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TORM A/S Q2 2010 Results

On a quarterly basis, TORM calculates the long-term earnings potential of its fleet based on discounted expected future cash flows. The calculated value of the fleet at 30 June 2010 supports book value.

Liabilities

During the second quarter of 2010, net interest-bearing debt increased to USD 1,691 million from USD 1,622 million at 31 March 2010. The increase in debt is due to borrowing in connection with the newbuilding programme. More than 74% of the debt is due after 2012.

Total equity

In the second quarter of 2010, equity decreased from USD 1,248 million at 31 March 2010 to USD 1,220 million, which was primarily due to the loss during the period. Equity as a percentage of total assets was 38% at 30 June 2010, compared to 39% at 31 March 2010.

At 30 June 2010, TORM held 3,461,580 treasury shares, corresponding to 4.8% of the Company's share capital, which is unchanged since 31 March 2010.

Liquidity

TORM's undrawn credit facilities and cash totalled about USD 600 million at the end of the second quarter of 2010.

Outlook

TORM forecasts a loss before tax of USD 40-60 million for 2010.

Coverage

At 30 June 2010, TORM had covered 33% of the remaining earning days for 2010 in the Tanker Division at USD/day 16,470 and 81% of the remaining earning days in the Bulk Division at USD/day 19,725.

The table below shows the figures for 2010 for the period 1 July to 31 December 2010, and full year 2011 and 2012.

  2010 2011 2012 2010 2011 2012
   Owned days      
LR2  2,196  4,380  4,392      
LR1  1,282  2,555  2,562      
MR  6,754  14,758  15,690      
SR  1,966  4,015  4,026      
Tanker Division  12,198  25,708  26,670      
Bulk Division  366  1,437  1,495      
Total  12,564  27,145  28,165      
             
   T/C in days  T/C in costs (USD/day)
LR2  --   --   --   --   --   -- 
LR1  2,559  5,303  4,334  21,879  22,219  22,485
MR  1,647  3,619  3,108  16,976  17,007  16,399
SR  --   --   --   --   --   -- 
Tanker Division  4,206  8,922  7,442  19,959  20,105  19,943
Bulk Division  2,003  3,581  4,228  15,793  15,477  15,954
Total  6,209  12,503  11,670  18,615  18,780  18,498
             
   Total physical days (owned + T/C in)  Covered days
LR2 2,196 4,380  4,392  610  456  40
LR1 3,841 7,858  6,896  1,109  365  366
MR 8,401 18,377  18,798  2,517  1,775  412
SR 1,966 4,015  4,026  1,228  1,059  40
Tanker Division  16,404  34,630  34,112  5,464  3,655  858
Bulk Division  2,369  5,018  5,723  1,907  581  -- 
Total  18,773  39,648  39,835  7,371  4,236  858
             
   Coverage %  Coverage rates (USD/day)
LR2 28 10 1  24,184  28,648  32,660
LR1 29 5 5  16,145  15,690  15,690
MR 30 10 2  15,768  16,283  15,348
SR 62 26 1  14,055  14,268  15,128
Tanker Division  33  11  3  16,399  17,182  16,298
Bulk Division  81  12  --   19,725  16,507  -- 
Total  39  11  2  17,259  17,089  16,298
             
Fair value of freight rate contracts that are mark-to-market in the income statement (USD m):
Contracts not included above    -1.2        
Contracts included above    0.2        
             
Notes            
Actual no. of days can vary from projected no. of days primarily due to vessel sales and timing of vessel deliveries. T/C in costs do not include potential extra payments from profit split arrangements.

Post balance sheet events

No subsequent events have occurred after the balance sheet date which would change TORM's expectations for its financial performance for either 2010 or any subsequent period.

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