Frontline Plc (FRO)

Frontline, an owner of oil tankers, reported the best quarterly profit in its history for the second quarter of 2026, $659.2 million 1. Revenue was $943.3 million, and its supertankers earned $152,700 a day on the spot market, where ships are hired voyage by voyage 1. The board paid $2.61 a share for the quarter, plus a special $0.80 a share from selling two 2017 supertankers 21.

Since the US-Israeli war with Iran began on 28 February, the Strait of Hormuz has been effectively closed 143. Chief executive Lars Barstad said losing roughly one fifth of the world's seaborne oil exports was expected to weaken tanker markets, but longer voyages and broader inefficiencies kept ships busy 3. Buyers now fetch more crude from the United States and Brazil, which the company says stretched voyages and supported earnings 1.

October brought the most attacks on ships in and around the strait on record, 28 by one think tank's count, and 11 supertankers damaged in that month alone on the International Maritime Organization's list 14. Frontline expects its third-quarter spot earnings to fall below the $156,900 a day already booked for 86 percent of its supertanker days, because of ballast days, the empty legs to the next cargo 1. A year earlier, its third-quarter results came on 21 November 2025 18.

Frontline was incorporated in Bermuda on 12 June 1992 as a shipping company 8. John Fredriksen has sat on its board since 3 November 1997, and Hemen Holding, the Fredriksen family's investment vehicle, is its largest shareholder 615. In March 2020 it closed the purchase of ten Suezmax tankers built in 2019 from the trader Trafigura, paid partly in its own shares and partly with $538.2 million in cash 8.

Revenue rose 27.6 percent in 2020 to $1,221.2 million, and net income reached $413.0 million 8. Higher market rates and the Trafigura ships did most of it: the benchmark supertanker voyage from the Middle East to China earned an estimated $48,300 a day in 2020, against $39,400 in 2019 8.

Then the pandemic's slump reached the tankers: world oil demand fell an estimated 8.8 million barrels a day in 2020, and freight rates sank in 2021 89. Revenue fell 38.6 percent in 2021 to $749.4 million and Frontline lost $11.1 million, mostly because lower market rates cut voyage revenue by $368.0 million 9. That year the benchmark supertanker voyage earned an estimated negative $518 a day 9.

Rates turned in 2022, when sanctions on Russian oil after the invasion of Ukraine lengthened trade routes and raised ton-miles, the distance cargo travels 10. Revenue rose 90.9 percent to $1,430.2 million and profit reached $475.5 million, with higher market rates adding $513.0 million 10. Frontline agreed an all-share combination with Euronav on 10 July 2022, then ended it in January 2023, saying conditions of the agreement were not met 10.

It also moved its legal home from Bermuda to Cyprus, effective 30 December 2022 10. In 2023 revenue rose 26.0 percent to $1,802.2 million and profit to $656.4 million, with market rates adding $239.7 million 11. On 9 October 2023 it settled with Euronav, renamed CMB.TECH, and agreed to buy 24 of its supertankers, average age 5.3 years, for $2,350.0 million 6.

It sold its own CMB.TECH shares for $251.8 million to help pay 6. The new ships carried 2024: revenue rose 13.8 percent to $2,050.4 million, with the 24 supertankers adding $595.0 million while lower rates took off $119.5 million 12. Frontline also sold its five oldest supertankers, built in 2009 and 2010, for $290.0 million, and profit came to $495.6 million 612.

In 2025 revenue slipped 4.2 percent to $1,965.1 million and profit to $379.1 million, as ship sales and softer rates cut voyage revenue 6. Sanctions reshaped the market: by year end about one fifth of the world's tankers were reported sanctioned, which the company says lifted demand for compliant ships like its own 6. Its supertankers' spot earnings jumped to $74,200 a day in the fourth quarter of 2025, from $34,300 in the third 4.

In December 2025 it agreed to sell eight supertankers built in 2015 and 2016 for $831.5 million, and in January 2026 to buy nine new ones from Hemen affiliates for $1,224.0 million 6. Then the war came: the first quarter of 2026 brought a profit of $559.1 million and the strongest adjusted profit since 2004, before the record second quarter 3. Baird Maritime reported first-half profit of $1.22 billion, against $110.8 million a year earlier 16.

VLCCs, the supertankers

A VLCC, a very large crude carrier, holds about 2 million barrels of crude 14. Frontline uses them mostly on long hauls from the Middle East Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana offshore oil port 6. It owned 41 at the end of 2025, and expects to own 40 once its current deals close 61.

They earned $152,700 a day on the spot market in the second quarter of 2026, against $103,500 in the first 1. Nine new ones bought from Hemen affiliates are being built at the Hengli and Dalian yards in China, and six had arrived by 26 August 2026 1. Frontline hired four of the new ships out for one year, two at $110,000 a day and two at $120,000 1.

Two ships built in 2016 went out for two and three years from August 2026, at average rates of $90,000 and $75,000 a day 1. Both contracts pay $110,000 a day in the first year and less after 1.

Suezmax tankers

Suezmax tankers carry crude mainly in the Atlantic Basin, the Middle East and Southeast Asia 6. Frontline had 21 at the end of 2025 and delivered its two oldest, built in 2014 and 2015, to a buyer in the second quarter of 2026 for $140.0 million, a gain of $54.7 million 61. Its Suezmaxes earned $111,500 a day on the spot market in that quarter 1.

