TORM announced interim results for the first quarter of 2018:
“We remained profitable in the first quarter of 2018 despite a muted freight rate environment, as the One TORM platform continues to deliver strong commercial results. In January, TORM successfully completed a USD 100m equity raise, which allowed us to execute on our fleet investment plan. The strong balance sheet and financial flexibility provided us the capacity to exercise options on three high specification MR newbuildings at historically attractive prices during April,” says Executive Director Jacob Meldgaard.
- TORM realized an EBITDA of USD 37m (2017, same period: USD 44m). The profit before tax amounted to USD 1.1m (2017, same period: USD 4.8m). Cash flow from operating activities was positive with USD 18m in the first quarter of 2018 (2017, same period: USD 27m) and earnings per share (EPS) was 1 US cent (2017, same period: 10 US cents). Return on Invested Capital (RoIC) was 2.4% (2017, same period: 3.9%).
- TORM achieved TCE rates of USD/day 14,225 (2017, same period: USD/day 15,264). In the first quarter of 2018, product tanker freight rates stayed relatively flat at levels slightly below the levels seen in the second half of 2017.
- As of 31 March 2018, 13% of the remaining earning days in 2018 were covered at USD/day 18,152. As of 11 May 2018, 61% of the remaining earning days in the second quarter of 2018 were covered at USD/day 14,244.
- TORM completed an equity raise of USD 100m in order to pursue accretive growth opportunities while maintaining the strength of the balance sheet.
- Subsequent to the balance sheet date, TORM exercised options for the construction of three high specification MR newbuildings for a total commitment of USD 93m and with expected delivery in 2019 through the first quarter of 2020 and secured commitment for attractive vessel financing of up to USD 63m, subject to loan documentation.
- TORM took delivery of two LR2 newbuildings in the first quarter of 2018 and a third LR2 newbuilding after the balance sheet date.
- As of 31 March 2018, available liquidity was USD 465m and consisted of USD 174m in cash and USD 292m in undrawn credit facilities. As of 31 March 2018, net interest-bearing debt amounted to USD 577m. As of 31 March 2018, TORM’s net loan-to-value ratio was 51%.
- Based on broker valuations as of 31 March 2018, TORM’s Net Asset Value (NAV) excluding charter commitments is estimated at USD 857m. This corresponds to a NAV/share of USD 11.6 or DKK 69.7.
- TORM’s book equity amounted to USD 892m as of 31 March 2018. This corresponds to a book equity/share of USD 12.0 or DKK 72.1.
- Based on broker valuations, TORM’s fleet including newbuildings had a market value of USD 1,600m as of 31 March 2018. As of 31 March 2018, TORM’s order book stood at eight newbuildings: two LR2s, four MRs and two LR1s all from Guangzhou Shipyard International. Following the balance sheet date, TORM has executed newbuilding options for an additional three MR vessels and took delivery of one LR2 newbuilding in April 2018. The LR2s are expected to be delivered in 2018 and the MRs and the LR1s in 2019 throughout the first quarter of 2020. Outstanding CAPEX relating to the order book and vessel purchases amounted to USD 242m, excluding the three MR newbuildings acquired in April 2018.
- The book value of the fleet was USD 1,433 m as of 31 March 2018 excluding outstanding installments on the newbuildings of USD 242m.