Slide 1: Q1 2017 Results
16 May 2017 Q1 2017 RESULTS
Slide 2: Safe Harbor Statement
Safe Harbor Statement Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or
Slide 3: Agenda
AGENDA • Highlights • Product Tanker Market Overview and Outlook • Financial and Operating Performance 3
Slide 4: Highlights for Q1 2017
HIGHLIGHTS FOR Q1 2017 • EBITDA of USD 44m and Profit before tax of USD 5m Q1 2017 • RoIC of 3.9% and Earnings per share of USD 0.1 or DKK 0.7 Results • Net Asset Value estimated at USD 663m as of 31 March 2017, corresponding to a NAV/share of USD 10.7 or DKK 75 • Solid balance sheet, Net Loan-to-Va
Slide 5: EBITDA of USD 44m in Q1 2017
EBITDA OF USD 44M IN Q1 2017 USDm Q1 2017 Q1 2016 2016 P&L TCE Earnings 107 138 458 Gross profit 55 80 242 Sale of vessels 0 0 0 EBITDA 44 70 200 Profit before tax 5 31 -142 Adjusted profit before tax 6 31 43 (excluding the impairment charge) Balance sheet Equity 786 1,001 781 NIBD 596 605 609 Cash
Slide 6: Agenda
AGENDA • Highlights • Product Tanker Market Overview and Outlook • Financial and Operating Performance 6
Slide 7: Product tanker freight rates improved in Q1 from previous quarter
PRODUCT TANKER FREIGHT RATES IMPROVED IN Q1 FROM PREVIOUS QUARTER FREIGHT RATES IN ‘000 USD/DAY Q1 West 60 • High gasoline stocks in the US limited imports from Europe LR2 (TC1) 50 • Steady demand in West Africa and strong demand in Brazil provided long-haul demand for LRs and MRs 40 • Very strong d
Slide 8: Demand fundamentals for product tankers
DEMAND FUNDAMENTALS FOR PRODUCT TANKERS GLOBAL CPP INVENTORIES Short-term factors • Current oil price level continues to support global oil demand, which is Billion bbl expected to grow by 1.3 mb/d in 2017, well above the average of 1.0 mb/d during 2005-2015 • Robust oil demand has helped to draw do
Slide 9: Supply outlook for the product tanker fleet varies by segment
SUPPLY OUTLOOK FOR THE PRODUCT TANKER FLEET VARIES BY SEGMENT NET FLEET GROWTH Y-O-Y (NO. OF VESSELS)* • In Q1, newbuilding focus was on crude tankers % 2005-2015 average fleet growth for while activity within product tankers remained LR2, LR1, MR and Handysize relatively limited • The product tanke
Slide 10: Product tanker vessel prices
PRODUCT TANKER VESSEL PRICES VESSEL PRICE DEVELOPMENT USDm • The second-hand market in Q1 was characterized LR2 - Newbuilding LR1 - Newbuilding MR - Newbuilding by low activity yet with signs of increasing interest from buyers for modern tonnage. Very few units of have actually been for sale • For o
Slide 11: Agenda
AGENDA • Highlights • Product Tanker Market Overview and Outlook • Financial and Operating Performance 11
Slide 12: TORM has significant operating leverage in the product tanker market
TORM HAS SIGNIFICANT OPERATING LEVERAGE IN THE PRODUCT TANKER MARKET Unfixed days # of days as of 31 March 2017 LR2 LR1 Handy 28,281 26,211 3,381 4,280 17,789 2,507 2,506 1,805 1,834 16,851 17,930 MR 11,574 2,576 3,472 3,565 2017 2018 2019 Of total earning days 88% 93% 99% Illustrative change in cas
Slide 13: Peer comparison shows TORM has continued to perform commercially
PEER COMPARISON SHOWS THAT TORM HAS CONTINUED TO PERFORM COMMERCIALLY USD/day Notes: • Peer group is based on Ardmore (split by ECO and ECO-modified), d’Amico (composite of MR and Handy), Frontline 2012, BW (Q1-Q2 2015), Norden, Teekay Tankers and Scorpio, OSG 13
Slide 14: OPEX has shown an improving trend
OPEX HAS SHOWN AN IMPROVING TREND USD/day -6% -8% 7,193 7,400 6,771 6,843 2015 2016 Q1 2016 Q1 2017 14
Slide 15: Fully integrated business model and admin expenses trending down
TORM HAS A FULLY INTEGRATED BUSINESS MODEL AND ADMIN EXPENSES ARE TRENDING SIGNIFICANTLY DOWN TORM operates on a fully integrated commercial and TORM has trimmed administration expenses significantly technical platform Admin. expenses (quarterly avg. in USDm) • TORM’s operational platform handles al
Slide 16: TORM's net asset value estimated at USD 663m
TORM’S NET ASSET VALUE ESTIMATED AT USD 663M 31 March figures, USDm Net LTV of 55% • Based on broker values, TORM’s vessels 176 including newbuildings were estimated at USD 1,345m as of 31 March 2017 • With an outstanding debt of USD 811m, 811 and committed CAPEX of USD 139m, TORM’s Net Loan-to-Valu
