ANNOUNCEMENT NO. 5 - 2008
14 March 2008
At the end of 2007, TORM's Board of Directors and Management developed a new
strategy, “Greater Earning Power 2.0”, which was approved in January 2008. The
strategy focuses on continued growth over the next three years, which means
that the number of vessels in the fleet has to grow to 225-250 incl. pool
vessels. The organization's resources should reflect these ambitions, and
therefore the next three years will focus on the development of competences and
growth as well as to operate the Company in a socially responsible manner.
• The profit before restructuring costs and tax was USD 819 million, which is
in line with the latest forecast of USD 810-820 million excluding restructuring
costs of USD 15 million in connection with the acquisition of OMI. No vessels
have been sold in 2007. The Board of Directors considers the profit to be
highly satisfactory.
• EBITDA was USD 304 million (DKK 1,654 million).
• Cash flow from operating activities was USD 205 million (DKK 1,115 million).
Cash flow before financing activities was USD -159 million (DKK -865 million),
while cash flow from investing activities was USD -364 million (DKK -1,980
million).
• At 31 december 2007, equity amounted to USD 1,081 million (DKK 5,491
million), corresponding to USD 15.6 per share (DKK 79.3) excluding treasury
shares.
• The market value of the Company's fleet as of 31 December 2007 exceeded the
book value by USD 1,578 million (2006: USD 1,061 million), equalling USD 22.8
per share (DKK 115.8) excluding treasury shares. To this should be added 44
chartered vessels. The company has purchase options on 19 of these.
• Return on Invested Capital (RoIC) was 10.5% (2006: 19.6%), and Return on
Equity (RoE) was 67.1% (2006: 21.5%).
• In March 2007, TORM sold its stake in Norden at a price of DKK 3,987 million
(USD 713 million), and in September half of the proceeds were distributed as an
extraordinary dividend, corresponding to DKK 27.5 per share (USD 5.1 per
share).
• In June 2007, TORM took over the US shipping company OMI in collaboration
with the Canadian shipping company Teekay. In connection with the acquisition
of OMI, TORM took over 26 product tankers incl. one newbuilding for delivery in
2009. Four of these were chartered vessels.
• At the end of 2007, the Company owned 62 vessels, 56 of which were product
tankers and six bulk carriers. In addition to the vessels taken over from OMI,
the Company took delivery of five vessels during the year and contracted seven
newbuildings not yet delivered.
• By the end of 2007, TORM had 21 vessels on order and had exercised one
purchase option. Consequently, the Company's fleet of owned and chartered
vessels will by 2011 consist of 143 vessels incl. pool vessels based on
existing contracts.
• The forecast profit before tax for 2008 excl. sale of vessels is USD 210-230
million. The profit before tax in 2007 was USD 161 million, excluding a profit
of USD 643 million from the sale of the Norden shares.
• The Board of Directors recommends, subject to approval by the Annual General
Meeting, that a dividend of DKK 4.50 (USD 0.89) per share be paid,
corresponding to a total dividend payment of DKK 327.6 million (USD 64.5
million) and equivalent to a return of 2.5% in relation to the closing price of
the Company's shares on the last business day of 2007. Including the
extraordinary dividend of DKK 27.5 (USD 5.1) per share paid out in September
2007, the accumulated dividend for 2007 was 55% of the net profit equivalent to
DKK 2,330 million (USD 434 million).
Telephone conference
A telephone conference and webcast (www.torm.com) reviewing the Annual Report
2007 will take place today, 14 March 2008, at 16:00 Copenhagen time. To
participate, please call 10 minutes before the call on tel.: +45 3271 4607
(from Europe) or +1 334 323 6201 (from the USA). A replay of the conference
will be available from TORM's website.
Contact A/S Dampskibsselskabet TORM Telephone +45 39 17 92 00
Tuborg Havnevej 18 Klaus Kjærulff, CEO
DK-2900 Hellerup
Denmark
About TORM TORM is one of the world's leading carriers of refined oil products
as well as being a significant participant in the dry bulk market. The Company
operates a combined fleet of 128 modern vessels, principally through a pooling
cooperation with other respected shipping companies who share TORM's commitment
to safety, environmental responsibility and customer service.
TORM was founded in 1889. The Company conducts business worldwide and is
headquartered in Copenhagen, Denmark. TORM's shares are listed on the
Copenhagen Stock Exchange (ticker TORM) as well as on the NASDAQ (ticker TRMD).
For further information, please visit www.torm.com.
Safe Harbor
Forward Looking
Statements Matters discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views with respect
to future events and financial performance and may include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other than
statements of historical facts. The forward-looking statements in this release
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, Management's examination of
historical operating trends, data contained in our records and other data
available from third parties. Although TORM believes that these assumptions
were reasonable when made, because these assumptions are inherently subject
to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, TORM cannot assure you that
it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward looking statements include the
strength of world economies and currencies, changes in charter hire rates and
vessel values, changes in demand for “tonne miles” of oil carried by oil
tankers, the effect of changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in demand that may affect
attitudes of time charterers to scheduled and unscheduled dry-docking, changes
in TORM's operating expenses, including bunker prices, dry-docking and
insurance costs, changes in governmental rules and regulations including
requirements for double hull tankers or actions taken by regulatory
authorities, potential liability from pending or future litigation, domestic
and international political conditions, potential disruption of shipping routes
due to accidents and political events or acts by terrorists. Risks and
uncertainties are further described in reports filed by TORM with the US
Securities and Exchange Commission, including the TORM Annual Report on Form
20-F and its reports on Form 6-K.
Forward looking statements are based on management's current evaluation, and
TORM is only under obligation to update and change the listed expectations to
the extent required by law.
