FRO – Fourth Quarter and Full Year 2023 Results

FRONTLINE PLC REPORTS RESULTS FOR THE FOURTH QUARTER ENDED DECEMBER 31, 2023

Frontline plc (the “Company” or “Frontline”), today reported unaudited results for the three and twelve months ended December 31, 2023:

Highlights

• Profit of $118.4 million, or $0.53 per share for the fourth quarter of 2023.
• Adjusted profit of $102.2 million, or $0.46 per share for the fourth quarter of 2023.
• Declared a cash dividend of $0.37 per share for the fourth quarter of 2023.
• Reported revenues of $415.0 million for the fourth quarter of 2023.
• Took delivery of 11 VLCCs from Euronav NV (“Euronav”) as part of the acquisition of 24 VLCCs (“the Acquisition”) in the fourth quarter of 2023 and delivery of a further 12 vessels in January 2024 with the last VLCC expected to be delivered within the first quarter of 2024.
• Entered into agreements to sell its five oldest VLCCs, built in 2009 and 2010 and one of its oldest Suezmax tankers, built in 2010, for an aggregate net sales price of $335.0 million in January 2024. After repayment of existing debt on the vessels the transactions are expected to generate net cash proceeds of approximately $238.0 million.
• In the process of refinancing eight Suezmax tankers and 16 LR2 tankers expected to generate net cash proceeds of approximately $408.0 million.
• The net cash proceeds of approximately $646.0 million expected to be generated from sale and refinancing of vessels, will enable Frontline to fully repay the Hemen shareholder loan and the amount drawn under the $275.0 million senior unsecured revolving credit facility with an affiliate of Hemen in relation to the Acquisition.

Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented:

“Frontline delivered its strongest full year result in fifteen years, despite muted markets in the fourth quarter. The year has been exceptional for the tanker industry and the asset classes we deploy, however, it’s the Suezmax, Aframax and product markets that have offered volatility. During the fourth quarter, Frontline started taking delivery of the 24 modern VLCCs acquired from Euronav, and it’s a testament to Frontline’s scalable business platform that within a few months Frontline has doubled its exposure in the VLCC market, by increasing its overall earnings capacity by more than one-third, with minimal impact on its operational setup. The continuous disruption in the Red Sea has caused West / East trading lanes to widen, which we believe benefits the larger vessel classes, offering economies of scale as oil and products move around the Cape of Good Hope.”  

Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added:

"When we entered into agreements with Euronav to acquire a high-quality ECO fleet of 24 VLCCs on October 9, 2023, we communicated that the Hemen shareholder loan may not be fully drawn as the Company was exploring other alternatives to free up capital, including re-leveraging part of the existing Frontline fleet and/or sale of older non-eco vessels. In January and February 2024, we executed on this with the agreement to sell six, older non-eco vessels and the ongoing process of refinancing 24 vessels, on, what we believe are, attractive terms, expected to generate net cash proceeds of approximately $646.0 million. This will enable us to fully repay the Hemen shareholder loan and the amount drawn under the $275.0 million senior unsecured revolving credit facility with an affiliate of Hemen in relation to the Acquisition and maintain our competitive cash breakeven rates.”

Average daily time charter equivalents ("TCEs")¹

($ per day)	Spot TCE						Spot TCE estimates	% Covered	Estimated average daily cash breakeven rates
	2023	Q4 2023	Q3 2023	Q2 2023	Q1 2023	2022	Q1 2024		2024
VLCC	50,300	42,300	42,500	64,000	52,500	31,300	55,100	81%	28,800
Suezmax	52,600	45,700	37,600	61,700	64,000	37,100	52,800	72%	23,700
LR2 / Aframax	46,800	42,900	33,900	52,900	56,300	38,500	67,800	69%	21,200

In December 2023, the Company took delivery of 11 VLCCs as part of the Acquisition. These vessels contributed 184 trading days net of offhire, of which 150 were ballast days. This negatively impacted the overall VLCC spot rate by $3,100 per day as limited revenues were recorded in relation to these vessels, whereas the Company includes all trading days in the VLCC spot rate. The spot TCEs presented for the fourth quarter of 2023 in the table above exclude the impact of the vessels delivered as a result of the Acquisition.

The spot TCEs estimates in the first quarter of 2024 include the impact of the vessels delivered as a result of the Acquisition. We expect the spot TCEs for the full first quarter of 2024 to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the fourth quarter. The number of ballast days at the end of the fourth quarter was 570 days for VLCCs, 384 days for Suezmax tankers and 138 days for LR2/Aframax tankers. 

The Board of Directors
Frontline plc
Limassol, Cyprus
February 28, 2024

Ola Lorentzon - Chairman and Director
John Fredriksen - Director
Ole B. Hjertaker - Director   
James O'Shaughnessy - Director
Steen Jakobsen - Director
Marios Demetriades - Director
Cato Stonex - 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 "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" 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, management's 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, including inflationary pressures and central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates;
• general market conditions, including fluctuations in charter hire rates and vessel values;
• changes in the supply and demand for vessels comparable to ours and the number of newbuildings under construction;
• the highly cyclical nature of the industry that we operate in;
• the loss of a large customer or significant business relationship;
• changes in worldwide oil production and consumption and storage;
• changes in the Company's operating expenses, including bunker prices, dry docking, crew costs and insurance costs;
• planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry docking, surveys and upgrades;
• risks associated with any future vessel construction;
• our expectations regarding the availability of vessel acquisitions and our ability to complete vessel acquisition transactions as planned;
• our ability to successfully compete for and enter into new time charters or other employment arrangements for our existing vessels after our current time charters expire and our ability to earn income in the spot market;
• 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 crew members and other employees and the related labor costs;
• work stoppages or other labor disruptions by our employees or the employees of other companies in related industries;
• compliance with governmental, tax, environmental and safety regulation, any non-compliance with U.S. regulations;
• the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our ESG policies;
• Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery;
• general economic conditions and conditions in the oil industry;
• effects of new products and new technology in our industry, including the potential for technological innovation to reduce the value of our vessels and charter income derived therefrom;
• new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime Organization, and/or imposed by regional or national authorities such as the European Union or individual countries;
• vessel breakdowns and instances of off-hire;
• the impact of an interruption in or failure of our information technology and communications systems, including the impact of cyber-attacks upon our ability to operate;
• potential conflicts of interest involving members of our board of directors and senior management;
• the failure of counter parties to fully perform their contracts with us;
• changes in credit risk with respect to our counterparties on contracts;
• our dependence on key personnel and our ability to attract, retain and motivate key employees;
• 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;
• government requisition of our vessels during a period of war or emergency;
• potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions;
• the arrest of our vessels by maritime claimants;
• general domestic and international political conditions or events, including “trade wars”;
• any further changes in U.S. trade policy that could trigger retaliatory actions by the affected countries;
• 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 developments 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 impact of adverse weather and natural disasters;
• the length and severity of epidemics and pandemics and their impacts on the demand for seaborne transportation of crude oil and refined products;
• the impact of port or canal congestion;
• the ability of the Company to complete the acquisition of 24 VLCCs from Euronav;
• business disruptions due to natural disasters or other disasters outside our control; and
• other important factors described from time to time in the reports filed by the Company with the Securities and Exchange 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.

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¹ This press release describes Time Charter Equivalent earnings and related per day amounts, which are not measures prepared in accordance with IFRS (“non-GAAP”). See Appendix 1 for a full description of the measures and reconciliation to the nearest IFRS measure.

Attachment

• 4th Quarter 2023 Results