Frontline plc.

Good morning and good afternoon. Welcome to Frontline's third quarter earnings call. This is my first call in the hot seat. I'm both excited and honored to serve our companies in this capacity. Frontline's long-term strategies are well cemented by the board, and we run a very professional organization that has easily adapted to this management transition. This has been a volatile quarter and an extraordinary year to date. I'm tempted to bring in black swans, but they seem to have become common to the shipping industry. The global COVID-19 pandemic has affected us all. And even though we still need to endure the situation a bit longer, there is no glimmer of hope in the horizon. Let's have a look at the highlights on slide three. Frontline came into Q3 2020 on a high note. But as the quarter progressed, freight rates started to correct. We still landed the quarter at good returns on a low-to-discharge basis, earning $49,200 per day on our VLCCs, $25,100 per day on our SUSE maxes, and $12,800 per day on our LR2-AFR maxes. This yielded a net income of $57.1 million, or $0.29 per diluted share. Our adjusted net income came in at $56.4 million, rounded to $0.29 per diluted share. We are very happy to report that Frontline has entered into three term loan facilities of up to $485.2 million. Inger is with me here today. We'll elaborate more on our financing activities later in this presentation. So far, in the fourth quarter, we have booked 74% of our available VLTC days at $22,600 per day, 61% of our available SUSEMAX days at $12,600 per day, and 65% of our LR2 slash AFRAMAX days at $13,800 per day. The booked earnings are a reflection of the challenges this market faces. And although we want to be upbeat on the future, there are uncertainties going forward. Frontline has therefore decided to refrain from paying dividends this quarter to preserve the company's cash position. I'll now let Inge take you through Frontline financial highlights.

Thanks Lars. Good morning and good afternoon ladies and gentlemen. Let's then turn to slide four. and look at the income statement. Frontenac achieved total operating revenues net of wage expenses of $178 million in the third quarter, and also an adjusted EBITDA of 108 million in the third quarter. Frontenac holds a net income of 57 million, or 29 cents per share, and adjusted net income of $56.4 million, or also 29% per share in the third quarter. The adjusted net income this quarter decreased about $160 million compared to the previous quarter, and that was primarily given by a decrease in our time charter equivalent earnings due to the lower reported TCE rates that last went through in the third quarter, but also more off-hire days in this quarter due to dry dock of four vessels. We also recorded a 13.9 million increase in ship operating expenses. That was mainly due to increase in dry docking costs of 4.3 million, also increase in repairs and maintenance of 2.1 million, And we also had 4.8 million additional crew costs due to COVID-19. In addition, we also had a reduction of 12.4 million as a result of that three in the second quarter. So we'll see. Let's then take a look at slide five. We have completed loan facilities in a total amount of approximately $920 million during 2020, where $725 million after that was done to refinance four existing loan facilities, which were due in December 2020 and the first half of 2021. But also we have completed to financing of $196 million to finance new vessels. All these loan facilities were done at very attractive terms, with LIBOR plus 190 basis points, or even better, maintaining our competitive cost structure. In November 2020, the company entered into three new term loan facilities, in a total amount of $485 million, where two of these facilities were to refinance to existing terminal facilities, maturing in the second quarter of 2021. And then the third facility was in an amount of $133 million to partially finance the four air-to-tankers and the constructions. The details on the refinancing of the two facilities were first that we had one senior secured terminal facility done with a strong banking group consisting of the largest global shipping banks in an amount of up to 250.7 million to refinance the 466.5 million facility which was maturing in April 2021. The new facility matured in May 2025 and has an amortization profile of 18 years. The facility was fully drawn down in November 2020, and $236.8 million of the refinanced facility has been recorded as long-term debt as of September 30, 2020. Further, we entered into one senior secure terminal facility with IMG and Curtis-Quist in an amount of up to $108 million, to refinance the 109.2 million facility, which matured in June 2021. This new facility matures now in November 2025 and has an amortization profile of 17 years. The facility was also fully drawn down in November 2020, and 78.6 million of the refinanced facility has been recorded as long-term debt. as of September 30, 2020. The slide shows debt maturities prior to refinancing in the gray column and following the refinancing in the blue column. You will notice that following the refinancing, we had no material debt maturities until 2023, and the debt maturities from 2025 onwards have increased substantially. Lastly, we also entered into a senior secure terminal facility with Sexim and Sinmosaur in an amount of $133.7 million to partially finance remaining costs of $142.3 million for the four Li-2 tankers under construction. The facility will have a tenure of 12 years. an amortization profile of 17 years. And following that, the new building program is fully funded. Let's then take a look at the balance sheet on slide six. The main happenings in the third quarter affecting the balance sheet were that we entered into the two new loan facilities, which I went through, to refinance the two loan facilities with total balloon payments of $324.4 million, which were due in April 2021 and June 2021. This has led to that short-term debt and current portion of long-term debt decreased with $311 million, and long-term debt increased with $283 million. Further, we paid $97 million in dividends, and we earned a just net income of $6.4 billion. At the end of September 30, 2020, Frontline has $432 million in cash and cash equivalents, including the annual amounts under our senior secured loan facility, marketable securities, and minimum cash requirements. Let's then take a closer look at the cash break-even rate and the OPEX on slide 7. We estimate that the average cash cost break-even rate for the fourth quarter of 2020 will be approximately $21,900 per day for the VTCs, $20,400 per day for the SUSEPAC tankers, and $15,700 per day for the LIQ tankers. Estimate is about $19,500 per day. These rates are the all-in daily rates that our vessels must earn to cover the budgeted operating costs on dry dock, the estimated interest expenses, TC and Babel tire, installments on loads, and G&H buses. The Suez Wax Tanker cash cost per given rate in the fourth quarter of 2020 is impacted by that we would dry dock four Suez Wax Tankers in the fourth quarter. We'll also dry dock one energy tanker in the fourth quarter. As already discussed, the Q3 OPEX was affected by increase in dry docking costs, increase in repairs and maintenance, and additional crew costs due to COVID-19. As usual, we would like to draw your attention to Frontline's cash flow generation potentials. In the graph on the right-hand side of the slide, we have shown incremental cash flow after debt service per year and per share, assuming $10,000, $20,000, $30,000, or $40,000 per day in achieved rates in excess of our cash spread even rates. These numbers include vessels on time sharper out, and we are looking at the period of 365 days from October the 1st, 2020. As an example, with a fleet average cash cost per given rate of $19,500 per day, and assuming $30,000 on top of the average fleet TCE, then the fleet TCE would be $49,500 per day, and sometimes we generate a cash flow per share at the service of $3.42. With this, I leave the word to Lars again.

