”Our
first quarter profit after tax of USD 40 million is in line with
expectations and satisfactory in light of the difficult markets. Our
Greater Efficiency Power project is well on the way to ensure an even more
efficient future operation of the Company. Furthermore we have
obtained a high degree of coverage of the remaining earning days in 2009,”
states Mikael Skov, CEO.
●
The profit for the first quarter of 2009 was USD 39 million before
tax and USD 40 million after tax.
●
TORM maintains the pre-tax profit forecast for 2009 of USD 100 – 140
million incl. sale of vessels as stated on 14 May 2009 (announcement no.
7/2009). However due to the development in freight rates there is
considerable uncertainty about the profit expectations.
●
Cash flows from operating activities amounted to USD 61 million for the
first quarter.
●
The Company’s net interest-bearing debt was USD 1,615 million, and
at the end of the first quarter the Company’s undrawn credit facilities
and cash amounted to approx. USD 600 million.
●
Earnings per share (EPS) were USD 0.6 for the first quarter of 2009
against USD 0.8 for the corresponding period of 2008.
●
Return on Invested Capital (RoIC) was 6.8% p.a., and Return on
Equity (RoE) was 12.1% p.a. for the quarter. Equity amounted to USD 1,341
million (DKK 7.508 million) at 31 March 2009, equaling a 5% increase.
Subsequently, in April, a dividend of DKK 291 million (USD 51 million) was
distributed for 2008. At 31 March 2009, the market value of the Company’s
fleet exceeded the book value by USD 31 million (DKK 172 million),
corresponding to USD 0.4 per share (DKK 2.5) excluding treasury
shares.
●
The Company's “Greater Efficiency Power” project is progressing
according to plan. The project is still expected to contribute USD 40 – 60
million savings on an annual basis effective from 2010.
●
Product tanker rates began the year at a high level, only to drop
to historical lows in mid-quarter. After the end of the quarter, rates
have recovered somewhat from these low levels. The rate performance during
the period is in line with the normal seasonal fluctuations as the winter
season ends and oil transports diminish. As a consequence of reduced oil
consumption and the global recession, this year’s drop in rates was more
severe than usual. At 31 March 2009, TORM had covered 42% of the remaining
earning days in the Tanker Division at USD/day 21,334.
●
Following the collapse in bulk rates towards the end of 2008,
earnings in the first quarter of 2009 were on average higher than at the
end of 2008. At 31 March 2009, TORM had covered 13% of the remaining
earning days in the Bulk Division at USD/day 13,434.
|
||
Teleconference
|
TORM’s
Management will review the report on the first quarter of 2009 in a
teleconference and webcast (www.torm.com) today, 19 May 2009, at 15.00
Copenhagen time (CET). To participate, please call 10 minutes before the
call on tel.: +45 3271 4607 (from Europe) or +1 334 323 6201
(from the USA). A replay of the conference will be available from
TORM’s website.
|
|
Contact
|
TORM
A/S
Tuborg
Havnevej 18
DK-2900
Hellerup
Denmark
|
Telephone:
+45 39 17 92 00
Mikael
Skov, CEO
Roland
M. Andersen, CFO
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
1/18
|
Million
USD
|
Q1 2009 | Q1 2008 |
2008
|
|||||||||
Income
statement
|
||||||||||||
Net
revenue
|
258.8 | 255.0 | 1.183.6 | |||||||||
Time
charter equivalent earnings (TCE)
|
199.1 | 200.1 | 905.9 | |||||||||
Gross
profit
|
97.5 | 110.6 | 537.8 | |||||||||
EBITDA
|
80.7 | 92.7 | 572.3 | |||||||||
Operating
profit
|
48.9 | 62.0 | 446.3 | |||||||||
Profit
before tax
|
39.2 | 52.1 | 360.1 | |||||||||
Net
profit
|
39.6 | 52.2 | 361.4 | |||||||||
Balance
sheet
|
||||||||||||
Total
assets
|
3,286.6 | 3,156.3 | 3,317.4 | |||||||||
Equity
|
