John Fredriksen controlled tanker giant Frontline Ltd. reported first quarter results that included net income of $165.3 million compared with $40.1 million in the same quarter of 2019.
“Frontline achieved its strongest first quarter result since 2008 amid an extremely volatile rate environment,” said Robert Hvide Macleod, CEO of Frontline Management AS. “We are extremely thankful to our staff and crewmembers for their extraordinary efforts and dedication, which contributed to our results during this challenging period. Our strong performance has carried over into the second quarter, as reflected in our bookings thus far. We have also secured some very attractive time charters and we will continue to explore period charter opportunities going forward. Our market view remains constructive, based on an order book at 25-year lows, an aging fleet and an expectation that oil volumes will return going forward as oil demand recovers. Frontline enjoys historically low estimated daily cash breakeven rates of $18,600 per day on average for our full fleet for the balance of 2020. The tanker market has corrected downwards in recent weeks and faces pressure in the short term, both from production cuts and inventory draws, but we believe we are well positioned due to our strong balance sheet and low cost base.”
In its quarterly report the company says that, due to the recent strength in freight rates and the concurrent decrease in fuel spreads, it has elected to postpone scrubber installations on two VLCCs and two Suezmax tankers. The company estimates a positive cash impact of approximately $7.6 million in 2020 resulting from these deferrals, excluding any benefit from decreased vessel off hire.
Read the full quarterly report HERE.