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FRONTLINE PLC
(registrant)
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Dated: March 1, 2024
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By:
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/s/ Inger M. Klemp
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Name: Inger M. Klemp
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Title: Principal Financial Officer
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•
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Profit of $118.4 million, or $0.53 per share for the fourth quarter of 2023.
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•
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Adjusted profit of $102.2 million, or $0.46 per share for the fourth quarter of 2023.
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•
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Declared a cash dividend of $0.37 per share for the fourth quarter of 2023.
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•
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Reported revenues of $415.0 million for the fourth quarter of 2023.
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•
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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.
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•
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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.
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•
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In the process of refinancing eight Suezmax tankers and 16 LR2 tankers expected to generate net cash proceeds of approximately $408.0 million.
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•
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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 $275.0 million senior unsecured revolving credit facility with an affiliate of Hemen in relation to the Acquisition.
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($ per day)
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Spot TCE
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Spot TCE estimates
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% Covered
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Estimated average daily cash breakeven rates
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|||||
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2023
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Q4 2023
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Q3 2023
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Q2 2023
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Q1 2023
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2022
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Q1 2024
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2024
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VLCC
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50,300
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42,300
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42,500
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64,000
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52,500
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31,300
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55,100
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81%
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28,800
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Suezmax
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52,600
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45,700
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37,600
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61,700
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64,000
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37,100
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52,800
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72%
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23,700
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LR2 / Aframax
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46,800
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42,900
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33,900
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52,900
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56,300
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38,500
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67,800
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69%
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21,200
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•
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the strength of world economies;
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•
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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;
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•
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general market conditions, including fluctuations in charter hire rates and vessel values;
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•
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changes in the supply and demand for vessels comparable to ours and the number of newbuildings under construction;
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•
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the highly cyclical nature of the industry that we operate in;
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•
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the loss of a large customer or significant business relationship;
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•
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changes in worldwide oil production and consumption and storage;
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•
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changes in the Company's operating expenses, including bunker prices, dry docking, crew costs and insurance costs;
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•
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planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry docking, surveys and upgrades;
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•
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risks associated with any future vessel construction;
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our expectations regarding the availability of vessel acquisitions and our ability to complete vessel acquisition transactions as planned;
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•
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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;
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•
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availability of financing and refinancing, our ability to obtain financing and comply with the restrictions and other covenants in our financing
arrangements;
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•
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availability of skilled crew members and other employees and the related labor costs;
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•
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work stoppages or other labor disruptions by our employees or the employees of other companies in related industries;
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compliance with governmental, tax, environmental and safety regulation, any non-compliance with U.S. regulations;
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•
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the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our ESG policies;
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Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery;
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•
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general economic conditions and conditions in the oil industry;
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•
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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;
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•
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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;
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•
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vessel breakdowns and instances of off-hire;
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•
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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;
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•
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potential conflicts of interest involving members of our board of directors and senior management;
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•
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the failure of counter parties to fully perform their contracts with us;
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•
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changes in credit risk with respect to our counterparties on contracts;
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•
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our dependence on key personnel and our ability to attract, retain and motivate key employees;
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•
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adequacy of insurance coverage;
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•
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our ability to obtain indemnities from customers;
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•
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changes in laws, treaties or regulations;
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•
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the volatility of the price of our ordinary shares;
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•
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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;
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•
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changes in governmental rules and regulations or actions taken by regulatory authorities;
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•
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government requisition of our vessels during a period of war or emergency;
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•
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potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions;
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•
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the arrest of our vessels by maritime claimants;
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general domestic and international political conditions or events, including “trade wars”;
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•
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any further changes in U.S. trade policy that could trigger retaliatory actions by the affected countries;
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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;
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•
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the impact of adverse weather and natural disasters;
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•
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the length and severity of epidemics and pandemics and their impacts on the demand for seaborne transportation of crude oil and refined products;
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•
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the impact of port or canal congestion;
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•
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the ability of the Company to complete the acquisition of 24 VLCCs from Euronav;
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•
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business disruptions due to natural disasters or other disasters outside our control; and
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•
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other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.
