Financial Performance - Second Quarter 2025 TCE was USD 208 million, compared to USD 214 million in the first quarter of 2025[7] - Second Quarter 2025 EBITDA was USD 127 million, down from USD 136 million in the first quarter of 2025[7] - Net profit for the Second Quarter 2025 was USD 59 million, compared to USD 63 million in the previous quarter[7] - The company's fleet size decreased from 91 vessels in Q1 2025 to 88 vessels in Q2 2025[7] - The company's dividend payout ratio was 67% in Q2 2025, a 5 percentage point increase from 62% in Q1 2025[32] Market Dynamics - Trade volumes reached a 16-month high at the start of Q3, driven by increased exports from the Middle East, Asia, and the Americas[17] - CPP-trading product tanker fleet capacity declined by approximately 2%, despite a 4% nominal fleet growth, comparing end Q2 2025 vs end Q2 2024[28] Future Outlook - The company expects TCE earnings to be USD 800 million - 950 million and EBITDA to be USD 475 million - 625 million for 2025[54] - The company has coverage for Q3 2025 at 56% at USD 30,617 per day and 66% coverage for FY 2025 at USD 27,833 per day[53]

Financial Data and Key Metrics Changes - TORM reported a TCE of USD 208 million for Q2 2025, consistent with previous quarters, resulting in a net profit of USD 59 million and an EBITDA of USD 127 million [4][18][27] - The average TCE rates were USD 26,700 per day, with LR2s above USD 35,000, LR1s slightly above USD 27,000, and MRs around USD 23,000, indicating stable freight rates [18][19] - The company declared a dividend of USD 0.40 per share, representing a payout ratio of 67% [22] Business Line Data and Key Metrics Changes - The product tanker market has shown resilience, with benchmark earnings for MR and LR2 vessels reflecting a healthy uptick due to increased trade flows and limited growth in the CPP trading fleet [6][8] - Tonne miles have increased significantly, driven by a surge in East to West middle distillate trades, reaching a sixteen-month high [7][8] Market Data and Key Metrics Changes - Trade volumes have surged, particularly in the middle distillate sector, with inventories in North West Europe falling, necessitating increased imports [7][8] - Refinery closures in North West Europe and the U.S. West Coast are expected to reduce local product supply, increasing demand for imports [9][10][11] Company Strategy and Development Direction - TORM is focusing on fleet optimization by divesting older vessels to maintain a modern and efficient fleet [4] - The company has raised its full-year guidance for TCE earnings to USD 800 million to USD 950 million, reflecting a stronger earnings outlook [27] Management's Comments on Operating Environment and Future Outlook - Management noted that despite geopolitical uncertainties, market sentiment remains positive, with strong momentum entering Q3 [5] - The company expects continued support for trade flows and vessel utilization, driven by geopolitical factors and refinery closures [8][16] Other Important Information - TORM has secured commitments for up to USD 857 million in refinancing, enhancing liquidity and financial flexibility [24][25] - The average age of the fleet is the highest in two decades, with a significant portion of older vessels under sanctions, impacting fleet utilization [14][16] Q&A Session Summary Question: What has caused the consistency in TCE over the last nine months? - Management acknowledged the remarkable stability and indicated that it does not restrict operational flexibility, with potential for upside as market dynamics evolve [30][31] Question: Will the payout ratio increase in the future? - Management expects the payout ratio to be higher in 2026 due to a decrease in cash flow breakeven [33][34] Question: What is driving the upside in MR rates? - The increase in CPP on the water and reduced cannibalization from crude tankers have contributed to the uptick in MR rates [41][42] Question: Are asset values stabilizing? - Management believes asset prices are stabilizing and could rise if freight rates improve [48][50] Question: When will the positive effects of refinery closures be seen? - The closures in Europe are expected to impact the market positively by the end of 2025, while U.S. West Coast closures will take effect in about a year [58][60] Question: What is the impact of the Russian price cap change? - Management indicated uncertainty regarding the impact but noted that many sanctioned vessels may not easily return to mainstream trades [62][64]

