“TORM has continued to benefit from the strong product tanker market that prevailed in the first half of 2015 where TORM generated an EBITDA of USD 100m,” says CEO Jacob Meldgaard and adds: “I am very pleased that TORM finalized its restructuring on 13 July 2015, as the Company’s strong operational platform now has financial and strategic flexibility.” In the second quarter of 2015, TORM realized a positive EBITDA of USD 47m and a result before tax of USD 0m.
- EBITDA for the second quarter of 2015 was USD 47m (Q2 2014: USD 14m). The result before tax for the second quarter of 2015 was USD 0m (USD -24m) after non-recurring advisor costs of USD 10m. Cash flow from operating activities was positive with USD 54m in the second quarter of 2015 (USD 15m).
- During the second quarter of 2015, the product tanker market continued to benefit from high refinery margins that supported the demand for transportation of refined products.TORM’s largest segment, MRs, achieved spot rates of USD/day 22,746 in the second quarter of 2015, which is up by 73% year-on-year. The Tanker segment reported a gross profit of USD 56m in the second quarter of 2015 (USD 26m).
- The bulk market remained at historically low levels during the second quarter of 2015 with average Panamax spot earnings at USD/day 5,189 (Baltic Panamax Index), or 18% below the level for the same period last year. In the second quarter of 2015, TORM’s bulk segment reported a gross result of USD -1m (USD 1m).
- With reference to announcement no. 19 of 13 July 2015, TORM has completed its Restructuring including (i) a write-down of debt of USD 535m in exchange for warrants with an estimated fair value of USD 18m, (ii) a conversion of debt of USD 312m in exchange for approx. 35.7bn A shares to the converting lenders and (iii) a contribution by OCM Njord Holdings S.à.r.l. (“Njord”) of 25 product tankers on water and six MR newbuildings in exchange for approx. 59.5bn A shares. As a consequence, Njord holds 61.99% of TORM’s outstanding shares, while DW Partners, LP holds in excess of 5% of the outstanding shares (cf. company announcement no. 20 and no. 22 dated 13 July and 22 July 2015). TORM has published a listing prospectus to admit the new A shares to trading and official listing on Nasdaq Copenhagen (cf. company announcement no. 23 dated 24 July 2015).
- The book value of the fleet was USD 1,192m as of 30 June 2015. Based on broker valuations, TORM’s fleet excl. assets held-for-sale had a market value of USD 861m as of 30 June 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 30 June 2015 supports the carrying amount.
- Net interest-bearing debt amounted to USD 1,337m as at 30 June 2015, compared to USD 1,367m as at 31 March 2015. The decrease in the second quarter of 2015 is primarily a result of positive cash flows before financing activities.
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As of 30 June 2015, TORM’s available liquidity was cash and cash equivalents of USD 94m. There are no newbuildings on order or CAPEX commitments related hereto.
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The equity is negative at USD -152m as at 30 June 2015 (USD -125m).
- The Restructuring will be accounted for as a reverse acquisition, which means that for financial reporting purposes Njord is the continuing reporting entity. Consequently, the consolidated financial results and the guidance for the full year 2015 will reflect the activities of Njord only during the period from 1 January 2015 until 13 July 2015, whereas the remaining period of 2015 will reflect the combined activity of TORM and Njord. For the full year 2015, TORM has upward adjusted the expectations for the combined group to a positive EBITDA in the range of USD 190-230m (up from USD 170-210m) and a profit before tax in the range of USD 115-155m (up from USD 100-140m). The combined group had an estimated proforma equity of USD 890m as per the Restructuring Completion Date on 13 July 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 Copenhagen (ticker: TORM A). 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. |
