TORM plc 6-K, filed May 9, 2024

TORM plc (TRMD)

6-K 2024-05-09 For: 2024-03-31

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TORM plc filed this 6-K on May 9, 2024.

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	TORM PLC

Dated: May 9, 2024

	By:	/s/ Jacob Meldgaard
		Jacob Meldgaard
		Executive Director and Principal Executive Officer

USDm	Q1 2024	Q1 2023	FY 2023
Income statements
Revenue	444.1	390.2	1,520.4
Time charter equivalent earnings (TCE) ¹⁾ ⁵⁾	330.7	265.0	1,083.8
Gross profit ¹⁾	275.2	216.2	874.1
EBITDA ¹⁾	265.8	198.5	847.9
Adjusted EBITDA ¹⁾	267.2	214.3	846.4
Operating profit (EBIT)	222.7	163.5	698.6
Financial items	-11.9	-8.4	-46.6
Profit/(loss) before tax	210.8	155.1	652.0
Net profit/(loss) for the year/period	209.2	153.6	648.0
Net profit/(loss) ex. non-recurring items¹⁾	192.7	153.6	595.9
Unrealized gain/(loss) on financial instruments related to
freight and bunker	-1.4	-15.8	1.5
Balance sheet and cash flow
Non-current assets	2,546.0	2,065.6	2,178.9
Total assets	3,507.8	2,864.4	2,870.1
Equity	2,065.0	1,656.9	1,666.0
Total liabilities	1,442.8	1,207.4	1,204.1
Invested capital ¹⁾	2,806.7	2,291.7	2,425.1
Net interest-bearing debt ¹⁾	757.9	646.5	773.4
Net Asset Value (NAV) ²⁾	3,176.6	2,560.2	2,858.0
Cash and cash equivalents incl. restricted cash	559.6	410.7	295.6
Investment in tangible fixed assets	410.0	222.9	608.3
Free cash flow	25.7	-26.9	434.5

	Q1 2024	Q1 2023	FY 2023
Key financial figures ¹⁾ Gross margin	62.0%	55.4%	57.5%
EBITDA margin	59.9%	50.9%	55.8%
Adjusted EBITDA margin	60.2%	54.9%	55.7%
Operating profit/(loss) (EBIT) margin	50.1%	41.9%	45.9%
Return on Equity (RoE)	44.9%	38.9%	40.9%
Return on Invested Capital (ROIC)	33.8%	29.2%	30.4%
Adjusted ROIC	32.8%	28.8%	27.6%
Equity ratio ³⁾	58.9%	57.8%	58.0%
TCE per day (USD)	43,152	41,717	37,124
OPEX per day (USD)	7,260	7,299	7,069
Net Loan-to-value (LTV) ratio ³⁾ ⁵⁾	21.6%	25.9%	27.6%
Share-related key figures ¹⁾
Basic earnings/(loss) per share	2.34	1.87	7.75
Diluted earnings/(loss) per share	2.26	1.80	7.48
Declared dividend per share (USD) ⁸⁾	1.50	1.46	4.42
Declared dividend (USDm) ⁸⁾	140.9	121.1	370.9
Dividend paid per share (USD)	-	-	7.01
Net Asset Value per share (NAV/share) (USD) ³⁾	34.5	30.9	33.3
Share price in DKK ³⁾ ⁶⁾	234.2	210.8	204.2
Share price in USD ³⁾ ⁷⁾	35.0	31.1	30.4
Number of shares ³⁾ ⁴⁾	92.2	82.8	85.7
No. of shares, weighted average (million) ⁴⁾	89.8	81.9	83.6

	Q2 2024	Q3 2024	Q4 2024	FY 2024
Total earning days
LR2	1,797	1,867	1,848	6,986
LR1	907	885	865	3,549
MR	5,059	5,092	5,209	20,691
Total	7,763	7,844	7,922	31,226
Covered days
LR2	1,044	302	276	3,094
LR1	465	—	—	1,361
MR	2,726	353	275	8,654
Total	4,235	655	551	13,109

