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

Unprecedented times springs to mind as we're reporting Q1 '26 well into the first half of the year. I've been in this industry for more than 20 years, and I did not imagine us in a situation for this duration where the Strait of Hormuz has been effectively closed.

With the OPEC, OPIC and volatile political narrative these days, the Frontline team focus on the real, cash-generating business to be done, not speculating too far into the future. We have put the most profitable quarter since 2004 behind us, and are well into a potentially even more rewarding one.

I'll get back to how we analyze the situation later in the call, and before I give the word to Inger, I'll run through our TCE numbers on slide 3 in the deck. In the first quarter of 2026, Frontline achieved $103,500 per day on our VLCC fleet, $72,400 per day on our Suezmax fleet, and $50,700 per day on our LR2/Aframax fleet.

Far in the second quarter of 2026, 82% of our VLCC days are booked at $181,700, 79% of our Suezmax days are booked at $131,300 per day, and 68% of our LR2/Aframax days are booked at $125,000 per day, six digits across the board. All numbers in this table are on a load to discharge basis with implications of ballast days at the end of the quarter.

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

Thanks Lars, and good morning and good afternoon, ladies and gentlemen. We can then turn to slide 4 and look at profit statement highlights.

We report profit of $559 million or $2.51 per share, and adjusted profit of $344.9 million or $1.55 per share in the first quarter of 2026. The adjusted profit in the first quarter increased by $114.5 million compared with the previous quarter, and that was primarily due to an increase in our time charter earnings of $112 million from $424.5 million in the previous quarter to $536.5 million in this quarter.

Ship operating expenses increased by $5.9 million from previous quarter, and that was mainly due to a decrease in supplier rebates of $5.4 million in the quarter. Administrative expenses, excluding the synthetic option revaluation loss of $5.8 million in the first quarter and gain of $0.5 million in the fourth quarter of '25, increased by $8.5 million from the previous quarter, and that was primarily due to synthetic option exercises in the first quarter of 2026.

Then the adjusted interest expense decreased by $9.8 million from previous quarter, and that was due to lower debt and decrease in interest rates and margins. Also, depreciation decreased by $6.2 million from previous quarter due to sales of VLCCs in the period.

Lastly, income tax expense decreased by $0.6 million from the previous quarter. Let's look at the balance sheet on slide 5.

Frontline has a solid balance sheet and strong liquidity of $945 million in cash and cash equivalents, including undrawn amounts of revolver capacity of $473 million, marketable securities, and minimum cash requirements as for the 31st of March 2026. We have no meaningful debt maturities until 2030.

Remaining newbuilding commitments at the end of the first quarter was $925 million, which relates to the acquisition of the nine newbuildings from affiliate of Hemen. The company has secured newbuilding financing of up to $737 million as set out in the press release.

Let's then look at slide 6: fleet composition, cash break-even rates, and opex. Our fleet consists of 43 VLCCs, 21 Suezmax tankers, and 18 LR2 tankers, has an average age of 7.5 years, and consists of 100% eco vessels, whereof 64% are scrubber fitted.

We estimate average cash break-even rates for the next 12 months of approximately $24,300 per day for VLCCs, $24,300 per day for Suezmax tankers, and $23,600 per day for the LR2 tankers. That gives a fleet average estimate of about $24,100 per day.

This number includes dry dock costs for six VLCCs, three Suezmax tankers, and eight LR2 tankers. The fleet average estimate, excluding dry dock costs, is about $23,000 per day, or $1,100 per day less.

We recorded opex, including dry dock, in the first quarter of $11,300 per day for VLCCs, $9,100 per day for Suezmax tankers, and $10,900 per day for LR2 tankers. This includes dry dock of four VLCCs and three LR2 tankers.

The Q1 '26 fleet average opex, excluding dry dock, was $8,900 per day. Then let's look at slide 7 and cash generation.

Following that we have been entering into one-year time charter agreements, and we have a fleet renewal in the first quarter and also in the second quarter, spot days for the next 12 months is about 23,700 days. Frontline has substantial cash generation potential with 27,900 earning days annually.

As you can see from this slide, the cash generation potential basis current fleet, TC rates, and TCE as of May 22nd, 2026, is $1.5 billion or approximately $7 per share. That provides a cash flow yield of 18% basis the current share price.

If we look at a 30% increase from current spot market, that will increase the cash generation potential to about $2.1 billion or $9.51 per share. An equal 30% decrease from current spot market would decrease the cash generation potential to about $1 billion or $4.41 per share.

With this, I leave the word to Lars again.

Thank you, Inger. Let's move to slide 8 and look at some of the market highlights that we're going to go through in this deck.

