FRO

On August 28, Frontline (NYSE:FRO) posted the best quarter in company history, with net income of $659 million and adjusted profit of $580 million for the second quarter of 2026, up $235 million from the prior quarter. The gains came from tanker rates that climbed across every vessel class Frontline operates, from its largest crude carriers to its smaller product tankers. CEO Lars Barstad described a market with no playbook, one where geopolitical disruption is reshaping how oil moves around the world. The bigger question left hanging on the call is how much of that strength holds once the disruptions ease. VLCC rates hit $153,000 per day in the second quarter of 2026, while Suezmax and LR2/Aframax vessels earned $111,000 and $92,400 per day. That strength has carried into the third quarter, where Frontline has already booked 86% of VLCC days at $157,000 per day, 79% of Suezmax days at $117,000 per day, and 70% of LR2 days at $81,000 per day, evidence that rates are holding rather than sliding back. The fleet backing those numbers is young and efficient, averaging 6.6 years old, fully eco-designed, and 69% scrubber-fitted, which keeps cash breakeven costs between $22,200 and $25,700 per day, well under what the ships are currently earning. That spread between cost and rate is throwing off real cash. Management estimated annual cash generation potential at $2.3 billion, or $10.35 per share, based on rates as of August 28, a 24% yield against the current share price. The balance sheet has room to match it: $1.2 billion in liquidity, no debt maturities until 2030, and a refinancing that cut the average interest rate margin by 52 basis points to 1.26%. Frontline also collected $270 million selling two VLCCs at about $135 million apiece, with Barstad noting some buyers are paying premiums for older tankers just to control their own logistics chains. Much of the current rate strength traces back to friction rather than growth in oil demand. Crude exports from inside the Strait of Hormuz are down 82% amid recent disruptions, and China's crude imports have fallen 35%, cushioned by inventory drawdowns rather than fresh buying. Barstad pointed to a 23% increase in VLCC idling days, driven by ship-to-ship transfers off Fujairah and Malaysia that can triple the distance a cargo travels before reaching its final buyer. That inefficiency is tightening effective fleet supply even as actual volumes shrink, which is a different story than genuine demand growth. Barstad also flagged rising risk around the Gulf of Oman, the Red Sea, and the Black Sea, with Houthi activity picking back up, and said there is a limit to how far nations are willing to draw down inventories to keep supply flowing. The order book is growing again too, at 33.5% of the existing VLCC fleet by headline count, or close to 40% once roughly 166 to 167 non-trading vessels are excluded from the denominator, a level Frontline itself compared to what preceded the 2008 to 2009 downturn. If the disruptions behind today's inefficiencies ease, the same forces propping up rates could reverse. Hedge fund ownership of Frontline held steady at 34 funds in the most recent quarter, unchanged from the prior one, a wait-and-see stance rather than accumulation or an exit. Short interest sits at 6.53% of float, enough to suggest a real bear camp rather than background noise. As of August 28, the stock trades at a forward P/E of just 6.32, a multiple that assumes today's rates and the cash they generate will not last. That mix suggests the market isn't yet convinced this quarter is the new normal. Frontline's second quarter shows what happens when a young, low-cost fleet meets a market stretched thin by geopolitical disruption and inefficiency. The bull case rests on rates and bookings that stayed elevated into the third quarter, backed by a balance sheet with no near-term debt due. The bear case rests on how much of that strength is borrowed from friction, in idling ships and rerouted cargo, rather than real demand growth. While we acknowledge the potential of FRO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

Frontline plc reported its best-ever quarterly results for the second quarter of 2026, with revenue of US$1,018.68 million, net income of US$659.17 million, basic earnings per share of US$2.96, and declared a Q2 cash dividend of US$2.61 per share, payable on or about 28 September 2026. Alongside record profitability, Frontline moved to enhance shareholder returns and earnings visibility by refinancing debt, agreeing to sell two VLCCs with plans for a special dividend, and securing high-rate time charters for both newbuild and older VLCCs. Against this backdrop of record quarterly profit and a sizeable cash dividend, we will examine how these developments reshape Frontline’s investment narrative. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To own Frontline today, you need to believe that its tanker fleet can keep converting tight vessel supply and volatile freight markets into strong cash generation, despite inherent cyclicality. The record Q2 2026 results and US$2.61 per share cash dividend support the near term earnings and payout story, while the biggest immediate risk remains exposure to swings in spot and short term charter rates. This news strengthens the current catalyst but does not remove that risk. The most relevant development here is Frontline’s record Q2 2026 profitability, with net income of US$659.17 million and basic EPS of US$2.96. Together with high rate time charters already secured on several VLCCs, this earnings step up may influence how investors weigh the appeal of current cash returns against the risk that future revenue and earnings are forecast to decline over the next three years. Yet behind the record quarter, investors should also be aware that... Read the full narrative on Frontline (it's free!) Frontline’s narrative projects $1.3 billion revenue and $674.0 million earnings by 2029. Uncover how Frontline's forecasts yield a $44.25 fair value, in line with its current price. The highest analyst estimates tell a much more optimistic story, with some expecting earnings of about US$786.8 million by 2029 even as revenue trends lower, so Q2’s record profit could prompt you to rethink how credible that bullish path really is and consider how sharply opinions differ about Frontline’s future. Explore 5 other fair value estimates on Frontline - why the stock might be worth 23% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Frontline research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision. Our free Frontline research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Frontline's overall financial health at a glance. Our daily scans reveal stocks with breakout potential. Don't miss this chance: The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 18 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. Uncover the next big thing with 22 elite penny stocks that balance risk and reward. We've uncovered the 12 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FRO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Friday, Aug. 28, 2026 at 9:00 a.m. ET Chief Executive Officer - Lars H. Barstad Chief Financial Officer - Inger Marie Klemp Operator: Good day, and thank you for standing by. Welcome to the Q2 26 Frontline PLC Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Lars H. Barstad, CEO. Please go ahead. Lars H. Barstad: Thank you very much. Dear all, thank you for dialing into Frontline's quarterly earnings call. Frontline is reporting its best quarter ever. Our long term strategy of growing voyage days and VLCC exposure during the slim years post COVID have come to fruition. And our shareholders are now reaping the benefits. There are lots of moving parts in this market and no playbook. The key takeaway, though, is that the prevailing situation will have long term implications. The current environment puts our lean organization to the test, and we are extremely thankful for the hard work the frontline global team is putting in keeping the propellers turning in this ocean of profits. Before I give the word to Inger I will run through our TCE numbers on slide 3 in the deck. In the second quarter of 26, Frontline achieved $153 thousand per day on our VLCC fleet $111 thousand per day on our Suezmax fleet and $92.4 thousand per day on our LR2 slash Aframax fleet. So far in the second quarter of 26, 86% of our VLCC days are booked at $157 thousand per day. 79% of our Suezmax days are booked at $117 thousand per day. And the LR twos are catching up. Having booked 70% of the days. At $81 thousand per day. Again, all numbers in this table are on the load to discharge basis. With the implications of ballast days at the end of the quarter this has. I will now let Inger take you through the financial highlights. Inger Marie Klemp: Thanks, Lars and good morning and good afternoon. Ladies and gentlemen. Then let's turn to Slide 4 and look at the profit statement. We report profit of $659 million or $2.96 per share and adjusted profit of 580 million or $2.61 per share in the second quarter of 26. As Lars mentioned, this is the best quarterly profit and adjusted profit ever recorded by the company. The adjusted profit in the second quarter increased by $235 million compared with the previous quarter primarily due to an increase in our TCE earnings. Ship operating expenses decreased by $4.3 million from previous quarter and that was mainly due to sales of 8 VLCCs in the first quarter, and 2 Suezmax tankers in the second quarter. And an increase in supplier rebates, which is partially offset by an