Frontline Plc — Earnings Release 2020

Aug 27, 2020

FRO - Second Quarter and Six Months 2020 Results

FRO - Second Quarter and Six Months 2020 Results

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

for the three and six months ended June 30, 2020:

Highlights

* Net income of $199.7 million, or $1.01 per diluted share for the second

quarter of 2020.

* Adjusted net income of $206.1 million, or $1.04 per diluted share for the

second quarter of 2020.

* Declared a cash dividend of $0.50 per share for the second quarter of 2020.

* Repaid $60 million of its $275.0 million senior unsecured facility in the

second quarter of 2020.

* Reported total operating revenues of $387.1 million for the second quarter

of 2020.

* Reported spot TCEs for VLCCs, Suezmax tankers and LR2 tankers in the second

quarter of 2020 were $75,800, $51,100 and $36,900 per day, respectively.

* For the third quarter of 2020, we estimate spot TCE on a load-to discharge

basis of $60,900 contracted for 76% of vessel days for VLCCs, $29,500

contracted for 77% of vessel days for Suezmax tankers and $14,500 contracted

for 67% of vessel days for LR2 tankers. We expect the spot TCEs for the full

third quarter of 2020 to be lower than the TCEs currently contracted, due to

the impact of ballast days at the end of the third quarter as well as

current weaker rates.

* Took delivery of the VLCC newbuilding Front Dynamic and the Suezmax

newbuilding Front Cruiser in the second quarter of 2020.

* Signed a senior secured term loan facility in July 2020 in an amount of up

to $328.6 million to refinance an existing loan facility maturing in

December 2020.

* Obtained financing commitment for a senior secured term loan facility in

August 2020 in an amount of up to $133.7 million to partially finance the

four LR2 tankers under construction, which is subject to final

documentation.

Robert Hvide Macleod, Chief Executive Officer of Frontline Management AS

commented:

"Our results for the first half of 2020 are the strongest in more than 10 years,

and we have paid aggregate cash dividends of $1.20 per share for the same

period. While tanker rates have seemingly found support at a lower level in the

third quarter, we expect oil demand and demand for transportation to recover

gradually. We have good visibility in our third quarter results based on our

contracted spot days as well as our charter coverage. We also expect our results

to be positively impacted by the modern profile of our fleet and breakeven costs

that are very competitive. The large moves in tanker rates during the last 12

months clearly illustrates the tight balance in the market and the fact that it

does not take much for the tanker market to rally. Looking ahead to 2021 and

beyond, recovering demand for crude oil transportation will coincide with

rapidly declining fleet growth, which supports our long term highly constructive

market outlook."

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

"In the second quarter of 2020 we refinanced two term loan facilities with total

balloon payments of $349.4 million due in December 2020 and in March 2021. We

expect to refinance further two term loan facilities with total balloon payments

of $320.3 million due in April 2021 and in June 2021 prior to maturity, leaving

the Company with no material maturities until 2023. Our strong cash flow in the

second quarter enabled us to both repay $60 million of our $275.0 million senior

unsecured facility, reducing the amount outstanding to $60 million, and to

return nearly $99 million to our shareholders in cash dividends."

Average daily time charter equivalents ("TCEs")(1)

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

Estimated

($ per Spot average daily

day)       estimates % covered cash BE rates

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

|  Q2 2020 Q1 2020 Q4 2019 2019 Q3 2020 | 2020 |

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

|VLCC 75,800 74,800 58,000 35,900 60,900 76% | 22,600 |

| | |

|SMAX 51,100 57,800 38,200 25,800 29,500 77% | 18,900 |

| | |

|LR2 36,900 31,200 29,800 22,000 14,500 67% | 15,700 |

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

The estimated average daily cash breakeven 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, time charter hire and net

general and administrative expenses for the remainder of the year.

Spot estimates are provided on a load-to-discharge basis, whereby the company

recognizes revenues over time ratably from commencement of cargo loading until

completion of discharge of cargo. The rates reported are for all days up until

the last contracted discharge of cargo for each vessel in the quarter. The

actual rates to be earned in the third quarter of 2020 will 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 on a load-to-discharge basis. Ballast days are days when a vessel is

sailing without cargo and therefore unable to recognize revenues. Furthermore,

when a vessel remains uncontracted at the end of the quarter, the Company will

recognize certain costs during the uncontracted days up until the period end,

whereas if a vessel is contracted, then certain costs can be deferred and

recognized over the load-to-discharge period.

The reporting of revenues on a load-to-discharge basis 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 2020, the Company uses the

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

is laden.

The Board of Directors

Frontline Ltd.

Hamilton, Bermuda

August 26, 2020

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

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

(1) This press release describes Time Charter Equivalent earnings and related

per day amounts, which are not measures prepared in accordance with US GAAP

("non-GAAP"). See Appendix 1 for a full description of the measures and

reconciliation to the nearest GAAP measure.