COPENHAGEN, Denmark, Aug. 19, 2010 (GLOBE NEWSWIRE) -- TORM posted a loss before tax of USD 24 million for Q2 2010. The result was in line with expectations and better than the same period a year ago. "In Q2, the product tanker market was affected by seasonality; however, positive signs of recovery were seen late in the quarter. We believe underlying demand is improving and will support the product tanker segment going forward," says CEO Jacob Meldgaard.
  • The result before tax for the second quarter of 2010 was a loss of USD 24 million, compared to a loss of USD 33 million in the same period last year. The result for the second quarter was in line with expectations. The result for the second quarter of 2010 was positively impacted by mark-to-market non-cash adjustments of USD 2 million.  
  • A loss of USD 22 million before tax was recorded for the first six months of 2010. The result for the first quarter of 2010 includes a profit of USD 18 million from the sale of two bulk vessels.  
  • In the second quarter of 2010, product tanker rates were negatively impacted by seasonality, influx of new tonnage and continued discharge of vessels from floating storage. The demand for refined products in the West remained slow, and the freight rate weakness seen in the crude oil markets did not spur additional demand for the larger LR tonnage. The demand for vegetable oil to China and Europe and for naphtha in the Far East did not offer sufficient rate support until the end of Q2 where also demand for gasoline in the West showed an upward trend.  
  • Panamax bulk rates remained volatile in the second quarter of 2010. Up to mid-May, the rates increased to USD 37,100/day, but then fell to USD 22,100/day at the end of the quarter. Due to TORM's high coverage of earning days, the volatility in bulk spot rates had limited impact on TORM's earnings.  
  • 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.  
  • At 30 June 2010, equity amounted to USD 1,220 million, equivalent to USD 17.6 per share (DKK 106.9 per share), excluding treasury shares, corresponding to an equity ratio of 38%.  
  • TORM's undrawn credit facilities and cash totalled approximately USD 600 million at the end of the second quarter. Capex relating to the order book amounted to USD 372 million.  
  • Net interest-bearing debt totalled USD 1,691 million at 30 June 2010, compared to USD 1,622 million at 31 March 2010. The increase is due to borrowing in connection with the newbuilding programme.   
  • At 30 June 2010, TORM had covered 33% of the remaining earning days for 2010 in the Tanker Division at USD 16,470/day and 81% of the remaining earning days in the Bulk Division at USD 19,725/day.  
  • TORM forecasts a loss before tax of USD 40-60 million for 2010.

Teleconference

TORM will host a teleconference and webcast ( www.torm.com ) today, at 3:00 pm Copenhagen time (CET), see details on page 9. 
Key figures  
Million USD   Q2 2010 Q2 2009 Q1-Q2 2010 Q1-Q2 2009 2009  
Income statement              
Revenue   201.3 193.6 406.8 452.4 862.3  
Time charter equivalent earnings (TCE)   130.2 138.2 277.7 337.3 632.9  
Gross profit   41.1 38.9 97.0 136.4 242.5  
EBITDA   23.6 30.6 78.9 111.3 202.5  
Operating profit (EBIT)   -10.8 -2.9 9.5 46.0 49.8  
Profit/(loss) before tax   -24.4 -32.5 -21.8 6.7 -19.0  
Net profit   -24.1 -33.6 -21.8 6.0 -17.4  
Balance sheet              
Total assets   3,210.2 3,255.7 3,210.2 3,255.7 3,227.2  
Equity   1,219.9 1,269.8 1,219.9 1,269.8 1,246.7  
Total liabilities   1,990.3 1,985.9 1,990.3 1,985.9 1,980.5  
Invested capital   2,908.6 2,932.6 2,908.6 2,932.6 2,926.0  
Net interest bearing debt   1,691.4 1,669.9 1,691.4 1,669.9 1,682.5  
Cash flow              
From operating activities   -0.2 11.8 20.7 73.0 116.3  
From investing activities   -68.3 -17.6 -27.2 -144.3 -199.4  
Thereof investment in tangible fixed assets   -69.6 -44.7 -93.2 -174.2 -288.8  
From financing activities   3.3 19.7 5.8 15.6 36.6  
Total net cash flow   -65.2 13.9 -0.7 -55.7 -46.5  
Key financial figures              
Gross margins:              
TCE   64.7% 71.4% 68.3% 74.6% 73.4%  
Gross profit   20.4% 20.1% 23.8% 30.2% 28.2%  
EBITDA   11.7% 15.8% 19.4% 24.6% 23.5%  
Operating profit   -5.4% -1.5% 2.3% 10.2% 5.8%  
Return on Equity (RoE) (p.a.)*)   -7.8% -8.0% -5.2% -0.3% -1.3%  
Return on Invested Capital (RoIC) (p.a.)**)   -1.5% -1.7% 0.0% 1.9% 1.7%  
Equity ratio   38.0% 39.0% 38.0% 39.0% 38.6%  
Exchange rate USD/DKK, end of period   6.07 5.27 6.07 5.27 5.19  
Exchange rate USD/DKK, average   5.86 5.48 5.62 5.60 5.36  
Share related key figures              
Earnings per share, EPS USD -0.3 -0.5 -0.3 0.1 -0.3  
Diluted earnings per share, EPS USD -0.3 -0.5 -0.3 0.1 -0.3  
Cash flow per share, CFPS USD 0.0 0.2 0.3 1.1 1.7  
Share price, end of period (per share of DKK 5 each) DKK 46.1 54.0 46.1 54.0 50.7  
Number of shares, end of period Million 72.8 72.8 72.8 72.8 72.8  
Number of shares (excl. treasury shares), average Million 69.3 69.2 69.3 69.2 69.2  
               