increase in general running costs. Administrative expenses decreased by 2.4 million from previous quarter This excludes the synthetic option revaluation gain of $5.3 million in the second quarter and the synthetic option revaluation loss of 5.8 million in the first quarter. Adjusted interest expense decreased by $4.8 million from previous quarter due to lower debt and decrease in interest rates. Lastly, depreciation decreased by $4.7 million from previous quarter due to sales of vessels. Let's then look at the balance sheet. On Slide 5. Frontline has a solid balance sheet and a very strong liquidity of SEK 1.2 billion in cash and cash equivalents. Including undrawn amounts of revolver capacity of $91 million, marketable securities, and minimum cash requirements banked as per June 30. We have no meaningful debt maturities until 2030. Remaining newbuilding commitments as per end June was 601 million and relates to the acquisition of the 9 new buildings from affiliates of Hemen. The company has secured new building financing of up to 737 million as set out in the press release. Then let's turn to Slide 6 In the second and third quarter of 26, we reduced our financing costs through a combination of margin reductions on existing facilities for the remaining tenors and a full refinancing of selected facilities reducing the weighted average interest rate margin by approximately 52 basis points from 178 basis points at the end of the first quarter of 26 to 126 basis points upon completion of the process in the third quarter of 26. The reduction was driven by amendments with 24 basis points, refinancings with 21 basis points, newbuilding financing and asset sales with 7 basis points. We have no debt maturities until 2/2028 and no meaningful maturities until 2030. Supported by increased tenure across the portfolio, as shown in the maturity chart. Then we can look at Slide 7. Fleet competition and cash breakeven rates and OpEx. Upon delivery of the remaining VLCC newbuildings and sale of 2 VLCCs, our fleet consists of 40 VLCCs, 19 Suezmax tankers and 18 Aframax/LR2 tankers, has an average age of 6.6 years, and consists of 100% eco vessels, whereof 69% are scrubber-fitted. We estimate that average cash breakeven rates for the next 12 months of approximately $23.8 thousand per day for the VLCCs, $25.7 thousand per day for the Suezmax tankers, and $22.2 thousand dollars per day for LR2 tankers. With a fleet average estimate of about $23.9 thousand per day. This includes dry dock cost for 7 VLCCs 7 Suezmax tankers and 8 LR2 tankers. The fleet average estimate excluding dry dock cost is about $22.3 thousand per day or $1.6 thousand per day less. We recorded OpEx, including dry dock, in the second quarter of $9.2 thousand per day for VLCCs. Dollars 9 thousand per day for Suezmax tankers and $13.3 thousand per day for LR2 tankers. This includes dry dock of 1 VLCC and 3 LR2 tankers. And the Q2 26 fleet average OpEx excluding dry dock was $8.7 thousand per day. Then lastly, let us look at slide 8. And the cash generation. Frontline has a substantial cash generation potential, with about 27.8 thousand earning days annually. As you can see from this slide, the cash generation potential based on current fleet TCE rates and average spot market rates, as of August 28 is $2.3 billion or approximately $10.35 per share. Providing a cash flow yield of 24%, based on the current share price. A 30% increase of these rates will increase the cash generation potential to $3.1 billion or $30.91 per share. And a 30% decrease of these rates will decrease the cash generation potential to $1.5 billion or $6.88 per share. With this, I will leave the word to Lars again. Lars H. Barstad: Central stage. We see increasing risk in and around the Gulf area. Both in the Gulf of Oman and in the Red Sea. We also see increased risk in the Black Sea, and the Houthis have become active again. Tanker rates remain high, and inefficiencies carry the weight of the shipping market. And we also see high risk premiums from certain trades, in particular, inner AG, which is somewhat illiquid, but at least showing on the bottom left hand chart you can see how the now somewhat theoretical TD3C index is printing levels nearing $600 thousand per day. We tend to look at the TD15 and it is being dwarfed in this connection. But if you look closely on the left hand scale, it is actually showing very close to a $100 thousand per day. Oil balances are kept in check. By aggressive inventory draws. We are extremely surprised that the oil price has managed to keep in this band between say, $78 and somewhat north of $90, The US, China, and the rest of the OECD are currently key sources of this inventory growth. The question is, of course, for how long can we draw. The tanker order book, paused over the summer. Lead times from ordering to delivery is now moving into 3.5 years. So we are talking about 30 deliveries. And we see this has kind of created a bit of a vacuum in the ordering market. After a quite frantic activity in the first half of the year. The long term implications as feeds continue to age will be around the inventory refill story energy security policies, and in the case of some sort of relief or some sort of solution between US and Iran, sanctions relief could also pay a part. We are in the midst of a storm, I would say. But the long-term implications are at least easier to reap. If we move to slide 10, and try to kind of analyze a little bit what is behind us. it is actually easier to analyze the market after the fact. We have had an 82% reduction in crude oil exports from inside this Strait of Hormuz. I know this is kind of a big question mark, as a certain agencies report higher exports than what is recorded out of The Middle East. Others are lower in respect to kind of transits by ocean through the Strait of Hormuz, Frontline is among the school of thought that believe we are somewhere between 4.5 to 5.5 million barrels per day. China crude imports have created a cushion for the oil price, we believe. And it is actually reduced by 35% in the same period. what is happened is that we have seen huge growth in inefficiencies in the market to the tune of 23% increase in idling days per VLCC, But I do note that this is not waiting time or time that where owners like ourselves are fiddling around trying to figure out what to do. This is basically due to the trade itself. Where inefficiencies are creeping into every aspect of the voyage. And on the contract, I am being paid you are actually waiting. We have also seen a great increase in the trade between particularly Latin America to the East of Suez. This basically results in the effective fleet supply tightening despite a decline in volumes. The increased STS transfers off Fujairah and around Singapore and Malaysia also add to this. If you can imagine, the cargo flow that formerly used to be from inner Middle East Gulf to, say, Japan, is now, like, a 3x trip You go firstly from inner AG to Fujairah in some sort of shuttle lane traffic. Then you, by way of STS, put the oil into another ship, that takes it to Malaysia. Where you can do an STS operation before a Japanese controlled ships take it into Japan. So basically moving the same barrels in an increasingly inefficient manner. We do see, though, that there is large gaps in the tracking data, and this also confuses us and most market analysts, as a lot of vessels are sailing dark, leaving a big blind spot. The headline figures may no longer be representative of the market but what is representative of the market is the rates that we are actually collecting. If you move to the next slide, the flows from Atlantic Basin has grown both outright by way of volume but more importantly, by the way of distances, it is actually sailing. You know, in a normal market, you will have kind of almost equal volume going from say, US Gulf into Europe. Us into Asia. Now a larger part of the volume being exported out of the Atlantic Basin is actually taking the long routes. With the Houthi actions, we are also seeing some very specific, inefficiencies. For the Yanbu export that formally used to sail through the Red Sea. Where it is now to greater degree going northbound. Basically, by way of you fill up a VLCC 3 quarters full. Take you through the Suez Canal, and then load up the remaining barrels in Sidi Kerir. Which is the end of the Sumed pipeline. The supply shortage on the Middle East is further compensated by inventory draws. In virtually any or every corner of the world. With US and China being the largest contributors. Asia ex China has increased the sourcing again, adding or creating the same ton-miles. Despite the volume shortfall, as previously mentioned, the inefficiency and the growing distances yields the high tanker demand we are currently experiencing. The big question, though, and this is the question as we near winter, is how long can and we will draw on inventories as we approach the colder season in the Northern Hemisphere. If you look at the top right chart, this is OECD onshore crude inventories. We have drawn materially the total including kind of other inventories as well is actually nearing a half billion barrels. Is still a lot of barrels to draw, but there is certainly a limit to how far down the various nations are willing to go in this very insecure situation we are in? If you move to slide 12 and look at the order books, These order books continue to grow or continued, I would like to say, going into, going into Q3. Currently, looking at kind of the headline number of VLCCs, the order book is around 33 and a half percent of the existing