1,340.7 | 1,129.6 | 1,278.9 | |||||||||
Total
liabilities
|
1,945.9 | 2,026.7 | 2,038.5 | |||||||||
Invested
capital
|
2,950.7 | 2,822.8 | 2,822.4 | |||||||||
Net
interest bearing debt
|
1,615.4 | 1,705.9 | 1,549.9 | |||||||||
Cash
flow
|
||||||||||||
From
operating activities
|
61.2 | 63.7 | 384.7 | |||||||||
From
investing activities
|
-126.7 | -221.2 | -262.4 | |||||||||
Thereof investment
in tangible fixed assets
|
-129.5 | -102.9 | -377.8 | |||||||||
From
financing activities
|
-4.1 | 129.3 | -59.0 | |||||||||
Net
cash flow
|
-69.6 | -28.2 | 63.3 | |||||||||
Key
financial figures
|
||||||||||||
Margins:
|
||||||||||||
TCE
|
76.9 | % | 78.5 | % | 76.5 | % | ||||||
Gross
profit
|
37.7 | % | 43.4 | % | 45.4 | % | ||||||
EBITDA
|
31.2 | % | 36.4 | % | 48.3 | % | ||||||
Operating
profit
|
18.9 | % | 24.3 | % | 37.7 | % | ||||||
Return on Equity
(RoE) (p.a.)*)
|
12.1 | % | 18.9 | % | 30.6 | % | ||||||
Return on Invested
Capital (RoIC) (p.a.)**)
|
6.8 | % | 9.1 | % | 16.4 | % | ||||||
Equity
ratio
|
40.8 | % | 35.8 | % | 38.6 | % | ||||||
Exchange
rate USD/DKK, end of period
|
5.60 | 4.72 | 5.28 | |||||||||
Exchange
rate USD/DKK, average
|
5.72 | 4.97 | 5.09 | |||||||||
Share
related key figures
|
||||||||||||
Earnings
per share, EPS
|
USD
|
0.6 | 0.8 | 5.2 | ||||||||
Diluted
earnings per share, DEPS
|
USD
|
0.6 | 0.8 | 5.2 | ||||||||
Cash
flow per share, CFPS
|
USD
|
0.9 | 0.9 | 5.6 | ||||||||
Share
price, end of period
(per
share of DKK 5 each)
|
DKK
|
43.5 | 140.5 | 55.5 | ||||||||
Number
of shares, end of period
|
Mill.
|
72.8 | 72.8 | 72.8 | ||||||||
Number
of shares (excl. treasury shares), average
|
Mill.
|
69.2 | 69.2 | 69.2 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
2/18
|
Million
USD
|
Q1
2009
|
Tanker
Division
|
Bulk
Division
|
Not
Allocated
|
Total
|
|||||||||||||
Revenue
|
210.1 | 48.7 | 0.0 | 258.8 | ||||||||||||
Port
expenses, bunkers and commissions
|
-56.4 | -2.4 | 0.0 | -58.8 | ||||||||||||
Freight
and bunkers derivatives
|
-0.9 | 0.0 | 0.0 | -0.9 | ||||||||||||
Time
charter equivalent earnings
|
152.8 | 46.3 | 0.0 | 199.1 | ||||||||||||
Charter
hire
|
-39.7 | -14.4 | 0.0 | -54.1 | ||||||||||||
Operating
expenses
|
-43.4 | -4.1 | 0.0 | -47.5 | ||||||||||||
Gross
Profit
|
69.7 | 27.8 | 0.0 | 97.5 | ||||||||||||
Profit
from sale of vessels
|
0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||
Administrative
expenses
|
-18.0 | -2.1 | 0.0 | -20.1 | ||||||||||||
Other
Operating income
|
2.4 | 0.0 | 0.0 | 2.4 | ||||||||||||
Share
of results of jointly controlled entities
|
1.2 | 0.0 | -0.3 | 0.9 | ||||||||||||
EBITDA
|
55.3 | 25.7 | -0.3 | 80.7 | ||||||||||||
Depreciation
and impairment losses
|
-29.8 | -2.0 | 0.0 | -31.8 | ||||||||||||
Operating
profit
|
25.5 | 23.7 | -0.3 | 48.9 | ||||||||||||
Financial
items, net
|
- | - | -9.7 | -9.7 | ||||||||||||
Profit/(Loss)
before tax
|
- | - | -10.0 | 39.2 | ||||||||||||
Tax
|
- | - | 0.4 | 0.4 | ||||||||||||
Net
profit
|
- | - | -9.6 | 39.6 |
The
activity that TORM owns in a 50/50 joint venture with Teekay and the 50%
ownership of FR8 Holding Pte. Ltd. is included in
"Not-allocated".
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
3/18
|
Tanker
Division
|
The
Tanker Division reported an operating profit of USD 25.5 million for the
first quarter of 2009.
Product
tanker rates began the year at a high level, only to drop to historical
lows in mid-quarter. After the end of the quarter, rates have for some
routes recovered from these low levels.
Freight
rates starting the year strongly and then dropping towards the end of the
first and into the second quarter is in line with normal seasonal
fluctuations as the winter season ends and oil transports diminish. As a
consequence of reduced oil consumption and the global recession, this
year’s drop in rates was more severe than normally.
