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 inJanuary 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$275.0 million senior unsecured revolving credit facility with an affiliate of Hemen in relation to the Acquisition.
“Frontline delivered its strongest full year result in fifteen years, despite muted markets in the fourth quarter. The year has been exceptional for the tanker industry and the asset classes we deploy, however, it’s the Suezmax, Aframax and product markets that have offered volatility. During the fourth quarter, Frontline started taking delivery of the 24 modern VLCCs acquired from Euronav, and it’s a testament to Frontline’s scalable business platform that within a few months Frontline has doubled its exposure in the VLCC market, by increasing its overall earnings capacity by more than one-third, with minimal impact on its operational setup. The continuous disruption in the
"When we entered into agreements with Euronav to acquire a high-quality ECO fleet of 24 VLCCs on
Average daily time charter equivalents ("TCEs")1
($ 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
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
Limassol,
Questions should be directed to:
+47 23 11 40 00
+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.
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 theEuropean 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, includingthe 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 theMiddle East , including the armed conflict inIsrael and theGaza 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.
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
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