	Q2 2024	Q3 2024	Q4 2024	FY 2024
Covered, %
LR2	58	16	15	44
LR1	51	—	—	38
MR	54	7	5	42
Total	55	8	7	42
Coverage rates, USD/day
LR2	51,078	42,105	43,284	51,933
LR1	45,975	—	—	46,858
MR	40,477	33,854	34,958	39,485
Total	43,695	37,664	39,130	43,189

						Change Q1-23
USDm	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024	- Q1-24
LR2 vessels
Available earning days ¹⁾	1,071	1,074	1,190	1,155	1,475	38%
Spot rates ²⁾	65,245	48,775	33,374	44,524	59,792	-8%
TCE per earning day ³⁾	65,551	47,918	35,054	44,048	54,443	-17%
Operating days	1,170	1,183	1,196	1,158	1,512	29%
Operating expenses per operating day	7,637	7,490	6,826	7,247	7,186	-6%
LR1 vessels
Available earning days ¹⁾	758	1,249	1,280	1,020	891	18%
Spot rates ²⁾	44,141	35,060	25,997	34,038	47,985	9%
TCE per earning day ³⁾	42,047	36,674	32,641	40,498	48,583	16%
Operating days	810	1,277	1,288	1,176	927	14%
Operating expenses per operating day	6,709	7,534	7,230	6,449	7,184	7%
MR vessels
Available earning days ¹⁾	4,903	5,127	5,188	5,137	5,331	9%
Spot rates ²⁾	37,058	33,336	31,730	36,793	39,972	8%
TCE per earning day ³⁾	36,461	33,862	32,632	36,122	39,121	7 %
Operating days	5,130	5,306	5,465	5,446	5,368	5%
Operating expenses per operating day	7,314	6,839	6,724	7,249	7,294	-%
Tanker segment
Available earning days ¹⁾	6,732	7,451	7,658	7,312	7,697	14%
Spot rates ²⁾	42,476	35,875	31,013	37,505	44,274	4%
TCE per earning day³⁾	41,717	36,360	33,010	37,985	43,152	3%
Operating days	7,110	7,766	7,949	7,780	7,807	10%
Operating expenses per operating day	7,299	7,053	6,821	7,128	7,260	-1%

The table shows recent and expected developments in TORM’s operating fleet. In addition to 64 owned product tankers as of 31 March 2024, TORM had 24 vessels under sale-and-leaseback agreements with options to buy back the vessels (financially reported as owned vessels in accordance with our accounting policies). In Q4 2023, TORM acquired four 2015-2016 built fuel-efficient eco MR vessels. Two were delivered in Q4 2023 (TORM Diana and TORM Dagmar) and two were delivered in January 2024 (TORM Denise and TORM Danica). Also in Q4 2023, TORM acquired eight 2010-12 built fuel efficient LR2 vessels, and in early 2024 acquired one 2011 built LR2 vessel. Seven of the vessels were delivered in Q1 2024 and two vessels were delivered in the following quarter. In late December 2023, TORM sold two LR1 vessels (TORM Sofia and TORM Signe) as well as one MR vessel (TORM Loke) that were all delivered to the new owners in the beginning of January 2024. After the end of Q1 2024, TORM has entered into agreement to sell one MR vessel (TORM Eric) with expected delivery to the new owner in the second quarter of this year.	___________ TORM Fleet Development

		Q3 2023	Changes	Q4 2023	Changes	Q1 2024	Changes	Q2 2024
	Owned vessels
	LR2	7	-1	6	7	13	2	15
	LR1	7	-2	5	-2	3	—	3
	MR	48	-1	47	1	48	-1	47
	Total	62	-4	58	6	64	1	65
	Leaseback vessels
	LR2	6	—	6	—	6	—	6
	LR1	7	—	7	—	7	—	7
	MR	11	—	11	—	11	—	11
	Total	24	—	24	—	24	—	24

