TORM
A/S
(registrant)
|
||
Dated:
November 18, 2009
|
By:
|
/s/ Mikael Skov
Name:
Mikael Skov
Title: Chief
Executive Officer
|
“Profit
for third quarter 2009 is in line with expectations and better than the
second quarter. Despite the continued low freight rates for product
tankers we are satisfied with TORM's success in securing earnings above
average market levels and at the same time deliver the planned cost
reductions. We see, however, no signs of immediate market recovery, but
our long-term strategic focus on the product tanker market remains,”
states CEO Mikael Skov.
|
||
—
|
Profit
before tax for the first nine months of 2009 was USD 11 million, in line
with the latest full-year forecast for 2009.
|
|
—
|
Profit
before tax for the third quarter was USD 4 million, including a positive
impact of USD 21 million from the sale of two bulk carriers. As announced
earlier, the vessels were sold during the second quarter, but the profit
was recognised in the third quarter in which delivery took
place.
|
|
—
|
The
third quarter was negatively impacted by non-cash mark-to-market
adjustments of USD 7 million, with USD 5 million on financial instruments
and USD 2 million on FFA/bunker derivatives.
|
|
—
|
In
the third quarter, product tanker rates remained at the low levels seen at
the end of the second quarter. The market is still suffering from the
negative impact of low global oil demand and the addition of new tonnage.
However, on routes to and from Asia, rates picked up considerably towards
the end of the quarter, benefiting TORM’s LR1 and LR2
vessels.
|
|
—
|
Third
quarter spot earnings in TORM’s MR Pool were USD/day 12,580, which was
higher than the average rate levels seen on the main routes in the MR
market. In the negative market conditions, the pools focused on optimising
the transport patterns of the global fleet and its access to cargo
contracts. This resulted in more effective utilisation of the fleet and,
consequently, higher earnings.
|
|
—
|
Bulk
Panamax rates fell back in mid third quarter, but regained some ground
toward the end of the quarter. Due to TORM’s high coverage of earning
days, the developments in bulk rates had limited impact on TORM’s
earnings.
|
|
—
|
TORM’s
efficiency improvement programme – Greater Efficiency Power – had a
favourable effect on performance in the third quarter as vessel operating
costs per day dropped by an average of approximately 12% year-on-year
across the fleet. Furthermore, the administration expenses have been
reduced by 21% year-on-year. The efficiency improvement programme will, as
planned, produce annual cost savings of USD 40-60 million from
2010.
|
|
—
|
On
a quarterly basis, TORM calculates the long-term earnings potential of its
fleet based on discounted future cash flows. The value of the fleet thus
calculated supports the book values.
|
|
—
|
At
30 September 2009, equity amounted to USD 1,274 million, equivalent to USD
18.4 per share (DKK 93.4 per share), excluding treasury shares, giving
TORM an equity ratio of 38%.
|
|
—
|
TORM’s
unutilised loan facilities and cash totalled approximately USD 400 million
at the end of the third quarter. Net interest-bearing debt totalled USD
1,682 million at 30 September 2009. Around 70% of the debt is due in 2013
or later.
|
|
—
|
At
30 September 2009, TORM had covered 49% of the remaining earning days for
2009 in the Tanker Division at USD/day 19,227 and 85% of the remaining
earning days in the Bulk Division at USD/day 17,050. For 2010, coverage at
30 September 2009 was 24% at USD/day 20,033 in the Tanker Division and 46%
at USD/day 16,650 in the Bulk Division.
|
|
—
|
TORM
maintains its forecast of a profit before tax of around break-even for
2009.
|
|
Teleconference
|
A teleconference and webcast
(www.torm.com) will take place today, at 15:00
Copenhagen time (CET), see details on page 9.
