TORM Returns to Profit After Five Years

Danish shipping company TORM reaped the benefits of a stronger tanker market delivering a positive net result for the first time in the last five years.

In the first quarter of 2015, TORM realized a positive EBITDA of USD 53m and a profit before tax of USD 9m, against a  loss of USD -222m from 2014.

TORM’s cash flow from operating activities after full interest payments was positive with USD 46m in the first quarter of 2015 (USD 10m).

“The combination of lower oil prices and wider refinery margins boosted the demand for transportation of refined oil products in the first quarter of 2015,” says CEO Jacob Meldgaard.

“TORM’s operational platform captured the benefits of the stronger market and has delivered a positive net profit result for the first time since the first quarter of 2010. The operational performance and the new restructuring agreement provide a robust foundation for TORM,” he added.

TORM’s largest segment, MRs, achieved spot rates of USD/day 25,275 in the first quarter of 2015, which is up by 66% year-on-year. The company’s tanker division reported a gross profit of USD 63m in the first quarter of 2015 (USD 32m).

In the quarter, the Panamax segment incurred the lowest average freight rates recorded by the Baltic Exchange Panamax Index. TORM’s bulk fleet achieved freight rates of USD/day 6,063, which is above the spot market but down by 63% compared to the first quarter of 2014. TORM’s bulk segment reported a gross result in the first quarter of 2015 of USD -2m (USD 1m).

TORM has signed the new restructuring agreement with Oaktree Capital Management and a majority of the lenders holding in aggregate 94% of TORM’s existing loan facilities by value on May 12th 2015.

The final implementation of the restructuring would be subject to certain conditions precedent, including required approvals from public authorities.

As the financial results for 2015 are subject to the completion of the new restructuring deal TORM said it would not provide earnings guidance for 2015.