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Frontline shares sail forward on sizeable revenue beat

  • Shares of Frontline (NYSE:FRO) surged as much as 7% by late-afternoon trading on Wednesday after reporting third quarter results.
  • The shipping tanker company posted Q3 revenue of $382.2M, which more than doubled and beat consensus by over $150 million. However its EPS of 37 cents a share missed estimates by just 1 cent.
  • In the third quarter, Frontline achieved $25,000 per day on its VLCC fleet, $41,100 per day on Suezmax fleet and $40,200 per day on LR2/Aframax fleet, the company said.
  • "We estimate average cash cost breakeven rates for the remainder of 2022 of approximately $25,000 per day for VLCCs; 20,200 per day for Suezmax tankers, and $17,200 per day for LR2 tankers, which with a fleet average estimate of $20,900 per day" - CFO Inger Klemp during earnings call
  • FRO board also announced its intention to declare and pay third quarter cash dividend, which is expected to be 80% of the reported adjusted net income, CFO Klemp added.
  • In the fourth quarter, the company anticipates spot TCEs to be lower than TCEs contracted presently, as it expects impact of ballast days at Q4 end.
  • FRO stock has more than doubled in the last one year, while the S&P 500 energy index recorded a 64% rise for the same period.