Torm 1H pre-tax profit of 28,7m dollar
The profit before tax for the first six months of 2019 amounted to USD 28.7m, compared to a loss of USD 7.5m I the first half of 2018. EBITDA for the half year ended 30 June 2019 was USD 102.1m, compared to USD 66.7m in 1H 2018.
”TORM’s results in the first half of 2019 reflect the Company’s strong operating performance relative to its peers and our focus on maintaining efficient operations and a low cost base. Our profit before tax of USD 28.7m in the first half of 2019 represented the strongest half-year result in three years, and we are pleased to be able to generate a profit also in the second quarter of year that has been negatively impacted by an unusually high and prolonged refinery maintenance period,“ says Executive Director Jacob Meldgaard and adds: “We believe the IMO 2020 regulation will drive increased demand for product tankers and that TORM is well positioned to take advantage of these new market dynamics.”
The Board of Directors has considered the Company’s options and believes that at this time the continued modernization of the fleet through newbuildings, purchase of modern second-hand tonnage and scrubber installations will provide for the optimal capital allocation.
In the second quarter of 2019, TORM achieved TCE rates of USD/day 15,405 (2018, same period: USD/day 12,944). The product tanker freight rates started the first quarter of 2019 at strong levels, last seen in 2016, before softening throughout the quarter as spring refinery maintenance gained pace. Refinery maintenance in the second quarter was particularly pronounced, and coupled with a series of unplanned outages, the volume of global refinery capacity that was offline was 23% higher than during the same period last year.
During the second quarter of 2019, TORM has purchased four modern 2011-built MR vessels for a total consideration of USD 83m. The vessels are expected to be delivered during August 2019. To finance the purchase and to support TORM’s solid capital structure, TORM has entered into six sale and leaseback transactions, which are expected to be executed during the third quarter of 2019. The transactions cover:
Four recently purchased 2011-built MR vessels providing proceeds of USD 66m. The transaction is with a Chinese counterpart and includes a purchase obligation in 2025.
The MR vessels TORM Torino and TORM Titan (both 2016-built) are providing total proceeds of USD 52m, and in connection with the transactions, USD 18m of the existing debt will be repaid. The transactions are with two separate Japanese counterparts and include a purchase obligation in 2024 for TORM Torino and in 2026 for TORM Titan
TORM also took delivery of two MR newbuildings during the second quarter of 2019, sold the MR vessel TORM Gunhild (built in 1999) for a consideration of USD 6m and repaid debt of USD 4m in connection with the vessel sale. The vessel has been delivered to the new owners. After the quarter ended on 30 June 2019, TORM has taken delivery of one MR newbuilding and sold two additional vessels, the MR vessel TORM San Jacinto (built in 2002) and the Handy vessel TORM Saone (built in 2004), for a total consideration of USD 16m. TORM will repay debt of USD 9m in connection with the vessel sales and expects to deliver the vessels to the new owners during the third quarter of 2019.
As of 30 June 2019, 11% of the remaining total earning days in 2019 were covered at an average rate of USD/day 15,197. As of 12 August 2019, 60% of the total earning days in the third quarter of 2019 were covered at USD/day 13,636. 31% of the total earning days in the second half of 2019 were covered at USD/day 13,738.