Fourth quarter red ink at Frontline

John Fredriksen controlled tanker giant Frontline Ltd. reported a loss of $11.8 million for the fourth quarter of 2010, equivalent to a loss per share of $0.15, compared with net income of $12.3 million and earnings per share of $0.16 for the preceding quarter. The fourth quarter loss in the fourth quarter includes non-operating losses of $5.2 million, which mainly relates to a loss of $9.4 million following a market price adjustment of shares owned in Overseas Shipholding Group Inc.

In January 2011, Frontline sold all its shares in OSG. The sale generated approximately $46.5 million in cash and Frontline expects to record a loss of approximately $3.3 million in the first quarter of 2011 in addition to a loss of $9.4 million recorded in the fourth quarter of 2010 following a market price adjustment of the shares.

The Frontline board says it is “very disappointed with the performance of this investment and also with the way OSG has developed since the investment in 2008. The management of OSG has never opened for real discussions about consolidation between Frontline and OSG. The decision to sell the shares was taken after thorough evaluation of OSG’s debt situation, mainly focusing on OSG’s sustainability and financing needs in case of a continued weak freight market.”

The full Frontline fourth quarter report is accessible HERE.

February 22, 2010