|
|
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. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
1/18
|
Million
USD
|
Q3 2009 | Q3 2008 | Q1-Q3 2009 | Q1-Q3 2008 | 2008 | ||||||||||||||||
Income
statement
|
|||||||||||||||||||||
Net
revenue
|
208.8 | 336.6 | 661.2 | 878.2 | 1.183.6 | ||||||||||||||||
Time
charter equivalent earnings (TCE)
|
149.4 | 244.2 | 486.7 | 680.2 | 905.9 | ||||||||||||||||
Gross
profit
|
54.4 | 152.3 | 190.8 | 409.3 | 537.8 | ||||||||||||||||
EBITDA
|
59.2 | 150.9 | 170.5 | 432.7 | 572.3 | ||||||||||||||||
Operating
profit
|
24.2 | 119.6 | 70.2 | 339.6 | 446.3 | ||||||||||||||||
Profit
before tax
|
4.4 | 91.3 | 11.1 | 289.8 | 360.1 | ||||||||||||||||
Net
profit
|
2.1 | 90.8 | 8.1 | 288.4 | 361.4 | ||||||||||||||||
Balance
sheet
|
|||||||||||||||||||||
Total
assets
|
3,360.1 | 3,242.5 | 3,360.1 | 3,242.5 | 3,317.4 | ||||||||||||||||
Equity
|
1,274.3 | 1,268.5 | 1,274.3 | 1,268.5 | 1,278.9 | ||||||||||||||||
Total
liabilities
|
2,085.8 | 1,974.0 | 2,085.8 | 1,974.0 | 2,038.5 | ||||||||||||||||
Invested
capital
|
2,947.6 | 2,833.3 | 2,947.6 | 2,833.3 | 2,822.4 | ||||||||||||||||
Net
interest bearing debt
|
1,681.9 | 1,574.7 | 1,681.9 | 1,574.7 | 1,549.9 | ||||||||||||||||
Cash
flow
|
|||||||||||||||||||||
From
operating activities
|
22.2 | 111.2 | 95.2 | 264.1 | 384.7 | ||||||||||||||||
From
investing activities
|
-34.2 | 3.4 | -178.5 | -225.2 | -262.4 | ||||||||||||||||
Thereof investment in tangible
fixed assets
|
-87.1 | -112.6 | -261.3 | -293.7 | -377.8 | ||||||||||||||||
From
financing activities
|
95.7 | -59.5 | 111.3 | -10.5 | -59.0 | ||||||||||||||||
Net
cash flow
|
83.7 | 55.1 | 28.0 | 28.4 | 63.3 | ||||||||||||||||
Key
financial figures
|
|||||||||||||||||||||
Margins:
|
|||||||||||||||||||||
TCE
|
71.6 | % | 72.5 | % | 73.6 | % | 77.5 | % | 76.5 | % | |||||||||||
Gross profit
|
26.1 | % | 45.2 | % | 28.9 | % | 46.6 | % | 45.4 | % | |||||||||||
EBITDA
|
28.4 | % | 44.8 | % | 25.8 | % | 49.3 | % | 48.3 | % | |||||||||||
Operating
profit
|
11.6 | % | 35.5 | % | 10.6 | % | 38.7 | % | 37.7 | % | |||||||||||
Return
on Equity (RoE) (p.a.)*)
|
-3.5 | % | 26.7 | % | 0.0 | % | 30.9 | % | 30.6 | % | |||||||||||
Return
on Invested Capital (RoIC) (p.a.)**)
|
1.2 | % | 15.6 | % | 2.6 | % | 15.8 | % | 16.4 | % | |||||||||||
Equity
ratio
|
37.9 | % | 39.1 | % | 37.9 | % | 39.1 | % | 38.6 | % | |||||||||||
Exchange
rate USD/DKK, end of period
|
5.08 | 5.22 | 5.08 | 5.22 | 5.28 | ||||||||||||||||
Exchange
rate USD/DKK, average
|
5.21 | 4.97 | 5.47 | 4.91 | 5.09 | ||||||||||||||||
Share
related key figures
|
|||||||||||||||||||||
Earnings per share, EPS |
USD
|
0.0 | 1.3 | 0.1 | 4.2 | 5.2 | |||||||||||||||
Diluted earnings per share, DEPS |
USD
|
0.0 | 1.3 | 0.1 | 4.2 | 5.2 | |||||||||||||||
Cash flow per share, CFPS |
USD
|
0.3 | 1.6 | 1.4 | 3.8 | 5.6 | |||||||||||||||
Share
price, end of period
(per
share of DKK 5 each)
|
DKK
|
51.6 | 126.2 | 51.6 | 126.2 | 55.5 | |||||||||||||||
Number of shares, end of period |
Mill.
|
72.8 | 72.8 | 72.8 | 72.8 | 72.8 | |||||||||||||||
Number
of shares (excl. reasury shares), average
|
Mill.
|
69.2 | 69.2 | 69.2 | 69.2 | 69.2 |
*) |
The
gain from sale of vessels and the compensation for early returns of four
Panamax bulk carriers and the mark-to-market adjustments of financial
instruments is not annualized when calculating the Return on
Equity.
|
**) |
The
gain from sale of vessels and the compensation for early returns of four
Panamax bulk carriers is not annualized when calculating the Return on
Invested Capital.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
2/18
|
Mio.
