ANNOUNCEMENT NO. 3 - 2009 11 March 2009
"TORM posted the best operating result ever for 2008. The outlook for 2009
reflects the recession in the global economy. TORM has initiated a
comprehensive efficiency programme in order to improve the cost level by USD
40-60 million. Based on a solid financial situation, TORM expects to continue
the Company's positive development," says CEO Mikael Skov.
• The pre tax profit for the year was USD 392 million before non-cash
mark-to-market adjustments of financial instruments of USD -32 million. The
profit before tax for the year was USD 360 million, which is in line with the
latest guidance of 355-370 million. The Board of Directors considers the profit
to be very satisfactory.
• The total cash flow was USD 63 million of which cash flow from operating
activities was USD 385 million, cash flow from investing activities USD -262
million and cash flow from financing activities USD -59 million.
• As of 31 December 2008, equity amounted to USD 1,279 million (DKK 6,753
million), corresponding to USD 18.5 per share (DKK 97.5) excluding treasury
shares.
• The market value of the Company's fleet as of 31 December 2008 exceeded the
book value by USD 367 million, corresponding to USD 5.3 per share (DKK 28.0)
excluding treasury shares. At the end of 2008, the Company owned 65 vessels, 59
of which were product tankers and six bulk carriers. By the end of 2008, TORM
had 20 vessels on order and had exercised one purchase option.
• Return on Invested Capital (RoIC) was 16.4% and Return on Equity (RoE) was
30.6%.
• TORM's strategy plan “Greater Earning Power 2,0”, which was approved in
January 2008, is expected to be adapted to the global economic development
maintaining TORM's ambitions and strategic focus.
• In 2008, TORM initiated a CSR project where the main focus areas are climate,
working environment and human and labour rights. In February 2009, TORM has
committed itself to comply with UN Global Compact.
• In March 2008, TORM acquired 50% of the shipping company FR8 at a price of
USD 125 million. FR8 contributed positively to TORM's net profit with USD 27
million.
• Following the integration of OMI, at the end of 2008 the Company has launched
a comprehensive efficiency programme focusing on standardization of processes,
better utilization of the IT platform, an improved level of vessel operating
expenses as well as optimization of the Company's global land-based setup. Once
it is fully implemented at the end of 2009, the programme is expected to
contribute with annual cost savings of USD 40-60 million, corresponding to
15-20%.
• As of 31 December 2008, TORM had unused credit facilities and cash of
approximately USD 675 million. More than 60% of the Company's debt is due after
2012.
• As of 1 March 2009, TORM had covered approximately 38% of the remaining
earning days in 2009.
• The forecasted profit before tax for 2009 is USD 100-140 million. Given the
global recession there is considerable uncertainty around the forecast.
• The Board of Directors recommends, subject to the approval at the Annual
General Meeting, that a dividend of DKK 4.00 (USD 0.76) per share be paid,
corresponding to a total dividend payment of DKK 291 million (USD 55 million)
and equivalent to a return of 7.2% in relation to the closing price of the
Company's shares on the last business day of 2008. Including the extraordinary
dividend of DKK 4.50 (USD 0.84) per share paid out in December 2008, the
accumulated dividend for 2008 was 32% of the net profit equivalent to DKK 619
million (USD 117 million).
Telephone conference:
A telephone conference and webcast (www.torm.com) reviewing the Annual Report
2008 will take place
today, 11 March 2008, at 16:00 Copenhagen time. To participate, please call 10
minutes before the call on
tel.: +45 3271 4607 (from Europe) or +1 334 323 6201 (from the USA). A replay
of the conference will be
available from TORM's website.
Contact:
Mikael Skov, CEO, tel.: +45 39 17 92 00
Roland M. Andersen, CFO, tel.: +45 39 17 92 00
About TORM
TORM is one of the world's leading carriers of refined oil products as well as
being a significant participant in the dry bulk market. The Company operates a
combined fleet of more than 130 modern vessels, principally through a pooling
cooperation with other respected shipping companies who share TORM's commitment
to safety, environmental responsibility and customer service.
TORM was founded in 1889. The Company conducts business worldwide and is
headquartered in Copenhagen, Denmark. TORM's shares are listed on the
Copenhagen Stock Exchange (ticker TORM) as well as on the NASDAQ (ticker TRMD).
For further information, please visit www.torm.com.
Safe Harbor
Forward Looking
Statements Matters discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views with respect
to future events and financial performance and may include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other than
statements of historical facts. The forward-looking statements in this release
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, Management's examination of
historical operating trends, data contained in our records and other data
available from third parties. Although TORM believes that these assumptions
were reasonable when made, because these assumptions are inherently subject
to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond our control, TORM cannot assure you that
it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward looking statements include the
strength of world economies and currencies, changes in charter hire rates and
vessel values, changes in demand for “tonne miles” of oil carried by oil
tankers, the effect of changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in demand that may affect
attitudes of time charterers to scheduled and unscheduled dry-docking, changes
in TORM's operating expenses, including bunker prices, dry-docking and
insurance costs, changes in governmental rules and regulations including
requirements for double hull tankers or actions taken by regulatory
authorities, potential liability from pending or future litigation, domestic
and international political conditions, potential disruption of shipping routes
due to accidents and political events or acts by terrorists. Risks and
uncertainties are further described in reports filed by TORM with the US
Securities and Exchange Commission, including the TORM Annual Report on Form
20-F and its reports on Form 6-K.
Forward looking statements are based on management's current evaluation, and
TORM is only under obligation to update and change the listed expectations to
the extent required by law.
