TORM plc(TRMD) - 2023 Q4 - Annual Report

Financial Performance - TORM reported a revenue of USD 1,520 million in 2023, an increase of 5.3% compared to USD 1,443 million in 2022[12]. - Time charter equivalent (TCE) earnings reached USD 1,084 million, up from USD 982 million in the previous year, reflecting a 10.4% increase[12]. - EBITDA for 2023 was USD 848 million, representing a 14.1% increase from USD 743 million in 2022[12]. - The net profit for the year was USD 648 million, compared to USD 563 million in 2022, marking a 15.1% increase[12]. - The adjusted return on invested capital (RoIC) was 27.6% in 2023, slightly down from 28.1% in 2022[12]. - TORM's equity ratio improved to 58.0% in 2023, up from 57.5% in 2022[12]. - The company declared a dividend of USD 4.42 per share for Q1-Q3 2023, compared to USD 4.63 in the same period of 2022[12]. - Proposed dividend per share for Q4 2023 is USD 1.36[12]. - TORM's total assets increased to USD 2,870 million in 2023, up from USD 2,614 million in 2022[12]. - TORM achieved record earnings in 2023, with a net profit of USD 648 million, representing a 15.1% increase from USD 563 million in 2022[22]. - The company declared and proposed dividends totaling USD 497 million in 2023, equivalent to 77% of net profit and 19% of market capitalization at year-end[29]. - TORM's adjusted Return on Invested Capital (ROIC) for 2023 was 27.6%, demonstrating superior performance compared to industry peers[25]. - The total TCE earnings for 2023 amounted to USD 1,084 million, with a net profit of USD 648 million, and TCE/day across all vessel classes was USD 37,124[47]. - TORM declared a total dividend of USD 497 million for 2023, including a proposed dividend of USD 126 million for the fourth quarter[83]. Fleet and Operations - The fleet was expanded to 90 vessels, with the acquisition of nine LR2 and seven LR1 vessels, enhancing long-haul capabilities[26]. - TORM operates a fleet of 90 vessels across all major product tanker classes, with a net loan-to-value (LTV) of USD 3,495 million and an adjusted return on invested capital (RoIC) of 27.6%[46]. - Approximately 90% of TORM's coverage in 2023 was through forward freight agreements (FFAs), allowing for increased operational leverage in a strong market[62]. - TORM's operational efficiency was supported by the One TORM platform, which integrates commercial and technical management, optimizing vessel positioning and performance[24]. - The company actively participated in the Tanker Security Program (TSP) with Seabulk, enhancing fleet flexibility and access to exclusive markets[28]. - TORM's fleet optimization strategy includes the acquisition of 23 new vessels and the sale of 11 older vessels, increasing the DWT ratio of LR vessel classes from approximately 40% to 50%[67][82]. - TORM's investment in fleet renewal included the delivery of 12 new vessels in 2023, contributing to the increase in primary/hybrid data[156]. Sustainability and Emissions - The company aims for a path towards zero emissions by 2050, with a 2030 energy transition plan in place[2]. - TORM achieved a 39.6% reduction in carbon intensity compared to 2008, nearing its 2025 target of a 40% reduction[31]. - TORM aims for zero CO2 emissions from its fleet by 2050, with specific performance measures in place to achieve this goal[91]. - The company is investigating opportunities to diversify its cargo capabilities, with plans to increase the number of vessels certified to carry chemicals from 17 to 26[71]. - TORM's energy transition plan includes known technologies to achieve a 40% CO2 intensity reduction by 2025, ahead of the IMO's target[91][96]. - TORM achieved a 39.6% reduction in annual emissions compared to the IMO baseline (2008), with a target of a 45% reduction by 2030[46][91]. - TORM's climate-related scenario analysis identified four financially material climate-related risks and three opportunities, informing the corporate strategy process[172]. - The company is actively collaborating on sustainable solutions to address infrastructure gaps for green fuels, which are essential for achieving zero emissions[104]. - TORM's safety performance in 2023 was measured at 0.32 lost time accident frequency (LTAF) per million exposure hours, with a target of 0.30 for 2030[137]. - The company has integrated energy efficiency initiatives into its annual budgeting process to ensure adequate funding for carbon reduction efforts[98]. - TORM continues to refine its Scope 3 emissions reporting to enhance data accuracy and awareness across its value chain[149]. - In 2023, TORM's primary/hybrid data increased from 75% to 92%, significantly impacting the Scope 3 emissions calculation, where Category 2 (capital goods – vessels and modifications) accounted for 70% of total emissions, up from 32% in 2022[155][156]. - TORM's Scope 1 CO2 emissions rose due to an increase in fleet size from 78 to 82 vessels and operating days increased from 29,610 to 30,605[158]. - Total greenhouse gas (GHG) emissions for 2023 increased, but TORM achieved a reduction in carbon intensity, with the Annual Efficiency Ratio (AER) decreasing from 5.15 to 4.93[161][162]. - TORM updated its emission factors for Scope 3 spend-based data, resulting in a 12% reduction in total CO2 emissions[157]. - The company engaged in various industry collaborations, including the Mærsk McKinney Møller Center for Zero Carbon Shipping, to promote sustainable practices[191]. Governance and Reporting - The company has established a new team dedicated to ESG reporting, enhancing its focus on sustainability and transparency[129]. - TORM is preparing for the significant impact of the CSRD in 2024, focusing on comprehensive reporting and double materiality assessments[174][175]. - The company is committed to achieving at least 35% of its leadership positions held by women by 2030[141].