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FRONTLINE LTD.
(registrant)
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Dated: December 6, 2022
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By:
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/s/ Inger M. Klemp
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Name: Inger M. Klemp
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Title: Principal Financial Officer
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• |
Net income of $154.4 million, or $0.69 per basic and diluted
share for the third quarter of 2022.
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• |
Adjusted net income of $82.9 million, or $0.37 per basic and diluted
share for the third quarter of 2022.
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• |
Intention to declare and pay the cash dividend in respect of the third quarter of 2022 only after the contemplated voluntary exchange offer by Frontline for Euronav shares that
was initially announced on July 11, 2022 (the “Tender Offer”) has been completed. This dividend is expected to be in the amount of 80% of adjusted net income for the third quarter of 2022.
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• |
Reported total operating revenues of $382.2 million for the third quarter of 2022.
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• |
Reported spot TCEs for VLCCs, Suezmax tankers and LR2/Aframax tankers in the third quarter of 2022
were $25,000, $41,100 and $40,200 per day, respectively.
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• |
For the fourth quarter of 2022, we estimate spot TCE on a load-to-discharge basis of $77,200 contracted for 75% of vessel days for VLCCs, $65,400 contracted for 76% of vessel
days for Suezmax tankers and $58,000 contracted for 70% of vessel days for LR2/Aframax tankers. We expect the spot TCEs for the full fourth quarter of 2022 to be lower than the TCEs currently contracted, due to the impact of ballast days at
the end of the fourth quarter. The number of ballast days at the end of the third quarter was 332 for VLCCs, 367 for Suezmax tankers and 269 for LR2/Aframax tankers.
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• |
Final Combination Agreement signed with Euronav in July 2022.
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• |
Entered into two senior secured term loan facilities, one in July and the other in October 2022, for a total amount of up to $287.2 million at attractive terms to refinance two
existing term loan facilities maturing in the first quarter of 2023.
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• |
Took delivery of the VLCC newbuildings, Front Tana and Front Gaula, from Hyundai Heavy Industries (“HHI”) in August 2022 and October 2022, respectively.
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• |
In November 2022, the Company extended its senior unsecured revolving credit facility of up to $275.0 million with an affiliate of Hemen Holding Ltd., the Company’s largest
shareholder, by 12 months to May 2024 at an interest rate of 8.50% and otherwise on existing terms.
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($ per day)
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Spot TCE
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Spot TCE
estimates
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%
Covered |
Estimated average daily cash breakeven rates
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||||
2022
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Q3 2022
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Q2 2022
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Q1 2022 20222022
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2021
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Q4 2022
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2022
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VLCC
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19,100
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25,000
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16,400
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15,700
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15,300
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77,200
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75%
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25,000
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Suezmax
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28,500
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41,100
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26,500
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16,900
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12,000
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65,400
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76%
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20,200
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LR2/ Aframax
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32,300
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40,200
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38,600
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19,000
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11,800
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58,000
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70%
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17,200
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(i) |
65 vessels owned by the Company (20 VLCCs, 27 Suezmax tankers, 18 LR2/Aframax tankers);
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(ii) |
four vessels that are under the Company’s commercial management (two Suezmax tankers and two Aframax tankers)
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Frontline Ltd.