fleet. I do, however, think that 1 should look at the efficient fleet. And as we note here, around 166 or 167 vessels are not a part of kind of the commercially traded fleet. Meaning that the VLCC order book currently is in fact very close to 40%. If you do the same kind of analysis across the asset classes, the front line is exposed to. You will get to that the current kind of order book to fleet ratio is in the mid thirties percent. We are actually closing in on what we saw in 2009. And this is or 2008, 2009. This is, of course, a concern looking forward. However, if you look at the aging of the fleet, we actually did not have to this extent back in late 2000s. The situation looks far more balanced. So if you move to slide 13, you can see that the total order book of the asset classes were involved in currently stands around 777 ships. As they deliver over the next 5 years, we will see 578 vessels moving towards the 20 year threshold. Which means that we will have a total population of 1.29 thousand vessels. Coming to age assuming no scrapping. This is, of course, dwarfing the current order book. If we have a look at the summary then from this presentation, the current market dwarfs the previous cycles. I would like to draw your attention to the orange column on the right hand side. Looking at what we thought was the strongest market we have ever seen in 2004, We are now, you know, twice that almost. The index is lying a little bit because a certain part of it is, of course, being weighed by both TC1 and TD3, which are inner AG loadings. But still, including that, we are way beyond what we have seen in previous years. And as I mentioned earlier in the presentation, constricted global oil supply yields inefficiencies and we see new trades and much longer trade lanes. Growing concern is starting to come forward for the supply cushion provided by primarily US and China. We have the Russia Ukraine situation adding fuel to the fire with increased risk in the Black Sea. We also see reduced Russian product exports. Going forward. Although this is in many cases, sanctioned barrels, it still adds to the products pool and in particular, affects the diesel supply going forward. The growth in the tanker order book is slowing. As the lead times are extending. We also see that yard expansions are stretched. There is a you know, there is been a little bit of a period now since we have heard of new births being launched, particularly in China. Energy security and inventory situation is likely to dominate the if the current situation persists into the winter. Again, from Frontline's center stage, our VLCC heavy efficient business model, And we do see that the long term period market is actually starting to price in these disruptions to last for much longer. With that, I would like to open for questions and answers. Operator: Thank you. To ask a question, you will need to press star 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press star 1 again. We are going to take our first question. 1 moment. And this question comes from Jonathan Chappell from Evercore ISI. Please go ahead. Jonathan Chappell: Thank you. Good afternoon. Lars, last quarter, you spoke to, I think, was 5% of the fleet. That you were estimated was sitting outside of the strait, and that was part of the inefficiencies. Did not mention that today. Obviously, you had a lot of other data, but do you have an update on that? As it relates to that, is that just right outside of the Strait, or is there a much greater geographical area that we are talking to where a lot of ships are idling and, you know, basically adding to the inefficiencies. Lars H. Barstad: You know, surprisingly, you know, we are actually observing that there, that kind of number of ships that are idling. Outside of Omar, you could say, or the Gulf of Oman. Stretching basically all down the Indian Coast has actually increased But this is increased with the, growing kind of volume coming out of the Middle East by way of STS. So firstly, you have the pipeline. Coming into Fajira and the kind of the Oman coast outside. But secondly, now you have a kind of an increased or have had at least an increased traffic vessels coming out for STS business. The timing of this is somewhat difficult to nail down. So it means that if you are a charter and you book to ship, you are not exactly gonna know the dates that STS ship is gonna be ready. For you. This creates a lot of delays. So this is why we see actually the population sitting in that region in particular. Is actually growing, completely illogical, to be quite honest, in the current market situation. Okay. Second 1, more strategic. Obviously, a generational market right now as you laid out in the last slide, and I think Frontline's track record and business model has been clear for the last 30 years. But you are doing some things that you have not really done before with the time charters and like the 3 year time charters, special dividend. Could this be an opportunity to really change the capital structure? I know Inger has done a lot with taking the cost of debt down and pushing all the maturities out. But could you use some of this generational upside to take the leverage down, or is that just something that is not part of the DNA? No. I would say it is not really a part of our DNA. As I think I have said many times, you know, we have kind of an informal strategy of trying to cover kind of 1/3 of our revenues as well as covering 1/3 of our key costs. You know, being fuel or interest rates interest rates. Currently, the market conditions have kinda prompted us to secure some of our revenues on VLCCs. And we are actually a little bit above 30% right now as we wait for the last newbuildings to deliver. But I do not think it is really changed kind of the way we look at the capital allocation. You know, kind of our proposition to investors is continues to be is to pay everything out and then leave to the investor to decide whether if he wants to reinvest. That will only kind of-- and it is never really gonna disturb our dividends. But I think the special dividends which you pointed to which came from selling 2 ships, You know, why we decided to just pay it out was basically due to the fact that we did not really see much of kind of upside in reinvesting it in the market in the current kind of price environment we are in? So I think kind of frontline will just continue as we always done. We pay the money to our shareholders. The leverage that we have now is comfortable. Considering the current market and where we are on asset values and so forth. So I think I you know, 1 should kind of keep that in mind going forward. Mhmm. Alright. Very helpful. Thank you, Lars. Operator: Thank you. Thank you. We are now going to take our next question. And this 1 comes from Greg Lewis from BTIG. Please go ahead. Greg Lewis: Thank you, and good afternoon, everybody, and thanks for taking my questions. I did want to just if you could follow-up Lars more on thoughts around to Jonathan's question around the decision to do the longer term time charters. But really, I am kind of curious, these were obviously opportunistic. You know, historically, we have seen a lot of 1-year You can-- it seems like, hey,. The price is the price at the time, but 1-year the time charters in the VLCC market are available. I am kinda curious how you know, you alluded to it. How is the actual depth of the 2-, 3- and potentially longer time charter market for VLCCs as we kind of sit here looking at the back half of the year. Is there really customer demand for these that we could actually see maybe not frontline, but a real increase. Of these types of these term deals going forward? Lars H. Barstad: Or was this kind of more of a 1-off? No. The it is a very good question. You know, at the time when kind of these 2 time charters, the 2 year and the 3 year were concluded, I would say that was somewhat limited But, as we kind of got over the summer, currently, it is quite deep. And this is what we alluded to in our presentation a little bit as well. It seems like kind of you know, what is deemed, intelligent, money is now increasingly interested in, getting kind of, longer term contracts on. So we are talking about oil majors and the big kind of operators. So, you know, we could easily today do 3-year time charters now kind of if we were willing to accept the current levels, which is well, it is still south of $80 thousand per day, but closing in. And it could actually be north of $80 thousand depending on the position you can deliver the ship in. So as I would I would say this is-- you know, we do not have a crystal ball in this market. Right? So this is why of course, you tend to end up fixing a little bit too early in retrospect. But, I must say that the liquidity was not really there either. So you basically just to make a decision But, but now, I think the game has changed a little bit. And we see know, I think a good indicator is looking at the FFA market. You know, right now, you know, exclusive of The Middle East, so exclusive of TD3C, the TD22, which is US Gulf to Asia, kind of marker, That paper is trading kind of close to a $100 thousand per day for 2028. When there is a 115 VLCCs being delivered. So I think I think the market is starting to potentially price in some of the tailwinds that we have been discussing. That, you know, in the event well, first of all, expectation is the situation to prevail for a while. Which is just gonna add further draws to the inventory, which is further gonna strengthen the tailwinds coming out of this ordeal at some point. So I am actually