“The fundamental oil demand was high, as expected, in the second quarter of 2016. However, inventory drawdowns and lower naphtha imports to the Far East reduced the transportation requirements and led to generally lower freight rates. TORM did achieve competitive blended freight rates of USD/day ~17,500,” says Executive Director Jacob Meldgaard and adds: “With the dividend payment of USD 25m and accretive share repurchases since May, TORM has demonstrated its commitment to let shareholders benefit directly from the operational cash flow generation.”

-The EBITDA for the second quarter of 2016 was USD 56.6m (2015, same period, pro forma: USD 75.3m)[1]. The profit before tax for the second quarter of 2016 was USD 15.2m (2015, same period, pro forma: USD 45.2m). Cash flow from operating activities was positive with USD 44.4m in the second quarter of 2016 and earnings per share (EPS) was USD 0.2 or DKK 1.6.

-During the second quarter of 2016, the product tanker freight rates remained at profitable levels, however at a softer level compared to the same period in 2015. In general, refinery utilization was high although at a lower level compared to the first quarter of 2016, due to maintenance and high gasoline and diesel stocks globally. TORM’s product tanker fleet realized average TCE earnings of USD/day 17,594 and realized a gross profit of USD 67.5m (2015, same period, pro forma: USD 86.0m) in the second quarter of 2016.

-On 15 April 2016, TORM established a new corporate structure of the TORM Group including the insertion of a UK parent company, TORM plc. TORM plc was listed on Nasdaq Copenhagen on 19 April 2016, and TORM A/S was delisted from Nasdaq Copenhagen on 26 April 2016. A total of 97.6% of TORM A/S’ shareholders have exchanged their shareholdings to TORM plc, and TORM plc has acquired the remaining 2.4% shares from TORM A/S’ minority shareholders. For accounting purposes, the consolidated financial statements for the TORM Group will be presented in the legal name of TORM plc, but will be a continuation of the financial statements of TORM A/S.

-As reported on 12 May 2016, TORM’s Board of Directors has approved a new distribution policy intending to distribute 25-50% of net income semi-annually. Today, TORM’s Board of Directors has approved the interim dividend payment of USD 25m, equivalent to 0.4 USD/share. The dividend is expected to be distributed on 15 September 2016 with the ex-dividend date on 24 August 2016. TORM plc has during June and July repurchased 113,347 own shares for a total consideration of USD 1m. Together with the purchase of the 2.4% of TORM A/S’ shares, this corresponds to total accretive repurchases of USD 20m. TORM may from time to time continue to conduct limited share repurchase in the market.

-TORM did not take delivery of any vessels in the second quarter of 2016, and TORM’s order book stands at four LR2 newbuildings with expected delivery in 2017 and 2018.

-The carrying value of the fleet including prepayments was USD 1,589m as of 30 June 2016 excluding outstanding installments on the LR2 newbuildings of USD 168m. Based on broker valuations, TORM’s fleet including newbuildings had a market value of USD 1,614m as of 30 June 2016. Compared to the broker values as of 31 March 2016, the fleet value has decreased by USD 198m (~11%). TORM estimates the fleet’s total long-term earning potential each quarter based on future discounted cash flows in accordance with IFRS requirements. The estimated value for the fleet as of 30 June 2016 supports the book value.

-Net interest-bearing debt amounted to USD 602m as of 30 June 2016. On 8 July 2016, TORM finalized a loan agreement for financing of the LR2 newbuildings of up to USD 115m, or up to 60% of the purchase price, with 12 years maturity.

-TORM had undrawn credit facilities and cash of approx. USD 192m at the end of the second quarter of 2016 in addition to the above-mentioned financing of the LR2 newbuildings. Outstanding CAPEX relating to the order book amounted to USD 168m.

-Based on broker valuations, TORM’s net asset value (NAV), excluding charter commitments, is estimated at USD 873m, equivalent to a NAV/share of USD 14.0 or DKK 93.9

-Equity amounted to USD 985m as of 30 June 2016, equivalent to a book equity/share of USD 15.8 or DKK 106.0 excluding treasury shares and outstanding warrants, giving TORM an equity ratio of 54%.

-TORM has changed the EBITDA interval to a positive EBITDA in the range of USD 210-250m and a profit before tax in the range USD 50-90m. As 12,258 earning days in 2016 are unfixed as at 30 June 2016, a change in freight rates of USD/day 1,000 will impact the profit before tax by USD 12.3m.