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Euronav NV
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Lars H. Barstad
Chief Executive Officer
Frontline Management AS
Tel: +47 23 11 40 00
Email: lba@frontmgt.no
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Mr. Brian Gallagher
Head of IR and Communications
Tel: +44 20 7870 0436
Email: IR@euronav.com
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2021
Jul-Sep
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2022
Jul-Sep
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CONDENSED CONSOLIDATED INCOME STATEMENT
(in thousands of $, except per share data)
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2022
Jan-Sep
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2021
Jan-Sep
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2021
Jan-Dec
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171,825
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382,186
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Total operating revenues
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900,067
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535,834
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749,381
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278
|
1,944
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Other operating gain
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9,026
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1,411
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5,893
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102,864
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173,343
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Voyage expenses and commission
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428,249
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279,804
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392,697
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(991)
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—
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Contingent rental income
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(623)
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(2,615)
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(3,606)
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45,562
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48,696
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Ship operating expenses
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143,532
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133,716
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175,607
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—
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—
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Charter hire expenses
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—
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2,593
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2,695
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6,452
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13,667
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Administrative expenses
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29,907
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20,782
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27,891
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37,454
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37,843
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Depreciation
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111,616
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109,188
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147,774
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191,341
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273,549
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Total operating expenses
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712,681
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543,468
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743,058
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(19,238)
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110,581
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Net operating income (loss)
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196,412
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(6,223)
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12,216
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26
|
198
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Interest income
|
386
|
109
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119
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(15,222)
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(26,961)
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Interest expense
|
(62,855)
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(44,634)
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(61,435)
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219
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47,072
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Gain on marketable securities
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35,336
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8,134
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7,677
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—
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5,652
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Share of results of associated company
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11,611
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(724)
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(724)
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(184)
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13
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Foreign currency exchange gain (loss)
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(4)
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(201)
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(116)
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1,215
