Danish shipping company TORM managed to remain profitable in the year ended December 31, 2017, despite a challenging product tanker market.
The company’s profit before tax amounted to USD 3 million in 2017, compared to USD -142 million seen in the previous year, while its revenue dropped to USD 657 million from USD 680 million reported in 2016.
For the full year 2017, TORM achieved Time Charter Equivalent (TCE) rates of USD 14,621 per day, which were down from USD 16,050 per day reported a year earlier.
Despite a healthy consumer-driven demand for refined oil products, the record high clean petroleum product inventory levels globally, which were built up during 2015 and 2016, had a negative impact on the product tanker market in 2017.
Inventory drawdown was an overriding theme in 2017, which naturally had a negative impact on product tanker demand. In fact, global stocks of clean petroleum products decreased by a volume equivalent to a loss of potential trade of 4%.
“In 2017, TORM continued to execute on its strategic objectives. I am pleased that we were able to grow the fleet through attractively priced vessel acquisitions, complete the US listing in December and finally, in January this year, we raised USD 100 million in new equity for further growth.” Christopher H. Boehringer, Chairman of the Board, said.
“Looking ahead, I have confidence in the strength and performance of the TORM platform. With an encouraging market outlook for product tankers, I look forward to reporting on our progress throughout 2018,” Boehringer added.
During 2017, TORM acquired six MR resale vessels, two of which were delivered in the third quarter of 2017, and executed newbuilding options for two LR1 vessels for a total consideration of USD 259 million.
In addition to the vessel acquisitions, TORM has over the course of 2017 sold five older vessels, including one MR and four Handysize vessels. TORM has also made three sale and leaseback transactions that are treated as financial leases although they have no purchase obligation attached.
In December 2017, TORM achieved a milestone by listing its A-shares on NASDAQ in New York. Following the balance sheet date, in January 2018, TORM completed an equity raise of USD 100 million.