*)  Gains from sale of vessels and the mark-to-market adjustments of 'Other financial assets' have not been annualised when calculating the  Return on Equity.  
 
**)  Gain from sale of vessels has not been annualised when calculating the Return on Invested Capital.  
 
Profit by division
Million USD Q2 2010 Q1-Q2 2010
  Tanker Division Bulk Division Non allocated Total Tanker Division Bulk Division Non allocated Total
Revenue 180.3 21.0 0.0 201.3 364.4 42.4 0.0 406.8
Port expenses, bunkers and commissions -69.3 -1.3 0.0 -70.6 -128.3 -2.2 0.0 -130.5
Freight and bunkers derivatives -0.5 0.0 0.0 -0.5 1.4 0.0 0.0 1.4
Time charter equivalent earnings 110.5 19.7 0.0 130.2 237.5 40.2 0.0 277.7
Charter hire -40.3 -14.1 0.0 -54.4 -78.9 -27.2 0.0 -106.1
Operating expenses -33.9 -0.8 0.0 -34.7 -72.2 -2.4 0.0 -74.6
Gross Profit 36.3 4.8 0.0 41.1 86.4 10.6 0.0 97.0
Profit/(loss) from sale of vessels 0.0 0.0 0.0 0.0 0.0 18.2 0.0 18.2
Administrative expenses -15.3 -2.2 0.0 -17.5 -32.1 -3.5 0.0 -35.6
Other Operating income 1.3 0.0 0.0 1.3 3.0 0.0 0.0 3.0
Share of results of jointly controlled entities 0.6 0.0 -1.9 -1.3 1.6 0.0 -5.3 -3.7
EBITDA 22.9 2.6 -1.9 23.6 58.9 25.3 -5.3 78.9
Impairment losses on jointly controlled entities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Depreciation and impairment losses -33.7 -0.7 0.0 -34.4 -68.1 -1.3 0.0 -69.4
Operating profit (EBIT) -10.8 1.9 -1.9 -10.8 -9.2 24.0 -5.3 9.5
Financial items, net -- -- -13.6 -13.6 -- -- -31.3 -31.3
Profit/(Loss) before tax -- -- -15.5 -24.4 -- -- -36.6 -21.8
Tax -- -- 0.3 0.3 -- -- 0.0 0.0
Net profit/(loss) -- -- -15.2 -24.1 -- -- -36.6 -21.8
The activity that TORM owns in a 50/50 joint venture with Teekay and the 50% ownership of FR8 Holding Pte. Ltd. are included in "Not-allocated".

Tanker Division

The division realised an operating loss of USD 11 million for the second quarter of 2010, compared to a loss of USD 12 million in the same period in 2009.

In line with seasonality, rates were generally low in the second quarter of 2010. Compared to the same period a year ago rate levels have improved as the global economy is regaining strength.

Influx of newbuildings, freed-up floating storage and a continued negative market sentiment kept the rates at low levels, also in a historical perspective.

In the second quarter of 2010, the fleet grew by approx. 2%. The significant delay in deliveries of new tonnage experienced in 2009 and the first quarter of 2010 continued in the second quarter, with slippage of more than 40%.

In the second quarter of 2010, the MR segment was negatively impacted by poor gasoline demand in the USA. The market players therefore sought alternative cargoes and destinations for the MR fleet, e.g. distilled oil products from the USA to South America, vegetable oil from South America to China and palm oil from Indonesia/Malaysia to the European continent.

The strengthening of the transatlantic trading route, seen late June, was partly driven by these changes in transport patterns, as this implied fewer vessels available on the European continent at the same time as the gasoline arbitrage from Europe to the USA opened.