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17,244
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Gain on derivatives
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51,042
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12,204
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17,509
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(7)
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844
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Other non-operating items
|
966
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369
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18,239
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(33,191)
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154,643
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Net income (loss) before income taxes
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232,894
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(30,966)
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(6,515)
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(15)
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(204)
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Income tax benefit (expense)
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(210)
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24
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(4,633)
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(33,206)
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154,439
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Net income (loss)
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232,684
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(30,942)
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(11,148)
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$(0.17)
|
$0.69
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Basic earnings (loss) per share
|
$1.10
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$(0.16)
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$(0.06)
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$(0.17)
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$0.69
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Diluted earnings (loss) per share
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$1.10
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$(0.16)
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$(0.06)
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2021
Jul-Sep
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2022
Jul-Sep
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in thousands of $)
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2022
Jan-Sep
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2021
Jan-Sep
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2021
Jan-Dec
|
(33,206)
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154,439
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Net income (loss)
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232,684
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(30,942)
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(11,148)
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(26)
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72
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Foreign currency exchange gain (loss)
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268
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(50)
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28
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(26)
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72
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Other comprehensive income (loss)
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268
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(50)
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28
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(33,232)
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154,511
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Comprehensive income (loss)
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232,952
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(30,992)
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(11,120)
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of $)
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Sep 30
2022
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Dec 31
2021
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ASSETS
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Current assets
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Cash and cash equivalents
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127,356
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113,073
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Marketable securities
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213,258
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2,435
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Other current assets
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352,505
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217,237
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Total current assets
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693,119
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332,745
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Non-current assets
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Newbuildings
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70,926
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130,633
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Vessels and equipment, net
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3,596,091
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3,477,801
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Vessels under finance lease, net
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—
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44,880
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Right of use assets under operating leases
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3,449