I'd like to remind the audience that we've had tightening fundamentals in the tanker markets ever since around this time last year, prior to the Middle East conflict. We reached an unprecedented situation after the 28th of February with the Strait of Hormuz effectively closed.

The chart on the top right-hand side kind of indicates this. Here you see the year-on-year weekly changes in flows, whereas the Middle East Gulf drops dramatically starting in in week 12.

The US-Iran on-off peace talks and the tightening, potentially easing of Iran-related sanctions together with uncertainty on Russia Russian oil assets creates a lot of volatility. The market has started to focus on the potential long-term implications coming from the the current situation in the Middle East, and more so if we can imagine the situation getting solved.

We're going to see restocking of inventories, increase strategic storage, especially amongst Asian importers, and we also going to see higher focus on diversification of oil supply, now that we've seen how vulnerable you can be being dependent on purely Middle East supply. We also see that order books continue to grow, as they stretch into 2030 delivery windows now.

Asset prices continue to appreciate, asset freight market outlook remains firm, and we see a fairly high activity on longer-term time charter market or contracts. Just want to give you a small little kind of hint on the bottom left-hand side chart.

We basically, not only using the the TD3C index, which is the Middle East Gulf loading index to China, we're also using the TD15 index outside of the Middle East Gulf, West Africa to China. Although it looks quite bleak, only kind of rewarding us with $100,000 per day, this is four times our cash break-even levels, it's still very good money.

Although we wish we could have made $400,000 per day every day, this is a very much a theoretical exercise as the market is right now. Further, if we move to slide 9, I'm going to take you through two fairly complicated slides, but I think needed for this session as we are in the situation we are.

We're trying to, first of all, Strait of Hormuz closure is very much a VLCC event. This is the big kind of ride for the VLCCs.

This is where the most volume is lifted on VLCCs, transporting oil both to the East and to the West. We've seen kind of prior to the closure that the daily tied-up VLCCs in this market has been on average 491 vessels.

This consists of laden, dry dock, vessels that are doing cargo ops or other stuff. We have at any point in time had stopped ballasters east of Suez, and we've always had vessels waiting to load in the Red Sea.

Basically, when the when the Straits closed, we had a massive loss of 130 ships that were so-called laden, dry docking, or doing cargo ops. This is the dark blue kind of baseline in the chart in the middle here.

Then we had an increase of 21 vessels waiting loading in the Red Sea, and this is like daily tied-up tonnage, it shouldn't really be looked at as an absolute number. Then suddenly we had 41 VLCCs laden, loaded with oil, waiting inside the Middle East Gulf.

Then you had 55 VLCC equivalents stopped and in ballast east of Suez. This brought us back to 480 VLCCs after the Hormuz closed.

Basically, only a reduction of 11 VLCC equivalents in this extremely severe situation for the VLCC segment in special. If we move to slide 10 and look at how the flows developed post-closure, we were at 17.7 million barrels per day from various suppliers inside the Middle East Gulf.

We lost 5.9 million barrels per day from Saudi, 3.2 from Iraq, almost two from UAE, and on it goes: 1.4 from Kuwait, and almost a million barrels from Qatar. As we proceeded, UAE were able to increase the throughput in the pipeline ending up in Fujairah of almost a million barrels per day.

Saudi Arabia started to utilize the Yanbu pipeline going from the from Middle East Gulf out to the Red Sea, increasing by 3.5 million barrels per day. Then the rest of the world has gradually, towards where we are now, increased output by 3.3 million barrels per day.

This has basically meaning a net loss of 6. point of only 6.2 million barrels per day.

What we later going to look at, and we might jump at it straight away if we move to to slide 11, is that even with this effective closure of Hormuz, we have had so large changes in trading patterns that we're actually back to oil kind of traveling over distances, oil on water, pre the Hormuz closure. The long-haul trade has kind of outgrown the loss of the relatively short-haul trade from the Middle East Gulf to to to Far East.

We also seen export capacity that actually didn't know existed, or at least we didn't really focus on it, adding to this volume. We've seen Asia increase their sourcing from virtually all available regions, all of them further afar, fueling this ton-mile and this high utilization.

Despite the volume shortfall then, adjusted for distances, shipping demand is surprisingly robust. Crude on water is recovering fast, and this is important to note: when you look at the real-time picture, you will not record this until after the fact.

It takes 30 to 45 days from a barrel is contracted to be freighted before the the the the oil is actually loaded on a ship. This means that it's only in the last three, four weeks we've seen this materially happen using the data, or using the kind of oil on water data.