happy to say that right now, that market is pretty deep. I would like to add 1 comment, though, which I probably should have mentioned. We did, you know, we did the 2 time charters, but we also sold 2 ships. This is actually our way of being able to capture the inner AG profits. Because the actor that was willing to pay so you know, that kind of money for almost 10-year-old ship was he had a reason for that. Basically, because it would enable him to get full control of the logistical chain of transporting oil through the Strait of Hormuz because owners are actually starting even the more kind of a bonkers owners are starting to be a little bit reluctant to sail through the Strait of Hormuz. Meaning that if you are a Middle East or an inner-AG exporter,, you are much better off basically just paying $135 million for a 10-year-old ship and controlling the entire logistical chain themselves. But for us, since we do not trade into the AG, at least not currently, that was the way for us to capture that premium. And hence, why we also just paid the proceeds out to shareholders. Okay. Okay. Super helpful. And then I did have a question on, you know, I just was looking for some clarity on slide 12 where you kind of laid out your view of the VLCC fleet, the 900 ships, Just as we think about those and I think you mentioned that there is maybe 170 ships that are not really part of the active fleet. You know, maybe they are doing infrastructure or other types of issues. Is that the sanction fleet? Or Is that-- is that outside? Is that other vessels because the sanction fleet and then I would think is trading Like, how do we think about what-- where the saying and then I am also curious as we think about that sanction fleet is a good way to think about it of those 170-ish sanctioned ships, those are all 15-plus-year-old vessels? Or is it kind of more broad across the I guess, the fleet age profile? No, I think-- no, it is more you know, it is more that every investment over 20 years is almost all of them are sanctioned. Because in the commercial kind of, you know, markets where we operate. Very few actors, except us who is that far north of or older than 20 years. There are some trading, but the trading then of internally for big oil majors or refiners where they kind of, you know, control the technical management on the netting of the ship themselves. So since I would almost put, like, an equal sign between 20-plus and sanction, Speaking of the sanction fleet, we are we are, you know, we are not really seeing kind of utilization increase on that fleet. But what we are seeing is that although extremely slowly, more and more are getting kind of sold for recycling. So it is it is a very, very kind of slow trend because you do face kind of the sanctions as you, you know, for the recycle when they need to or want to purchase the steel. But there are kind of starting to we are starting to see movements there where actually some of these ships are getting removed. Okay. Super helpful. Thank you very much, and have a great weekend. Operator: Well, thank you. Same to you. Thank you. As a reminder to ask a question, will need to press 1 and 1 on your telephone. We are now going to take our next question. And this 1 is from Devin Sangoi from Tetch Investments. Please go ahead. Analyst: On a good set of numbers. I have few questions. 1, on when do you see the China, you know, as the winters will approach, China will come back in the market. And in that situation, how do you see the market? And second 1 is on the Suez. You have a drought and obviously the limited amount of ships are going to go through Suez now. How does it impact the flows? Of the smaller ship? Lars H. Barstad: Yeah. No. First of all, on China, I think, kind of the question you are raising there is basically the big the big question. The biggest question of them all in shipping. Because China has effectively reduced their imports, you know, at certain periods, they basically halved it. And from what we understand from industry sources is that, you know, Chinese kind of domestic demand is not materially reduced And so and since imports are down to the tune of 3.5 to 5 million barrels per day, you know, for sure, they need to be drawing on inventories. They have a huge pile of oil. They have actually been building inventories in the last you know, years leading up to the situation in 2026. So they have a huge cushion. But at a certain point, you know, when you know, somebody in Beijing will start to think that maybe we should kind of be a bit careful on continuing here. I do not know whether if we are there yet. I do not know if we will be there in a year time. it is very difficult to say. But it is this is 1 of the kind of the big important questions. But I think it is more important in respect of oil price rather than shipping at this point. Of course, it could propel shipping even further if they start to aggressively chase barrels. But I think kind of the this is more an oil price kind of thing than on a shipping thing. When it comes to Suez, I think, respectfully,, you might be confusing Suez for the Panama Canal. The Panama Canal is where the drought is, is being experienced. And that is where kind of we are seeing reduced volumes. But not really we because the Panama Canal you know, it is prioritized for containers and, you know, natural gas and LPG vessels. And, you know, kind of the rates and the way that kind of transits are organized. Very few tankers are using For the Suez, this has not yet been an issue that is been addressed. And 1 more question on the scrapping. What are your view? We have seen no scrapping because the market's been very good. But, what is your view? Going forward on next, say, 12 to 24 months? No. As I mentioned a little bit previously, you know, we are seeing some small positive development on recycling, or scrapping, as you say. The challenge has been that the recycling industry is a dollar nominated industry too. So it means that, they have difficulty in actually paying cash for a vessel that is, sanctioned. What we have seen is that the, you know, US authorities have been willing to give exemptions for vessels that are not owned by owners that have sanctioned themselves. So it means that, certain kind of quite well renowned, recyclers have been able to go to US authorities. This is the vessel. This is the history of the vessel. These are the owners. Can we kind of buy this and get the get an exemption or a license to buy this vessel for recycling? They have gotten yes. So, but the, you know, the number of vessels here, we are talking kind of in the teens. So it is it is not material looking at, you know, the vast fleet of sanctioned vessels currently. But at least it is a-- it is a spot. So how that will evolve going forward, you know, it is very difficult to say, but it is-- it is a positive movement at least. Thank you, Lars. Have a great weekend. Thank you. You too. Operator: Thank you. We are now going to take our next question. And this 1 comes from Audrey Zhong from CICC Please go ahead. Audrey Zhong: Hi, good afternoon, Lars and Inger. This is Audrey Zhong from CICC. Lars, thank you again for joining our webinar with Chinese institutional investors in March. My first question is on the recent VLCC sale. We know that you sold 2 VLCCs or about $270 million. I think this is a very Your decision to sell the VLCC because given the current strong rate environment how did you compare the sale price with the present value of the future cash flows from continuing to operate the 2 tankers. Thank you. This is my first question. Lars H. Barstad: Yeah. Hi, Audrey. No, it is, again, an, excellent question. There were 2 kind of key analysis that we applied to the considerations. 1 was kind of what this implied value of the assets that Frontline own. And as we are priced by the market at the, you know, multiple of almost well, at the time, it was, north of 1.3x NAV. The implied value of the vessel was actually higher than what we achieved But the second 1 is, and this is where it gets a little bit kind of not mathematical to put it that way. it is-- you know, it goes a little bit on experience in this market. You know, we are operating in 1 of the most volatile markets in the world. If not the most. That volatility tells you that nobody actually knows what is gonna happen around the next turn. We looked at the assets. And, you know, for us to decline selling at that level, we have to believe that we were gonna make almost $70 thousand per day every day until that vessel was 20 years old. Or those vessels were 22 years old. If you look at kind of how our market is has been moving historically, We thought that was a bold ask. So, you know, of course, it was the highest price achieved for that generation of ships at the time. And that was basically the analysis So, basically, what we do is we look at what do we need to get the 15% return on equity, which is, you know, where Frontline wants it to be kind of in order to make an investment case. And that resulted in this kind of rate requirements, and how likely it was set up that rate requirement was going to be real. And we thought potentially not. Maybe for the next couple of years, but not for 9.5 years or-- sorry-- 11.5 years or 11 years, whatever it was at the time. So that was, basically the analysis. But you have a very good point. It was an easy decision to make when you are standing in the middle of the market, which at the time was earning for VLCC around a $100 thousand per day. it is, of course,, something you that needs deep consideration. Audrey Zhong: