Norway's Frontline (FRO)
, the world's biggest tanker company, reported record net profits for 2000 compared to a 1999 loss and forecast higher earnings for 2001. Net 2000 profits leapt to $313.9 million from a $86.9 million loss in 1999, helped by a strong tanker market and a takeover of U.S. rival Golden Ocean Group (GDOCF)
. Net operating revenues surged to $599.9 million from $253.2 million in 1999. "For the full year (2001) result the board are cautiously optimistic about the opportunity to improve the 2000 results further," the company said in a statement. But it sees earnings falling in the first quarter, partly because of an oil production cut by OPEC that would curb demand for tonnage. Frontline (FRO)
has 29 Suezmax tankers and 30 VLCCs.
Frontline shares have traded between a low of 36.9 crowns in January 2000 to a November peak of 170.
"It is likely to that the earnings during the first quarter will exceed $100 million," Frontline said. It earned a net $181.2 million in the fourth quarter of 2000. "After a very strong finish of the year 2000, the market has slowed down in the first quarter 2001 but rates are still healthy," it said.
Timecharter earnings so far in 2001 have averaged $40,000 a day for Suezmaxes and $60,000 for VLCCs, it said. In the fourth quarter of 2000, single fixtures for VLCCs had exceeded $100,000 a day and $90,000 for Suezmaxes.
For 2000 as a whole, Frontline said "the tanker market situation showed increasing strength...with VLCC rates more than tripling and Suezmax rates more than doubling between the first and last quarters."
It said that extensive scrapping and modest newbuilding deliveries in 1999 and the first half of 2000 helped bolster prices. Higher OPEC oil production from early 2000 also raised demand for shipping.
Frontline said net profits included an unrealised currency gain of $14.8 million. Golden Ocean Group, with 10 drybulk carriers and eight VLCCs, was included in the accounts from October 10 after a takeover. - (Reuters)