USD
|
Q3
2009
|
Q1-Q3
2009
|
||||||
Tanker
Division
|
Bulk
Division
|
Not
Allocated
|
Total
|
Tanker
Division
|
Bulk
Division
|
Not
Allocated
|
Total
|
|
Revenue
|
185.3
|
23.5
|
0.0
|
208.8
|
568.3
|
92.9
|
0.0
|
661.2
|
Port
expenses, bunkers and commissions
|
-55.1
|
-1.0
|
0.0
|
-56.1
|
-159.5
|
-3.5
|
0.0
|
-163.0
|
Freight
and bunkers derivatives
|
-3.3
|
0.0
|
0.0
|
-3.3
|
-11.5
|
0.0
|
0.0
|
-11.5
|
Time
charter equivalent earnings
|
126.9
|
22.5
|
0.0
|
149.4
|
397.3
|
89.4
|
0.0
|
486.7
|
Charter
hire
|
-42.1
|
-14.2
|
0.0
|
-56.3
|
-121.6
|
-43.9
|
0.0
|
-165.5
|
Operating
expenses
|
-36.8
|
-1.9
|
0.0
|
-38.7
|
-121.2
|
-9.2
|
0.0
|
-130.4
|
Gross
Profit
|
48.0
|
6.4
|
0.0
|
54.4
|
154.5
|
36.3
|
0.0
|
190.8
|
Profit
from sale of vessels
|
0.0
|
20.7
|
0.0
|
20.7
|
0.0
|
33.2
|
0.0
|
33.2
|
Administrative
expenses
|
-16.6
|
-1.3
|
0.0
|
-17.9
|
-55.3
|
-5.2
|
0.0
|
-60.5
|
Other
Operating income
|
1.5
|
0.0
|
0.0
|
1.5
|
6.3
|
0.0
|
0.0
|
6.3
|
Share
of results of jointly controlled entities*
|
0.7
|
0.0
|
-0.2
|
0.5
|
2.4
|
0.0
|
-1.7
|
0.7
|
EBITDA
|
33.6
|
25.8
|
-0.2
|
59.2
|
107.9
|
64.3
|
-1.7
|
170.5
|
Depreciation
and impairment losses
|
-33.7
|
-1.3
|
0.0
|
-35.0
|
-94.6
|
-5.7
|
0.0
|
-100.3
|
Operating
profit
|
-0.1
|
24.5
|
-0.2
|
24.2
|
13.3
|
58.6
|
-1.7
|
70.2
|
Financial
items, net
|
-
|
-
|
-19.8
|
-19.8
|
-
|
-
|
-59.1
|
-59.1
|
Profit/(Loss)
before tax
|
-
|
-
|
-20.0
|
4.4
|
-
|
-
|
-60.8
|
11.1
|
Tax
|
-
|
-
|
-2.3
|
-2.3
|
-
|
-
|
-3.0
|
-3.0
|
Net
profit
|
-
|
-
|
-22.3
|
2.1
|
-
|
-
|
-63.8
|
8.1
|
Tanker
Division
|
The
Tanker Division’s EBITDA for the third quarter of 2009 was USD 34
million.
|
In
the third quarter, product tanker rates remained at the low level seen at
the end of the second quarter, and the market is still suffering from the
negative impacts of low global demand for oil and the addition of new
tonnage. However, toward the end of the third quarter, rates rose
significantly for the large vessels, LR1 and LR2, driven by a demand for
naphtha in the Far East and increased exports from new refineries in the
East. At the end of September, spot rates were well over USD/day 20,000
for both LR1 and LR2 vessels, relative to a level of just over USD/day
10,000 at the end of the second
quarter.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
3/18
|
MR
rates were low throughout the quarter, primarily as a result of limited US
demand for gasoline. Third quarter spot earnings in TORM’s MR Pool were
USD/day 12,580, which was higher than the average rate levels seen on the
main routes in the MR market. In the negative market conditions, the pools
focused on optimising the transport patterns of the global fleet and its
access to cargo contracts. This resulted in more effective utilisation of
the fleet and, consequently, higher earnings.
|
||
The
tanker market was affected by the following main factors in the third
quarter:
|
||
Positive
impact:
|
||
—
|
Use
of LR1 and LR2 vessels as floating storage facilities and slow steaming
reduced the supply of available tonnage. The vessels mainly stored gasoil
off the coasts of the EU and West Africa
|
|
—
|
Increased
exports from new refineries in the East
|
|
—
|
Higher
demand for naphtha in the Far East
|
|
Negative
impact:
|
||
—
|
Continued
low demand for gasoline in the USA
|
|
—
|
Delivery
of a large number of newbuildings
|
|
—
|
High
fuel costs
|
|
—
|
Lower
utilisation of refinery capacity squeezed the demand for crude oil
transports and, consequently, the earnings of some of the LR2
vessels
|
|
In
the third quarter of 2009, the Tanker Division achieved freight rates
which, relative to the third quarter of 2008, were 64% lower for the LR2
segment, 30% lower for the LR1 segment, 42% lower for the MR segment and
8% lower for the SR segment.
|
||
The
efficiency improvement programme, Greater Efficiency Power, produced an
average cost reduction per ship day of 11% relative to the third quarter
of 2008.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
4/18
|
Tanker
Division
|
Q3 08 | Q4 08 | Q1 09 | Q2 09 | Q3 09 |
Change
Q3
08
-
Q3 09
|
12
month avg.
