UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of March , 2001
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Frontline Ltd.
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(Translation of registrant's name into English)
Mercury House, 101 Front Street, Hamilton, HM 12, Bermuda
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F
Form 20-F ___X___ Form 40-F _______
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes _______ No ___X___
If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-_______
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 1 is a copy of the press release of Frontline
Ltd. (the "Company"), dated February 26, 2001.
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Exhibit I
FRO: YEARLY RESULTS
(in thousands of $, except Earnings per share)
2000 1999 2000 1999
Oct-Dec Oct-Dec
Net operating revenue 249,473 53,614 599,944 253,214
Gain (loss) on sale of assets 697 - 1,160 (37,779)
Operating expenses 37,369 32,145 132,132 136,210
Operating income (loss)
before depreciation 212,801 21,469 468,972 79,225
Operating income (loss)
after depreciation 182,994 1,480 376,092 (12,210)
Share of results from
associated companies 8,882 1,111 12,817 3,067
Net financial items (10,632) (21,138) (75,001) (82,007)
Net income (loss) before tax
and minority 181,244 (18,547) 313,908 (91,150)
Tax and minority 41 22 41 4,254
Net income (loss) after tax
and minority 181,203 (18,551) 313,867 (86,896)
Earnings (loss) per share 2.29 (0.31) 4.28 (1.76)
Fixed assets 2,486,408 1,589,226
Current assets 292,979 137,747
Total assets 2,779,387 1,726,793
Stockholders' equity 1,033,960 576,251
Long term liabilities 1,455,037 981,330
Current liabilities 290,390 169,212
Frontline reports a record quarterly result of net income of
$181.2 million in the fourth quarter of 2000: an 86 per cent
increase over the immediately preceding quarter. Earnings before
interest, tax, depreciation, and amortisation (EBITDA) for the
quarter, including earnings from associated companies were $221.7
million, compared with $22.6 million for the comparable 1999
period. Basic earnings per share for the quarter were $2.29 and
cashflow per share for the quarter was $2.66. The two key factors
affecting this result are the strong tanker market that prevailed
throughout the fourth quarter of 2000 and the inclusion of Golden
Ocean Group Limited ("GOGL") with effect from October 10, 2000.
The net income includes an unrealised currency gain of $14.8
million linked to Yen debt in GOGL. The average daily time
charter equivalents ("TCEs") earned by the VLCCs, Suezmax
tankers, and Suezmax OBO carriers trading in the spot market were
$67,900, $49,500 and $46,300, respectively.
For the year ended December 31, 2000, the Company earned
consolidated net income of $313.9 million (1999 - net loss of
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$86.9 million) and EBITDA of $481.8 million (1999 - $82.3
million). In 1999, in addition to the tanker market being
significantly weaker, the results included the loss on the sale
of four VLCCs in connection with the acquisition of ICB Shipping
AB. The annual average daily time charter equivalents ("TCEs")
earned by the VLCCs, Suezmax tankers, and Suezmax OBO carriers
trading in the spot market were $46,300, $35,500 and $33,300
respectively, compared with $20,000, $16,700 and $16,800 in 1999.
Net interest expense was $89.3 million (1999 - $81.2 million).
Earnings per share for the 2000 year were $4.28 (1999 - loss of
$1.76) and cashflow per share was $5.53 (1999 - $0.09). The
average number of shares outstanding during 2000 was 73,390,654
(1999 - 49,467,970).
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Frontline Ltd.
Fourth Quarter and Financial Year 2000 Results
-- Frontline reports record Fourth Quarter EBITDA of $221.7
million and net income of $181.2 million.
-- Frontline reports record EBITDA of $481.8 million and net
income of $313.9 million for the year 2000.
-- The tanker market strengthened significantly in the fourth
quarter.
-- Fundamentals point towards a continued healthy market and
strong earnings.
-- Frontline acquired Golden Ocean in October 2000.
-- Frontline acquired the 1997 and 1998 built Suezmax tankers
Front Ardenne and Front Brabant, and the 1993 built VLCC
Front Ace.
FOURTH QUARTER AND ANNUAL RESULTS
Frontline reports a record quarterly result of net income of
$181.2 million in the fourth quarter of 2000: an 86 per cent
increase over the immediately preceding quarter. Earnings before
interest, tax, depreciation, and amortisation (EBITDA) for the
quarter, including earnings from associated companies were $221.7
million, compared with $22.6 million for the comparable 1999
period. Basic earnings per share for the quarter were $2.29 and
cashflow per share for the quarter was $2.66. The two key factors
affecting this result are the strong tanker market that prevailed
throughout the fourth quarter of 2000 and the inclusion of Golden
Ocean Group Limited ("GOGL") with effect from October 10, 2000.
