Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the TORM Second Quarter 2025 Conference Call. I would now like to turn the conference over to Jacob Meldgaard, CEO. You may begin.

Yes. Thank you very much, and a warm welcome here to everyone joining us on TORM's Q2 2025 Conference Call. Earlier this morning, we did release our interim results for the second quarter of '25. I'm pleased that, again, we can report market-leading performance. In the quarter, we witnessed a continuation of the more stable operating environment established in the first quarter, offering a clear contrast to the freight rate volatility seen in the latter part of last year. Our TCE came in at USD 208 million, broadly consistent with both the last quarter of 2024 and the first quarter of 2025. This translated into a net profit of USD 59 million, leading to another quarter with attractive dividend distribution of USD 0.40 per share. We also advanced our fleet optimization strategy by divesting 1 LR2 vessel and 2 MR vessels, all built in 2008. This aligns with our ongoing approach of phasing out older tonnage to maintain a modern, high-quality, and commercially attractive fleet. These well-placed transactions underscore the strong condition and upkeep of our vessels and reinforce our commitment to operating an efficient and competitive platform. Looking ahead, the macro environment continues to be fast-moving and marked by geopolitical uncertainty, but market sentiment remains broadly positive. We have entered the third quarter with strong momentum, supported by firming rates across our vessel segments and an encouraging degree of visibility into our upcoming fixtures. Despite the external challenges, both the underlying fundamentals and the forward curve for freight rates remain positive. Based on this and the rates we have already secured, we have raised our full-year guidance to reflect a stronger earnings outlook for the remainder of this year. As always, we remain vigilant and agile. And with that, let us turn to the key drivers shaping the market and our positioning going forward. Please turn to Slide #5. Here, let me just go into first is a snapshot of the market landscape and product tanker rates have remained both stable and attractive across the board. And here, as illustrated in this graph, benchmark earnings for MR and LR2 vessels show resilience, with recent figures reflecting a healthy uptick. This stability is underpinned by increased trade flows and the limited net growth in the CPP trading fleet. And here, please turn to Slide 6, I'll elaborate on that. Trade volumes have surged recently and reached a 16-month high at the start of Q3. This growth has been driven by increased East to West middle distillate flows. For the past 2 quarters, we've been pointing out that low trade volumes on this route have not been sustainable. With inventories in Northwest Europe falling into the lower end of the 5-year range, we have recently seen a surge in East to West middle distillate trades, further supported by strong exports from the United States. This has lifted ton-miles again to levels well above what we saw before the Red Sea disruption. At the same time, crude cannibalization has normalized at more historically relevant levels. Looking further ahead, the product tanker market is expected to continue to be driven by geopolitical factors, higher uncertainty, but we expect market fundamentals to continue to support trade flows and vessel utilization. And please turn to Slide 7. Since the start of this year, 2 refineries in Northwest Europe have closed, with 2 more expected to close by the end of the year. These closures combined correspond to 6% of the region's refining capacity, leading to a lower local product supply and increased need for imported middle distillates in an environment where product supply is already tight. According to our calculations, if all this supply were replaced by imported diesel and jet from the Middle East Gulf, this will translate into an additional demand of 15 to 24 LR2 equivalents per year, depending on whether the vessels transit the Red Sea or sail around the Cape of Good Hope. To put it into perspective, this corresponds to 6% to 10% of the current CPP trading LR2 fleet. Refineries are not limited to Europe. In less than 1 year from now, 2 refineries with a combined 11% of the region's capacity will close on the U.S. West Coast. This, we expect to lead to increased need for gasoline and jet imports, which according to our calculations will translate into an additional demand of more than 25 MR equivalents on a round-trip basis if they all come from Asia. Please turn to Slide 8. Geopolitical developments remain a key driver in the market. In its latest sanctions package against Russia, the EU introduced a ban on third-country petroleum products obtained from Russian crude oil from January next year, which mainly affects diesel imports from India and Turkey. We do not expect any significant effect on ton-miles from this with alternative sources available from the same distance, but there will be a slight positive impact if imports are replaced by supplies from further away. While it is still unclear whether President Trump's threat of additional tariffs on India will force Indian refineries to shift away from Russian crude, potential reshuffling of crude flows, with China taking more Russian oil and India more Middle East or Western oil, is likely to be positive for larger crude tankers and negative for the Aframax segment. Nevertheless, we expect the demand loss for Aframaxes to be offset by a substantial share of sanctioned Aframaxes not returning to the mainstream trades. Clearly, it is still highly uncertain what the U.S. administration's next move vis-a-vis Russia is, but we do not foresee any reversal of EU sanctions anytime soon. Please turn to Slide 9. Let's take a look at the tonnage supply side. As we pointed out earlier, the relatively high product tanker order book should be seen in combination with the fact that the average age of the fleet is the highest in 2 decades. In addition, a large share of especially the older fleet is sanctioned, which is expected to support exits from the market. This is especially the case for the combined LR2/Aframax fleet, where every fourth vessel in the global fleet is under either OFAC, EU, or U.K. sanctions. It is especially the OFAC sanctions that had a strong impact on fleet utilization, with our data showing that ton-miles on vessels sanctioned since January have declined by 75%. Lower utilization on sanctioned Aframaxes has incentivized LR2s to move to dirty trades, as a result of which we have seen a 2% decline in the CPP trading fleet over the past 12 months. This is while the nominal product tanker fleet has grown by 4%, driven by newbuilding deliveries. Please turn to Slide 10. Looking ahead, several factors will continue to shape the product tanker market, including ongoing geopolitical uncertainty, additional EU sanctions against Russia, evolving U.S. trade policy and continuing Red Sea disruption. In addition, returning crude output from OPEC is indirectly supporting our market. On the demand side, oil consumption remains robust, and changes in the refinery landscape are increasing ton-miles. On the supply side, increased newbuild deliveries need to be seen in combination with the increasing number of scrapping candidates, alongside reduced trading on the sanctioned fleet. This will influence tonnage availability and market balance. I'm certain that TORM is well-positioned to maneuver in this environment through our conservative capital structure, the operational leverage, and the integrated platform. So with that, I'll hand it over to you, Kim, who will walk us through the financials.

