Slide 1: Q1 2010 Results
Q1 2010 Results CEO Frontline Mgt, Jens Martin Jensen CFO Frontline Mgt, Inger M. Klemp May 21, 2010
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION AND ITS ENCLOSURES AND APPENDICES (HEREINAFTER JOINTLY REFERRED TO AS THE “PRESENTATION” HAS BEEN PREPARED BY FRONTLINE LTD. (“FRONTLINE” or THE ”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR REGISTERED WITH ANY PUBLIC AUTHORI
Slide 3: Agenda
Agenda First Quarter 2010 Highlights and Transactions Financial Review Newbuildings Market Update Outlook Q&A 3
Slide 4: Highlights and transactions
First Quarter 2010 Highlights and transactions Completion of private placement of $225 million of convertible bonds (April) Delivery of the first three Suezmax newbuildings from Rongsheng Hull H1017 – Northia (5 Jan. 2010) Hull H1018 – Front Odin (12 May 2010) Hull H1019 – Naticina (9 Marc
Slide 5: Financial Highlights
First Quarter 2010 Financial Highlights 120 103 Q1 2010 results 100 80 77 80 Net income: $79.7m 60 EPS: $1.02 40 28 Net income excl. gain: $69.9m 20 4 EPS excl. gain: $0.90 0 -6 Q1 FY Q4 Q3 Q2 Q1 -20 2010 2009 Net Income/loss ex sales ($million) Sales profit/loss ($million) Dividend declared
Slide 6: Income Statement
Financial Review Income Statement CONDENSED CONSOLIDATED INCOME STATEMENTS 2010 2009 2009 Jan-Dec (in thousands of $) Jan-Mar Jan-Mar (audited) Total operating revenues 331,823 356,601 1,133,286 Gain on sale of assets and amortization of deferred gains 9,817 - 3,061 Voyage expenses and commission 67
Slide 7: Income on time charter basis
Financial Review Income on time charter basis 2010 2009 $/day Q1 FY Q4 Q3 Q2 Q1 VLCC Spot DH 49 200 38 000 30 400 26 800 38 700 56 200 VLCC Spot SH 23 600 23 800 12 600 20 000 28 300 28 200 VLCC Spot 47 500 36 900 29 600 26 300 37 700 53 700 VLCC w hole fleet 45 300 38 300 33 200 32 100 38 400 50 30
Slide 8: Ship operating expenses/Off-hire
Financial Review Ship operating expenses/Off-hire Total fleet opex ($/day) Number of vessels drydocked 12 000 18 16 11 400 16 11 500 14 11 000 12 10 500 10 600 10 500 10 200 10 10 000 9 800 8 9 700 6 5 9 500 4 4 4 3 9 000 2 2 8 500 0 Q1 FY Q4 Q3 Q2 Q1 Q1 FY Q4 Q3 Q2 Q1 2010 2009 2010 2009 Off hire (
Slide 9: Balance sheet
Financial Review Balance sheet Balance sheet (in $ million) 2010 2009 2009 Mar. 31 Mar. 31 Dec. 31 Cash 86 207 83 Restricted cash 224 334 430 Other Current assets 400 236 271 Long term assets: Restricted cash 68 125 70 Vessels 2 446 2 591 2 419 Newbuildings 351 421 414 Other long term assets 85 28 2
Slide 10: Cash Cost Breakeven
Financial Review Cash Cost Breakeven Estimated Cash cost breakeven rates 2010 ($/day) VLCC 31,100 Suezmax 25,300 Suezmax OBO 24,800 Comments to B/E rates: Included in cash B/E rates are: BB hire/installments & interest loans + opex and admin. costs. B/E rates exclude M/T Hampstead, M/T Kensingto
Slide 11: Newbuildings
Newbuildings 11
Slide 12: Newbuildings Overview
Newbuildings Newbuildings Overview Total newbuilding program end Q1-10 after cancellations and restructuring approx. $847.7m Six VLCCs and two Suezmax tankers Financial exposure limited to $649.7m (four VLCCs and two Suezmax tankers + $54m) Installments paid per end Q1-10: $313m (Q4 $364m in
