Frontline Supertanker Owner Says Market Remains Weak

Frontline owner, the Norwegian-born John Fredrikson noted that leasing their ships to oil companies is currently facing a weak market and forces the company to become more passive, and possibly even sell assets, including vessels.

The tanker industry is at the start of a 5-year downturn, according to Tor Olav Troeim, who is a director at Frontline and several other companies at a conference near Oslo on Tuesday. 

According to the Baltic Exchange, VLCCs that reaped $177,036 a day in 2008 were last at $8,900.  These vessels would need $29,700 a day in order to simply break even for Frontline. 

Frontline will pay a dividend of 10 cents a share for the first quarter after net profit dropped from over $79 million to $15.5 million in one year, as released in a statement. 

In a statement released by Frontline, the board explained the low results from the first quarter, seem to be extending well into the second quarter and makes for a grim projector of the quarters to come.  The board doesn’t see a turnaround for the tanker market in the near future, as they believe the supply of ships is growing more steadily than the demand for them.