Form 6-K TORM plc For: Jun 30

TORM PLC

Dated: August 10, 2021

By:

/s/ Jacob Meldgaard

Jacob Meldgaard

Executive Director and Principal Executive Officer

VESSEL TRANSACTIONS

During the second quarter of 2021, TORM took delivery of six of the eight 2007-2012 built MR product tanker vessels from Team Tankers Deep Sea Ltd. and the remaining two vessels were delivered during July 2021. A total of 5.97m shares was issued as part of the payment for the vessels. In the first quarter of 2021, TORM purchased the three 2015-built scrubber-fitted and fuel-efficient LR2 vessels Nissos Schinoussa, Nissos Heraclea and Nissos Therassia from Okeanis Eco Tankers Corp. for a total consideration of USD 120.8m. Nissos Schinoussa and Nissos Therassia were delivered in the second quarter of 2021 and Nissos Heraclea is expected to be delivered in August 2021. 

In the first quarter of 2021, TORM obtained commitment for the financing of two of the vessels from Danish Ship Finance for USD 60.0m. The third vessel will be financed through a sale- and leaseback agreement with proceeds of USD 31.8m. Commitment for this and for the sale- and leaseback of two LR2 vessels was obtained from a Chinese financial institution on attractive terms. The sale- and leaseback transactions were closed early in the third quarter and are expected to generate net liquidity of USD 24.1m.

LIQUIDITY

As of 30 June 2021, TORM’s available liquidity was USD 267.4m consisting of USD 111.3m in cash and cash equivalents including restricted cash, USD 24.6m in undrawn credit facilities and USD 131.5m (net of USD 46.2m existing TORM debt to be repaid) sale and leaseback financing related to the financing of two newbuildings and one secondhand and the refinancing of two LR2 vessels. Cash and cash equivalents include USD 7.1m in restricted cash, primarily related to collateral for financial instruments. As of 30 June 2021, net interest-bearing debt amounted to USD 889.5m, and TORM's net loan-to-value (LTV) ratio was 53.9%.

VESSEL VALUES

Based on broker valuations, TORM’s fleet including newbuildings had a market value of USD 1,904.4m as of end June 2021. Compared to broker valuations as of 31 March 2021, the market value of the fleet increased by USD 81.1m when adjusted for acquired and sold vessels acquired in Q2. The book value of TORM’s fleet was USD 1,911.6m as of 30 June 2021 excluding outstanding payments on the newbuildings and secondhand vessels. The outstanding installments include payment for scrubbers related to the two LR2 newbuildings.

NET ASSET VALUE

Based on broker valuations, TORM’s Net Asset Value (NAV) excluding charter commitments was estimated at USD 930.9m as of 30 June 2021 corresponding to a NAV/share of USD 11.8 (DKK 73.8). TORM’s book equity amounted to USD 1,047.6m as of 30 June 2021 corresponding to a book equity/share of USD 13.2 (DKK 82.5).

SCRUBBER UPDATE

As of 30 June 2021, TORM had installed 49 scrubbers out of 53 planned and the remaining 4 are expected to be installed during the remainder of 2021 and the first quarter of 2022, including two on the LR2 newbuildings and one on an acquired vessel.

COVERAGE

As of 30 June 2021, 23% of the remaining total earning days in 2021 were covered at an average rate of USD/day 14,612. As of 05 August 2021, the coverage for the third quarter of 2021 was 65% at USD/day 13,387. For the individual segments, the coverage was 76% at USD/day 15,700 for LR2, 62% at USD/day 10,062 for LR1, 64% at USD/day 13,391 for MR and 45% at USD/day 8,313 for Handysize.

On behalf of TORM plc

 

Christopher H. Boehringer, Chairman of the Board of Directors

10 August 2021

SAFE HARBOR STATEMENTS AS TO THE FUTURE

 

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 statements other than statements of historical facts. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions generally identify forward-looking statements.

 

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 the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, the Company cannot guarantee 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 the world economy and currencies, general market conditions, including fluctuations in charter hire rates and vessel values, the duration and severity of the COVID-19, including its impact on the demand for petroleum products and the seaborne transportation thereof, the operations of our customers and our business in general, changes in demand for “ton-miles” of oil carried by oil tankers and changes in demand for tanker vessel capacity, 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 the regulation of shipping operations, including 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, political events including “trade wars,” or acts by terrorists.

 

 

 

In light of these risks and uncertainties, you should not place undue reliance on forward-looking statements contained in this release because they are statements about events that are not certain to occur as described or at all. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

 

Except to the extent required by applicable law or regulation, the Company undertakes no obligation to release publicly any revisions or updates to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Please

see TORM’s filings with the U.S. Securities and Exchange Commission for a more complete discussion of certain of these and other risks and uncertainties.