The
tanker market was affected by the following factors in the first quarter
of 2009:
Positive
impact:
· Long
transports of gasoil from the Far East to Europe and of naphtha from
Europe to the Far East.
· Lower
spot prices than forward prices for refined oil products meant increased
oil trader activity, making it \
profitable to use tankers as floating storage. This reduced the product
tanker fleet, thus supporting freight
rates.
· Discharging
delays prolonged port calls, which again reduced the available product
tanker fleet to the benefit of freight rates.
Negative
impact:
· A large
supply of newbuildings for delivery in 2009. An additional 45 LR2, 44 LR1
and 188 MR vessels are expected to be delivered, equalling a growth of
42%.
· The
decline in global oil consumption reduced the need for oil product
transports. Energy International Administration (EIA) assesses that the
global oil consumption will decline by 1.4 million barrels in 2009,
equalling a drop in oil consumption of 2%.
· As a
consequence of the global recession, a mild winter and few delays at the
Bosporus Strait, freight rates for crude oil transports in the
Mediterranean were low, affecting the Company's LR2 fleet.
· A
generally negative sentiment in the crude oil and the refined product
markets.
TORM’s
Tanker Division achieved freight rates in the first quarter of 2009 which,
relative to the first quarter of 2008, were 12% lower for the LR1 segment
and 12% lower for the MR segment, whereas the rates obtained for the LR2
segment were 23% lower. As a result of a decline in crude oil transports,
the LR2 fleet reported a significant drop in earnings, underperforming the
market in general. LR1 and MR fleet earnings were affected by the general
global economic downturn. With a relatively high coverage, the SR vessels
recorded reasonable earnings during the first quarter. At 31 March 2009,
TORM had covered 42% of the remaining earning days in the Tanker Division
at USD/day 21,334.
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
4/18
|
Tanker
Division
|
Q1 08 | Q2 08 | Q3 08 | Q4 08 | Q1 09 |
Change
Q1
08
-
Q1 09
|
12
month
avg.
|
|||||||||||||||||||||
LR2
(Aframax, 90-110,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
908 | 926 | 970 | 1,104 | 1,167 | 29 | % | |||||||||||||||||||||
TCE
per earning day from the LR2 Pool
|
28,370 | 32,327 | 45,267 | 37,009 | 24,192 | -15 | % | |||||||||||||||||||||
TCE per earning
day1)
|
28,538 | 32,084 | 48,421 | 31,862 | 21,977 | -23 | % | 33,586 | ||||||||||||||||||||
Operating
days
|
819 | 849 | 963 | 1,069 | 1,080 | 32 | % | |||||||||||||||||||||
Operating expenses
per operating day2)
|
8,646 | 8,359 | 7,319 | 8,564 | 7,507 | -13 | % | 7,937 | ||||||||||||||||||||
LR1
(Panamax 75-85,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
1,822 | 1,764 | 1,804 | 2,009 | 1,864 | 2 | % | |||||||||||||||||||||
TCE
per earning day from the LR1 Pool
|
24,630 | 28,370 | 34,700 | 35,140 | 22,503 | -9 | % | |||||||||||||||||||||
TCE per earning
day1)
|
24,630 | 28,370 | 34,700 | 35,140 | 21,755 | -12 | % | 29,991 | ||||||||||||||||||||
Operating
days
|
819 | 819 | 828 | 828 | 810 | -1 | % | |||||||||||||||||||||
Operating expenses
per operating day2)
|
8,014 | 8,262 | 7,798 | 7,478 | 7,852 | -2 | % | 7,848 | ||||||||||||||||||||
MR
(45,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
2,490 | 2,576 | 2,668 | 2,796 | 3,174 | 27 | % | |||||||||||||||||||||
TCE
per earning day from the MR Pool
|
22,527 | 25,615 | 29,102 | 22,282 | 22,566 | 0 | % | |||||||||||||||||||||
TCE per earning
day1)
|
22,716 | 23,158 | 26,458 | 22,298 | 19,802 | -13 | % | 22,929 | ||||||||||||||||||||
Operating
days
|
2,366 | 2,441 | 2,484 | 2,400 | 2,497 | 6 | % | |||||||||||||||||||||
Operating expenses
per operating day2)
|
8,267 | 8,172 | 7,609 | 7,653 | 8,227 | 0 | % | 7,915 | ||||||||||||||||||||
SR
(35,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
1,088 | 1,092 | 1,100 | 1,102 | 1,145 | 5 | % | |||||||||||||||||||||
TCE per earning
day1)
|
21,034 | 21,036 | 20,078 | 22,338 | 20,963 | 0 | % | 21,104 | ||||||||||||||||||||
Operating
days
|
910 | 910 | 920 | 920 | 969 | 6 | % | |||||||||||||||||||||
Operating expenses
per operating day2)
|
6,725 | 6,644 | 6,193 | 6,633 | 7,662 | 14 | % | 6,783 |
1) | TCE = Time Charter Equivalent Earnings = Gross freight income less bunker, commissions and port expenses. |
2)
|
Operating
expenses are related to owned
vessels.
