Overseas Shipholding Group, Inc.
The shipping industry offers high yields to help compensate investors for the great volatility in earnings. When the shipping industry sees a lack ships the amount of time required to produce new vessels creates years of lag time. This disconnect between supply and demand means that when demand is high supply is relatively constrained. Companies receive new vessels with little respect to the current market conditions. With the current downturn more »
Part 1 was the restructuring overview.
Now let me dig into Frontline's (NYSE: FRO) fleet. To do that I am going to divide the fleet into smaller groups, five groups in all.
A. Frontline owned vessels
- 1 "for sale" Suezmax
- 2 Suezmax newbuilds
The older Suezmax was sold in Q1 2012 for a small loss. Only $12.5 million has been paid on the two newbuilds. Frontline has to more »
Over the past year, almost every facet of the oil and gas industry has been very profitable except one. That one sector is shipping, specifically the tanker vessels that transport crude oil and refined products across the world's oceans.
The reason for this sector being a money loser is a simple one...too much supply. During the boom years before the 2008 financial crisis, ship owners thought the good more »