I have to say, though, and we might actually flip back to slide 9 because this is important: on this chart, you'll see kind of in the middle on the top right-hand side there, there's a number, plus 55. These are vessels that are contracted, or majorly contracted, to players that are not necessarily having the same economical rationale that than we as a shipowner would have.

These are vessels who do the baseline of oil transportation from the Middle East Gulf to Asia. They're contracted to industrial players like refiners and oil majors.

For these guys, to not have vessels available should the Strait open can be an extremely costly affair. These ships are contracted on modest rates.

You're talking 5-year deals, 6-year, or 7- or 10-year deals between $35,000 and $45,000 per day, meaning that that's the option premium they pay in order to be able to lift first oil as it comes. For them, this is logistics.

It's not necessarily profit, different from Frontline. Of course, hadn't we had this kind of idle fleet, I think the supply and demand picture would have looked a bit different on on on tankers and especially VLCC.

That's the case, and that's the way it is. Right now we're reaping the benefits of the fact that a relatively large portion of the fleet is unutilized, waiting for something to happen in the Middle East.

Let's jump forward again and get into slide number 12. I mentioned that the order books continue to grow.

It's we're starting to get into kind of territory where you have kind of percentage numbers that start with a three, but still we have this aging of the fleet that is ongoing. If you look at the table on the top left-hand side, the vessels that are currently 15 years or or currently 15 years or younger, they are going to be 20 years within five years, and that amounts to 45.5% of the current fleet.

If you put that in the back of your head and we look at the order book, which for the asset classes we deploy is around 23.2%, then it doesn't look too alarming. The period that the current order book is delivering over is the next three to four years, where kind of the bulk of the vessels for especially VLCC and Suezmax are actually coming in 2028.

With this in mind, I'm not saying that the order book is nonexistent, but I'm saying that the order book is manageable. Also, I think it's important to note when we look at these charts that the likely outcome or the likely likely kind of points on the list if there is a peace solution between US and Iran is going to include sanctions on Iranian oil.

This means that the current part of the fleet that is now servicing the Iranian crude is going to be obsolete, and that amounts to 15% to 17% of the overall VLCC fleet, which overnight are going to become useless. We can move to slide 13 and dig a little bit further into this argument.

We have very strong spot and period markets in addition to the fundamental backdrop which I just pointed on, and this keeps ordering activity high despite the current opaque situation in the Middle East. Tanker ordering is accelerating for 2029, and we are starting to see slots move into the 2030 window, increasing the runway.

We're talking about three years, 3.5 years until a new hull can be added to this order book. With the absence of recycling, but the continuous aging of the fleet, the net compliant fleet growth is still manageable where we are now.

Mind you again, we do not see vessels over 20 years being deployed in any markets despite extremely constructive rates. As I mentioned, the likely end game of Middle East conflict implies reversal of Iran sanctions, adding to the demand for compliant tonnage and potentially triggering the very kind of sought-after wave of recycling.

One kind of larger fundamental piece in this picture is that the number of shipyards is still materially lower than what we saw in the 2010-2011 peak, but the consolidation and, more recently, efficiency gains puts the CGT capacity closer to highs. I'm almost saying this that basically to to to explain how even though the building capacity and the capacity to to basically have new new tonnage into the market to service future oil transportation demand seems limited, we are actually in a phase where we are going to be able to to to to maintain a fleet that can service oil markets for many years to come.

The top right-hand side chart shows us basically how the kind of overall net fleet development is looking right now, and it's not alarming by any means. Then let's move into slide 14.

I think I'll just start so that you can look at the bottom hand slide bottom hand chart because we've used that, for for quite a few quarters now. Mind you, the orange thing at the end there.

I mentioned that we Frontline has not had a quarter like this since 2004. Look at where we are now year to date in 2026.

It's quite extraordinary. Yes, there's a certain portion of these indexes that is colored by the fact that we have some of the the trades that cannot be performed that are are being printed at extremely high levels, but still we are in unprecedented times.

Fundamentally, tight market conditions, and they were present prior to the Middle East disruptions. The disruption in trade lanes has yielded efficiencies, and new trades and longer trade lanes have been developing, and we believe this can be a bit sticky, basically due to energy security part of this.

We have continuous muted growth in the compliant tanker fleet, and that remains that is still at the core of the case of owning tanker stocks. Asset prices continue to move, and both spot and period markets support investment decisions as we move forward here.

The current political environment changes the game, and I repeat myself, we are focused we will see a higher focus on energy supply security going forward. Frontline is in center stage with our VLCC-heavy, efficient business model as, hopefully, positive outcomes nears.

Thank you very much for the attention, and then I'll open up for questions.

