Pro forma EBITDA was $319 mill for 2015, compared to $119 mill in 2014, while the company recorded a positive EBITDA of $210 mill for the year. The 2015 pro forma profit before tax amounted to $188 mill, compared to just $1 mill for 2014 with the reported profit being $127 mill.
In the first half of 2015, the product tanker freight rates were driven by increasing refinery margins, strong growth in US demand for gasoline, long-haul movement of naphtha from Europe to the Far East and newly added Middle East refinery capacity, leading to strong freight rates during the period.
In the second half of the year, refinery margins and freight rates peaked during the third quarter. During the fourth quarter, freight rates softened, despite remaining at strong level, TORM said.
For the full year, TORM’s average spot rates reached the highest levels seen since 2008 with pro forma rates of $22,986 per day recorded, compared to $15,565 per day for the previous year - a 48% increase.
The tanker division’s pro forma gross profit was $365 mill last year, compared with $171 mill in 2014, corresponding to an increase of $194 mill year-on-year, primarily due to the increased freight rates.
In 2015, TORM sold its last two drybulk vessels, resulting in the company becoming a pure product tanker player.
On 13th July, 2015, TORM, its lenders and Oaktree, completed a comprehensive restructuring of the company’s balance sheet following the effective merger between TORM and Oaktree.
The restructuring included a debt write-down of $536 mill, a $312 mill debt conversion into new equity in TORM and a contribution of 25 vessels and six newbuildings by Oaktree. In return for the vessel contribution and the debt-to-equity conversion, Oaktree and TORM’s lenders obtained equity stakes in TORM of 62% and 37%, respectively, following a share capital increase.
Furthermore, TORM also adopted new corporate governance provisions including minority shareholder protection rights, published a listing prospectus, elected a new board, implemented a reverse stock split with a consolidation ratio of 1,500:1 and, on 13th January, 2016, conducted a subsequent share capital decrease of the company’s treasury shares.
As of 31st December, 2015, TORM’s available liquidity was $243 mill, which consisted of $168 mill in cash and $75 mill in undrawn credit facilities. Outstanding CAPEX relating to the order book and vessel purchases amounted to $224 mill. Net interest-bearing debt totalled $612 mill.
In addition to the financial restructuring of TORM’s debt, the company secured new financing of $93 mill against collateral in three MR newbuildings and two MRs.
For 2016, TORM forecast an EBITDA of between $250 - $330 mill and a profit before tax of between $100 mill - $180 mill.
“The positive market sentiments that started in the fourth quarter of 2014 continued throughout 2015 with freight rates reaching the highest levels since 2008. The completion of TORM’s restructuring has provided TORM with financial and strategic flexibility. TORM realised a pro forma EBITDA of $319 mill and a ROIC of 14% in 2015, when adjusting for the restructuring,” said CEO, Jacob Meldgaard.