Frontline plc.

Good morning and good afternoon, everyone. Welcome to Frontline's first quarter's earnings call. I think I'll start off with saying it's safe to say that this has been a busy quarter in many respects. The conflict in Ukraine has been demanding on our organization, first of all, in order to support our crew, both Ukrainian and Russian nationals, in some instances working together on our ships. Our legal and compliance team have worked relentlessly in an ever-changing sanctions environment, making sure we are staying compliant. But it's also very satisfactory to see Frontline has managed to maneuver all these challenges and traded our ships very competitively at the same time. To top it all, we announced the proposed combination with Euronav early April. And we've since then been working diligently together to finalize an appropriate transaction structure for this combination. So let's move to slide three and look at the highlights. In the fourth quarter, Frontline achieved $15,700 per day on our VLCC fleet. We achieved $16,900 per day on our SUSEMAX fleet and $19,000 per day on our LR2-AFROMAX fleet. So far in the first quarter of 2022, we booked 74% of our VLCC days at $22,600 per day. We booked 70% of our SUSEMAX days at $32,700 per day. and 58% of our LR2 slash AfraMax days at $46,300 per day. All numbers in this table are on the low-to-discharge basis, as usual for Frontline. Also, this quarter, I would like to draw your attention to slide four to explain the differences in returns depending on the vessel characteristics. You can clearly see on the figures on the right-hand side on this slide that the earnings differentiate a lot in respect of what type of ship we're trading. As you can see on the left-hand side, Frontline has a young fleet. 88% of our fleet is regarded ecovessels, and we have 53% scrubber penetration. And as you also can see, all the scrubbers are focused on the VLCC and SUSEMAX assets that have the highest consumption. But we're up now to $17,100 per day premium for a VLCC between an eco with scrubber compared to a traditional non-eco VLCC or vessel. For the SUSEMAXs, the premium is $9,500 compared to a non-eco. And for the LR2s, it's $8,500 a day premium compared to a non-eco. So basically, this high oil price environment is affecting us a lot. This does not tell the full story, though. As the technical, operational, and commercial performance we managed to achieve is also very much dependent on our talented team. And we work more like asset managers, optimizing a portfolio of multi-million dollar investments than traditional ship owners. With that, I'll 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 number five and look at the income statements. If you want to achieve total operating revenues, of $104 million and adjusted EBITDA of $53 million in the first quarter of 2022. We reported net income of $31.1 million, or $0.15 per share, and the adjusted net loss was $1.6 million, or $0.01 per share, in the first quarter. The adjustments that we have made this quarter consist of a $24.9 million gain on derivatives a 0.3 million gain on marketable securities, a 6.1 million gain on sale of vessels, a 0.4 million gain on insurance claim, and a 1.3 million amortization of acquired time charters, partially offset by a 0.1 million share of losses of associated companies. The adjusted net loss in this quarter decreased then 3.1 million compared with the fourth quarter of 21. And the decrease in adjusted net loss was driven by an increase in our time charge equivalent earnings due to the higher GCE rates in the quarter, partly offset by other movements in operating gains and expenses. Then let's take a look at the balance sheet at slide six. Total balance sheet numbers. have decreased with $56 million in the first quarter compared with the fourth quarter of 2021. The balance sheet movements in this quarter are primarily related to the sale of the LR2 tankers, Front Lion and Front Panther, in addition to ordinary deficit repayments and depreciation. As of March 31, 2022, Front Lion has $179 million in cash and cash equivalents, including under amounts under our senior unsecured loans facility, multiple securities, and minimum cash requirements. Short-term debt includes total balloon payments of 251.1 million for two existing loan facilities with maturity in the first quarter of 2023, which is expected to be refinanced prior to maturity. Let's then take a closer look at slide seven. Keeping costs down has always been in Frontline's DNA, and the core values of the Frontline platform is keeping it simple and focused and maintain lean and efficient management teams. This slide shows that Frontline outperforms Paris in the first quarter of 22 on OPEX, GNA, and interest expense. This, together with outperformance of peers on revenues this quarter, explains the superior operational performance of Frontline in the first quarter of 2022. Then I think we should take a look at slide 8. We