Frontline's revenue in the first quarter increased to $621.6 million from $511.6 million in 2023. In the first quarter, the Oslo-listed tanker carrier also took over the last VLCC tanker it acquired in its deal with Belgian rival Euronav. The remaining 13 of the total 24 vessels were delivered in the first quarter.
Specifically, in the first quarter, Frontline's existing fleet of VLCC tankers was at a rate of $54,200 per day for TCE vessels, compared to $42,300 per day for delivered VLCC tankers. The company attributes the difference to the $4,900/day fee for positioning and ballast days.
In addition, freight rates have improved in the second quarter. Frontline has earned 78% of VLCC days, estimated at $60,400/day. Suezmax tankers were charged $46,400/day for the quarter, with 73% of capacity booked, up from $45,800/day in the first quarter. LR2/Aframax vessels had a 72% capacity booking rate of $64,700/day, up from $54,300/day in the first quarter.
Commenting on the first quarter's results, CEO Lars Barstad said: "In the first quarter of 2024, Frontline took delivery of the remaining 13 of the 24 VLCC vessels acquired from Euronavl last year. With these vessels joining the Frontline fleet, our scalable business model has proven to be efficient, with our vessels increasing their daily exposure by approximately one-third. Our earnings in the first quarter were solid as the market remained strong throughout the quarter. ”
In its quarterly report, Frontline noted that overall tanker order volume is positive for the future development of the market. The company is particularly bullish on the VLCC market.
"According to industry sources, only one VLCC vessel is expected to be delivered for the remainder of 2024 and five in 2025, so the outlook for the asset class is particularly bright," the company said in the report. ”
Frontline further noted that the increase in order book primarily reflects delivery plans for 2026 and 2027 and is "not expected to impact the overall outlook of the tanker fleet in the near term," and is explained by the overall age of the existing fleet.
Currently, there are 41 VLCC tankers, 65 Suezmax tankers and 116 LR2 tankers on the order book. Frontline announced a first-quarter dividend of $0.62 per share.
