John Fredriksen-controlled Frontline is the latest in a series of tanker carriers to confirm that the end of 2020 turned out extremely difficult for the segment.
In the fourth quarter, Frontline booked a net loss of USD 9.2 million, shows an unaudited annual report, published Friday.
The end of the year was characterized by tough market conditions, in which tanker companies saw a particularly draw on inventories.
From the start of 2021, the company’s new CEO, Lars H. Barstad, therefore puts his trust in increasing oil demand. For now, however, both Frontline and its competitors look into a weak market.
“Demand for tankers is currently muted as the total volume of oil transported is capped,” says Barstad in the report, adding that he sees indications that inventory draws may soon return to normal.
“When global oil markets switch from drawing on inventories, to call on equal volumes from the marketplace, growing demand for freight should be expected.”
For the first quarter of 2021, TCE spot rates are expected to be lower than the current level, Frontline continues. This is largely related to a combination of ballast days at the end of the quarter “as well as current prevailing freight rates”.
Best annual result since 2008
Overall, however, 2020’s result ends up being the strongest since 2008, says Frontline.
The tanker carrier particularly benefited from a strong first half-year, not least due to the oil price war between Saudi Arabia and Russia.
The year ended with a total net profit of USD 412.9 million, according to the annual report. This result is a significant improvement compared to 2019, in which Frontline booked a USD 140.1 million deficit.
Barstad recently took over as interim CEO from Robert Hvide Macleod, who announced his departure last year.
Frontline is registered in Bermuda but listed in New York and has strong roots in Norway. At the end of the year, the fleet covered 68 tankers.
English Edit. Ida Jacobsen
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