Frontline 2012 has reported an improved second-quarter net profit, although its first-half performance sagged from the same period last year.
Lifted by better earnings from its growing product tanker fleet, the company’s second-quarter net profit totalled USD136.6 million, up from USD23.1 million in the same period last year.
Frontline 2012, which is merging with Frontline, received USD35.9 million over the quarter in compensation from cancellations of delayed newbuildings and newbuilding contract sales, down from USD42.8 million in the same period in 2014.
But the crude and product tanker company’s first-half profit of USD61.8 million plunged from USD151.1 million in the same period last year.
Charter hire expenses over the first six months of this year came to USD17.0 million, up from nil a year earlier. In the first half of 2014 Frontline 2012 also booked a USD16.8 million gain from selling shares.
Compensation from cancellations of delayed newbuildings and newbuilding contract sales over the first half totalled USD63.7 million, up from USD35.9 million in the same period last year.
The company said the average spot freight rate for a VLCC trading on a standard ‘TD3’ voyage between the Gulf and Japan in the second quarter was Wordscale (WS) 64, up 5 points from the previous quarter.
For a Suezmax trading on a standard ‘TD20’ voyage between West Africa and Rotterdam in the quarter, the spot freight rate was WS 88, down 2 points from the previous quarter’s average.
MRs trading on a standard ‘TC2’ voyage between Rotterdam and New York had an average spot rate of WS 155, up 12 points from the previous quarter, while an LR2 trading on a standard ‘TC1’ voyage between the Middle East and Japan had a rate of WS 110, up 11 points.
On 30 June, the company had 22 newbuildings on order, representing a capital expenditure of USD1.17 billion. After that date, it took up an option for two LR2 vessels.
Erik Nikolai Stavseth and Kurt Waldeland, shipping analysts at Arctic in Oslo, said these two ships may conclude Frontline 2012’s newbuilding programme.
“We see these two vessels as being the last of the known options, but would not rule out FRNT [Frontline 2012] having secured additional options,” they said.
This post was sourced from IHS Maritime 360: View the original article here.