TORM plc(US:TRMD)2024-05-08 19:00Financial Data and Key Metrics Changes - TORM reported a TCE of $331 million and an EBITDA of $266 million for Q1 2024, reflecting strong financial performance [3][21] - The net profit for the quarter amounted to $209 million, with an adjusted profit of $192 million, up 25% compared to the previous year [25][46] - The company declared a dividend of $1.50 per share, continuing a positive trend in cash distributions to shareholders [9][50] Business Line Data and Key Metrics Changes - TORM's fleet size is now 89 vessels after divesting an older MR vessel, indicating a stable fleet size compared to the previous year [33] - The company achieved TCE rates exceeding $43,000 per day, with LR2s at over $54,000, LR1s around $48,000, and MRs at approximately $39,000 per day [22][47] - The fleet had a total of 7,698 earning days, significantly higher than the 6,732 days in the same quarter last year [47] Market Data and Key Metrics Changes - Trade volumes of refined oil products increased by 4% compared to the same quarter last year, supported by strong market fundamentals [36] - The share of global clean petroleum products trade transiting the Suez Canal declined from 12% to 4%, leading to increased ton-mile demand for product tankers [12] - The global product tanker demand in terms of ton-mile increased by 8% last year, with an additional estimated 5% increase due to disruptions in the Red Sea [20] Company Strategy and Development Direction - TORM is focused on balancing growth investments with shareholder returns, as evidenced by the recent dividend declaration [9][50] - The company is actively scouting for opportunities to enhance fleet capacity while managing asset values amid a dynamic market [66] - The geopolitical environment is expected to support longer ton-mile transportation, which aligns with TORM's strategic focus [70][74] Management's Comments on Operating Environment and Future Outlook - Management noted that geopolitical tensions have reshaped product tanker trade flows, leading to longer trading distances and increased demand [5][10] - The outlook for the second quarter of 2024 anticipates continued seasonality and volatility, with expectations for longer trade distances [37] - TORM updated its guidance range for TCE earnings to between $1.1 billion and $1.35 billion and EBITDA between $800 million and $1,050 million for the full year [51] Other Important Information - The company has maintained a stable loan-to-value ratio in the range of 25% to 30%, reflecting strong capital management [23] - The order book for product tankers stands at 15% of the fleet, with expectations of limited net fleet growth in the coming years [17][42] Q&A Session Summary Question: Thoughts on increasing coverage with the current order book and market liquidity - Management indicated that there is a growing interest among clients to hedge against a strong market, suggesting potential for longer contracts [58][71] Question: Strategy regarding fleet additions versus subtractions - Management acknowledged a stable fleet size with one vessel added and one divested, while remaining open to future opportunities that present a good risk-reward scenario [66][68]