Core Viewpoint - TORM PLC reported quarterly earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, but down from $2.02 per share a year ago, indicating a significant decline in profitability [1][2] Financial Performance - The company achieved revenues of $210.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.57%, but down from $437.7 million year-over-year [2] - Over the last four quarters, TORM has surpassed consensus EPS estimates three times and topped revenue estimates three times as well [2] Stock Performance and Outlook - TORM shares have declined approximately 2% since the beginning of the year, contrasting with the S&P 500's gain of 10% [3] - The company's earnings outlook is crucial for future stock performance, with current consensus EPS estimates at $0.60 for the upcoming quarter and $2.84 for the current fiscal year [4][7] Industry Context - The Transportation - Shipping industry, to which TORM belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that TORM's stock may outperform the market based on favorable estimate revisions [5][6]

Financial Performance - In Q2 2025, TORM generated time charter equivalent earnings (TCE) of USD 208.2 million, a decrease of 36% from USD 325.9 million in Q2 2024[2][12] - Adjusted EBITDA for Q2 2025 totaled USD 129.0 million, down from USD 251.1 million in the same period last year, reflecting a decline of 48.7%[2][12] - Net profit for Q2 2025 was USD 58.7 million, compared to USD 194.2 million in Q2 2024, representing a year-over-year decline of 69.8%[2][12] - For the first half of 2025, TORM achieved TCE of USD 422.2 million, down 35.7% from USD 656.6 million in the same period of 2024[3][12] - The average TCE rate per day in Q2 2025 was USD 26,672, a decrease of 37% from USD 42,057 in Q2 2024[5][14] - In Q2 2025, TORM reported revenue of $315.2 million, a decrease of 28% compared to $437.7 million in Q2 2024[59] - Operating profit (EBIT) for Q2 2025 was $74.6 million, a decline of 63% from $204.3 million in Q2 2024[59] - Basic earnings per share for Q2 2025 were $0.60, compared to $2.08 in Q2 2024, reflecting a significant decline[59] - The total comprehensive income for Q2 2025 was $59.0 million, down from $192.2 million in Q2 2024[61] - Net profit for Q1-Q2 2025 was $121.6 million, a decrease of 69.9% compared to $403.4 million in Q1-Q2 2024[69] - Revenue for Q1-Q2 2025 was $644.3 million, down 26.9% from $881.7 million in Q1-Q2 2024[71] - Operating profit (EBIT) for Q1-Q2 2025 was $157.0 million, a decline of 63.3% from $427.0 million in FY 2024[71] Assets and Liabilities - Total assets as of June 30, 2025, were USD 3,396.7 million, a decrease of USD 72.9 million since the end of 2024[20] - TORM's fleet had a market value of USD 2,887.6 million as of June 30, 2025, down from USD 3,730.4 million a year earlier[10] - Total liabilities decreased to USD 1,289.4 million as of June 30, 2025, down USD 105.4 million from December 31, 2024, primarily due to reduced borrowings[24] - Total current liabilities decreased to USD 266.1 million as of June 30, 2025, from USD 287.7 million a year earlier, a decrease of 7.0%[62] - Total non-current liabilities decreased to USD 1,023.3 million as of June 30, 2025, down from USD 1,134.1 million a year prior, a reduction of 9.8%[62] - Total assets as of June 30, 2025, amounted to USD 3,384.9 million, a decrease of 15.2% compared to USD 3,396.7 million on June 30, 2024[72] - Total liabilities decreased to USD 1,289.4 million as of June 30, 2025, from USD 1,421.8 million on June 30, 2024, a reduction of 9.3%[75] Cash Flow and Financing - Net cash flow from operating activities for the first half of 2025 was USD 244.4 million, a decrease from USD 468.4 million in the same period of 2024[25] - Cash and cash equivalents, including restricted cash, decreased to USD 369.8 million from USD 532.4 million on June 30, 2024, representing a decline of 30.6%[62] - TORM secured financing commitments of up to USD 857 million to refinance existing loans and lease agreements, enhancing capital flexibility[11] - Net interest-bearing debt stood at USD 767.0 million, with a net debt loan-to-value ratio of 27.0% for the tanker segment[81] - Total borrowings as of June 30, 2025, were USD 1,126.0 million, down from USD 1,258.0 million in the previous year, indicating a 10.5% reduction[94] - The company reported a net cash flow from investing activities of $48.5 million in Q1-Q2 2025, contrasting with a negative cash flow of $150.0 million in Q1-Q2 2024[69] Dividends and Shareholder Returns - TORM's interim dividend for Q2 2025 was set at USD 0.40 per share, totaling an expected payment of USD 39.2 million, equivalent to 67% of net profit[28] - Declared dividend per share for Q2 2025 was USD 0.40, down from USD 1.80 in Q2 2024, representing a 77.8% decrease[99] - The company paid dividends totaling USD 97.7 million during the first half of 2025[63] Market Conditions and Outlook - The product tanker market saw a 2% year-on-year decline in clean petroleum product trade volumes in Q2 2025[30] - LR2 rates in the Middle East nearly tripled due to geopolitical tensions, reaching above USD 50,000 per day before stabilizing around USD 30,000[31] - The company anticipates further challenges due to economic uncertainties and market fluctuations affecting future performance[56] - TORM expects to remain in compliance with financial covenants for the remainder of 2025[94] Fleet and Operations - TORM's fleet included 66 owned product tankers and 24 vessels under sale-and-leaseback agreements as of June 30, 2025[47] - TORM's total fleet decreased from 91 vessels in Q1 2025 to 90 vessels in Q2 2025, with a projected increase to 88 vessels by Q3 2025[51] - The company sold three vessels in Q2 2025, including the LR2 vessel TORM Mathilde and two MR vessels, TORM Voyager and TORM Discoverer[49] - TORM exercised purchase options for 13 leaseback vessels, with the first four transitioning to full ownership in Q3 2025[50] Employee and Operational Costs - Total staff costs for Q2 2025 amounted to USD 22.1 million, a slight increase from USD 21.4 million in Q2 2024, representing a 3.3% year-over-year growth[86] - The average number of seafarers employed as of June 30, 2025, was 3,798, up from 3,291 a year earlier, indicating a 15.4% increase in workforce[86] - Total seafarer costs for the first half of 2025 reached USD 75.3 million, compared to USD 68.6 million in the same period of 2024, reflecting a 9.8% increase[88] Asset Valuation - The carrying amount of vessels and capitalized dry-docking as of June 30, 2025, was USD 2,691.7 million, an increase from USD 2,528.7 million a year prior, marking a 6.4% growth[92] - Total Net Asset Value (NAV) as of June 30, 2025, is USD 2,299.8 million, a significant decrease from USD 3,258.0 million in the previous year[128] - Total Net Asset Value per share (NAV/share) is USD 23.5 as of June 30, 2025, down from USD 34.6 a year earlier[128]