	Total fleet	86	-4	82	6	88	1	89


Safe Harbor Statement as to the Future Matters discussed in this release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. 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 performance, and underlying assumptions and other statements, which are statements other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. Words such as, but not limited to, “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “targets,” “projects,” “forecasts,” “potential,” “continue,” “possible,” “likely,” “may,” “could,” “should” and similar expressions or phrases may identify forward-looking statements. The forward-looking statements in this release are based upon various assumptions, many of which are, in turn, based upon further assumptions, including without limitation, the Management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs, or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, our future operating or financial results; changes in governmental rules and regulations or actions taken by regulatory authorities; the central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates; inflationary pressure; increased cost of capital or limited access to funding due to EU Taxonomy or	relevant territorial taxonomy regulations; the length and severity of epidemics and pandemics and their impact on the demand for seaborne transportation of petroleum products; general domestic and international political conditions or events, including sanctions, “trade wars”, and the conflict between Russia and Ukraine, the developments in the Middle East, including the conflicts in Israel and the Gaza Strip, and the conflict regarding the Houthi attacks in the Red Sea; changes in economic and competitive conditions affecting our business, including market fluctuations in charter rates and charterers’ abilities to perform under existing time charters; changes in the supply and demand for vessels comparable to ours and the number of newbuildings under construction; the highly cyclical nature of the industry that we operate in; the loss of a large customer or significant business relationship; changes in worldwide oil production and consumption and storage; risks associated with any future vessel construction; our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions planned; availability of skilled crew members other employees and the related labor costs; work stoppages or other labor disruptions by our employees or the employees of other companies in related industries; the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our ESG policies; Foreign Corrupt Practices Act of 1977 or other applicable regulations relating to bribery; effects of new products and new technology in our industry, including the potential for technological innovation to reduce the value of our vessels and charter income derived therefrom; new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime Organization, and/or imposed by regional or national authorities such as the European Union or individual countries; the impact of an interruption in or failure of our information technology and communications systems, including the impact of cyber-attacks, upon our ability to operate; potential conflicts of interest involving members of our Board of Directors and Senior Management; the failure of counterparties to fully perform their contracts with us; changes in credit risk with respect to our counterparties on contracts; our dependence on key personnel and our ability to attract, retain and motivate key	employees; adequacy of insurance coverage; our ability to obtain indemnities from customers; changes in laws, treaties or regulations; our incorporation under the laws of England and Wales and the different rights to relief that may be available compared to other countries, including the United States; government requisition of our vessels during a period of war or emergency; the arrest of our vessels by maritime claimants; any further changes in U.S. trade policy that could trigger retaliatory actions by the affected countries; potential disruption of shipping routes due to accidents, climate-related incidents, environmental factors, political events, public health threats, acts by terrorists or acts of piracy on ocean-going vessels; the impact of adverse weather and natural disasters; damage to storage and receiving facilities; potential liability from future litigation and potential costs due to environmental damage and vessel collisions; and the length and number of off-hire periods and dependence on third-party managers. In the light of these risks and uncertainties, undue reliance should not be placed on forward-looking statements contained in this release because they are statements about events that are not certain to occur as described or at all. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to release publicly any revisions or updates to these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Please see TORM’s filings with the U.S. Securities and Exchange Commission for a more complete discussion of certain of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.

USDm	Note	Q1 2024	Q1 2023	FY 2023
Revenue		444.1	390.2	1,520.4
Port expenses, bunkers, commissions, and other cost of goods and services sold		-112.3	-122.1	-430.3
Operating expenses	1	-56.6	-51.9	-216.0
Profit from sale of vessels	2	17.0	—	50.4
Administrative expenses	1, 2	-26.2	-17.6	-82.9
Other operating income and expenses		-0.2	-0.1	6.3
Depreciation and amortization	2	-43.1	-35.0	-149.3
Operating profit (EBIT)		222.7	163.5	698.6
Financial income		6.4	4.1	14.3
Financial expenses		-18.3	-12.5	-60.9
Profit before tax		210.8	155.1	652.0
Tax		-1.6	-1.5	-4.0
Net profit for the period		209.2	153.6	648.0
Net profit for the period attributable to:
TORM plc shareholders		209.7	153.6	648.3
Non-controlling interest		-0.5	—	-0.3
Net profit for the period		209.2	153.6	648.0
Earnings per share
Basic earnings per share (USD)	6	2.34	1.87	7.75
Diluted earnings per share (USD)	6	2.26	1.80	7.48

