Torm loss of 19 million dollar in 2009
Torm profit before tax and extraordinary impairment loss totalled 1 million dollar. After an extraordinary impairment write-down of 20 million dollar relating to the Company's 50% stake in FR8, loss before tax amounted to 19 million dollar. For 2010 Torm forecasts a loss before tax of 15-60 million dollar.
"Torm posted a 2009 result in line with break-even expectations. High fleet utilisation yielding above market earnings during the year combined with substantial cost reductions contributed positively to earnings. In combination with a fully funded order book the Company has improved its competitive position further under difficult market conditions," Torm's CFO Roland M. Andersen says.
In 2009, the Tanker Division's earnings were negatively impacted by the global recession and the resulting decline in global oil consumption as well as the influx of a high number of new vessels. Effective utilisation of Torm's fleet in the second half secured earnings above the general market average.
The sale and delivery of four bulk carriers affected profit before tax positively by 33 million dollar. The sale of two bulk carriers in November 2009 at a total profit of 18 million dollar will be taken to income in the first quarter of 2010 upon delivery of the vessels.
Torm's efficiency programme Greater Efficiency Power will in 2010, in line with projections, reduce vessel operating costs by some 15% per vessel and administrative expenses by some 20% compared to 2008. Annual cost savings will materialise in the range of 50 million dollar.
In December 2009, Torm signed an agreement to finance six of the Company's MR newbuildings in the amount of 167 million dollar. The vessels are planned for delivery between 2010 and 2012. After the balance sheet date, Torm signed an additional agreement on 1 February 2010 to finance six other MR newbuildings in the amount of 170 million dollar. Torm's cash and unutilised loan facilities hereafter amounted to 700 million dollar.
Remaining installments relating to Torm's order book as of 31 December 2009 amounted to USD 455 million, which is fully funded.
As of 31 December 2009, equity amounted to 1,247 million dollar.
Torm calculates the long-term earnings potential of its fleet based on discounted expected future cash flows in accordance with IFRS. The calculated value of the fleet as of 31 December 2009 supports book values.
In 2009, Torm strengthened the Company's CSR strategy and defined ambitious goals for reduction of CO2 emissions going forward. The Company signed the UN Global Compact during 2009 and a global CSR organisation has been established.
As of 31 December 2009, 31% of the earning days in the Tanker Division for 2010 had been covered at a rate of USD/day 18,989 and 71% of the earning days in the Bulk Division at a rate of USD/day 18,100.
The Board of Directors recommends, subject to approval at the Annual General Meeting, that no dividend will be distributed for the year 2009.
Source: Torm
