TORM
A/S
(registrant)
|
||
Dated:
August 19, 2010
|
By:
|
/s/ Jacob
Meldgaard
Name:
Jacob Meldgaard
Title: Chief
Executive Officer
|
TORM
posted a loss before tax of USD 24 million for Q2 2010. The result was in
line with expectations and better than the same period a year ago. "In Q2,
the product tanker market was affected by seasonality, however positive
signs of recovery were seen late in the quarter. We believe underlying
demand is improving and will support the product tanker segment going
forward," says CEO Jacob Meldgaard.
|
||
●
|
The
result before tax for the second quarter of 2010 was a loss of USD 24
million, compared to a loss of USD 33 million in the same period last
year. The result for the second quarter was in line with expectations. The
result for the second quarter of 2010 was positively impacted by
mark-to-market non-cash adjustments of USD 2 million.
|
|
●
|
A
loss of USD 22 million before tax was recorded for the first six months of
2010. The result for the first quarter of 2010 includes a profit of USD 18
million from the sale of two bulk vessels.
|
|
●
|
In
the second quarter of 2010, product tanker rates were negatively impacted
by seasonality, influx of new tonnage and continued discharge of vessels
from floating storage. The demand for refined products in the West
remained slow, and the freight rate weakness seen in the crude oil markets
did not spur additional demand for the larger LR tonnage. The demand for
vegetable oil to China and Europe and for naphtha in the Far East did not
offer sufficient rate support until the end of Q2 where also demand for
gasoline in the West showed an upward trend.
|
|
●
|
Panamax
bulk rates remained volatile in the second quarter of 2010. Up to mid-May,
the rates increased to USD 37,100/day, but then fell to USD 22,100/day at
the end of the quarter. Due to TORM's high coverage of earning days, the
volatility in bulk spot rates had limited impact on TORM's
earnings.
|
|
●
|
On
a quarterly basis, TORM calculates the long-term earnings potential of its
fleet based on discounted expected future cash flows. The calculated value
of the fleet at 30 June 2010 supports book value.
|
|
●
|
At
30 June 2010, equity amounted to USD 1,220 million, equivalent to USD 17.6
per share (DKK 106.9 per share), excluding treasury shares, corresponding
to an equity ratio of 38%.
|
|
●
|
TORM's
undrawn credit facilities and cash totalled approximately USD 600 million
at the end of the second quarter. Capex relating to the order book
amounted to USD 372 million.
|
|
●
|
Net
interest-bearing debt totalled USD 1,691 million at 30 June 2010, compared
to USD 1,622 million at 31 March 2010. The increase is due to borrowing in
connection with the newbuilding programme.
|
|
●
|
At
30 June 2010, TORM had covered 33% of the remaining earning days for 2010
in the Tanker Division at USD 16,470/day and 81% of the remaining earning
days in the Bulk Division at USD 19,725/day.
|
|
●
|
TORM
forecasts a loss before tax of USD 40-60 million for
2010.
|
Telecon-ference
|
TORM will host a teleconference
and webcast (www.torm.com) today, at 3:00 pm Copenhagen
time (CET), see details on page 9.
|
||
Contact
|
TORM
A/S
|
Telephone:
+45 39 17 92 00
|
|
Tuborg
Havnevej 18
|
Jacob
Meldgaard, CEO
|
||
DK-2900
Hellerup, Denmark
|
Roland
M. Andersen, CFO
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
