Product Tanker Woes Hit TORM’s Earnings
Image Courtesy: TORMPressured by a difficult product tanker market, Danish shipping company TORM ended the second quarter of 2017 with a net loss of USD 1.6, compared to a net profit of USD 15 million seen in the same period a year earlier.
The company’s revenue for the three months dropped to USD 157 million, from USD 176.9 million seen in the corresponding quarter of 2016, while its time charter equivalent earnings (TCE) were at USD 93 million, down from USD 122.7 million reported in the second quarter in the previous year.
For the first half of the year, TORM managed to deliver a profit of USD 3 million, against a profit of USD 45.9 million. Similarly, its revenue was down to USD 329.8 million from USD 370.6 million seen in the first half of 2016, while TCE plunged to USD 199.9 million from USD 261.1 million in the respective periods.
“I am satisfied that we have been able to deliver a profit for the first six months of 2017 despite a difficult product tanker market. Over the summer, we have utilized our strong capital structure to pursue two attractive vessel growth opportunities totaling six vessels at what we believe is an opportune time in the cycle,” Jacob Meldgaard, Executive Director, said.
During the first six months of 2017, TORM sold three vessels, namely TORM Anne, TORM Madison and TORM Trinity, and completed sale and leaseback transactions for three vessels, including TORM Helene, TORM Mary and TORM Vita.
Additionally, following the balance sheet date, the company completed two transactions to purchase a total of six MR resale vessels for a price of USD 185 million.
The first transaction includes four MR resale vessels with expected delivery in 2019. TORM has received firm commitment from Danish Ship Finance to finance the four vessels with 65% of the purchase price. The transaction includes an option to purchase up to four additional MR vessels with expected delivery in late 2019.
The second transaction includes two MR resale vessels for delivery in the third quarter of 2017. In addition to the six vessels purchased, TORM has sold one vessel, TORM Fox, a 2005-built Handysize vessel.
