Frontline’s sale of five of its oldest VLCCs for $290m is a sign that tanker asset prices remain strong.
The move, first reported by TradeWinds on 9 January and confirmed by Frontline on Friday, pushed Fearnley Securities to bump up its valuations, with a VLCC resale estimated to be worth $5m more at $130m and a 15-year-old vessel standing pat at $55m.
“As the long-term story firms up, the lack of available deals in the market forces buyers to bid up asset prices,” Fearnley Securities analyst Oystein Vaagen said.
Frontline moved the 297,000-dwt Front Singe, Front Cecilie (both built 2010), 298,000-dwt Front Queen, Front Kathrine and 321,300-dwt Front Endurance (all built 2009).
The John Fredriksen-backed company did not disclose a counterparty, but Sinokor Merchant Marine is reportedly the buyer.
The implied price of $58m each — in the middle of the mid-$50m to $60m range rumoured in the market — is “quite firm”, broker Einar Straume said in Cleaves’ weekly note.
“For Frontline, this is a step in their fleet renewal process; in addition to the 24 modern VLCCs bought from Euronav late last year, the Seatankers group is also reported to have signed up for 2+2 VLCC newbuildings at Dalian, for deliveries in 2026 and priced at $116m including scrubbers,” he said.
Data from Clarksons shows tanker asset values on a multi-year upswing.
A 310,000-dwt VLCC newbuilding is worth $136m, it said, up from $130m last year and $125m in 2022.
A 15-year-old VLCC was estimated to be worth $55m, flat from 2023 and down from $58m in 2022, but up from $33m in 2021.
The broker said suezmaxes, aframaxes and product tankers firmed across the board.
Its five-year-old tanker index rose 5% to 216 last week, up from 210 last year and 186 in 2022.
Pareto Securities’ Eirik Haavaldsen noted that the quintet was Frontline’s last non-eco tankers and the sale furthers its commitment to what chief executive Lars Barstad described as “our strategy of running the most modern, fuel-efficient fleet in the market”.
Haavaldsen forecast Frontline’s first-half earnings per share at $1.80, up from $1.40 on the back of suezmax and aframax/LR2 rates.
By the end of the year, he expects net asset value to near NOK 215 ($20.79) per share.
In late trading on Monday, Frontline’s Oslo Stock Exchange-listed shares were trading at NOK 231.85, a slight drop of NOK 1 or 0.43%.
