Frontline Q1 Profit Disappoints

 

* Declares quarterly dividend $ 0.15 per share (Reuters poll $0.13 per share)

 

* Notwithstanding near-term pressure on crude tanker rates, we believe the market will ultimately return to balance as demand for crude oil continues to increase and vessel scrapping will begin to offset the negative effect of newbuilding deliveries

 

* There are many opportunities to continue our strategy of fleet growth and renewal, and we are confident in our ability to execute on this strategy

 

* Very pleased to have secured financing for newly acquired four VLCC resales and newbuilding contracts in an amount of up to $221.0 million

 

* Opportunities include buying vessels on the water, newbuildings/resales as well as buying shares and companies

 

* Believes that the market will begin to improve in 2018 as the pace of deliveries of newbuilding vessels slows and vessels are retired from the global fleet

 

* Following the implementation of OPEC and non-OPEC production caps, which have largely been complied with, we have seen trade routes evolve. In particular, there have been increased long-haul voyages from the Atlantic Basin to Asia driven in part by increasing U.S. production and a shift in U.S. exports towards long-haul voyages

 

* Crude oil demand, particularly from China and India, continues to grow, and crude oil is being imported from nontraditional sources due to OPEC production cuts and the desire to diversify supply. The effect on ton-mile demand is positive, and we expect this trend to continue

 

* All factors considered, the company maintains a cautious near-term view on the tanker market and believes the market will begin to balance as vessels are absorbed into the global fleet and older vessels retire from trading. In the meantime, the Company expects that periods of market weakness will inevitably create attractive opportunities to acquire assets at historically low prices

 

* In April 2017, the Company ordered two VLCC newbuildings to be constructed at Hyundai Heavy Industries at a purchase price of $79.8 million each

 

* In April and May the Company sold a further 2.4 million shares in DHT for proceeds of $11.0 million and expects torecord a gain of $0.6 million in the second quarter