Frontline PLC

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Frontline PLC (NYSE: FRO) headquartered in Cyprus, operates within the global transportation industry, specializing in the maritime shipment of crude oil and refined petroleum products. The company manages an international fleet comprising VLCCs, Suezmax, and LR2/Aframax tankers, which are primarily used for the seaborne transport of oil and related cargo across global trade routes.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• The stock has surged by 6.66%, closing at USD 20.51, indicating strong bullish momentum. A volume spike of 3.78 million shares accompanies the price rally, supporting the strength of the upward move and indicating increased market participation.
• The 21-day MA (USD 18.67) is above the 50-day MA (USD 18.30), confirming a short-term bullish crossover that occurred in late May. Price is trading well above both moving averages, reflecting sustained upward momentum and strong support at lower levels.
• The RSI is at 66.99, approaching overbought territory (70). This suggests growing buying pressure, but a near-term pullback or consolidation may occur if it crosses into overbought level.

1.2 The Key Positives, Negatives, and Investment summary   

1.3 Top 10 shareholders:

The top 10 shareholders together form ~ 52.44% of the total shareholding, signifying concentrated shareholding. Hemen Holding Limited and Folketrygdfondet are the biggest shareholders, holding the maximum stake in the company at ~35.55% and ~5.55%, respectively.

1.4 Dividend payments with impressive dividend yield:

Over the past five years, Frontline PLC has maintained a consistent quarterly dividend distribution pattern, with 20 dividends paid between 2020 and 2025. The stock has offered a notably high dividend yield, often ranging between 7% and 12% depending on market conditions. At price peaks, such as in mid-2023 when the stock traded around USD 25, the estimated annualized yield was approximately 11.2%, while during troughs like early 2024 at around USD 16, the yield still held around 7.5%. As of August 2025, with the stock price at USD 20.51 and assuming a quarterly dividend of USD 0.50, the forward dividend yield stands close to 9.8%, reinforcing Frontline’s appeal as a high-yield income stock throughout fluctuating market cycles.

1.5 Key Metrics

In Q1 FY25, Frontline Plc experienced a notable decline across all key profitability metrics compared to Q1 FY24. The drop in gross, EBITDA, operating, pretax, and net margins was primarily driven by weaker TCE rates, reduced voyage income, and lower overall revenue. Despite maintaining cost discipline, fixed operating expenses weighed more heavily on profitability due to a smaller revenue base. Additionally, losses on derivatives and marketable securities, along with muted charter activity, further compressed margins. As a result, return on equity also fell significantly, reflecting the sharp decline in net income and reduced shareholder returns.

Despite declining profitability, Frontline PLC illustrates a steady improvement in Frontline Plc’s liquidity over five quarters, with cash and equivalents rising from USD 297.4 million in Q1 FY24 to USD 436.5 million in Q1 FY25. Despite some fluctuations mid-year, strategic refinancing and disciplined cash management helped the current ratio increase significantly to 1.82x by Q1 FY25. This reflects the company's stronger short-term solvency and enhanced financial flexibility, supported by reduced near-term debt obligations and consistent operating cash flow.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q1 FY25:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• The stock has surged by 6.66%, closing at USD 20.51, indicating strong bullish momentum. A volume spike of 3.78 million shares accompanies the price rally, supporting the strength of the upward move and indicating increased market participation.
• The 21-day MA (USD 18.67) is above the 50-day MA (USD 18.30), confirming a short-term bullish crossover that occurred in late May. Price is trading well above both moving averages, reflecting sustained upward momentum and strong support at lower levels.
• The RSI is at 66.99, approaching overbought territory (70). This suggests growing buying pressure, but a near-term pullback or consolidation may occur if it crosses into overbought level.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation  

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 05, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.