The Danish Tanker operator Torm has seen a challenging first quarter 2017. The EBITDA shrinks from 70 mill. $ in Q1 2016 to 44 mill. $ in Q1 2017 and the profit before tax decreases from 31 mill. $ to 5 mill. $.
During the first quarter of 2017, product tanker freight rates start[ds_preview]ed out at weak levels similar to the fourth quarter of 2016 but strengthened towards the end of the first quarter Torm informs. The freight rate improvement was primarily driven by increased demand for clean petroleum products in the western markets, which resulted in stronger TCE earnings for the first quarter of 2017 compared to the preceding quarter. In the first quarter of 2017, Torm’s product tanker fleet realized average TCE earnings of 15,264 $/day for 7,004 earning days (2016, same period: 19,845 $/day for 6,973 earning days) and realized a gross profit of 55 mill. $ (2016, same period: 80 mill. $).
During the first quarter 2017 the Danish sold one vessel (»Torm Anne« and completed sale and leaseback transactions for two vessels, »Torm Helene« and »Torm Mary«. Following the balance sheet date, Torm has sold two handy size tankers, »Torm Madison« and »Torm Trinity« and completed a sale and leaseback transaction for one vessel, »Torm Vita«. The three sale and leaseback transactions are treated as financial leases but have no purchase obligation attached the company stated.
Torm has four newbuildings on order
Torm had undrawn credit facilities and cash of approx. 405 mill. $ at the end of the first quarter of 2017. The company’s order book stands at four LR2 newbuildings with expected delivery in 2017 and 2018. Outstanding CAPEX relating to the order book amounted to 139 mill. $ and is fully financed Torm stated.