estimate average cash cost break-even rates for the remainder of 2022 of approximately $23,700 per day for the VCC segment, $19,800 per day for the ZeusMax tankers, and $16,600 per day for the LR2 tankers. The fleet average estimate is about $20,100 per day and includes dry dock of 13 vessels in the period from the second quarter to the fourth quarter of 2022, with an impact of $750 per day. The distribution of the 30 vessels is three VLCCs, five SUSEMAX tankers, and five LR2 tankers. We recorded OPEC expenses including dry dock in the first quarter of $8,200 per day for VLCCs, $7,000 per day for the SUSEMAX tankers, and $7,900 per day for the LR2 tankers. In the first quarter, we dry docked one VLCC, which was completed in the second quarter, and two LR2 tankers where one was completed in the second quarter. The graph on the right-hand side of the slide shows the free cash flow per share after debt service and free cash flow yield basis current fleet and share price the 23rd of May at alternative TCE rates. Based on historic Clarkson TCE rates for non-Ecovessels in the period 2000 to 2021, adjusted for premiums on scrubber and eco-vessels, Frontline has a free cash flow per share of $2.43 and a free cash flow yield of 27%. Free cash flow yield potential increases with higher assumed TCE rates and on a fully delivered basis. With that, I leave the word to Lars again.

Thank you, Inger. So, the headline for My Q1 tanking market report is basically volatility is back. And if you look at the graph on the bottom left side on slide nine, you'll see that after coming through a period, almost 18 months, where we've been hovering between 10 and 30,000 on a good day, we're suddenly rocketing up. The quarter was fairly quiet as global oil demand was estimated to have averaged around 98.8 million barrels. Q1 is historically or seasonally a shoulder quarter, and the demand was down 1.7 million barrels compared to Q4. Supply came in at the same number, in fact. So this is the first quarter for a long time we've not drawn significantly on inventories. But if you compare it to Q1 last year, we start to see some significant changes. Demand was, in fact, up 4.5 million barrels per day compared to last year, and supply had increased by a whopping 6.3 million barrels per day. As we enter the year, oil in transit stabilized around 1 billion barrels, and as I mentioned, inventory draws dwindles. The invasion of Ukraine sparked volatility as trade lanes started to change. And what we saw towards the end of the quarter and into Q2 is high product demand growth in both US and Europe starting to open arms from Asia. COVID-19 continues to affect in particular Chinese demand, more so due to their zero tolerance policy and full lockdowns. This is predominantly what's affecting VOCC utilization. Let's move to slide 10 and I'll try to do some explanations to what's going on with regards to the Russian flows. So new trading patterns are evolving and Russian and oil and product export from Black Sea and the Baltic was in fact knocked down more than 360,000 barrels per day since Feb 22 compared to May. European imports from Russia are down 1.4 million barrels per day in the same period. This has been replaced by imports from Asia, Africa and America to Europe. Asia has increased their imports from Russia by about 850,000 barrels per day And unknown, which is seen on the top right corner on the graph at the top here, adds another 1.1 million barrels. Unknown is basically because this is tracking, and the vessels have yet to reach their destination port. So as we move forward, this will become more and more known, to put it that way. So in essence, 2 million barrels of oil per day is diverted. Compared to what's regarded the global trade of oil, or seaborne oil, which is around 38 million barrels per day, this amounts to 6%. And 6% of oil is now traveling at least 50% longer, if not twice the distance, and some even argue 2.5 times the oldest So geographically, Europe is obviously close to Russia. And now, significant amounts of crude oil and products are sailing past Europe to clients in predominantly Asia, whilst Europe needs to replace those same barrels from either Middle East, West Africa, or US. The only way to kind of stop this trend would be a blockade of Russian exports or direct sanctions on oil itself. How likely that is I'll leave to you to discuss, but in addition we have an element of US now arguing to or indicating to lift sanctions on Venezuelan crude for exports to US and Europe. So basically this whole kind of change, or diversion, or disruption, is now causing both, in particular Afromaxis, but also, to a large extent, Seuss Maxis, to basically have much tighter market conditions than we had prior to the Ukrainian invasion. If we move to slide 11, because there is another thing going on in our markets as well, and look at the products market. We are, in fact, in what's regarded, or you can read the headlines coming out more and