1
/ 20
|
Q1-Q2 | Q1-Q2 | ||||||||||||||||||||
Million
USD
|
|
Q2 2010 | Q2 2009 | 2010 | 2009 | 2009 | |||||||||||||||
Income
statement
|
|||||||||||||||||||||
Revenue
|
201.3 | 193.6 | 406.8 | 452.4 | 862.3 | ||||||||||||||||
Time
charter equivalent earnings (TCE)
|
130.2 | 138.2 | 277.7 | 337.3 | 632.9 | ||||||||||||||||
Gross
profit
|
41.1 | 38.9 | 97.0 | 136.4 | 242.5 | ||||||||||||||||
EBITDA
|
23.6 | 30.6 | 78.9 | 111.3 | 202.5 | ||||||||||||||||
Operating
profit (EBIT)
|
-10.8 | -2.9 | 9.5 | 46.0 | 49.8 | ||||||||||||||||
Profit/(loss)
before tax
|
-24.4 | -32.5 | -21.8 | 6.7 | -19.0 | ||||||||||||||||
Net
profit
|
|
-24.1 | -33.6 | -21.8 | 6.0 | -17.4 | |||||||||||||||
Balance
sheet
|
|||||||||||||||||||||
Total
assets
|
3,210.2 | 3,255.7 | 3,210.2 | 3,255.7 | 3,227.2 | ||||||||||||||||
Equity
|
1,219.9 | 1,269.8 | 1,219.9 | 1,269.8 | 1,246.7 | ||||||||||||||||
Total
liabilities
|
1,990.3 | 1,985.9 | 1,990.3 | 1,985.9 | 1,980.5 | ||||||||||||||||
Invested
capital
|
2,908.6 | 2,932.6 | 2,908.6 | 2,932.6 | 2,926.0 | ||||||||||||||||
Net
interest bearing debt
|
|
1,691.4 | 1,669.9 | 1,691.4 | 1,669.9 | 1,682.5 | |||||||||||||||
Cash
flow
|
|||||||||||||||||||||
From
operating activities
|
-0.2 | 11.8 | 20.7 | 73.0 | 116.3 | ||||||||||||||||
From
investing activities
|
-68.3 | -17.6 | -27.2 | -144.3 | -199.4 | ||||||||||||||||
Thereof
investment in tangible fixed assets
|
-69.6 | -44.7 | -93.2 | -174.2 | -288.8 | ||||||||||||||||
From
financing activities
|
3.3 | 19.7 | 5.8 | 15.6 | 36.6 | ||||||||||||||||
Total
net cash flow
|
|
-65.2 | 13.9 | -0.7 | -55.7 | -46.5 | |||||||||||||||
Key
financial figures
|
|||||||||||||||||||||
Gross
margins:
|
|||||||||||||||||||||
TCE
|
64.7 | % | 71.4 | % | 68.3 | % | 74.6 | % | 73.4 | % | |||||||||||
Gross
profit
|
20.4 | % | 20.1 | % | 23.8 | % | 30.2 | % | 28.2 | % | |||||||||||
EBITDA
|
11.7 | % | 15.8 | % | 19.4 | % | 24.6 | % | 23.5 | % | |||||||||||
Operating
profit
|
-5.4 | % | -1.5 | % | 2.3 | % | 10.2 | % | 5.8 | % | |||||||||||
Return
on Equity (RoE) (p.a.)*)
|
-7.8 | % | -8.0 | % | -5.2 | % | -0.3 | % | -1.3 | % | |||||||||||
Return
on Invested Capital (RoIC) (p.a.)**)
|
-1.5 | % | -1.7 | % | 0.0 | % | 1.9 | % | 1.7 | % | |||||||||||
Equity
ratio
|
38.0 | % | 39.0 | % | 38.0 | % | 39.0 | % | 38.6 | % | |||||||||||
Exchange
rate USD/DKK, end of period
|
6.07 | 5.27 | 6.07 | 5.27 | 5.19 | ||||||||||||||||
Exchange
rate USD/DKK, average
|
|
5.86 | 5.48 | 5.62 | 5.60 | 5.36 | |||||||||||||||
Share
related key figures
|
|||||||||||||||||||||
Earnings
per share, EPS
|
USD
|
-0.3 | -0.5 | -0.3 | 0.1 | -0.3 | |||||||||||||||
Diluted
earnings per share, EPS
|
USD
|
-0.3 | -0.5 | -0.3 | 0.1 | -0.3 | |||||||||||||||
Cash
flow per share, CFPS
|
USD
|
0.0 | 0.2 | 0.3 | 1.1 | 1.7 | |||||||||||||||
Share
price, end of period (per share of DKK 5 each)
|
DKK
|
46.1 | 54.0 | 46.1 | 54.0 | 50.7 | |||||||||||||||
Number
of shares, end of period
|
Million
|
72.8 | 72.8 | 72.8 | 72.8 | 72.8 | |||||||||||||||
Number
of shares (excl. treasury shares), average
|
Million
|
69.3 | 69.2 | 69.3 | 69.2 | 69.2 |
*)
|
Gains
from sale of vessels and the mark-to-market adjustments of 'Other
financial assets' have not been annualised when calculating
the Return on Equity.
|
**)
|
Gain
from sale of vessels has not been annualised when calculating the Return
on Invested Capital.
