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May 9, 2001

Strong tanker market boosts Frontline earnings
Frontline reports net income of $161.7 million for the first quarter of 2001, compared with net income of $1.0 million for the first quarter of 2000. The result reflects the strong tanker market that continued from the latter half of 2000 into the early part of 2001, combined with a full quarter's contribution from the inclusion of the Golden Ocean fleet.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter, including earnings from associated companies were $196.6 million (2000 quarter: $41.1 million). The average daily time charter equivalents (TCE) earned by the compan's VLCCs, Suezmax tankers, and Suezmax OBO carriers trading in the spot market were $62,100, $43,000 and $39,400, respectively.

Net interest expense for the quarter was $22.2 million (2000 quarter: $20.0 million), as a result of higher debt balances due to the increased fleet, offset by lower average interest rates and higher cash balances.

The company recorded an unrealized foreign currency exchange gain of $22.3 million relating to the revaluation of Yen debt in certain Golden Ocean subsidiaries. Frontline changed accounting treatment for interest hedging instruments as from year 2001. This implies that the interest rate swaps are marked to market at balance sheet date. For the quarter this lead to a loss of $4.7 million booked under other financial items.


THE MARKET

After a very strong finish to the year 2000, tanker rates slowed down somewhat in the first quarter of 2001 as a result of seasonally lower demand and OPEC's production cut in February. In spite of the decline in activity tanker rates stayed healthy through the quarter as the overall supply of tankers and demand for crude oil transportation remained in balance. Frontline says there is a trend towards higher quality awareness among users of tanker tonnage that continues to favor owners of modern tonnage.

In spite of the strong market a total of 5 VLCCs and 7 Suezmaxes were removed from trading in the quarter either through scrapping or as they were converted for offshore purposes. 6 VLCCs and 5 Suezmaxes were delivered from shipyards in the period.

Prices for second-hand vessels have been stable so far this year, while the price level for newbuildings has strengthened as a function of a tight yard situation.

CORPORATE AND OTHER MATTERS

In February 2001, Frontline entered into five newbuilding contracts. Two Suezmaxes were ordered with the Sasebo Shipyard in Japan for delivery in August and October 2001, and three VLCCs were ordered with Hitachi for delivery in April, August and October 2002. The total newbuilding project will have a cost of approximately $330 million.

In March 2001, Frontline entered into Memoranda of Agreement to sell the two 1993-built VLCCs, Front Tartar and Front Tarim, at an agreed total sales price of $104 million. The Front Tartar was delivered to the purchaser on April 24, 2001 and the Front Tarim on April 26, 2001. The company considers these sales as an important part of its fleet renewal strategy.

In the first quarter of 2001 the company bought back and cancelled 1,387,300 of its own shares. The average price paid for the shares was $13.15. .

On April 23, 2001 the Company announced that it was making an offer for the outstanding shares of the Oslo listed Mosvold Shipping Ltd. ("Mosvold') and on April 27, 2001, Frontline submitted the formal offer document to the Oslo Stock Exchange. The offer expires May 11, and has certain restrictions attached. Mosvold has two 1974-built VLCCs and three VLCC newbuilding contracts with deliveries scheduled for November 2001, August 2002 and July 2003. The offer price values Mosvold at approximately $46 million. At May 8, 2001 Frontline held 20.5% of the shares in Mosvold.

Frontline's wholly owned subsidiary, Golden Ocean, agreed in May to a settlement with certain parties, in order to formally take over 5 VLCCs for which Golden Ocean had purchase options. Two of these vessels are employed through a market related bare boat charter arrangement with Shell. One vessel is fixed to Arcadia for another 14 months at a TCE of $40,000 per day. The two last vessels are trading spot. Frontline controls several debt instruments related to these vessels. These instruments will likely be converted to equity, and will together with bank refinancing of the vessels make up most of the financing needed to acquire the vessels. The total cost for the 5 vessels excluding any allocation for the overall acquisition cost for Golden Ocean amounts to less than $320 million. This is more than $75 million lower than the assessed market values of the vessels. The Board expects that the inclusion of the five vessels in Frontline's Profit and Loss statement will significantly improve earnings and cash flow per share.

The plans to list the company's shares at New York Stock Exchange are progressing as planned. The Board anticipates the Company's shares to be listed in July this year after the existing ADR program has been terminated.

OUTLOOK

The seasonal slowdown in the market created by refinery overhaul and reduced OPEC production has led to lower rates for May fixtures. Frontline expects tanker rates to firm again in the summer when oil production is anticipated to increase. It is likely that the OPEC production in the fourth quarter will be at least 2 million barrels higher than the current levels. This will lead to an improvement in the supply / demand balance and result in increased freight rates.

Frontline has so far in the second quarter averaged TCE rates of $52,000 for its VLCCs and $39,000 for its Suezmaxes. It is likely that the net income before currency effects and sales profit for the second quarter will be lower than for the first quarter. The second quarter results will include a sales profit of $15 million linked to the sale of Front Tarim and Front Tartar.

With the outlook for a significantly increased OPEC production in the second half of the year, combined with the increased fleet, the board says it is confident that the full year net income before currency effects and sales profits will be significantly higher than the comparable $298 million the Company made in 2000.


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