|
Bulk
Division
|
For
the first quarter of 2009, the Bulk Division recorded an operating profit
of USD 23.7 million, including compensation in the amount of USD 26
million for early returns of four Panamax bulk carriers, which was already
announced in the Annual Report for 2008. The compensation has been
recognized as revenue in the first quarter of 2009.
In
the first quarter, bulk rates were very volatile, but higher than at the
end of 2008. Freight rates were positively affected by rising iron ore
imports to China, which at 131.4 million tons in the first quarter reached
a historical high, equaling an increase of 19% compared to the first
quarter of 2008. Moreover, 99 bulk carriers, equaling 4.0 million dwt,
were scrapped during the first quarter. At 31 March 2009, TORM had covered
13% of the remaining earning days in the Bulk Division at USD/day
13,434.
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
5/18
|
Bulk
Division
|
Q1 08 | Q2 08 | Q3 08 | Q4 08 | Q1 09 |
Change
Q1
08
-
Q1 09
|
12
month
avg.
|
|||||||||||||||||||||
Panamax
(60-80,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
1,394 | 1,367 | 1,421 | 1,466 | 1,458 | |||||||||||||||||||||||
TCE
per earning day1)
|
36,909 | 50,568 | 49,888 | 38,958 | 13,929 | -62 | % | 38,336 | ||||||||||||||||||||
Operating
days
|
565 | 585 | 552 | 600 | 622 | |||||||||||||||||||||||
Operating
expenses per operating day2)
|
7,194 | 6,723 | 6,261 | 5,352 | 6,798 | -6 | % | 6,284 |
Other
activities
|
Other
(non-allocated) activities consist of investments in joint ventures of USD
-0.3 million, financial items of USD -9.7 million and tax of USD 0.4
million.
|
Fleet
development
|
At
the end of the first quarter of 2009, TORM’s fleet totalled 68 vessels, 61
of which were tankers and seven bulk
carriers.
|
31
December 2008
|
Addition
|
Disposal
|
31
March 2009
|
|
LR2
/ Aframax
|
12.5
|
12.5
|
||
LR1
/ Panamax
|
7.5
|
7.5
|
||
MR
|
29.0
|
1
|
30.0
|
|
SR
|
10.0
|
1
|
11.0
|
|
Tankers
|
59.0
|
2
|
61.0
|
|
Panamax
|
6.0
|
1
|
7.0
|
|
Bulkers
|
6.0
|
1
|
7.0
|
|
Total
|
65.0
|
3
|
68.0
|
Planned
fleet
changes
|
No
vessels were contracted in the first quarter of
2009.
|
31
March 2009
|
2010
|
2011
|
2012
|
Total
|
||||||||||||||||||||
Q2
|
Q3
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Order
book
|
|||||||||
Tankers
|
||||||||||||||||||||||||
LR3
|
12.5
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|||||||
LR1
|
7.5
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|||||||
MR
|
30
|
1
|
2
|
-
|
3
|
2
|
1
|
1
|
-
|
-
|
-
|
1
|
-
|
1
|
1
|
1
|
14
|
|||||||
SR
|
11
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|||||||
Bulkers
|
||||||||||||||||||||||||
Kamsarmax
|
0
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
1
|
2
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
|||||||
Panamax
|
7
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|||||||
Total
|
68
|
1
|
2
|
0
|
3
|
2
|
1
|
2
|
1
|
2
|
0
|
1
|
0
|
1
|
1
|
1
|
18
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
6/18
|
Pools
|
At
31 March 2009, the three product tanker pools that TORM operates comprised
93 vessels. To this should be added 24 vessels which TORM operates outside
pools. By the end of 2009, the three pools are expected to comprise a
total of 102 vessels and 21 vessels outside the pools.
|
Results
|
|
First
quarter
2009
|
The
first quarter of 2009 showed a gross profit of USD 98 million, against USD
111 million for Første kvartal 2009 udviste et dækningsbidrag på USD 98
mio. mod USD 111 mio. i det tilsvarende kvartal 2008 the corresponding
quarter of 2008 Resultatet før afskrivninger (EBITDA) for perioden var USD
81 mio. mod USD 93 mio. i første kvartal 2008 Profit before depreciation
(EBITDA) for the period was USD 81 million, against USD 93 million for the
first quarter of 2008 Faldet i både dækningsbidrag og EBITDA skyldes
generelt lavere fragtrater for både produkttankskibe og tørlastskibe The
decline in gross profit and EBITDA was due to generally lower freight
rates for product tankers as well as bulk carriers.
