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FRONTLINE PLC
(registrant)
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Dated: August 30, 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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• |
Profit of $187.6 million, or $0.84 per share for the second quarter
of 2024.
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• |
Adjusted profit of $138.2 million, or $0.62 per share for the second
quarter of 2024.
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• |
Declared a cash dividend of $0.62 per share for the second quarter of 2024.
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• |
Reported revenues of $556.0 million for the second quarter of 2024.
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• |
Achieved average daily spot time charter equivalent earnings ("TCEs")1 for VLCCs, Suezmax tankers and LR2/Aframax
tankers in the second quarter of $49,600, $45,600 and $53,100 per day, respectively.
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• |
Entered into an agreement to sell its oldest Suezmax tanker built in 2010, for a net sales price of $48.5 million. After repayment of existing debt, the transaction is expected
to generate net cash proceeds of approximately $36.5 million.
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• |
Entered into a senior secured term loan facility in an amount of up to $606.7 million to refinance eight Suezmax tankers and eight LR2 tankers, which generated net cash proceeds
of approximately $275.0 million.
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• |
Repaid an aggregate of $395.0 million under both the shareholder loan with Hemen Holding Limited (“Hemen”), our largest shareholder, and the $275.0 million senior unsecured
revolving credit facility with an affiliate of Hemen in the second and third quarters of 2024.
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• |
Secured a commitment for a sale-and-leaseback agreement in an amount of up to $512.1 million to refinance 10 Suezmax tankers, which is subject to execution of final transaction
documents to both parties' satisfaction. The refinancing is expected to generate net cash proceeds of approximately $101.0
million in the fourth quarter of 2024, which is expected to be partly used to repay the remaining $75.0 million drawn under the $275.0 million senior unsecured revolving credit
facility with an affiliate of Hemen.
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($ per day)
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Spot TCE
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Spot TCE currently contracted
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% Covered
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Estimated average daily cash breakeven rates for the next 12 months
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2024
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Q2 2024
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Q1 2024
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Q3 2024
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VLCC
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48,800
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49,600
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48,100
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47,400
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79%
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29,600
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Suezmax
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45,700
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45,600
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45,800
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41,900
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85%
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22,300
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LR2 / Aframax
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53,700
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53,100
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54,300
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50,100
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65%
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21,200
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• |
the strength of world economies;
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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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• |
the impact that any discontinuance, modification or other reform or the establishment of alternative reference rates have on the Company’s floating interest rate debt
instruments;
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• |
general market conditions, including fluctuations in charter hire rates and vessel values;
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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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• |
the highly cyclical nature of the industry that we operate in;
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• |
the loss of a large customer or significant business relationship;
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• |
changes in worldwide oil production and consumption and storage;
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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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• |
planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry docking, surveys and upgrades;
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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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• |
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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• |
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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• |
availability of skilled crew members and other employees and the related labor costs;
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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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• |
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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• |
general economic conditions and conditions in the oil industry;
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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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• |
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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• |
vessel breakdowns and instances of off-hire;
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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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• |
potential conflicts of interest involving members of our board of directors and senior management;
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• |
the failure of counter parties to fully perform their contracts with us;
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• |
changes in credit risk with respect to our counterparties on contracts;