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3,914
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Goodwill
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112,452
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112,452
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Investment in associated company
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13,670
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555
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Loan notes receivable
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1,388
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1,388
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Other long-term assets
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57,566
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12,730
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Total non-current assets
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3,855,542
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3,784,353
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Total assets
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4,548,661
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4,117,098
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LIABILITIES AND EQUITY
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Current liabilities
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Short-term debt and current portion of long-term debt
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256,915
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189,286
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Current portion of obligations under finance lease
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—
|
7,601
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Current portion of obligations under operating lease
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1,114
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1,122
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Dividends payable
|
33,393
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—
|
Other current liabilities
|
133,190
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94,666
|
Total current liabilities
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424,612
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292,675
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Non-current liabilities
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Long-term debt
|
2,092,381
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2,126,910
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Obligations under finance lease
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—
|
40,865
|
Obligations under operating lease
|
2,626
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3,114
|
Other long-term liabilities
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1,453
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992
|
Total non-current liabilities
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2,096,460
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2,171,881
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Commitments and contingencies
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Equity
|
||
Frontline Ltd. equity
|
2.028.061
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1,653,014
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Non-controlling interest
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(472)
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(472)
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Total equity
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2,027,589
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1,652,542
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Total liabilities and equity
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4,548,661
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4,117,098
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2021
Jul-Sep
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2022
Jul-Sep
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of $)
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2022
Jan-Sep
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2021
Jan-Sep
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2021
Jan-Dec
|
OPERATING ACTIVITIES
|
|||||
(33,206)
|
154,439
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Net income (loss)
|
232,684
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(30,942)
|
(11,148)
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Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|||||
38,566
|
39,225
|
Depreciation and amortization of deferred charges
|
115,711
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112,926
|
152,981
|
—
|
—
|
Gain on sale of vessels and equipment
|
(6,055)
|
—
|
(5,058)
|
—
|
—
|
Loss on finance lease termination
|
431
|
—
|
—
|
(1,271)
|
(304)
|
Amortization of acquired time charters
|
(2,806)
|
(3,773)
|
(5,045)
|
(991)
|
(1)
|
Contingent rental income
|
(624)
|
(2,615)
|
(3,607)
|
(219)
|
(47,072)
|
Gain on marketable securities
|
(35,336)
|
(8,134)
|
(7,677)
|
—
|
(5,652)
|
Share of results of associated company
|
(11,611)
|
724
|
724
|
(2,686)
|
(15,757)
|
Unrealized gain on derivatives
|
(51,108)
|
(16,532)
|
(23,262)
|
434
|
405
|
Other, net
|
1,325
|
92
|
432
|
(4,152)
|
(56,646)
|
Change in operating assets and liabilities
|
(91,468)
|
(14,054)
|
(35,408)
|
(3,525)
|
68,637
|
Net cash provided by (used in) operating activities
|
151,143
|
37,692
|
62,932
|
INVESTING ACTIVITIES
|
|||||
(36,850)
|
(79,077)
|
Additions to newbuildings, vessels and equipment
|
(238,711)
|
(218,830)
|
(462,400)
|
—
|
—
|
Proceeds from sale of vessels and equipment
|
80,000
|
—
|
80,000
|
—
|
(1,505)
|
Investment in associated company
|
(1,505)
|
—
|
—
|
—
|
—
|
Net cash inflow on sale of subsidiary
|
—
|
2,813
|
5,625
|
—
|
—
|
Marketable securities acquired
|
—
|
(357)
|
(357)
|
(18,000)
|
—
|
Prepaid consideration
|
—
|
(18,000)
|
—
|
—
|
—
|
Proceeds from sale of marketable securities
|
—
|
14,074
|
14,074
|
(54,850)
|
(80,582)
|
Net cash used in investing activities
|
(160,216)
|
(220,300)
|
(363,058)
|
FINANCING ACTIVITIES