Great. Great. Thank you a lot. that is very clear and very helpful. And my second question is the cash breakeven rate. I noticed that despite the reduction in financing margins, I think you did a very great job in decreasing your financing cost. But actually, the Suezmax cash breakeven point increased to exceeding the VLCC breakeven for the first time since 2021 based on our quarterly tracking. So that is the $25.7 thousand already reflect the benefit of the lower financing margin? If so, what other factors that drove the increase? And how should we expect the Suezmax cash breakeven to trend in the second half of 26? Thank you. Inger Marie Klemp: Sorry. I was not hearing everything you asked about but I think you were referring to the Suezmax breakeven rate. Is that correct? Audrey Zhong: Yes. If you please allow me to repeat my question. Actually, it is why the Suezmax cash breakeven higher than even VLCC Cash breakeven rates in Q2. Inger Marie Klemp: Yeah. The reason for that is that the dry dock component and the cash breakeven rate for Q3 cash breakeven rates are much higher than it was for the Q1 cash breakeven rates. And then in addition to that, in Q1, we had undrawn debt or an RCF, which was undrawn. On 1 of the vessels, which is assumed to be drawn in the Q2 breakeven rate. Audrey Zhong: Okay. Great. So can we expect that the Suezmax cash breakeven in Q3 and Q4 also have the trend, like, in Q2? Because I think it is increasing. The Suezmax cash breakeven. Inger Marie Klemp: I am I am not so sure I understood what you said now. What was the question again? Actually, it is Q3 and Q4, what would the Suezmax cash breakeven be like? Say, I think the Suezmax cash breakeven is increasing. Sorry. The cash breakeven rates are for 12 months forward. So it is for 12 months forward from the second from the end of June 2026. You add on 4 quarters to the end of June 2027. So this the cash breakeven rate. of 27 and a $25.7 thousand for Suezmax vessels are for the 12-month period going forward, including then the Q3 Q4, Q1, and Q2 of 27. it is an average. So yes, And it is explained by what I just said. That you have dry dock of 7 vessels in that period. Which they did not have in the previous cash breakeven rate, which we showed you for the end of the first quarter. Okay. Okay. Great. I understand that. Thank you, Inger. Thank you. Operator: Thank you. That was the last question for today. I will now hand the call back to Lars for his closing remarks. Lars H. Barstad: You very much. And all of you for listening in. it is truly an exceptional market. We are experiencing and also well into Q3. So, looking forward to our call next quarter. Thank you very much. Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Frontline (FRO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Profit: Reported profit of $659.2 million, or $2.96 per share, in Q2 2026. Adjusted Profit: Adjusted profit of $580.2 million, or $2.61 per share, in Q2 2026. Quarterly Profit Increase: Profit increased by $235.3 million compared with the previous quarter, primarily due to an increase in TCE earnings. Ship Operating Expenses: Decreased by $4.3 million from the previous quarter, mainly due to vessel sales and increased supplier rebates. Administrative Expenses: Decreased by $2.4 million from the previous quarter, excluding a mark-to-market revaluation gain of $5.3 million in Q2. Adjusted Interest Expense: Decreased by $4.8 million from the previous quarter due to lower debt and decreased interest rates. Depreciation: Decreased by $4.7 million from the previous quarter due to sales of vessels. Liquidity: Strong liquidity of $1.2 billion in cash and cash equivalents, including undrawn amounts under revolving credit facilities of $901 million as of June 30. Newbuilding Commitments: Remaining commitments of $601.1 million, related to the acquisition of 9 newbuildings from affiliates of Hemen. Financing Costs: Reduced weighted average interest rate margin by approximately 52 basis points, from 178 basis points at the end of Q1 2026 to 126 basis points upon completion in Q3 2026. Fleet Composition: Fleet consists of 40 VLCCs, 19 Suezmax tankers, and 18 Aframax/LR2 tankers, with an average age of 6.6 years. Cash Break-Even Rates: Estimated average cash break-even rates for the next 12 months are approximately $23,800 per day for VLCCs, $25,700 per day for Suezmax tankers, and $22,200 per day for LR2 tankers, with a fleet average of about $23,900 per day. Operating Expenses (OpEx): Q2 2026 OpEx including drydock was $9,200 per day for VLCCs, $9,000 per day for Suezmax tankers, and $13,300 per day for LR2 tankers; fleet average OpEx excluding drydock was $8,700 per day. Cash Generation Potential: Based on current fleet, TC rates, and average stock market rates as of August 28, cash generation potential is $2.3 billion or approximately $10.35 per share, providing a cash flow yield of 24%. Is FRO fairly valued? Test your thesis with our free DCF calculator. Release Date: August 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Frontline PLC (NYSE:FRO) reported its best quarterly profit ever, with a net profit of $659.2 million and adjusted profit of $580.2 million in Q2 2026. The company achieved record TCE rates: $152,700 per day for VLCCs, $111,400 for Suezmax, and $92,400 for LR2/Aframax, with strong bookings for Q3. Frontline PLC (NYSE:FRO) has a solid balance sheet with $1.2 billion in liquidity, no meaningful debt maturities until 2030, and reduced financing costs by 52 basis points. The company's fleet is 100% eco vessels with 69% scrubber-fitted, and it has a low average cash break-even rate of approximately $23,900 per day. Frontline PLC (NYSE:FRO) is capitalizing on market inefficiencies, such as increased ton-mile demand and longer trade routes, which are driving high rates and cash generation potential of $2.3 billion annually. The company has secured long-term time charters and sold vessels at attractive prices, demonstrating strategic capital allocation and shareholder returns. The tanker orderbook has grown to about 33.5% of the existing fleet, approaching levels seen in 2008-2009, which raises concerns about future supply. Geopolitical risks are elevated, including increased tensions in the Gulf, Red Sea, and Black Sea, which could disrupt operations and trade flows. Global oil inventories are being drawn down aggressively, and there is uncertainty about how long this can continue, potentially impacting future demand for tankers. The market is experiencing significant inefficiencies, such as increased idling days and STS transfers, which, while boosting rates, also create operational complexities and risks. Sanctioned vessels are aging and not being scrapped at a sufficient rate, leading to a growing shadow fleet that could distort market dynamics. The company's Suezmax cash break-even rate increased to $25,700 per day, higher than the VLCC rate, due to drydock costs and other factors, which could pressure margins. Q: Can you provide an update on the number of vessels idling outside the Strait of Hormuz and whether this inefficiency is expanding to a wider geographical area? A: Lars Barstad, CEO, noted that the number of ships idling outside Oman, stretching down the Indian coast, has actually increased. This is driven by growing Middle East volumes moving via ship-to-ship (STS) transfers. The timing of these STS operations is difficult to predict, causing significant delays for charterers and leading to a growing population of vessels waiting in the Fujairah region, which adds to market inefficiencies. Q: Given the generational market, is Frontline considering using this opportunity to change its capital structure and take leverage down, or is that not part of the company's DNA? A: Lars Barstad, CEO, stated that reducing leverage is not part of Frontline's DNA. The company's strategy is to cover roughly one-third of revenues and key costs. The recent two- and three-year time charters were opportunistic, and the special dividend from vessel sales was paid out because reinvesting in the current asset price environment didn't offer sufficient upside. The current leverage is comfortable, and the company will continue its policy of paying everything out to shareholders. Q: How deep is the market for longer-term time charters (2-3 years) for VLCCs, and could this be a growing trend? A: Lars Barstad, CEO, explained that while the market was limited when Frontline concluded its deals, it has since become quite deep. Oil majors and large operators are increasingly interested in securing longer-term contracts. The CEO noted that the market is pricing in tailwinds, with the TD22 (US Coast to Asia) paper trading near $100,000 per day for 2028. He also clarified that the sale of two older VLCCs was a way to capture the intra-AG premium, as the buyer was willing to pay a high price to control the logistical chain through the Strait of Hormuz. Q: Regarding the ~170 vessels not part of the active VLCC fleet, is this the sanctioned fleet, and are these all older vessels? A: Lars Barstad, CEO, confirmed that the inactive fleet is largely comprised of vessels over 20 years old, which are almost all sanctioned. These older ships are not commercially traded in the open market. While utilization of the sanctioned fleet isn't increasing, there is a slow trend of these vessels being sold for recycling, with some US authorities granting exemptions for well-known recyclers to purchase them. Q: When will China return to the market, and how will the drought impacting the Suez Canal affect flows for smaller ships? A: Lars Barstad, CEO, stated that