Hi, thanks, and good afternoon. First starting with the fixture count.

When I look at VLCC fixtures, I see activity out of the US Gulf and West Africa declining slightly from April to May, even though rates have remained very strong. I'm curious if you're seeing the same thing, and if you have an idea of what's going on with fixture activity.

It's kind of this this market has kind of moved into very much a stealth mode, so it's of course not everything that is seen. I think kind of from a utilization perspective, if you are a oil trader, you'll always utilize your own fleet first.

This means that those are fixtures that will not be reported in the market, although the volume might remain the same. Secondly, we've seen that kind of the fixing happening out of the of the US Gulf has been extremely kind of mini-cyclical.

It starts with kind of the short-term barrels being fixed on on Aframaxes, which we've seen kind of recently, and suddenly it trips into Suezmaxes bringing the oil to Europe, until suddenly you see dates being kind of confirmed for oil moving into the Far East, which brings the VLCC kind of into the game. Then suddenly the VLCC fade, the the Suezmax fade, and we're back on the Aframaxes again, and then it just repeats itself.

The it seems like the US Gulf fixtures on the VLCC side happens on a kind of a monthly cycle, and it only happens within a week, week and a half in that month. I think it's it's quite difficult to read from fixtures, first of all, because it's very difficult to see all of them, and secondly, because you have this kind of a little bit untypical pattern.

You don't have like a kind of continuous flow of of VLCCs being being fixed, or a continuous flow of Suezmaxes, or a continuous flow of of Aframaxes. It basically depends a little bit on on on the price of crude, and and and how the arbs are kind of opening or closing.

Of course, with extreme volatile narrative, virtually every Friday, we're about to open Hormuz, and every Monday, it's closed again. This makes this kind of a very difficult playground for for even the traders.

I definitely get whiplash from the headlines. Sticking with the idea of captive fleets, the presentation mentions 55 VLCCs on standby outside the Arabian Gulf.

Do you have a thought on why the NOCs, I'm assuming they're NOCs, might do that rather than participate in alternative trades for the time being?

No, I think obviously I don't know this, but a likely theory is that in the event of an opening, say somebody kind of tweets and a press kind of release is coming out tomorrow saying that now it's all okay, we can travel through. The first vessel that goes through can potentially buy Iraqi oil with a $30 discount to Dubai or Brent.

That's $60 million right there. I think kind of that's the motivation: having the ability to be able to move quickly to take the first barrels as opposed to having to call Frontline and ask us for a rate that has huge value.

The alternative is that if they went in to compete with say us in Atlantic market, that vessel will be gone for 70 to 90 days, and then they really have to call us if they need freight out of the Middle East Gulf quickly, kind of. I think I would assume that's the analysis behind this.

Since the cost kind of on holding these vessels it's not like a current market cost, it's a time charter contract that was agreed years ago. I think the cost to kind of keeping that option is manageable, but of course what happens tomorrow is impossible to say.

Great color, as always. Thank you, Lars.

Thank you.

Close enough. Good afternoon, Lars and Inger.

Lars, the slides 9 through 11 are really fantastic: a lot of detail, super interesting, haven't seen it laid out this way before. My question is, if the impact from the fleet on slide 9 is only 11 VLCCs, and then 10 and 11 kind of net themselves out, like you said, the loss of volume is obviously negative, but the ton-mile impact is almost a complete offset, it feels like the utilization then overall should be relatively balanced to before the Strait closed.

Yet, rates have obviously been incredibly strong. You have the theoretical ones, but then you also have the real ones as well.

What's the differentiating factor that takes what looks to be a balanced outcome versus three months ago and has put rates into the stratosphere?

I think again the biggest X factor, and we didn't kind of see this coming at all, was the amount of vessels that seem seemingly for kind of, it's not like obvious economical reasons, sit unutilized. I think that kind of the ton-miles do amount to a lot.

I think people are surprised by the amount of volume Saudi has been able to ramp up the Yanbu loads with. I don't think you can get away from the fact that we have this kind of uneconomical and for different reasons, the part of the fleet that remains unutilized is the biggest kind of factor in here.

Because even we did not believe that what's happened or transpired since 28th of February could be bullish VLCC, or neutral to VLCC.

Okay. You spoke on slide 13 about the likely end game, and I think that most people would agree with you that that's most likely.

Certainly, the stock market acts that way. Frontline has always been positioned, obviously, to maximize spot market exposure.

If we were to consider the other end game, which is continued and escalated hostilities and maybe a more permanent closure of that waterway, how do you think about how you manage risk in that outcome? Again, I know we have to lean towards the likely outcome and what the market's telling you and the Friday afternoon tweets, but have you thought about managing the fleet or even the balance sheet in a different manner, just in case that unlikely tail risk emerges from this unprecedented time?