In
the first quarter of 2009, depreciation amounted to USD 32
million.
The
operating profit for the first quarter of 2009 was USD 49 million, against
USD 62 million in the same quarter of 2008. Of this amount, the Tanker and
Bulk Divisions contributed USD 26 million and USD 24 million,
respectively. In the first quarter of 2009, financial items amounted to
USD -10 million, against USD -10 million in the same quarter of
2008.
Profit
after tax was USD 40 million, against USD 52 million in the first quarter
of 2008.
|
Assets
|
Total
assets fell from USD 3,317 million to USD 3,287 million in the first
quarter of 2009.
|
Liabilities
|
The
Company’s net interest-bearing debt rose from USD 1,550 million to USD
1,615 million, primarily as a consequence of a large investment program in
the first quarter of 2009. At the end of the first quarter, the Company
had cash and undrawn credit facilities amounting to approx. USD 600
million at its disposal and considers this adequate for the existing
newbuilding program.
|
Equity
|
In
the first quarter of 2009, equity rose from USD 1,279 million to USD 1,341
million, primarily as a result of earnings during the period. With lower
total assets and higher equity, the Company’s equity as a percentage of
total assets rose from 38.6% at 31 December 2008 to 40.8% at 31 March
2009.
At
31 March 2009, TORM held 3,556,364 treasury shares, corresponding to 4.9%
of the Company’s share capital, which is unchanged compared with 31
December 2008.
|
Subsequent
events
|
On
14 May 2009, TORM sold TORM Martha and TORM Baltic at a price of USD 42.5
million.
|
Outlook
|
TORM
maintains the profit forecast before tax for 2009 of USD 100-140 million
incl. sale of vessels, as stated in Stock Exchange Announcement No. 7 of
14 May 2009. However due to the development in freight rates there is
considerable uncertainty about the profit expectations.
|
Sensitivity
|
At
the beginning of the second quarter of 2009, 38% of the earning days of
the Company’s tankers and bulk carriers were covered for the remainder of
the year.
|
Hedging
as per 31 March 2009
|
|||||||||||||||||
Total
days
|
Covered
days
|
Covered
in
%
|
USD/day
|
||||||||||||||
Product
tank
|
|||||||||||||||||
LR2
|
4,263 | 909 | 21 | % | 29,145 | ||||||||||||
LR1
|
5,826 | 2,637 | 45 | % | 22,760 | ||||||||||||
MR
|
11,690 | 5,017 | 43 | % | 20,863 | ||||||||||||
SR
|
3,514 | 2,059 | 59 | % | 17,207 | ||||||||||||
Dry
bulk
|
|||||||||||||||||
Panamax
|
4,496 | 583 | 13 | % | 13,434 | ||||||||||||
Total
|
29,789 | 11,205 | 38 | % | 20,923 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
7/18
|
Safe
Harbor
Forward-looking
statements
|
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 other statements, which are
other than statements of historical facts. 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 TORM
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, TORM cannot assure you 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 world economies and currencies, changes in charter hire rates
and vessel values, changes in demand for “tonne 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 governmental rules and
regulations 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 and political
events or acts by terrorists. Risks and uncertainties are further
described in reports filed by TORM with the US Securities and Exchange
Commission, including the TORM Annual Report on Form 20-F and its reports
on Form 6-K.
Forward
looking statements are based on management’s current evaluation, and TORM
is only under obligation to update and change the listed expectations to
the extent required by law.
The
TORM share
The
price of a TORM share was DKK 43.5 as of 31 March 2009, against DKK 55.5
at the beginning of the year – a reduction of DKK 12 per share,
corresponding to a reduction of 22% in the quarter.
Accounting
policies
The
presented interim report for the first quarter of 2009 has been prepared
in accordance with IAS 34 "Interim Financial Reporting", as adopted by the
EU, and additional Danish regulations governing presentation of interim
reports by listed companies.
Except
for the instances mentioned below, the interim report has been prepared
using the accounting polices as for the Annual Report for 2008. The
accounting policies are described in more detail in the Annual Report for
2008.