The net income includes an unrealised currency gain of $14.8
million linked to Yen debt in GOGL. The average daily time
charter equivalents ("TCEs") earned by the VLCCs, Suezmax
tankers, and Suezmax OBO carriers trading in the spot market were
$67,900, $49,500 and $46,300, respectively.
The increases in operating costs compared with the comparable
quarter of 1999 represent the inclusion of GOGL. Administrative
expenses in the fourth quarter of 2000 include costs relating to
the Tankers International Pool while in the fourth quarter of
1999 they include the costs associated with the operation of ICB
Shipping AB: this operation was closed down in early 2000.
Net interest expenses for the quarter were $25.0 million (1999 -
$21.0 million). This has increased from $22.0 million in the
third quarter of 2000, reflecting the inclusion of GOGL and
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additional debt drawndown in October 2000 in connection with the
acquisition of three vessels by Frontline. Higher average cash
balances, the repayment of $38.8 million of debt during the
fourth quarter and reduced margins have served to offset this
increase.
During the fourth quarter, the Company issued 1,245,998 ordinary
shares in connection with the acquisition of GOGL and 5,134
shares in connection with the exercise of warrants and share
options. Late in the quarter, the Company bought back and
cancelled 1,719,845 of its own shares in a series of market
transactions. At December 31, 2000, 78,068,811 ordinary shares
were outstanding and the weighted average number of shares
outstanding for the quarter was 79,218,871 (as at December 31,
1999, 60,961,860 and for the quarter then ended - 59,300,990).
For the year ended December 31, 2000, the Company earned
consolidated net income of $313.9 million (1999 - net loss of
$86.9 million) and EBITDA of $481.8 million (1999 - $82.3
million). In 1999, in addition to the tanker market being
significantly weaker, the results included the loss on the sale
of four VLCCs in connection with the acquisition of ICB Shipping
AB. The annual average daily time charter equivalents ("TCEs")
earned by the VLCCs, Suezmax tankers, and Suezmax OBO carriers
trading in the spot market were $46,300, $35,500 and $33,300
respectively, compared with $20,000, $16,700 and $16,800 in 1999.
The Company has been successful in maintaining its low operating
costs during 2000. The average daily operating costs of the
VLCCs, Suezmax tankers, and Suezmax OBO carriers including
insurance and drydocking provisions was $6,900, $5,500 and
$6,200, respectively compared with $6,800, $6,000 and $6,400 in
1999.
Net interest expense was $89.3 million (1999 - $81.2 million).
Earnings per share for the 2000 year were $4.28 (1999 - loss of
$1.76) and cashflow per share was $5.53 (1999 - $0.09). The
average number of shares outstanding during 2000 was 73,390,654
(1999 - 49,467,970).
Acquisition of Golden Ocean
On October 10, 2000 Frontline took control of Golden Ocean Group
Limited and with effect from that date GOGL is included in the
consolidated financial statements of Frontline. GOGL is a non-
recourse subsidiary of Frontline. The acquisition was financed
through the issuance of 1,245,998 Frontline shares and payment of
approximately $43.5 million in settlement of creditors claims.
Through this transaction Frontline has invested $15 million
equity in GOGL and total debt of $55 million.
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The acquisition of GOGL brings into Frontline's consolidated
balance sheet, ten drybulk carriers, including two owned through
joint ventures, and eight VLCCs, including one chartered in and
three owned through joint ventures. The entire drybulk fleet is
fixed on long-term charters. The VLCC fleet is fixed on charters
that range from one year to eleven years remaining. Certain of
the VLCC charters provide for profit sharing that has allowed
GOGL to benefit from the strong market in the fourth quarter of
2000. The GOGL vessels have been financed by a variety of
structures some of which include Yen debt. In some cases this
debt is fully covered by contracted Yen income. In other cases
GOGL has some exposure to the Yen. In either scenario, quarterly
accounting practises to revalue Yen debt will result in the
recognition of exchange gains or losses. Total Yen debt as of
year-end 2000 was approximately $250 million (exchange rate
114.37).
In addition to the on-balance sheet vessels, at the date of
acquisition, GOGL had one purchase obligation and four purchase
options on delivered VLCCs. It is the board's intention to take
measures that will bring these vessels onto the balance sheet
during 2001.
