Saturday, March 25, 2023
HomeFinance & EconomyFrontline Posts Higher Quarterly Net Income Since 2Q2008

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Frontline Posts Higher Quarterly Net Income Since 2Q2008

Frontline plc reported unaudited results for the three and twelve months ended December 31, 2022.

Highlights

  • Highest quarterly net income since the second quarter of 2008 of $240.0 million, or $1.08 per basic and diluted share for the fourth quarter of 2022.
  • Adjusted net income of $215.5 million, or $0.97 per basic and diluted share for the fourth quarter of 2022.
  • Declared a cash dividend of $0.30 per share for the third quarter of 2022 and a cash dividend of $0.77 per share for the fourth quarter of 2022.
  • Reported total operating revenues of $530.1 million for the fourth quarter of 2022.
  • Reported spot TCEs for VLCCs, Suezmax tankers and LR2/Aframax tankers in the fourth quarter of 2022 were $63,200, $57,900 (highest since the third quarter of 2008) and $58,800 (an all-time high) per day, respectively.
  • For the first quarter of 2023, we estimate spot TCE on a load-to-discharge basis of $58,300 contracted for 87% of vessel days for VLCCs, $72,400 contracted for 77% of vessel days for Suezmax tankers and $63,900 contracted for 68% of vessel days for LR2/Aframax tankers.
  • Sold the 2009-built VLCC, Front Eminence, and the 2009-built Suezmax tanker, Front Balder, for aggregate gross proceeds of approximately $100.5 million. After repayment of existing debt on the vessels, the transactions are expected to generate net cash proceeds of approximately $63.8 million.
  • Took delivery of the three remaining VLCC newbuildings from Hyundai Heavy Industries (“HHI”): Front Gaula in October 2022, and Front Orkla and Front Tyne in January 2023.
  • Terminated the Combination Agreement with Euronav on January 9, 2023 and received from Euronav an emergency arbitration request for urgent interim and conservatory measures on January 17, 2023, which was fully dismissed by the Emergency Arbitrator on February 7, 2023.
  • Received from Euronav an arbitration request for proceedings on the merits of the termination on January 28, 2023.
  • Repaid $60.0 million of its $275.0 million senior unsecured revolving credit facility in February 2023.

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

“The fourth quarter of 2022 may have given us a preview of the years to come in the tanker market as Frontline posts its best quarterly result in more than 14 years. With Chinese demand returning in earnest, the VLCC market also kicked into action during the fourth quarter and Frontline reaped the full benefits of its lean and efficient operations with all asset classes generating solid shareholder returns.

Overall freight demand continues to be positively affected by expanding trade lanes caused by Russian sanctions and the price cap on product exports that kicked in on the 5th of February. We should not forget this is all happening against the backdrop of an ageing fleet, dwindling orderbooks and unprecedented lead-times to new tonnage supply providing further support for the markets.”

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

“We expect to refinance a term loan facility with total balloon payment of $80.1 million due in August 2023 prior to maturity, leaving the Company with no material maturities until 2024. Our strong cash flow in the second half of 2022 enables us to return $238.2 million to our shareholders in cash dividends. Considering that asset values are moving ahead of earnings fundamentals, we believe the best capital allocation of the net proceeds from the sale of the two 2009 built vessels is to repay our $275.0 million senior unsecured revolving credit facility and have repaid $60.0 million in February 2023, reducing the amount outstanding to $149.7 million.”

We expect the spot TCEs for the full first quarter of 2023 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 322 for VLCCs, 428 for Suezmax tankers and 174 for LR2/Aframax tankers.

Related Posts

Video

Finance & Economy
Shipping News
Ports

Eva Birgitte Bisgaard steps down as chief commercial officer at Maersk Tankers

Eva Birgitte Bisgaard is stepping down from her role as chief commercial officer at Maersk Tankers. Christian M. Ingerslev, chief executive officer of Maersk Tankers,...

Frontline’s Fredriksen appointed to Euronav supervisory board

Belgium’s Euronav said its shareholders had overwhelmingly voted to elect John Fredriksen of peer Frontline, a major investor that pulled out of a merger...

UBS Likely to Shrink Credit Suisse’s $10 Billion Shipping Portfolio – Report

UBS Group AG will likely shrink Credit Suisse Group’s $10 billion shipping portfolio that it inherited as part of its emergency takeover on Sunday,...

Braemar: Record revenue & profitability

Braemar Plc., a provider of expert investment, chartering, and risk management advice to the shipping and energy markets, announced an update on trading...

Oldendorff Carriers announces change of leadership

Effective today, the board of OLDENDORFF CARRIERS has appointed Patrick Hutchins as the new President and CEO of the company. Patrick succeeds Peter Twiss, who...

Global Goods Trade Softening from 2022’s Record Level

International commerce soared to a record of $32 trillion in 2022, but goods trade...

New Hybrid Ferry ‘P&O Pioneer’ Docks At DP World Limassol For Bunkering

P&O Ferries’ newly commissioned Fusion Class vessel ‘P&O Pioneer’ has docked at DP World...

Baltic index gains as capesize rates rebound

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Minerva puts cost of fuel theft as high as $5.2 bil/year

The bunkering industry is losing as much $5.2 billion of fuel annually to quantity...

Baltic index logs worst day in five weeks on tepid demand for larger vessels

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Drewry: Port Throughput Index Down 4.5% Year-on-Year

The Drewry Container Port Throughput Indices are a series of calendar adjusted volume growth/decline indices based on monthly throughput data for a sample of...

Port of Los Angeles moves 487,846 container units in February

The Port of Los Angeles processed 487,846 Twenty-Foot Equivalent Units (TEUs) in February, a 43% decrease from the previous February’s all-time record. “February declines were...

Piraeus Port Authority: Strong growth in 2022

PPA S.A. announced Full Year 2022 financial results, marking a consecutive year of growth with a turnover of €194.6 million compared to €154.2 million...

WLP welcomes 14 strategic Vietnamese partners to its growing network of international traders

World Logistics Passport (WLP), a Dubai-led global initiative designed to smooth the flow of world trade, has welcomed 14 Vietnamese partners to its global...

Port of Hedland February Iron Ore Exports 2% Down

Pilbara Ports Authority has delivered a total monthly throughput of 54.8 million tonnes (Mt) for February 2023. This throughput was a five per cent increase...