Slide 1: Q1 2019 Results Teleconference
1 4 M AY 2 0 1 9 Q1 2019 RESULTS TELECONFERENCE 1
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: Today's Presenters
TODAY’S PRESENTERS Jacob Meldgaard ▪ Executive Director in TORM plc ▪ CEO of TORM A/S since April 2010 ▪ Board member of Danish Ship Finance ▪ Previously Executive Vice President of the Danish shipping company NORDEN ▪ Prior to that he held various positions with J. Lauritzen and A.P. Møller-Mærsk ▪
Slide 4: Q1 2019 Highlights
Q1 2019 HIGHLIGHTS • EBITDA of USD 61.5m and Profit before tax of USD 23.5m • RoIC of 8.8% and Earnings per share of 31 US cents • Net Asset Value estimated at USD 829m as of 31 March 2019, corresponding to a NAV/share of USD 11.2 or DKK 74.5 Q1 results • Solid balance sheet; Net loan-to-value of 52
Slide 5: Majority of scrubber installations delivered ahead of 2020 deadline supported by TORM's scrubber JV
MAJORITY OF 34 SCRUBBER INSTALLATIONS WILL BE DELIVERED AHEAD OF THE 2020 DEADLINE SUPPORTED BY TORM’S SCRUBBER JV TORM’s scrubber JV, ME Production China Ownership share: 27.5% • One of the largest risks with scrubber installations is the potential delay during both ME Production the production and
Slide 6: Strong start to the year followed by seasonal softening
STRONG START TO THE YEAR FOLLOWED BY SEASONAL SOFTENING USD/day Q1 2019 • Open arbitrage windows and generally healthy trade patterns • Commencement of refinery maintenance period in Europe, the US and the Middle East • Unplanned refinery outages in the US leading to increased gasoline imports to th
Slide 7: Product inventories back to normal levels
PRODUCT INVENTORIES BACK TO NORMAL LEVELS Aggregated global CPP inventories* Inventories compared to 5-year average levels Billion bbl • Global CPP inventories are back to 5-year average levels • Diesel inventories in main import areas continue to be at relatively low levels, indicating a potential
Slide 8: Middle East refinery capacity additions set to increase significantly through 2021
MIDDLE EAST REFINERY CAPACITY ADDITIONS SET TO INCREASE SIGNIFICANTLY THROUGH 2021 Middle East refinery capacity net additions (m b/d) Forecasted Realized 0.82 0.84 0.47 0.18 0.12 0.12 0.06 0.12 -0.03 2015 2016 2017 2018 2019F 2020F 2021F • As oil product demand increases, the ton-mile demand is pos
Slide 9: IMO 2020 sulfur cap will potentially lead to ~5% incremental growth in product tanker trade
IMO 2020 SULFUR CAP WILL POTENTIALLY LEAD TO ~5% INCREMENTAL GROWTH IN THE PRODUCT TANKER TRADE Global consumption of marine bunkers* Distillates VLSFO M b/d Compliant fuels* HSFO 6 5 4 TORM’s current estimate Potential of for new trade clean product tankers additional diesel demand 3 2 1 0 2017 202
Slide 10: Medium-haul regional and long-haul trade supported by IMO 2020 regulation
BOTH MEDIUM-HAUL REGIONAL TRADE AND LONG-HAUL TRADE WILL BE SUPPORTED BY THE IMO 2020 REGULATION Examples of trade routes enforced by the IMO 2020 regulation • Increased flexibility to produce additional diesel in net exporting regions and refinery expansion support long-haul and medium-haul trade r
Slide 11: Product tanker order book continues to shrink
PRODUCT TANKER ORDER BOOK CONTINUES TO SHRINK Product tanker order book as percentage of the fleet M dwt • Product tanker order book to fleet ratio at a historically low level of 8.3% (11% for MRs, 3% for LR1s and 9% for LR2s) • In Q1 2019, the product tanker fleet grew by 1.6% with 4.3% growth expe
Slide 12: TORM commercially outperforms peers in its key MR segment
TORM COMMERCIALLY OUTPERFORMS PEERS IN ITS KEY MR SEGMENT Q1 2019 performance: • TORM: USD/day 16,765 • Peer average: USD/day 15,031 FY 2015: USD 28m FY 2016: USD 14m FY 2017: USD 35m FY 2018: USD 20m Q1 2019: USD 8m Note: Peer group is based on Ardmore, d’Amico (composite of LR1, MR and Handy), Fro
Slide 13: Spot orientation provides significant operating leverage
SPOT ORIENTATION PROVIDES SIGNIFICANT OPERATING LEVERAGE Unfixed days # of days as of 31 March 2019 LR2 LR1 MR Handy (% of total days) 28,138 (98%) 28,972 (100%) 3,589 4,230 3,274 3,265 18,105 (89%) 2,271 1,764 19,480 19,662 12,781 1,289 1,795 1,815 2019 2020 2021 Illustrative change in cash flow ge
Slide 14: Fully integrated business model with competitive cost structure
FULLY INTEGRATED BUSINESS MODEL WITH COMPETITIVE COST STRUCTURE TORM has trimmed administration Significant reduction in OPEX expenses OPEX per day (yearly, weighted avg. in USD/day) Admin. expenses (quarterly avg. in USDm) -16% 2008 7,655 2009 7,193 6,771 6,673 6,448 2010 6,389 Compared to 2014 201
Slide 15: Well-positioned to service future capex commitments
WELL-POSITIONED TO SERVICE FUTURE CAPEX COMMITMENTS CAPEX and liquidity as of 31 March 2019 USDm CAPEX commitments Available liquidity Retrofit scrubbers* Newbuildings incl. scrubber 438 Subject to documentation 46 2 162 26 42 40 75 155 258 232 2019 2020 Total Cash position Available working Newbuil
Slide 16: Net asset value estimated at USD 829m
NET ASSET VALUE ESTIMATED AT USD 829M 31 March 2019 figures, USDm Net LTV of 52% 1,599 728 829 57 4 258 155 Value of vessels Outstanding debt Committed Cash Working Capital Other* Net Asset Value (incl. newbuildings) CAPEX • Net Loan-to-Value was 52% ensuring a strong capital structure • Net Asset V
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