Torm Buys Eight LR2 Tankers


Danish shipping company Torm announced it has entered into an agreement to acquire eight secondhand LR2 vessels from an undisclosed seller.

Q3 2023 results, dividend distribution, and financial outlook 2023

“The strong and sustained market for product tankers has resulted in historical high TCE earnings for the first nine months of 2023, that are 26% higher than last year. We expect a strong ending to the year, driven by seasonal factors and continued favorable market conditions,” says Jacob Meldgaard and continues: “This quarter, we will return USD 123.2m to our shareholders as dividend.”

Financial results

Results delivered in the first nine months of 2023 were historically high despite a temporary drop in freight rates over the summer. In Q3 2023, TCE per day was USD 33,010 compared to USD 44,376 in the same period last year, where rates were exceptionally high. Available earning days increased 9% to 7,658 in Q3 (Q3 2022: 7,035) as a function of a net increase in the fleet by eight vessels since same period last year. Consequently, TCE earnings declined 23% to USD 244.4m in Q3 (Q3 2022: USD 316.8m), while EBITDA decreased 32% to USD 178.2m (Q3 2022: USD 262.2m).

 The healthy financial performance in the first nine months of 2023 is primarily related to the strong product tanker market and the trade recalibration in connection with sanctions and self-sanctioning of Russian product exports as well as global refinery dislocation. Strong markets and high earnings have allowed for continued quarterly dividend distribution. The declared dividend for Q3 2023 is USD 1.46 per share, equivalent to a pay-out ratio of 99%.

Key Figures (summary)

USDmQ3 2023Q3 2022changeQ1-Q3 2023Q1-Q3 2022changeFY 2022
Time charter equivalent earnings (TCE) 244.4 316.8-23% 817.4 649.826%981.5
EBITDA 178.2 262.2-32% 613.6 476.029% 743.0
EBITDA margin %49.8%58.5% 54.2%47.8% 51.5%
Unrealized gain/(loss) on financial instruments1)-8.44.5 12.8-6.6   -0.6
Return on Invested Capital (RoIC) %22.6%43.0% 29.4%23.6% 29.2%
TCE per day (USD)33,01044,376-26%36,83729,97023%34,154
OPEX per day (USD) 6,821 7,041-3% 7,049 6,7604%6,825
Free cash flow 196.8 192.62% 259.6 267.4-3%513.2

1)         Included in TCE earnings and EBITDA. but not included in TCE per day

Business highlights

In the third quarter, TORM has entered into two 2-year Time Charter-Out contracts for two LR2 vessels at a rate of USD 43,000 per day.

During Q3, TORM has sold and delivered one MR vessel, reducing the fleet to 86 vessels in total as of 30 September 2023. Additionally, two LR1 vessels were sold in Q3 with delivery in November.

Since the end of Q3, TORM has sold one LR2 vessel and two MR vessels with expected delivery in Q4.

Since the end of Q3, TORM has acquired four MR eco product tanker vessels built in 2015-2016 for a total cash consideration of USD 75.0m and the issuance of 2.68m shares with expected completion in Q4.

On 09 November 2023, TORM has entered into an agreement to acquire eight eco LR2 vessels built in 2010-2012, of which one vessel is expected to be delivered in late Q4 2023 and seven vessels in Q1 2024 for a total consideration of USD 399m, with a cash consideration of USD 239m and the issuance of approximately 5.5 million shares.

This will bring the total fleet up to 93 vessels on a fully delivered basis.


The product tanker market continued to be strong, but volatile in the third quarter of 2023. Although rates were lower than in the first two quarters of the year, the lower rates were primarily attributable to temporary refinery maintenance and seasonally lower Russian clean petroleum product exports as well as continued draw from diesel inventories in Europe, which led to a temporary release of global vessel capacity. The markets strengthened towards the end of the third quarter, which is expected to have a positive impact on earnings in the fourth quarter.


TORM’s Board of Directors has today approved an interim dividend for Q3 2023 of USD 1.46 per share, resulting in an expected total dividend payment of USD 123.2m. The payment date is 05 December 2023 while the ex-dividend date is 21 November 2023, and the record date is 22 November 2023. 

Financial Outlook 2023

As of 06 November 2023, TORM had covered 91% of the 2023 full-year earning days at USD/day 36,452 and the coverage for the fourth quarter of 2023 was 64% at USD/day 38,822. For the individual vessel classes, the coverage for the fourth quarter of 2023 was 62% at USD/day 47,126 for LR2, 75% at USD/day 39,935 for LR1, and 62% USD/day 36,715 for MR.

Our financial outlook is based on our current product tanker market expectations. but we have limited visibility on TCE rates that are not yet fixed with our customers. Hence. the market rates realized during 2023 may be significantly lower or significantly higher than our current expectations.

For the full-year 2023, TCE earnings are expected to be in the range of USD 1,075m-1,125m (previous outlook: USD 1,050m-1,175m) and EBITDA is expected to be in the range of USD 825m-875m (previous outlook: USD 775m-900m) based on the current fleet size including published acquisitions and divestments of vessels. The main difference between the adjustments to TCE earnings and EBITDA outlooks is related to profits from vessel sales. We refer to the Financial Outlook 2023 in our Quarterly Report for the Second Quarter 2023 and our Safe harbor statements as to the future.


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