Frontline Plc — Earnings Release 2019

Aug 27, 2019

FRO - Second Quarter and Six Months 2019 Results

FRO - Second Quarter and Six Months 2019 Results

Frontline Ltd. (the "Company" or "Frontline"), today reported unaudited results

for the three and six months ended June 30, 2019:

Highlights

* Net income attributable to the Company was $1.1 million, or $0.01 per share,

for the second quarter of 2019.

* Net income attributable to the Company was $4.2 million, or $0.02 per share

adjusted for certain non-cash items for the second quarter of 2019.

* Reported spot average daily time charter equivalent ("TCE") for VLCCs,

Suezmax tankers and LR2/Aframax tankers in the second quarter were $25,600,

$16,200 and $18,100, respectively.

* For the third quarter of 2019, we estimate spot TCE of $28,000 contracted

for 83% of vessel days for VLCCs. The estimated spot TCE is provided using

the load-to-discharge method of accounting. We expect the spot TCE for the

full quarter to be lower primarily due to impact of ballast days at the end

of the quarter.

* In May and June 2019, the Company entered into agreements to purchase a

Suezmax tanker resale and a VLCC resale both under construction in Korea and

expected to be delivered in May 2020. In June 2019, the Company ordered two

LR2 newbuildings from SWS, China, expected to be delivered in January and

March 2021.

* In August 2019, the Company entered into a non-binding term sheet together

with Trafigura Group and Golden Ocean Group Limited ("Golden Ocean") to

establish a JV for the supply of marine fuels.

* In August 2019, the Company entered into a sale and purchase agreement with

Trafigura Maritime Logistics ("TML") to acquire ten Suezmax tankers built in

2019. Five vessels will be chartered back to Trafigura on three-year time

charters at a daily rate of $28,400 with a 50% profit share above the base

rate.

Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS

commented:

"Frontline is well positioned as we approach what we believe is an important

inflection point in the tanker market.  The increase in US crude oil production

is driving tonne-miles, refineries are coming back from maintenance and the

impact of the IMO 2020 is expected to be positive. We believe the tanker market

dynamics present a compelling opportunity across multiple time frames. Our

recent agreement to acquire 10 Suezmax tankers, done with the support of our

largest shareholder, increases our earnings potential significantly at what we

believe is an ideal time. Frontline is well positioned ahead of the IMO 2020

implementation date with an average fleet age below four years, significant

exposure to favourable scrubber economics, and the ability to source various

fuel types on a timely and competitive basis through our fuel joint venture with

Trafigura Group."

Inger M. Klemp, Chief Financial Officer of Frontline Management AS added:

"Frontline is unique in its ability to access capital from a variety of sources

on attractive terms.  Our strong standing with institutional lenders, combined

with the financial support of our largest shareholder, allow us to react quickly

to market changes and growth opportunities.  We will continue to consistently

focus on maintaining our competitive break even levels to ensure we are well

positioned to generate significant cash flow and create value for our

shareholders."

The average daily time charter equivalents ("TCE") earned by Frontline in the

quarter ended June 30, 2019, the prior quarter and in the year ended December

31, 2018 are shown below, along with spot estimates for the third quarter of

2019 and the estimated average daily cash break-even ("BE") rates for the

remainder of 2019:

Average daily time charter equivalents ("TCEs")

--------------------------------------------------------------------------------

Estimated average

($ per day) Spot Spot estimates % covered daily BE rates

+-----------------------------------------------------------+------------------+

|  Q2 2019 Q1 2019 2018 Q3 2019 | 2019 |

+-----------------------------------------------------------+------------------+

| | 24,500 |

|VLCC 25,600 35,700 18,300 28,000 83% |   |

| | |

|SMAX 16,200 28,200 17,300 18,300 70% | 21,300 |

| | |

|LR2 18,100 24,000 14,900 16,800 68% | 16,200 |

+-----------------------------------------------------------+------------------+

The estimated average daily cash break-even rates are the daily TCE rates the

vessels must earn in order to cover operating expenses including dry docks,

repayments of loans, interest on loans, bareboat hire and general and

administrative expenses.

Spot estimates are provided using the load-to-discharge method of accounting.

The rates quoted are for days currently contracted. The actual rates to be

earned in the third quarter of 2019 will therefore depend on the number of

additional days that we can contract, and more importantly the number of

additional days that each vessel is laden. Therefore, a high number of ballast

days at the end of the quarter will limit the amount of additional revenues to

be booked based on load to discharge accounting principles.

On May 15, 2019 the Company disclosed that spot TCE of $34,800 per day had been

contracted for 63% of vessel days for our VLCCs. As described above, due to the

limited number of additional laden days at the end of the second quarter,

additional revenues booked were limited and as such the total revenues for the

63% of vessel days contracted was spread over 100% of the days in the quarter,

resulting in a lower TCE per day by the end of the second quarter.

The load-to-discharge method of accounting results in revenues being recognized

over fewer days, but at a higher rate for those days. Over the life of a voyage

there is no difference in the total revenues and costs to be recognized.

When expressing TCE per day for the second quarter of 2019, the Company uses the

total available days for the quarter and not just the number of days the vessel

is laden.

Questions should be directed to:

Robert Hvide Macleod: Chief Executive Officer, Frontline Management AS

+47 23 11 40 84

Inger M. Klemp: Chief Financial Officer, Frontline Management AS

+47 23 11 40 76

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 Ltd. and its subsidiaries, or the Company, desires 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,

general market conditions, including fluctuations in charter hire rates and

vessel values, changes in the supply and demand for vessels comparable to ours,

changes in world wide oil production and consumption and storage, changes in the

Company's operating expenses, including bunker prices, dry docking and insurance

costs, the market for the Company's vessels, 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

workers and the related labor costs, compliance with governmental, tax,

environmental and safety regulation, any non-compliance with the U.S. Foreign

Corrupt Practices Act of 1977 (FCPA) 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, the failure of counter

parties to fully perform their contracts with us, our dependence on key

personnel, adequacy 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 Bermuda 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, potential liability from

pending or future litigation, general domestic and international political

conditions, potential disruption of shipping routes due to accidents, political

events or acts by terrorists, and other important factors described from time to

time in the reports filed by the Company with the Securities and Exchange

Commission or 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