Frontline Ltd. : FRO - Preliminary Fourth Quarter and Financial Year 2012 Results

  Frontline Ltd. : FRO - Preliminary Fourth Quarter and Financial Year 2012
                                   Results

Highlights

  *Frontline reports a net loss attributable to the Company of $16.6  million 
    for the fourth quarter of 2012, equivalent to a loss per share of $0.21.

  *Frontline reports a net loss attributable to the Company of $82.8  million 
    for the year ended December  31, 2012, equivalent to  a loss per share  of 
    $1.06.

  *Frontline records a vessel impairment loss of $18.9 million in the  fourth 
    quarter.

  *Frontline will not pay a dividend for the fourth quarter of 2012.

  *Frontline terminated the long  term charter parties  for the OBO  carriers 
    Front  Climber   and  Front   Driver  in   October  and   November   2012, 
    respectively.

  *Frontline terminated  the charter  parties for  the two  singe hull  VLCCs 
    Ticen Ocean  and  Titan  Aries  in November  2012  and  in  January  2013, 
    respectively, and recognized a gain of $11.2 million in the fourth quarter
    and expects to recognize a gain of approximately $7.5 million in the first
    quarter of 2013, respectively.

  *Frontline re-delivered the chartered-in VLCC  Gulf Eyadah to its owner  in 
    December 2012.

  *In December 2012,  Frontline agreed to  an early termination  of the  time 
    charter out contracts  on the  two OBO  carriers, Front  Viewer and  Front 
    Guider, and  received  compensation for  loss  of hire  of  $35.0  million 
    (gross). Frontline also agreed to terminate the long term charter  parties 
    for these vessels and paid $23.5  million to Ship Finance as  compensation 
    for the early termination of the charters. 

  *In February  2013, Frontline  agreed to  terminate the  long term  charter 
    party for the Suezmax tanker Front Pride 

Preliminary Fourth Quarter and Full Year 2012 Results

The Board of  Frontline Ltd. (the  "Company" or "Frontline")  announces a  net 
loss attributable to the  Company of $16.6 million  for the fourth quarter  of 
2012, equivalent  to a  loss per  share of  $0.21, compared  with a  net  loss 
attributable to the Company of $49.0 million and a loss per share of $0.63 for
the preceding quarter. The net loss attributable to the Company in the  fourth 
quarter includes a loss on sale  of assets and amortization of deferred  gains 
of $2.6 million,  which includes an  aggregate deferred gain  of $3.7  million 
relating to the sale  and leasebacks of  DHT Eagle (ex  Front Eagle) and  Gulf 
Eyadah (ex Front Shanghai), a gain of $11.2 million on the termination of  the 
lease for the single  hull VLCC Ticen  Ocean, a loss of  $16.5 million on  the 
termination of the lease for Front Viewer and losses of $0.8 million and  $0.2 
million on the termination of the  leases for Front Driver and Front  Climber, 
respectively.

The Company has  recorded a  vessel impairment loss  of $18.9  million in  the 
fourth quarter. This loss comprises $14.2 million, which is the expected  loss 
on the termination of the long term  charter for the OBO carrier Front  Guider 
in March 2013 and $4.7 million, which is the expected loss on the  termination 
of the long term charter for the  Suezmax tanker Front Pride in late  February 
2013. Impairment  losses are  taken when  events or  changes in  circumstances 
occur that  cause  the  Company to  believe  that  future cash  flows  for  an 
individual vessel  will  be  less  than  its  carrying  value  and  not  fully 
recoverable. In  such instances  an  impairment charge  is recognized  if  the 
estimate of the undiscounted cash flows expected to result from the use of the
vessel and its eventual disposition is less than the vessel's carrying amount.