|
|||||||||||||||||||||
LR2
(Aframax, 90-110,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
970 | 1,104 | 1,167 | 1,179 | 1,190 | 23 | % | |||||||||||||||||||||
TCE
per earning day from the LR2 Pool
|
45,267 | 37,009 | 24,192 | 17,145 | 18,401 | -59 | % | |||||||||||||||||||||
TCE
per earning day1)
|
48,421 | 31,862 | 21,977 | 15,785 | 17,406 | -64 | % | 21,583 | ||||||||||||||||||||
Operating
days
|
963 | 1,069 | 1,080 | 1,092 | 1,104 | 15 | % | |||||||||||||||||||||
Operating
expenses per operating day2)
|
7,319 | 8,564 | 7,507 | 7,556 | 6,496 | -11 | % | 7,522 | ||||||||||||||||||||
LR1
(Panamax 75-85,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
1,804 | 2,009 | 1,864 | 1,756 | 1,835 | 2 | % | |||||||||||||||||||||
TCE
per earning day from the LR1 Pool
|
34,700 | 35,140 | 22,503 | 15,577 | 15,036 | -57 | % | |||||||||||||||||||||
TCE
per earning day1)
|
23,648 | 23,217 | 21,755 | 18,491 | 16,514 | -30 | % | 23,301 | ||||||||||||||||||||
Operating
days
|
828 | 828 | 810 | 819 | 828 | 1 | % | |||||||||||||||||||||
Operating
expenses per operating day2)
|
7,798 | 7,478 | 7,852 | 7,142 | 6,706 | -14 | % | 7,292 | ||||||||||||||||||||
MR
(45,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
2,668 | 2,796 | 3,174 | 3,344 | 3,602 | 35 | % | |||||||||||||||||||||
TCE
per earning day from the MR Pool
|
29,102 | 22,282 | 20,201 | 14,712 | 14,974 | -49 | % | |||||||||||||||||||||
TCE
per earning day1)
|
26,458 | 22,298 | 19,802 | 15,363 | 15,349 | -42 | % | 17,951 | ||||||||||||||||||||
Operating
days
|
2,484 | 2,400 | 2,497 | 2,548 | 2,707 | 11 | % | |||||||||||||||||||||
Operating
expenses per operating day2)
|
7,609 | 7,653 | 8,227 | 7,458 | 6,621 | -13 | % | 7,464 | ||||||||||||||||||||
SR
(35,000 DWT)
|
||||||||||||||||||||||||||||
Available
earning days
|
1,100 | 1,102 | 1,145 | 1,135 | 1,160 | 5 | % | |||||||||||||||||||||
TCE
per earning day1)
|
20,078 | 22,338 | 20,963 | 17,483 | 18,378 | -8 | % | 19,767 | ||||||||||||||||||||
Operating
days
|
920 | 920 | 969 | 1,001 | 1,012 | 10 | % | |||||||||||||||||||||
Operating
expenses per operating day2)
|
6,193 | 6,633 | 7,662 | 6,600 | 6,105 | -1 | % | 6,743 |
Bulk
Division
|
EBITDA
for the Bulk Division for the third quarter of 2009 was USD 26 million.
USD 21 million of this was attributable to the sale of TORM Marta and TORM
Tina. The vessels were sold during the second quarter, but the profit was
recognised in the third quarter in which delivery took
place.
|
Bulk
Panamax rates fell back in mid third quarter, but regained some ground
toward the end of the quarter, and their third-quarter performance was
thus relatively better than that of the larger Capesize vessels. Chinese
coal and iron ore imports remain the most significant driver of bulk
rates.
|
|
Going
into the quarter, TORM’s coverage of earning days was high, and therefore
the spot rate developments had limited impact on Bulk Division
earnings.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
5/18
|
The
bulk market was affected by the following main factors in the third
quarter:
|
||
Positive
impact:
|
||
—
|
Continued
extensive Chinese coal and iron ore imports, which reached a new high
during the third quarter
|
|
—
|
During
the quarter, the number of waiting days rose to its highest level in 2009,
but subsequently fell at the end of the quarter
|
|
—
|
Higher
steel production, principally in China, but also to some extent in Europe
and Japan
|
|
Negative
impact:
|
||
—
|
Delivery
of a large number of newbuildings
|
|
—
|
Slowdown
in the phasing out of old vessels due to the higher freight
rates
|
|
The
Bulk Division’s earnings per day were 64% lower in the third quarter of
2009 than in the same quarter of 2008.
|
||
The
efficiency improvement programme, Greater Efficiency Power, produced an
average cost reduction per ship day of 28% relative to the third quarter
of 2008.
|
||
Bulk
Division
|
Q3
08
|
Q4
08
|
Q1
09
|
Q2
09
|
Q3
09
|
Change
Q3
08
-
Q3 09
|
12
month
avg.
|
|
Panamax
(60-80,000 DWT)
|
||||||||
Available
earning days
|
1,421
|
1,466
|
1,458
|
1,496
|
1,255
|
-12%
|
||
TCE
per earning day1)
|
49,888
|
38,958
|
13,929
|
13,756
|
17,968
|
-64%
|
21,242
|
|
Operating
days
|
552
|
600
|
622
|
636
|
392
|
-29%
|
||
Operating
expenses per operating day2)
|
6,261
|
5,352
|
6,798
|
5,106
|
4,477
|
-28%
|
5,530
|
Other
activities
|
Other
(non-allocated) activities are profits on investments in joint ventures of
USD 0 million, financial expenses of USD 20 million and tax of USD 2
million.
|
Fleet
development
|
In
the third quarter, TORM took delivery of two MR newbuildings and delivered
the two sold Panamax bulk carriers TORM Marta and TORM Tina to their new
owners. At the end of the quarter, TORM’s fleet of owned vessels comprised
63 tankers and four bulk carriers. In addition to these, TORM had 25
tankers and ten bulk carriers on time charter. Additional 37 tankers were
either in pools or under commercial
management.
