COPENHAGEN, Denmark, May 8, 2013 (GLOBE NEWSWIRE) --
In the first quarter of 2013, TORM realized a positive EBITDA of USD 36 million and a loss before tax of USD 16 million. "The seasonally strong first quarter in the product tanker segment was the best we have seen since the beginning of the financial crisis. TORM positioned itself well to take advantage of the market improvements, and we saw the positive effects of TORM's restructured time charter fleet and the cost program. Cash flow from operations after interest was positive," says CEO Jacob Meldgaard.
- EBITDA for the first quarter of 2013 was a gain of USD 36 million compared to an EBITDA of USD -7 million in the first quarter of 2012. The first quarter of 2013 had net mark-to-market non-cash adjustments of USD 0 million, compared to a positive impact of USD 11 million in the same period of 2012. The result before tax for the first quarter of 2013 was a loss of USD 16 million, compared to a loss of USD 79 million in the same period of 2012. Cash flow from operating activities after interest was positive with USD 11 million in the first quarter of 2013, compared to USD -57 million in the same period of 2012.
- In the first quarter of 2013, the product tanker freight rates were as expected at seasonally high levels. In addition arbitrage opportunities, the unusually cold weather in North Asia and increased Australian import demand following recent refinery capacity adjustments resulted in the highest quarterly freight rates in four years. The freight rates continued to be volatile.
- The freight rates in all bulk segments started at historically low levels in the seasonally weak January. Later in the first quarter of 2013, freight rates for Panamax and Handymax increased mainly due to the South American grain season and mineral activity from the US Gulf.
- TORM's cost program has led to a 14% reduction of administration costs to USD 14 million in the first quarter of 2013, compared to USD 17 million in the same period of 2012.
- The book value of the fleet excl. assets held for sale was USD 1,923 million as of 31 March 2013. Based on broker valuations, TORM's fleet had a market value of USD 1,161 million as of 31 March 2013. In accordance with IFRS, TORM estimates the fleet's total long-term earning potential each quarter based on discounted future cash flow. The estimated value of the fleet as of 31 March 2013 supports the carrying amount.
- Net interest-bearing debt amounted to USD 1,871 million in the first quarter of 2013, compared to USD 1,868 million as at 31 December 2012.
- As of 31 March 2013, cash totaled USD 17 million and undrawn credit facilities amounted to USD 53 million. TORM has no newbuilding order book and therefore no CAPEX commitments related hereto.
- Equity amounted to USD 255 million as at 31 March 2013, equivalent to USD 0.4 per share (excluding treasury shares), giving TORM an equity ratio of 11%.
- By 31 March 2013, TORM had covered 9% of the remaining tanker earning days in 2013 at USD/day 15,012 and 2% of the earning days in 2014 at USD/day 15,001. 61% of the remaining bulk earning days in 2013 are covered at USD/day 11,711 and 30% of the 2014 earning days at USD/day 17,513.
- For the full year 2013, TORM forecasts a total positive EBITDA of USD 80-110 million and a loss before tax of USD 100-130 million. This includes the write-down of USD 5 million from the sale of five vessels as reported in announcement no. 8 dated 22 April 2013. The forecasts are before any potential further vessel sales and 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 interest payment. The uncertainties and sensitivities about freight rates and asset prices may have an effect on the Company's compliance with the financial covenants. As 17,924 earning days for 2013 are unfixed as at 31 March 2013, a change in freight rates of USD/day 1,000 will impact the profit before tax by USD 18 million
Safe Harbor statements as to the future
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements 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 TORM 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, TORM 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 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 TORM'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 TORM with the US Securities and Exchange Commission, including the TORM Annual Report on Form 20-F and its reports on Form 6-K. Forward-looking statements are based on management's current evaluation, and TORM is only under an obligation to update and change the listed expectations to the extent required by law.