Slide 17: Favourable financing profile and strong liquidity position
TORM HAS A FAVOURABLE FINANCING PROFILE AND STRONG LIQUIDITY POSITION CAPEX and liquidity as of 31 March 2017 (USDm) CAPEX commitments Available liquidity TORM is well-positioned to service 405 75 future CAPEX and debt commitments 115 215 86 0 139 53 2017 2018 2019 Total Cash position Available LR
Slide 18: TORM has distributed a total of USD 47m to shareholders in 2016
TORM HAS DISTRIBUTED A TOTAL OF USD 47M TO SHAREHOLDERS IN 2016 2016 distribution to shareholders (USDm) • In connection with the Corporate Restructuring, TORM plc has made accretive share repurchases for an amount of USD 19m covering 2.4% of the outstanding TORM A/S shares • During the second half
Slide 19: Appendix
APPENDIX
Slide 20: TORM aims to be the reference company in the product tanker segment
TORM AIMS TO BE REGARDED AS THE REFERENCE COMPANY IN THE PRODUCT TANKER SEGMENT TORM is a pure-play product tanker owner TORM’s superior integrated active in all large product tanker segments to operating platform includes meet customer demands in-house technical and commercial management (preferred
Slide 21: Fleet update
FLEET UPDATE As of 31.03.2017 # of vessels EoY 2016 Changes Q1 2017 Changes EoY 2017 Changes EoY 2018 Changes EoY 2019 Owned vessels LR2 8 -1 7 1 8 3 11 - 11 LR1 7 - 7 - 7 - 7 - 7 MR 51 -2 49 -1 48 - 48 - 48 Handysize 11 - 11 -2 9 - 9 - 9 Total 77 -3 74 1 78 3 75 - 75 Charter-in vessels LR2 2 1 3 -
Slide 22: TORM at a glance
TORM AT A GLANCE Key facts Global footprint based on regional power and presence A world-leading product tanker company • 128 years of history • A leading product tanker owner Listed on Nasdaq Copenhagen TORM employees: TORM offices: ~280 Seafarers: ~3,000 • 1,500 Filipino seafarers • 1,200 Indian s
Slide 23: Flexibility to transport a wide range of different products
FLEXIBILITY TO TRANSPORT A WIDE RANGE OF DIFFERENT PRODUCTS 23
Slide 24: Management team with an international outlook
MANAGEMENT TEAM WITH AN INTERNATIONAL OUTLOOK AND MANY YEARS OF SHIPPING EXPERIENCE Executive Director Jacob Meldgaard ▪ Executive Director in TORM plc ▪ CEO of TORM A/S since April 2010 ▪ Previously Executive Vice President of the Danish shipping company NORDEN where he was in charge of the company
Slide 25: Oaktree is the majority shareholder and ownership has become more dispersed
OAKTREE IS THE MAJORITY SHAREHOLDER AND OWNERSHIP HAS BECOME MORE DISPERSED Share information Ownership has become more dispersed Shareholdings as of April 2016, % 100 TORM’s shares are listed on Nasdaq 3 Copenhagen under the ticker TRMD A 8 10 62 10 Shares 7 • 62.3m A shares, one B share and one C
Slide 26: Key figures
KEY FIGURES USDm Q1 2017 Q1 2016 2016 Revenue 173 194 680 EBITDA 44 70 200 Impairment -1 - -185 Profit/(loss) before tax 5 31 -142 Adjusted Profit/(loss) before tax 6 31 43 Balance sheet Total assets 1,699 1,847 1,571 Equity 786 1,001 781 NIBD 596 605 609 Cash and cash equivalents 215 123 76 Cash fl
Slide 27: TORM tanker spot rates versus industry benchmark
TORM TANKER SPOT RATES VERSUS INDUSTRY BENCHMARK TORM spot vs. industry benchmark Q1 2017 (USD/day) TORM Benchmark 30,000 25,000 20,000 +80% +38% +30% +29% 15,000 10,000 5,000 0 LR2 LR1 MR Handysize TORM spot vs. industry benchmark last 12 months (USD/day) TORM Benchmark 30,000 25,000 20,000 +31% +6
Slide 28: TORM has a spot-oriented profile in a fundamentally strong market
TORM HAS A SPOT-ORIENTED PROFILE IN A FUNDAMENTALLY STRONG MARKET 2017 2018 2019 2017 2018 2019 As of 31.03.2017 Owned days LR2 1,976 3,764 3,999 Owned days LR1 1,904 2,507 2,506 MR 12,871 17,183 17,347 Handysize 2,642 3,472 3,565 Total 19,392 26,926 27,418 Charter-in and Leaseback days at fixed rat
Slide 29: TORM's corporate social responsibility
INDUSTRY COOPERATION AND TRANSPARENCY IS KEY TO TORM’S CORPORATE SOCIAL RESPONSIBILITY TORM is actively participating in… TORM has set and communicated on climate targets • UN Global Compact Set climate target for 2016: TORM became signatory to the UNGC in 2009 as the first Danish • In 2016, TORM se