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
2
/ 20
|
Million
USD
|
Q2
2010
|
Q1-Q2
2010
|
||||||
Tanker
|
Bulk
|
Non
|
|
Tanker
|
Bulk
|
Non
|
|
|
|
Division
|
Division
|
allocated
|
Total
|
Division
|
Division
|
allocated
|
Total
|
Revenue
|
180.3
|
21.0
|
0.0
|
201.3
|
364.4
|
42.4
|
0.0
|
406.8
|
Port
expenses, bunkers and commissions
|
-69.3
|
-1.3
|
0.0
|
-70.6
|
-128.3
|
-2.2
|
0.0
|
-130.5
|
Freight
and bunkers derivatives
|
-0.5
|
0.0
|
0.0
|
-0.5
|
1.4
|
0.0
|
0.0
|
1.4
|
Time
charter equivalent earnings
|
110.5
|
19.7
|
0.0
|
130.2
|
237.5
|
40.2
|
0.0
|
277.7
|
Charter
hire
|
-40.3
|
-14.1
|
0.0
|
-54.4
|
-78.9
|
-27.2
|
0.0
|
-106.1
|
Operating
expenses
|
-33.9
|
-0.8
|
0.0
|
-34.7
|
-72.2
|
-2.4
|
0.0
|
-74.6
|
Gross
Profit
|
36.3
|
4.8
|
0.0
|
41.1
|
86.4
|
10.6
|
0.0
|
97.0
|
Profit/(loss)
from sale of vessels
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
18.2
|
0.0
|
18.2
|
Administrative
expenses
|
-15.3
|
-2.2
|
0.0
|
-17.5
|
-32.1
|
-3.5
|
0.0
|
-35.6
|
Other
Operating income
|
1.3
|
0.0
|
0.0
|
1.3
|
3.0
|
0.0
|
0.0
|
3.0
|
Share
of results of jointly controlled entities
|
0.6
|
0.0
|
-1.9
|
-1.3
|
1.6
|
0.0
|
-5.3
|
-3.7
|
EBITDA
|
22.9
|
2.6
|
-1.9
|
23.6
|
58.9
|
25.3
|
-5.3
|
78.9
|
Impairment
losses on jointly controlled entities
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Depreciation
and impairment losses
|
-33.7
|
-0.7
|
0.0
|
-34.4
|
-68.1
|
-1.3
|
0.0
|
-69.4
|
Operating
profit (EBIT)
|
-10.8
|
1.9
|
-1.9
|
-10.8
|
-9.2
|
24.0
|
-5.3
|
9.5
|
Financial
items, net
|
-
|
-
|
-13.6
|
-13.6
|
-
|
-
|
-31.3
|
-31.3
|
Profit/(Loss)
before tax
|
-
|
-
|
-15.5
|
-24.4
|
-
|
-
|
-36.6
|
-21.8
|
Tax
|
-
|
-
|
0.3
|
0.3
|
-
|
-
|
0.0
|
0.0
|
Net
profit/(loss)
|
-
|
-
|
-15.2
|
-24.1
|
-
|
-
|
-36.6
|
-21.8
|
The
activity that TORM owns in a 50/50 joint venture with Teekay and the 50%
ownership of FR8 Holding Pte. Ltd. are included in
"Not-allocated".
|
Tanker
Division
|
The
division realised an operating loss of USD 11 million for the second
quarter of 2010, compared to a loss of USD 12 million in the same period
in 2009.
|
In
line with seasonality, rates were generally low in the second quarter of
2010. Compared to the same period a year ago rate levels have improved as
the global economy is regaining strength.
|
|
Influx
of newbuildings, freed-up floating storage and a continued negative market
sentiment kept the rates at low levels, also in a historical
perspective.
|
|
In
the second quarter of 2010, the fleet grew by approx. 2%. The significant
delay in deliveries of new tonnage experienced in 2009 and the first
quarter of 2010 continued in the second quarter, with slippage of more
than 40%.
|
|
In
the second quarter of 2010, the MR segment was negatively impacted by poor
gasoline demand in the USA. The market players therefore sought
alternative cargoes and destinations for the MR fleet, e.g. distilled oil
products from the USA to South America, vegetable oil from South America
to China and palm oil from Indonesia/Malaysia to the European
continent.
|
|
The
strengthening of the transatlantic trading route, seen late June, was
partly driven by these changes in transport patterns, as this implied
fewer vessels available on the European continent at the same time as the
gasoline arbitrage from Europe to the USA opened.
|
|
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
3
/ 20
|
The
LR segment continued to show some strength, as naphtha demand from the Far
East remained firm throughout the second quarter of 2010 despite added
tonnage from newbuildings and notably freed-up tonnage from floating
storage. The weaker dirty market implied that the tonnage balance was not
supported by vessels swapping into dirty.
The
continued reduction in floating storage during the second quarter of 2010
has impacted the tonnage supply for the larger LR vessels, and thus rates.
