Frontline Plc — Earnings Release 2013

Feb 27, 2014

FRO - Fourth Quarter and Full Year 2013 Results

FRO - Fourth Quarter and Full Year 2013 Results

Highlights

* Frontline reports a net loss attributable to the Company of $13.0 million

for the fourth quarter of 2013, equivalent to a loss per share of $0.15.

* Frontline reports a net loss attributable to the Company of $188.5 million

for the year ended December 31, 2013, equivalent to a loss per share of

$2.36.

* Frontline reports a net loss, excluding impairment loss on vessels,

attributable to the Company of $84.8 million for the year ended December

31, 2013, equivalent to a loss per share of $1.06.

* Frontline will not pay a dividend for the fourth quarter of 2013.

* Frontline issued 1,193,300 new shares in the fourth quarter further to the

ATM offering launched in June 2013.

* In January 2014, Frontline increased the amount that may be raised from the

ATM from up to $40.0 million to up to $100.0 million. Frontline issued

8,829,063 new shares under the ATM during January 2014.

Fourth Quarter and Full Year 2013 Results

The Board of Frontline Ltd. (the "Company" or "Frontline") announces a net loss

attributable to the Company of $13.0 million in the fourth quarter, equivalent

to a loss per share of $0.15, compared with a net loss of $36.4 million in the

preceding quarter, equivalent to a loss per share of $0.46. The net loss

attributable to the Company in the fourth quarter includes a net gain of $13.8

million, which was recognized on the lease terminations of the VLCCs Front

Champion and Golden Victory and a loss of $12.7 million, which was recognized on

the conversion of $25.0 million of the Company's convertible bonds into cash and

shares.

Following the termination of the lease on the Company's final OBO carrier, Front

Guider, in the first quarter of 2013 the results of the OBO carriers have been

recorded as discontinued operations in accordance with U.S. generally accepted

accounting principles.

The average daily time charter equivalents ("TCEs") earned in the spot and

period market in the fourth quarter by the Company's VLCCs and Suezmax tankers

were $22,400 and $12,900, respectively, compared with $16,100 and $12,400,

respectively, in the preceding quarter. The spot earnings for the Company's

double hull VLCCs and Suezmax vessels were $21,600 and $12,900, respectively,

compared with $13,900 and $12,400, respectively, in the preceding quarter.

Contingent rental expense in the fourth quarter relates to the amended charter

parties for four vessels leased from German KGs vessels. Contingent rental

income in the third quarter is primarily due to the release of an accrual, which

was not required at September 30.

Ship operating expenses decreased by $3.8 million compared with the preceding

quarter due to a $1.5 million decrease in dry docking costs and a decrease in

running expenses following lease terminations/vessel redeliveries.

Following the redelivery of the chartered-in VLCC DHT Eagle on May 8, 2013, the

Company no longer has any vessels chartered-in under operating leases.

Interest expense, net of capitalized interest, was $22.4 million in the fourth

quarter of which $6.2 million relates to the Company's subsidiary Independent

Tankers Corporation Limited ("ITCL").

Frontline announces a net loss attributable to the Company of $188.5 million for

the year ended December 31, 2013, equivalent to a loss per share of $2.36. The

average daily TCEs earned in the spot and period market in the year ended

December 31, 2013 by the Company's VLCCs and Suezmax tankers were $17,400 and

$13,400, respectively, compared with $22,200 and $15,200, respectively, in the

year ended December 31, 2012. The spot earnings for the Company's double hull

VLCCs and Suezmax vessels were $15,400 and $13,400, respectively, in the year

ended December 31, 2013 compared with $22,400 and $15,200, respectively, in the

year ended December 31, 2012.

As of December 31, 2013, the Company had total cash and cash equivalents of

$53.8 million and restricted cash of $68.4 million. Restricted cash includes

$66.2 million relating to deposits in ITCL.

The Company estimates average total cash cost breakeven rates for the remainder

of 2014 on a TCE basis for VLCCs and Suezmax tankers of approximately $23,100

and $18,100 respectively.

Fleet Development

In October 2013, we agreed with Ship Finance International Limited ("Ship

Finance") to terminate the long term charter parties for the 1998 and 1999 built

VLCCs Front Champion and Golden Victory, and Ship Finance simultaneously sold

the vessels to unrelated third parties. The charter parties were terminated in

November 2013 upon the redelivery of the vessels to Ship Finance. We have agreed

to a compensation payment to Ship Finance of $89.9 million for the early

termination of the charter parties, of which $10.9 million was paid upon

termination and the balance was recorded as notes payable, with similar

amortization profiles to the current lease obligations, with reduced rates until

2015 and full rates from 2016. Front Champion and Golden Victory had the highest

charter rates among the vessels Frontline has chartered in from Ship Finance and

the level of compensation is a reflection of this.

Newbuilding Program

As of December 31, 2013 the Company was committed to make newbuilding

installments of $87.9 million with expected payment in 2014.

Corporate

In October 2013, the Company entered into a private agreement to exchange $25.0

million of the outstanding principal amount of its 4.50% Convertible Bond Issue

2010/2015 (the "Convertible Bonds"), for an aggregate of 6,474,827 ordinary

shares and a cash payment of $2.25 million. As of December 31, 2013, $190.0

million of the Convertible Bonds were outstanding.