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• |
our dependence on key personnel and our ability to attract, retain and motivate key employees;
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• |
adequacy of insurance coverage;
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• |
our ability to obtain indemnities from customers;
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• |
changes in laws, treaties or regulations;
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• |
the volatility of the price of our ordinary shares;
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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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• |
changes in governmental rules and regulations or actions taken by regulatory authorities;
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• |
government requisition of our vessels during a period of war or emergency;
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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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• |
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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• |
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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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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• |
the impact of port or canal congestion;
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• |
business disruptions due to adverse weather, natural disasters or other disasters outside our control; and
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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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2023
Apr-Jun
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2024
Apr-Jun
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CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(in thousands of $, except per share data)
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2024
Jan-Jun
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2023
Jan-Jun
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2023
Jan-Dec
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512,763
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556,026
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Revenues
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1,134,423
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1,010,095
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1,802,184
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9,391
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51,487
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Other operating income
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94,229
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23,680
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24,080
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522,154
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607,513
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Total revenues and other operating income
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1,228,652
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1,033,775
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1,826,264
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156,610
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197,795
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Voyage expenses and commission
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404,983
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315,437
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618,595
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43,772
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57,519
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Ship operating expenses
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117,345
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87,490
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176,533
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11,701
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12,566
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Administrative expenses
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27,412
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24,339
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53,528
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57,096
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83,714
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Depreciation
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171,726
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112,642
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230,942
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269,179
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351,594
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Total operating expenses
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721,466
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539,908
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1,079,598
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252,975
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255,919
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Net operating income
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507,186
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493,867
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746,666
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4,855
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5,647
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Finance income
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7,874
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7,728
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18,065
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(32,390)
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(73,380)
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Finance expense
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(144,756)
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(77,807)
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(171,336)
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(20,795)
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2,088
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Gain (loss) on marketable securities
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815
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(23,968)
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22,989
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1,217
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(2,134)
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Share of results of associated company
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(920)
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4,955
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3,383
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24,973
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975
