Analysts are not expecting any big surprises in Frontline’s fourth-quarter earnings report on Thursday, with all eyes turning to its first-quarter results.
This is when the full effect of its $2.35bn swoop for 24 modern VLCCs from Euronav will be seen.
The analyst consensus on fourth-quarter Ebitda is $211m.
The owner has already guided for 81% of fleet days booked at $48,100 per day for VLCCs, and 70% of suezmaxes and LR2s at $50,300 and $51,300, respectively, with limited impact so far from the Euronav tankers.
“Interesting will be Q1 2024, where Frontline sits with impressive operational gearing through their 42 VLCCs (adjusted for disposals), and let’s not forget their 12 LR2s and 24 suezmaxes,” Fearnley Securities analysts Oystein Vaagen and Fredrik Dybwad said.
Ebitda in the three months to March could come in at $320m Fearnley believes, versus current consensus at $299m.
“Unlike what we’ve seen from VLCC peers (eg DHT ahead of their report), Q1 expectations are seemingly not running too high for Frontline. The impressive LR2 (almost all trading clean)/suezmax strength offsets weakened VLCC rates,” the analysts added.
Frontline has been busy selling older ships in recent weeks.
Five VLCCs went to Sinokor Merchant Marine in South Korea for $290m in January, and a suezmax to NGM Energy in Greece after that.
The analysts expect this cash to be used for deleveraging.
They have a “buy” rating on Frontline shares.
The target price for the stock is NOK 265 ($25), against NOK 238 in Oslo on Wednesday morning.