Thank you, Jacob. Now please turn to Slide 12 for an overview of the financials. In the second quarter, our TCE amounted to USD 208 million, and based on this, we achieved USD 127 million in EBITDA and USD 59 million in net profit. Fleet-wide, we averaged TCE rates of USD 26,672 per day, with LR2s above USD 35,000, LR1 slightly above USD 27,000, and MRs around USD 23,000. Thus, freight rates during the quarter remained broadly in line with the previous 2 quarters, underpinned by solid market fundamentals. This stability provides a strong base as we progress through the year, with our earnings continuing to reflect performance well above market rates. And now please move to Slide 13. This slide illustrates our revenue progression quarter-by-quarter since Q2 2024. With this quarter's results, we now mark 3 consecutive quarters with stable freight rates and earnings, highlighting a period of sustained performance and consistent market conditions. Despite continued geopolitical uncertainty, underlying ton-mile demand remains solid, though we stay alert to how quickly market dynamics can evolve. Against this backdrop, we delivered a satisfying result, generating TCE of USD 208 million and EBITDA of USD 127 million, based on a fleet-wide range rate of USD 26,672 per day. Adjusting for the gain on sold vessels, EBITDA amounted to USD 122 million, thus on par with the USD 126 million realized in the previous quarter. With our current operational leverage, we are well positioned to benefit from any future improvement in freight rates. So for every $1,000 increase in daily rates, our quarterly EBITDA could rise by approximately USD 8 million, based on around 8,000 earning days, highlighting the meaningful earnings upside should the market strengthen further. Slide 14, please. Here, we show the quarterly development in net profit and key share-related ratios, which closely follow the trend in EBITDA. As a result, earnings per share for the second quarter amounted to USD 0.60. Our approach to shareholder returns remains clear and consistent. We continue to distribute excess liquidity on a quarterly basis while maintaining a disciplined financial buffer to safeguard our balance sheet. So for the second quarter, this approach has led to a declared dividend of USD 0.40 per share, representing a payout ratio of 67%. This aligns with our free cash flow after debt repayments and reflects both our solid earnings performance and our ongoing commitment to responsible capital allocation. Now please turn to Slide 15. As illustrated on this slide, following several quarters of steadily rising vessel values, broker valuations for our fleet were at USD 2.9 billion at the end of the quarter, reflecting both lower vessel valuation as well as our described divestment of vessels. Although vessel values were down around 7% across the fleet, it is worth noticing that this number is heavily influenced by older tonnage from 2010 to 2012, while newer tonnage has held up relatively well, showing only low single-digit declines. Turning to the center chart, our net interest-bearing debt now stands at USD 767 million, with a stable net loan-to-value of 27%, consistent with the levels maintained for the last couple of quarters and underscoring the strength of our conservative capital structure. On the right side of the slide, you can see our debt maturity profile. Over the next 12 months, we only have USD 157 million in borrowing maturing, just around 14% of our total debt, and we face no significant maturities until 2029, giving us ample runway and financial stability. To further strengthen our capital structure, TORM has secured commitments for up to USD 857 million on the most attractive refinancing terms in our history. This refinancing package covers 2 existing syndicated loan facilities and our lease agreements. The new structure will be divided between term loans and revolving credit facilities, enhancing our liquidity and giving us greater financial flexibility. Thus, the package also extends the maturity profile, with the new financing running into 2030. Our loan facilities are expected to be refinanced in Q3 2025, while the lease agreements will be refinanced on a rolling basis as buyback options are exercised, with final completion expected before Q2 2026. Altogether, our solid financial foundation gives us flexibility to navigate current market conditions and to pursue value-creating opportunities as they arise. Now please turn to Slide 16 for the outlook. Our strong performance in the first half of the year sets a solid foundation for the remainder of the year. As of August 4, we have secured 56% of our earnings base in the third quarter at an average of TCE of $30,617 per day across the fleet. For the full year 2025, we have fixed 66% of our earning days at an average TCE of USD 27,833 per day. These levels provide us with solid earnings visibility and reflect continued market strength across our vessel segments. While geopolitical volatility remains a factor, we are seeing improved sentiment in the market environment. On that basis, we are confident in both increasing and narrowing our full-year guidance range. We now forecast TCE earnings of USD 800 million to USD 950 million compared to our previous guidance of USD 700 million to USD 900 million. Similarly, we raised our expectations for EBITDA for the year to USD 475 million to USD 625 million, up from USD 400 million to USD 600 million previously. This revision reflects our secured coverage and the future market expectations while acknowledging the potential for continued fluctuations. Overall, we remain well-positioned to deliver strong results in 2025. With this, I will conclude my remarks and hand over the mic to the operator.