|
Owned
vessels
|
||||||||||||||||
30-Jun-09
|
Addition
|
Disposal
|
30-Sep-09
|
|||||||||||||
LR2
/ Aframax
|
12.5 | - | - | 12.5 | ||||||||||||
LR1
/ Panamax
|
7.5 | - | - | 7.5 | ||||||||||||
MR
|
30.0 | 2.0 | - | 32.0 | ||||||||||||
SR
|
11.0 | - | - | 11.0 | ||||||||||||
Tankers
|
61.0 | 2.0 | - | 63.0 | ||||||||||||
Panamax
dry bulk
|
6.0 | - | 2.0 | 4.0 | ||||||||||||
Total
|
67.0 | 2.0 | 2.0 | 67.0 |
Planned fleet
changes
|
No
vessels were contracted in the third quarter of 2009, and at the end of
the quarter the order book thus comprised 12 MR vessels and four Kamsarmax
vessels. The remaining Capex relating to the order book amounted to USD
483 million.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
6/18
|
30
September 2009
|
2009
|
2010
|
2011
|
2012
|
Total
Order
book
|
|||||||||||
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
||||
Product
tankers
|
||||||||||||||||
LR2
|
12.5
|
- |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|
LR1
|
7.5
|
- |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|
MR
|
32
|
1 |
3
|
2
|
1
|
1
|
-
|
-
|
-
|
1
|
-
|
1
|
1
|
1
|
12
|
|
SR
|
11
|
- |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|
Bulkers
|
||||||||||||||||
Kamsarmax
|
0
|
- |
-
|
-
|
-
|
1
|
1
|
2
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
|
Panamax
|
4
|
- |
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0
|
|
Total
|
67
|
1 |
3
|
2
|
1
|
2
|
1
|
2
|
0
|
1
|
0
|
1
|
1
|
1
|
16
|
Results
|
|
Third
quarter 2009
|
The
gross profit for the third quarter of 2009 was USD 54 million, against USD
152 million for the corresponding quarter of 2008. The administration
expenses were USD 17.9 million, against USD 22.6 million for the third
quarter of 2008, corresponding to a reduction of 21%. Profit before
depreciation (EBITDA) for the period was USD 59 million, against USD 151
million for the third quarter of 2008. The decline in gross profit and
EBITDA was due to significantly lower freight rates for both tankers and
bulk carriers.
|
Depreciation
was USD 35 million during the third quarter of 2009.
|
|
An
operating profit of USD 24 million was posted for the third quarter of
2009, against USD 120 million for the same quarter of 2008. The Tanker and
Bulk Divisions contributed profits of USD 0 million and USD 25 million,
respectively.
|
|
In
the third quarter, there was a negative effect from non-cash
mark-to-market adjustments of USD 7 million, with USD 5 million on
financial instruments and USD 2 million on FFA/bunker
derivatives.
|
|
In
the third quarter of 2009, financials amounted to an expense of USD 20
million, against an expense of USD 28 million in the same quarter of
2008.
|
|
A
profit after tax of USD 2 million was posted in the third quarter of 2009,
against USD 91 million in the third quarter of
2008.
|
Assets
|
Total
assets rose from USD 3,256 million to USD 3,360 million in the third
quarter of 2009.
|
On
a quarterly basis, TORM calculates the long-term earnings potential of its
fleet based on discounted future cash flows. The value of the fleet thus
calculated supports the book values. In addition, TORM receives quarterly
valuations of its fleet’s market value from three internationally
acknowledged shipbrokers. Based on the broker valuations, the market value
of TORM’s fleet was below book value at 30 September 2009. However, as the
market for product tankers is currently illiquid, the broker valuations
are subject to significant uncertainty.
|
|
Liabilities
|
During
the third quarter of 2009, the net interest-bearing debt rose from USD
1,670 million to USD 1,682 million. The item mainly comprised net
borrowing in connection with the delivery of vessels and positive cash
earnings of the period. Around 70% of the debt is due in 2013 or
later.
|
Total
equity
|
In
the third quarter of 2009, equity rose from USD 1,270 million to USD 1,274
million, which is principally the result of earnings during the period.
Equity as a percentage of total assets dropped from 39% at 30 June 2009 to
38% at 30 September 2009.
|
At
30 June 2009, TORM held 3,556,364 treasury shares, corresponding to 4.9%
of the Company’s share capital, which was unchanged from 30 June
2009.
|
|
Liquidity
|
TORM’s
unutilised loan facilities and cash totalled approximately USD 400 million
at the end of the third quarter.
|
Outlook
|
TORM’s
forecast for 2009 of a profit before tax of around break-even, as stated
in announcement no. 11 dated 12 August 2009, is
unchanged.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
7/18
|
Sensitivity
|
At
30 September 2009, TORM had covered 49% of the remaining earning days for
2009 in the Tanker Division at USD/day 19,227 and 85% of the remaining
earning days in the Bulk Division at USD/day 17,050. For 2010, coverage
was 24% at USD/day 20,033 in the Tanker Division and 46% at USD/day16,650
in the Bulk Division.
