Tanker entity Frontline (FRO) reported Q4 2022 and full year results on 2/28/23.
- Operating rev of $530.1M
- Net income of $240M (highest net income since Q2 2008)
- Declared Q4 dividend of 77c/sh.
- There is a Q3 dividend of 30c/sh that was deferred until the completion of the Euronav merger. Since merger did not get consumed, not sure how FRO determine eligibilty for Q3 div.
- Reported Q4 TCE avgs: VLCCs - $63,200, Suezmax - $57,900 & Aframax/LR2s - $58,800 (historic high)
- Q1-to-date TCE avgs Even higher currently, but expected to decrease with some ballast days,
- Sold an older VLCC (2009 build) and an older Suezmax (2009 build) for > $100M
- Repaid a portion of expensive line-of-credit from Fredriksen. The facility keeps getting rolled forward (now into 2024). I suspect, some of it may be paid down during good quarters, and then eventually, Fredriksen just converts a portion to equity.
- Took delivery of two newbuild VLCCs in Jan 2023.
- Euronav filed a case against Frontline for terminating the merger. A court has already ruled in Frontline’s favor.
4th Quarter 2022 Results (globenewswire.com)
Though a little late to the party, took a FRO position this week. Seems like FRO has rediscovered some of its tanker mojo. Though the company could have opted to stay focused on just the VLCC and Suezmax segments, the decision to opt-in on the Aframax/LR2 category now seems a good move. The vessel category offers FRO optionality to trading clean too.