Core Viewpoint - TORM reported strong second-quarter results despite global uncertainties, leading to an increase in full-year guidance for 2025 [1][11]. Financial Results - In Q2 2025, TORM generated time charter equivalent earnings (TCE) of USD 208.2 million, down from USD 325.9 million in Q2 2024, reflecting a decline of USD 117.7 million [5]. - Adjusted EBITDA for the same period was USD 129.0 million, compared to USD 251.1 million in Q2 2024, a decrease of USD 122.1 million [5]. - Net profit for Q2 2025 was USD 58.7 million, down from USD 194.2 million in Q2 2024, a decline of USD 135.5 million [5]. - Average TCE rates were USD 26,672 per day in Q2 2025, significantly lower than USD 42,057 per day in Q2 2024, a drop of USD 15,385 [3][5]. - Basic earnings per share (EPS) were USD 0.60, down from USD 2.08 in the same period last year [4][5]. Market Conditions - The tanker market faced complexities due to geopolitical developments and expanded sanctions, affecting trade volumes, particularly in routes impacted by the Red Sea disruption [2]. - Despite a rebound in product tanker ton-miles starting March 2025, trade volumes remained subdued, neutralizing earlier gains [2]. Vessel Transactions - TORM sold the 2008-built LR2 vessel TORM Mathilde and two 2008-built MR vessels, TORM Voyager and TORM Discoverer, with the latter delivered in July 2025 [6]. Financing - TORM secured financing commitments of up to USD 857 million to refinance existing loans and lease agreements for 22 vessels, enhancing capital flexibility [7]. Dividend Distribution - An interim dividend of USD 0.40 per share was approved for Q2 2025, totaling an expected payment of USD 39.2 million, representing 67% of net profit [9]. Financial Outlook - TORM increased its full-year 2025 guidance, expecting TCE earnings between USD 800 million and USD 950 million, up from the previous range of USD 700 million to USD 900 million [11]. - As of August 4, 2025, TORM had covered 56% of Q3 2025 earning days at an average rate of USD 30,617 per day [10].