|
2009
|
2010
|
2011
|
||||||||||||||||||||||||||||||||||
Total
Days
|
Covered
in %
|
USD/day
|
Total Days |
Covered
in %
|
USD/day
|
Total
days
|
Covered
in
%
|
USD/day
|
||||||||||||||||||||||||||||
Product
tank
|
||||||||||||||||||||||||||||||||||||
LR2
|
1,183 | 34 | % | 24,745 | 5,488 | 16 | % | 27,478 | 4,563 | 9 | % | 29,812 | ||||||||||||||||||||||||
LR1
|
1,922 | 46 | % | 17,846 | 7,749 | 18 | % | 19,922 | 6,768 | 11 | % | 18,590 | ||||||||||||||||||||||||
MR
|
3,808 | 48 | % | 19,316 | 17,511 | 23 | % | 20,379 | 18,256 | 7 | % | 18,541 | ||||||||||||||||||||||||
SR
|
1,123 | 77 | % | 17,218 | 3,682 | 52 | % | 16,242 | 3,650 | 20 | % | 15,132 | ||||||||||||||||||||||||
Total
Product tank
|
8,036 | 49 | % | 19,227 | 34,430 | 24 | % | 20,033 | 33,237 | 10 | % | 19,273 | ||||||||||||||||||||||||
Dry
bulk
|
||||||||||||||||||||||||||||||||||||
Panamax
|
1,189 | 85 | % | 17,050 | 5,102 | 46 | % | 16,650 | 6,143 | 7 | % | 14,150 | ||||||||||||||||||||||||
Total
|
9,225 | 53 | % | 18,779 | 39,532 | 26 | % | 19,274 | 39,380 | 9 | % | 18,665 |
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 51.5 at 30 September 2009, against DKK 54 at
the beginning of the third quarter, equivalent to a decrease of DKK 3.5
(6%).
|
|
Accounting
policies
|
|
This
interim report for the third quarter of 2009 has been prepared in
accordance with IAS 34 “Interim financial reporting” as adopted by the EU
and additional Danish regulations governing the presentation of interim
reports by listed companies.
|
|
Except
for the instances mentioned below, the interim report has been prepared
using the same accounting policies as for the Annual Report for 2008. The
accounting policies are described in more detail in the Annual Report
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”, minor
changes from Improvements to IFRSs, IFRIC 12 “Service Concession
Agreements” and IFRIC 13 “Customer Loyalty Programmes”. The new standards
and interpretations have not affected recognition and measurement in
TORM’s interim report for the third quarter of 2009. The presentation 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.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
8/18
|
The
interim report for the third 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
18 November 2009 at 15:00 Copenhagen time (CET), reviewing the interim
report for the third quarter of 2009. The conference call will be hosted
by Mikael Skov, CEO, and Roland M. Andersen, CFO, and will be conducted in
English.
|
|
To
participate, please call 10 minutes before the conference on tel.: +45
3271 4607 (from Europe) or +1 887 491 0064 (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
Annual Report 2009 will be released on 11 March 2010.
|
|
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 – 30 September 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,
18 November 2009
|
||
Management
|
||
Mikael
Skov, CEO
|
Niels
Erik Nielsen, Chairman
|
|
Roland
M. Andersen, CFO
|
Christian
Frigast, Deputy Chairman
|
|
Peter
Abildgaard
Lennart
Arrias
Margrethe
Bligaard
Bo
Jagd
Jesper
Jarlbæk
Gabriel
Panayotides
Angelos
Papoulias
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 runs a fleet
of approximately 140 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
NASDAQ OMX Copenhagen (ticker: TORM) and on NASDAQ in New York (ticker:
TRMD). For further information, please visit www.torm.com.