86,511,713 ordinary shares were outstanding as of December 31, 2013, and the

weighted average number of shares outstanding for the quarter was 84,389,254.

Frontline issued 8,829,063 new shares under the ATM during January

2014. 95,340,776 ordinary shares were outstanding as of February 26, 2014.

The Market

The market rate for a VLCC trading on a standard 'TD3' voyage between the

Arabian Gulf and Japan in the fourth quarter of 2013 was WS 53, representing an

increase of WS 17 point from the third quarter of 2013 and WS10 above the fourth

quarter of 2012. The flat rate increased by 9.1 percent from 2012 to 2013.

The market rate for a Suezmax trading on a standard 'TD5' voyage between West

Africa and Philadelphia in the fourth quarter of 2013 was WS 66, representing an

increase of WS 10 points from the third quarter of 2013 and an increase of WS 5

points from the fourth quarter of 2012. The flat rate increased by 9.3 percent

from 2012 to 2013.

Bunkers at Fujairah averaged $615/mt in the fourth quarter of 2013 compared to

$660/mt in the third quarter of 2013. Bunker prices varied between a high of

$629/mt on November 1(st) and a low of $604.5/mt on October 2(nd).

The International Energy Agency's ("IEA") February 2014 report stated an OPEC

crude production, including Iraq, of 29.8 million barrels per day (mb/d) in the

fourth of 2013. This was a decrease of 0.8 mb/d compared to the third quarter of

2013 due to Libyan production collapsing and Iraq not able to sustain the record

levels seen earlier in the year.

The IEA estimates that world oil demand averaged 92.2 mb/d in the fourth quarter

of 2013, which is an increase of 0.2 mb/d compared to the previous quarter. IEA

estimates that world oil demand in 2014 will be 92.6 mb/d, representing an

increase of 1.4 percent or 1.3 mb/d from 2013.

The VLCC fleet totalled 623 vessels at the end of the fourth quarter of 2013,

unchanged from the previous quarter. Seven VLCCs were delivered during the

quarter, seven were removed. The order book increased by 26 vessels and counted

82 vessels at the end of the fourth quarter which represents 13 percent of the

VLCC fleet. According to Fearnleys, the single hull fleet stands unchanged at

one vessel.

The Suezmax fleet totaled 446 vessels at the end of the fourth quarter, down

from 447 vessels at the end of the previous quarter. One vessel was delivered

during the third quarter whilst two were removed. The order book counted 40

vessels at the end of the fourth quarter which represents approximately nine

percent of the Suezmax fleet. According to Fearnley's, the single hull fleet is

down to three vessels, two less than the previous quarter.

Strategy and Outlook

The recent increase in rates which began in the second half of last year is a

sign of an improved balance in the tanker market and the Company expects that

the supply/demand balance will improve further. However this is a fine balance

which can easily be changed by increased fleet supply caused by increased

ballast speed, decrease in vessel scrapping and aggressive newbuilding ordering.

As of December 31, 2013 Frontline had total debt and lease obligations,

excluding non-recourse debt in ITCL of $1,058 million comprised of $727 million

in capital lease obligations to Ship Finance, $78 million in notes payable to

Ship Finance, $63 million in capital lease obligations to German KGs and $190

million in convertible bond loan. A full repayment of this debt is, to a large

extent, dependent on a sustained improvement in tanker rates in the years to

come.

The balance sheet has been strengthened from the raising of $40 million in new

equity in January 2014 and the outlook has improved for the tanker market. This

improves the financial position of the Company and creates opportunities going

forward. The recent positive development in the tanker market is likely to give

a better operating result (excluding one time gains and losses) in the first

quarter.

Forward Looking Statements

This press release contains forward looking statements. These statements are

based upon various assumptions, many of which are based, in turn, upon further

assumptions, including Frontline management's examination of historical

operating trends. Although Frontline believes that these assumptions were

reasonable when made, because assumptions are inherently subject to significant

uncertainties and contingencies which are difficult or impossible to predict and

are beyond its control, Frontline cannot give assurance that it will achieve or

accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actual results to

differ materially from those discussed in this press release include the

strength of world economies and currencies, general market conditions including

fluctuations in charter hire rates and vessel values, changes in demand in the

tanker market as a result of changes in OPEC's petroleum production levels and

world wide oil consumption and storage, changes in the Company's operating

expenses including bunker prices, dry-docking and insurance costs, changes in

governmental rules and regulations or actions taken by regulatory authorities,

potential liability from pending or future litigation, general domestic and

international political conditions, potential disruption of shipping routes due

to accidents or political events, and other important factors described from

time to time in the reports filed by the Company with the United States

Securities and Exchange Commission.

The full report is available for download in the link enclosed.

The Board of Directors

Frontline Ltd.

Hamilton, Bermuda

February 26, 2014

Questions should be directed to:

Jens Martin Jensen: Chief Executive Officer, Frontline Management AS

+47 23 11 40 99

Inger M. Klemp: Chief Financial Officer, Frontline Management AS

+47 23 11 40 76

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1765100]