Core Viewpoint - The article emphasizes the importance of value investing and highlights TORM (TRMD) as a potentially undervalued stock with strong financial metrics [2][8]. Group 1: Investment Metrics - TORM (TRMD) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4][3]. - The stock is currently trading at a P/E ratio of 5.77, which is lower than the industry average of 6.77 [4]. - TRMD's Forward P/E has fluctuated between 3.06 and 6.73 over the past 52 weeks, with a median of 5.28 [4]. Group 2: Valuation Ratios - TORM has a P/B ratio of 0.84, significantly lower than the industry average of 1.42, suggesting it may be undervalued [5]. - The P/S ratio for TRMD is 1.21, compared to the industry's average of 1.45, indicating a favorable valuation based on sales [6]. - The P/CF ratio stands at 2.90, which is attractive relative to the industry average of 4.83, further supporting the notion of undervaluation [7]. Group 3: Overall Assessment - The combination of these financial metrics suggests that TORM is likely being undervalued at present, supported by a strong earnings outlook [8].

Core Viewpoint - The article emphasizes the importance of value investing and highlights TORM (TRMD) as a strong value stock based on various valuation metrics [2][8]. Valuation Metrics - TORM (TRMD) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4]. - The stock's P/E ratio is 5.42, significantly lower than the industry's average of 6.63, suggesting it may be undervalued [4]. - TORM's P/B ratio stands at 0.79, compared to the industry's average P/B of 1.40, further indicating attractive valuation [5]. - The P/S ratio for TRMD is 1.22, which is lower than the industry's average P/S of 1.51, reinforcing its value proposition [6]. - TORM's P/CF ratio is 2.73, well below the industry's average P/CF of 4.77, highlighting its undervaluation based on cash flow strength [7]. Investment Outlook - The combination of TORM's favorable valuation metrics and strong earnings outlook positions it as a compelling value stock at present [8].

Core Viewpoint - The article emphasizes the importance of value investing and highlights TORM (TRMD) as a strong value stock based on its favorable valuation metrics and earnings outlook [2][8]. Company Analysis - TORM (TRMD) currently holds a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - The stock is trading at a P/E ratio of 5.05, significantly lower than the industry average of 6.36, suggesting it may be undervalued [4]. - TRMD has a P/B ratio of 0.76, compared to the industry average of 1.31, further indicating its undervaluation [5]. - The P/S ratio for TRMD is 1.17, which is also lower than the industry average of 1.35, reinforcing the notion of being undervalued [6]. - The P/CF ratio for TRMD stands at 2.61, well below the industry average of 4.58, highlighting its strong cash flow outlook [7]. - Overall, the metrics suggest that TORM is likely undervalued, making it an attractive option for value investors [8].

Company Overview - TORM plc is a fossil fuel shipping company that specializes in transporting refined fossil fuels such as gasoline, naphtha, jet fuel, and kerosene through its fleet of vessels and strategic alliances with leading oil producers [1] Investment Focus - The company is of interest to individual investors who seek value in companies linked to commodity production, particularly those with sustained free cash flows, low leverage, and sustainable debt levels [1] - There is a focus on companies undergoing distress but with high recovery potential, especially in sectors like oil & gas, metals, and mining, particularly in emerging markets [1] Shareholder Value - The company is characterized by a solid pro-shareholder attitude, maintaining consistent buyback programs and dividend distributions over time [1]

Group 1 - The company TRMD has previously been identified as a strong buy, and it has recently exceeded earnings estimates, although rates have not gained significant momentum [1] - The analyst has a diverse professional background across various industries, which contributes to a comprehensive investment perspective [1] - The investment strategy focuses on cyclical industries, aiming for substantial returns during economic recovery while also incorporating fixed-income investments to balance risk [1]