 

USDm

Q2 2020

Q3 2020

Q4 2020

Q1 2021

Q2 2021

Change Q2 20 - Q2 21

12-month avg.

LR2 vessels

Available earning days

 1,002

901

  873

  847

  788

-21%

Spot rates ¹⁾

37,677

 21,495

  18,510

  10,221

11,716

-69%

 15,443

TCE per earning day ²⁾

32,732

23,854

 19,632

 16,455

 14,303

-56%

 18,726

Operating days

 1,092

  984

  920

  900

931

-15%

Operating expenses per operating day ³⁾

6,864

7,756

7,274

6,779

 7,019

2%

 7,218

LR1 vessels

Available earning days

812

 811

  826

  805

813

0%

Spot rates ¹⁾

  30,116

20,703

  13,081

  13,710

 12,954

-57%

 15,222

TCE per earning day ²⁾

 31,655

20,629

  14,931

 14,750

  14,914

-53%

 16,302

Operating days

819

  828

  828

810

819

0%

Operating expenses per operating day ³⁾

5,787

6,530

6,752

7,527

6,329

9%

6,782

MR vessels

Available earning days

 4,791

4,663

4,372

4,378

4,750

-1%

Spot rates ¹⁾

23,297

 15,259

  11,082

  11,838

 14,009

-40%

  13,147

TCE per earning day ²⁾

 23,012

 15,077

  11,243

 12,935

 14,566

-37%

 13,504

Operating days

5,069

4,987

 4,715

4,663

4,997

-1%

Operating expenses per operating day ³⁾

 5,910

6,595

 6,681

6,656

6,523

10%

 6,612

Handy vessels

Available earning days

182

183

 116

176

182

0%

Spot rates ¹⁾

 15,872

 7,193

 9,051

7,382

  14,916

-6%

9,753

TCE per earning day ²⁾

 15,270

7,628

8,257

7,362

 15,062

-1%

9,728

Operating days

182

184

184

180

182

0%

Operating expenses per operating day ³⁾

5,097

 6,186

6,826

 6,159

5,637

11%

6,204

Tanker segment

Available earning days

6,787

6,558

 6,187

6,206

6,533

-4%

Spot rates ¹⁾

25,528

 16,220

11,717

  11,889

 13,760

-46%

 13,483

TCE per earning day ²⁾

25,274

 16,762

 12,863

 13,493

  14,591

-42%

 14,463

Operating days

 7,162

6,983

6,647

6,553

6,929

-3%

Operating expenses per operating day ³⁾

 6,021

6,740

6,776

6,767

6,543

9%

6,705

¹⁾ Spot rates = Time Charter Equivalent Earnings for all charters with less than six months' duration = Gross freight income less bunker, commissions and port expenses.

²⁾ TCE = Time Charter Equivalent Earnings = Gross freight income less bunker, commissions and port expenses.

³⁾ Operating expenses are related to owned vessels and vessels on bareboat charter-in.

USDm

Note

Q2 2021

Q2 2020

Q1-Q2 2021

Q1-Q2 2020

FY 2020

Revenue

150.8

  227.8

  274.9

  470.4

  747.4

Port expenses, bunkers and commissions

  -47.3

  -53.4

  -94.7

-137.8

  -227.9

Operating expenses

1

  -45.4

  -43.2

  -89.7

  -86.3

-178.4

Profit from sale of vessels

  -

  0.2

  -

  0.2

 1.1

Administrative expenses

1, 2

-13.2

-12.2

  -26.8

  -26.0

  -50.8

Other operating income and expenses

-0.1

-0.1

-0.1

0.1

-19.3

Share of profit/(loss) from joint ventures

-0.1

-0.1

  -

-0.1

  -0.2

Impairment losses and reversal of impairment on tangible assets

2, 4

  -0.8

  -3.3

  -0.8

  -3.3

  -11.1

Depreciation

2

-31.5

  -30.6

  -62.0

  -62.0

 -121.9

Operating profit/(loss) (EBIT)

12.4

85.1

  0.8

155.2

138.9

Financial income

-0.1

  0.3

  0.2

  0.7

  0.5

Financial expenses

  -9.9

-14.0

-19.7

  -27.7

  -49.9

Profit/(loss) before tax

  2.4

71.4

-18.7

128.2

  89.5

Tax

  -0.3

  -0.3

  -0.5

  -0.7

-1.4

Net profit/(loss) for the period

2.1

 71.1

-19.2

127.5

88.1

EARNINGS PER SHARE

Basic earnings/(loss) per share (USD)

  0.03

  0.96

  -0.25

 1.71

 1.19

Diluted earnings/(loss) per share (USD)

  0.03

  0.96

  -0.25

 1.71

 1.19