Slide 13: Financing
Newbuildings Financing 80% of contract price for first two VLCCs from Waigaoqiao and four Suezmax tankers from Rongsheng $302.7m outstanding debt per end Q1-10 Expect to draw further $73.7m in 2010 70% of contract price for last two VLCCs from Waigaoqiao $58.6m outstanding debt per end Q1-
Slide 14: Capital Expenditures
Newbuildings Capital Expenditures USDm 400 350 62 300 250 62 200 354 150 292 250 100 188 50 104 104 0 2010 2011 Total Total cap.ex. and short term loan NBs Financing; Committed and assumed financing* Funds from convertible bond 14 *Assumed financing for the two unfinanced VLCCs is $65m/vessel
Slide 15: Frontline Fleet
Corporate Overview Frontline Fleet Incl. vessels on commercial management & ITCL, excl. newbuildings OBO 8 VLCC SH 5 Suezmax DH 28 VLCC DH 43 Total: 84 DH: Double Hull, SH: Single Hull 15
Slide 16: Frontline Fleet
Corporate Overview Frontline Fleet 2010 VESSELS AS PER END 2011 No. of Av. TC Av. Net Av. TC Av. Net No. of vessels Coverage TC/BB Rate Coverage TC/BB Rate vessels (current) (2010) $/day (2010) (year) ($/day) DH 31 13 % 46 300 36 7% 47 700 SH 2 75 % 41 300 0 VLCC SH/DS on BB-out 3 93 % 17 300 * 3 64
Slide 17: Earnings & Market Factors
Market Update Earnings & Market Factors Q1 – Average Market earnings 240 000 VLCC 220 000 200 000 ■ VLCC : $55,600/day Suezmax : $32,500/day 180 000 ■ 160 000 140 000 $ / day Market Trends 120 000 100 000 80 000 ■ Fewer newbuilding deliveries than expected for Q1 VLCC: 17 del. Vs. 20 estimated 60 00
Slide 18: VLCC Fleet
Market Update VLCC Fleet Fleet Current fleet & Orderbook Delivery Schedule 18 Source: Fearnleys 1 May 2010
Slide 19: Suezmax Fleet
Market Update Suezmax Fleet Fleet Current fleet & Orderbook Delivery Schedule 19 Source: Fearnleys 1 May 2010
Slide 20: Newbuilding prices and time charter market
M USD 50 70 80 60 90 100 120 140 150 160 170 110 130 180 2005-01 2005-04 2005-07 VLCC NB 2005-10 2006-01 Rates Market Update 2006-04 2006-07 2006-10 SMAX NB 2007-01 2007-04 2007-07 2007-10 2008-01 2008-04 2008-07 FRO VLCC NB NEWBUILDING 2008-10 2009-01 2009-04 2009-07 2009-10 2010-01 FRO SMAX NB 201
Slide 21: Fleet Development
Market Update Fleet Development 80 75 VLCC Frontline estimate Deliveries – Estimate vs. Actual 70 65 VLCC SUEZMAX 60 55 ■ 2009 (Est.): 68 73 50 45 ■ 2009 (Actual): 54 46 40 35 68 72 Change: -14 -27 30 61 55 25 20 40 38 15 ■ 2010 FY (Est.): 72 67 10 5 Q1 (Est.) 20 24 0 2008 2009 2010 Q1 (Act.) 17 18
Slide 22: China
Market Update China Development Refinery Expansion & Stockpiling ■ Oil imports tracking car sales ■ Tremendous refinery expansion – will elevate imports ■ Estimated car sales of 15.2 million units in 2010 ■ 2 new storage facilities announced in Guangdong – Up 12% y-o-y ■ 2010 oil refinery capacity:
Slide 23: Outlook
Market Update Outlook FLEET ■ Modest fleet growth in Q1 for VLCC ■ Newbuilding prices are increasing – …seemingly limited 2012 VLCC NB slots available ■ From Q4 2010 the “expensive orderbook” will commence WORLD ■ Production and demand moving up ■ IMF – expectations of increased world GDP ■ Volatile
Slide 24: Any questions?
Any questions? 24