The net loss  attributable to  the Company in  the fourth  quarter includes  a 
compensation for loss of  hire of $35.0 million  (gross) resulting from  early 
termination from the charterers of the  time charter out contracts on the  two 
OBO carriers,  Front Viewer  and  Front Guider.  The  amount was  recorded  in 
operating revenues. This amount together with the loss of $16.5 million on the
termination of the  lease for Front  Viewer and the  $14.2 million  impairment 
loss on Front Guider resulted in a net gain of approximately $4.3 million from
this transaction.

The net loss attributable to the  Company in the preceding quarter includes  a 
gain on sale  of assets and  amortization of deferred  gains of $3.3  million, 
which includes an aggregate deferred gain of $3.8 million relating to the sale
and leasebacks of DHT Eagle and Gulf Eyadah.

The average daily  time charter equivalents  ("TCEs") earned in  the spot  and 
period market in the  fourth quarter by the  Company's VLCCs, Suezmax  tankers 
and Suezmax  OBO carriers  were $19,300,  $14,000 and  $35,100,  respectively, 
compared with $12,300,  $10,500 and  $33,700, respectively,  in the  preceding 
quarter. The spot  earnings for the  Company's double hull  VLCCs and  Suezmax 
vessels were  $18,500 and  $14,000, respectively,  compared with  $13,300  and 
$10,500, respectively, in the preceding quarter

The contingent rental expense relates to the amended charter parties with Ship
Finance International Limited ("Ship Finance") and the amended charter parties
for four  other leased  vessels and  is based  on the  difference between  the 
renegotiated rates and  the actual TCE  revenues up to  the original  contract 
rates.

Ship operating expenses decreased by $7.4 million compared with the  preceding 
quarter due to a decrease in running costs and a decrease in dry docking costs
of $4.8 million.

Charter hire expenses decreased  by $2.5 million  compared with the  preceding 
quarter primarily as a result of the redelivery of vessels.

Interest expense, net of capitalized interest, was $23.1 million in the fourth
quarter of which $5.5 million relates to the Company's subsidiary  Independent 
Tankers Corporation Limited ("ITCL").

Frontline announces a net  loss attributable to the  Company of $82.8  million 
for the year ended December 31, 2012, equivalent to a loss per share of $1.06.
The average daily TCEs earned in the spot and period market in the year  ended 
December 31, 2012  by the  Company's VLCCs,  Suezmax tankers  and Suezmax  OBO 
carriers were  $22,200,  $15,200,  and $33,600,  respectively,  compared  with 
$22,800, $14,100 and  $36,700, respectively,  in the year  ended December  31, 
2011. The  spot earnings  for  the Company's  double  hull VLCCs  and  Suezmax 
vessels were $22,400 and $15,200, respectively, in the year ended December 31,
2012.

As of December 31, 2012,  the Company had total  cash and cash equivalents  of 
$137.6 million and restricted cash of $87.5 million. Restricted cash  includes 
$86.3 million relating to deposits in ITCL.

The Company estimates  average cash  cost breakeven rates  for 2013  on a  TCE 
basis for its VLCCs and Suezmax tankers of approximately $24,200 and  $18,800, 
respectively.

Fleet Development

In August 2012, the Company announced that it had agreed with Ship Finance  to 
terminate the long term  charter party for the  OBO carrier Front Climber  and 
that Ship Finance had  simultaneously sold the vessel.  The charter party  was 
terminated on October  15, 2012. The  Company made a  compensation payment  to 
Ship Finance of  $0.6 million for  the early termination  of the charter.  The 
Company recorded an impairment loss of $4.2 million in the second quarter  and 
a loss of $0.2 million  in gain (loss) of sale  of assets and amortization  of 
deferred gains in the fourth quarter.

In September 2012, the  Company agreed with Nordic  American Tankers Ltd  that 
Frontline's nine Suezmax  vessels would leave  the Orion Suezmax  pool due  to 
Frontline's wish to be more flexible in  the operation of its vessels. All  of 
the Company's Suezmax vessels left the pool during the fourth quarter.