At the end of June, floating storage has been reduced to some 3% of the
total fleet, which is a more natural level. The level of and movements in
floating storage are volatile and impacted by the forward curve for the
various refined products.
|
|
At
30 June, coverage for the remaining part of 2010 was 33% at USD
16,470/day.
|
Tanker
Division
|
Q2
09
|
Q3
09
|
Q4
09
|
Q1
10
|
Q2
10
|
Change
Q2
09
-
Q2 10
|
12
month
avg.
|
LR2
(Aframax, 90-110,000 DWT)
|
|||||||
Available
earning days
|
1,179
|
1,190
|
1,173
|
1,163
|
1,122
|
-5%
|
|
TCE
per earning day from the LR2 Pool
|
17,145
|
18,401
|
20,331
|
19,270
|
17,185
|
0%
|
|
TCE
per earning day1)
|
15,785
|
17,406
|
18,356
|
18,456
|
15,505
|
-2%
|
17,431
|
Operating
days
|
1,092
|
1,104
|
1,104
|
1,080
|
1,092
|
0%
|
|
Operating
expenses per operating day2)
|
7,556
|
6,496
|
6,933
|
6,908
|
6,301
|
-17%
|
6,660
|
LR1
(Panamax 75-85,000 DWT)
|
|
|
|||||
Available
earning days
|
1,756
|
1,835
|
2,025
|
1,748
|
1,777
|
1%
|
|
TCE
per earning day from the LR1 Pool
|
15,577
|
15,036
|
14,304
|
16,273
|
14,903
|
-4%
|
|
TCE
per earning day1)
|
18,491
|
16,514
|
16,516
|
16,686
|
15,509
|
-16%
|
16,306
|
Operating
days
|
819
|
828
|
828
|
810
|
749
|
-9%
|
|
Operating
expenses per operating day2)
|
7,142
|
6,706
|
5,986
|
6,454
|
5,420
|
-24%
|
6,142
|
MR
(45,000 DWT)
|
|
|
|
||||
Available
earning days
|
3,344
|
3,602
|
3,829
|
3,755
|
3,916
|
17%
|
|
TCE
per earning day from the MR Pool
|
14,712
|
14,974
|
11,521
|
14,179
|
12,567
|
-15%
|
|
TCE
per earning day1)
|
15,363
|
15,349
|
12,417
|
14,700
|
12,363
|
-20%
|
13,707
|
Operating
days
|
2,548
|
2,707
|
2,832
|
2,790
|
2,951
|
16%
|
|
Operating
expenses per operating day2)
|
7,458
|
6,621
|
6,770
|
6,883
|
6,053
|
-19%
|
6,582
|
SR
(35,000 DWT)
|
|
|
|
||||
Available
earning days
|
1,135
|
1,160
|
1,103
|
1,002
|
979
|
-14%
|
|
TCE
per earning day1)
|
17,483
|
18,378
|
16,894
|
18,034
|
16,099
|
-8%
|
17,351
|
Operating
days
|
1,001
|
1,012
|
1,012
|
990
|
1,001
|
0%
|
|
Operating
expenses per operating day2)
|
6,600
|
6,105
|
6,326
|
6,041
|
4,821
|
-27%
|
5,823
|
Bulk
Division
|
Operating
profit for the second quarter of 2010 was USD 2 million, compared to USD
10 million in the second quarter of 2009.
|
The
number of earning days for the Bulk Division was 29% lower in the second
quarter of 2010 than in the same period last year due to the sale of
vessels.
|
|
The
dry bulk market stayed at a relatively strong level throughout most of the
second quarter of 2010, with Panamax spot rates peaking at around USD/day
37,100 in mid-May. Rates continued to be driven by the Chinese demand for
iron ore and coal as well as high port congestion.
|
|
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
4
/20
|
However,
towards the end of the quarter and at the beginning of the third quarter,
rates decreased sharply and did not stabilise until the end of July. By
then, Panamax spot rates were down to around USD 16,000/day. The decline
in rates was driven by the continued high influx of new vessels,
especially in the Capesize segment, in combination with declining Chinese
demand for coal and uncertainty surrounding the future Chinese demand for
iron ore. Total fleet growth in the dry bulk segment came to about 4% in
the second quarter of 2010.
As
TORM seeks high coverage of earning days for the Bulk Division, the
volatility in bulk spot rates has limited impact on TORM's earnings in
2010.
|
|
At
30 June, coverage for the remaining part of 2010 was 81% at USD
19,725/day.
|
Bulk
Division
|
Q2
09
|
Q3
09
|
Q4
09
|
Q1
10
|
Q2
10
|
Change
Q2
09
-
Q2 10
|
12
month
avg.
