Slide 1: Q2 2017 Results
16 August 2017 Q2 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
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 Financial and operating performance 3
Slide 4: Highlights for Q2 2017
HIGHLIGHTS FOR Q2 2017 • EBITDA of USD 36m and Profit before tax of USD -2m • RoIC of 2.1% and Earnings per share of USD 0.0 or DKK 0.0 Q2 2017 Results • Net Asset Value estimated at USD 707m as of 30 June 2017, corresponding to a NAV/share of USD 11.4 or DKK 74.2 • Solid balance sheet, Net Loan-to-
Slide 5: EBITDA of USD 36m in Q2 2017
EBITDA OF USD 36M IN Q2 2017 Q1-Q2 Q1-Q2 USDm Q2 2017 Q2 2016 2017 2016 2016 P&L TCE Earnings 93 123 200 261 458 Gross profit 45 68 100 148 242 Sale of vessels 2 0 3 0 0 EBITDA 36 57 80 126 200 Profit before tax -2 15 3 46 -142 Adjusted profit before tax -2 15 4 46 43 (excluding impairment charges)
Slide 6: Agenda
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 Financial and operating performance 6
Slide 7: Product tanker freight rates remained flat in Q2
PRODUCT TANKER FREIGHT RATES REMAINED FLAT IN Q2 Q2 West Spot rates • Overall, the market remained influenced by high product inventories and strong refinery runs on both 60 LR2 (TC1) sides of the Atlantic 50 • High inventories coupled with high local refinery throughput limited gasoline imports to
Slide 8: Demand fundamentals for product tankers
DEMAND FUNDAMENTALS FOR PRODUCT TANKERS Global CPP inventories Short-term factors Billion bbl • Current oil price level continues to support global oil demand, which is expected 1.80 1.80 to grow by 1.4 mb/d both in 2017 and 2018, well above the average of 1.0 mb/d Millions during 2005-2015 1.70 1.7
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)* % 2005-2015 average fleet growth for • In Q2 2017, product tanker newbuilding activity gained momentum from an almost LR2, LR1, MR and Handysize non-existent level in the previous five quarters, as
Slide 10: Product tanker vessel prices
PRODUCT TANKER VESSEL PRICES Vessel price development USDm LR2 - Newbuilding LR1 - Newbuilding MR - Newbuilding • The second-hand market for product tankers remained relatively muted in Q2 60 2017; however, prices for modern tonnage trended upwards 55 • In Q3 so far, second-hand activity has been wi
Slide 11: Agenda
Orion purchase price considerations AGENDA 1 Highlights 2 Product tanker market overview and outlook 3 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 LR2 LR1 Handy Unfixed days # of days as of 30 June 2017 27,918 25,696 4,280 3,239 2,507 2,506 10,808 17,928 16,760 1,169 1,034 MR 7,177 3,190 3,204 2017 2018 2019 Of total 79% 92% 99% earning days Illustrative change in cash flow g
Slide 13: Peer comparison shows TORM has continued to perform commercially
PEER COMPARISON SHOWS THAT TORM HAS CONTINUED TO PERFORM COMMERCIALLY MR reported TCE, USD/day High-Low TORM Peer avg. 30,000 25,000 20,000 15,000 10,000 5,000 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 Note: Peer group is based on Ardmore, d’Amico (composite of MR and Handy), Frontline 2012, BW (Q
Slide 14: OPEX has shown an improving trend
OPEX HAS SHOWN AN IMPROVING TREND USD/day -6% -4% 7,193 6,771 6,914 6,667 2015 2016 Q2 2016 Q2 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 technical platform TORM has trimmed administration expenses significantly • TORM’s operational platform handles all commercial and Admin. expenses (quarter
Slide 16: TORM's net asset value estimated at USD 707m
TORM’S NET ASSET VALUE ESTIMATED AT USD 707M 30 June 2017 figures, USDm Net LTV of 51% 182 • Based on broker values, TORM’s vessels including newbuildings were estimated at USD 1,354m as of 30 June 2017 770 • With an outstanding debt of USD 767m and committed CAPEX of USD 134m, TORM’s Net Loan-to-Va
Slide 17: Favourable financing profile and strong liquidity position
TORM HAS A FAVOURABLE FINANCING PROFILE AND STRONG LIQUIDITY POSITION CAPEX and liquidity as of 30 June 2017 (USDm) CAPEX commitments Available liquidity TORM is well-positioned to service future CAPEX and debt commitments 404 75 • In addition to the CAPEX 115 214 commitments, TORM has 86 0 134 USD
Slide 18: TORM has distributed a total of USD 48m to shareholders
TORM HAS DISTRIBUTED A TOTAL OF USD 48M TO SHAREHOLDERS IN 2016 AND 2017 Distribution to shareholders (USDm) 1 • TORM will pay a USD 1.2m dividend on 12 September 25 2017, with ex-dividend date on 24 August 2017 • The USD 1.2m dividend corresponds to a dividend per share of USD 0.02 or DKK ~0.13 48
Slide 19: Appendix
APPENDIX
Slide 20: TORM aims to be the reference company in product tankers
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 07.08.2017 # of vessels Q1 2017 Changes Q2 2017 Changes 2017 Changes 2018 Changes 2019 Owned vessels LR2 7 - 7 1 8 3 11 - 11 LR1 7 - 7 - 7 - 7 - 7 MR 49 -1 48 2 50 - 50 4 54 Handysize 11 -2 9 -1 8 - 8 - 8 Total 74 -3 71 2 73 3 76 4 80 Chartered-in and leaseback vessels LR2 3 - 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: ~290 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
OAKTREE IS THE MAJORITY SHAREHOLDER AND OWNERSHIP HAS BECOME MORE DISPERSED Share information Estimated shareholdings as of 31 January 2017, % TORM’s shares are listed on Nasdaq 100 2 Copenhagen under the ticker TRMD A 13 Shares 12 64 1 • 62.3m A shares, one B share and one C 8 share • The B and C s
Slide 26: Key figures
KEY FIGURES USDm Q2 2017 Q2 2016 2016 Revenue 157 177 680 EBITDA 36 57 200 Impairment - - -185 Profit/(loss) before tax -2 15 -142 Adjusted Profit/(loss) before tax -2 15 43 Balance sheet Total assets 1,651 1,824 1,571 Equity 788 985 781 NIBD 556 602 609 Cash and cash equivalents 214 117 76 Cash flo
Slide 27: TORM tanker spot rates versus industry benchmark
TORM TANKER SPOT RATES VERSUS INDUSTRY BENCHMARK TORM spot vs. industry benchmark Q2 2017 (USD/day) TORM Benchmark 30,000 25,000 20,000 +46% +71% +73% +57% 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 +38% +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 30.06.2017 Owned days LR2 1,342 3,624 4,001 Owned days LR1 1,282 2,507 2,506 MR 8,658 17,109 17,349 Handysize 1,630 3,190 3,204 Total 12,911 26,430 27,061 Charter-in and leaseback days at fixed rate
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