Rune Rudberg

The Short Case On Frontline

Patrick, if you decide to sit short over a dividend is a zero sum game, since a stock price will decline with the same amount as the dividend when going ex. div.....

Another common misunderstanding is that Frontlines fleets break even rates are among the lowest in the business and that the companies fleet is among the most modern.

Firstly, the companys VLCCs currently have a break even rate at almost 30000 usd/day and further more a profit split agreement, which entitles Ship Finance to 20% of every usd frontline earns above the break even rates...

Frontlines fleet is also getting old, in fact among the older in the industry, which tells us that we should expect that most of the ships would spend more time dry docked as they did i Q3...

Finaly the current rates, in a quarter which was expected to be strong, are getting pretty close to break even rates, at least on the AG- EAST route. The rates are also expected to decline further before they MIGHT strengthen in January. The list of available tonnage tells us that almost 80 VLCCs are expected to reach the AG the next 30 days and everything over 60 VLCCs tells us that the rates should decline further...