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Dividends received
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1,283
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25,500
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36,852
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230,835
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189,115
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Profit before income taxes
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371,482
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430,275
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656,619
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(161)
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(1,541)
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Income tax benefit (expense)
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(3,089)
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25
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(205)
|
230,674
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187,574
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Profit for the period
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368,393
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430,300
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656,414
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$1.04
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$0.84
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Basic and diluted earnings per share
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$1.65
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$1.93
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$2.95
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2023
Apr-Jun
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2024
Apr-Jun
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands of $)
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2024
Jan-Jun
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2023
Jan-Jun
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2023
Jan-Dec
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230,674
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187,574
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Profit for the period
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368,393
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430,300
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656,414
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Items that may be reclassified to profit or loss:
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|||||
77
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(214)
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Foreign currency exchange gain (loss)
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446
|
131
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(39)
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77
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(214)
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Other comprehensive income (loss)
|
446
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131
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(39)
|
230,751
|
187,360
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Comprehensive income
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368,839
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430,431
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656,375
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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of $)
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Jun 30
2024
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Dec 31
2023
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ASSETS
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||
Current assets
|
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Cash and cash equivalents
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359,236
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308,322
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Marketable securities
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8,247
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7,432
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Other current assets
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491,785
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412,172
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Total current assets
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859,268
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727,926
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Non-current assets
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Vessels and equipment
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5,435,574
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4,633,169
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Right-of-use assets
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1,864
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2,236
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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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11,467
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12,386
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Prepaid consideration
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—
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349,151
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Other non-current assets
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30,790
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45,446
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Total non-current assets
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5,592,147
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5,154,840
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Total assets
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6,451,415
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5,882,766
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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
|
455,040
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261,999
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Current portion of obligations under leases
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1,130
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1,104
|
Other current payables
|
165,638
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145,951
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Total current liabilities
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621,808
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409,054
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Non-current liabilities
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Long-term debt
|
3,402,413
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3,194,464
|
Obligations under leases
|
942
|
1,430
|
Other non-current payables
|
463
|
472
|
Total non-current liabilities
|
3,403,818
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3,196,366