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
9/18
|
Income
statement
|
|||||||||||||||||||
Million
USD
|
Q3 2009 | Q3 2008 | Q1-Q3 2009 | Q1-Q3 2008 | 2008 | ||||||||||||||
Revenue
|
208.8 | 336.6 | 661.2 | 878.2 | 1,183.6 | ||||||||||||||
Port
expenses, bunkers and commissions
|
-56.1 | -76.5 | -163.0 | -190.4 | -264.1 | ||||||||||||||
Freight
and bunkers derivatives
|
-3.3 | -15.9 | -11.5 | -7.6 | -13.6 | ||||||||||||||
Time
charter equivalent earnings
|
149.4 | 244.2 | 486.7 | 680.2 | 905.9 | ||||||||||||||
Charter
hire
|
-56.3 | -50.4 | -165.5 | -140.7 | -193.8 | ||||||||||||||
Operating
expenses
|
-38.7 | -41.5 | -130.4 | -130.2 | -174.3 | ||||||||||||||
Gross
profit (Net earnings from shipping activities)
|
54.4 | 152.3 | 190.8 | 409.3 | 537.8 | ||||||||||||||
Profit
from sale of vessels
|
20.7 | 10.8 | 33.2 | 62.8 | 82.8 | ||||||||||||||
Administrative
expenses
|
-17.9 | -22.6 | -60.5 | -62.1 | -89.9 | ||||||||||||||
Other
operating income
|
1.5 | 4.3 | 6.3 | 11.0 | 14.5 | ||||||||||||||
Share
of results of jointly controlled entities
|
0.5 | 6.1 | 0.7 | 11.7 | 27.1 | ||||||||||||||
EBITDA
|
59.2 | 150.9 | 170.5 | 432.7 | 572.3 | ||||||||||||||
Depreciation
and impairment losses
|
-35.0 | -31.3 | -100.3 | -93.1 | -126.0 | ||||||||||||||
Operating
profit
|
24.2 | 119.6 | 70.2 | 339.6 | 446.3 | ||||||||||||||
Financial
items
|
-19.8 | -28.3 | -59.1 | -49.8 | -86.2 | ||||||||||||||
Profit
before tax
|
4.4 | 91.3 | 11.1 | 289.8 | 360.1 | ||||||||||||||
Tax
|
-2.3 | -0.5 | -3.0 | -1.4 | 1.3 | ||||||||||||||
Net
profit
|
2.1 | 90.8 | 8.1 | 288.4 | 361.4 | ||||||||||||||
Earnings
per share, EPS
|
|||||||||||||||||||
Earnings
per share, EPS (USD)
|
0.0 | 1.3 | 0.1 | 4.2 | 5.2 | ||||||||||||||
Earnings
per share, EPS (DKK)*)
|
0.2 | 6.5 | 0.6 | 20.4 | 26.6 |
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
10/18
|
Million
USD
|
Q3 2009 | Q3 2008 | Q1-Q3 2009 | Q1-Q32008 | 2008 | ||||||||||||||
Net
profit for the period
|
2.1 | 90.8 | 8.1 | 288.4 | 361.4 | ||||||||||||||
Other
comprehensive income:
|
|||||||||||||||||||
Exchange
rate adjustment arising on translation
|
|||||||||||||||||||
of
entities using a measurement currency different
|
|||||||||||||||||||
from
USD
|
0.0 | -0.1 | 0.0 | 0.0 | 0.0 | ||||||||||||||
Fair
value adjustment on hedge instruments
|
0.5 | -40.0 | 25.0 | -42.6 | -56.5 | ||||||||||||||
Value
adjustment on hedge instruments transferred
|
0.1 | 6.9 | 3.9 | 4.9 | 15.1 | ||||||||||||||
to
income statement
|
|||||||||||||||||||
Value
adjustment on hedge instruments transferred
|
0.0 | 0.0 | -1.2 | 0.0 | - | ||||||||||||||
to
assets
|
|||||||||||||||||||
Fair
value adjustment on available for sale investments
|
1.5 | -1.8 | 2.2 | -3.9 | -4.8 | ||||||||||||||
Transfer
to income statement on sale of available for sale
investments
|
|||||||||||||||||||
0.0 | 0.0 | 0 | 0.0 | -2.6 | |||||||||||||||
Other
comprehensive income after tax
|
|||||||||||||||||||
2.1 | -35.0 | 29.9 | -41.6 | -48.8 | |||||||||||||||
Total
comprehensive income
|
4.2 | 55.8 | 38.0 | 246.8 | 312.6 |
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
11/18
|
Million
USD
|
Q3 08 | Q4 08 | Q1 09 | Q2 09 | Q3 09 | ||||||||||||||
Revenue
|
336.6 | 305.4 | 258.8 | 193.6 | 208.8 | ||||||||||||||
Port
expenses, bunkers and commissions
|
-76.5 | -73.7 | -58.8 | -48.1 | -56.1 | ||||||||||||||
Freight
and bunkers derivatives
|
-15.9 | -6.0 | -0.9 | -7.3 | -3.3 | ||||||||||||||
Time
charter equivalent earnings
|
244.2 | 225.7 | 199.1 | 138.2 | 149.4 | ||||||||||||||
Charter
hire
|
-50.4 | -53.1 | -54.1 | -55.1 | -56.3 | ||||||||||||||
Operating
expenses
|
-41.5 | -44.1 | -47.5 | -44.2 | -38.7 | ||||||||||||||
Gross
profit (Net earnings from shipping activities)
|
152.3 | 128.5 | 97.5 | 38.9 | 54.4 | ||||||||||||||