LR2 and Aframax tankers

These smaller ships carry mainly refined products such as fuel, and crude from ports too shallow for bigger ships 6. They trade between refining centers such as the Gulf of Mexico, the Middle East, Rotterdam and Singapore 6. Frontline owns 18, which earned $92,400 a day on the spot market in the second quarter of 2026 1.

How it earns its money

Frontline reports one business, tankers, so it files no revenue by ship type 6. It hires most ships voyage by voyage: at the end of 2025, 77 of its 80 ships worked that way 6. It now has 17 ships on contracts longer than a year, against three at the end of 2025 16.

Earnings are counted as time charter equivalent, revenue less voyage costs such as fuel and port charges, per day 6. The company puts the daily cash breakeven, the rate a supertanker needs to cover its cash costs over the next 12 months, at $23,800 1.

Ships, offices and crews

Frontline owns no material property besides its ships and leases its offices 6. About 85 people work in its offices in Cyprus, the United Kingdom, Norway, Singapore and China, while outside ship managers handle maintenance and crewing 6. Crews come from Ukraine, Romania, India, the Philippines, Latvia and Georgia, and the ships fly the flags of Cyprus, Malta, the Marshall Islands, Liberia or Hong Kong 6.

People

Lars H Barstad, who earlier ran freight derivatives desks at Glencore and Noble, has run Frontline Management, the company's managing arm, since October 2020 6. Inger M Klemp has been finance chief since 1 June 2006 6. Ola Lorentzon chairs the board, which includes John Fredriksen and, since February 2026, Mikkel Storm Weum of Seatankers, a company under common control with Hemen 613.

Rivals

The tanker market is fragmented: oil companies' own fleets, independent owners and pools of ships compete for cargoes on rate, location, size, age and condition, mostly through brokers 6. No customer brought in 10 percent of revenue in 2023, 2024 or 2025 6. Its 40 supertankers after the current deals would be about 4 percent of a world fleet of more than 900 (computed) 114.

Problems

The war is the largest risk: Reuters counted more than 30 supertankers damaged in the region since it began 14. Frontline carries war risk insurance, but its annual report warns that any claim may go unpaid 6. Hemen's 35.6 percent lets it strongly influence votes, and the report says its interests may differ from other shareholders' 6.

If Hemen and other large holders that do not qualify reached 50 percent, Frontline could lose its US tax exemption on shipping income 6. Sanctions add work too: by the end of 2025 about one fifth of the world's tankers were sanctioned by at least one major authority 6.

The umbrella, in words

Frontline plc is a holding company, and Exhibit 8.1 of its annual report lists its significant subsidiaries 7. Among them are Frontline Management AS in Norway, Frontline Shipping Limited in Bermuda and one company per ship, such as Front Thor Inc. in Liberia, each 100 percent owned 7.

It owns 15 percent of TFG Marine, which supplies fuel to its ships, and 43.6 percent of FMS Holdco, through which it holds part of Clean Marine AS, a maker of scrubber equipment it buys 6. Hemen Holding, held by trusts John Fredriksen set up for his family, owns 79,145,703 shares, or 35.6 percent 6. Folketrygdfondet reported 4.5 percent in its latest filing on the company 17.

Hemen is also a principal shareholder of other listed shipping and oil service companies, among them SFL, Archer, Flex LNG and Paratus Energy, and some Frontline directors sit on their boards 6.

Three of the nine supertankers from Hemen affiliates are still due: two in the fourth quarter of 2026 and the last in the first quarter of 2027 1. Frontline said it owed $198.3 million on them in 2026 and $89.8 million in 2027, and arranged a $410.6 million loan from Bank of China Hong Kong for five of the ships 1.

After those deliveries and the latest sales, the company expects a fleet of 77 ships with an average age of about 6.6 years, 53 of them fitted with scrubbers 1. It expects a gain of about $110.0 million in the third quarter from selling the two 2017 supertankers 1.

For the third quarter it had booked $156,900 a day on 86 percent of its supertanker days and $117,400 on 79 percent of its Suezmax days, and said the full quarter would come in lower 1. Finance chief Inger Klemp said refinancing cut the average loan margin, the interest above the base rate, from 178 to 126 basis points 1.

Barstad said on 28 August 2026 that energy security will increasingly dominate strategic decisions and alter trade lanes, and that refilling oil inventories should help tankers 1. The company expects Asian buyers to reconsider their reliance on Middle Eastern crude, keeping supertanker voyages long 1.

The company expects a sustained need to refill oil stockpiles, which it says should outweigh any gradual return to normal trade for some time 1. A large revolving loan was fully repaid and had $790.3 million available and undrawn at the August report 1.

The company says orders for new tankers of its three types equal 25.4 percent of the existing fleet, while 34.5 percent of that fleet will be over 20 years old once those orders arrive 1. Shareholders' waiver of pre-emption rights, which lets the board issue up to 377,377,111 new shares, runs for twelve months from 8 December 2025 6. Synthetic options granted to staff in 2021 expire in December 2026 6.