more on diesel shortages. And this is causing record refining margins and ARBs to open up. The jury's still out whether if it's all due to disrupted diesel flows or middle-desolate flows from Russia, because there's also an element of quite strong demand, particularly in Europe as well. So basically what's happened is that refining margins have literally exploded. As you can see on the graph on the left hand side there, this is Northwest Europe spot refinery margins coming back from May 2020 until now. These margins are some due to lack of feedstock, but also some due to the high demand. And this is basically opened up for the first time in quite a while, wide arbitrages from Middle East and from Asia. The longevity of the current situation is very hard to call, but this is a structural challenge. Refining capacity in both US and Europe was reduced during COVID-19 pandemic when they were suffering disastrous refining margins. There is ample refining capacity in Middle East and Asia and this is growing as well. Then let's move to slide 12 and the tanker order books. This is the first time since 2018 that we've seen fleet growth turning negative. What we've done in this top left chart is basically to look at the net fleet growth in deadweight terms, year-on-year change, and the net recycling of tankers during the same period. And as we can see, started this development late in Q4, and throughout Q1, the net tanker fleet growth has actually turned negative. The last few times we've experienced this, so first in 2013, 2014, and secondly towards the end of 2018, it was followed by a period of high volatility and fairly good market rates. We expect this to continue, just looking at the various order books. We continue to be in the same situation, if you look at the VLCCs first, where there is a large portion of that fleet that should have been retired and still is floating on the seven seas. So 82 VLCCs will come to age, either they are already above 20 years or they will become above 20 years in 2022. For the SUSEMax, the same number is 67. And for the LR2s, it's a whopping 22. And the order book, as the audience would know, is dwindling. There are no new orders being placed. In fact, for the VLC and SUSEMax segment, we haven't seen one single order placed since September last year. For the LR2s, there is a bit of activity. And six LR2s have been ordered so far this year, but it's still not putting a dent into basically the outlook for that sector either. With regards to when you can expect to receive a vessel, should you go out and order now? I think 2024 is more or less out of the question, and you need to look into 2025. And it's still the case that For the main yards that build tankers, they're far more interested in building other asset classes, as that yields them better margins. So, to sum it all up, oil demand continues to rise, but global oil supply issues are swelling with the Russian exports curtail. We got volatility in tankers back in Q1 2022. As I've said a few times through media and with analysts now, it's too early to call the big cyclical upswing, but we have hopes. Tanker fleet growth is now in negative territory, and that's expected to continue at an accelerating pace as long as no new orders are being placed. Tonn miles are expanding significantly, and in particular for Susomax and Afromax as Russian flows are diverted. There is high product demand and record refinery margins in Europe, and this is very supportive of our LR2s, which we refer to as the VLCCs of the product market. It is expected, though, that with these refinery margins, one should see increased refinery runs, which in the end would support the VLCC. We're very happy that Frontline is able to quickly capture volatility with what we regard efficient diversified fleet, low cost base and agile approach to the market. Lastly, before Q&A, let me do a few points on the frontline and urinal combination. As I mentioned initially, since we went public with this in April, we have been working diligently together and what we want to achieve is is a combined company with a $4.2 billion market cap. This would incur a wider index inclusion. We believe it will attract share liquidity and, of course, broker coverage. We also believe it could improve access to cap-restricted finance resources. Frontline and Euronav alone are actually regarded small cap or borderline small cap. Now we're moving firmly into the mid-cap. if you look at the New York Stock Exchange. We believe the combination would give enhanced commercial offering. The significant size, well, we would have significant size in all relevant trading areas, and this would yield efficiency and utilization. There's also significant synergies discovered between the two companies, both on OPEX, G&A, and financing. And finally, Both companies regard themselves as leading on the ESG, and this will obviously form force in that respect in the industry. With that, I'd like to open up for questions.