Frontline Q4 Earnings: Revenue Beats, But EPS Sinks—CEO Cites 'Unusually Soft' Market

Frontline Plc FRO reported fourth-quarter revenue growth of 6.9% year-over-year to $443.491 million, surpassing the $300.67 million consensus.

Adjusted EPS for the quarter declined to 20 cents from 46 cents a year ago, missing the consensus of 36 cents.

Reported spot TCEs for VLCCs, Suezmax tankers, and LR2/Aframax tankers were $35,900 (vs. $39,200 last year), $33,300 (vs. $45,700 last year) and $26,100 (vs. $42,900 prior year) per day.

At the close of the fourth quarter of 2024, contracted ballast days totaled 1,116 for VLCCs, 238 for Suezmax tankers, and 174 for LR2/Aframax tankers.

Net operating income for the quarter declined to $129.72 million from $138.05 million a year ago, and margin contracted 400 bps to 29.3%.

Operating cash flow was $167.85 million in the fourth quarter, compared to $100.49 million in the same quarter a year ago. For 2024, it stood at $736.41 million, down from $856.18 million a year ago. Frontline held cash and cash equivalents of $413.53 million as of the quarter end.

The Board declared a $0.20 per share dividend for the fourth quarter, with a record date of March 14, 2025, ex-dividend dates of March 13 (Oslo) and March 14 (NYSE), and payment on March 31, 2025.

As of December 31, 2024, the Company owned a fleet of 81 vessels, including 41 VLCCs, 22 Suezmax tankers, and 18 LR2/Aframax tankers, with a total capacity of approximately 17.8 million DWT.

"The fourth quarter of 2024 came in unusually soft compared to previous years. Global oil demand was up marginally as the year came to an end, but global seaborne exports slowed in the fourth quarter. During the quarter we saw positive developments in the enforcement of sanctions against Iran and Russia in particular, but we could not escape the fact that these two countries represent a material part of the supply to Asia, at cost to demand for the vessels Frontline operates," commented Lars H. Barstad, Chief Executive Officer of Frontline Management.

"For 2025 we have already seen broader sanctions with a wider scope, at the same time as key importers of exposed crude are diversifying away from the mentioned suppliers. Compliant fleet growth for the asset classes we deploy peaked a few years back, making the outlook very constructive as Frontline sail into the new year with our cost-efficient operations and modern fleet," added Barstad.

Outlook: Frontline expects spot TCEs for the first quarter of 2025 to be lower than the currently contracted rates, primarily due to the impact of ballast days.

Price Action: FRO shares traded higher by 1.05% at $15.47 premarket at last check Friday.