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2022
Oct-Dec
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2023
Oct-Dec
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CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(in thousands of $, except per share data)
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2023
Jan-Dec
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2022
Jan-Dec
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530,141
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415,004
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Revenues
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1,802,184
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1,430,208
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451
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—
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Other operating income
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24,080
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8,040
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530,592
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415,004
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Total revenues and other operating income
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1,826,264
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1,438,248
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177,295
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158,107
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Voyage expenses and commission
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618,595
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605,544
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46,852
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44,941
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Ship operating expenses
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176,533
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175,164
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18,156
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13,889
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Administrative expenses
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53,528
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47,374
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42,882
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60,018
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Depreciation
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230,942
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165,170
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—
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—
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Contingent rental income
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—
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(623)
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285,185
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276,957
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Total operating expenses
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1,079,598
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992,629
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245,407
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138,047
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Net operating income
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746,666
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445,619
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1,097
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6,537
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Finance income
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18,065
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1,479
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(33,446)
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(55,419)
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Finance expense
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(171,336)
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(45,330)
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23,023
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29,074
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Gain (loss) on marketable securities
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22,989
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58,359
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2,632
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118
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Share of results of associated company
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3,383
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14,243
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542
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240
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Dividends received
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36,852
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1,579
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239,255
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118,597
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Profit before income taxes
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656,619
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475,949
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(202)
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(226)
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Income tax benefit (expense)
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(205)
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(412)