|
|
Panamax
(60-80,000 DWT)
|
||||||||
Available
earning days
|
1,496
|
1,255
|
1,204
|
1,119
|
1,060
|
-29%
|
||
TCE
per earning day1)
|
13,756
|
17,968
|
19,690
|
18,298
|
|
18,611
|
35%
|
18,642
|
Operating
days
|
636
|
392
|
368
|
315
|
182
|
-71%
|
||
Operating
expenses per operating day2)
|
5,106
|
4,477
|
4,066
|
5,187
|
|
4,603
|
-10%
|
4,583
|
Other
activities
|
Other
(non-allocated) activities were a loss on investments in jointly
controlled entities of USD 2 million, financial expenses of USD 14 million
and tax of USD 0 million.
|
Fleet
developments
|
In
the second quarter, TORM took delivery of two MR newbuildings, TORM Alice
and TORM Alexandra. At the end of the quarter, TORM's fleet of owned
vessels comprised 66 tankers and two bulk carriers. In addition to these,
TORM had 25 tankers and 11 bulk carriers on time charter. Another 37
tankers were either in pools or under commercial
management.
|
|
Owned
vessels
|
|||||||||||||||
|
31
Mar 10
|
Addition
|
Disposal
|
30
Jun 10
|
||||||||||||
LR2
/ Aframax
|
12.5 | - | - | 12.5 | ||||||||||||
LR1
/ Panamax
|
7.5 | - | - | 7.5 | ||||||||||||
MR
|
33.0 | 2.0 | - | 35.0 | ||||||||||||
SR
|
11.0 | - | - | 11.0 | ||||||||||||
Product
tankers
|
64.0 | 2.0 | - | 66.0 | ||||||||||||
Panamax
dry bulk
|
2.0 | - | - | 2.0 | ||||||||||||
Total
|
66.0 | - | - | 68.0 |
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
5
/ 20
|
Planned
fleet changes
|
No
vessels were contracted in the second quarter of 2010, and at the end of
the quarter the order book thus comprised nine MR vessels and four
Kamsarmax vessels. Capex relating to the order book amounted to USD 372
million.
|
|
New
buildings to be delivered
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
2010
|
2011
|
2012
|
2013
|
||||||||||||||||||||||||||||||||||||||||||||
|
Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
Total
|
||||||||||||||||||||||||||||||||||||
LR2
/ Aframax
|
- | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
LR1
/ Panamax
|
- | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
MR
|
3,0 | - | 2,0 | - | 1,0 | 1,0 | - | 1,0 | 1,0 | - | - | 9,0 | ||||||||||||||||||||||||||||||||||||
SR
|
- | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Tank
|
3,0 | - | 2,0 | - | 1,0 | 1,0 | - | 1,0 | 1,0 | - | - | 9,0 | ||||||||||||||||||||||||||||||||||||
Kamsarmax
dry bulk
|
- | - | 2,0 | - | - | - | - | - | - | 1,0 | 1,0 | 4,0 | ||||||||||||||||||||||||||||||||||||
I
alt
|
3,0 | - | 4,0 | - | 1,0 | 1,0 | 0,0 | 1,0 | 1,0 | 1,0 | 1,0 | 13,0 |
|
In
July 2010, TORM took delivery of the MR vessel TORM Aslaug from the
Chinese shipyard GSI Guangzhou.
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
6
/ 20
|
Second
quarter 2010
|
|
Results
|
Gross
profit for the second quarter of 2010 was USD 41 million, up from USD 39
million for the corresponding period of 2009. Administrative expenses were
USD 18 million, against USD 23 million for the second quarter of 2009,
corresponding to a reduction of 22%. Profit before depreciation and
amortisation (EBITDA) for the period was USD 24 million, against USD 31
million for the second quarter of 2009. The primary reason for the decline
in EBITDA is that the second quarter of 2009 was positively affected by a
profit of USD 13 million from sale of vessels.
|
Depreciation
was USD 34 million during the second quarter of 2010.
|
|
Operating
profit for the second quarter of 2010 was a loss of USD 11 million,
compared to a loss of USD 3 million for the same quarter of
2009.
|
|
The
second quarter of 2010 was impacted by mark-to-market non-cash adjustments
of USD 2 million related to FFA/bunker derivatives.
|
|
In
the second quarter of 2010, financial items amounted to an expense of USD
14 million, against an expense of USD 30 million in the same quarter of
2009. The second quarter of 2009 was influenced by a negative non-cash
fair value adjustment of USD 23 million on the value of options related to
vessel values acquired in connection with the acquisition of OMI.
|
|
The
result after tax was a loss of USD 24 million in the second quarter of
2010, against a loss of USD 34 million in the second quarter of 2009. The
result in the second quarter of 2009 was impacted by a profit of USD 13
million from sale of vessels. No vessels were sold during the second
quarter of 2010.
|
|
Assets
|
Total
assets fell from USD 3,226 million at 31 March 2010 to USD 3,210 million
at 30 June 2010.
|
On
a quarterly basis, TORM calculates the long-term earnings potential of its
fleet based on discounted expected future cash flows. The calculated value
of the fleet at 30 June 2010 supports book value.
|
|
Liabilities
|
During
the second quarter of 2010, net interest-bearing debt increased to USD
1,691 million from USD 1,622 million at 31 March 2010. The increase in
debt is due to borrowing in connection with the newbuilding programme.
