Frontline, the world's largest oil tanker company, has said first quarter...
Frontline, the world's largest oil tanker company, has said first quarter profit dropped by ninety two percent as lower oil production slashed demand for its ships, pushing down the rates it could charge customers.
Net income at the Bermuda based company, which is controlled by the Norwegian ship owner John Fredriksen, dropped to $14.9 million, or 19 cents a share, from $192.3 million, or $2.49 a share, in the same period a year earlier. Analysts expected a net loss of four million dollars, according to a survey by news service TDN Finans.
?Earnings beat expectations and have eased concern for the performance this quarter,? said Bjoern Knudsen, an analyst at Nordea Securities, who has a ?strong buy? rating on the shares, which rose by one and a half kroner on the news, or 1.4 percent, to 106. The tanker market ?will rebound in the second half as OPEC lifts production.?
Crude oil freight rates have declined after the Organization of Petroleum Exporting Countries and other oil producers last year agreed to reduce output quotas by five and a half million barrels per day through to the end of the first half of the year, in order to bolster the sinking crude prices. The production cuts created a glut among ships that transport oil, causing freight rates to fall to a one and a half decade low in April.