Spot rates achieved during the quarter by the company"s very large crude carriers, in particular, were noticeably higher than the market average.
A weaker spot market for crude oil tankers sent Frontline"s second quarter net profit tumbling by 91%, to $27.8m.
However, spot rates achieved during the quarter by the company"s very large crude carriers, in particular, were noticeably higher than the market average.
This factor, by itself, ensured that Frontline"s net profit outstripped even the most optimistic analyst projection.
Frontline achieved an average VLCC spot rate of $38,700 a day during the second quarter, compared with $56,200 in the first quarter this year, and $105,200 in the second quarter of 2008.
Anders Karlsen, Oslo-based senior shipping analyst at Nordea, said the second quarter figure of $38,700 came during a three-month period when the rate in the market at large fluctuated between $0 and $45,000.
A combination of being lucky and being smart is likely to have helped Frontline achieve its number, Mr Karlsen said.
?Sometimes you are unlucky, as Frontline itself was a few quarters back, and you end up earning rates at the low end of the spectrum,? Mr Karlsen said. ?However, if you are lucky, your ships may have to wait less. And if you are in a position to, or are able to, make smart moves such as minimising ballast time, it helps your average rate.?
Frontline could have been able to ride spot fixtures done at higher rates earlier in the year for a duration into the second quarter, other experts said.
Frontline"s second quarter suezmax spot rates averaged at $24,400 a day, down from $38,300 a quarter ago and $77,500 a year ago.
The company said its cash break-even on VLCCs and suezmaxes is $31,900 and $25,200 a day, respectively.
Frontline"s second quarter earnings per share of $0.36 beat the street consensus of $0.10-$0.12.
Top line revenues at the company shrank by 49% in the second quarter, to $281.5m. However, last year"s quarterly top line of $547.5m included a one-off ship sale gain of $126.8m.
Frontline said it would distribute a dividend of $0.25 per share, and reiterated its time-honoured position that it would reward shareholders with competitive cash returns, with the caveat that ?present earning, market prospects, current capital expenditure programmes, as well as investment opportunities? allow such payments.
The preponderance of spot market trading would also remain a cornerstone of the company"s business, the second quarter results suggested.
On this backdrop, Mr Karlsen said that the results did not throw up any substantially new developments and, despite the unexpectedly high quarterly net profit, the longer-term caution about the company remains in place.
?I will agree with a summary that thanks to smartness and luck, especially in the VLCC spot market, the company had an outperforming quarter,? he said. ?However, beyond that, the market remains the market, and the longer-term prospects remain unchanged.?
Mr Karlsen earlier this week issued a circumspect outlook for the company, in which it would remain only modestly profitable through to 2011 as the tanker market works through a ship oversupply and weak demand.