Cash flow from operating activities was positive with $54 mill in 2Q15, compared with $15 mill in 2Q14. During the period, the product tanker market continued to benefit from high refinery margins that supported the demand for transportation of refined products.
TORM’s largest segment, MRs, achieved spot rates of $22,746 per day in 2Q15, which is up by 73% year-on-year. The Tanker segment reported a gross profit of $56 mill in 2Q15, compared with $26 mill in 2Q14.
The bulk market remained at historically low levels during the period with average Panamax spot earnings at $5,189 per day (Baltic Panamax Index), or 18% below the level for the same period last year.
In 2Q15, TORM’s bulk segment reported a gross result of minus $ 1 mill, compared with a positive $1 mill in 2Q14.
TORM completed its restructuring programme on 13th July, which included (i) a write-down of debt of $535 mill in exchange for warrants with an estimated fair value of $18 mill, (ii) a conversion of debt of $312 mill in exchange for about 35.7 bill A shares to the converting lenders and (iii) a contribution by OCM Njord Holdings of 25 product tankers on water and six MR newbuildings in exchange for around 59.5 bill A shares.
As a result, Njord holds 61.99% of TORM’s outstanding shares, while DW Partners holds in excess of 5% of the outstanding shares.
The book value of the fleet was $1,192 mill as of 30th June, 2015. Based on broker valuations, TORM’s fleet excluding assets held-for-sale, had a market value of $861 mill as of the same date.
Net interest-bearing debt amounted to $1,337 mill as at the end of June, compared to $1,367 mill as at 31st March, 2015. The decrease in 2Q15 is primarily a result of positive cash flows before financing activities.
As of 30th June, 2015, TORM’s available liquidity was cash and cash equivalents amounting to $94 mill. There are no newbuildings on order or CAPEX commitments going forward.
The restructuring programme will be accounted for as a reverse acquisition, which means that for financial reporting purposes, Njord is the continuing reporting entity. As a result, the consolidated financial results and the guidance for the full year will reflect the activities of Njord only during the period from 1st January, 2015 to 13th July, 2015, whereas the remaining period of 2015 will reflect the combined activity of TORM and Njord.
For the full year 2015, TORM has upward adjusted the expectations for the combined group to a positive EBITDA of between $190-230 mill (up from $170-210 mill) and a profit before tax in the range of $115-155 mill (up from $100-140 mill).
“TORM has continued to benefit from the strong product tanker market that prevailed in the first half of 2015 where TORM generated an EBITDA of 100 mill,” said CEO Jacob Meldgaard: “I am very pleased that TORM finalised its restructuring on 13th July, 2015, as the company’s strong operational platform now has financial and strategic flexibility.”