However, the EBIT for the drybulk division was a negative $9 mill, compared with a negative $22 mill in 3Q14.
The result for 3Q15 was $10 mill, compared with a loss of $46 mill in 3Q14. ? ?
TORM said that declining rates seen thus far in the fourth quarter will provide a difficult start to 2016.
Expectations for the 2015 EBIT was maintained at $70- $90 mill.
“TORM’s strong operational platform has delivered the highest product tanker freight rates since 2008 and a positive EBITDA of USD 96 mill in the third quarter of 2015. TORM has demonstrated its financial and strategic flexibility with the exit from bulk to become a pure-play product tanker company, the acquisition of three MR vessels and two new financing agreements in the third quarter of 2015,” said CEO Jacob Meldgaard. “With our proven track record and a large fleet on the water, TORM is well-positioned to take advantage of the promising supply and demand fundamentals in the market.”
On 13th July, 2015, TORM successfully completed the restructuring programme, which includedthe contribution of 31 vessels by OCM (Gibraltar) Njord Midco.
In connection with the restructuring, TORM has published a listing prospectus, elected a new board and mandated a reverse stock split that was completed at a consolidation ratio of 1,500:1 on 24th September, 2015.
Due to reverse acquisition accounting, the consolidated financial results reflected the activities for Njord only for 2014 and the period from 1st January, 2015 until 13th July, 2015, whereas the remaining period of this year will reflect the combined activity of TORM and Njord.
This quarterly report also contained pro forma figures for Q1-Q3 of 2014 and 2015.
The reported EBITDA for 3Q15 was $96 mill and the pro forma EBITDA was $105 mill.
The reported profit before tax for the third quarter of 2015 was $65 mill and the pro forma profit before tax was $81 mill (2014, same period, pro forma = minus $4 mill).
During 3Q15, the product tanker market reached its highest level since 2008, primarily due to continued high refinery utilisation supporting demand for transportation of refined products.
TORM’s largest segment, MRs, achieved spot rates of $24,599 per day in 3Q15, which was up by 77% year-on-year.
As the final step in the planned wind-down of TORM’s bulk activities, the two Panamax vessels were sold during the quarter. There was no P&L effect from the sale. The vessels have been delivered to their new owners and as a result, TORM no longer operates any owned or timechartered-in vessels in the bulk segment.
Net interest-bearing debt amounted to $534 mill as at 30th September, 2015. During the 3Q15, TORM secured undrawn financing of $67 mill from Danish Ship Finance for the first three newbuildings and undrawn financing of $26 mill from Danske Bank for the purchase of two out of the three secondhand MRs.
For the full year 2015, TORM has narrowed the EBITDA to a positive range of $200 - 220 mill and profit before tax of $115 – 135 mill. On a pro forma basis TORMs full year guidance equals an EBITDA in the range of $310 - 330 mill and a profit before tax in the range of $185 – 205 mill.
TORM also announced that it is contemplating a new structure with a potential listing on the New York Stock Exchange and Nasdaq Copenhagen, which, if undertaken, is expected to be completed in 2016.
Near neighbour and rival NORDEN reported Group EBIT of $21 mill for 3Q15, compared with a negative $28 mill in 3Q14. The result for the period was plus $10 mill, compared with a negative $46 mill in the same period of 2014.
This was helped by a record tanker sector EBIT of $37 mill, compared to a negative $2 mill in 3Q14. Holding the company back was a weak drycargo sector, which posted an EBIT of minus $9 mill, an improvement over minus $22 mill recorded for 3Q14.
However, NORDEN said that the TCEs in both sectors were considerably above market rates. The company also said that it would continue its policy of optimising the newbuilding programme and cost savings.
Similar to other tanker companies, NORDEN said that declining rates at the start of the 4Q15 would mean a difficult start to next year.
Forecasts for the 12-month EBIT maintained at $70-90 mill.
CEO Jan Rindbo, commented: ”NORDEN’s tanker business has achieved a record result. Low oil prices and strong demand have kept tanker rates up also during the third quarter, which is otherwise considered to be low season.
“The strong tanker result provides comfort during a time, when the drycargo market continues to be very challenging, and consequently NORDEN has reduced its exposure to the market by adjusting its newbuilding programme and by chartering vessels for shorter periods.
“Our initiated cost focus continues with good results, and we look forward to implementing our new strategy ‘Focus and Simplicity’, which sets out to make NORDEN market leader within Supramax and Panamax vessels,” he said.