Frontline plc (the âCompanyâ or âFrontlineâ), today reported unaudited results
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for the nine months ended September 30, 2023:
Highlights
- Profit of $107.7 million, or $0.48 per basic and diluted share for the third
quarter of 2023.
- Adjusted profit of $80.8 million, or $0.36 per basic and diluted share for
the third quarter of 2023.
- Declared a cash dividend of $0.30 per share for the third quarter of 2023.
- Reported revenues of $377.1 million for the third quarter of 2023.
- Announced agreement for an integrated solution to the strategic and
structural deadlock in Euronav NV (âEuronavâ).
- Closed the sale of 13.7 million shares of Euronav to CMB NV for proceeds of
$252.0 million.
- Entered into agreements with Euronav to purchase 24 VLCCs with an average
age of 5.3 years, for an aggregate purchase price of $2,350.0 million from
Euronav (the âAcquisitionâ). All agreements are effective, and a majority of
the vessels are expected to be delivered in the fourth quarter of 2023 and
the balance of the vessels are expected to be delivered in the first quarter
of 2024.
- Entered into a senior secured term loan facility with a group of our
relationship banks in November 2023 in an amount of up to $1,410.0 million
and a shareholder loan from Hemen Holding Ltd., the Companyâs largest
shareholder (âHemenâ), in an amount up to $539.9 million to partly finance
the Acquisition.
Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented:
âThe third quarter of the year proved to be a shoulder quarter for Frontline. As
the Russian benchmark crude price firmly established itself above the price cap,
owners left the trade causing the capacity in the non-Russia fleet to grow. We
have had a streak of four strong quarters, but July to September came in on the
softer side. Towards the end of the quarter, we saw normal seasonality return,
and freight demand picked up as refineries in the northern hemisphere came out
of their maintenance season. Strong US exports and continuous firm Asian imports
have brought us back to a more normalized market where VLCCs take the lead on
earnings. This amplifies our excitement as we prepare to take delivery of the
24 modern VLCCs from Euronav, more than doubling our exposure to this segment,
increasing our overall tanker footprint by more than 30%.â
Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added:
âWe are very grateful for the financial support from a group of our relationship
banks and our largest shareholder, allowing us to react quickly to growth
opportunities which made the acquisition of the 24 modern VLCCs from Euronav
possible. We will continue to consistently focus on maintaining our competitive
breakeven levels to ensure that we are well positioned to generate significant
cash flow and create value for our shareholders.â
Average daily time charter equivalents (âTCEsâ)(1)
Âą----------------------------------------------Âą---------Âą-------Âą---------+
| | | |Estimated |
| | | | average |
| | | |daily cash|
| ($ per | Spot TCE | % |breakeven |
| day) Spot TCE |estimates |Covered | rates |
Âą----------------------------------------------Âą---------Âą-------Âą---------+
| 2023 Q3 2023 Q2 2023 Q4 2022 2022 | Q4 2023 | 2023 |
| | | |
|VLCC 52,900 42,500 64,000 63,200 31,300| 48,100 81% | 28,200 |
| | | |
|Suezmax 54,600 37,600 61,700 57,900 37,100| 50,300 70% | 25,700 |
| | | |
|LR2 / | | |
|Aframax 48,000 33,900 52,900 58,800 38,500| 51,300 70% | 17,100 |
Âą----------------------------------------------Âą------------------Âą---------+
We expect the spot TCEs for the full fourth quarter of 2023 to be lower than the
TCEs currently contracted, due to the impact of ballast days at the end of the
third quarter. The number of ballast days at the end of the third quarter was
429 for VLCCs, 394 for Suezmax tankers and 128 for LR2/Aframax tankers. The
estimated spot TCE rates and cash breakeven rates exclude the impact of the
Acquisition. The Company expects the Acquisition vessels delivered in the fourth
quarter to load their first cargos for the Company in January 2024 and, as such,
expects the additional revenues to be recognized in the fourth quarter of 2023
in relation to these vessels to be limited.
