Frontline Plc (FRO) reported strong second-quarter results, exceeding revenue expectations but falling short on adjusted earnings per share. The company’s revenue reached $607.5 million, surpassing the consensus estimate of $382.3 million. However, adjusted EPS came in at $0.62, missing the consensus of $0.67. This slight miss can be attributed to a decrease in spot Time Charter Equivalent (TCE) rates for Very Large Crude Carriers (VLCCs), Suezmax tankers, and LR2/Aframax tankers compared to the previous year. Despite the lower TCEs, Frontline’s net operating income improved to $255.92 million from $252.98 million a year ago.
The company declared a dividend of $0.62 per share for the second quarter, payable on or about September 30, 2024. The record date for the dividend is September 13, 2023.
Looking ahead, Frontline anticipates that spot TCEs for the third quarter of 2024 will be lower than current contracted rates due to ballast days at the end of the quarter. However, the company expects oil demand to increase in the second half of the year, potentially reaching 104.9 million barrels per day (mbpd) by December 2024.
Frontline’s CEO, Lars H. Barstad, highlighted the company’s commitment to enhancing shareholder returns by divesting older assets, consolidating financials, and efficiently managing its fleet, which is one of the largest modern fleets in the tanker market.
Investors interested in gaining exposure to Frontline can invest in the Invesco Oil & Gas Services ETF (PXJ) and the SonicShares Global Shipping ETF (BOAT).
FRO shares were up 0.21% at $23.37 premarket at the last check Friday.