|
|||||
81,422
|
317,433
|
Proceeds from debt
|
551,433
|
253,446
|
403,868
|
(41,190)
|
(295,276)
|
Repayment of debt
|
(518,546)
|
(131,813)
|
(219,521)
|
(979)
|
—
|
Repayment of finance leases
|
(1,197)
|
(4,178)
|
(5,194)
|
684
|
—
|
Net proceeds from issuance of shares
|
—
|
684
|
52,447
|
—
|
—
|
Finance lease termination payments
|
(4,456)
|
—
|
—
|
(1,008)
|
(2,667)
|
Debt fees paid
|
(3,878)
|
(3,125)
|
(8,050)
|
38,929
|
19,490
|
Net cash provided by financing activities
|
23,356
|
115,014
|
223,550
|
(19,446)
|
7,545
|
Net change in cash and cash equivalents and restricted cash
|
14,283
|
(67,594)
|
(76,576)
|
141,501
|
119,811
|
Cash and cash equivalents and restricted cash at start of period
|
113,073
|
189,649
|
189,649
|
122,055
|
127,356
|
Cash and cash equivalents and restricted cash at end of period
|
127,356
|
122,055
|
113,073
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of $ except number of shares)
|
2022
Jan-Sep
|
2021
Jan-Sep
|
2021
Jan-Dec
|
NUMBER OF SHARES OUTSTANDING
|
|||
Balance at beginning of period
|
203,530,979
|
197,692,321
|
197,692,321
|
Shares issued
|
19,091,910
|
339,000
|
5,838,658
|
Balance at end of period
|
222,622,889
|
198,031,321
|
203,530,979
|
SHARE CAPITAL
|
|||
Balance at beginning of period
|
203,531
|
197,692
|
197,692
|
Shares issued
|
19,092
|
339
|
5,839
|
Balance at end of period
|
222,623
|
198,031
|
203,531
|
ADDITIONAL PAID IN CAPITAL
|
|||
Balance at beginning of period
|
448,291
|
402,021
|
402,021
|
Stock compensation expense
|
—
|
(338)
|
(338)
|
Capital contribution
|
175,488
|
—
|
—
|
Shares issued
|
(19,092)
|
1,593
|
46,608
|
Balance at end of period
|
604,687
|
403,276
|
448,291
|
CONTRIBUTED SURPLUS
|
|||
Balance at beginning of period
|
1,004,094
|
1,004,094
|
1,004,094
|
Balance at end of period
|
1,004,094
|
1,004,094
|
1,004,094
|
ACCUMULATED OTHER COMPREHENSIVE INCOME
|
|||
Balance at beginning of period
|
228
|
200
|
200
|
Other comprehensive income (loss)
|
268
|
(50)
|
28
|
Balance at end of period
|
496
|
150
|
228
|
RETAINED EARNINGS (DEFICIT)
|
|||
Balance at beginning of period
|
(3,130)
|
8,018
|
8,018
|
Net income (loss)
|
232,684
|
(30,942)
|
(11,148)
|
Cash dividends
|
(33,393)
|
—
|
—
|
Balance at end of period
|
196,161
|
(22,924)
|
(3,130)
|
EQUITY ATTRIBUTABLE TO THE COMPANY
|
2,028,061
|
1,582,627
|
1,653,014
|
NON-CONTROLLING INTEREST
|
|||
Balance at beginning of period
|
(472)
|
(472)
|
(472)
|
Balance at end of period
|
(472)
|
(472)
|
(472)
|
TOTAL EQUITY
|
2,027,589
|
1,582,155
|
1,652,542
|
(in thousands of $)
|
2022
Jan-Sep
|
2021
Jan-Sep
|
2021
Jan-Dec
|
Net income (loss)
|
232,684
|
(30,942)
|
(11,148)
|
(in thousands)
|
|||
Weighted average number of ordinary shares
|
211,109
|
197,805
|
198,965
|
Dilutive effect of share options
|
—
|
—
|
—
|
Denominator for diluted earnings per share
|
211,109
|
197,805
|
198,965
|
(in thousands of $)
|
YTD 2022
|
Q3 2022
|
Q2 2022
|
Q1 2022
|
FY 2021
|
Adjusted net income (loss)
|
|||||
Net income (loss)
|
232,684
|
154,439
|
47,097
|
31,148
|
(11,148)
|
Add back:
|
|||||
Loss on marketable securities
|
12,005
|
—
|
12,005
|
—
|
457
|
Share of losses of associated companies
|
92
|
—
|
—
|
92
|
789
|
Unrealized loss on derivatives (1)
|
—
|
—
|
—
|
—
|
3,282
|
Tax expense on received dividends
|
—
|
—
|
—
|
—
|
4,455
|
Loss on termination of leases
|
431
|
—
|
431
|
—
|
—
|
Less:
|
|||||
Unrealized gain on derivatives (1)
|
(51,108)
|
(15,757)
|
(9,217)
|
(26,134)
|
(26,544)
|
Gain on marketable securities
|
(47,341)
|
(47,072)
|
—
|
(269)
|
(4,134)
|
Share of results of associated companies
|
(11,703)
|
(5,652)
|
(6,051)
|
—
|
(65)
|
Amortization of acquired time charters
|
(2,806)
|
(304)
|
(1,258)
|
(1,244)
|
(5,045)
|
Gain on sale of vessels
|
(6,055)
|
—
|
—
|
(6,055)
|
(5,058)
|
Dividends received
|
—
|
—
|
—
|
—
|
(17,819)
|
Gain on settlement of insurance and other claims
|
(3,998)
|
(2,796)
|
(840)
|
(362)
|
—
|
Adjusted net income (loss)
|
122,201
|
82,858
|
42,167
|
(2,824)
|
(60,830)
|
(in thousands)
|
|||||
Weighted average number of ordinary shares
|
211,109
|
222,623
|
206,965
|
203,531
|
198,965
|
Denominator for diluted earnings (loss) per share
|
211,109
|
222,623
|
206,965
|
203,531
|
198,965
|
(in $)
|
|||||
Basic earnings (loss) per share
|
1.10
|
0.69
|
0.23
|
0.15
|
(0.06)
|
Adjusted basic earnings (loss) per share
|
0.58
|
0.37
|
0.20
|
(0.01)
|
(0.31)
|
Diluted earnings (loss) per share
|
1.10
|
0.69
|
0.23
|
0.15
|
(0.06)
|
Adjusted diluted earnings (loss) per share
|
0.58
|
0.37
|
0.20
|
(0.01)
|
(0.31)
|
(in thousands of $)
|
YTD 2022
|
Q3 2022
|
Q2 2022
|
Q1 2022
|
FY 2021
|
Unrealized gain on derivatives
|
51,108
|
15,757
|
9,217
|
26,134
|
23,262
|
Interest income (expense) on derivatives
|
(66)
|
1,487
|
(340)
|
(1,213)
|
(5,753)
|
Gain on derivatives
|
51,042
|
17,244
|
8,877
|
24,921
|
17,509
|
(in thousands of $)
|
YTD 2022
|
Q3 2022
|
Q2 2022
|
Q1 2022
|
FY 2021
|
Total operating revenues
|
900,067
|
382,186
|
300,440
|
217,441
|
749,381
|
less
|
|||||
Voyage expenses and commission
|
(428,249)
|
(173,343)
|
(141,255)
|
(113,651)
|
(392,697)
|
Other non-vessel items
|
(11,057)
|
(4,188)
|
(4,972)
|
(1,897)
|
(19,551)
|
Total TCE
|
460,761
|
204,655
|
154,213
|
101,893
|
337,133
|
YTD 2022
|
Q3 2022
|
Q2 2022
|
Q1 2022
|
FY 2021
|
|
Time charter TCE (in thousands of $)
|
|||||
VLCC
|
—
|
—
|
—
|
—
|
8,235
|
Suezmax
|
41,465
|
11,535
|
17,306
|
12,624
|
51,810
|
LR2
|
1,937
|
1,937
|
—
|
—
|
3,230
|
Total Time charter TCE
|
43,402
|
13,472
|
17,306
|
12,624
|
63,275
|
Spot TCE (in thousands of $)
|
|||||
VLCC
|
93,828
|
42,387
|
26,414
|
25,027
|
96,519
|
Suezmax
|
171,351
|
88,071
|
50,004
|
33,276
|
95,163
|
LR2
|
152,180
|
60,725
|
60,489
|
30,966
|
82,176
|
Total Spot TCE
|
417,359
|
191,183
|
136,907
|
89,269
|
273,858
|
Total TCE
|
460,761
|
204,655
|
154,213
|
101,893
|
337,133
|
Spot days (available days less offhire days)
|
|||||
VLCC
|
4,905
|
1,698
|
1,612
|
1,595
|
6,305
|
Suezmax
|
6,002
|
2,141
|
1,890
|
1,971
|
7,901
|
LR2
|
4,706
|
1,512
|
1,567
|
1,627
|
6,944
|
Spot TCE per day (in $ per day)
|
|||||
VLCC
|
19,100
|
25,000
|
16,400
|
15,700
|
15,300
|
Suezmax
|
28,500
|
41,100
|
26,500
|
16,900
|
12,000
|
LR2
|
32,300
|
40,200
|
38,600
|
19,000
|
11,800
|