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239,053
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118,371
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Profit for the period
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656,414
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475,537
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$1.07
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$0.53
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Basic and diluted earnings per share
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$2.95
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$2.22
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2022
Oct-Dec
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2023
Oct-Dec
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of $)
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2023
Jan-Dec
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2022
Jan-Dec
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239,053
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118,371
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Profit for the period
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656,414
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475,537
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Items that may be reclassified to profit or loss:
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||||
(42)
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(117)
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Foreign currency exchange gain (loss)
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(39)
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226
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(42)
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(117)
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Other comprehensive income (loss)
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(39)
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226
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239,011
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118,254
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Comprehensive income
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656,375
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475,763
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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of $)
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Dec 31
2023
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Dec 31
2022
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ASSETS
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Current assets
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Cash and cash equivalents
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308,322
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254,525
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Marketable securities
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7,432
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236,281
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Other current assets
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412,172
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390,244
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Total current assets
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727,926
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881,050
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Non-current assets
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Newbuildings
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—
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47,991
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Vessels and equipment
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4,633,169
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3,650,652
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Right-of-use assets
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2,236
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3,108
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Goodwill
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112,452
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112,452
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Investment in associated company
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12,386
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16,302
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Loan notes receivable
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—
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1,388
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Prepaid consideration
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349,151
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—
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Other non-current assets
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45,446
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55,500
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Total non-current assets
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5,154,840
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3,887,393
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Total assets
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5,882,766
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4,768,443
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LIABILITIES AND EQUITY
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Current liabilities
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Short-term debt and current portion of long-term debt
