Thank you very much. Dear all, thank you for dialing in to Frontline's quarterly earnings call.

In discussions with market actors in recent weeks, a recurring phrase has been heard, people basically saying, "What a time to be alive." Frontline has been around through many cycles, but the tanker markets do actually evolve over time.

We will argue that we've never been in a cycle like this where indices and freight derivatives weigh so heavily in the freight pricing mechanism. This fuels almost violent moves as we proceed.

For every 200,000 per day dollar per day fixture done physically, there is an exponential number of contractual obligations that are triggered, giving this market a new dimension and very exciting dynamics. Before I give the word to Inger, I'll run through the TCE numbers, let's move to slide 3 in the deck.

In the fourth quarter of 2025, Frontline achieved 70 $74,200 per day on our VLCC fleet, $53,800 per day on our Suezmax fleet, and $33,500 per day on our LR2/Aframax fleet. Far in the first quarter of '26, 92% of our VLCC days are booked at $107,100 per day, 83% of our Suezmax days is booked at $76,700 per day, and 67% of our LR2/Aframax days are booked at $62,400 per day.

Again, all numbers in this table are on a load to discharge basis with the implications of ballast days at the end of the quarter this incurs. However, for the VLCCs, there is little mystery left with such a high percentage in the book.

I'll now let Inger take you through the financial highlights.

Thanks, Lars, and good morning and good afternoon, ladies and gentlemen. Let's then turn to slide 4.

Yeah. We report profit of $228 million or $1.02 per share and adjusted profit of $230 million or $1.03 per share in the fourth quarter of 2025.

The adjusted profit in this quarter increased by $188 million compared with the previous quarter, and that was primarily due to an increase in our TCE earnings from 248 million in the previous quarter to 424.5 million in this quarter. That again was a consequence of higher TCE rates.

We also had some decrease in finance and ship operating expenses and also some fluctuations in other income and expenses. Ship operating expenses in particular decreased 7.1 million from previous quarter, mainly due to an increase in supplier rebates of $7.1 million.

Let's then look at the balance sheet at slide 5. The balance sheet movements this quarter are mainly related to ordinary items and also prepayment of debt under revolving reducing credit facilities.

Frontline has a solid balance sheet and strong liquidity of $705 million in cash and cash equivalents, and that includes undrawn amounts of revolver capacity, marketable securities, and also minimum cash requirements in the bank as per December 31, '25. We have no meaningful debt maturities until 2030.

In January 2026, we sold eight of our oldest first-generation eco VLCCs for total sales price of $831.5 million, and after commissions and repayment of existing debt on the vessels, the transaction is expected to generate net cash proceeds of approximately $477 million. In parallel, we acquired nine latest-generation scrubber-fitted eco VLCC newbuildings from affiliate of Hemen for an aggregate purchase price of $1 billion 224 million.

We will pay approximately 25% of the purchase price in the first quarter of 2026, and 75% is due upon delivery of each vessel. The company intends to finance this acquisition with cash and then 60% long-term debt financing.

Let's then look at slide 6. That's the fleet composition and cash break-even rates and opex.

Our fleet consists of 41 VLCCs, 21 Suezmax tankers, and 18 LR2 tankers, has an average age of 7.5 years, and consists of 100% eco vessels, whereof 57% are scrubber-fitted. We estimate average cash break-even rates for the next 12 months of approximately $25,000 per day for VLCCs, $23,700 per day for Suezmax tankers, and $23,800 per day for LR2 tankers.

That gives a fleet average estimate of about $24,300 per day. This number includes drydock cost for five VLCCs, two Suezmax tankers, and eight LR2 tankers.

The fleet average estimate excluding drydock cost is about $23,300 per day or $1,000 less. We record opex, including drydock, in the fourth quarter of $9,600 per day for VLCCs, $7,600 per day for Suezmax tankers, and $12,400 per day for LR2 tankers.

This number includes drydock of three VLCCs and three LR2 tankers. The Q4 '25 fleet average opex excluding drydock was $7,600 per day.

Lastly, let's look at slide 7, cash generation. Following that we entered into one-year time charter agreements, and we also had fleet renewal in the first quarter, the spot days for next 12 months is about 24,400 days.

Frontline has substantial cash generation potential with 27,700 earning days annually. As you can see from this slide, the cash generation potential basis current fleet, TCE rates and TC as of February 27 is $2.8 billion or $12.51 per share, which provides a cash flow yield of 34% basis current share price.

A 30% increase from this current spot market will increase cash generation potential to $3.7 billion or $16.84 per share. Likewise, a 30% decrease from current spot market will decrease the cash generation potential to $1.8 billion or $8.19 per share.