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Commitments and contingencies
|
||
Equity
|
||
Frontline plc equity
|
2,426,261
|
2,277,818
|
Non-controlling interest
|
(472)
|
(472)
|
Total equity
|
2,425,789
|
2,277,346
|
Total liabilities and equity
|
6,451,415
|
5,882,766
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2023
Apr-Jun
|
2024
Apr-Jun
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of $)
|
2024
Jan-Jun
|
2023
Jan-Jun
|
2023
Jan-Dec
|
OPERATING ACTIVITIES
|
|||||
230,674
|
187,574
|
Profit for the period
|
368,393
|
430,300
|
656,414
|
Adjustments to reconcile profit to net cash provided by operating activities:
|
|||||
27,535
|
67,732
|
Net finance expense
|
136,882
|
70,079
|
153,271
|
57,096
|
83,714
|
Depreciation
|
171,726
|
112,642
|
230,942
|
(9,251)
|
(51,487)
|
(Gain) on sale of vessels and equipment
|
(94,229)
|
(21,960)
|
(21,959)
|
20,795
|
(2,088)
|
(Gain) loss on marketable securities
|
(815)
|
23,968
|
(22,989)
|
(1,217)
|
2,134
|
Share of results of associated company
|
920
|
(4,955)
|
(3,383)
|
(27)
|
2,919
|
Other, net
|
7,865
|
10,658
|
18,199
|
(8,033)
|
12,387
|
Change in operating assets and liabilities
|
(54,587)
|
(917)
|
(8,512)
|
(1,298)
|
(11,241)
|
Debt issuance costs paid
|
(18,774)
|
(1,325)
|
(20,020)
|
(43,142)
|
(70,554)
|
Interest paid
|
(133,349)
|
(83,181)
|
(165,193)
|
10,008
|
11,587
|
Interest received
|
19,978
|
17,845
|
39,411
|
283,140
|
232,677
|
Net cash provided by operating activities
|
404,010
|
553,154
|
856,181
|
INVESTING ACTIVITIES
|
|||||
(2,566)
|
(9,434)
|
Additions to newbuildings, vessels and equipment
|
(908,493)
|
(153,280)
|
(1,631,423)
|
43,610
|
208,350
|
Proceeds from sale of vessels
|
382,350
|
142,740
|
142,740
|
—
|
—
|
Cash inflow on repayment of loan to associated company
|
—
|
1,388
|
1,388
|
—
|
—
|
Proceeds from sale of marketable securities
|
—
|
—
|
251,839
|
41,044
|
198,916
|
Net cash used in investing activities
|
(526,143)
|
(9,152)
|
(1,235,456)
|
FINANCING ACTIVITIES
|
|||||
129,375
|
462,253
|
Proceeds from issuance of debt
|
1,355,037
|
259,375
|
1,609,449
|
(216,053)
|
(693,702)
|
Repayment of debt
|
(961,132)
|
(356,625)
|
(536,587)
|
(207)
|
(233)
|
Repayment of obligations under leases
|
(462)
|
(411)
|
(862)
|
(155,837)
|
(138,026)
|
Dividends paid
|
(220,396)
|
(394,043)
|
(638,928)
|
(242,722)
|
(369,708)
|
Net cash provided by (used in) financing activities
|
173,047
|
(491,704)
|
433,072
|
81,462
|
61,885
|
Net change in cash and cash equivalents
|
50,914
|
52,298
|
53,797
|
225,361
|
297,351
|
Cash and cash equivalents at start of period
|
308,322
|
254,525
|
254,525
|
306,823
|
359,236
|
Cash and cash equivalents at end of period
|
359,236
|
306,823
|
308,322
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of $ except number of shares)
|
2024
Jan-Jun
|
2023
Jan-Jun
|
2023
Jan-Dec
|
NUMBER OF SHARES OUTSTANDING
|
|||
Balance at beginning and end of period
|
222,622,889
|
222,622,889
|
222,622,889
|
SHARE CAPITAL
|
|||
Balance at beginning and end of period
|
222,623
|
222,623
|
222,623
|
ADDITIONAL PAID IN CAPITAL
|
|||
Balance at beginning and end of period
|
604,687
|
604,687
|
604,687
|
CONTRIBUTED SURPLUS
|
|||
Balance at beginning and end of period
|
1,004,094
|
1,004,094
|
1,004,094
|
ACCUMULATED OTHER RESERVES
|
|||
Balance at beginning of period
|
415
|
454
|
454
|
Other comprehensive income (loss)
|
446
|
131
|
(39)
|
Balance at end of period
|
861
|
585
|
415
|
RETAINED EARNINGS
|
|||
Balance at beginning of period
|
445,999
|
428,513
|
428,513
|
Profit for the period
|
368,393
|
430,300
|
656,414
|
Cash dividends
|
(220,396)
|
(394,043)
|
(638,928)
|
Balance at end of period
|
593,996
|
464,770
|
445,999
|
EQUITY ATTRIBUTABLE TO THE COMPANY
|
2,426,261
|
2,296,759
|
2,277,818
|
NON-CONTROLLING INTEREST
|
|||
Balance at beginning and end of period
|
(472)
|
(472)
|
(472)
|
TOTAL EQUITY
|
2,425,789
|
2,296,287
|
2,277,346
|
(in thousands of $)
|
YTD 2024
|
Q2 2024
|
Q1 2024
|
FY 2023
|
Q2 2023
|
Adjusted profit
|
|||||
Profit
|
368,393
|
187,574
|
180,819
|
656,414
|
230,674
|
Add back:
|
|||||
Loss on marketable securities
|
1,273
|
—
|
1,273
|
23,968
|
20,795
|
Share of losses of associated companies
|
2,134
|
2,134
|
—
|
1,690
|
—
|
Unrealized loss on derivatives (1)
|
3,385
|
3,385
|
—
|
20,950
|
—
|
Debt extinguishment losses
|
936
|
—
|
936
|
—
|
—
|
Less:
|
|||||
Unrealized gain on derivatives (1)
|
(815)
|
—
|
(815)
|
(6,075)
|
(6,075)
|
Gain on marketable securities
|
(2,088)
|
(2,088)
|
—
|
(46,957)
|
—
|
Share of results of associated companies
|
(1,214)
|
—
|
(1,214)
|
(5,073)
|
(1,217)
|
Gain on sale of vessels
|
(94,229)
|
(51,487)
|
(42,742)
|
(21,960)
|
(9,251)
|
Dividends received
|
(1,283)
|
(975)
|
(308)
|
(36,852)
|
(24,973)
|
Debt extinguishment gains
|
(354)
|
(354)
|
—
|
—
|
—
|
Gain on settlement of insurance and other claims
|
—
|
—
|
—
|
(397)
|
—
|
Adjusted profit
|
276,138
|
138,189
|
137,949
|
585,708
|
209,953
|
(in thousands)
|
|||||
Weighted average number of ordinary shares
|
222,623
|
222,623
|
222,623
|
222,623
|
222,623
|
(in $)
|
|||||
Adjusted basic and diluted earnings per share
|
1.24
|
0.62
|
0.62
|
2.63
|
0.94
|
(in thousands of $)
|
YTD 2024
|
Q2 2024
|
Q1 2024
|
FY 2023
|
Q2 2023
|
Unrealized gain (loss) on derivatives
|
(2,570)
|
(3,385)
|
815
|
(14,875)
|
6,075
|
Interest income on derivatives
|
12,418
|
6,254
|
6,164
|
22,914
|
5,551
|
Gain (loss) on derivatives
|
9,848
|
2,869
|
6,979
|
8,039
|
11,626
|
(in thousands of $)
|
YTD 2024
|
Q2 2024
|
Q1 2024
|
FY 2023
|
Q2 2023
|
Revenues
|
1,134,423
|
556,026
|
578,397
|
1,802,184
|
512,763
|
Less
|
|||||
Voyage expenses and commission
|
(404,983)
|
(197,795)
|
(207,188)
|
(618,595)
|
(156,610)
|
Other non-vessel items
|
(2,066)
|
(575)
|
(1,491)
|
(13,524)
|
(3,810)
|
Total TCE
|
727,374
|
357,656
|
369,718
|
1,170,065
|
352,343
|
YTD 2024
|
Q2 2024
|
Q1 2024
|
FY 2023
|
Q2 2023
|
|
Time charter TCE (in thousands of $)
|
|||||
Suezmax
|
2,566
|
2,566
|
—
|
—
|
—
|
LR2
|
28,101
|
14,044
|
14,057
|
45,586
|
11,337
|
Total Time charter TCE
|
30,667
|
16,610
|
14,057
|
45,586
|
11,337
|
Spot TCE (in thousands of $)
|
|||||
VLCCs ex. vessels acquired from Euronav
|
179,858
|
78,889
|
100,969
|
395,514
|
126,102
|
VLCCs acquired from Euronav
|
187,658
|
103,393
|
84,265
|
1,054
|
—
|
VLCCs total
|
367,516
|
182,282
|
185,234
|
396,568
|
126,102
|
Suezmax
|
193,036
|
91,493
|
101,543
|
480,346
|
144,669
|
LR2
|
136,155
|
67,271
|
68,884
|
247,565
|
70,235
|
Total Spot TCE
|
696,707
|
341,046
|
355,661
|
1,124,479
|
341,006
|
Total TCE
|
727,374
|
357,656
|
369,718
|
1,170,065
|
352,343
|
Spot days (available days less off hire days)
|
|||||
VLCCs ex. vessels acquired from Euronav
|
3,357
|
1,493
|
1,864
|
7,869
|
1,971
|
VLCCs acquired from Euronav
|
4,170
|
2,180
|
1,990
|
184
|
—
|
VLCCs total
|
7,527
|
3,673
|
3,854
|
8,053
|
1,971
|
Suezmax
|
4,223
|
2,005
|
2,218
|
9,140
|
2,344
|
LR2
|
2,535
|
1,267
|
1,268
|
5,294
|
1,328
|
Spot TCE per day (in $ per day)
|
|||||
VLCCs ex. vessels acquired from Euronav
|
53,600
|
52,800
|
54,200
|
50,300
|
64,000
|
VLCCs acquired from Euronav
|
45,000
|
47,400
|
42,300
|
5,700
|
—
|
VLCCs total
|
48,800
|
49,600
|
48,100
|
49,200
|
64,000
|
Suezmax
|
45,700
|
45,600
|
45,800
|
52,600
|
61,700
|
LR2
|
53,700
|
53,100
|
54,300
|
46,800
|
52,900
|