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261,999
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277,854
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Current portion of obligations under leases
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1,104
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1,024
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Other current payables
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145,951
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112,781
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Total current liabilities
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409,054
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391,659
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Non-current liabilities
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Long-term debt
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3,194,464
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2,112,460
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Obligations under leases
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1,430
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2,372
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Other non-current payables
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472
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2,053
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Total non-current liabilities
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3,196,366
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2,116,885
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Equity
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Frontline plc equity
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2,277,818
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2,260,371
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Non-controlling interest
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(472)
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(472)
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Total equity
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2,277,346
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2,259,899
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Total liabilities and equity
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5,882,766
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4,768,443
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2022
Oct-Dec
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2023
Oct-Dec
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of $)
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2023
Jan-Dec
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2022
Jan-Dec
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OPERATING ACTIVITIES
|
||||
239,053
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118,371
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Profit for the period
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656,414
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475,537
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Adjustments to reconcile profit to net cash provided by operating activities:
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||||
32,349
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48,882
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Net finance expense
|
153,271
|
43,851
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42,882
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60,018
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Depreciation
|
230,942
|
165,170
|
22
|
—
|
(Gain) loss on sale of vessels and equipment
|
(21,959)
|
(4,596)
|
(23,023)
|
(29,074)
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(Gain) loss on marketable securities
|
(22,989)
|
(58,359)
|
(2,632)
|
(118)
|
Share of results of associated company
|
(3,383)
|
(14,243)
|
3,596
|
2,066
|
Other, net
|
18,199
|
2,376
|
(43,873)
|
(49,003)
|
Change in operating assets and liabilities
|
(8,513)
|
(142,112)
|
(471)
|
(18,684)
|
Debt issuance costs paid
|
(20,020)
|
(4,349)
|
(30,520)
|
(43,614)
|
Interest paid
|
(165,193)
|
(83,039)
|
4,774
|
11,650
|
Interest received
|
39,411
|
5,094
|
222,157
|
100,494
|
Net cash provided by operating activities
|
856,180
|
385,330
|
INVESTING ACTIVITIES
|
||||
(81,884)
|
(1,477,907)
|
Additions to newbuildings, vessels and equipment
|
(1,631,423)
|
(335,815)
|
—
|
—
|
Proceeds from sale of vessels
|
142,740
|
80,000
|
—
|
—
|
Investment in associated company
|
—
|
(1,505)
|
—
|
—
|
Cash inflow on repayment of loan to associated company
|
1,388
|
—
|
—
|
251,839
|
Proceeds from sale of marketable securities
|
251,839
|
—
|
(81,884)
|
(1,226,068)
|
Net cash used in investing activities
|
(1,235,456)
|
(257,320)
|
FINANCING ACTIVITIES
|
||||
99,815
|
1,350,074
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Proceeds from issuance of debt
|
1,609,449
|
651,248
|
(79,288)
|
(134,544)
|
Repayment of debt
|
(536,586)
|
(597,834)
|
(238)
|
(231)
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Repayment of obligations under leases
|
(862)
|
(2,123)
|
—
|
—
|
Lease termination payments
|
—
|
(4,456)
|
(33,393)
|
(66,787)
|
Dividends paid
|
(638,928)
|
(33,393)
|
(13,104)
|
1,148,512
|
Net cash provided by (used in) financing activities
|
433,073
|
13,442
|
127,169
|
22,938
|
Net change in cash and cash equivalents
|
53,797
|
141,452
|
127,356
|
285,384
|
Cash and cash equivalents at start of period
|
254,525
|
113,073
|
254,525
|
308,322
|
Cash and cash equivalents at end of period
|
308,322
|
254,525
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of $ except number of shares)
|
2023
Jan-Dec
|
2022
Jan-Dec
|