China's reduced imports are a major question. While Chinese domestic demand hasn't materially reduced, they are drawing on large inventories. The timing of their return is more of an oil price issue than a shipping one. Regarding the drought, the CEO clarified that it is the Panama Canal, not Suez, that is experiencing drought. The Panama Canal prioritizes container and gas vessels, and very few tankers use it, so it hasn't been a significant issue for Frontline. Q: What are your views on scrapping over the next 12-24 months, given the lack of activity? A: Lars Barstad, CEO, noted some small positive developments in recycling. The challenge is that the recycling industry is dollar-denominated and has difficulty paying cash for sanctioned vessels. However, US authorities have been willing to give exemptions for vessels not owned by sanctioned owners, allowing some renowned recyclers to purchase them. While the number of vessels is in the tens and not yet material, it is a positive movement. Q: How did you compare the sale price of the two VLCCs with the present value of future cash flows from continuing to operate them? A: Lars Barstad, CEO, explained that the analysis involved two key factors. First, the implied value of the vessels based on Frontline's market multiple was higher than the sale price. Second, given the market's extreme volatility, the company calculated that to decline the sale, they would need to earn almost $70,000 per day until the vessels were 20 years old. They deemed this a bold assumption, and since the sale achieved the highest price for that generation of ships, they decided to sell. Q: Why is the Suezmax cash break-even rate higher than the VLCC rate, and what should we expect in the second half of 2026? A: Inger Klemp, CFO, explained that the higher Suezmax break-even rate is due to a higher dry dock component in the 12-month forward estimate, which includes drydocks for 7 Suezmax tankers. Additionally, an undrawn revolving credit facility (RCF) on one vessel is assumed to be drawn in the Q2 break-even calculation. The rate is an average for the 12-month period from end of June 2026 to end of June 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

FRONTLINE PLC REPORTS RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2026 Frontline plc (the “Company”, “Frontline,” “we,” “us,” or “our”), today reported unaudited results for the six months ended June 30, 2026: Highlights Reported the best quarterly profit ever of $659.2 million, or $2.96 per share for the second quarter of 2026 and the best adjusted profit ever of $580.2 million for the second quarter of 2026, or $2.61 per share. Declared a cash dividend of $2.61 per share for the second quarter of 2026. Reported revenues of $943.3 million for the second quarter of 2026. Achieved average daily spot time charter equivalent earnings ("TCEs")1 for VLCCs, Suezmax tankers and LR2/Aframax tankers in the second quarter of $152,700, $111,500 and $92,400 per day, respectively. Reduced financing costs through a combination of margin reductions on existing facilities and full refinancing of selected facilities, reducing the Company's weighted average interest rate margin by approximately 52 basis points ("bps") from 178 bps at the end of the first quarter of 2026 to 126 bps upon completion of the process in the third quarter of 2026. Entered into agreements to sell two VLCCs built in 2017 in July 2026 for a total sales price of $270.0 million. Subject to the completion of the sales, the total cash proceeds from the sales of approximately $179.0 million will be returned to shareholders through the payment of a special one-time dividend of $0.80 per share. Delivered our two oldest Suezmax tankers built in 2014 and 2015 in the second quarter of 2026, resulting in a gain on sale of $54.7 million. Entered into two one-year time charter-out agreements for two VLCC newbuildings delivered on June 22, 2026 and July 3, 2026, at a rate of $120,000 per day per vessel. Entered into time charter-out agreements for two VLCCs, both built in 2016, for periods of two and three years at average rates of $90,000 and $75,000 per day, respectively, commencing in August 2026. Lars H. Barstad, Chief Executive Officer of Frontline Management AS, commented: “The second quarter of 2026 continued to be volatile. The entire energy complex is being challenged, creating inefficiencies that support tanker utilization. While the fundamental story of oil demand versus vessel supply has temporarily taken a back seat, Frontline remains focused on capturing near-term value for our shareholders. Currently, it is difficult to see the ultimate endgame of the ongoing conflict in the Middle East, but our conviction regarding its longer-term effects remains firm. Energy supply security will increasingly dominate strategic decisions, altering trade lanes. At the same time, the need to replenish oil inventories should create material tailwinds for tankers. Frontline continues to capitalize on these markets into the third quarter, with an increased focus on securing revenue visibility at historically high levels.” Inger M. Klemp, Chief Financial Officer of Frontline Management AS, added: “In the second and third quarters of 2026, we reduced our financing costs through a combination of margin reductions on existing facilities for their remaining tenors and full refinancing of selected facilities, reducing the Company’s weighted average interest rate margin by approximately 52 bps from 178 bps at the end of the first quarter of 2026 to 126 bps upon completion of the process in the third quarter of 2026. We believe that the refinancing of, and amendments to, our existing debt facilities have been achieved on highly attractive terms, further strengthening our liquidity position while reducing our borrowing costs and cash breakeven rates. We continue to focus on maintaining our competitive cost structure, breakeven levels and solid balance sheet to ensure that we are well positioned to generate significant cash flow and create value for our shareholders.” Average daily TCEs and estimated cash breakeven rates We expect the spot TCEs for the full third quarter of 2026 to be lower than the spot TCEs currently contracted, due to the impact of ballast days during the third quarter of 2026. See Appendix 1 for further details. The Board of DirectorsFrontline plcLimassol, CyprusAugust 27, 2026 Ola Lorentzon - Chairman and DirectorJohn Fredriksen - Director James O'Shaughnessy - Director Cato Stonex - DirectorDr. Maria Papakokkinou - DirectorMikkel Storm Weum - Director Questions should be directed to: Lars H. Barstad: Chief Executive Officer, Frontline Management AS+47 23 11 40 00 Inger M. Klemp: Chief Financial Officer, Frontline Management AS+47 23 11 40 00 Forward-Looking Statements Matters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Frontline plc and its subsidiaries, or the Company, desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance and are not intended to give any assurance as to future results. When used in this document, the words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" and similar expressions, terms or phrases may identify forward-looking statements. The forward-looking statements in this report are based upon various assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include: the strength of world economies; fluctuations in currencies and interest rates, including inflationary pressures and central bank policies intended to combat overall inflation and high interest rates and foreign exchange rates; the impact that any discontinuance, modification or other reform or the establishment of alternative reference rates have on the Company’s floating interest rate debt instruments; general market conditions, including fluctuations in charter hire rates and vessel values; changes in the supply and demand for vessels comparable to ours and the number of newbuildings under construction; supply chain disruptions affecting shipyards, spare parts or critical equipment, including delays in newbuilding deliveries or vessel maintenance; the highly cyclical nature of the industry that we operate in; the loss of a large customer or significant business relationship; changes in worldwide oil production and consumption and storage; changes in OPEC and non-OPEC production decisions and geopolitical developments affecting oil supply and trade flows; changes in the Company's operating expenses, including bunker prices, dry docking, crew costs and insurance costs; planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including dry docking, repairs, surveys and upgrades; risks associated with any future vessel construction; our expectations regarding the availability of vessel acquisitions and our ability to complete vessel acquisition transactions as planned; our ability to successfully compete for and enter into new time charters or other employment arrangements for our existing vessels after our current time charters expire and our ability to earn income in the spot market; availability of financing and refinancing, our ability to obtain financing and comply with the restrictions and other covenants in our financing arrangements; availability of skilled crew members and other employees and the related labor costs; work stoppages or other labor disruptions by our employees or the employees of other companies in related industries; compliance with governmental, tax, environmental and safety regulation, any non-compliance with U.S. European Union and other international regulations; the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance policies; compliance with the Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery; general economic conditions and conditions in the oil industry; effects of new products and new technology in our industry, including the potential for technological innovation to reduce the value of our vessels and charter income derived therefrom; new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime Organization, and/or imposed by regional or national authorities such as the European Union or individual countries; vessel breakdowns and instances of off-hire; cost and effects of cybersecurity incidents or other failures, interruptions, or security breaches of our systems or those of our customers or third-party providers, including software failures, unforeseeable security breaches, or incidents stemming from the misuse of intentional or unintentional misapplication of artificial intelligence in our business; our ability to successfully adopt artificial intelligence and digital logistics into our operating systems; risks associated with potential cybersecurity or other privacy threats and data security breaches; potential conflicts of interest involving members of our Board of Directors and senior management; the failure of counter parties to fully perform their contracts with us; changes in credit risk with respect to our counterparties on contracts; our dependence on key personnel and our ability to attract, retain and motivate key employees; adequacy and cost of insurance coverage; our ability to obtain indemnities from customers; changes in laws, treaties or regulations; the volatility of the price of our ordinary shares; our incorporation under the laws of Cyprus and the different rights to relief that may be available compared to other countries, including the United States; changes in governmental rules and regulations or actions taken by regulatory authorities; government requisition of our vessels during a period of war or emergency; potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions; the arrest of our vessels by maritime claimants; general domestic and international political conditions or events, including “trade wars”; any further changes in U.S. trade policy that could trigger retaliatory actions by the affected countries; disruptions to global trade routes, including actual or threatened attacks on commercial shipping, military conflicts, piracy, terrorism, sanctions enforcement actions, restricted transit through strategic waterways, or other security incidents affecting the Strait of Hormuz, Bab el-Mandeb, Red Sea, Suez Canal, Panama Canal or other major shipping routes; the impact of increasing trade restrictions, tariffs, port charges, sanctions, export controls, and other protectionist measures; that may affect global oil trade flows, vessel utilization, customer demand, or operating costs; the impact of port or canal congestion; business disruptions due to adverse weather, natural disasters or other disasters outside our control; and other important factors described from time to time in the reports filed by the Company with the U.S Securities and Exchange Commission. We caution readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are no guarantee of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements. This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. 1 This press release describes Time Charter Equivalent earnings and related per day amounts and spot TCE currently contracted, which are not measures prepared in accordance with IFRS (“non-GAAP”). See Appendix 1 for a full description of the measures and reconciliation to the nearest IFRS measure. Attachment 2nd Quarter 2026 Results

Interested in Frontline PLC? Here are five stocks we like better. Record quarterly performance: Frontline reported $659.2 million in net income and $580.2 million in adjusted profit for Q2 2026, driven by sharply higher tanker rates and increased spot-market exposure. Strong tanker earnings and liquidity: Average daily TCE rates reached $152,700 for VLCCs, $111,400 for Suezmaxes and $92,400 for LR2/Aframaxes. The company ended June with $1.2 billion of liquidity and no meaningful debt maturities until 2030. Market disruptions support the outlook: Strait of Hormuz tensions, ship-to-ship transfers, longer-haul routes and vessel delays have reduced effective tanker supply and increased ton-mile demand, helping sustain elevated rates despite lower crude-export volumes. Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit Frontline (NYSE:FRO) reported its highest quarterly profit and adjusted profit on record for the second quarter of 2026, supported by sharply higher tanker rates and market inefficiencies that management said have tightened effective vessel supply. The company posted net income of $659.2 million, or $2.96 per share, while adjusted profit totaled $580.2 million, or $2.61 per share. Adjusted profit rose $235.3 million from the prior quarter, primarily reflecting higher time-charter equivalent, or TCE, earnings. → Quantum Computing Is Raising the Stakes for Cybersecurity: 5 Stocks to Watch Win-Win Momentum Plays With Strong Dividend Yields “Frontline is reporting its best quarter ever,” Chief Executive Officer Lars Barstad said. He attributed the results in part to the company’s strategy of expanding voyage days and exposure to the spot market during the weaker period following the COVID-19 pandemic. During the second quarter, Frontline achieved average daily TCE rates of $152,700 for its VLCC fleet, $111,400 for Suezmax tankers and $92,400 for LR2/Aframax tankers. → Palantir's Kool-Aid Moment: The Math Behind Karp's Forecast Top Shipping Firms Driving Industry-Leading Revenue Growth Barstad said that 86% of VLCC days had been booked at $156,900 per day, while 79% of Suezmax days were booked at $117,400 per day. The company’s LR2 fleet had booked 70% of days at $81,000 per day. He noted that the figures were calculated on a load-to-discharge basis, including the effect of ballast days at quarter-end. Chief Financial Officer Inger Klemp said operating costs, administrative expenses, interest expense and depreciation all declined from the first quarter. Ship operating expenses fell by $4.3 million, which she attributed largely to vessel sales, increased supplier rebates and partially offsetting higher general running costs. Administrative expenses declined by $2.4 million, while adjusted interest expense decreased by $4.8 million because of lower debt and lower interest rates. → Looking Beyond NVIDIA? These 3 AI ETFs Are Beating the Market Frontline reported $1.2 billion of liquidity as of June 30, including cash, cash equivalents, undrawn revolver capacity, marketable securities and bank minimum-cash requirements. The company said it has no meaningful debt maturities until 2030. Remaining newbuilding commitments stood at $601.1 million at the end of June and relate to nine newbuildings being acquired from an affiliate of CMN. Frontline has secured up to $737 million in financing for those newbuildings, according to Klemp. In the second and third quarters, Frontline reduced its weighted-average interest-rate margin by about 52 basis points, to 126 basis points from 178 basis points at the end of the first quarter. The reduction resulted from amendments to existing facilities, refinancings, newbuilding financing and asset sales, Klemp said. Following delivery of its remaining VLCC newbuildings and the sale of two VLCCs, Frontline expects its fleet to consist of 40 VLCCs, 19 Suezmax tankers and 18 Aframax/LR2 tankers. The fleet has an average age of 6.6 years, is entirely comprised of ECO vessels, and is 69% scrubber-fitted. Estimated 12-month VLCC cash break-even rate: $23,800 per day Estimated 12-month Suezmax cash break-even rate: $25,700 per day Estimated 12-month LR2 cash break-even rate: $22,200 per day Fleet-average cash break-even rate: about $23,900 per day Klemp said the estimates include dry-docking costs for seven VLCCs, seven Suezmaxes and eight LR2s. Excluding dry-docking costs, the fleet-average estimate was about $22,300 per day. Barstad said tanker markets remained elevated amid heightened risks in the Gulf of Oman, Red Sea and Black Sea, as well as renewed activity by the Houthis. He pointed to high-risk premiums on certain trades and said the TD3C benchmark was approaching $600,000 per day, while TD15 was near $100,000 per day. According to Barstad, crude exports from inside the Strait of Hormuz have declined by 82%, while Chinese crude imports have fallen 35% over the same period. Despite lower volumes, he said the market has experienced a 23% increase in VLCC idling days because of delays and increasingly complex trading patterns. Management cited growing ship-to-ship transfer activity near Fujairah, Singapore and Malaysia, as well as longer-haul crude movements from the Atlantic Basin to Asia. Barstad said cargoes that historically moved directly from the Middle East to Japan can now require multiple vessel legs and ship-to-ship transfers, increasing ton-mile demand and constraining the effective supply of tankers. During the question-and-answer session, Barstad said the number of vessels idling outside Oman and along India’s coast had increased as ship-to-ship activity expanded. He said timing uncertainty around transfer operations was contributing to delays for charterers. Barstad said Frontline’s capital-allocation approach remains focused on paying cash to shareholders rather than materially changing its leverage strategy. The company has used longer-term time charters in the current environment, with Barstad saying the depth of the two- and