In October 2012, the Company announced that it had agreed with Ship Finance to
terminate the long  term charter party  for the OBO  carrier Front Driver  and 
that Ship Finance had  simultaneously sold the vessel.  The charter party  was 
terminated November 20, 2012. The Company made a compensation payment to  Ship 
Finance of $0.5 million for the early termination of the charter. The  Company 
recorded an impairment loss of $4.0 million  in the second quarter and a  loss 
of $0.8 million in gain (loss) of sale of assets and amortization of  deferred 
gains in the fourth quarter.

In October 2012 the Company terminated the bareboat charters on the two single
hull VLCCs Ticen Ocean and Titan Aries  and the vessels were delivered to  the 
buyers (as announced in  September, 2011) in November  2012 and January  2013, 
respectively.

The Company re-delivered  the chartered-in VLCC  Gulf Eyadah to  its owner  in 
December 2012.

In December  2012, the  Company agreed  to an  early termination  of the  time 
charter out contracts on the two OBO carriers, Front Viewer and Front  Guider, 
and received a compensation payment in  December 2012 from the charterers  for 
loss of hire due to  the early termination of  $35.0 million. This amount  was 
recorded in operating revenues. The Company  also agreed with Ship Finance  to 
terminate the  long term  charter  parties for  these  two OBO  carriers.  The 
charter party for  Front Viewer terminated  in December 2012  and the  charter 
party for the Front Guider  is expected to terminate  in March 2013 after  its 
present voyage. The Company paid $23.5 million to Ship Finance as compensation
for the early termination of the charters and the estimated loss of contingent
rentals relating  to  the  two  vessels. As  previously  advised  the  Company 
recorded in the  fourth quarter  loss on termination  of the  lease for  Front 
Viewer of $16.5 million and a vessel  impairment loss of $14.2 million on  the 
expected loss on termination of the lease on Front Guider in March 2013.

In February 2013,  Frontline agreed with  Ship Finance to  terminate the  long 
term charter party  for the Suezmax  tanker Front Pride  and Ship Finance  has 
simultaneously sold the vessel. The charter party was terminated February  15, 
2013.  Frontline  will  make  a  compensation  payment  to  Ship  Finance   of 
approximately $2.1  million for  the  early termination  of the  charter.  The 
transaction will  reduce the  Company's obligations  under capital  leases  by 
approximately $5.1 million and the Company has recorded an impairment loss  of 
$4.7 million in the fourth quarter.

Newbuilding Program

As of  December 31,  2012,  the Company's  newbuilding program  comprised  two 
Suezmax  tankers,  and   the  Company  was   committed  to  make   newbuilding 
installments of $87.9 million with expected payment in 2013.

Corporate

In January  2013, the  Company was  allocated 1,142,857  shares in  a  private 
placement by  Frontline 2012  Ltd.  of 59  million  new ordinary  sharesat  a 
subscription price of $5.25  per share. Following  the private placement,  the 
Company' has an ownership of 6.3% in Frontline 2012 Ltd..

In February 2013, the  Security and Exchange  Commission ("the SEC")  declared 
the Company's Form F-3 Registration Statement effective.

The Board of Directors has  decided not to declare  a dividend for the  fourth 
quarter of 2012.

77,858,502 ordinary shares were outstanding as  of December 31, 2012, and  the 
weighted average number of shares outstanding for the quarter was 77,858,502.

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 2012 was WS 42.8, representing
an increase of approximately WS 7 point  from the third quarter of 2012 and  a 
decrease of  approximately WS  15  points from  the  fourth quarter  of  2011. 
Present market indications are zero per day in the first quarter of 2013.

The market rate for a Suezmax trading on a standard 'TD5' voyage between  West 
Africa  and  Philadelphia  in  the  fourth  quarter  of  2012  was  WS   60.5, 
representing an increase of one WS point from the third quarter of 2012 and  a 
decrease of  WS 9  points from  the  fourth quarter  of 2011.  Current  market 
forward rates are approximately $10,750 per day in the first quarter of 2013.

