TORM plc interim results for the half-year ended 30 June 2017

16 August 2017

"I am satisfied that we have been able to deliver a profit for the first six months of 2017 despite a difficult product tanker market. Over the summer, we have utilized our strong capital structure to pursue two attractive vessel growth opportunities totaling six vessels at what we believe is an opportune time in the cycle," says Executive Director Jacob Meldgaard.

In the first six months of 2017, TORM realized a positive EBITDA of USD 80m and a profit before tax of USD 3m. Q2 2017 had an EBITDA of USD 36m and a profit before tax of USD -2m.

• EBITDA for the half-year ended 30 June 2017 was USD 80m %282016, same period: USD 126m%29. Profit before tax for the first six months of 2017 was USD 3m %282016, same period: USD 46m%29. Cash flow from operating activities was positive with USD 65m in the first six months of 2017 %282016, same period: USD 116m%29 and earnings per share %28EPS%29 was USD 0.0 %282016, same period: USD 0.7%29.

• During the half-year ended 30 June 2017, consumption of clean petroleum products was healthy; however, inventory drawdowns were limited due to the large quantity of oil being refined. The high clean petroleum product inventories had a negative impact on the demand for product tankers. TORM%27s product tanker fleet realized average TCE earnings of USD/day 14,567 for 13,722 earning days %282016, same period: USD/day 18,713 for 14,024 earning days%29 and a gross profit of USD 100m %282016, same period: USD 148m%29.

• The Board of Directors has approved an interim dividend of USD 1.2m, equivalent to USD 0.02 per share. The dividend is expected to be distributed on 12 September 2017 with the ex-dividend date on 24 August 2017. The interim dividend payment is in line with the Company%27s distribution policy and corresponds to 42% of net income for the six months ended 30 June 2017.

• During the first six months of 2017, TORM sold three vessels: TORM Anne %281999-built MR vessel%29, TORM Madison and TORM Trinity %28both 2000-built Handysize vessels%29. Furthermore, TORM completed sale and leaseback transactions for three vessels: TORM Helene, TORM Mary and TORM Vita. The three sale and leaseback transactions are treated as financial leases but have no purchase obligation attached.

• Following the balance sheet date, TORM has completed two transactions to purchase a total of six MR resale vessels for a total consideration of USD 185m. The first transaction includes four MR resale vessels with expected delivery in 2019. TORM has received firm commitment from Danish Ship Finance to finance the four vessels with 65% of the purchase price. The transaction includes an option to purchase up to four additional MR vessels with expected delivery in late 2019. The second transaction includes two MR resale vessels for delivery in the third quarter of 2017. In addition to the six vessels purchased, TORM has sold one vessel, TORM Fox, a 2005-built Handysize vessel.

• The carrying value of the fleet including prepayments was USD 1,342m as of 30 June 2017 excluding outstanding installments on the LR2 newbuildings of USD 134m. Based on broker valuations, TORM%27s fleet including newbuildings had a market value of USD 1,354m as of 30 June 2017. Compared to the broker valuations as of 31 March 2017, the fleet value has increased by USD 9.6m %28~0.7%%29. When excluding vessels sold during the second quarter, the fleet value has increased by ~1.8%.

• Net interest-bearing debt amounted to USD 556m as of 30 June 2017.

• As of 30 June 2017, TORM had undrawn credit facilities and cash of approx. USD 404m. As of 30 June 2017, TORM%27s order book stood at four LR2 newbuildings with expected delivery in 2017 and 2018. Outstanding CAPEX relating to the order book amounted to USD 134m and is fully financed. The available liquidity, order book and outstanding CAPEX figures are as of 30 June 2017. The figures do not include financing and CAPEX commitments related to the six MR resale vessels.

• Based on broker valuations as of 30 June 2017, TORM%27s net asset value %28NAV%29, excluding charter commitments, is estimated at USD 707m, equivalent to a NAV/share of USD 11.4 or DKK 74.2.

• Equity amounted to USD 788m as of 30 June 2017, equivalent to a book equity/share of USD 12.7 or DKK 82.8 excluding treasury shares and outstanding warrants, giving TORM an equity ratio of 48%.

• As of 30 June 2017, 21% of the remaining earning days in 2017 were covered at USD/day 16,046.

• As of 7 August 2017, TORM had covered 58% of the earning days in the third quarter of 2017 at an average TCE of USD/day 14,442.

About TORM
TORM is one of the world%27s leading carriers of refined oil products. The Company operates a fleet of approximately 80 modern vessels with a strong commitment to safety, environmental responsibility and customer service. TORM was founded in 1889. The Company conducts business worldwide. TORM%27s shares are listed on Nasdaq Copenhagen %28ticker: TRMD A%29. For further information, please visit www.torm.com.

TORM, press release