As
from 1 January 2009, TORM has implemented the following new or amended
standards and interpretations: Amendment to IAS 1 "Presentation of
Financial Statements", amendment to IAS 23 "Borrowing Costs", smaller
changes from Improvements to IFRSs, IFRIC 12 "Service Concission
Agreements" and IFRIC 13 "Customer Loyalty Programmes". The new or amended
standards and interpretations have not affected recognition and
measurement in TORM’s interim report for the first quarter of 2009. The
implementation of the amendments to IAS 1 has changed the presentation in
the interim report as Comprehensive income is presented in a separate
statement. Comprehensive income was previously included in the statement
of changes in Equity.
The
interim report for the first quarter of 2009 is unaudited, in line with
the normal practice.
Information
Teleconference
TORM
will host a telephone conference for financial analysts and investors on
19 May 2009 at 15:00 Copenhagen time (CET), reviewing the interim report
for the first quarter of 2009. The conference call will be hosted by
Mikael Skov, CEO, and Roland M. Andersen, CFO, and will be conducted in
English.
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
8/18
|
To
participate, please call 10 minutes before the conference on tel.: +45
3271 4607 (from Europe) or +1 334 323 6201 (from the USA). The
teleconference will also be webcast via TORM’s website www.torm.com. The
presentation material can be downloaded from the
website.
Next
reporting
TORM’s
financial report for the first half of 2009 will be released on 20 August
2009.
Statement
by the Board of Directors and Management on the Interim
Report
The
Board of Directors and Management have considered and approved the interim
report for the period 1 January – 31 March 2009.
The
interim report, which is unaudited, has been prepared in accordance with
the general Danish financial reporting requirements governing listed
companies, including the measurement and recognition provisions in IFRS
which are expected to be applicable for the Annual Report
2009.
We
consider the accounting policies applied to be appropriate, and in our
opinion the interim report gives a true and fair view of the Group's
assets, liabilities, financial position and of the results of operations
and consolidated cash flows.
Copenhagen,
19 May 2009
|
Management
Mikael Skov,
CEO
Roland
M. Andersen, CFO
|
Board
of Directors
Niels
Erik Nielsen, Chairman
Christian
Frigast, Deputy Chairman
Peter
Abildgaard
Lennart
Arrias
Margrethe
Bligaard
Bo
Jagd
Jesper
Jarlbæk
Gabriel
Panayotides
Angelos
Papoulias
E.
Michael Steimler
Nicos
Zouvelos
|
|
About
TORM
|
TORM
is one of the world’s leading carriers of refined oil products as well as
a significant participant in the dry bulk market. The Company operates a
combined fleet of more than 130 modern vessels, principally through a
pooling cooperation with other respected shipping companies who share
TORM’s 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 the
Copenhagen Stock Exchange (ticker TORM) as well as on the NASDAQ (ticker
TRMD). For further information, please visit www.torm.com.
|
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
9/18
|
Million
USD
|
Q1 2009 | Q1 2008 |
2008
|
|||||||||
Revenue
|
258.8 | 255.0 | 1,183.6 | |||||||||
Port
expenses, bunkers and commissions
|
-58.8 | -54.5 | -264.1 | |||||||||
Freight
and bunkers derivatives
|
-0.9 | -0.4 | -13.6 | |||||||||
Time
charter equivalent earnings
|
199.1 | 200.1 | 905.9 | |||||||||
Charter
hire
|
-54.1 | -46.0 | -193.8 | |||||||||
Operating
expenses
|
-47.5 | -43.5 | -174.3 | |||||||||