More than 74% of the debt is due after 2012.
|
Total
equity
|
In
the second quarter of 2010, equity decreased from USD 1,248 million at 31
March 2010 to USD 1,220 million, which was primarily due to the loss
during the period. Equity as a percentage of total assets was 38% at 30
June 2010, compared to 39% at 31 March 2010.
|
At
30 June 2010, TORM held 3,461,580 treasury shares, corresponding to 4.8%
of the Company's share capital, which is unchanged since 31 March
2010.
|
|
Liquidity
|
TORM's
undrawn credit facilities and cash totalled about USD 600 million at the
end of the second quarter of 2010.
|
Outlook
|
TORM
forecasts a loss before tax of USD 40-60 million for
2010.
|
Coverage
|
At
30 June 2010, TORM had covered 33% of the remaining earning days for 2010
in the Tanker Division at USD/day 16,470 and 81% of the remaining earning
days in the Bulk Division at USD/day 19,725.
|
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
7 /
20
|
|
||||||||||||||||||||||||
|
|
|||||||||||||||||||||||
2010
|
2011
|
2012
|
2010
|
2011
|
2012
|
|||||||||||||||||||
Owned
days
|
||||||||||||||||||||||||
LR2
|
2,196 | 4,380 | 4,392 | |||||||||||||||||||||
LR1
|
1,282 | 2,555 | 2,562 | |||||||||||||||||||||
MR
|
6,754 | 14,758 | 15,690 | |||||||||||||||||||||
SR
|
1,966 | 4,015 | 4,026 | |||||||||||||||||||||
Tanker
Division
|
12,198 | 25,708 | 26,670 | |||||||||||||||||||||
Bulk
Division
|
366 | 1,437 | 1,495 | |||||||||||||||||||||
Total
|
12,564 | 27,145 | 28,165 | |||||||||||||||||||||
T/C
in days
|
T/C
in costs (USD/day)
|
|||||||||||||||||||||||
LR2
|
- | - | - | - | - | - | ||||||||||||||||||
LR1
|
2,559 | 5,303 | 4,334 | 21,879 | 22,219 | 22,485 | ||||||||||||||||||
MR
|
1,647 | 3,619 | 3,108 | 16,976 | 17,007 | 16,399 | ||||||||||||||||||
SR
|
- | - | - | - | - | - | ||||||||||||||||||
Tanker
Division
|
4,206 | 8,922 | 7,442 | 19,959 | 20,105 | 19,943 | ||||||||||||||||||
Bulk
Division
|
2,003 | 3,581 | 4,228 | 15,793 | 15,477 | 15,954 | ||||||||||||||||||
Total
|
6,209 | 12,503 | 11,670 | 18,615 | 18,780 | 18,498 | ||||||||||||||||||
Total
physical days
(owned
+ T/C in)
|
Covered
days
|
|||||||||||||||||||||||
LR2
|
2,196 | 4,380 | 4,392 | 610 | 456 | 40 | ||||||||||||||||||
LR1
|
3,841 | 7,858 | 6,896 | 1,109 | 365 | 366 | ||||||||||||||||||
MR
|
8,401 | 18,377 | 18,798 | 2,517 | 1,775 | 412 | ||||||||||||||||||
SR
|
1,966 | 4,015 | 4,026 | 1,228 | 1,059 | 40 | ||||||||||||||||||
Tanker
Division
|
16,404 | 34,630 | 34,112 | 5,464 | 3,655 | 858 | ||||||||||||||||||
Bulk
Division
|
2,369 | 5,018 | 5,723 | 1,907 | 581 | - | ||||||||||||||||||
Total
|
18,773 | 39,648 | 39,835 | 7,371 | 4,236 | 858 | ||||||||||||||||||
Coverage
%
|
Coverage
rates (USD/day)
|
|||||||||||||||||||||||
LR2
|
28 | 10 | 1 | 24,184 | 28,648 | 32,660 | ||||||||||||||||||
LR1
|
29 | 5 | 5 | 16,145 | 15,690 | 15,690 | ||||||||||||||||||
MR
|
30 | 10 | 2 | 15,768 | 16,283 | 15,348 | ||||||||||||||||||
SR
|
62 | 26 | 1 | 14,055 | 14,268 | 15,128 | ||||||||||||||||||
Tanker
Division
|
33 | 11 | 3 | 16,399 | 17,182 | 16,298 | ||||||||||||||||||
Bulk
Division
|
81 | 12 | - | 19,725 | 16,507 | - | ||||||||||||||||||
Total
|
39 | 11 | 2 | 17,259 | 17,089 | 16,298 |
Contracts
not included above
|
-1.2
|
||||
Contracts
included above
|
0.2
|
Post
balance sheet events
|
No
subsequent events have occurred after the balance sheet date which would
change TORM's expectations for its financial performance for either 2010
or any subsequent period.
