John Fredriksen-controlled tanker owner and operator Frontline ended the third quarter of 2017 in loss due to weak average spot daily time charter equivalent (TCE) earnings.
During the period ended September 30, the company reported a net loss of USD 24.1 million, compared to a net income of USD 5.5 million seen in the same quarter a year earlier. The change was mainly attributed to weak time charter rates achieved by the company’s fleet and a USD 5.8 million loss on the termination of the charter of one of Frontline’s ships.
The company’s total operating revenues also dropped to USD 140.5 million from USD 157.2 million reported in the third quarter of 2016..
“The impact of the significant fleet growth over the last two years was felt across the industry and is reflected in our results for the third quarter,” Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS, said.
“Indeed, the rate environment presented in the quarter was the weakest we have experienced since 2013. During this time, we showed commercial discipline by not accepting unreasonably low offers from charterers. This resulted in extended waiting time, particularly on our VLCC’s, and impacted our average TCE earnings,” Macleod added.
Net income attributable to the Company in the nine months ended September 30, 2016 included a loss on the cancellation and sale of newbuildings and vessels of $2.7 million, a vessel impairment loss of USD 34.4 million, an impairment loss on shares of USD 7.2 million, and a loss on derivatives of USD 11.4 million.
As of November 2017, the company estimates that the average daily cash breakeven rates for the remainder of 2017
will be approximately USD 21,600, USD 17,700 and USD 15,700 for its owned and leased VLCCs, Suezmax tankers and LR2/Aframax tankers, respectively.