Jacob, on Page 13, the TCE fleet-wide, TCE EBITDA chart, the consistency over the last 3 quarters is really noticeable, especially for an industry that's notoriously volatile and especially given all the geopolitics and macro uncertainty that you mentioned in your prepared remarks. What do you think has caused this consistency over the last 9 months or so? And does that restrict you at all with the things that you could do with TORM, whether it's positioning vessels or S&P activity or charter in, charter out? Does it kind of restrict some of your flexibility?

I agree that we’ve seen remarkable stability over the last three quarters, and it doesn’t restrict us at all. I view these markets as needing to establish a clear understanding of their direction and the range we are in. We have been range-bound for some time, as I mentioned in my remarks. However, there is potential for change. For example, if additional oil comes to market, trade routes will likely remain stretched, and further refinery closures in areas where we already need imports could create a situation where the headwinds we’ve encountered might shift. This could lead to more favorable conditions in the coming quarters. I see this as a solid foundation for potential upside as the oil markets evolve, particularly with OPEC's adjustments.

Okay. And then just a follow-up, Kim. I think it needs to be asked. I understand you have a calculation for your dividend policy. The payout ratio thus far this year has been lower than it was last year. Now that you've completed this tremendous financing, do you think that the calculation if we kind of look beyond the leases, maybe fourth quarter or first quarter next year, becomes a bit more favorable in the magnitude of payout ratio?