The Board of Directors
Frontline plc
Limassol, Cyprus
November 29, 2023
Ola Lorentzon - Chairman and Director
John Fredriksen - Director
Ole B. Hjertaker - Director
James O'Shaughnessy - Director
Steen Jakobsen - Director
Marios Demetriades - Director
Questions should be directed to:
Lars H. Barstad: Chief Executive Officer, Frontline Management AS
+47 23 11 40 00
Inger M. Klemp: Chief Financial Officer, Frontline Management AS
+47 23 11 40 00
Forward-Looking Statements
Matters discussed in this report may constitute forward-looking statements. The
Private Securities Litigation Reform Act of 1995 provides safe harbor
protections for forward-looking statements, which include statements concerning
plans, objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than statements of
historical facts.
Frontline plc and its subsidiaries, or the Company, desires to take advantage of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and is including this cautionary statement in connection with this safe
harbor legislation. This report and any other written or oral statements made by
us or on our behalf may include forward-looking statements, which reflect our
current views with respect to future events and financial performance and are
not intended to give any assurance as to future results. When used in this
document, the words âbelieve,â âanticipate,â âintend,â âestimate,â âforecast,â
âproject,â âplan,â âpotential,â âwill,â âmay,â âshould,â âexpectâ and similar
expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this report are based upon various
assumptions, including without limitation, managementâs examination of
historical operating trends, data contained in our records and data available
from third parties. Although we believe that these assumptions were reasonable
when made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, we cannot assure you that we will achieve or accomplish
these expectations, beliefs or projections. We undertake no obligation to update
any forward-looking statements, whether as a result of new information, future
events or otherwise.
In addition to these important factors and matters discussed elsewhere herein,
important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies, fluctuations in currencies and interest rates,
general market conditions, including fluctuations in charter hire rates and
vessel values, changes in the supply and demand for vessels comparable to ours,
changes in worldwide oil production and consumption and storage, changes in the
Companyâs operating expenses, including bunker prices, dry docking and insurance
costs, the market for the Companyâs vessels, availability of financing and
refinancing, our ability to obtain financing and comply with the restrictions
and other covenants in our financing arrangements, availability of skilled
workers and the related labor costs, compliance with governmental, tax,
environmental and safety regulation, any non-compliance with the U.S. Foreign
Corrupt Practices Act of 1977 (FCPA) or other applicable regulations relating to
bribery, the impact of increasing scrutiny and changing expectations from
investors, lenders and other market participants with respect to our ESG
policies, general economic conditions and conditions in the oil industry,
effects of new products and new technology in our industry, the failure of
counter parties to fully perform their contracts with us, our dependence on key
personnel, adequacy of insurance coverage, our ability to obtain indemnities
from customers, changes in laws, treaties or regulations, the volatility of the
price of our ordinary shares; our incorporation under the laws of Cyprus and the
different rights to relief that may be available compared to other countries,
including the United States, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents, environmental factors,
political events, public health threats, international hostilities including the
ongoing developments in the Ukraine region and the development in the Middle
East, including the armed conflict in Israel and the Gaza Strip, acts by
terrorists or acts of piracy on ocean-going vessels, the length and severity of
epidemics and pandemics and their impacts on the demand for seaborne
transportation of petroleum products, the impact of increasing scrutiny and
changing expectations from investors, lenders and other market participants with
respect to our Environmental, Social and Governance policies, the impact of port
or canal congestion, the ability of the Company to complete the acquisition of
24 VLCCs from Euronav and other important factors described from time to time in
the reports filed by the Company with the Securities and Exchange Commission or
Commission.
We caution readers of this report not to place undue reliance on these forward-
looking statements, which speak only as of their dates. These forward-looking
statements are no guarantee of our future performance, and actual results and
future developments may vary materially from those projected in the forward-
looking statements.
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act.
(1) This press release describes Time Charter Equivalent earnings and related
per day amounts, which are not measures prepared in accordance with IFRS (ânon-
GAAPâ). See Appendix 1 for a full description of the measures and reconciliation
to the nearest IFRS measure.
Kilde
