COPENHAGEN, Denmark, Nov. 5, 2013 (GLOBE NEWSWIRE) -- "The results for the third quarter of 2013 were in line with our expectations as TORM continued to benefit from improving market fundamentals and a strong operational platform. Our long-term view of the product tanker market remains positive. EBITDA for the first nine months of 2013 was USD 71 million, which was an improvement of USD 112 million compared to last year," says CEO Jacob Meldgaard. TORM realized a positive EBITDA of USD 11 million and a loss before tax of USD 40 million in the third quarter of 2013.
- EBITDA for the third quarter of 2013 was a gain of USD 11m (Q3 2012: USD -11m). The result before tax for the third quarter of 2013 was a loss of USD 40m (USD -78m). Cash flow from operating activities after interest payments was positive with USD 9m in the third quarter of 2013 (USD 6m).
- In the third quarter of 2013, the product tanker freight rates were at seasonally low levels although the product tanker segment benefitted from stronger market fundamentals compared to the same period of 2012. TORM's largest segment, MRs, achieved spot rates of USD/day 14,585 in the third quarter of 2013, which is up 37% year-on-year. The Tanker Division reported an EBITDA of USD 22m in the third quarter of 2013 (USD -8m).
- The freight rates for the relevant bulk segments stayed at depressed levels until the end of the third quarter of 2013, where the seasonal restocking of especially iron ore in China commenced. TORM's largest segment, Panamax, achieved TCE-earnings of USD/day 8,128, which is at par with the second quarter of 2013. The Bulk Division reported an EBITDA in the third quarter of 2013 of USD -11m (USD -3m).
- The book value of the fleet was USD 1,880m as of 30 September 2013. Based on broker valuations, TORM's fleet had a market value of USD 1,207m as of 30 September 2013. In accordance with IFRS, TORM estimates the product tanker fleet's total long-term earning potential each quarter based on discounted future cash flow. The estimated value of the fleet as of 30 September 2013 supports the carrying amount.
- Net interest-bearing debt amounted to USD 1,725m as at 30 September 2013, compared to USD 1,852m as at 30 June 2013. The decrease in the third quarter of 2013 is primarily a result of repayment of debt in connection with the delivery of the five vessels held for sale.
- As of 30 September 2013, TORM's available liquidity was USD 99m consisting of USD 31m in cash and USD 68m in undrawn credit facilities. There are no newbuildings on order or CAPEX commitments related hereto.
- Equity amounted to USD 190m as at 30 September 2013, equivalent to USD 0.3 per share (excluding treasury shares), giving TORM an equity ratio of 9%.
- By 30 September 2013, TORM had covered 20% of the tanker earning days in the fourth quarter of 2013 at USD/day 14,003 and 3% of the earning days in 2014 at USD/day 15,708. 55% of the bulk earning days in the fourth quarter of 2013 were covered at USD/day 11,558 and 12% of the 2014 earning days at USD/day 18,140.
- For the full year 2013, TORM has narrowed the forecasts to a positive EBITDA of USD 90-100m and a loss before tax of USD 110-120m. The forecasts are before any potential further vessel sales or impairment charges. TORM expects to remain in compliance with the financial covenants for 2013. In addition, TORM expects to be operational cash flow positive after all interest payments. As at 30 September 2013, 5,025 earning days for the fourth quarter of 2013 were unfixed meaning that a change in freight rates of USD/day 1,000 will impact the profit before tax by USD 5m.
Safe Harbor statements as to the future
Matters discussed in this company announcement may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statement.
Forward-looking statements in this company announcement reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and statements other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward- looking statements include the conclusion of definitive waiver documents with our lenders, the strength of the world economy and currencies, changes in charter hire rates and vessel values, changes in demand for "tonne miles" of oil carried by oil tankers, the effect of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, changes in the regulation of shipping operations, including requirements for double hull tankers or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by the Company with the US Securities and Exchange Commission, including the Company's Annual Report on Form 20-F and its reports on Form 6-K.
Forward-looking statements are based on management's current expectations, and the Company is under no obligation to update or change the listed expectations unless required by law.