NUMBER OF SHARES OUTSTANDING
|
||
Balance at beginning of period
|
222,622,889
|
203,530,979
|
Shares issued in connection with Euronav share acquisition
|
—
|
19,091,910
|
Balance at end of period
|
222,622,889
|
222,622,889
|
SHARE CAPITAL
|
||
Balance at beginning of period
|
222,623
|
203,531
|
Shares issued in connection with Euronav share acquisition
|
—
|
19,092
|
Balance at end of period
|
222,623
|
222,623
|
ADDITIONAL PAID IN CAPITAL
|
||
Balance at beginning of period
|
604,687
|
448,291
|
Shares issued in connection with Euronav share acquisition
|
—
|
156,396
|
Balance at end of period
|
604,687
|
604,687
|
CONTRIBUTED SURPLUS
|
||
Balance at beginning of period
|
1,004,094
|
1,004,094
|
Balance at end of period
|
1,004,094
|
1,004,094
|
ACCUMULATED OTHER RESERVES
|
||
Balance at beginning of period
|
454
|
228
|
Other comprehensive income
|
(39)
|
226
|
Balance at end of period
|
415
|
454
|
RETAINED EARNINGS (DEFICIT)
|
||
Balance at beginning of period
|
428,513
|
(13,631)
|
Profit for the period
|
656,414
|
475,537
|
Cash dividends
|
(638,928)
|
(33,393)
|
Balance at end of period
|
445,999
|
428,513
|
EQUITY ATTRIBUTABLE TO THE COMPANY
|
2,277,818
|
2,260,371
|
NON-CONTROLLING INTEREST
|
||
Balance at beginning of period
|
(472)
|
(472)
|
Balance at end of period
|
(472)
|
(472)
|
TOTAL EQUITY
|
2,277,346
|
2,259,899
|
(in thousands of $)
|
2023
Jan-Dec
|
2022
Jan-Dec
|
Profit for the period
|
656,414
|
475,537
|
(in thousands)
|
||
Weighted average number of basic and diluted shares
|
222,623
|
214,011
|
(in thousands of $)
|
FY 2023
|
Q4 2023
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
FY 2022
|
Q4 2022
|
Adjusted profit
|
|||||||
Profit
|
656,414
|
118,371
|
107,743
|
230,674
|
199,626
|
475,537
|
239,054
|
Add back:
|
|||||||
Loss on marketable securities
|
23,968
|
—
|
—
|
20,795
|
3,173
|
12,005
|
—
|
Share of losses of associated companies
|
1,690
|
—
|
1,690
|
—
|
—
|
92
|
—
|
Unrealized loss on derivatives (1)
|
20,950
|
13,211
|
375
|
—
|
7,364
|
1,116
|
1,116
|
Loss on termination of leases
|
—
|
—
|
—
|
—
|
—
|
431
|
—
|
Less:
|
|||||||
Unrealized gain on derivatives (1)
|
(6,075)
|
—
|
—
|
(6,075)
|
—
|
(51,108)
|
—
|
Gain on marketable securities
|
(46,957)
|
(29,074)
|
(17,883)
|
—
|
—
|
(70,364)
|
(23,023)
|
Share of results of associated companies
|
(5,073)
|
(118)
|
—
|
(1,217)
|
(3,738)
|
(14,335)
|
(2,632)
|
Amortization of acquired time charters
|
—
|
—
|
—
|
—
|
—
|
(2,806)
|
—
|
Gain on sale of vessels
|
(21,960)
|
—
|
—
|
(9,251)
|
(12,709)
|
(4,618)
|
—
|
Dividends received
|
(36,852)
|
(240)
|
(11,112)
|
(24,973)
|
(527)
|
(1,579)
|
(542)
|
Gain on settlement of insurance and other claims
|
(397)
|
—
|
—
|
—
|
(397)
|
(3,998)
|
—
|
Adjusted profit
|
585,708
|
102,150
|
80,813
|
209,953
|
192,792
|
340,373
|
213,973
|
(in thousands)
|
|||||||
Weighted average number of ordinary shares
|
222,623
|
222,623
|
222,623
|
222,623
|
222,623
|
214,011
|
222,623
|
(in $)
|
|||||||
Adjusted basic and diluted earnings per share
|
2.63
|
0.46
|
0.36
|
0.94
|
0.87
|
1.59
|
0.96
|
(in thousands of $)
|
FY 2023
|
Q4 2023
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
FY 2022
|
Q4 2022
|
Unrealized gain (loss) on derivatives
|
(14,875)
|
(13,211)
|
(375)
|
6,075
|
(7,364)
|
49,992
|
(1,116)
|
Interest income (expense) on derivatives
|
22,914
|
6,283
|
6,116
|
5,551
|
4,964
|
3,631
|
3,697
|
Gain (loss) on derivatives
|
8,039
|
(6,928)
|
5,741
|
11,626
|
(2,400)
|
53,623
|
2,581
|
(in thousands of $)
|
FY 2023
|
Q4 2023
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
FY 2022
|
Q4 2022
|
Revenues
|
1,802,184
|
415,004
|
377,085
|
512,763
|
497,332
|
1,430,208
|
530,141
|
Less
|
|||||||
Voyage expenses and commission
|
(618,595)
|
(158,107)
|
(145,051)
|
(156,610)
|
(158,827)
|
(605,544)
|
(177,295)
|
Other non-vessel items
|
(13,524)
|
(5,625)
|
(2,934)
|
(3,810)
|
(1,155)
|
(12,254)
|
(1,197)
|
Total TCE
|
1,170,065
|
251,272
|
229,100
|
352,343
|
337,350
|
812,410
|
351,649
|
FY 2023
|
Q4 2023
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
FY 2022
|
Q4 2022
|
|
Time charter TCE (in thousands of $)
|
|||||||
Suezmax
|
—
|
—
|
—
|
42,078
|
613
|
||
LR2
|
45,586
|
14,226
|
14,221
|
11,337
|
5,802
|
7,921
|
5,984
|
Total Time charter TCE
|
45,586
|
14,226
|
14,221
|
11,337
|
5,802
|
49,999
|
6,597
|
Spot TCE (in thousands of $)
|
|||||||
VLCCs ex. vessels acquired from Euronav
|
395,514
|
83,511
|
85,656
|
126,102
|
100,245
|
211,938
|
118,110
|
VLCCs acquired from Euronav
|
1,054
|
1,054
|
—
|
—
|
—
|
—
|
—
|
VLCCs total
|
396,568
|
84,565
|
85,656
|
126,102
|
100,245
|
211,938
|
118,110
|
Suezmax
|
480,346
|
97,382
|
85,731
|
144,669
|
152,564
|
313,981
|
142,630
|
LR2
|
247,565
|
55,099
|
43,492
|
70,235
|
78,739
|
236,492
|
84,312
|
Total Spot TCE
|
1,124,479
|
237,046
|
214,879
|
341,006
|
331,548
|
762,411
|
345,052
|
Total TCE
|
1,170,065
|
251,272
|
229,100
|
352,343
|
337,350
|
812,410
|
351,649
|
Spot days (available days less offhire days)
|
|||||||
VLCCs ex. vessels acquired from Euronav
|
7,869
|
1,975
|
2,014
|
1,971
|
1,909
|
6,775
|
1,870
|
VLCCs acquired from Euronav
|
184
|
184
|
—
|
—
|
—
|
—
|
—
|
VLCCs total
|
8,053
|
2,159
|
2,014
|
1,971
|
1,909
|
6,775
|
1,870
|
Suezmax
|
9,140
|
2,130
|
2,282
|
2,344
|
2,384
|
8,464
|
2,462
|
LR2
|
5,294
|
1,285
|
1,283
|
1,328
|
1,398
|
6,139
|
1,433
|
Spot TCE per day (in $ per day)
|
|||||||
VLCCs ex. vessels acquired from Euronav
|
50,300
|
42,300
|
42,500
|
64,000
|
52,500
|
31,300
|
63,200
|
VLCCs acquired from Euronav
|
5,700
|
5,700
|
—
|
—
|
—
|
—
|
—
|
VLCCs total
|
49,200
|
39,200
|
42,500
|
64,000
|
52,500
|
31,300
|
63,200
|
Suezmax
|
52,600
|
45,700
|
37,600
|
61,700
|
64,000
|
37,100
|
57,900
|
LR2
|
46,800
|
42,900
|
33,900
|
52,900
|
56,300
|
38,500
|
58,800
|