With this, I leave the word to Lars again.

Thank you very much, Inger. Let's move to slide 8 and look at the current market highlights.

Oil demand seems to be growing healthily outright, but with key focus on non-sanctioned molecules, creating substantial year-on-year changes in trade, as shown on the illustration or the graph on the right-hand side of the slide. We have a very politically laden market environment.

We talk about US-India trade, US-Iran-Israel discussions, and US-EU-Ukraine-Russia talks. Venezuela liberation and further pressure on Russia, in addition to Iran tension, creates strong tailwinds for us operating in the compliant market of oil transportation.

We're also in an environment where weakening US dollar is supportive of global oil demand, and the inflationary economic environment is supportive of the commodities in general. Asset prices for ships is appreciating firmly.

Order books are building materially in 2029 and onwards, but with the 20-year age cap observed, future supply remains manageable. Let's move to slide 9 and look at the flows.

Global crude oil in transit continues to be at elevated levels. On the graph on the right, we've added the TD3C Baltic Index by some referred to as the Dow Jones of the freight markets.

There you can see how sensitive this index seemingly is to the oil trading on the seven seas. In this picture, we see sanctioned crudes moving slower, particularly for the Russian barrels, or being stored, particularly for the Iranian barrels.

This creates an increased dark fleet utilization, and the dark fleet then needs new capacity or attract new capacity into the dark vessel pool. These vessels are pulled out of the compliant fleet.

OPEC Middle East exports is growing firmly, but also adds to this increased demand for compliant and approved tonnage. Despite the eye-watering freight levels we're facing right now, we see very few charters, in fact none, breaking this 20-year age cap, which supports the case that we've been arguing for years.

Strong import growth to Far East and India, contradicting the energy transition narrative, and especially for China. I think people are starting to get familiarized with the energy addition, not transition term.

Long-haul arbs are challenged. Just to explain what an arb is, that's basically the price difference between one continent to another in respect of oil, which basically if it's at a wide enough point, a trader or an oil major can make a profit moving the oil over long distances and selling it in a different market.

Freight is of course a key component in this. By example, if the freight for a VLCC from US Gulf to China is $18 million, the charterer is actually exposed to $9 per barrel freight.

Basically, this spread between the two oil markets need to accommodate that. This has put some pressure on these arbs, and we've seen fairly little volume moving from the US to the Far East.

Again, if oil needs to move, or when it needs to move, these differentials will just have to price to accommodate this spread. The incremental marginal barrel is now compliant.

We've also discussed this in previous calls, is that we don't see any kind of fantastic production growth in Iran. We don't see any kind of fantastic production growth coming out of Russia.

We do see compliant oil production and exports growing. The big factor is of course OPEC reversing cuts, but then you have countries like Brazil, Guyana performing extremely well.

These are the new molecules coming to market, and they need compliant ships. Let's move to slide 9 and look a little bit at the fleet development.

The order book continues to grow. We're basically in a market where decades-high prices for modern tonnage, if tonnage is even there for sale, that is on the water, meaning that the vessel can trade straightaway, is so high that it pushes actors into the yards.

Other asset classes as LNG, containers, bulkers continue to populate yards' order books, but we do see tanker ordering accelerating for 2029, especially in China. As the chart on the top right-hand indicates, it shows basically the efficiency loss of a vessel as it ages.

The curve starts to dip around 10 years of age and then further deteriorates into almost ignorable when it gets to 20 years. With this in mind, as we move forward and move into 2029, we're going to meet the generations of ships that were delivered around 2010 and onwards.

This is a large population of ships that then again will be 20 years of age and exposed to this deteriorating efficiency curve. With that in mind, although ordering is accelerating and we have a kind of high amount of ships expected to come in 20 2029 and it's basically being added for every day, it's not alarming with this in mind considering the age of the fleet and the fleet profile.

We see it as we have 2 to 3 years of a very good runway before the supply could become a worry. We also expect going forward that yard capacity will grow, and especially in China.

It's not necessarily new yards, but it's the yards that haven't built tankers, or at least not been specialized in tankers, but they're now adding berths in order to cater for this industry. We believe there's an other trend that will evolve as we proceed here, considering or assuming this rate environment is sustainable, that Korea and Japan will increase its focus on building tankers in general and VLCC in special as the margins on these contracts start to compete with what they can achieve for containers or LNGC.

Let's move into slide 11 where we have the familiar tables. I'm not going to spend too much time on this slide, only to say that in our methodology, and we try to be consistent, we use data that's based on when an IMO number is registered.

This means that these statistics will always be a little bit slow to react. The general assumption in the market is that the order-book-to-fleet ratio for VLCC is probably already at 20%.