		31 March	31 March	31 December
USDm	Note	2024	2023	2023
ASSETS
Non-current Assets
Intangible assets
Goodwill		1.8	1.8	1.8
Other intangible assets		1.9	1.8	1.8
Total intangible assets		3.7	3.6	3.6
Tangible fixed assets
Land and buildings		4.8	5.2	5.5
Vessels and capitalized dry-docking	2	2,463.5	2,025.3	2,070.2
Prepayments on vessels	3	60.4	19.6	86.0
Other non-current assets under construction		4.2	—	4.2
Other plant and operating equipment		3.9	5.2	4.4
Total tangible fixed assets		2,536.8	2,055.3	2,170.3
Financial assets
Investments in joint ventures		0.1	0.1	0.1
Loan receivables		4.5	4.6	4.5
Deferred tax asset		0.3	0.5	0.4
Other investments		0.6	1.5	—
Total financial assets		5.5	6.7	5.0
Total non-current assets		2,546.0	2,065.6	2,178.9
Current Assets
Inventories		70.4	70.9	61.7
Trade receivables		258.2	226.3	211.0
Other receivables		63.9	64.6	60.5
Prepayments		9.7	26.3	15.2
Cash and cash equivalents incl. restricted cash		559.6	410.7	295.6
Current assets, excl. assets held-for-sale		961.8	798.8	644.0
Assets held-for-sale	2	—	—	47.2
Total current assets		961.8	798.8	691.2
Total Assets		3,507.8	2,864.4	2,870.1

USDm	Common shares	Share premium	Treasury shares	Hedging reserves	Translation reserves	Retained profit	Equity attributable to shareholders of TORM plc	Non- controlling interest	Total
Equity as of 01 January 2024	0.9	260.0	-4.2	25.6	-0.4	1,382.2	1,664.1	2.0	1,666.1
Comprehensive income/loss for the period:
Net profit for the period	—	—	—	—	—	209.7	209.7	-0.5	209.2
Other comprehensive income for the period	—	—	—	1.6	-0.1	—	1.5	-0.1	1.4
Tax on other comprehensive income	—	—	—	-0.5	—	—	-0.5	—	-0.5
Total comprehensive income/(loss) for the period	—	—	—	1.1	-0.1	209.7	210.7	-0.6	210.1
Capital increase ¹⁾	0.1	180.0	—	—	—	—	180.1	—	180.1
Transaction costs of capital increase	—	-0.3	—	—	—	—	-0.3	—	-0.3
Share-based compensation	—	—	—	—	—	9.0	9.0	—	9.0
Total changes in equity for the period	0.1	179.7	—	1.1	-0.1	218.7	399.5	-0.6	398.9
Equity as of 31 March 2024	1.0	439.7	-4.2	26.7	-0.5	1,600.9	2,063.6	1.4	2,065.0

