Reporting its half-yearly results for 2018, Frontline Management said an ownership stake in a scrubber manufacturer put the company in a good position ahead of IMO’s 2020 regulations on sulphur in fuels.
Frontline CEO Robert Hvide Macleod said a 20% acquisition of Feen Marine Scrubbers shares gave his company the ability to source a large volume of the exhaust gas cleaning systems (EGCSs) at a good price.
“We are pleased that we have been able to secure ownership in a scrubber producer and capacity to buy a large volume of scrubbers at a very competitive price,” he said, noting Frontline would look for further investment opportunities.
In spite of net losses in the vicinity of US$23M for the second quarter of 2018, a loss of US$13.6M in the first quarter and a ‘weak rate environment’, Mr Macleod said the Norwegian company was ‘optimistic’ about a recovery in tanker rates.
Mr Macleod said he saw ‘cyclical changes underway’ that included scrapping levels offsetting newbuilding deliveries in the run up to 2020 as well as trade growth from increased US exports and OPEC production of crude oil.
“Additionally, crude oil demand remains strong, and the end of the inventory draw cycle seems increasingly inevitable. We are actively positioning for IMO 2020,” he said.
Frontline reported that as of June 30, its newbuilding program comprised two VLCCs. As of 30 June, 2018, the company’s fleet consisted of 63 vessels, with an aggregate capacity of approximately 12.3 million DWT. Frontline owns 46 of its vessels including 12 VLCCs, 16 Suezmax tankers and 18 LR2/Aframax tankers.