TORM plc (NASDAQ:TRMD) Q3 2024 Earnings Conference Call November 7, 2024 9:00 AM ET

Company Participants

Jacob Meldgaard – Chief Executive Officer
Kim Balle – Chief Financial Officer

Conference Call Participants

Emily Harkins – Jefferies

Operator

Hello, my name is Audra and I will be your conference operator today. At this time I would like to welcome everyone to the TORM Third Quarter 2024 Results Conference Call. Today’s conference 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]

At this time, I would like to turn the conference over to Jacob Meldgaard, Chief Executive Officer. Please go ahead.

Jacob Meldgaard

Thank you and a warm welcome to everyone joining us on the call today. This morning we released our third quarter results and I’m pleased to share that TORM has once again delivered a strong financial performance. Let me start by highlighting some of the key takeaways for the quarter. Our time charter equivalent earnings rose to US$263 million and EBITDA amounted to US$191 million although freight rates have been lower than expected in the last part of the quarter. We continue to see the market dynamics we’ve experienced in recent quarters driven by ongoing geopolitical tensions from both the Ukraine-Russia conflict and escalating issues in the Middle East. These factors have resulted in vessel rerouting, longer voyages and higher ton-mile demand, contributing to a tight supply-demand balance in the product tanker market.

However, in the quarter we have also seen that a significant part of the increased CPP volumes has been carried on uncoated VLCCs and suezmaxes and this has shifted the balance and put a temporary cap on rates. Looking ahead, we believe the key fundamentals supporting a positive rate environment will remain in place, although we recognize that the market is very susceptible to changes in both the geopolitical scenario and potential cannibalization from crude carriers. As mentioned by our CFO back in August we acquired eight second-hand MR vessels for US$340 million in a partly share based transaction.

These vessels built at Hyundai Mipo Dockyard between 2014 and 2015 are part of our ongoing program to replenish our fleet and so far we’ve taken delivery of six of the vessels and are expected to take over the remaining two before the end of the year. With this strategy, we believe TORM is set to continue to create significant value for our shareholders also in the years ahead. It’s been a profitable quarter and in line with our policy of distributing excess cash flow after debt repayment, TORM has declared a dividend of US$1.20 per share for the quarter, adding to the strong dividend flow seen in recent periods.