Frontline misses by $0.02, beats on revs
- Reports Q2 (Jun) loss of ($0.08) per share, excluding non-recurring items, $0.02 worse thanthe Capital IQ Consensus of ($0.06); revenues fell 22% year/year to $150.1 mln vs the $101.4 mln Capital IQ Consensus.
- "The market has been decidedly weak since the start of the second quarter of 2017, which is primarily the result of the increase in the size of the global crude oil tanker fleet. While the weak market naturally affects our earnings in the short term, the company's strategy is not altered. We continue to take proactive steps to increase the earnings potential of our fleet through the ongoing renewal of our fleet and by pursuing an opportunistic approach in the resale and newbuilding markets. Over the last several quarters, we have divested older, less economical VLCCs and Suezmax tankers and have remained focused on acquiring high-quality, modern VLCCs at attractive prices, lowering the average age for our fleet from 8.1 years to 5.7 years."
- "The upcoming quarters may present challenges as vessel supply continues to increase, but we are confident in our ability to continue to execute our strategy with the goal of returning value to shareholders. Given how both the ship values and spot market conditions have developed over the summer, we believe we are better positioned having not done any substantial acquisitions in the first half of the year. We expect attractive opportunities to emerge as a result of the weak market and will remain opportunistic going forward."
Outlook:
- The growth in crude tanker tonne-mile demand suggests that the current tanker market is not suffering from weak demand growth, but rather from excess supply growth which has occurred over the last 18 months. Despite current market weakness which is forecast to continue in the near-term, the Company continues to believe 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
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