The LR segment continued to show some strength, as naphtha demand from the Far East remained firm throughout the second quarter of 2010 despite added tonnage from newbuildings and notably freed-up tonnage from floating storage. The weaker dirty market implied that the tonnage balance was not supported by vessels swapping into dirty.

The continued reduction in floating storage during the second quarter of 2010 has impacted the tonnage supply for the larger LR vessels, and thus rates. At the end of June, floating storage has been reduced to some 3% of the total fleet, which is a more natural level. The level of and movements in floating storage are volatile and impacted by the forward curve for the various refined products.

At 30 June, coverage for the remaining part of 2010 was 33% at USD 16,470/day.

 
Tanker Division Q2 09   Q3 09   Q4 09   Q1 10   Q2 10   Change Q2 09 - Q2 10 12 month avg.  
  LR2 (Aframax, 90-110,000 DWT)              
Available earning days 1,179 1,190 1,173 1,163 1,122 -5%  
TCE per earning day from the LR2 Pool 17,145 18,401 20,331 19,270 17,185 0%  
TCE per earning day 1) 15,785 17,406 18,356 18,456 15,505 -2% 17,431
Operating days 1,092 1,104 1,104 1,080 1,092 0%  
Operating expenses per operating day 2) 7,556 6,496 6,933 6,908 6,301 -17% 6,660
  LR1 (Panamax 75-85,000 DWT)              
Available earning days 1,756 1,835 2,025 1,748 1,777 1%  
TCE per earning day from the LR1 Pool 15,577 15,036 14,304 16,273 14,903 -4%  
TCE per earning day 1) 18,491 16,514 16,516 16,686 15,509 -16% 16,306
Operating days 819 828 828 810 749 -9%  
Operating expenses per operating day 2) 7,142 6,706 5,986 6,454 5,420 -24% 6,142
  MR (45,000 DWT)              
Available earning days 3,344 3,602 3,829 3,755 3,916 17%  
TCE per earning day from the MR Pool 14,712 14,974 11,521 14,179 12,567 -15%  
TCE per earning day 1) 15,363 15,349 12,417 14,700 12,363 -20% 13,707
Operating days 2,548  2,707 2,832 2,790 2,951 16%  
Operating expenses per operating day 2) 7,458 6,621 6,770 6,883 6,053 -19% 6,582
  SR (35,000 DWT)              
Available earning days 1,135 1,160 1,103 1,002 979 -14%  
TCE per earning day 1) 17,483 18,378 16,894 18,034 16,099 -8% 17,351
Operating days 1,001 1,012 1,012 990 1,001 0%  
Operating expenses per operating day 2) 6,600 6,105 6,326 6,041 4,821 -27% 5,823
               
1) TCE = Time Charter Equivalent Earnings = Gross freight income less bunker, commissions and port expenses.
2) Operating expenses are related to owned vessels.

Bulk Division

Operating profit for the second quarter of 2010 was USD 2 million, compared to USD 10 million in the second quarter of 2009.

The number of earning days for the Bulk Division was 29% lower in the second quarter of 2010 than in the same period last year due to the sale of vessels.

The dry bulk market stayed at a relatively strong level throughout most of the second quarter of 2010, with Panamax spot rates peaking at around USD/day 37,100 in mid-May. Rates continued to be driven by the Chinese demand for iron ore and coal as well as high port congestion.

However, towards the end of the quarter and at the beginning of the third quarter, rates decreased sharply and did not stabilise until the end of July. By then, Panamax spot rates were down to around USD 16,000/day. The decline in rates was driven by the continued high influx of new vessels, especially in the Capesize segment, in combination with declining Chinese demand for coal and uncertainty surrounding the future Chinese demand for iron ore. Total fleet growth in the dry bulk segment came to about 4% in the second quarter of 2010.

As TORM seeks high coverage of earning days for the Bulk Division, the volatility in bulk spot rates has limited impact on TORM's earnings in 2010.

At 30 June, coverage for the remaining part of 2010 was 81% at USD 19,725/day.
 
Bulk Division Q2 09   Q3 09   Q4 09   Q1 10   Q2 10   Change Q2 09 - Q2 10 12 month avg.  
  Panamax (60-80,000 DWT)              
Available earning days 1,496 1,255 1,204  1,119 1,060 -29%  
TCE per earning day 1) 13,756 17,968 19,690  18,298 18,611 35% 18,642
Operating days 636 392 368  315 182 -71%  
Operating expenses per operating day 2) 5,106 4,477 4,066  5,187 4,603 -10%  4,583
               
1) TCE = Time Charter Equivalent Earnings = Gross freight income less bunker, commissions and port expenses.
2) Operating expenses are related to owned vessels.