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
8 /
20
|
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 statements 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 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 "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 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 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 an 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 46.1 at 30 June 2010, against DKK 57.0 at 31
March 2010, equivalent to a decrease of DKK 10.9 (19%).
|
Accounting
policies
|
This
interim report for the second quarter of 2010 is presented in accordance
with IAS 34 "Interim financial reporting" as adopted by the EU and
additional Danish disclosure requirements for interim reports of listed
companies. The interim report for the second quarter of 2010 is unaudited
and is presented in accordance with the same accounting policies as the
Annual Report 2009.
|
Information
|
Teleconference
|
TORM
will host a telephone conference for financial analysts and investors on
19 August 2010 at 3:00 pm Copenhagen time (CET), reviewing the interim
report for the first six months of 2010. The conference call will be
hosted by Jacob Meldgaard, CEO, Roland M. Andersen, CFO, and Sune S.
Mikkelsen, VP IR, 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
financial report for the first nine months of 2010 will be published on 18
November 2010.
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
9 /
20
|
Statement
by the Board of Directors and Executive Management on the Interim
Report
|
|||
The
Board of Directors and Executive Management have considered and approved
the interim report for the period 1 January – 30 June
2010.
|
|||
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 of IFRS
which are expected to be applicable to the Annual Report
2010.
|
|||
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 August 2010
|
|||
Executive
Management
|
Board
of Directors
|
||
Jacob
Meldgaard, CEO
|
Niels
Erik Nielsen, Chairman
|
||
Roland
M. Andersen, CFO
|
Christian
Frigast, Deputy Chairman
|
||
Peter
Abildgaard
|
|||
Lennart
Arrias
|
|||
Margrethe
Bligaard Thomasen
|
|||
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 player in the dry bulk market. The Company runs a fleet of
approximately 140 modern vessels in cooperation with other respected
shipping companies sharing 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 NASDAQ
OMX Copenhagen (ticker: TORM) and on NASDAQ in New York (ticker: TRMD).
For further information, please visit
www.torm.com.
|
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
10 /
20
|
Million
USD
|
Q2 2010 | Q2 2009 | Q1-Q2 2010 | Q1-Q2 2009 | 2009 | |||||||||||||||
|
||||||||||||||||||||
Revenue
|
201.3 | 193.6 | 406.8 | 452.4 | 862.3 | |||||||||||||||
Port
expenses, bunkers and commissions
|
-70.6 | -48.1 | -130.5 | -106.9 | -217.4 | |||||||||||||||
Freight
and bunkers derivatives
|
-0.5 | -7.3 | 1.4 | -8.2 | -12.0 | |||||||||||||||
Time
charter equivalent earnings
|
130.2 | 138.2 | 277.7 | 337.3 | 632.9 | |||||||||||||||
Charter
hire
|
-54.4 | -55.1 | -106.1 | -109.2 | -220.9 | |||||||||||||||
Operating
expenses
|
-34.7 | -44.2 | -74.6 | -91.7 | -169.5 | |||||||||||||||
Gross
profit (Net earnings from shipping activities)
|
41.1 | 38.9 | 97.0 | 136.4 | 242.5 | |||||||||||||||
Profit
from sale of vessels
|
0.0 | 12.5 | 18.2 | 12.5 | 33.1 | |||||||||||||||
Administrative
expenses
|
-17.5 | -22.5 | -35.6 | -42.6 | -78.2 | |||||||||||||||
Other
operating income
|
1.3 | 2.4 | 3.0 | 4.8 | 7.4 | |||||||||||||||
Share
of results of jointly controlled entities
|
-1.3 | -0.7 | -3.7 | 0.2 | -2.3 | |||||||||||||||
EBITDA
|
23.6 | 30.6 | 78.9 | 111.3 | 202.5 | |||||||||||||||
Impairment
losses on jointly controlled entities
|
0.0 | 0.0 | 0.0 | 0.0 | -20.0 | |||||||||||||||
Depreciation
and impairment losses
|
-34.4 | -33.5 | -69.4 | -65.3 | -132.7 | |||||||||||||||
|
||||||||||||||||||||
Operating
profit (EBIT)
|
-10.8 | -2.9 | 9.5 | 46.0 | 49.8 | |||||||||||||||
Financial
items
|
-13.6 | -29.6 | -31.3 | -39.3 | -68.8 | |||||||||||||||
Profit
before tax
|
-24.4 | -32.5 | -21.8 | 6.7 | -19.0 | |||||||||||||||
Tax
|
0.3 | -1.1 | 0.0 | -0.7 | 1.6 | |||||||||||||||
Net
profit/(loss) for the period
|
-24.1 | -33.6 | -21.8 | 6.0 | -17.4 | |||||||||||||||
Earnings
per share, EPS
|
||||||||||||||||||||
Earnings
per share, EPS (USD)
|
-0.3 | -0.5 | -0.3 | 0.1 | -0.3 | |||||||||||||||
Earnings
per share, EPS (DKK) *)
|
-2.0 | -2.7 | -1.8 | 0.5 | -1.3 |
*)
The key figures have been translated from USD to DKK using the average
USD/DKK exchange change rate for the period in
question.