three-year VLCC charter market has improved since the summer. He said Frontline could potentially secure several additional three-year charters at prevailing rates, which he said were still below $80,000 per day but approaching that level depending on vessel delivery position. The forward market for the U.S. Gulf-to-Asia TD22 route was trading near $100,000 per day for 2028, according to Barstad. The company also sold two VLCCs and distributed the proceeds through a special dividend. Barstad said Frontline viewed the sale as a way to capture a premium for vessels that could be useful to buyers seeking control over logistics through the Strait of Hormuz, while Frontline itself was not currently trading into the Arabian Gulf. Looking ahead, Barstad said the tanker order book remains a concern, with the headline VLCC order book representing about 33.5% of the existing fleet. However, he said the outlook appears more balanced when considering fleet aging: Frontline estimates 578 vessels across its operating segments will approach the 20-year threshold over the next five years, compared with a total order book of about 707 ships. Barstad said inventory draws, particularly in the U.S. and China, could become a central market issue as winter approaches. He added that the long-term charter market appears increasingly to be pricing in the possibility that current disruptions will persist. Frontline Ltd. (NYSE:FRO) is a leading global shipping company specializing in the seaborne transportation of crude oil and petroleum products. The company's core business activities encompass the ownership and operation of very large crude carriers (VLCCs), Suezmax tankers and Aframax vessels. Through long-term charters, spot market operations and time charters, Frontline provides flexible shipping solutions that cater to a diverse set of energy producers, refiners and trading houses worldwide. Frontline's fleet is geared toward high-capacity, ocean-going tankers capable of carrying large volumes of crude oil over intercontinental distances. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Frontline Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly profit driven by a long-term strategy of increasing VLCC exposure and voyage days during the post-COVID period. Market strength is driven by extreme trade inefficiencies, including a 23% increase in idling days per VLCC, which have emerged despite an 82% reduction in crude oil exports from the Strait of Hormuz. Observed a significant shift in trade patterns, with Atlantic Basin exports taking longer routes and Middle East exports increasingly relying on multi-stage ship-to-ship (STS) transfers. Global oil supply is currently being sustained by aggressive inventory draws in the US, China, and OECD nations, which management views as a temporary cushion. The effective fleet supply is tightening despite declining volumes because of increased distances and vessels 'sailing dark,' which creates tracking blind spots. Strategic asset sales of older VLCCs were executed to capture high premiums from buyers seeking to control their own logistical chains through the Strait of Hormuz. Maintained a lean organizational structure and high eco-vessel composition (100%) to maximize margins during this period of high volatility. Anticipates energy security policies and inventory refill requirements will dominate market dynamics as the Northern Hemisphere approaches the winter season. The tanker order book is slowing as yard lead times extend to 3.5 years, creating a potential supply vacuum for deliveries reaching into 2030. Management assumes the current high-rate environment will persist, as evidenced by the long-term period market starting to price in extended disruptions. Future fleet supply remains balanced despite a growing order book, as 578 vessels will reach the 20-year threshold over the next five years. Guidance for cash breakeven rates includes significant dry dock activity, with 22 vessels scheduled for maintenance over the next 12 months. Successfully reduced weighted average interest rate margins by 52 basis points through comprehensive refinancing and margin amendments. Identified increased geopolitical risk in the Gulf of Oman, Red Sea, and Black Sea as primary drivers of high risk premiums in certain trades. Noted that while recycling activity is starting to move for sanctioned vessels, the pace remains extremely slow due to dollar-denominated transaction hurdles. Reported a special dividend following the sale of two vessels, reflecting a strategy to return capital when reinvestment at current asset prices lacks sufficient upside. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that liquidity for 2- to 3-year charters has deepened significantly, with 'intelligent money' now willing to pay near $80,000 per day. The shift toward term deals reflects a market expectation that current tailwinds and disruptions will prevail for a significant period. Frontline maintains an informal strategy to cover approximately one-third of revenues to balance volatility while paying out remaining profits. Approximately 166 to 167 vessels are considered outside the commercially traded fleet, effectively increasing the order-book-to-fleet ratio to nearly 40%. Management equates vessels over 20 years old with the sanctioned fleet, noting that utilization of these ships is not increasing. A slow trend of recycling is emerging as some owners obtain US licenses to sell sanctioned steel for scrap. China has reduced imports by 3.5 to 5 million barrels per day, relying on a massive inventory cushion built up in previous years. Management views this as a critical question for oil prices rather than shipping, though an aggressive return to chasing barrels would propel rates further. It remains uncertain how long Beijing will allow inventories to draw before shifting back to active importing. The Suezmax breakeven rate rose to $25.7 thousand per day, exceeding VLCC rates for the first time since 2021. The increase is primarily driven by a heavy dry dock schedule for seven Suezmax vessels in the 12-month forward-looking period. The figure also reflects the assumption of fully drawing down a revolving credit facility (RCF) that was previously undrawn.

Frontline (NYSE:FRO) is back in focus after reporting second quarter 2026 results and declaring a cash dividend of $2.61 per share, which ties shareholder payouts directly to its latest earnings performance. At a latest share price of $43.75, Frontline has seen strong momentum, with a 1 month share price return of 12.82% and a year to date share price return of 112.59%. The 1 year total shareholder return of 132.88% points to gains that have come from both price and dividends as investors react to record quarterly earnings, higher cash payouts and recent vessel sales and charter agreements. Spot other shipping and energy plays that could echo Frontline's momentum by reviewing our hand picked 46 high quality undervalued stocks for ideas with solid fundamentals and potential mispricing. The stock has already delivered a powerful run on record earnings and a rich cash dividend from Frontline. The next step is to ask whether the current price still leaves clear upside on the table or if most of the easy gains are behind it. Frontline's most followed valuation narrative puts fair value at $44.25, only slightly above the latest $43.75 close. This frames the recent share price surge in a much tighter valuation range. Read the complete narrative.. Want to see why this fair value still sits above today’s price? The narrative leans heavily on margin strength, trade route length, and a richer future earnings multiple. The full set of earnings and revenue assumptions may surprise you. Result: Fair Value of $44.25 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this Frontline narrative could be challenged if the global energy transition reduces seaborne oil demand faster than expected, or if stricter regulations significantly raise operating costs. Find out about the key risks to this Frontline narrative. The first narrative for Frontline leans on future earnings and a higher P/E in a few years. Today, the picture looks different. Frontline trades on a P/E of 10.8x, which is slightly above its fair ratio of 10.7x, yet below the US Oil and Gas industry average of 12.8x and a peer average of 23.2x. That mix of a small premium to the fair ratio and a discount to peers can signal either limited room for re-rating or some residual upside if sentiment stays supportive. Which side of that trade-off do you think matters more right now. See what the numbers say about this price — find out in our valuation breakdown. With Frontline attracting both enthusiasm and caution, this is a good moment to move fast and test the story against the underlying data for yourself. A useful starting point is to weigh up the 2 key rewards and 3 important warning signs. If you stop with Frontline, you only see part of the opportunity set. Use the screeners below to uncover other stocks that could suit your approach. Target resilient income by reviewing companies in the 12 dividend fortresses that focus on stronger yields and established payout histories. Hunt for mispriced quality by scanning the 20 high quality undiscovered gems where solid fundamentals may not yet be fully reflected in share prices. Protect your downside by checking the 76 resilient stocks with low risk scores which highlights stocks with steadier risk profiles and more robust financial characteristics. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FRO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]