Other activities

Other (non-allocated) activities were a loss on investments in jointly controlled entities of USD 2 million, financial expenses of USD 14 million and tax of USD 0 million.

Fleet developments

In the second quarter, TORM took delivery of two MR newbuildings, TORM Alice and TORM Alexandra. At the end of the quarter, TORM's fleet of owned vessels comprised 66 tankers and two bulk carriers. In addition to these, TORM had 25 tankers and 11 bulk carriers on time charter. Another 37 tankers were either in pools or under commercial management.
 
   Owned vessels
  31 Mar 10 Addition Disposal 30 Jun 10
LR2 / Aframax 12.5 -- -- 12.5
LR1 / Panamax 7.5 -- -- 7.5
MR 33.0 2.0 -- 35.0
SR 11.0 -- -- 11.0
Product tankers 64.0 2.0 -- 66.0
Panamax dry bulk 2.0 -- -- 2.0
Total 66.0 -- -- 68.0

Planned fleet changes

No vessels were contracted in the second quarter of 2010, and at the end of the quarter the order book thus comprised nine MR vessels and four Kamsarmax vessels. Capex relating to the order book amounted to USD 372 million.
   
  New buildings to be delivered
  2010 2011 2012 2013  
  Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Total
LR2 / Aframax -- -- -- -- -- -- -- -- -- -- -- --
LR1 / Panamax -- -- -- -- -- -- -- -- -- -- -- --
MR 3,0 -- 2,0 -- 1,0 1,0 -- 1,0 1,0 -- -- 9,0
SR -- -- -- -- -- -- -- -- -- -- -- --
Tank 3,0 -- 2,0 -- 1,0 1,0 -- 1,0 1,0 -- -- 9,0
Kamsarmax dry bulk -- -- 2,0 -- -- -- -- -- -- 1,0 1,0 4,0
I alt 3,0 -- 4,0 -- 1,0 1,0 0,0 1,0 1,0 1,0 1,0 13,0

In July 2010, TORM took delivery of the MR vessel TORM Aslaug from the Chinese shipyard GSI Guangzhou.

Second quarter 2010

Results

Gross profit for the second quarter of 2010 was USD 41 million, up from USD 39 million for the corresponding period of 2009. Administrative expenses were USD 18 million, against USD 23 million for the second quarter of 2009, corresponding to a reduction of 22%. Profit before depreciation and amortisation (EBITDA) for the period was USD 24 million, against USD 31 million for the second quarter of 2009. The primary reason for the decline in EBITDA is that the second quarter of 2009 was positively affected by a profit of USD 13 million from sale of vessels.

Depreciation was USD 34 million during the second quarter of 2010.

Operating profit for the second quarter of 2010 was a loss of USD 11 million, compared to a loss of USD 3 million for the same quarter of 2009.

The second quarter of 2010 was impacted by mark-to-market non-cash adjustments of USD 2 million related to FFA/bunker derivatives.

In the second quarter of 2010, financial items amounted to an expense of USD 14 million, against an expense of USD 30 million in the same quarter of 2009. The second quarter of 2009 was influenced by a negative non-cash fair value adjustment of USD 23 million on the value of options related to vessel values acquired in connection with the acquisition of OMI.

The result after tax was a loss of USD 24 million in the second quarter of 2010, against a loss of USD 34 million in the second quarter of 2009. The result in the second quarter of 2009 was impacted by a profit of USD 13 million from sale of vessels. No vessels were sold during the second quarter of 2010.

Assets

Total assets fell from USD 3,226 million at 31 March 2010 to USD 3,210 million at 30 June 2010.

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.

Safe Harbor Forward-looking Statements 

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 performance, and underlying assumptions and statements other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although TORM believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, TORM 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 the strength of the world economy and currencies, changes in charter hire rates and vessel values, changes in demand for "tonne miles" of oil carried by oil tankers, the effect of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in TORM's operating expenses, including bunker prices, dry-docking and insurance costs, changes in the regulation of shipping operations, including requirements for double hull tankers or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further described in reports filed by TORM with the U.S. Securities and Exchange Commission, including the TORM Annual Report on Form 20-F and its reports on Form 6-K.

Forward-looking statements are based on management's current evaluation, and TORM is only under an obligation to update and change the listed expectations to the extent required by law.

The TORM share

The price of a TORM share was DKK 46.1 at 30 June 2010, against DKK 57.0 at 31 March 2010, equivalent to a decrease of DKK 10.9 (19%).

Accounting policies

This interim report for the second quarter of 2010 is presented in accordance with IAS 34 "Interim financial reporting" as adopted by the EU and additional Danish disclosure requirements for interim reports of listed companies. The interim report for the second quarter of 2010 is unaudited and is presented in accordance with the same accounting policies as the Annual Report 2009.