Profit
from sale of vessels
|
10.8 | 20.0 | 0.0 | 12.5 | 20.7 | ||||||||||||||
Administrative
expenses
|
-22.6 | -27.8 | -20.1 | -22.5 | -17.9 | ||||||||||||||
Other
operating income
|
4.3 | 3.5 | 2.4 | 2.4 | 1.5 | ||||||||||||||
Share
of results of jointly controlled entities
|
6.1 | 15.4 | 0.9 | -0.7 | 0.5 | ||||||||||||||
EBITDA
|
150.9 | 139.6 | 80.7 | 30.6 | 59.2 | ||||||||||||||
Depreciation
and impairment losses
|
-31.3 | -32.9 | -31.8 | -33.5 | -35.0 | ||||||||||||||
Operating
profit
|
119.6 | 106.7 | 48.9 | -2.9 | 24.2 | ||||||||||||||
Financial
items
|
-28.3 | -36.4 | -9.7 | -29.6 | -19.8 | ||||||||||||||
Profit
before tax
|
91.3 | 70.3 | 39.2 | -32.5 | 4.4 | ||||||||||||||
Tax
|
-0.5 | 2.7 | 0.4 | -1.1 | -2.3 | ||||||||||||||
Net
profit
|
90.8 | 73.0 | 39.6 | -33.6 | 2.1 | ||||||||||||||
Earnings
per share, EPS*
Earnings
per share, EPS (USD)
|
1.3
|
1.1
|
0.6
|
-0.5
|
0.0
|
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
12/18
|
Million
USD
|
30
Sep. 2009
|
30
Sep. 2008
|
31
Dec. 2008
|
||||||||
NON-CURRENT
ASSETS
|
|||||||||||
Intangible
assets
|
|||||||||||
Goodwill
|
89.2 | 89.2 | 89.2 | ||||||||
Other
intangible assets
|
2.3 | 3.1 | 2.4 | ||||||||
Total
intangible assets
|
91.5 | 92.3 | 91.6 | ||||||||
Tangible
fixed assets
|
|||||||||||
Land
and buildings
|
3.7 | 3.8 | 3.7 | ||||||||
Vessels
and capitalized dry-docking
|
2,421.4 | 2,240.6 | 2,325.9 | ||||||||
Prepayments
on vessels
|
293.0 | 308.1 | 272.7 | ||||||||
Other
plant and operating equipment
|
9.9 | 7.6 | 9.2 | ||||||||
Total
tangible fixed assets
|
2,728.0 | 2,560.1 | 2,611.5 | ||||||||
Financial
assets
|
|||||||||||
Investment
in jointly controlled entities
|
132.3 | 113.8 | 130.5 | ||||||||
Loans
to jointly controlled entities
|
39.2 | 49.4 | 42.2 | ||||||||
Other
investments
|
8.6 | 9.9 | 6.4 | ||||||||
Other
financial assets
|
8.5 | 46.0 | 31.0 | ||||||||
Total
financial assets
|
188.6 | 219.1 | 210.1 | ||||||||
TOTAL
NON-CURRENT ASSETS
|
3,008.1 | 2,871.5 | 2,913.2 | ||||||||
CURRENT
ASSETS
|
|||||||||||
Bunkers
|
21.0 | 29.0 | 18.3 | ||||||||
Freight
receivables, etc.
|
62.8 | 127.6 | 120.2 | ||||||||
Other
receivables
|
52.3 | 56.7 | 72.0 | ||||||||
Other
financial assets
|
4.3 | 0.0 | 10.7 | ||||||||
Prepayments
|
15.3 | 9.2 | 14.7 | ||||||||
Cash
and cash equivalents
|
196.3 | 133.4 | 168.3 | ||||||||
352.0 | 355.9 | 404.2 | |||||||||
Assets
held for sale
|
0.0 | 15.1 | 0.0 | ||||||||
TOTAL
CURRENT ASSETS
|
352.0 | 371.0 | 404.2 | ||||||||
TOTAL
ASSETS
|
3,360.1 | 3,242.5 | 3,317.4 |
ANNOUNCEMENT
NO. 15 – 2009
|
||
18
NOVEMBER 2009
|
TORM
– THIRD QUARTER REPORT 2009
|
13/18
|
Million
USD
|
30
Sep. 2009
|
30
Sep. 2008
|
31
Dec. 2008
|
||||||||
EQUITY
|
|||||||||||
Common
shares
|
61.1 | 61.1 | 61.1 | ||||||||
Treasury
shares
|
-18.1 | -18.1 | -18.1 | ||||||||
Revaluation
reserves
|
2.1 | 3.4 | -0.1 | ||||||||
Retained
profit
|
1,230.1 | 1,247.0 | 1,209.5 | ||||||||
Proposed
dividends
|
0.0 | 0.0 | 55.1 | ||||||||
Hedging
reserves
|
-5.0 | -29.0 | -32.7 | ||||||||
Translation
reserves
|
4.1 | 4.1 | 4.1 | ||||||||
TOTAL
EQUITY
|
1,274.3 | 1,268.5 | 1,278.9 | ||||||||
LIABILITIES
|
|||||||||||
Non-current
liabilities
|
|||||||||||
Deferred
tax liability
|
55.1 | 55.3 | 55.1 | ||||||||
Mortgage
debt and bank loans
|
1,702.2 | 1,514.6 | 1,505.8 | ||||||||
Finance
lease liabilities
|
32.1 | 0.0 | 0.0 | ||||||||
Acquired
liabilities related to options on vessels
|
2.3 | 20.9 | 10.7 | ||||||||
Acquired
time charter contracts
|
0.1 | 6.5 | 3.9 | ||||||||
TOTAL
NON-CURRENT LIABILITIES
|
1,791.8 | 1,597.3 | 1,575.5 | ||||||||
Current
liabilities
|
|||||||||||
Mortgage
debt and bank loans
|
142.0 | 193.5 | 212.4 | ||||||||
Finance
lease liabilities
|
1.9 | 0.0 | 0.0 | ||||||||