Yes, we have. I think although kind of we've done some more kind of time charter coverage, particularly so on the VLCCs kind of during Q1 and also continuing.

I think kind of the first iteration of that was basically we looked at unprecedented market prior to the Hormuz closing, of course we didn't know that was going to happen. What's happened in the aftermath is that we've actually continued to secure short-term coverage, like 1-year coverage on the VLCCs to the point where, and Inger has a table in there, we're closing on 30% of our voyage days for VLCC for the next 12 months or thereabouts, or at least for the first couple of quarters being covered by time charter contracts.

We've always kind of communicated this that our proposition to US investors is to try and give you a spot exposure, but of course certain points in the curve will try to cover. That's of course to try and prevent ourselves from going bankrupt should we be wrong.

I think that is the answer to your question. We could kind of be all spot at this point in time, but we're actually very close to 30% of our voyage days on VLCC, which is the most exposed segment we believe for a long-term closure in case nothing is solved there.

That's great. All right.

Thank you, Lars. Really helpful.

Thanks, Jon.

Hi Lars. I just want to ask you two questions.

First one is that we've seen a lot of countries have used the reserves, crude reserves, what they had because of the disruptions. If they have to go back to the previous reserves, which previous to this war and build up tonnage, how the demand will shape up even if the war is over?

Kind of, this is the big, and I If I got your question correctly, you you you you you're asking basically how will this market look in when it normalizes, right?

Yes, yes.

Yeah. No, in our world, and of course we lean on analysts that actually knows this properly, I don't think we'll see kind of Middle East exports resume to levels prior to the closure anytime soon.

I think that will take time. You will have an initial kind of flow of oil coming out: first of all, the vessels that are already laden; secondly, kind of barrels that sit in tanks inside the Gulf currently; and then new production is going to be coming on.

For some of the exporters, this is of course a liquidity thing, so that they want to get as much oil into the market sold and get some cash as soon as possible. At the same time, you'll also have this, what we believe, high probability of Iranian crude also being a compliant crude when this happens.

Mind you, that's 1.5 to 2 million barrels there as well coming from Iran that needs compliant tonnage. As we move forward here, I think if I was a refinery in Asia or a short kind of oil entity in Asia, I would kind of the minute I filled up my inventories, I would start to basically spread my risk on how I procure oil going forward.

I think that could kind of create a more long-term situation where we see kind of this longer old-school ton-miles become more and more stable as we proceed. Kind of the opening scenario, I think it's very difficult to paint a bleak picture for tankers.

There could also be the possibility to paint a quite bullish picture for oil price basically because in the middle of this inventory build, you will not get production back overnight, and there will be kind of a bit of a shortness on oil as well going forward. I think the point that we cannot get away from is that this whole situation, which is now lasted for 12 weeks or whatever upon counting, is also a huge kind of push for energy diversification by way of looking at other kind of energy sources, like nuclear, wind, gas, what have you.

Maybe not gas, but at least solar then. This is actually a push towards long-term energy transition.

I think kind of that's five years out. It's not something that we need to think about right now, but I think kind of a short-term scenario is how I describe it.

Lars, the other thing is that India contracted today from Venezuela, and after this war is over, that 20%, which is a huge dependence of lot of countries, especially India, China, which is taking it from Middle East, they would like to diversify. Does that permanently change the ton-mile demand and the ton-mile travel for the ships, especially the large ones?

I believe so. I think this is also the root cause for some of the interest we're seeing from kind of these Asian industrial players that they actually are trying to access the time charter market, taking ships for delivery in 2027, '28, and '29.

I think that's kind of the long game in this: that they are there to try and commit themselves for oil supply contracts from Latin America, West Africa, and US, and then basically need to secure tonnage against those contracts.

Does it mean in FY '29, calendar year '29, you're going to have a very strong or a stable high-rate scenario for this fleet?

I think that's impossible to say to be quite honest. We see that the freight markets and the period markets are backwardated.

Kind of a 1-year contract for a vessel delivering fairly soon is around $120,000 per day. The minute you do 2-year contract, you talk about $90,000; a 3-year contract, $75,000, $76,000; and then if you kind of go out and do a 5-year deal for delivery 2029, you're down in the $40,000s.

Yeah.

Thanks a lot, Lars. All the best.

Thank you.

Yeah. Again, thank you very much for listening in.

It's quite hectic political landscape we're working under, but rest assured Frontline are focused on trying to collect cash as we proceed here, and it looks pretty okay for now. Thank you.