Yes, I do. That is our expectation. We believe that by 2026, our cash flow breakeven will decrease significantly. With that, you can anticipate that, depending on market conditions, the dividend will likely be higher, as will the payout ratio. Yes, I would expect that.

Do you have any sense on what the expected range is for the payout ratio? Is it kind of 75 to 80 again, similar to what it was in '24?

Good question, but probably, yes. I would imagine that now I'm going out on a limb here because I don't have a calculation for this meeting, Jon, but I would expect that 75 to 80 would be a fine place to be.

Yes, nice to hear kind of the thoughts of lower breakeven and a potential higher payout ratio as we look into next year. I wanted to maybe just ask about kind of what we're seeing here in the third quarter. Obviously, some pretty good guidance in terms of your bookings, especially on the MRs where you're showing 28,000, which is quite a bit above kind of peers, but also what you have been capturing in the prior few quarters and which is interesting because the LR2s and LR1s are kind of flattish to slightly higher, but it's really the MRs that have gone up. Can you maybe just talk about what's driving that upside? And what can we expect from here for the rest of the year to the extent you can say?

Yes. So I think on a granular basis, what I've been thinking about, and I think it's the right question is, okay, what has been driving this? Really, as we look at the data points, the fact that CPP on the water now has, going into the third quarter, gone up to the highest that we've seen for more than a year is significant. In combination with that, if we go back exactly 12 months, I think we were all a bit puzzled by the fact that crude tankers, predominantly Suez, but also some VLCCs were really turning their attention to the CPP market, taking away demand for about 8%. And now we are back to 1% of the trading Suez and VLCC being in our scope. So I think the combination of that really, you've seen a trading uptick sort of in general, and you've seen this cannibalization, at least for now, having more or less evaporated from a very high, historically unusual level. And that really just trickles down more into the MR because you only have that many LR2s trading, as I alluded to. It is a little fascinating that I think we have all been following the order book of LR2s, watching and saying, okay, that seems to be quite a hefty order book. But the fact is actually that, even I think numbers say that there's 50 vessels that have been delivered over the last 3 quarters or so, the trading fleet of LR2s is the same, sort of in broad strokes. So I think it's just this filtering down into that there's been more trade at a granular basis in the MRs and that we've also then been assisted by the fact that in the larger segments, that CPP has simply not been moving on our sister vessels or the sister segment. I think it's very positive because I think it demonstrates a very solid market since you see that. It's not like we should just count how many cargoes are there of Naphtha out of the AG to Asia. That will not tell you the dynamic and the strength of the market. It is actually a lot of pockets of strength, and that's what in aggregate leads us to that we've got more CPP on the water now than at any point in time over the last 16 months. It's really that underlying strength that translates into the MR rates that you've seen.

That's very helpful to get a good lay of the land there. And so I guess maybe just with that backdrop, a lot more cargo on the water, less cannibalization so the fleet in general seems tighter. You talked in the presentation just about values having been softer. You're obviously very transaction-oriented with the acquisitions and the sales. What are you seeing right now in terms of the S&P market? Are values finding a floor? Is there any potential for them to rise just given this improvement in rates? Any color you're able to share on that front?

Yes, that's a great question, Omar. In these markets, the primary observation is that spot rates can fluctuate significantly; they have shown considerable volatility over the past three years. Recently, it appears that rates have been stable over the last three quarters, while asset prices have gradually decreased. It's uncommon for everyone to lower their asset prices simultaneously, and it takes time to reach clearance prices. We believe we are at a turning point where rates have stabilized for an extended period, contributing to the gradual decline in asset prices. Currently, if we take a snapshot, I would suggest that prices are stabilizing around the figures reflected in our Q2 end numbers. However, it remains to be seen how things will unfold in the coming quarter. If freight rates begin to rise generally, there's a possibility that asset prices could either hold steady or increase from their current levels. That's the rationale behind our thinking.

