In the third quarter of 2024, TORM’s time charter equivalent earnings (TCE) amounted to USD 263.4m (2023, same period: USD 244.4m). TORM realized an adjusted EBITDA of USD 190.9m (2023, same period: USD 186.6m) and a net profit for the period of USD 130.7m (2023, same period: USD 124.3m).
“Our performance this quarter remains strong, with fleet-wide freight rates slightly above last year’s levels. Despite the expected impact of seasonality, we continued to deliver solid results in the third quarter,” says Jacob Meldgaard.
In the first nine months of 2024, TORM achieved TCE of USD 920.1m including unrealized losses on derivatives of USD -0.6m (2023, same period: USD 817.4m including unrealized gains on derivatives of USD 12.8m) and an adjusted EBITDA of USD 709.2m (2023, same period: USD 600.8m) and a net profit of USD 534.1m (2023, same period: USD 463.4m), underscoring both strong market fundamentals and the growth of our fleet.
During the third quarter of 2024, ton-mile demand related to clean petroleum products grew by 12% year-on-year, However, during the quarter around 50 crude tankers cleaned up to transport clean petroleum products and thus captured much of the additional ton-mile demand. The effect of this combined with the third quarter’s seasonality led to TCE rates significantly subsiding compared to the first half of the quarter. Compared to the same quarter last year, average TCE rates were, however, at similar levels. In this market, TORM achieved TCE rates of USD/day 33,722 on average (2023, same period: USD/day 33,010), and available earning days increased to 7,788 (2023, same period: 7,658). Our vessel class LR2 achieved TCE rates of USD/day 41,064, the LR1 vessels achieved TCE rates of USD/day 33,749, and the MR vessels achieved TCE rates of USD/day 31,193.
For the third quarter of 2024, Return on Invested Capital amounted to 20.3% (2023, same period: 22.6%) reflecting the continued strong earnings relative to the increased investments in vessels.
During the quarter, the weighted number of average outstanding shares excluding treasury shares increased to 94.4m shares which combined with the net profit led to basic EPS of USD 1.38 (2023, same period: USD 1.47).
Key Figure
| USDm | Q3 2024 | Q3 2023 | change | Q1-Q3 2024 | Q1-Q3 2023 | change |
| Time charter equivalent earnings (TCE) | 263.4 | 244.4 | 19.0 | 920.1 | 817.4 | 102.7 |
| Adjusted EBITDA1 | 190.9 | 186.6 | 4.3 | 709.2 | 600.8 | 108.4 |
| Net profit/(loss) for the period | 130.7 | 124.3 | 6.4 | 534.1 | 463.4 | 70.7 |
| Unrealized gains/(losses) on derivatives | 0.8 | (8.4) | 9.2 | (0.6) | 12.8 | -13.4 |
| TCE per day (USD)2 | 33,722 | 33,010 | 712 | 39,626 | 36,837 | 2,789 |
| Return on invested capital | 20.3 % | 22.6 % | (2.3) % | 28.7 % | 29.4 % | (0.7) % |
| Basic earnings/(loss) per share (USD) | 1.38 | 1.47 | (0.09) | 5.77 | 5.57 | 0.20 |
| Declared dividend per share (USD) | 1.20 | 1.46 | (0.26) | 4.50 | 4.42 | 0.08 |
| Dividend pay-out ratio | 89 % | 99 % | (10) % | 78 % | 79 % | (1) % |
1Adjusted EBITDA excludes unrealized gains/losses on derivatives.
2 Unrealized gain/losses on derivatives included in TCE earnings and EBITDA, but not included in TCE per day.
Vessel Transactions
Early in the quarter, TORM entered into an agreement to acquire eight second-hand 2014-15 built MR vessels and during the quarter TORM took delivery of the first three of these vessels (TORM Diwata, TORM Durga, and TORM Damini).
After the closing of the quarter, TORM has taken delivery of a further three of the vessels (TORM Dulce, TORM Doris, and TORM Dagny), whilst the remaining two vessels are expected to be delivered before the end of the year.
Also in the quarter, TORM sold and delivered one 2006-built MR vessel, TORM Platte, to its new owner.
Thus, after completion of the deliveries, TORM’s fleet size will increase to 96 vessels.
Distribution of Dividend for the Third Quarter of 2024
TORM’s Board of Directors has today approved an interim dividend for the third quarter of 2024 of USD 1.20 per share to be paid to the shareholders corresponding to an expected total dividend payment of USD 116.2m. The distribution for the quarter is equivalent to 89% of net profit and reflects the Distribution Policy implemented this year. The payment date is 04 December 2024 to all shareholders on record as of 21 November 2024, and the ex-dividend date is 20 November 2024 for the shares listed on Nasdaq OMX Copenhagen and 21 November 2024 for the shares listed on Nasdaq New York.
Financial Outlook 2024 (INSIDE INFORMATION)
As of 04 November 2024, TORM had covered 52% of the Q4 2024 earning days at USD/day 29,044. For the individual vessel classes, the Q4 2024 coverage was 61% at USD/day 40,704 for LR2, 37% at USD/day 28,263 for LR1 and 51% at USD/day 24,493 for MR.
Thus, as of 04 November 2024 87% of the 2024 earning days were covered at USD/day 38,372. Hence, 13% of the full-year earning days in 2024 are subject to change. Consequently, as 4,001 earning days in 2024 are unfixed, a change in freight rates of USD/day 1,000 will – all other things being equal – impact the EBITDA by 4m
Based on the earnings realized in the first nine months of the year as well as the coverage for the remaining part of the year, TORM adjusts its full-year guidance for 2024, thus TCE earnings are expected to be USD 1,110 – 1,160m (previous guidance 1,150 – 1,350m), and EBITDA is expected to be USD 810 – 860m (previous guidance 850 – 1,050m) based on the current fleet size including announced acquisitions and divestment of vessels.