Frontline CEO Says Growing Sanctions And Middle East Tensions Test Tanker Trade

Frontline plc (NYSE:FRO) reported second-quarter 2025 profit of $77.5 million, or 35 cents per share, down 59% from 84 cents in the same quarter last year but up from 15 cents in the first quarter.

Adjusted profit was $80.4 million, or 36 cents per share, missing analyst estimates of $0.47.

Revenue was $480.1 million, down 14% from $556.0 million last year, but ahead of the $309.85 million consensus and up from $427.9 million in the first quarter.

Also Read: Frontline CEO Says Tanker Industry’ Maintains Business As Usual’ Amid Uncertainty

Frontline reported average daily spot time charter equivalent (TCE) earnings of $43,100 for VLCCs, $38,900 for Suezmax tankers, and $29,300 for LR2/Aframax tankers.

Total TCE earnings rose to $283.0 million from $241.1 million in the first quarter, driving the quarter’s profit increase.

Operating cash flow for the first half of 2025 was $291.5 million, compared with $404.0 million in the year-ago period.

As of June 30, 2025, cash and cash equivalents totaled $476.7 million, up from $413.5 million at year-end 2024. Debt stood at $3.59 billion, with $317.6 million in short-term debt and $3.27 billion in long-term borrowings.

Frontline secured a $1.29 billion senior secured term loan facility in April to refinance debt on 24 VLCCs. The company also agreed to sell its oldest Suezmax tanker, built in 2011, for $36.4 million, a transaction expected to generate $23.7 million in net cash proceeds in the third quarter.

As of June 30, the company’s fleet comprised 81 owned vessels with a total capacity of 17.8 million DWT and an average age of 7.1 years. Four vessels were on time charter-out contracts.

The company declared a cash dividend of 36 cents per share, payable Sept. 24, 2025, to shareholders of record on Sept. 12, 2025.

Chief Executive Officer Lars H. Barstad said, “The second quarter of 2025 proved to be volatile, with growing unrest in the Middle East affecting tanker trade and freight. Although OPEC continued its strategy of reducing voluntary production cuts, these reversals have so far only yielded modest increases in exports. The summer is a period of high domestic demand for large oil producers, and it is expected that we will see more volume come into the market as we approach fall in the northern hemisphere.”

“The U.S., G7 and the EU continue to widen the scope of sanctions, especially for Russia, causing increased oil trade inefficiencies. We have seen a gradual increase in utilization for the compliant tanker trade during the first half of the year, and with Frontline’s efficient spot-exposed fleet, we are excited as we approach the seasonal high demand period,” Barstad added.

For the third quarter, the company expects full-period spot TCEs to be lower than currently contracted levels due to ballast days.

Price Action: FRO shares are trading lower by 0.48% to $20.62 premarket at last check Friday.

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