Information Teleconference

TORM will host a telephone conference for financial analysts and investors on 19 August 2010 at 3:00 pm Copenhagen time (CET), reviewing the interim report for the first six months of 2010. The conference call will be hosted by Jacob Meldgaard, CEO, Roland M. Andersen, CFO, and Sune S. Mikkelsen, VP IR, and will be conducted in English.

To participate, please call 10 minutes before the conference on tel.: +45 3271 4607 (from Europe) or +1 887 491 0064 (from the USA). The teleconference will also be webcast via TORM's website www.torm.com . The presentation material can be downloaded from the website.

Next reporting

TORM's financial report for the first nine months of 2010 will be published on 18 November 2010.

Statement by the Board of Directors and Executive Management on the Interim Report

The Board of Directors and Executive Management have considered and approved the interim report for the period 1 January - 30 June 2010.

The interim report, which is unaudited, has been prepared in accordance with the general Danish financial reporting requirements governing listed companies, including the measurement and recognition provisions of IFRS which are expected to be applicable to the Annual Report 2010.

We consider the accounting policies applied to be appropriate, and in our opinion the interim report gives a true and fair view of the Group's assets, liabilities, financial position and of the results of operations and consolidated cash flows.

Copenhagen, 19 August 2010
Executive Management Board of Directors
   
Jacob Meldgaard, CEO Niels Erik Nielsen, Chairman
Roland M. Andersen, CFO Christian Frigast, Deputy Chairman
  Peter Abildgaard
  Lennart Arrias
  Margrethe Bligaard Thomasen
  Bo Jagd
  Jesper Jarlbaek
  Gabriel Panayotides
  Angelos Papoulias
  Nicos Zouvelos

About TORM

TORM is one of the world's leading carriers of refined oil products as well as a significant player in the dry bulk market. The Company runs a fleet of approximately 140 modern vessels in cooperation with other respected shipping companies sharing TORM's commitment to safety, environmental responsibility and customer service.

TORM was founded in 1889. The Company conducts business worldwide and is headquartered in Copenhagen, Denmark. TORM's shares are listed on NASDAQ OMX (Copenhagen:TORM) and on NASDAQ in New York (Nasdaq:TRMD). For further information, please visit www.torm.com .
Income statement  
             
Million USD Q2 2010 Q2 2009 Q1-Q2 2010 Q1-Q2 2009 2009  
             
Revenue 201.3 193.6 406.8 452.4 862.3  
Port expenses, bunkers and commissions -70.6 -48.1 -130.5 -106.9 -217.4  
Freight and bunkers derivatives -0.5 -7.3 1.4 -8.2 -12.0  
             
Time charter equivalent earnings 130.2 138.2 277.7 337.3 632.9  
             
Charter hire -54.4 -55.1 -106.1 -109.2 -220.9  
Operating expenses -34.7 -44.2 -74.6 -91.7 -169.5  
             
Gross profit (Net earnings from shipping activities) 41.1 38.9 97.0 136.4 242.5  
             
Profit from sale of vessels 0.0 12.5 18.2 12.5 33.1  
Administrative expenses -17.5 -22.5 -35.6 -42.6 -78.2  
Other operating income 1.3 2.4 3.0 4.8 7.4  
Share of results of jointly controlled entities -1.3 -0.7 -3.7 0.2 -2.3  
             
EBITDA 23.6 30.6 78.9 111.3 202.5  
             
Impairment losses on jointly controlled entities 0.0 0.0 0.0 0.0 -20.0  
Depreciation and impairment losses -34.4 -33.5 -69.4 -65.3 -132.7  
             
Operating profit (EBIT) -10.8 -2.9 9.5 46.0 49.8  
             
Financial items -13.6 -29.6 -31.3 -39.3 -68.8  
             
Profit before tax -24.4 -32.5 -21.8 6.7 -19.0  
             
Tax 0.3 -1.1 0.0 -0.7 1.6  
             
Net profit/(loss) for the period -24.1 -33.6 -21.8 6.0 -17.4  
             
Earnings per share, EPS             
Earnings per share, EPS (USD) -0.3 -0.5 -0.3 0.1 -0.3  
Earnings per share, EPS (DKK) *) -2.0 -2.7 -1.8 0.5 -1.3  
             
*) The key figures have been translated from USD to DKK using the average USD/DKK exchange change rate for the period in question.  
 
