“TORM delivered a solid first-quarter result in line with our expectations despite continued geopolitical uncertainty,” says Jacob Meldgaard.
Financial Results
In the first quarter of 2025, TORM generated time charter equivalent earnings (TCE) of USD 214.0m including unrealized losses on derivatives of USD-2.1m (2024, same period: USD 330.7m including unrealized losses on derivatives of USD -1.4m). Adjusted EBITDA totaled USD 137.7m (2024, same period: USD 267.2m), while net profit for the period amounted to USD 62.9m (2024, same period: USD 209.2m), reflecting significantly lower freight rates compared to the same quarter last year, yet remained in line with levels observed in the fourth quarter of 2024.
By early 2025, trade volumes on routes most affected by the Red Sea disruption had declined by around one-third, which effectively negated the distance-driven ton-miles gains. Encouragingly, product tanker ton-miles began to rebound in March 2025.
In case of a reopening of the Red Sea, the Middle East-to-Europe trade flows would be expected to be restored, thus reducing the incentive for crude tankers to carry clean petroleum products (“CPP”) around the Cape of Good Hope. Further, a potential easing of sanctions on Russia could lead to a partial or full return to shorter trade distances and bring previously sanctioned vessels back into the mainstream market. However, this may be partially offset by the scrapping of older tonnage, particularly vessels that are poorly maintained or unable to obtain adequate insurance coverage.
U.S. tariffs are not expected to directly affect oil and oil product flows, but they may have an indirect impact through slower global economic growth. Additionally, Chinese retaliatory tariffs could prompt a shift from LPG to naphtha in the country’s petrochemical industry. Tighter U.S. sanctions on Iran and Venezuela are also expected to positively influence the crude tanker segment by redirecting trade and increasing utilization of the non-sanctioned fleet. This, in turn, reduces the risk of further crude cannibalization in the CPP market.
In this market, TORM achieved TCE rates of USD/day 26,807 on average (2024, same period: USD/day 43,152), and available earning days increased to 8,061 (2024, same period: 7,697). Our vessel class LR2 achieved TCE rates of USD/day 33,806, the LR1 vessels achieved TCE rates of USD/day 24,947, and the MR vessels achieved TCE rates of USD/day 24,675.
For the first quarter of 2025, Return on Invested Capital amounted to 10.3% (2024, same period: 33.8%) reflecting the lower freight rates compared to the very high levels seen a year ago.
During the quarter, the weighted number of average outstanding shares excluding treasury shares was 97.4m shares which combined with the net profit led to basic EPS of USD 0.64 (2024, same period: USD 2.34).
Vessel transactions
In early 2025, TORM sold the 2005-built MR vessels TORM Ragnhild, TORM Resilience, and TORM Thames. The vessels were all delivered to their new owners during the first quarter of the year. Also, after the end of the quarter TORM sold one 2008-built LR2 vessel.
Distribution of Dividend
TORM’s Board of Directors has today approved an interim dividend for the first quarter of 2025 of USD 0.40 per share to be paid to the shareholders corresponding to an expected total dividend payment of USD 39.1m. The distribution for the quarter is equivalent to 62% of net profit and reflects the Distribution Policy. The payment date is 04 June 2025 to all shareholders on record as of 22 May 2025, and the ex-dividend date is 21 May 2025 for the shares listed on Nasdaq OMX Copenhagen and 22 May 2025 for the shares listed on Nasdaq New York.
Financial Outlook 2025
As of 05 May 2025, TORM had covered 57% of the Q2 2025 earning days at an average rate of USD/day 28,026. By vessel class, coverage stood at 64% for LR2s at USD/day 36,831, 46% for LR1s at USD/day 29,714 and 57% for MRs at USD/day 24,150
For the full year 2025 43% of the earning days have been fixed at an average rate of USD/day 27,829. The remaining 57% of the earning days in 2025 - equivalent to 18,454days - remain open and thus subject to market fluctuations. A change in freight rates of USD/day 1,000 will, all else equal, impact EBITDA by approximately USD 18m
Based on the earnings realized in the first quarter of the year as well as the coverage for the remaining part of the year, TORM narrows the full-year 2025 guidance. Thus, TCE earnings are expected to be in the range of USD 700 - 900m (2024: USD 1,135m), and EBITDA is expected to be in the range of USD 400 – 600m (2024: USD 851m) based on the current fleet size.
Source:www.torm.com