TORM plc Annual Report 2018
March 12 2019 - 3:33AM
TORM plc Annual Report 2018
“TORM’s commercial performance over the past year has
continuously been among the best within its peer group. The product
tanker market has rebounded significantly since November 2018, and
looking ahead, we are well-positioned to leverage the ongoing
market recovery, illustrated by a 43% increase in freight rates
achieved so far in the first quarter of 2019 compared to 2018,”
says Executive Director Jacob Meldgaard.
- In 2018, TORM realized an EBITDA of USD 121m (2017: USD 158m).
The 2018 profit before tax amounted to USD -33m (2017: USD 3m).
Despite negative results, TORM’s performance has been strong
compared to industry peers. Return on Invested Capital (RoIC) was
0.1% (2017: 2.8%).
- For the full year 2018, TORM achieved TCE rates of USD/day
12,982 (2017: USD/day 14,621). The first half of 2018 continued a
trend from 2017 with healthy consumer-driven demand for refined oil
products offset by inventory drawdown. The drawdowns resulted in a
loss of potential trade of 4% over the period. In the third quarter
of 2018, freight rates reached historically low levels due to
reduced trading volumes and continued cargo cannibalization by
newbuilt crude tankers opting for clean cargos on their maiden
voyage. Towards the end of 2018 and early 2019, the broader tanker
markets experienced a significant recovery with freight rates
reaching levels last seen towards the end of 2015 and beginning of
2016.
- On 26 January 2018, TORM completed an equity raise through a
private placement of USD 100m. The new equity increased TORM’s
ability to pursue attractively priced growth opportunities,
including the ongoing newbuilding program.
- In 2018, TORM executed newbuilding options for three MR vessels
for a total commitment of USD 93m from Guangzhou Shipyard
International. This brings the total number of newbuilding
deliveries in the 2017-2020 period up to 15 of which TORM took
delivery of four LR2 vessels during 2018. The remaining newbuilding
program covers two LR1 and seven MR vessels with expected
deliveries in 2019 and the first quarter of 2020. In 2018, TORM
sold four older vessels (two MR vessels and two Handysize vessels)
for a total consideration of USD 27m. Three of the vessels were
delivered to their new owners in 2018, and one vessel was delivered
in the first quarter of 2019. In the first quarter of 2019, TORM
also sold and delivered one older MR vessel. As of 31 December
2018, TORM’s fleet consisted of 72 owned vessels, three chartered
vessels and nine vessels on order, including vessels for which a
sale has been agreed.
- In the fourth quarter of 2018, TORM established a joint venture
with ME Production, a leading scrubber manufacturer, and Guangzhou
Shipyard International, which is part of the China State
Shipbuilding Corporation group. The joint venture, named ME
Production China, will manufacture scrubbers in China and deliver
them to a range of maritime industry customers for both
newbuildings and retrofitting. TORM holds an ownership stake of
27.5% in the new joint venture. In connection with the
establishment of the joint venture, TORM has ordered a number of
scrubbers from ME Production China. With these orders, TORM has
committed to install scrubbers on 21 vessels and signed a letter of
intent for installations on up to a total of 39 vessels, or
approximately half of TORM’s fleet. During 2018, TORM successfully
conducted its first retrofit scrubber installation on the MR
ice-class vessel TORM Lene. On 15 October 2018, TORM took delivery
of the first newbuilding outfitted with a scrubber, the LR2 vessel
TORM Hilde.
- As of 31 December 2018, TORM’s available liquidity was USD 406m
and consisted of USD 127m in cash, USD 233m in undrawn credit
facilities and USD 46m in undrawn credit facilities subject to
documentation. During 2018, TORM secured bank financing for five
newbuildings, ensuring that the newbuilding program is fully
financed. In addition, TORM has extended one credit facility with
original maturity in 2019. Net interest-bearing debt amounted to
USD 627m, and the net loan-to-value (LTV) ratio was estimated at
53% as of 31 December 2018.
- Based on broker valuations, TORM’s NAV excluding charter
commitments is estimated at USD 856m. This corresponds to a
NAV/share of USD 11.6 or DKK 75.5. TORM’s book equity amounted to
USD 847m. This corresponds to a book equity/share of USD 11.5 or
DKK 74.9.
- As of 31 December 2018, TORM’s fleet including newbuildings had
a market value of USD 1,675m based on broker valuations. TORM’s
nine remaining newbuildings are expected to be delivered in 2019
and throughout the first quarter of 2020. Outstanding CAPEX
relating to the order book, including costs related to the
installation of scrubbers, amounted to USD 281m as of 31 December
2018. TORM performed a review of the recoverable amount of its
assets by assessing the recoverable amount for the most significant
assets. Based on this review, Management concluded that the assets
were not impaired as the value in use approximates the carrying
value. The book value of the fleet was USD 1,442m as of 31 December
2018 excluding outstanding installments on the newbuildings of USD
258m.
- As of 31 December 2018, 10% of the total earning days in 2019
were covered at USD/day 17,306. As of 5 March 2019, 85% of the
total earning days were covered at USD/day 18,522 for the first
quarter of 2019. 24% of the total earning days in 2019 were covered
at USD/day 18,193.
- TORM intends to distribute 25-50% of net income semi-annually.
For the first half of 2018, TORM did not distribute dividends, and
for the second half of 2018 the Board of Directors also proposes
that no dividend be distributed.
CONFERENCE CALLTORM will be hosting a
conference call for investors and financial analysts at 10:00 am
Eastern Time / 3:00 pm Central European Time. If you wish to listen
to the call, please dial +45 8071 8097 (+1 (866) 966 1396 for USA
connections) at least 10 minutes prior to the start of the call to
ensure connection and use 2982249 as conference ID. The
presentation can be downloaded from
https://investors.torm.com/.
CONTACT |
TORM
plc |
Jacob
Meldgaard, Executive Director, tel.: +45 3917 9200 |
Birchin Court,
20 Birchin Lane |
Christian
Søgaard-Christensen, CFO, tel.: +45 3917 9285 |
London, EC3V
9DU, United Kingdom |
Morten Agdrup,
IR, tel.: +45 3917 9249 |
Tel.: +44 203
713 4560 |
|
www.torm.com |
ABOUT TORM TORM is one of the world’s leading
carriers of refined oil products. 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. TORM’s shares are
listed on NASDAQ Copenhagen and NASDAQ New York (tickers: TRMD A
and TRMD). For further information, please visit www.torm.com.
SAFE HARBOR STATEMENTS AS TO THE FUTUREMatters
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 words
“believe,” “anticipate,” “intend,” “estimate,” “forecast,”
“project,” “plan,” “potential,” “may,” “should,” “expect,”
“pending” and similar expressions generally 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 that 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.
In light of these risks and uncertainties, you should not place
undue reliance on forward-looking statements contained in this
release because they are statements about events that are not
certain to occur as described or at all. These forward-looking
statements are not guarantees of our future performance, and actual
results and future developments may vary materially from those
projected in the forward-looking statements.
Except to the extent required by applicable law or regulation,
the Company undertakes no obligation to release publicly any
revisions to these forward-looking statements to reflect events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated events.
- 02-2019 - TORM Annual Report 2018 - US
- TORM Annual Report 2018
TORM (NASDAQ:TRMD)
Historical Stock Chart
From Aug 2024 to Sep 2024
TORM (NASDAQ:TRMD)
Historical Stock Chart
From Sep 2023 to Sep 2024