Statement of comprehensive income
     
           
Million USD Q2 2010 Q2 2009 Q1-Q2 2010 Q1-Q2 2009 2009
           
Net profit/(loss) for the period -24.1 -33.6 -21.8 6.0 -17.4
           
Other comprehensive income:          
           
Exchange rate adjustment arising on translation of entities using a measurement currency different from USD 0.0 0.1 0.0 0.0 0.0
           
Fair value adjustment on hedging instruments -5.4 8.1 -9.7 24.5 26.5
           
Value adjustment of hedging instruments transferred  to income statement 2.3 -1.0 3.9 3.8 4.1
           
Value adjustment of hedging instruments transferred to assets 0.0 0.0 0.0 -1.2 -1.2
           
Fair value adjustment of available for sale investments -0.3 1.7 -0.5 0.7 1.6
           
Transfer to income statement on sale of available for sale investments 0.0 0.0 0.0 0.0 -3.7
           
Other comprehensive income after tax -3.4 8.9 -6.3 27.8 27.3
           
Total comprehensive income -27.5 -24.7 -28.1 33.8 9.9
           
           
Income statement by quarter          
           
Million USD Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
           
Revenue 193.6 208.8 201.1 205.5 201.3
Port expenses, bunkers and commissions -48.1 -56.1 -54.4 -59.9 -70.6
Freight and bunkers derivatives -7.3 -3.3 -0.5 1.9 -0.5
           
Time charter equivalent earnings 138.2 149.4 146.2 147.5 130.2
           
Charter hire -55.1 -56.3 -55.4 -51.7 -54.4
Operating expenses -44.2 -38.7 -39.1 -39.9 -34.7
           
Gross profit (Net earnings from shipping activities) 38.9 54.4 51.7 55.9 41.1
           
Profit from sale of vessels 12.5 20.7 -0.1 18.2 0.0
Administrative expenses -22.5 -17.9 -17.7 -18.1 -17.5
Other operating income 2.4 1.5 1.1 1.7 1.3
Share of results of jointly controlled entities -0.7 0.5 -3.0 -2.4 -1.3
           
EBITDA 30.6 59.2 32.0 55.3 23.6
           
Impairment losses on jointly controlled entities 0.0 0.0 -20.0 0.0 0.0
Depreciation and impairment losses -33.5 -35.0 -32.4 -35.0 -34.4
           
Operating profit (EBIT) -2.9 24.2 -20.4 20.3 -10.8
           
Financial items -29.6 -19.8 -9.7 -17.7 -13.6
           
Profit before tax -32.5 4.4 -30.1 2.6 -24.4
           
Tax -1.1 -2.3 4.6 -0.3 0.3
           
Net profit/(loss) for the period -33.6 2.1 -25.5 2.3 -24.1
           
           
Earnings per share, EPS           
Earnings per share, EPS (USD) -0.5 0.0 -0.4 0.0 -0.3
       
       
Assets      
 
 Million USD   30 June 2010 30 June 2009 31 December 2009
       
NON-CURRENT ASSETS      
       
Intangible assets      
Goodwill 89.2 89.2 89.2
Other intangible assets 2.2 2.4 2.2
Total intangible assets 91.4 91.6 91.4
       
Tangible fixed assets      
Land and buildings 3.6 3.7 3.7
Vessels and capitalized dry-docking 2,423.5 2,354.4 2,390.4
Prepayments on vessels 266.3 306.8 273.9
Other plant and operating equipment 9.3 11.4 10.7
Total tangible fixed assets 2,702.7 2,676.3 2,678.7
       
       
Financial assets      
Investment in jointly controlled entities 118.5 131.8 123.0
Loans to jointly controlled entities 36.5 39.7 38.7
Other investments 2.7 7.1 3.2
Other financial assets 6.0 4.3 8.5
Total financial assets 163.7 182.9 173.4
       
TOTAL NON-CURRENT ASSETS 2,957.8 2,950.8 2,943.5
       
       
CURRENT ASSETS      
       
Bunkers 28.6 20.7 24.6
Freight receivables, etc. 70.9 57.0 62.1
Other receivables 13.9 58.3 16.8
Other financial assets 0.0 11.5 0.4
Prepayments 17.9 15.1 13.6
Cash and cash equivalents 121.1 112.6 121.8
  252.4 275.2 239.3
       
Non-current assets held for sale 0.0 29.7 44.4
       
TOTAL CURRENT ASSETS 252.4 304.9 283.7
       
TOTAL ASSETS 3,210.2 3,255.7 3,227.2
       
       
Equity and liabilities      
 
 Million USD   30 June 2010 30 June 2009 31 December 2009
       
EQUITY      
       
Common shares 61.1 61.1 61.1
Treasury shares -17.9 -18.1 -18.1
Revaluation reserves -2.7 0.6 -2.2
Retained profit 1,184.4 1,227.7 1,205.1
Proposed dividends 0.0 0.0 0.0
Hedging reserves -9.1 -5.6 -3.3
Translation reserves 4.1 4.1 4.1
TOTAL EQUITY 1,219.9 1,269.8 1,246.7
       