USDm	31 March 2024				31 March 2023				31 December 2023
USDm	Tanker segment	Marine Exhaust segment	Inter- segment elimination	Total	Tanker segment	Marine Exhaust segment	Inter- segment elimination	Total	Tanker segment	Marine Exhaust segment	Inter- segment elimination	Total
ASSETS
Non-current Assets
Intangible assets
Goodwill	—	1.8	—	1.8	—	1.8	—	1.8	—	1.8	—	1.8
Other intangible assets	1.0	0.9	—	1.9	0.6	1.2	—	1.8	0.9	0.9	—	1.8
Total intangible assets	1.0	2.7	—	3.7	0.6	3.0	—	3.6	0.9	2.7	—	3.6
Tangible fixed assets
Land and buildings	4.4	0.4	—	4.8	4.3	0.9	—	5.2	4.9	0.6	—	5.5
Vessels and capitalized dry-docking	2,478.9	—	-15.4	2,463.5	2,033.9	—	-8.6	2,025.3	2,081.7	—	-11.5	2,070.2
Prepayments on vessels	60.4	—	—	60.4	15.8	3.8	—	19.6	86.0	—	—	86.0
Other non-current assets under construction	—	4.5	-0.3	4.2	—	—	—	—	—	4.5	-0.3	4.2
Other plant and operating equipment	3.0	0.9	—	3.9	3.8	1.4	—	5.2	3.3	1.1	—	4.4
Total tangible fixed assets	2,546.7	5.8	-15.7	2,536.8	2,057.8	6.1	-8.6	2,055.3	2,175.9	6.2	-11.8	2,170.3
Financial assets
Investments in joint ventures	0.1	—	—	0.1	0.1	—	—	0.1	0.1	—	—	0.1
Loan receivables	4.5	—	—	4.5	4.6	—	—	4.6	4.5	—	—	4.5
Deferred tax asset	0.4	-0.1	—	0.3	0.5	—	—	0.5	0.4	—	—	0.4
Other investments	0.6	—	—	0.6	1.5	—	—	1.5	—	—	—	—
Total financial assets	5.6	-0.1	—	5.5	6.7	—	—	6.7	5.0	—	—	5.0
Total non-current assets	2,553.3	8.4	-15.7	2,546.0	2,065.1	9.1	-8.6	2,065.6	2,181.8	8.9	-11.8	2,178.9
Current Assets
Inventories	65.6	4.8	—	70.4	65.5	5.4	—	70.9	58.0	3.7	—	61.7
Trade receivables	253.6	4.6	—	258.2	223.3	3.8	-0.8	226.3	206.2	5.0	-0.2	211.0
Other receivables	58.9	5.0	—	63.9	62.9	1.7	—	64.6	58.8	1.7	—	60.5
Prepayments	9.1	0.6	—	9.7	25.6	0.7	—	26.3	10.7	4.5	—	15.2
Cash and cash equivalents incl. restricted cash	552.3	7.3	—	559.6	405.9	4.8	—	410.7	290.7	4.9	—	295.6
Current assets, excl. assets held-for-sale	939.5	22.3	—	961.8	783.2	16.4	-0.8	798.8	624.4	19.8	-0.2	644.0
Assets held-for-sale	—	—	—	—	—	—	—	—	47.2	—	—	47.2
Total current assets	939.5	22.3	—	961.8	783.2	16.4	-0.8	798.8	671.6	19.8	-0.2	691.2
Total Assets	3,492.8	30.7	-15.7	3,507.8	2,848.3	25.5	-9.4	2,864.4	2,853.4	28.7	-12.0	2,870.1



TCE per day	=	TCE excluding unrealized gains/losses on derivatives
		Available earning days

Gross profit %	=	Gross profit
		Revenue

EBITDA %	=	EBITDA
		Revenue

Operating profit/(loss) %	=	Operating profit/(loss) (EBIT)
		Revenue

Return on Equity (RoE) %	=	Net profit/(loss) for the year
		Average equity

Return on Invested Capital	=	Operating profit/(loss) less tax
(RoiC) %		Average invested capital

Equity ratio	=	Equity
		Total assets

Earnings per share, EPS	=	Net profit/(loss) for the year
		Average number of shares

Diluted earnings/(loss) per share, EPS	=	Net profit/(loss) for the year
(USD)		Average number of shares less average number of treasury shares

USDm	31 March 2024	31 March 2023	31 December 2023
Tangible and intangible fixed assets	2,540.5	2,058.9	2,173.8
Investments in joint ventures	0.1	0.1	0.1
Deferred tax asset	0.3	0.5	0.4
Other investments	0.6	1.5	—
Inventories	70.4	70.9	61.7
Accounts receivables ¹⁾	331.8	317.2	286.7
Assets held-for-sale	—	—	47.2
Non-current tax liability related to held over gains	-45.2	-45.2	-45.2
Deferred tax liability	-4.7	-4.4	-3.6
Trade payables ²⁾	-84.0	-99.8	-91.3
Current tax liabilities	-1.1	-1.0	-0.7
Provisions	-0.5	-6.8	-0.6
Deferred income	-1.5	-0.2	-3.4
Invested capital	2,806.7	2,291.7	2,425.1