Why Frontline Shares Are Falling Today

  • Frontline Plc FRO reported a first-quarter FY23 operating revenue increase of 128.7% year-over-year to $497.33 million, beating the consensus of $356.5 million.
  • Reported spot TCEs for VLCCs, Suezmax tankers, and LR2/Aframax tankers in the first quarter of 2023 were $52,500 (-16.9% sequentially), $64,000 (+10.5%) and $56,300 (-4.3%) per day.
  • Adjusted EPS was $0.87 versus a loss per share of $(0.02) in 1Q22, missing the consensus of $0.96.
  • Q1's net operating income improved to $240.89 million versus $20.75 million a year ago.
  • Frontline's operating cash flow was $262.72 million compared to $19.94 million in the same quarter last year.
  • FRO held cash and cash equivalents of $225.36 million, as of March 31, 2023.
  • Dividend: The company declared a dividend of $0.70 per share for Q1, payable June 30, 2023. The record date for the dividend will be June 16, 2023.
  • "The most prominent market development during the quarter was that China abandoned its zero-tolerance policy in respect of Covid-19 and started reopening. Freight demand and rates remained firm throughout the quarter, defying historical seasonal patterns. Our constructive long-term outlook is not affected by short-term volatility, as oil demand is expected to rise significantly in the second half of the year," commented Lars H. Barstad, CEO of Frontline Management AS.
  • For 2Q23, FRO estimate spot TCE on a load-to-discharge basis of $75,000 contracted for 78% of vessel days for VLCCs, $65,000 contracted for 71% of vessel days for Suezmax tankers, and $65,700 contracted for 63% of vessel days for LR2/Aframax tankers.
  • Price Action: FRO shares are trading lower by 6.80% at $14.01 premarket on Wednesday.
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