In This Article:
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VLCC Fleet Rate: $39,600 per day in Q3 2024; 77% booked at $44,300 per day for Q3.
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Suezmax Fleet Rate: $39,900 per day in Q3 2024; 70% booked at $39,600 per day for Q3.
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LR2/Aframax Fleet Rate: $36,000 per day in Q3 2024; 60% booked at $34,800 per day for Q3.
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Profit: $60.5 million or $0.27 per share in Q3 2024.
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Adjusted Profit: $75.4 million or $0.34 per share in Q3 2024.
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TCE Earnings: Decreased from $357.7 million in Q2 2024 to $292.2 million in Q3 2024.
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Liquidity: $526 million in cash and cash equivalents as of September 30, 2024.
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Fleet Composition: 41 VLCCs, 22 Suezmax tankers, 18 LR2 tankers; average age of six years.
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OpEx Expenses: $8,700 per day for VLCCs, $7,900 per day for Suezmax, $7,800 per day for LR2 tankers in Q3 2024.
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Cash Generation Potential: $304 million or $1.36 per share at current fleet and spot market earnings.
Release Date: November 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Frontline PLC (NYSE:FRO) achieved strong daily rates in Q3 2024, with $39,600 per day on VLCCs, $39,900 on Suezmaxes, and $36,000 on LR2/Aframax vessels.
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The company reported a solid liquidity position with $526 million in cash and cash equivalents.
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Frontline PLC (NYSE:FRO) has a modern fleet with an average age of six years, consisting of 99% eco vessels, enhancing operational efficiency.
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The company has no remaining new building commitments and no significant debt maturities until 2027, providing financial stability.
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Despite a challenging spot market, Frontline PLC (NYSE:FRO) generates positive cash flow with substantial upside potential if market conditions improve.
Negative Points
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Adjusted profit decreased by $62.8 million compared to the previous quarter, primarily due to lower TCE earnings.
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The market has not provided the expected numbers, leading to a decrease in TCE rates from the previous quarter.
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Global oil demand growth remains muted, impacting the overall market sentiment and potential earnings.
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The tanker market is expected to be oversupplied in 2025, which could affect utilization rates and profitability.
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Geopolitical risks, such as Middle East tensions and sanctions, continue to pose uncertainties for the market.
Q & A Highlights
Q: Inger, with the market volatility and concerns about leverage, has there been any thought about deleveraging the balance sheet more proactively? A: Inger Klemp, CFO: Our long-term value is just below 50%, and we are comfortable with our current debt level. We don't see it as high leverage.