Frontline Ltd. — First Quarter 2006 Results


HAMILTON, Bermuda, May 26, 2006 (PRIMEZONE) —


-- Frontline reports net income of $219.1 million and earnings 
   per share of $2.93 for the first quarter of 2006.

-- Frontline announces a cash dividend of $1.50 per share.

First Quarter Results

The Board of Frontline Ltd. (the “Company” or “Frontline”) announces net income of $219.1 million for the first quarter of 2006, equivalent to earnings per share of $2.93. Operating income for the quarter was $275.6 million compared to $236.9 million in the fourth quarter of 2005. This reflects the strengthening of the market during the quarter. The average daily time charter equivalents (“TCEs”) earned in the spot and period market by the Company’s VLCCs, Suezmax tankers and Suezmax OBO carriers were $73,000, $49,700 and $31,700 respectively compared with $65,800, $44,100 and $32,900 respectively in the fourth quarter of 2005.

In the first quarter of 2006, the Company reported a gain from sale of assets of $12.1 million. The gain arises from the sale of Golden Stream in the amount of $11.0 million and as a result of a release of $1.1 million of the $1.8 million loss on impairment that was accrued in the fourth quarter of 2005 on the sale of Navix Astral, which was delivered to its new owner in January 2006.

Interest income was $10.7 million in the quarter, of which, $6.0 million relates to restricted deposits held by subsidiaries reported in Independent Tankers Corporation (“ITC”). The Company recorded interest expense of $52.6 million in the quarter of which $15.4 million relates to ITC.

Other financial items in the first quarter was a gain of $15.0 million compared to a gain of $6.8 million in the fourth quarter of 2005. A continued increase in the forward curve for LIBOR rates in the quarter has resulted in valuation gains of $5.2 million compared to valuation gains of $3.1 million in the fourth quarter of 2005. As at March 31, 2006, the Company had interest rate swaps with a total notional principal of $535.7 million all of which relates to Ship Finance International Limited (“Ship Finance”). Ship Finance also entered into a number of swaps which subsequently were terminated during the quarter at a total gain of $3.6 million. The valuation of freight future agreements to market value has resulted in a gain of $0.3 million compared to a gain of $0.6 million in the fourth quarter. Dividends received from marketable securities totalled $7.7 million in the first quarter with no corresponding balance in the fourth quarter.

As at March 31, 2006, the Company had total cash and cash equivalents of $792.1 million which includes $604.0 million of restricted cash. Restricted cash includes $315.0 million relating to deposits in ITC and $274.5 million in Frontline Shipping Limited and Frontline Shipping II Limited. As of May 2006, the Company has cash breakeven rates on a TCE basis for VLCCs and Suezmaxes of $28,508 and $21,295 respectively.

The results for the first quarter of 2005 have been restated to reflect the sale of a vessel later in 2005 that was accounted for as discontinued operations.

The Company continues to consolidate Ship Finance International Limited this quarter in accordance with FIN 46.

The full report is available in the below attachment:

 May 26, 2006
 The Board of Directors
 Frontline Ltd.
 Hamilton, Bermuda
CONTACT:  Frontline Ltd.
          Tor Olav Troeim, Director
          +44 7734 976 575

          Frontline Management AS
          Oscar Spieler, Chief Executive Officer
            +47 23 11 40 79
          Inger M. Klemp, Chief Financial Officer
            +47 23 11 40 76