This will become more and more evident as these contracts are being registered and the IMO numbers are being created. With that, I think we move on to the summary.

I've changed the headline here. VLCC takes the center stage, Suezmax and Aframax to follow [question mark?]

? It's actually not much of a question mark because the Suezmaxes are already on the way.

The Aframaxes is boiling. We are in a fundamentally tight market condition that yields extreme volatility.

Oil demand and supply is developing positively, but especially for compliant molecules. The global tanker fleet age profile and efficiency loss tighten the supply-demand balances.

Asset prices are on the move as both spot and period markets support the investment decisions. The volatile political landscape fuels energy insecurity, conditions where tankers tend to thrive.

Frontline's efficient business model stands to produce material shareholder returns as we proceed. Thank you very much, and with that they will open up for questions.

Good afternoon. Thanks very much.

Lars, so many things to ask you, but I'm not going to be greedy, I'll keep it to two. The first thing is, obviously we're in a parabolic situation right now.

We've seen this once or twice before, but as you said, the underlying factors seem to be very different this time. Rates don't go to the moon.

There's a certain point where there's a ceiling. What's the catalyst to provide a plateau and maybe a little bit of an easing from here?

Is that a geopolitical event? Is it a seasonal event?

Is it a Sinokor event? What takes a little bit of the froth out of the market to which would still be very fantastic rates, but maybe lower than where they're moving this week?

No, it's an extremely good question. I think the answer is kind of seasonality.

There is also kind of normal seasonality. We're actually not unused to having fairly poised kind of poised markets during this time of the year, many times due to US refineries going into turnaround, allowing for more barrels to be exported.

We're actually going into that phase now. There would be potentially a few more months where we actually can sustain these rates, depending on how the flows work.

Then there is going to be a summer lull, and it's almost inevitable. Whether if it's a summer lull that moves from $200,000 a day to a 100 or that is almost impossible to gauge.

I also think one needs to note that there is one major importer in this market being China, and they have built an enormous amount of inventory over the years. They could, for any reason, choose to basically turn down the speed a little bit for a period of time.

This will also create volatility. I expect this to occur, but it's of course extremely impossible or extremely difficult to say when something like that might happen.

Definitely. Thanks for that.

The other one is also maybe a bit difficult, but it's just something I've been wondering about. Nobody's done what your Korean friends are doing right now for seemingly 50 years, and that includes your shareholder who many people probably would have anticipated would have been the one to try this.

Why hasn't anyone tried to corner the VLCC market in the past, and where could it go spectacularly wrong for them, just what are the risks, I guess? I guess the final thing is how do you position Frontline so that you're not affected by if it does go spectacularly wrong for this player?

Yeah. No, it's a good question.

You're right, it hasn't really been done in a material manner in the tanker market for at least longer than I can remember. There is a parallel story from the mid-2000s involving a certain person from Taiwan, but this was in the dry bulk space.

The key to his success in dry and the potential key to this success that the Korean actor might have is actually that you go in in a market that is already fundamentally tight. Then you don't need much to slow the supply side of tanker capacity before you get these violent moves.

Also, as most people are familiar with, if you look at how freight prices just empirically, the minute you go from 90% utilization to 95, the moves are exponential. That would kind of be my explanation to why this is possible.

I'm not going to comment on why Mr. Fredriksen hasn't looked at this.

The thing is, we are a stock-listed public company. This is of course easier to do if you are a private entrepreneur in this market and, of course, willing to risk a substantial amount of money in such a game.

Where it can go wrong, in these situations, and we've seen them before potentially at smaller scale, it ends up being almost like a game of chicken. Who can hold the longest?

This is what makes me extremely excited of the months to come and the summer and so forth because we'll see some very interesting dynamics come to play. One thing I'm 100% certain of is that there will be volatility.

That's all very helpful. Thank you, Lars.

Mhm.

Hey, good afternoon. It seems like charterers are seeing what you're seeing and willing to take more ships on term.

Would you say that's the case and the TC market's more active, or is it just that rates have risen to a level that shipowners are more comfortable with?

No, I think, as I kind of touched upon in the introduction today, is that this market has evolved quite a lot in the last 20, 25 years. If you look at the Middle East market for instance for VLCC, transport from plain vanilla from Middle East to Asia, this market used to have a lot of physical liquidity.

What happened over the years is that more and more actors are using the index itself to price the freight, basically doing contracts, floating contracts that prices off the Baltic Index quote to the point where actually very little liquidity is actually transacted in the market. Price visibility has been quite difficult actually sometimes.

