Historically low rates impact TORM results

Mar 15 2019


Product tanker owner and operator, TORM suffered a loss before tax of $33 mill last year, compared to a profit of $3 mill in 2017.

EBITDA was recorded as $121 mill for 2018, compared with $158 mill in the previous year. 

TORM achieved average fleet TCE rates of $12,982 last year, compared to $14,621 per day during 2017.

The first half of 2018 continued a trend seen in 2017 with healthy consumer-driven demand for refined oil products offset by inventory drawdown. The drawdowns resulted in a loss of potential trade of 4% over the period.

In 3Q18, freight rates reached historically low levels, due to reduced trading volumes and continued cargo cannibalisation by newbuilding crude tankers opting for clean cargoes on their maiden voyages.

Towards the end of last year and in early 2019, the broader tanker markets experienced a significant recovery with freight rates reaching levels last seen towards the end of 2015 and beginning of 2016.

As of 31st December, 2018, TORM’s available liquidity was $406 mill consisting of $127 mill in cash, $233 mill in undrawn credit facilities and $46 mill in undrawn credit facilities subject to documentation.

Net interest-bearing debt amounted to $627 mill.

During 2018, TORM secured bank financing for five newbuildings, ensuring that the newbuilding programme is fully financed. In addition, TORM has extended one credit facility with original maturity in 2019.

As of the end of last year, 10% of the total earning days in 2019 were covered at an average of $17,306. As of 5th March, 2019, 85% of the total earning days were covered at $18,522 for 1Q19. Around 24% of the total earning days in 2019 were covered at an average of $18,193.

“TORM’s commercial performance over the past year has continuously been among the best within its peer group. The product tanker market has rebounded significantly since November, 2018, and looking ahead, we are well-positioned to leverage the ongoing market recovery, illustrated by a 43% increase in freight rates achieved so far in the first quarter of 2019 compared to 2018,” claimed executive director, Jacob Meldgaard.

 



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