Frontline reports strongest results in 15 years

2023 revenues were $1.8 billion, up from $1.4 billion in 2022, as average time charter equivalent (TCE) earnings rose across its three vessel sizes - VLCC, suezmax, and aframax/LR2.

Frontline signed a deal in the fourth quarter 2024 to acquire 24 VLCCs from Euronav, 11 of which were delivered in the same quarter with the rest expected to join the fleet by the end of Q1 2024. The deliveries further expand the company’s earnings potential, tempered by the sale of its five oldest VLCCs.

While the Frontline side of the Euronav deal seems to have gone without a hitch, the other has hit a snag. A US investor filed a lawsuit this week to block CMB's mandatory takeover bid for Euronav as the Belgian operator looks to transform Euronav into a sustainability-focussed shipping company.

In its earnings presentation, Frontline said earnings had risen in the first quarter of 2024 compared to the last quarter of 2023. VLCC earnings were 81% done for Q1 2024 at an average of $55,100 per day, up from $42,300. Suezmaxes were 72% done at $53,800 from $45,700, and LR2/Aframax were 69% done at $67,800 up from $42,900

The company noted the impacts of attacks on shipping in the Red Sea, reducing traffic by 40% - 50% in the region and increasing tonnage on the cape of good hope route. Frontline branded the Bab El-Mandeb straits between Yemen and Djibouti “unsafe for passage for responsible owners.”

Lars H. Barstad, CEO of Frontline Management, said: “Frontline delivered its strongest full year result in fifteen years, despite muted markets in the fourth quarter… The continuous disruption in the Red Sea has caused West / East trading lanes to widen, which we believe benefits the larger vessel classes, offering economies of scale as oil and products move around the Cape of Good Hope.”

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