Frontline plc.

Ladies and gentlemen, thank you for standing by and welcome to the Frontline 2020 Q1 Limited Earnings Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you do wish to ask a question, you will need to press star 1 on your telephone keypad and wait for your name to be announced. I must advise you the conference is being recorded today, Wednesday the 20th of May 2020. I would now like to hand the conference over to your speaker today, Robert McLeod. Thank you and please go ahead, sir.

Thank you very much. Good morning and good afternoon, everyone. First of all, apologies for the delay in starting the call, which was due to some technical difficulties. So first, to kick off the call, I would like to express gratitude towards our shore staff and our crew members for their extraordinary efforts and dedication. They are clearly critical factors to our strong results. Frontline's performance in the first quarter of 2020 was the strongest since 2008, and we have made solid bookings for the second quarter. The year has been extraordinary, quite a rollercoaster ride, but tanker earnings have been very strong amidst an unprecedented world situation. Let's kick off by moving to slide three, please, and quickly look at the highlights from Q1. Net income of £165.3 million, or 84 cents per share, certainly a solid quarter. Adjusted for non-cash items, the net income was significant. $179.3 million. The $7.1 million profits related to the five profits as service maxes are not included in these figures. Frontline declares a $0.70 dividend. The last dividend paid was $0.40 for Q4 of 2019. The VLCC has made around $75,000 in Q1, and we have booked 75% at $92.5 for Q2. SousMax has made 57.8 in Q1, and we have booked just over 60% of Q2, just shy of 72,000. LR2's made just over 30 in Q1, and are just over 50% done of Q2 at around 50,000. On the finance side, we closed the 544 million ICBC facility for the 10 SUS Maxes. Then before discussing the tanker markets, I would like to hand the call over to Inga. Please take us through the financials.

Thanks, Robert, and good morning, and good afternoon, ladies and gentlemen. Let's then turn to slide four, and then we can look at the income statements. We achieved total operating revenues, net of voyage expenses of $289 million, and EBITDA adjusted for certain non-cash items of $234 million in the first quarter. Frontrun reports a net income of $165.3 million, equivalent to $0.84 per share. and a net income adjusted for certain non-cash items of 179.3 million, equivalent to 91 cents per share in the first quarter. The net income in the first quarter excludes the 7.1 million of net cash received and accrued profit share in relation to the five chartered in and chartered out agreements with Trafigura that have been treated as a reduction of the acquisition cost of the vessels instead. The non-cash items this quarter was net $14 million in total and consisted of $5.4 million unrealized loss on marketable securities, a $15.8 million loss on derivatives, a $1.2 million gain related to our equity method investments, a $1.8 million gain on settlement of claim, and a $4.2 million gain on termination of the lease from Takata. The first quarter shows an increase compared to the fourth quarter of 2019 of 70 million against adjusted EBITDA and an increase of 72 million against adjusted net income. And the increase in net income in the first quarter of 72 million is mainly explained by the increase in results on time-chartered basis due to the higher reported TCE rates in the first quarter compared to the previous quarter. Then let us take a look at the balance sheet on slide five. Changes to the balance sheet as of the end of March 2020 compared to December 31, 2019 mainly relate to an increase in cash and cash equivalents of $54 million, which is the net effect of capex payments, repayment of debts, drawdown of debts, cash flow from operation, and dividend payments. Then we had an increase in new building of $21 million, explained by installments paid in the quarter. We had an increase in vessels of $278 million, related to the five vessels on TC Auto Strategura, which were recorded on the balance sheet when closing of the acquisition took place on March 16 this year. Also, we had an increase in short and long-term debt of $484 million due to drawdown on the $544 million facility with ICBCL offset by repayment this quarter. We had a decrease in short and long-term debt, sorry, short and long-term obligations under finance leases of $298 million, primarily due to the five Safigura vessels moved to owned vessels at closing. and then we had an increase in equity of $94 million, mainly due to the net income for the quarter, offset by cash dividend. As of March 31st, 2020, Frontline has $392 million in cash and cash equivalents, including the undrawn amounts under our unsecured loan facility and marketable securities and minimum cash requirements. Our remaining new billing capex requirements at the end of March amounted to $282 million and related to one suspect banker, which we took delivery of on May 19th, and one VLCC expected to be delivered in June 2020. And then four LR2 tankers expected to be delivered in January, March, and October 2021, and January 2022 respectively. We estimate approximately 239 million in depth capacity for these new buildings, where we drew down 42 million under the term loan facility with Credit Suisse. entered into in November 2019, in May, to finance the delivery of SUSEMAC thank you from Cluser. The short-term part of long-term debt includes approximately 310 million debt faturity of the 500 million facility, which faturates in December 2020, and approximately 40 million debt maturity of the 60.6 million facility, which matured in March 2021. We are in the process of refinancing the 500 million facility, and we have signed a terminal facility with Nordea in May this year in an amount of 50 million dollars to refinance the 40 million maturing in March 2021. In March 2020, as Robert mentioned, we did sign the sale and lease-back agreement, with ICBCL of $544 million. And then in April 2020, we repaid $60 million of our $275 million Senior and Secured Facility Agreement with an affiliate of Heman. And up to $250 million remains now available under the facility following these three payments. In May, finally, we signed a new secure terminal facility with Kredi Agricole in an amount of up to $62.5 million to part-finance the VLTC that we have at the construction at Hyundai. Let's then take a closer look at cash break-even rates and objects on slide 6. We estimate average cash cost per gain rate for 2020 of approximately $22,000 per day for VLCs, $18,600 per day for sewage tankers, and $15,000 per day for the LR2 tankers. And the fleet average is estimated to be about $18,600 per day. These rates are the all-in daily rates that our vessels must earn to cover the budgeted operating costs and dry dock, the estimated interest expenses, time shorter and bearable tire, installments on loans, and G&A expenses. In the graph on the right hand side of this slide, we have shown incremental cash flow after debt service per year and per share, assuming $10,000 per day, $20,000, $30,000, or $40,000 per day in achieved rates and excess of a cash break even rate, irrespectively. These numbers include the vessels on time charter out, and we are looking at a period of 365 days from April 1, 2020. As an example, with a fleet average cash cost break-even rate of $18,600 per day, and assuming $30,000 on top, the average fleet TCE rate would be $48,600 per day. And Frontline would, in this scenario, generate a cash flow per share after debt service of $3.55. With this, I leave the word to Robert again.