Gross
profit (Net earnings from shipping activities)
|
97.5 | 110.6 | 537.8 | |||||||||
Profit
from sale of vessels
|
0.0 | 0.0 | 82.8 | |||||||||
Administrative
expenses
|
-20.1 | -19.7 | -89.9 | |||||||||
Other
operating income
|
2.4 | 3.6 | 14.5 | |||||||||
Share
of results of jointly controlled entities
|
0.9 | -1.8 | 27.1 | |||||||||
EBITDA
|
80.7 | 92.7 | 572.3 | |||||||||
Depreciation
and impairment losses
|
-31.8 | -30.7 | -126.0 | |||||||||
Operating
profit
|
48.9 | 62.0 | 446.3 | |||||||||
Financial
items
|
-9.7 | -9.9 | -86.2 | |||||||||
Profit
before tax
|
39.2 | 52.1 | 360.1 | |||||||||
Tax
|
0.4 | 0.1 | 1.3 | |||||||||
Net
profit
|
39.6 | 52.2 | 361.4 | |||||||||
Earnings
per share, EPS
|
||||||||||||
Earnings
per share, EPS (USD)
|
0.6 | 0.8 | 5.2 | |||||||||
Earnings
per share, EPS (DKK)*)
|
3.3 | 3.7 | 26.6 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
10/18
|
Million
USD
|
Q1 2009 | Q1 2008 |
2008
|
|||||||||
Net
profit for the period
|
39.6 | 52.2 | 361.4 | |||||||||
Other
comprehensive income:
|
||||||||||||
Exchange
rate adjustment arising on translation
|
||||||||||||
of
entities using a measurement currency different
|
||||||||||||
from
USD
|
-0.1 | 0.2 | 0.0 | |||||||||
Fair
value adjustment on hedge instruments
|
16.4 | -2.4 | -56.5 | |||||||||
Value
adjustment on hedge instruments transferred
|
||||||||||||
to
income statement
|
4.8 | -1.9 | 15.1 | |||||||||
Value
adjustment on hedge instruments transferred
|
||||||||||||
to
vessels
|
-1.2 | - | - | |||||||||
Fair
value adjustment on available for sale investments
|
-1.0 | -1.1 | -4.8 | |||||||||
Transfer
to income statement on sale of available for sale
|
||||||||||||
investments
|
0.0 | 0.0 | -2.6 | |||||||||
Other
comprehensive income after tax
|
18.9 | -5.2 | -48.8 | |||||||||
Total
comprehensive income
|
58.5 | 47.0 | 312.6 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
11/18
|
Million
USD
|
Q1 08 | Q2 08 | Q3 08 | Q4 08 | Q1 09 | |||||||||||||||
Revenue
|
255.0 | 286.6 | 336.6 | 305.4 | 258.8 | |||||||||||||||
Port
expenses, bunkers and commissions
|
-54.5 | -59.4 | -76.5 | -73.7 | -58.8 | |||||||||||||||
Freight
and bunkers derivatives
|
-0.4 | 8.7 | -15.9 | -6.0 | -0.9 | |||||||||||||||
Time
charter equivalent earnings
|
200.1 | 235.9 | 244.2 | 225.7 | 199.1 | |||||||||||||||
Charter
hire
|
-46.0 | -44.3 | -50.4 | -53.1 | -54.1 | |||||||||||||||
Operating
expenses
|
-43.5 | -45.2 | -41.5 | -44.1 | -47.5 | |||||||||||||||
Gross
profit (Net earnings from shipping activities)
|
110.6 | 146.4 | 152.3 | 128.5 | 97.5 | |||||||||||||||
Profit
from sale of vessels
|
0.0 | 52.0 | 10.8 | 20.0 | 0.0 | |||||||||||||||
Administrative
expenses
|
-19.7 | -19.8 | -22.6 | -27.8 | -20.1 | |||||||||||||||
Other
operating income
|
3.6 | 3.1 | 4.3 | 3.5 | 2.4 | |||||||||||||||
Share
of results of jointly controlled entities
|
-1.8 | 7.4 | 6.1 | 15.4 | 0.9 | |||||||||||||||
EBITDA
|
92.7 | 189.1 | 150.9 | 139.6 | 80.7 | |||||||||||||||
Depreciation
and impairment losses
|
-30.7 | -31.1 | -31.3 | -32.9 | -31.8 | |||||||||||||||
Operating
profit
|
62.0 | 158.0 | 119.6 | 106.7 | 48.9 | |||||||||||||||
Financial
items
|
-9.9 | -11.6 | -28.3 | -36.4 | -9.7 | |||||||||||||||
Profit
before tax
|
52.1 | 146.4 | 91.3 | 70.3 | 39.2 | |||||||||||||||
Tax
|
0.1 | -1.0 | -0.5 | 2.7 | 0.4 | |||||||||||||||
Net
profit
|
52.2 | 145.4 | 90.8 | 73.0 | 39.6 | |||||||||||||||
Earnings
per share, EPS
Earnings
per share, EPS (USD)
|
0.8 | 2.1 | 1.3 | 1.1 | 0.6 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
12/18
|
Million
USD
|
31
March 2009
|
31
March
2008
|
31
Dec.
