Can Frontline Ltd. (FRO) Survive the Shipping Slump?

Since then, things have gotten even worse. In April, Frontline described the market as being in a “state of panic” as it started rejecting oil cargos due to low shipping rates. According to figures from the Baltic Exchange in London, very large crude carriers were losing about $3,000 per day running the Saudi Arabia-to-Japan route. Those losses narrowed to about $1,200 by the end of April, but the industry clearly still remains under pressure. Meanwhile, the trade association in charge of ship crews and maintenance workers has said that Frontline Ltd. (NYSE:FRO) and its peers will struggle to retain personnel given their big losses.

In Frontline’s report, pay close attention to how the company plans to deal with its extensive debt. Moreover, with CEO John Fredriksen also involved in other ventures like the Frontline 2012 tanker subsidiary as well as deepwater driller Seadrill, Frontline shareholders need to make sure that they’re getting Fredriksen’s full attention in getting through the current crisis.

The article Can Frontline Survive the Shipping Slump? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Seadrill. The Motley Fool owns shares of Seadrill.

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