Included in this report is unaudited selected supplementary
information for the fourth quarter of 2000. In the period ended
December 31, 2000 GOGL contributed EBITDA of $24.8 million and
net income of $29.2 million. Included in the net income is a
foreign exchange gain of $14.8 million. At December 31, 2000 GOGL
on a stand alone basis had total assets of $537.4 million and
stockholders' equity of $44.2 million. The consolidation of GOGL
into Frontline has given rise to goodwill of $2.75 million.
However, in accordance with US generally accepted accounting
principles, this amount is subject to adjustment as the
valuations allocated to certain assets acquired are crystallised.
This primarily relates to the purchase options and obligation
held by GOGL companies.
THE MARKET
The tanker market showed increasing strength through the year
2000 with VLCC rates more than tripling and Suezmax rates more
than doubling between the first and last quarters. Single
fixtures were made for VLCCs at above USD 100,000 per day and
single Suezmaxes were fixed at above USD 90,000 in the fourth
quarter.
The underlying factors for the market improvement were mainly the
supply and demand balance in the market created through extensive
scrapping and modest newbuilding deliveries in 1999 and the first
half of 2000 and a marked increase in OPEC oil production from
spring 2000. The Erika oil spill in late 1999 contributed to a
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stricter view on using older tonnage, which further tightened the
market and especially benefited modern tonnage.
The charter market improvement resulted in increases in second-
hand ship prices and newbuilding prices over the year. A total of
26 VLCCs and 17 Suezmaxes were removed through scrapping from the
trading fleet in 2000 and 41 VLCCs and 22 Suezmaxes were
delivered from shipyards in the period.
CORPORATE AND OTHER MATTERS
During the fourth quarter of 2000, the Company bought back a
total of 1,719,845 of its own shares pursuant to a current Board
authority to acquire up to 3,500,000 shares. Since the year end
a further 1,167,300 shares have been acquired and 76,901,525
shares are outstanding as at February 26, 2001. The average price
paid for the shares acquired is NOK112.92 ($12.61). The Board
feels that during this period the Frontline share has been
undervalued and undertook this share buyback exercise as an
effective way to increase shareholder value.
In October 2000, the Company took delivery of two secondhand
Suezmax tankers, Front Ardenne and Front Brabant. At the same
time Frontline also acquired a 1993-built VLCC, which was named
Front Ace and on delivery to the Company was placed in the
Tankers International Pool. This vessel was acquired for $53
million from a related party, such price being based on three
independent valuations less a $1 million discount.
In February 2001, Frontline announced that it had entered into
five newbuilding contracts. Two Suezmaxes have been ordered with
the Sasebo Shipyard in Japan for delivery in August and October
2001, and three VLCCs have been ordered with Hitachi for delivery
in April, August and October 2002. The total newbuilding project
will have a cost of approximately USD 330 million, and will be
paid through a competitive instalment plan until delivery. It is
expected that the five contracts in total will need less than USD
100 million in equity and that Frontline's free cash flow in the
first quarter of 2001 will be sufficient to cover this
requirement.
OUTLOOK
The Board notes with pleasure that the strategy laid down for
Frontline in 1997 is now rewarded and wants to assure the
Company's shareholders that continued effort will be made to
improve the Company's position in the crude oil transportation
market and to increase return to investors.
After a very strong finish of the year 2000, the market has
slowed down in the first quarter 2001 but rates are still at
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healthy levels. Frontline expects seasonal demand changes to be
reflected in rates this year with rates improving towards the
second half of the year. The cut-back of 1.5 MBPD production
implemented by OPEC on February 1, 2001 partly reflected a
slowdown in demand after a very hectic finish of year 2000.
Further cut-backs are being discussed by OPEC, again reflecting
slower seasonal demand in the spring, in the attempt to keep the
oil price within the OPEC price band. Underlying demand, however,
is expected to increase over 2000 with emphasis on growth in the
second half of the year.
Longer term, the new IMO rules, which are subject to approval at
the IMO's April meeting, are expected to cause removal by rule in
the years 2002 - 2005 of the remaining 1970s built Suezmaxes and
VLCCs. The rule would phase out about 30% of the existing total
fleet in each segment. The current order books for Suezmaxes and
VLCCs for delivery in the period until end 2003 / early 2004
stand at 90 VLCCs and 60 Suezmaxes. The requirement for
replacement of older tonnage in combination with generally
increasing transportation demand points to a positive market
development in coming years.