To do a parallel, for every physical barrel of Brent oil that is produced, it trades tenfold on paper. We've seen a little bit of the same kind of tendency or trend in freight.

This becomes a problem then if everybody are kind of pricing their freight off an index that runs out of control. Then suddenly you need to hedge, and then you need to access the paper market, or you need to buy back hedges for the guys who have taken ships on time charter and basically hedge the parts of the curve in that exposure and so forth.

You end up with a very vibrant FFA market, which every FFA broker today would testify to. You get these kind of ebb and flows out on the curve from panic to some sort of quiet until the panic kicks in again.

Because over the last couple of weeks, you see the index is just relentlessly printing what is physically actually being done. It's not like 10 cargoes are fixed today.

It's two to three cargoes maybe fixed today. The amount of pricing exposure around that quote is enormous, and this triggers kind of this almost like self-propelled move going forward.

I think it's important to note, this is not manipulation. The market is fundamentally extremely tight.

Of course, you could argue that maybe freight rates are moving ahead basically due to this tightness, as the panic ebbs and flows.

Oh, that's very interesting. Something else that I thought was interesting was your comments specifically about new tanker yard capacity coming online.

I apologize if you mentioned this and I missed it, but do you have a sense of what the turnaround time on these projects might be and when first ships might hit the water?

No, it's 2029. A yard that is now marketing kind of a new berth that they're going to build, but it's not like a greenfield, because the yard exists, it is there.

They're just kind of introducing a new berth that can, say, accommodate a VLCC build, that is 2029. So 3 years then.

Got it. Lars, thank you for your time.

Thank you.

Hi, Lars. Just want to ask you what will be your strategy on spot versus time charter as you go through this interesting times?

That's all. That's my first question.

Yeah. No, and it's a good question.

As we've said before, our proposition to our investors is of course to give you spot returns. Basically, you don't have to buy a ship, you can just buy Frontline.

At times we will choose to use elevated markets to try and secure revenues. We don't have a fixed policy or anything, but we have a golden rule of 1/3.

In theory, our board would be comfortable under certain conditions that we get up to time charter coverage of 30%. As you've seen from the stuff we did, we reported the seven one-year time charters, in the report today we also reported another one that was done a week later.

We are in this modus operandi to try and secure some longer-term income. We are so constructive about this market that we are not really engaging yet at least in the longer term.

Because we actually do believe that there is still some to go for the longer-term contracts. They are also appreciating quickly.

I'm not going to exclude anything. You will not find Frontline in a situation where we've put 50% of our exposure out on time charter because that's not really what our investors are after, we believe.

Sure. I see the dark fleet which we've been struggling, and finally it's coming with sanctions and whatever was needed to be done is being done now.

In this, though the probability is 50%, if the war stops and the sanctions are lifted, it's also going to get into a compliant fleet. Do you foresee in such scenario what will happen to the market?

Yeah. If you had asked me this in September 2022, I would have said it would be an immediate kind of bearish kind of proposition.

Much time has passed, and if the Russian barrel becomes a compliant barrel, kind of you'll probably get half of the capacity on the shipping side into the compliant fold, but the other half will actually be disqualified basically due to age. This is the same for the fleet servicing the Iranian oil.

It's a lot of ships, yes, but these are ships that were supposed to be recycled years ago basically due to age. Very few of them are actually going to come back into kind of compliant trade.

Also the scrutiny in the compliant market on ships' history is extremely kind of tough. It's not very easy to kind of whitewash a tanker that's been involved in illicit trades.

One point I need to make, we've actually seen this before when sanctions were eased towards Iran in 2016. They have a national fleet, national tanker company, NITC.

Of course, any part of a sanctions-lifting kind of solution will also involve nationally controlled shipping companies. For Russia, that would be Sovcomflot and potentially others.

Again, just analyzing those fleets, age is the problem. Actually we would welcome these molecules into the compliant fold.

Sure. The last follow-up is that if this sustains, and obviously and you do the best to make out of, the cash becomes a cash pile, obviously you're paying out large part of it, but do you think at what point in time you will start deleveraging balance sheet or you will stay levered?

No, our intention is to stay levered because for every share you buy in Frontline, you get 1.4 ship exposure equivalent, basically due to our leverage. We still believe that's the model.

Obviously I can't rule anything out, but we have no inclination to delever apart from what naturally happens when you pay down debt. The pile of cash is actually going to you guys.

Okay. Congratulations and all the best for the future.

Thanks for...

Thank you very much.

Thank you. Thank you very much for listening in, and I hope you are as excited as I am to what the future is going to bring.

I think it's the tanker market's turn now, let's enjoy the ride. Thank you very much.