Frontline Ltd. (FRO) has reported 65.76 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $27.02 million, or $0.16 a share in the quarter, compared with $78.91 million, or $0.50 a share for the same period last year. Revenue during the quarter dropped 22.01 percent to $177.13 million from $227.10 million in the previous year period. Total expenses were 76.97 percent of quarterly revenues, up from 54.75 percent for the same period last year. That has resulted in a contraction of 2223 basis points in operating margin to 23.03 percent.
Operating income for the quarter was $40.78 million, compared with $102.77 million in the previous year period.
Robert Hvide Macleod, chief executive officer of Frontline Management AS commented: "Notwithstanding near-term pressure on crude tanker rates, we believe the market will ultimately return to balance as demand for crude oil continues to increase and vessel scrapping will begin to offset the negative effect of newbuilding deliveries. The recent market weakness and other factors have contributed to a historically low asset price environment that has presented us with opportunities to acquire modern tonnage at attractive prices."
Operating cash flow drops significantly
Frontline Ltd. has generated cash of $79.78 million from operating activities during the quarter, down 34.32 percent or $ 41.68 million, when compared with the last year period. The company has spent $283.32 million cash to meet investing activities during the quarter as against cash outgo of $159.40 million in the last year period.
Cash flow from financing activities was $128.67 million for the quarter, up 185.69 percent or $83.63 million, when compared with the last year period.
Cash and cash equivalents stood at $127.53 million as on Mar. 31, 2017, down 53.05 percent or $144.10 million from $271.63 million on Mar. 31, 2016.
Debt moves up
Frontline Ltd. has witnessed an increase in total debt over the last one year. It stood at $1,537.81 million as on Mar. 31, 2017, up 8.49 percent or $120.32 million from $1,417.48 million on Mar. 31, 2016. Interest coverage ratio deteriorated to 2.71 for the quarter from 7.37 for the same period last year.
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