2008
|
|||||||||
NON-CURRENT
ASSETS
|
||||||||||||
Intangible
assets
|
||||||||||||
Goodwill
|
89.2 | 89.2 | 89.2 | |||||||||
Other
intangible assets
|
2.4 | 5.6 | 2.4 | |||||||||
Total
intangible assets
|
91.6 | 94.8 | 91.6 | |||||||||
Tangible
fixed assets
|
||||||||||||
Land
and buildings
|
3.6 | 4.1 | 3.7 | |||||||||
Vessels
and capitalized dry-docking
|
2,421.4 | 2,171.5 | 2,325.9 | |||||||||
Prepayments
on vessels
|
273.0 | 331.0 | 272.7 | |||||||||
Other
plant and operating equipment
|
9.9 | 6.7 | 9.2 | |||||||||
Total
tangible fixed assets
|
2,707.9 | 2,513.3 | 2,611.5 | |||||||||
Financial
assets
|
||||||||||||
Investment
in jointly controlled entities
|
134.6 | 119.0 | 130.5 | |||||||||
Loans
to jointly controlled entities
|
40.9 | 113.8 | 42.2 | |||||||||
Other
investments
|
5.4 | 12.7 | 6.4 | |||||||||
Other
financial assets
|
27.8 | 46.0 | 31.0 | |||||||||
Total
financial assets
|
208.7 | 291.5 | 210.1 | |||||||||
TOTAL
NON-CURRENT ASSETS
|
3,008.2 | 2,899.6 | 2,913.2 | |||||||||
CURRENT
ASSETS
|
||||||||||||
Bunkers
|
19.0 | 22.8 | 18.3 | |||||||||
Freight
receivables, etc.
|
73.5 | 71.9 | 120.2 | |||||||||
Other
receivables
|
61.1 | 71.6 | 72.0 | |||||||||
Other
financial assets
|
10.7 | 0.0 | 10.7 | |||||||||
Prepayments
|
15.4 | 13.6 | 14.7 | |||||||||
Cash
and cash equivalents
|
98.7 | 76.8 | 168.3 | |||||||||
TOTAL
CURRENT ASSETS
|
278.4 | 256.7 | 404.2 | |||||||||
TOTAL
ASSETS
|
3,286.6 | 3,156.3 | 3,317.4 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
13/18
|
Million
USD
|
31
March 2009
|
31
March
2008
|
31
Dec.
2008
|
|||||||||
EQUITY
|
||||||||||||
Common
shares
|
61.1 | 61.1 | 61.1 | |||||||||
Treasury
shares
|
-18.1 | -18.1 | -18.1 | |||||||||
Revaluation
reserves
|
-1.1 | 6.2 | -0.1 | |||||||||
Retained
profit
|
1,252.4 | 1.007.2 | 1.209.5 | |||||||||
Proposed
dividends
|
55.1 | 64.5 | 55.1 | |||||||||
Hedging
reserves
|
-12.7 | 4.4 | -32.7 | |||||||||
Translation
reserves
|
4.0 | 4.3 | 4.1 | |||||||||
TOTAL
EQUITY
|
1,340.7 | 1,129.6 | 1,278.9 | |||||||||
LIABILITIES
|
||||||||||||
Non-current
liabilities
|
||||||||||||
Deferred
tax liability
|
55.0 | 55.6 | 55.1 | |||||||||
Mortgage
debt and bank loans
|
1,501.7 | 1.005.3 | 1.505.8 | |||||||||
Acquired
liabilities related to options on vessels
|
3.4 | 31.6 | 10.7 | |||||||||
Acquired
time charter contracts
|
2.1 | 11.7 | 3.9 | |||||||||
TOTAL
NON-CURRENT LIABILITIES
|
1,562.2 | 1,104.2 | 1,575.5 | |||||||||
Current
liabilities
|
||||||||||||
Mortgage
debt and bank loans
|
212.4 | 777.4 | 212.4 | |||||||||
Other
financial liabilities
|
0.0 | 10.0 | 0.0 | |||||||||
Trade
payables
|
28.8 | 42.3 | 49.0 | |||||||||
Current
tax liabilities
|
7.9 | 13.2 | 9.7 | |||||||||
Other
liabilities
|
122.0 | 63.8 | 179.8 | |||||||||
Acquired
liabilities related to options on vessels
|
1.7 | 0.0 | 0.0 | |||||||||
Acquired
time charter contracts
|
9.7 | 14.3 | 11.2 | |||||||||
Deferred
income
|
1.2 | 1.5 | 0.9 | |||||||||
TOTAL
CURRENT LIABILITIES
|
383.7 | 922.5 | 463.0 | |||||||||
TOTAL
LIABILITIES
|
1,945.9 | 2,026.7 | 2,038.5 | |||||||||
TOTAL
EQUITY AND LIABILITIES
|
3,286.6 | 3,156.3 | 3,317.4 |
ANNOUNCEMENT NO. 8 – 2009 |
||
19 MAY
2009
|
TORM A/S – FIRST QUARTER REPORT 2009
|
14/18
|
Million
USD
|
Common
Shares
|
Treasury
Shares
|
Retained
profit
|