Thank you, Inge. So let's move over to slide eight and recap the third quarter in the tanking market. So global oil demand bottomed in May, and in June we were already in recovery, and demand surpassed supply amid deep cuts by OPEC and other key producers. The oil market switched from inventory build to inventory draws. This can be seen on the slide at the bottom left with the yellow bars. Subsequently, OPEC Plus increased production slightly, but kept the cap significantly below Jan 20 levels, and the draw cycle continues. When in draw mode, it's normally the expensive barrel that draws first, and this is typically floating storage. The majority of OPEC cuts have been geographically centered around the Middle East Gulf. This has led to recovering economies, in particular in Asia, sourcing their oil from further afar. This incurs longer term miles. In the end, this has favoured the VOC market, as these vessels offer the best economies of scale. We also saw continued demand for product storage during the quarter, and specifically jet fuel storage, keeping LR2 markets relatively sound. This development is well reflected in our results for the quarter. Let's move to the next slide, slide nine, and look at the fleet and order books. Tankers have continued to enter the market during the quarter, but many have been engaged directly from yard in product storage. This has limited the impact on crude spot markets. The WAS reports or there has been reports of significant delivery backlog due to the COVID-19 related disruption. But this backlog seems to have been cleared. There are recent speculations of mammoth orders in clips of five and ten vessels being placed in Asia. These are yet to be confirmed and not a part of this data set. As the chart indicates, there is room for fleet growth in both 2022 and more so in 2023, assuming 20-year-old ships leave the competitive spot markets and oil demand develops on trend in that time horizon. One of the big X factors for shipping going forward is obviously propulsion technology. Frontline follows these developments closely, leveraging on our extensive business platform But there is still a way to go to reach any conclusions. Let's move to slide 10, where we try to explain one of these market mysteries. We have a record number of vessels, literally in all acid classes, reaching or passing the 20-year mark. The average recycling age for tankers is very close to this age, sometimes depending on the underlying freight rates. We are now in the market with relatively high volumes of inventory still, in addition to a high amount of sanctioned oil volume. This seems to have supported the demand for tankers in the tail end of their effective lifespan. In the chart below, we illustrate this by comparing the average price achieved on tonnage transacted aged close to 20 years and the reported price achieved for recycling. The disconnect is pronounced and likely explains the muted recycling activity. Selling for alternative use is currently the preferred option for the owners. I think it's important to note that for the competitive spot market where we operate, we are under strict scrutiny from wetting policies, and these vessels play an insignificant part of those balances. Let's move on to frontline and our approach to ESG. Efficient, safe, and transparent operations have been frontline's core values for years. Efficient in order to save costs, but also fuel costs. Safe in order to safeguard our seafarers, the environment, and our physical assets. Transparent in order for the investing community, like yourselves, to easily understand our business model. What we have found, as we have familiarized ourselves with the relevant ESG framework for our industry the last couple of years, is that for us, it's more about how we structure our communication on policies and routines we already have in place, rather than enforcing completely new routines or altering the way we conduct ourselves. A central part of our business model is for technical management to be clustered or shared, if you wish. with other listed companies we are familiar with. In this, we gain economies of scale as we share knowledge and practices for more than 230 vessels. This collaboration gives us an impressive leverage to shape and influence standards we expect to be met, both on social aspects and on governance. But we also share synergies when it comes to applying technology to optimize performance, both in traditional manners, as in speed and consumption, but also with respect to our environmental footprint. Frontline is, although potentially a bit under-communicated, very well positioned to comply with the stricter environmental, social, and governance framework the shipping industry has to get comfortable with going forward. So let's move to slide 12 and the tank market outlook. Increased oil supply is now key in order for the tanking market to balance. We were shielded for a period as tankers were employed by storage. Now we're dependent on volumes to come to the market and normal trading patterns resuming. The demand for tankers is still capped by the OPEC caps, but we find it extremely encouraging to see oil prices perform strongly as the volumes offered increase significantly. particularly by the Libyan exports that resumed in October. This in isolation suggests oil demand might actually be firmer than the market in general respects. Looking at the benchmark Brent oil curve, we see the same tightness expressed in a dramatic move from contango, or carry if you like, to a near flattening of the curve. This signals inventory draws to accelerate, and oil markets potentially finding a balance at an earlier stage. It's obviously a bit early to call, but just to explain how these mechanisms work. If we are drawing in a territory of 3 to 4 million barrels per day from inventories now, that's the volume needed from producers once inventory levels normalize, which in turn can be translated into increased tanking demand. Finally, let me sum up on slide 13. So Frontline is financially strong. We have no material death maturities until 2023. The company is very well positioned towards E3 related expectations. Despite extended regional lockdowns, oil demand continues to recover. Crude oil price action indicates a change in oil market sentiment. and we expect freight market volatility to increase going forward. Thank you. Then we can move on to the Q&A.