Bunkers at Fujairah averaged $615/mt in the fourth quarter of 2012 compared to
$650/mt in the third quarter  of 2012. Bunker prices  varied between a low  of 
$593/mt on November 5th and a high of $655/mt on October 1st.

The International Energy Agency's ("IEA") February 2013 report stated an  OPEC 
oil production, including Iraq, of 30.9 million barrels per day (mb/d) in  the 
fourth quarter of 2012. This was a decrease of 0.5 mb/d compared to the  third 
quarter of  2012,  due to  lower  Saudi  Arabian production  in  November  and 
December.

The IEA  estimates that  world oil  demand averaged  91.0 mb/d  in the  fourth 
quarter of 2012, which is an increase of 0.8 mb/d compared to previous quarter
and the IEA estimates that world  oil demand averaged approximately 89.8  mb/d 
in 2012, representing an increase of 1.1  percent or 1.0 mb/d from 2011.  2013 
demand is expected to be 90.7 mb/d. 

The VLCC fleet totalled 622 vessels at the end of the fourth quarter of  2012, 
up from  617  vessels at  the  end of  the  previous quarter.  11  VLCCs  were 
delivered during the  quarter, six  were removed.  The order  book counted  81 
vessels at  the end  of  the fourth  quarter, down  from  91 orders  from  the 
previous quarter. The current order  book represents approximately 13  percent 
of the  VLCC fleet.  According to  Fearnley's,  the single  hull fleet  is  17 
vessels, five less than last quarter.

The Suezmax fleet counts 468 vessels at the end of the fourth quarter, up from
462 vessels at  the end  of the previous  quarter. 14  vessels were  delivered 
during the  quarter whilst  eight  were removed.  The  order book  counted  72 
vessels at the end of the fourth  quarter, which represents 15 percent of  the 
total fleet. According to Fearnley's, the  single hull fleet has been  reduced 
from nine to five vessels.

Strategy and Outlook

The tanker market  has shown a  strong negative development  in the last  four 
years. Currently crude tankers are going through one of the worst winters ever
with VLCC  rates close  to zero,  limited  number of  fixtures and  very  high 
availability  of   VLCC  tonnage.   Several  tanker   companies  are   already 
experiencing severe problems and if the weak market continues it is likely  to 
lead  to  significant  financial  problems  for  the  whole  tanker  industry. 
Consensus is that  the tanker  market will not  experience sustained  recovery 
until overcapacity is removed.

The Company's free cash  position was during the  quarter reduced from  $164.5 
million to $137.6  million. The  cash position  is anticipated  to be  further 
reduced after payment of $52.2 million cash sweep in March 2013 related to the
amended charter parties with Ship Finance.

Frontline will, in this  market environment, continue  its strategy to  reduce 
the fleet by redelivering the  older and non core  vessels in order to  reduce 
the Company's financial exposure. The  Company will remain cautious and  focus 
its resources on the present activities  until a clearer sign of recovery  can 
be seen in the tanker market.

If the tanker market does not recover before 2015 and no additional equity can
be raised  or  assets sold  there  is a  risk  that Frontline  will  not  have 
sufficient cash to repay  the existing $225 million  convertible bond loan  at 
maturity in April 2015.  Such a situation might  force a restructuring of  the 
Company,  including  modifications  of  charter  lease  obligations  and  debt 
agreements.

Based on results achieved so far in the first quarter, the current outlook and
the early  termination  of the  time  charter out  contracts  on the  two  OBO 
carriers, Front  Guider and  Front  Viewer, the  Board expects  the  operating 
result in the first quarter to be weaker than in the fourth quarter.

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

The Board of Directors
Frontline Ltd.
Hamilton, Bermuda
February 21, 2013

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

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.

This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
4th Quarter 2012 Results

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Source: Frontline Ltd. via Thomson Reuters ONE
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