Danish shipping company TORM saw its earnings plunge in the third quarter of 2018 driven by historically low levels in the product tanker market.
The company’s net loss for the period reached USD 24.9 million, compared to a net loss of USD 4.2 million reported in the same quarter a year earlier. Revenue for the period ended September 30, 2018, was down at USD 140.4 million from USD 155.8 million reported in the corresponding period of 2017.
“The product tanker market reached historically low levels in the third quarter impacted by a decrease in demand growth and shorter sailing distances. I am nonetheless pleased that TORM continues to perform well in a difficult market,” Jacob Meldgaard, Executive Director, said.
“We believe product tanker freight rates have bottomed out in the third quarter, and in the fourth quarter we have experienced firmer product tanker freight rates driven by increasing export activity in the US Gulf and a stronger crude tanker market. We maintain an optimistic view of the long-term prospects of the product tanker market.
In the third quarter of 2018, TORM achieved TCE rates of 10,598 USD/day, compared to the 14,279 USD/day reported in the same period of 2017. The product tanker market has remained soft throughout the third quarter of 2018, with MR benchmark freight rates reaching all-time historically low levels, the company explained.
During the third quarter of 2018, TORM entered into agreements to sell two older vessels. In October 2018, TORM has entered into an agreement to sell the MR vessel TORM Clara. The three vessels were sold for a total consideration of USD 20 million, and a total debt of USD 12 million is expected to be repaid in connection with the vessel sales.