FRONTLINE PLC REPORTS RESULTS FOR THE
FIRST QUARTER ENDED MARCH 31, 2023
Frontline plc (the “Company” or “Frontline”),
today reported unaudited results for the three months ended
March 31, 2023:
Highlights
- Highest first quarter profit since 2008 of $199.6 million, or
$0.90 per basic and diluted share for the first quarter of
2023.
- Adjusted profit of $193.3 million, or $0.87 per basic and
diluted share for the first quarter of 2023.
- Declared a cash dividend of $0.70 per share for the first
quarter of 2023.
- Reported revenues of $497.3 million for the first quarter of
2023.
- Reported spot TCEs for VLCCs, Suezmax tankers and LR2/Aframax
tankers in the first quarter of 2023 were $52,500, $64,000 and
$56,300 per day, respectively.
- For the second quarter of 2023, we estimate spot TCE on a
load-to-discharge basis of $75,000 contracted for 78% of vessel
days for VLCCs, $65,000 contracted for 71% of vessel days for
Suezmax tankers and $65,700 contracted for 63% of vessel days for
LR2/Aframax tankers.
- Sold the 2010-built Suezmax tanker, Front Njord in May 2023,
for aggregate gross proceeds of $44.5 million. After repayment of
existing debt on the vessel, the transaction is expected to
generate net cash proceeds of approximately $28.2 million.
- Entered into two fixed rate time charter-out contracts in April
2023 and May 2023 for two LR2/Aframax tankers to third parties on
two-year time charters, both at a daily base rate of $46,500.
- Entered into a senior secured term loan facility in May 2023
for a total amount of up to $129.4 million at attractive terms to
refinance an existing term loan facility maturing in August
2023.
Lars H. Barstad, Chief Executive Officer
of Frontline Management AS, commented:
“Frontline continued to generate elevated cash
returns for its shareholders in the first quarter of 2023. The most
prominent market development during the quarter was that China
abandoned its zero-tolerance policy in respect of Covid-19 and
started reopening. Freight demand and rates remained firm
throughout the quarter, defying historical seasonal patterns. Our
constructive long-term outlook is not affected by short-term
volatility, as oil demand is expected to rise significantly in the
second half of the year. We will continue to position Frontline
towards capturing value, both on assets and period business as we
proceed into what we believe may be a very exciting cycle.”
Inger M. Klemp, Chief Financial Officer of Frontline
Management AS, added:
“In May 2023, we entered into a senior secured
term loan facility for a total amount of up to $129.4 million to
refinance an existing term loan facility with total balloon payment
of $80.1 million maturing in August 2023. We intend to use the
expected net cash proceeds from the refinancing and from the sale
of Front Njord to partially repay our $275.0 million senior
unsecured revolving credit facility.”
Average daily time charter equivalents
("TCEs")1
($ per day) |
Spot TCE |
Spot TCE estimates |
% Covered |
Estimated average daily cash breakeven rates |
|
Q1 2023 |
Q4 2022 |
2022 |
Q2 2023 |
2023 |
VLCC |
52,500 |
63,200 |
31,300 |
75,000 |
78% |
26,500 |
Suezmax |
64,000 |
57,900 |
37,100 |
65,000 |
71% |
22,700 |
LR2 / Aframax |
56,300 |
58,800 |
38,500 |
65,700 |
63% |
16,800 |
We expect the spot TCEs for the full second
quarter of 2023 to be lower than the TCEs currently contracted, due
to the impact of ballast days at the end of the first quarter. The
number of ballast days at the end of the first quarter was 359 for
VLCCs, 429 for Suezmax tankers and 216 for LR2/Aframax tankers.
The Board of DirectorsFrontline plcLimassol,
CyprusMay 30, 2023
Ola Lorentzon - Chairman and DirectorJohn
Fredriksen - DirectorOle B. Hjertaker - Director
James O'Shaughnessy - Director Steen Jakobsen - DirectorMarios
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 "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,
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 Company's operating
expenses, including bunker prices, dry docking and insurance costs,
the market for the Company's 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, acts by terrorists or acts of
piracy on ocean-going vessels, the length and severity of epidemics
and pandemics, including the ongoing global outbreak of the novel
coronavirus ("COVID-19"), 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 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 (“non-GAAP”). See Appendix 1 for a full
description of the measures and reconciliation to the nearest IFRS
measure.
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