LIABILITIES      
       
Non-current liabilities      
Deferred tax liability 54.6 55.2 55.0
Mortgage debt and bank loans 1,609.0 1,644.0 1,629.2
Finance lease liabilities 31.5 0.0 31.7
Acquired liabilities related to options on vessels 1.0 2.8 1.9
Acquired time charter contracts 0.0 0.3 0.1
TOTAL NON-CURRENT LIABILITIES 1,696.1 1,702.3 1,717.9
       
Current liabilities      
Mortgage debt and bank loans 170.1 138.5 141.5
Finance lease liabilities 1.9 0.0 1.8
Trade payables 41.9 25.6 25.0
Current tax liabilities 3.0 8.7 5.7
Other liabilities 75.2 100.0 82.9
Acquired liabilities related to options on vessels 1.8 1.8 1.8
Acquired time charter contracts 0.3 8.7 3.8
Deferred income 0.0 0.3 0.1
TOTAL CURRENT LIABILITIES 294.2 283.6 262.6
       
TOTAL LIABILITIES 1,990.3 1,985.9 1,980.5
       
TOTAL EQUITY AND LIABILITIES 3,210.2 3,255.7 3,227.2
 
 
Equity 1 January - 30 June 2010
 
Million USD Common shares Treasury shares Retained profit Proposed dividends Revaluation reserves Hedging reserves Translation reserves Total  
                 
Equity at 1 January 2010 61.1 -18.1 1,205.1 0.0 -2.2 -3.3 4.1 1,246.7
Changes in equity Q1-Q2 2010:                
Purchase treasury shares, cost -- -- -- -- -- -- -- 0.0
Disposal treasury shares, cost -- 0.2 -- -- -- -- -- 0.2
Gain/loss from disposal treasury shares -- -- -0.2 -- -- -- -- -0.2
Share-based compensation -- -- 1.3 -- -- -- -- 1.3
Comprehensive income for the period -- -- -21.8 -- -0.5 -5.8 0.0 -28.1
Total changes in equity Q1-Q2 2010 0.0 0.2 -20.7 0.0 -0.5 -5.8 0.0 -26.8
Equity at 30 June 2010 61.1 -17.9 1,184.4 0.0 -2.7 -9.1 4.1 1,219.9
 
 
Equity 1 January - 30 June 2009
 
                 
Million USD   Common shares Treasury shares Retained profit Proposed dividends Revaluation reserves Hedging reserves Translation reserves Total
                 
Equity at 1 January 2009 61,1 -18,1 1.209,5 55,1 -0,1 -32,7 4,1 1.278,9
Changes in equity Q1-Q2 2009:                
Dividends paid -- -- -- -51,2 -- -- -- -51,2
Dividends paid on treasury shares -- -- 2,5 -- -- -- -- 2,5
Exchange rate adjustment on dividends paid -- -- 3,9 -3,9 -- -- -- 0,0
Share-based compensation -- -- 5,8 -- -- -- -- 5,8
Comprehensive income for the period -- -- 6,0 -- 0,7 27,1 0,0 33,8
Total changes in equity Q1-Q2 2009 0,0 0,0 18,2 -55,1 0,7 27,1 0,0 -9,1
Equity at 30 June 2009 61,1 -18,1 1.227,7 0,0 0,6 -5,6 4,1 1.269,8
 
 
Statement of cash flows
 
 Million USD   Q2 2010 Q2 2009   Q1-Q2 2010 Q1-Q2 2009 2009  
           
Cash flow from operating activities          
Operating profit -10.8 -2.9 9.5 46.0 49.8
           
Adjustments:          
Reversal of profit from sale of vessels 0.0 -12.5 -18.2 -12.5 -33.1
Reversal of depreciation and impairment losses 34.4 33.5 69.4 65.3 132.7
Reversal of impairment of jointly controlled entities 0.0 0.0   0.0 20.0
Reversal of share of results of jointly controlled entities 1.3 0.7 3.7 -0.2 2.3
Reversal of other non-cash movements -3.8 5.6 -7.8 5.3 1.3
           
Dividends received 0.0 0.0 0.0 0.0 0.1
Dividends received from joint controlled entities 0.9 2.1 1.2 2.8 3.0
Interest received and exchange rate gains 0.3 2.4 0.4 4.2 5.1
Interest paid and exchange rate losses -12.7 -12.1 -26.9 -29.7 -56.9
Income taxes paid/repaid 0.0 -0.1 -2.9 -1.8 -2.7
Change in bunkers, accounts receivables and payables -9.8 -4.9 -7.7 -6.4 -5.3
Net cash flow from operating activities -0.2 11.8 20.7 73.0 116.3
           
