In This Article:
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VLCC TCE Rates (Q4 2024): $35,900 per day.
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Suezmax TCE Rates (Q4 2024): $33,400 per day.
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LR2/Aframax TCE Rates (Q4 2024): $26,100 per day.
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Profit (Q4 2024): $66.7 million or $0.30 per share.
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Adjusted Profit (Q4 2024): $45.1 million or $0.20 per share.
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Cash and Cash Equivalents: $693 million.
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Fleet Composition: 41 VLCCs, 22 Suezmax tankers, 18 LR2 tankers.
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Average Fleet Age: 6.6 years.
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OpEx (Q4 2024): $7,600 per day for VLCCs, $9,100 per day for Suezmax, $7,600 per day for LR2.
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Cash Generation Potential: $447 million or $2.01 per share.
Release Date: February 28, 2025
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 TCE rates in Q4 2024, with $35,900 per day for VLCCs, $33,400 per day for Suezmax, and $26,100 per day for LR2/Aframax fleets.
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The company reported a solid profit of $66.7 million for the quarter, translating to $0.30 per share.
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Frontline PLC (NYSE:FRO) maintains a strong liquidity position with $693 million in cash and cash equivalents.
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The fleet is modern, with an average age of 6.6 years, and 99% of vessels are ECO-friendly, with 56% scrubber-fitted.
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The tanker fleet growth is expected to remain muted, which could support higher rates in the future due to limited supply.
Negative Points
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Adjusted profit decreased by $30 million compared to the previous quarter, primarily due to lower TCE earnings.
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Global oil exports were down 700,000 barrels per day in Q4 2024 compared to the previous year, impacting tanker rates.
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The geopolitical landscape, including sanctions and tariffs, creates uncertainty and complicates market dynamics.
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The average fleet age for tankers is at its highest since 2001, indicating potential future replacement needs.
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Frontline PLC (NYSE:FRO) faces challenges in ordering new vessels due to high newbuilding prices and geopolitical uncertainties affecting shipyard operations.
Q & A Highlights
Q: Have recent geopolitical events and sanctions had a real impact on chartering and market dynamics? A: Yes, the Shandong province's decision not to allow OFAC-listed vessels to discharge has been a game changer, causing a spike in Aframax rates. Iranian crude is backing up, and there's a noticeable shift in chartering patterns, particularly for compliant oil into Asian refiners. However, market efficiency has reduced the frequency of extreme rate spikes.
Q: Can you clarify the dry dock schedule and administrative expenses for 2025? A: For 2025, we have scheduled dry docks for two VLCCs and one Suezmax. Regarding administrative expenses, the reported $1.7 million for the quarter was due to a gain on our synthetic option program. Normalized G&A expenses are expected to be around $9 million to $10 million per quarter.