Frontline Plc — Earnings Release 2021

Nov 29, 2021

FRO - Third Quarter and Nine Months 2021 Results

FRO - Third Quarter and Nine Months 2021 Results

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

for the three and nine months ended September 30, 2021:

Highlights

* Net loss of $33.2 million, or $0.17 per basic and diluted share for the

third quarter of 2021.

* Adjusted net loss of $35.9 million, or $0.18 per basic and diluted share for

the third quarter of 2021.

* Reported total operating revenues of $171.8 million for the third quarter of

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

quarter of 2021 were $10,500, $7,900 and $10,700 per day, respectively.

* For the fourth quarter of 2021, we estimate spot TCE on a load-to discharge

basis of $21,600 contracted for 79% of vessel days for VLCCs, $17,900

contracted for 72% of vessel days for Suezmax tankers and $16,000 contracted

for 64% of vessel days for LR2 tankers.

* Entered into senior secured term loan facilities in September and October

2021 for a total amount of up to $247.0 million to partially finance the

acquisition of two 2019-built VLCCs, which were delivered to the Company in

October and November of 2021, respectively, and the acquisition of two of

the six resale VLCC newbuilding contracts.

* Obtained financing commitments for senior secured term loan facilities in

October and November 2021 for a total amount of up to $260.0 million to

partially finance the acquisition of four of the six VLCC newbuilding

contracts, which are subject to final documentation.

* Entered into an agreement in November 2021 to sell four of its scrubber-

fitted LR2 tankers built in 2014 and 2015 for an aggregate sale price of

$160.0 million. The transaction is expected to generate net cash proceeds of

approximately $67.0 million.

* In November 2021, the Company extended the terms of its senior unsecured

revolving credit facility of up to $275.0 million with an affiliate of Hemen

Holding Ltd. by 12 months to May 2023.

Lars H. Barstad, Chief Executive Officer of Frontline Management AS commented:

"The third quarter continued to be a challenging period for tanker owners.

Global oil demand rose, but oil supply growth remained muted, resulting in one

of the most demanding quarters on record for tankers. Global inventories were

drawn throughout the period, albeit at a reduced pace compared to the

immediately preceding quarter. Yet again Frontline has been reaping the benefits

of running a 'tight ship', with what we believe to be industry low operational,

financial, and administrative costs. In the current market, where oil prices and

fuel costs have risen considerably, we believe having a modern, fuel-efficient

fleet has proven advantageous. In the previous quarter I pointed to the fact

that freight rates below operational cost, and in some cases negative for

inefficient tonnage, is not sustainable. During the third quarter of the year,

we finally started to see ship recycling accelerate. The fundamentals of this

market remain the same; the global tanker fleet is aging rapidly, orderbooks are

dwindling as global oil demand is about to grow beyond hundred million barrels

per day. These factors combine to create a potentially potent cocktail for the

recovery of the tanker market."

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

"In the third and fourth quarter we have entered into term loan facilities and

obtained financing commitments at what we believe to be highly attractive terms

for a total amount of up to $507.0 million to partially finance the acquisition

of the two 2019-built VLCCs and the six VLCC newbuilding contracts. When

factoring in the $33.4 million available under the term loan facility entered

into in November 2020 to partially finance the delivery of the last LR2 tanker,

we have established bank debt of up to $540.4 million. The Company has also

raised gross proceeds of $51.2 million under the Equity Distribution Agreement

and net cash proceeds after the repayment of bank debt of approximately $67.0

million through sale of four LR2 tankers. Following this the remaining

commitments as per September 30, 2021 for Frontline's newbuilding program

consisting of one LR2 tanker and six VLCCs and for the acquisition of the two

2019-built VLCCs, is fully funded.

Through these new financings we reduce our borrowing cost and industry leading

cash break even rates, providing significant operating leverage and sizeable

returns during period of market strength and help protecting our cash flows

during periods of market weakness.

The Company has also extended the terms of its senior unsecured revolving credit

facility of up to $275.0 million by 12 months to May 2023, leaving Frontline

with no loan maturities until 2023."

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

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

Estimated

average

daily

cash BE

rates for

the

($ remainder

per Spot TCE % of the

day) Spot TCE estimates Covered year

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

| Q4 | |

|  2021 Q3 2021 Q2 2021 Q1 2021 2020 2020 Q4 2021 | 2021 |

| | |

|VLCC 14,900 10,500 15,000 19,000 17,200 54,500 21,600 79% | 21,400 |

| | |

|SMAX 11,300 7,900 11,000 15,200 9,800 35,600 17,900 72% | 17,800 |

| | |

| LR2 11,000 10,700 10,600 12,000 12,500 23,400 16,000 64% | 14,100 |

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

The estimated average daily cash breakeven rates are the daily TCE rates our

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 contracted days

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

The actual rates to be earned in the fourth quarter of 2021 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, we are 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 end of the period, whereas if a vessel is contracted, then certain

costs can be deferred and recognized over the load-to-discharge period.

The recognition 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 as compared to a discharge-to-discharge basis.

When expressing TCE per day the Company uses the total available days, net of

off hire days and not just the number of days the vessel is laden.

The Board of Directors

Frontline Ltd.

Hamilton, Bermuda

November 28, 2021

Ola Lorentzon - Chairman and Director

John Fredriksen - Director

Tor Svelland - Director

James O'Shaughnessy - Director

Questions should be directed to:

Lars H. Barstad: Chief Executive Officer, Frontline Management AS

+47 23 11 40 37

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 worldwide 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, the length and severity of epidemics and

pandemics, including the ongoing global outbreak of the novel coronavirus

("COVID-19"), and their impacts on the demand for seaborne transportation of

petroleum products, the impact of increasing scrutiny and changing expectations

from investors, lenders and other market participants with respect to our

Environmental, Social and Governance policies, the impact of port or canal

congestion 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.

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(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.