Bermuda-based Frontline Ltd, the oil tanker shipping company, has reported a net loss of $26.6 million, or 13 cents per basic and diluted share for the second quarter of 2021.

The company reported an adjusted net loss of $23.2 million, or 12 cents per basic and diluted share for the quarter.

Frontline reported total operating revenues of $170 million for the quarter.

It said spot time charter equivalents for very large crude carriers, Suezmax tankers and LR2 tankers in the second quarter were $15,000, $11,000 and $10,600 per day, respectively.

For the third quarter, the company estimates spot TCE on a load-to discharge basis of $14,000 contracted for 70 per cent of vessel days for VLCCs, $9,800 contracted for 64 per cent of vessel days for Suezmax tankers and $11,800 contracted for 63 per cent of vessel days for LR2 tankers.

Frontline said it expects spot TCEs for the full third quarter to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the third quarter as well as current freight rates.

The company said it entered into an agreement in May for the acquisition through resale of six scrubber fitted, latest generation ECO-type VLCC newbuilding contracts currently under construction at the Hyundai Heavy Industries shipyard in South Korea. The vessels are scheduled to deliver during 2022 starting in the first quarter.

Frontline agreed in June to acquire two scrubber fitted, latest generation ECO-type VLCCs built in 2019 at the HHI shipyard. The vessels are scheduled to deliver during the fourth quarter this year.

The company obtained financing commitments for three senior secured term loan facilities this month in a total amount of up to $247 million to partially finance the acquisition of the two VLCCs built in 2019 and two of the six VLCC newbuilding contracts, which are subject to final documentation.

Lars H Barstad, chief executive officer of Frontline Management AS, said: “The tanker markets remained challenging throughout the second quarter of 2021, even though most energy related commodities and shipping markets saw a firm upswing in demand and prices.

“Soft tanker markets did catch up with Frontline this quarter, but with our modern fleet, cost-efficient and agile operating model we continued to yield returns above key benchmarks.

“Oil demand is recovering firmly in the US and Europe, and with relatively high vaccination rates, the spread of the Delta variant has had a limited impact on oil demand recovery in these regions. In Asia however the pace of the recovery is more clouded as countries again move in to lockdowns.

“The fundamentals of the tanker market continue to be encouraging, and even more pronounced now as order books are being filled with vessels catering for trades other than oil and refined products.

“Looking at key market indices for tankers, and the fleet average age and composition, we believe that we are now in a situation where a significant portion of the fleet is experiencing negative freight rates. This is not sustainable.

“Frontline has faced markets like these before, and we continue to position ourselves towards what we believe will be a firm recovery as global markets continue to regain lost ground.”

Inger M Klemp, chief financial officer of Frontline Management AS, added: “We are very pleased to have secured financing commitments in a total amount of up to $247 million on highly attractive terms to partially finance four of our newly acquired VLCCs.

“Through this financing we extend our bank group, reduce our borrowing cost and industry leading cash break even rates and maximise potential cashflow per share after debt service costs.”