TORM plc(TRMD) - 2024 Q4 - Annual Report

Financial Performance - Revenue for 2024 reached $1,559 million, a 2.6% increase from $1,520 million in 2023[15] - EBITDA for 2024 was $851 million, compared to $848 million in 2023, reflecting a slight increase[15] - Net profit for the year was $612 million, a decrease from $648 million in 2023[15] - Return on Equity (ROE) decreased to 32.7% from 40.9% in 2023[15] - Adjusted Return on Invested Capital (ROIC) was 22.2%, down from 27.6% in 2023[15] - The company declared a dividend of $5.10 per share, down from $5.78 in 2023[15] - TORM achieved a net profit of USD 611.5 million in 2024, driven by high freight rates[41] - TORM reported time charter equivalent (TCE) earnings of USD 1,134.8 million and Group EBITDA of USD 850.8 million for 2024, meeting recent market guidance[152] - Net profit for the year was USD 614.1 million, a decrease of USD 34.8 million compared to 2023[159] Operational Metrics - Time charter equivalent earnings (TCE) per day was $36,061, down 2.9% from $37,124 in 2023[15] - Gross profit margin remained stable at 57.4%, slightly down from 57.5% in 2023[15] - The average fleet-wide TCE rates fluctuated from USD 43,152 per day in Q1 to USD 25,775 per day in Q4, reflecting volatile freight rates throughout the year[152] - Operating expenses (OPEX) rose by USD 29.2 million to USD 245.6 million in 2024, driven by 2,250 additional operating days and a 5.8% increase in expenses per day[167] - Administrative expenses increased by USD 11.4 million to USD 87.9 million in 2024, primarily due to a retention program for employees[169] Fleet and Assets - Total assets increased to $3,470 million from $2,870 million in 2023[15] - TORM's fleet was modernized with the delivery of 19 vessels and the divestment of 7 older vessels, bringing the total fleet to 94 vessels[40] - Total assets for the Tanker segment increased by USD 602.6 million to USD 3,456.0 million as of December 31, 2024, mainly due to increased vessel acquisitions[174] - Total liabilities for the Tanker segment rose by USD 191.0 million to USD 1,383.1 million, primarily due to increased borrowings for vessel acquisitions[181] Environmental and Social Responsibility - The company achieved a 40% reduction in carbon intensity compared to 2008, surpassing the IMO 2030 target ahead of schedule[42] - TORM's absolute Scope 1 GHG emissions were reported at 1,594,793 metric tons, with a target to reduce to ≤1,500,000 metric tons[24] - The company aims for net-zero Scope 2 GHG emissions by reducing them from 832 metric tons to ≤600 metric tons[24] - TORM achieved a 40% reduction in CO2 intensity by 2025 compared to 2008, one year ahead of its target, with a future goal of 45% reduction by 2030 and net-zero emissions by 2050[85][86] - TORM's employee engagement score was reported at 8.7, exceeding the target of ≥8.2[29] - The company has set a target of 40% underrepresented gender in the Board of Directors by 2030, up from the current 20%[29] Market Outlook and Strategy - The company expects robust tanker earnings in 2025, supported by steady capacity utilization and balanced market fundamentals[44] - The average freight rate level is expected to remain strong, despite increased volatility in the freight market due to geopolitical events[123] - TORM focuses on maintaining a high-quality fleet and actively manages fleet deployment between spot and time charters[190] - TORM's strategy includes capturing increased profit margins during favorable market conditions through spot market operations[195] Risk Management - TORM's risk management framework includes an annual Enterprise Risk Management process to identify and mitigate principal and emerging risks[108] - TORM's risk assessment for 2024 concluded an appropriate balance between risk tolerance and net severity for top risks, including severe vessel accidents[130] - TORM's operational risks related to oil major approvals are low, with a focus on efficient controls to prevent environmental disasters[124] - The company has temporarily halted transit through the Bab-el-Mandeb Strait due to piracy and terrorism risks, while other regions have seen reduced risks[126] Cash Flow and Financing - Net cash flow from operating activities was USD 826.8 million, an increase from USD 805.0 million in 2023, driven by higher TCE[185] - Net cash flow from investing activities was USD -442.1m in 2024, compared to USD -370.6m in 2023, reflecting a decrease of USD 71.5m[188] - Net cash flow from financing activities improved to USD -378.3m in 2024 from USD -489.4m in 2023, an increase of USD 111.1m[188] - Total available liquidity as of December 31, 2024, was USD 615m, including a cash position of USD 291m[200] - Net interest-bearing debt stood at USD 948m, with a net debt loan-to-value ratio of 26.8% for the tanker segment[200]