“The combination of lower oil prices and wider refinery margins boosted the demand for transportation of refined oil products in the first quarter of 2015,” says CEO Jacob Meldgaard and adds: “TORM’s operational platform captured the benefits of the stronger market and has delivered a positive net profit result for the first time since the first quarter of 2010. The operational performance and the new Restructuring Agreement provide a robust foundation for TORM.”
In the first quarter of 2015, TORM realized a positive EBITDA of USD 53m and a profit before tax of USD 9m.
- EBITDA for the first quarter of 2015 was a gain of USD 53m (Q1 2014: USD 21m). The result before tax for the first quarter of 2015 was a gain of USD 9m (USD -222m incl. impairments of USD 195m). Cash flow from operating activities after full interest payments was positive with USD 46m in the first quarter of 2015 (USD 10m).
- During the first quarter of 2015, the product tanker market benefitted from a combination of lower oil prices and higher refinery margins, which led to both a higher end-consumer demand and a supplier-driven increase of transportation of refined products. TORM’s largest segment, MRs, achieved spot rates of USD/day 25,275 in the first quarter of 2015, which is up by 66% year-on-year. The Tanker Division reported a gross profit of USD 63m in the first quarter of 2015 (USD 32m).
- In the first quarter of 2015, the Panamax segment incurred the lowest average freight rates recorded by the Baltic Exchange Panamax Index. TORM’s bulk fleet achieved freight rates of USD/day 6,063, which is above the spot market but down by 63% compared to the first quarter of 2014. TORM’s bulk segment reported a gross result in the first quarter of 2015 of USD -2m (USD 1m).
- With reference to announcement no. 9 of 20 April 2015, the new Restructuring Agreement has been signed by TORM, Oaktree Capital Management and a majority of the Lenders holding in aggregate 94% of TORM’s existing loan facilities by value (as of 13 May 2015). The final implementation of the restructuring would be subject to certain conditions precedent, including required approvals from public authorities.
- The book value of the fleet was USD 1,200m as of 31 March 2015. Based on broker valuations, TORM’s fleet excl. assets held-for-sale had a market value of USD 852m as of 31 March 2015. In accordance with IFRS, TORM estimates the product tanker fleet’s total long-term earning potential each quarter based on discounted future cash flow, and the estimated value of the fleet as of 31 March 2015 supports the carrying amount.
- Net interest-bearing debt amounted to USD 1,367m as at 31 March 2015, compared to USD 1,394m as at 31 December 2014. The decrease in the first quarter of 2015 is primarily a result of cash flows before financing activities.
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As of 31 March 2015, TORM’s available liquidity was cash and cash equivalents of USD 53m. There are no newbuildings on order or CAPEX commitments related hereto.
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The equity is negative at USD -153m as at 31 March 2015 (USD -103m).
- As of 31 March 2015, TORM had covered 5% of the remaining tanker earning days in 2015 at USD/day 25,757. 40% of the remaining bulk earning days in 2015 were covered at USD/day 8,299.
- The financial results for 2015 are subject to the completion of the new Restructuring Agreement. Consequently, TORM has decided not to provide earnings guidance for 2015.
| Conference call | Contact TORM A/S | |
| TORM will be hosting a conference call for financial analysts and investors at 3 pm CEST today. Please dial in 10 minutes before the conference is due to start on +45 3271 4611 (from Europe) or +1 866 803 8344 (from the USA). The presentation can be downloaded from www.torm.com. |
Tuborg Havnevej 18, DK-2900 Hellerup, Denmark Tel.: +45 3917 9200 / Fax: +45 3917 9393, www.torm.com DK-VAT: 22460218 Jacob Meldgaard, CEO, tel.: +45 3917 9200 Mads Peter Zacho, CFO, tel.: +45 3917 9200 Christian Søgaard-Christensen, IR, tel.: +45 3076 1288 |
| About TORM |
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TORM is one of the world’s leading carriers of refined oil products as well as a player in the dry bulk market. The Company operates a fleet of approximately 80 modern vessels with a strong commitment to safety, environmental responsibility and customer service. TORM was founded in 1889. The Company conducts business worldwide and is headquartered in Copenhagen, Denmark. TORM’s shares are listed on NASDAQ OMX Copenhagen (ticker: TORM). For further information, please visit www.torm.com. |
| Safe Harbor statements as to the future |
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Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and statements other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward- looking statements include the strength of the world economy and currencies, changes in charter hire rates and vessel values, changes in demand for “ton miles” of oil carried by oil tankers, the effect of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in TORM’s operating expenses, including bunker prices, dry-docking and insurance costs, changes in the regulation of shipping operations, including requirements for double hull tankers or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists. Forward-looking statements are based on management’s current evaluation, and TORM is only under an obligation to update and change required by law. |
