Slide 1: Q2 2010 Results
Q2 2010 Results CEO Frontline Mgt, Jens Martin Jensen CFO Frontline Mgt, Inger M. Klemp August 27, 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 Second Quarter 2010 Highlights and Transactions Financial Review Newbuildings Market Update Outlook Q&A 3
Slide 4: Highlights and transactions
Second Quarter 2010 Highlights and transactions Completion of private placement of $225 million of convertible bonds (April) Delivery of two Suezmax newbuildings from Rongsheng Hull H1018 – Front Odin, 12 May 2010 Hull H1026 – Front Njord, 12 August 2010 Delivery of two VLCC newbuildings f
Slide 5: Highlights and transactions
Second Quarter 2010 Highlights and transactions Ordering of two 156,900 dwt Suezmax newbuildings with expected delivery in February and May 2013 and securing options for two similar Suezmax newbuildings (June) Front Duke redelivered from time charter and subsequently entered into a bareboat char
Slide 6: Financial Highlights
Second Quarter 2010 Financial Highlights 120 103 Q2 2010 results 100 81 80 80 77 Net income: $81.3m 60 EPS: $1.04 40 28 Net income excl. gain: $71.6m 20 4 EPS excl. gain: $0.92 0 -6 Q2 Q1 FY Q4 Q3 Q2 Q1 -20 2010 2009 Net Income/loss ex sales ($million) Sales profit/loss ($million) Dividend d
Slide 7: Income Statement
Financial Review Income Statement 2009 2010 CONDENSED CONSOLIDATED INCOME STATEMENTS 2010 2009 2009 Apr-Jun Apr-Jun (in thousands of $) Jan-Jun Jan-Jun Jan-Dec (audited) 281,536 356,116 Total operating revenues 687,939 638,137 1,133,286 - 9,664 Gain on sale of assets and amortization of deferred gai
Slide 8: Income on time charter basis
Financial Review Income on time charter basis 2010 2009 $/day YTD Q2 Q1 FY Q2 Q1 VLCC Spot DH 49 700 50 020 49 200 38 000 38 700 56 200 VLCC Spot SH 23 200 22 100 23 600 23 800 28 300 28 200 VLCC Spot 48 600 49 500 47 500 36 900 37 700 53 700 VLCC w hole fleet 46 000 46 600 45 300 38 300 38 400 50 3
Slide 9: Ship operating expenses/Off-hire
Financial Review Ship operating expenses/Off-hire Total fleet opex ($/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 10 100 10 000 9 800 8 9 700 6 5 9 500 4 4 4 3 3 9 000 2 2 8 500 0 Q2 Q1 FY Q4 Q3 Q2 Q1 Q2 Q1 FY Q4 Q3 Q2 Q1 2010 2009 2010
Slide 10: Balance sheet
Financial Review Balance sheet Balance sheet (in $ million) 2010 2010 2009 Jun. 30 Mar. 31 Dec. 31 Cash 169 86 83 Restricted cash 236 224 430 Other Current assets 345 400 271 Long term assets: Restricted cash 69 68 70 Vessels 2 782 2 446 2 419 Newbuildings 278 351 414 Other long term assets 88 85 29
Slide 11: Cash Cost Breakeven
Financial Review Cash Cost Breakeven Estimated Cash cost breakeven rates 2010 ($/day) VLCC 30,900 Suezmax 26,400 Suezmax OBO 24,500 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 vessels on short term TC-in,
Slide 12: Newbuildings
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Slide 13: Newbuildings Overview
Newbuildings Newbuildings Overview Total newbuilding program end Q2-10 after cancellations and restructuring approx. $799.7m Five VLCCs and three Suezmax tankers. Financial exposure limited to $601.7m (three VLCCs and three Suezmax tankers + $54m). Installments paid per end Q2-10: $246.4m (Q
Slide 14: Financing
Newbuildings Financing 80% of contract price for first two VLCCs from Waigaoqiao and four Suezmax tankers from Rongsheng $334m outstanding debt per end Q2-10 Remaining to be drawn: $39.6m in August 2010 70% of contract price for last two VLCCs from Waigaoqiao $109.8m outstanding debt per e
Slide 15: Capital Expenditures
Newbuildings Capital Expenditures USDm 400 350 41 300 250 200 355 150 314 20 9 100 0 139 120 113 50 104 81 81 22 12 0 10 2010 2011 2012 2013 Total Total cap.ex. Committed and assumed financing* Funds from convertible bond 15 *Assumed financing for the unfinanced NBs approx. 70% of market value
Slide 16: Frontline Fleet
Corporate Overview Frontline Fleet Incl. vessels on commercial management & ITCL, excl. newbuildings OBO 8 VLCC SH 5 Suezmax DH 21 VLCC DH 46 Total: 80 DH: Double Hull, SH: Single Hull 16
Slide 17: 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 34 14 % 46 300 31 8% 47 700 SH 1 77 % 41 100 VLCC SH/DS on BB-out 4 94 % 15 800 * 2 100
Slide 18: Earnings & Market Factors
Market Update Earnings & Market Factors Q2 – Average Market earnings 240 000 VLCC ■ VLCC : $54.500/day 220 000 200 000 ■ Suezmax : $32.700/day 180 000 160 000 140 000 Market Movers $ / day 120 000 ■ Fewer newbuilding deliveries than expected for Q2 100 000 – VLCC: 12 del. Vs. 18 estimated 80 000 60
Slide 19: VLCC Fleet
Market Update VLCC Fleet Fleet Current Fleet 537 Orderbook 180 DH Fleet 482 Deliveries 2010 74 SH (DS, DB, SS) Fleet 55 Deliveries 2011 76 Current fleet & Orderbook Delivery Schedule 19 Source: Fearnleys August 2010
Slide 20: Suezmax Fleet
Market Update Suezmax Fleet Fleet Current fleet & Orderbook Delivery Schedule 20 Source: Fearnleys August 2010
Slide 21: Newbuilding prices and TC market rates
M USD 50 70 80 60 90 100 120 140 150 160 170 110 130 180 2006-01 2006-03 2006-05 2006-07 2006-09 FRO VLCC NB 2006-11 Rates 2007-01 Market Update 2007-03 2007-05 2007-07 2007-09 2007-11 2008-01 2008-03 FRO SMAX NB 2008-05 2008-07 2008-09 2008-11 2009-01 NEWBUILDING 2009-03 VLCC NB 2009-05 2009-07 200
Slide 22: Actual deliveries
Market Update Actual deliveries 2009 VLCC Suezmax ■ Estimate 68 73 ■ Actual 55 46 22 Source: RS Platou, 5/8 2010, Fearnleys
Slide 23: Waiting
Market Update Waiting ■ One waiting day at Fujairah is equal to abt. 0,4 ws points (on a regular PG- Singapore voyage) which by the way in today's market is an approximate $11,000/day voyage over 26 days. ■ You could thus wait for abt. 20 days and still make the same voyage return if the market incr
Slide 24: Outlook
Market Update Outlook FLEET ■ Modest fleet growth in 2010 for VLCC ■ 87.6% utilization for the total tanker fleet 1st half 2010 ■ Floating storage still of essence ■ About 50% of single hulls untradeable ■ Orderbook still large but container and offshore market back in fashion – taking away yard spa
Slide 25: Questions?
Questions? (It’s not dead… - only resting) 25