TORM plc(US:TRMD)2025-03-06 16:22Financial Data and Key Metrics Changes - TORM reported TCE earnings of $1.135 billion for the full year 2024, achieving a net profit of $612 million and a return on invested capital of 24.3% [6][24][25] - In Q4 2024, TCE amounted to $215 million, with EBITDA of $142 million and net profit of $77 million [23][24] - Fleet-wide rates decreased to $25,775 per day in Q4, down from $39,626 per day in the first three quarters [5][30] Business Line Data and Key Metrics Changes - Clean product tanker ton miles increased by 9% in 2024, but due to crude clean-ups, product tankers benefited from only two-thirds of that increase [11][12] - Fleet-wide rates declined by about 40% from Q1 to Q4, while TCE saw a smaller decline of 35% [30] Market Data and Key Metrics Changes - European diesel imports are down by 30%, affecting trade volumes on routes impacted by the Red Sea disruption [13] - The average age of the fleet is the highest in two decades, with 50% of the fleet being more than 20 years old [18] Company Strategy and Development Direction - The company remains focused on fleet efficiency, disciplined cost management, and a well-executed commercial strategy despite geopolitical risks [7][8] - TORM plans to maintain its fleet strategy, selling older vessels and ensuring the average age aligns with the global product tanker fleet [52][54] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that geopolitical developments and trade flow shifts will shape market conditions, impacting freight rates and fleet utilization [8][20] - For 2025, TORM forecasts TCE earnings of $650 million to $950 million and EBITDA of $350 million to $650 million, reflecting expectations of lower freight rates year-on-year [45] Other Important Information - The Board of Directors declared a dividend of $0.60 per share for Q4 2024, maintaining a payout ratio of 75% [28][39] - TORM has made significant strides in sustainability reporting, aiming for a 45% reduction in carbon intensity by 2030 and net zero CO2 emissions by 2050 [40][43] Q&A Session Summary Question: How does TORM's strategy change with the current market uncertainty? - Management confirmed that there will be no change in strategy regarding operations, fleet evolution, or capital structure, emphasizing agility and preparedness for various scenarios [49][54] Question: What is the current state of crude cannibalization on traditional product trades? - Management indicated that currently, 3% of CPP on water is on VLs and Suezmaxes, down from 8% at the peak last year, suggesting a return to normalized levels [65] Question: How does TORM view seasonality in the current market? - Management acknowledged that while seasonality exists, geopolitical factors are currently more impactful, and they do not have a specific view on how it will play out this year [71][72] Question: Has the U.S. proposal of taxing Chinese tonnage affected TORM's operations? - Management stated that TORM has no new builds and a relatively low percentage of Chinese-built vessels, indicating no immediate plans to change operations due to the proposal [76][79] Question: What is TORM's outlook on fleet renewal and market activity? - Management expects an uptick in transactions as the market recalibrates to new price levels, indicating that liquidity will return as earning potential stabilizes [85][86]