The Board, against the observations above, places confidence in
the tanker market going forward. Based on the earnings achieved
so far during the first quarter with daily timecharter equivalent
income of $40,000 for Suezmaxes and $60,000 for VLCCs, it is
likely that the earnings during the first quarter will exceed USD
100 million. As for the full year result the Board are cautiously
optimistic about the opportunity to improve the 2000 result
further.
February 26, 2001
The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
Questions should be directed to:
Contact: Tor Olav Troim: Director
+47 23 11 40 00
Ola Lorentzon, Managing Director, Frontline
Management AS
+47 23 11 40 00
Tom E. Jebsen: CFO Frontline Management AS
+47 23 11 40 00
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FRONTLINE GROUP UNAUDITED FOURTH QUARTER REPORT
1999 2000c INCOME STATEMENT 2000 1999
Oct-Dec Oct-Dec (in thousands of $) Jan-Dec Jan-Dec
(audited)
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86,871 273,647 Freight, bareboat and 697,260 369,876
time charter revenues
(33,257) (24,174) Voyage expenses (97,316) (116,662)
53,614 249,473 Net operating revenues 599,944 253,214
697 Gain (loss) from sale of assets 1,160 (37,779)
21,146 25,413 Ship operating expenses 88,455 92,708
7,838 9,332 Charterhire expenses 34,351 31,719
3,161 2,624 Administrative expenses 9,326 11,783
21,469 212,801 Operating income before 468,972 79,225
depreciation and amortisation
19,989 29,807 Depreciation and amortisation 92,880 91,435
1,480 182,994 Operating income (loss) after 376,092 (12,210)
depreciation and amortisation
2,453 3,134 Interest income 6,858 7,561
(23,495) (28,158) Interest expense (96,174) (88,728)
1,111 8,882 Share of results from associated 12,817 3,067
companies
(96) 14,392 Other financial items 14,315 (840)
(18,547) 181,244 Income (loss) before taxes and 313,908 (91,150)
minority interest
(13) - Minority interest - 4,245
(9) 41 Taxes 41 (9)
(18,551) 181,203 Net income (loss) 313,867 (86,896)
$(0.31) $2.29 Earnings (loss) per Share ($) $4.28 $(1.76)
Income on timecharter basis
($ per day per ship)*
16,700 67,900 VLCC 46,300 20,000
14,500 49,500 Suezmax 35,500 16,700
14,400 46,300 Suezmax OBO 33,300 16,800
* Basis = Calendar days minus off-hire.
Figures after deduction of broker
commission
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BALANCE SHEET 2000 1999
(in thousands of $) Dec 30 Dec 31
(audited)
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ASSETS
Short term
Cash and bank deposits 116,094 66,267
Marketable securities 4,045 10,867
Other current assets 172,840 60,613
Long term
Newbuildings and vessel purchase options 36,326 32,777
Vessel and equipment, net 2,363,308 1,523,112
Investment in associated companies 27,361 16,274
Goodwill 12,785 12,203
Deferred charges and other long-term assets 46,628 4,860
Total assets 2,779,387 1,726,793
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Short term interest bearing debt 212,767 116,814
Other current liabilities 77,623 52,398
Long term
Long term interest bearing debt 1,331,372 962,880
Other long term liabilities 123,665 18,450
Minority interest 4,470 18,951
Stockholders' equity 1,029,490 557,300
Total liabilities and stockholders' equity 2,779,387 1,726,793
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UNAUDITED FOURTH QUARTER SUPPLEMENTARY INFORMATION
SELECTED FINANCIAL DATA Frontline Golden Ocean
(in thousands of $) Oct-Dec Oct-Dec
2000 2000
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Net operating revenues 226,383 23,089
Operating income before depreciation and amortisation 195,136 17,664
Depreciation and amortisation 24,513 5,293
Operating income after depreciation and amortisation 170,623 12,371
Interest income 4,081 248
Interest expense (23,990) (5,364)
Share of results from associated companies 1,131 7,116
Other financial items (401) 14,794
Net income 152,039 29,164
Total current assets 272,161 16,772
Vessels and equipment (including options and
vessels under capital lease) 1,904,044 467,510
Total assets 2,313,977 537,438
Total current liabilities 246,535 43,855
Total liabilities 1,313,915 493,274
Total stockholders' equity 1,000,062 44,164
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorised.
Frontline Ltd.
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(Registrant)
Date March 7, 2001 By /s/ Kate Blankenship
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Kate Blankenship
Secretary
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02089009.AD7