Frontline Expects Improved Results after Losses Narrow
Net loss $13 mln in Q4 vs forecast $18 mln loss; Repayment of debt dependent on improving tanker rates.
Oil tanker firm Frontline expects its operating result in the first quarter to improve on the previous quarter due to a recent increase in rates as it reported fourth-quarter results slightly ahead of expectations on Thursday.
The shipping market has struggled for several years, squeezed between an global economic downturn and an oversupply of new ships. On Thursday Frontline said a recent recovery in the rates for hiring tankers suggested the market balance was improving.
"The recent positive development in the tanker market is likely to give a better operating result ... in the first quarter," the firm said in a statement. Its fourth-quarter pretax loss narrowed to $13 million from $17 million a year earlier, beating a forecasted loss of $18 million in a Reuters poll of analysts. The firm has debts of $1 billion it must repay. Frontline said a full repayment was dependent "to a large extent" on a sustained improvement in tanker rates in the years to come.
As expected, the company will not pay a dividend for the fourth quarter.
Reporting by Gwladys Fouche; Reuters.