TORM plc (NASDAQ:TRMD) Q2 2024 Earnings Conference Call August 15, 2024 9:00 AM ET

Company Participants

Jacob Meldgaard - Executive Director and Chief Executive Officer
Kim Balle - Chief Financial Officer

Conference Call Participants

Jon Chappell - Evercore
Omar Nokta - Jefferies
Clement Mullins - Value Investors Edge
Peter Hagen - ABG

Operator

Good day, and thank you for standing by. Welcome to the TORM First Six Months and Second Quarter 2024 Results Call.

Please note that today’s call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

I will now turn the call over to Jacob Meldgaard, CEO. Please go ahead, sir.

Jacob Meldgaard

Thank you, and thank you everybody for joining us on this call today.

This morning, we released our Company announcement with the results for the second quarter of the year, and I’m pleased to report that again this quarter TORM has achieved a strong financial performance.

Our time charter equivalent earnings increased to $326 million and EBITDA improved to $251 million as freight rates remained firm throughout most of the quarter. Again, we had witnessed a continuation of the market dynamics that we’ve seen in the previous quarters, i.e. geopolitical tension stemming from both the Ukraine and Russian conflict and the escalating confrontations in the Middle East that leads to rerouting of vessels, longer voyages and higher ton-mile demand. This, of course, adds to an already tight supply demand balance in the product tanker market.

We remain optimistic about the prospects for the coming years as we believe that the supportive fundamentals for the positive rate environment is likely to stay intact. Thus, we expect longer ton-mile, higher utilization rates in the years to come and at the same time, manageable newbuilding deliveries. Consequently and in-line with what you have seen in previous quarters, in early July, we entered into an agreement to acquire additional secondhand vessels.

This time, eight MR vessels to be delivered during the second half of this year for a total consideration of $340 million. The vessels have all been built at Hyundai Mipo Dockyard in 2014, 2015, and six of the vessels have been fitted with scrubbers. And, then as you would expect us to do when our vessels reach a certain age, we have divested one 2006-built MR tanker for delivery in the third quarter 2024 for a cash consideration of $23.3 million. Thus, adding it all together, we are both expanding and replenishing our fleet. And, as we’ve done for some time now, we are using our partner share-based structure to finance the transaction. By continuing this way forward, we believe that TORM will be in a strong position to further add to our value creation over the coming years.