|
|||||
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
11
/ 20
|
Million
USD
|
Q2 2010 | Q2 2009 | Q1-Q2 2010 | Q1-Q2 2009 | 2009 | |||||||||||||||
|
||||||||||||||||||||
Net
profit/(loss) for the period
|
-24.1 | -33.6 | -21.8 | 6.0 | -17.4 | |||||||||||||||
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 hedging instruments
|
-5.4 | 8.1 | -9.7 | 24.5 | 26.5 | |||||||||||||||
Value
adjustment of hedging instruments transferred to
income statement |
2.3 | -1.0 | 3.9 | 3.8 | 4.1 | |||||||||||||||
|
||||||||||||||||||||
Value
adjustment of hedging instruments transferred
to
assets
|
0.0 | 0.0 | 0.0 | -1.2 | -1.2 | |||||||||||||||
Fair
value adjustment of available for sale investments
|
-0.3 | 1.7 | -0.5 | 0.7 | 1.6 | |||||||||||||||
Transfer
to income statement on sale of available for sale
investments
|
0.0 | 0.0 | 0.0 | 0.0 | -3.7 | |||||||||||||||
Other
comprehensive income after tax
|
-3.4 | 8.9 | -6.3 | 27.8 | 27.3 | |||||||||||||||
Total
comprehensive income
|
-27.5 | -24.7 | -28.1 | 33.8 | 9.9 |
ANNOUNCEMENT
NO. 8 – 2010
|
||
19
AUGUST 2010
|
TORM
– SECOND QUARTER REPORT 2010
|
12
/ 20
|
Million
USD
|
Q2 09 | Q3 09 | Q4 09 | Q1 10 | Q2 10 | |||||||||||||||
Revenue
|
193.6 | 208.8 | 201.1 | 205.5 | 201.3 | |||||||||||||||
Port
expenses, bunkers and commissions
|
-48.1 | -56.1 | -54.4 | -59.9 | -70.6 | |||||||||||||||
Freight
and bunkers derivatives
|
-7.3 | -3.3 | -0.5 | 1.9 | -0.5 | |||||||||||||||
Time
charter equivalent earnings
|
138.2 | 149.4 | 146.2 | 147.5 | 130.2 | |||||||||||||||
Charter
hire
|
-55.1 | -56.3 | -55.4 | -51.7 | -54.4 | |||||||||||||||
Operating
expenses
|
-44.2 | -38.7 | -39.1 | -39.9 | -34.7 | |||||||||||||||
Gross
profit (Net earnings from shipping activities)
|
38.9 | 54.4 | 51.7 | 55.9 | 41.1 | |||||||||||||||
Profit
from sale of vessels
|
12.5 | 20.7 | -0.1 | 18.2 | 0.0 | |||||||||||||||
Administrative
expenses
|
-22.5 | -17.9 | -17.7 | -18.1 | -17.5 | |||||||||||||||
Other
operating income
|
2.4 | 1.5 | 1.1 | 1.7 | 1.3 | |||||||||||||||
Share
of results of jointly controlled entities
|
-0.7 | 0.5 | -3.0 | -2.4 | -1.3 | |||||||||||||||
EBITDA
|
30.6 | 59.2 | 32.0 | 55.3 | 23.6 | |||||||||||||||
Impairment
losses on jointly controlled entities
|
0.0 | 0.0 | -20.0 | 0.0 | 0.0 | |||||||||||||||
Depreciation
and impairment losses
|
-33.5 | -35.0 | -32.4 | -35.0 | -34.4 | |||||||||||||||
|
||||||||||||||||||||
Operating
profit (EBIT)
|
-2.9 | 24.2 | -20.4 | 20.3 |