This is Frode Mørkedal, Clarksons. Just looking at the slide you provided on Page 5 or 6, on the CPP ton-miles, it sounded like it was trade volumes driving that up. The question is really, have you seen any change to the miles component? I feel like a lot of the trade has been more like a regionalized trade for a while, and we've basically been waiting for the inter-basin trade to pick up on the LR2 side. So are you seeing any change there?

Yes, trade volumes have indeed increased as shown on Slide #6. The ton-mile aspect reflects the growing incentive to transport middle distillates, particularly from the Middle East and Eastern Hemisphere to the West during this period. This situation will affect both volume and distillate sales. It's a combination of factors, particularly the need to restock middle distillates in the inventories of Northwest Europe. As observed in our recent quarters, we were initially puzzled by why suppliers of middle distillates weren't maintaining their inventories at higher levels. However, towards the end of the second quarter, it became evident that there was a necessity to replenish inventories instead of relying solely on what was in stock. This replenishment was primarily sourced from the Middle East and the U.S. Gulf, resulting in increased volumes and miles.

Great. On the next slide, which was also impressive, can you provide more details about the refinery closures? You may have mentioned it already, but what is the expected timeline for when we can see the positive effects?

Yes. We believe that by the end of 2025, already, we will see the European refiners closing down. They have been moving along at a slow pace, but the decision has been made for them to finally close business and are no longer viable. This will be from the end of this year, whereas in the U.S. West Coast, as I mentioned, that will be in about a year from now.

Mid next year.

But the broader picture, if I may add a little comment, is that obviously from a political standpoint, it is the ambition to close the local refineries down in, for instance, Western Europe and also the U.S. West Coast. However, it has been proved that those actions have accelerated compared to how fast the transition on the demand for exactly the products they are producing is. So it may be that consumption, let's say, on the U.S. West Coast is slowly going down, but the pace of closures is much faster than that. That means we will be called upon in the broader product tanker market to carry more cargoes actually.

Yes, indeed. And I guess my final question is on this Russian price cap change. Specifically, I guess, I mean, there's a lot of LR2s that are trading into dirty trades, right, which has been impacted. But then when the EU lowers the price cap, you might see Aframaxes that are trading legally Russian crude today lose that compliance and then have to move out of that trade and into the conventional market, which would put downward pressure on Aframaxes crude rates probably. Do you see that as a threat to that switching for LR2s or not?

Yes. I think that it is clearly the jury is out on the real effect of this. The fact that these vessels, especially if you look at the type of vessels that have been sanctioned, in many cases, also would be the vessels that you point to, whether they can easily go from a commercial point of view back into the trades that we operate in; that's number one. Whether they are also actually maintained at a standard where it makes sense for them to be retrofitted into the standard of our type of customers. So the jury is out. But it does seem to me that when investments have been made by people into the gray fleet or the dark fleet and they subsequently get sanctioned, they are not looking for a long-term investment. They are looking for the short-term gains of being in a trade that few people want to touch, and their operating earnings are what they're looking at. It's not the maintenance of the vessel that is the main focus. So the jury is out. I think it could be negative, as you point to, for midsized vessels, and more positive for VLCCs as this trade goes on. But most likely, a considerable part of this, let's say, crude trading LR2/Aframaxes of older vintage already sanctioned will have a hard time coming back either for commercial reasons or because, after a period of time, they are substandard.

I wanted to start by following up on Jon's question on the cash breakeven. Could you talk a bit about the average margin on the sale and leasebacks you're buying back relative to the margin on the new financing facilities?

You can find the information in our recent 20-F, which provides a complete overview of our leasing arrangement. It's important to note that this is broken down by specific arrangements, and while there are various costs, we have a fixed rate in place. When comparing this to the syndicate facilities we've established, we haven't released the current rate, but it will be included in our upcoming 2025 20-F. This rate is significantly lower than the approximately 1.85 to 1.9 we have on our current syndicated facilities.

Any more questions?

That concludes today's question-and-answer session. I would now like to turn the call back over to Jacob Meldgaard for closing remarks. You may go ahead.

Yes. Thank you very much. And I just want to say thanks to all of you for being interested in TORM and for listening in today. Have a great day. Thank you.

This concludes today's conference call. You may disconnect.