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“The product tanker market was relatively soft in line with our expectations for the third quarter. Despite this, TORM’s fleet was able to capitalize on the market volatility, and the TCE earnings per day were on average up by 16% compared to the third quarter of 2013. TORM continued to generate positive cash flows from operations after full interest payment,” says CEO Jacob Meldgaard and adds “I am pleased that TORM has entered into an agreement with a group of its lenders and Oaktree Capital Management regarding a possible restructuring of TORM.” TORM realized a positive EBITDA of USD 14m and a loss before tax of USD 26m in Q3 2014. |
- EBITDA for the third quarter of 2014 was a gain of USD 14m (Q3 2013: USD 11m). The result before tax for the third quarter of 2014 was a loss of USD 26 (USD -40m). Cash flow from operating activities after full interest payments was positive with USD 6m in the third quarter of 2014 (USD 9m).
- During the third quarter of 2014, the product tanker market showed further signs of recovery despite a weak Atlantic basin with increasing naphtha demand in Asia during the period. TORM’s largest segment, MRs, achieved spot rates of USD/day 14,295 in the third quarter of 2014, which is down 2% year-on-year. The Tanker Division reported an EBITDA of USD 15m in the third quarter of 2014 (USD 22m).
- The bulk market remained under pressure during the third quarter of 2014 with spot freight rates for the Panamax segment averaging USD/day 5,860, or -34% compared to the same period last year. TORM’s largest segment, Panamax, achieved freight rates of USD/day 10,426 in the third quarter of 2014. The Bulk Division reported an EBITDA in the third quarter of 2014 of USD -1m (USD -11m).
- With reference to company announcement no. 16 dated 27 October 2014, TORM has entered into an agreement with a group of its lenders, representing 61% of TORM’s ship financing, and Oaktree Capital Management regarding a possible restructuring of TORM.
- The book value of the fleet was USD 1,232m as of 30 September 2014. Based on broker valuations, TORM’s fleet had a market value of USD 899m as of 30 September 2014. In accordance with IFRS, TORM estimates the product tanker fleet’s total long-term earning potential each quarter based on discounted future cash flow. The estimated value of the fleet as of 30 September 2014 supports the carrying amount.
- Net interest-bearing debt amounted to USD 1,376m as at 30 September 2014, compared to USD 1,367m as at 30 June 2014.
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As of 30 September 2014, TORM’s available liquidity was USD 75m consisting of USD 30m in cash and USD 45m in undrawn credit facilities. There are no newbuildings on order or CAPEX commitments related hereto.
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TORM’s equity is negative with USD 150m as at 30 September 2014.
- By 30 September 2014, TORM had covered 19% of the remaining tanker earning days in 2014 at USD/day 16,803 and 55% of the remaining bulk earning days in 2014 were covered at USD/day 9,673.
- For the full year 2014, TORM upward adjusts the forecasts to a positive EBITDA of USD 70-80m and a loss before tax of USD 280-290m. As at 30 September 2014, 3,910 earning days for 2014 were unfixed, where a change in freight rates of USD/day 1,000 would impact the forecasts by USD 4m. The forecasts are before any potential further vessel sales or impairment charges. TORM expects to be operational cash flow positive after full interest payments. By 30 September 2014, TORM was in compliance with its financial covenants.
| Conference call | Contact TORM A/S | |
| TORM will be hosting a conference call for financial analysts and investors at 3 pm CET today. Please dial in 10 minutes before the conference is due to start on +45 3271 4607 (from Europe) or +1 877 491 0064 (from the USA). The presentation can be downloaded from www.torm.com. |
Tuborg Havnevej 18, DK-2900 Hellerup, Denmark Tel.: +45 3917 9200 / Fax: +45 3917 9393, www.torm.com DK-VAT: 22460218 Jacob Meldgaard, CEO, tel.: +45 3917 9200 Mads Peter Zacho, CFO, tel.: +45 3917 9200 Christian Søgaard-Christensen, IR, tel.: +45 3076 1288 |
