(RTTNews) - Frontline Ltd. (FRO: News ) reported Friday a loss for its third-quarter ended September 30, 2009, driven by significant decline in revenues, reflecting weaker spot market. Notwithstanding the current setback, the group expects to return to profitability in its fourth quarter.

The Hamilton, Bermuda-based group is engaged in ownership and operation of oil tankers, including oil/bulk/ore, or OBO carriers. The Company operates tankers of two sizes: very large crude carriers or VLCCs, which are between 200,000 and 320,000 deadweight tons, or dwt, and Suezmaxes, which are vessels between 120,000 and 170,000 dwt.

Frontline posted quarterly net loss of $5.61 million or $0.07 per basic share versus net profit of $107.85 million or $1.39 per basic share a year ago. On average, nine analysts polled by Thomson Reuters expected the company to report a loss of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.

The group's quarterly total operating revenues declined to $233 million, yet came in above Street consensus of $195.65 million, from $577.26 million last year.

In the immediately preceding quarter, the company reported net income of $27.8 million or $0.36 per share, on revenues of $281.54 million.

Earlier this month, FBR Capital Markets upgraded Frontline to "Outperform," raising its price target to $33 from $23 and lifting earnings estimates.
During the latest third-quarter under review, total operating expenses almost halved to $207.91 million from $404.66 million, reflecting a decline in voyage expenses and commission, profit share expense, ship operating expenses, charterhire expenses and administrative expenses. Charterhire expenses were lower during the quarter, owing to weaker spot market, resulting in reduced expenses on floating rate charters and profit share payments. However, depreciation charge rose to $60.21 million from $56.29 million.

In the recent third-quarter, average daily time charter equivalents, or TCEs, earned in the spot and period market by the VLCCs, Suezmax tankers plunged to $32,100 and $15,900, from $74,700 and $62,700, respectively, while Suezmax OBO carriers were down $42,200 from $44,100 a year earlier. Average daily spot earnings for the double hull VLCCs, Suezmax tankers and Suezmax tankers in the Gemini Suezmax pool were $26,800, $12,800 and $14,866, respectively.

In November, the Company had average total cash cost breakeven rates, on a TCE basis, of around $32,900 and $27,100, for VLCCs and Suezmaxes, respectively.

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