Cash flow from investing activities          
Investment in tangible fixed assets -69.6 -44.7 -93.2 -174.2 -288.8
Investment in equity interests and securities 0.0 0.0 0.0 0.0 0.0
Loans to jointly controlled entities 1.2 1.1 2.3 2.4 4.7
Payment of liability related to options on vessels 0.0 0.0 0.0 1.5 0.0
Received share on options on vessels 0.0 0.0 0.0 0.0 1.5
Sale of equity interests and securities 0.0 0.0 0.0 0.0 4.7
Sale of non-current assets 0.1 26.0 63.7 26.0 78.5
Net cash flow from investing activities -68.3 -17.6 -27.2 -144.3 -199.4
           
Cash flow from financing activities          
Borrowing, mortgage debt and finance lease liabilities 54.8 245.4 80.5 263.4 368.0
Repayment/redemption, mortgage debt and finance lease liabilities -51.5 -177.0 -74.7 -199.1 -282.7
Dividends paid 0.0 -48.7 0.0 -48.7 -48.7
Purchase/disposals of treasury shares 0.0 0.0 0.0 0.0 0.0
Net cash flow from financing activities 3.3 19.7 5.8 15.6 36.6
           
Net cash flow from operating, investing and financing activities -65.2 13.9 -0.7 -55.7 -46.5
           
Cash and cash equivalents, beginning balance 186.3 98.7 121.8 168.3 168.3
           
Cash and cash equivalents, ending balance 121.1 112.6 121.1 112.6 121.8
 
 
Statement of cash flows by quarter
           
Million USD Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
 
           
Cash flow from operating activities          
Operating profit -2.9 24.2 -20.4 20.3 -10.8
           
Adjustments:          
Reversal of profit from sale of vessels -12.5 -20.7 0.1 -18.2 0.0
Reversal of depreciation and impairment losses 33.5 35.0 32.4 35.0 34.4
Reversal of impairment of jointly controlled entities 0.0 0.0 20.0 0.0 0.0
Reversal of share of results of jointly controlled entities 0.7 -0.5 3.0 2.4 1.3
Reversal of other non-cash movements 5.6 -0.6 -3.4 -4.0 -3.8
           
Dividends received 0.0 0.0 0.1 0.0 0.0
Dividends received from joint controlled entities 2.1 0.0 0.2 0.3 0.9
Interest received and exchange rate gains 2.4 0.1 0.8 0.1 0.3
Interest paid and exchange rate losses -12.1 -14.4 -12.8 -14.2 -12.7
Income taxes paid/repaid -0.1 -0.1 -0.8 -2.9 0.0
Change in bunkers, accounts receivables and payables -4.9 -0.8 1.9 2.1 -9.8
Net cash flow from operating activities 11.8 22.2 21.1 20.9 -0.2
           
Cash flow from investing activities          
Investment in tangible fixed assets -44.7 -87.1 -27.5 -23.6 -69.6
Investment in equity interests and securities 0.0 0.0 0.0 0.0 0.0
Loans to jointly controlled entities 1.1 0.5 1.8 1.1 1.2
Payment of liability related to options on vessels 0.0 0.0 -1.5 0.0 0.0
Received share on options on vessels 0.0 0.0 1.5 0.0 0.0
Sale of equity interests and securities 0.0 0.0 4.7 0.0 0.0
Sale of non-current assets 26.0 52.4 0.1 63.6 0.1
Net cash flow from investing activities -17.6 -34.2 -20.9 41.1 -68.3
           
Cash flow from financing activities          
Borrowing, mortgage debt and finance lease liabilities 245.4 110.5 -5.9 25.7 54.8
Repayment/redemption, mortgage debt and finance lease liabilities -177.0 -14.8 -68.8 -23.2 -51.5
Dividends paid -48.7 0.0 0.0 0.0 0.0
Purchase/disposals of treasury shares 0.0 0.0 0.0 0.0 0.0
Net cash flow from financing activities 19.7 95.7 -74.7 2.5 3.3
           
Net cash flow from operating, investing and financing activities 13.9 83.7 -74.5 64.5 -65.2
           
Cash and cash equivalents, beginning balance 98.7 112.6 196.3 121.8 186.3
           
Cash and cash equivalents, ending balance 112.6 196.3 121.8 186.3 121.1
CONTACT:  TORM A/S          Jacob Meldgaard, CEO          Roland M. Andersen, CFO          +45 39 17 92 00          Tuborg Havnevej 18          DK-2900 Hellerup, Denmark