Financial Performance - In 2023, the company realized Time Charter Equivalent (TCE) rates of $37,124/day, with a projected TCE rate of $36,061/day for 2024[33]. - The average spot TCE earnings for the product tanker fleet in 2024 were $36,061 per day[136]. - The average age of the company's vessels is 11 years as of December 31, 2024, which may impact competitiveness against newer, more efficient vessels[130]. - The company is heavily dependent on spot charters, with fluctuations in spot charter rates significantly affecting earnings[135]. - In 2024, 20 customers accounted for approximately 69% of the company's revenue, indicating a high dependency on a limited customer base[150]. Market Conditions - The product tanker market is cyclical, with freight rates declining from a high of $26,458/day in mid-2008 to an average of approximately $14,200/day from 2009 to 2014[33]. - The product tanker sector is characterized by volatility, which may lead to reductions in charter rates and vessel values[29]. - Seasonal fluctuations in demand for product tankers may result in quarter-to-quarter volatility in revenues, with typically stronger performance in fall and winter months[56]. - The oversupply of product tankers may lead to reduced charter hire rates and profitability, impacting future performance and cash flows[54]. - The demand for product tankers is influenced by external factors such as global economic conditions and changes in energy consumption patterns[39]. Regulatory and Compliance Risks - The company is subject to complex laws and regulations, including environmental regulations, which can adversely affect its financial position[30]. - The company is subject to various international and U.S. environmental regulations, including the U.S. Oil Pollution Act of 1990 and the International Maritime Organization's regulations, which could lead to significant penalties and operational disruptions if not complied with[73][74][77]. - Compliance with complex environmental regulations may require costly operational changes, affecting the company's financial position[71]. - The European Commission's Emission Trading Scheme (ETS) will require shipowners to purchase emission allowances starting in 2024, with compliance costs expected to increase over the following years[88]. - The FuelEU Maritime regulation, effective January 2025, mandates shipping companies to gradually lower the GHG intensity of fuels consumed on voyages involving EU ports, potentially increasing operational costs[90]. Financial Risks - The company has a significant amount of financial debt, which limits funds available for other corporate purposes and may restrict operational flexibility[34]. - As of December 31, 2024, the company had interest-bearing debt totaling $1,238.8 million and cash and cash equivalents of $291.2 million, resulting in a net debt of $947.6 million[198]. - The company may experience difficulties obtaining financing in the future due to changes in lending practices and economic conditions[44]. - The company may incur additional debt in the future, which could adversely affect its ability to obtain financing on favorable terms[199]. - The company is subject to financial covenants that restrict its operational flexibility, including maintaining specified minimum liquidity and equity requirements[205]. Operational Risks - The company faces risks related to international operations, including political instability and economic sanctions, which could adversely affect its business[30]. - The company faces risks from geopolitical conflicts, including political instability in the Middle East and Ukraine, which may adversely affect its operations[110]. - The ongoing conflict in Ukraine could lead to further economic sanctions, impacting the company's business and financial condition[114]. - Labor interruptions could have a material adverse effect on the company's operations and financial position if not resolved timely[109]. - The company may experience unexpected costs and delays due to operational risks inherent in the product tanker industry[104]. Customer and Counterparty Risks - A substantial portion of the company's revenues is derived from a limited number of customers, making it vulnerable to revenue loss if any of these customers are lost[30]. - The company is exposed to counterparty risks that could lead to significant losses if counterparties fail to meet their obligations[140]. - The company has received two cargo claims related to a customer's inability to honor indemnification obligations, which could adversely affect business[143]. - The company may face reputational damage and regulatory claims if contraband is found on its vessels[133]. Environmental and ESG Considerations - A shift in consumer demand away from oil products towards renewable energy sources may adversely affect the demand for product tankers[60]. - The company faces risks related to compliance with evolving Environmental, Social, and Governance (ESG) standards, which may impact its reputation and access to capital if not adequately addressed[97][98]. - Unfavorable ESG ratings could lead to negative investor sentiment and impact the company's access to capital[101]. - The company may incur additional costs and require resources to comply with ESG requirements, which could adversely affect its financial condition[1]. Tax and Legal Risks - The company is subject to a 4% U.S. federal income tax on gross shipping income attributable to transportation that begins or ends in the U.S., unless exempt under Section 883 of the U.S. Internal Revenue Code[175]. - As of December 31, 2024, the company estimates a non-current tax liability of $45.2 million related to held over gains if it abandons participation in the tonnage tax scheme[178]. - Changes in tax laws or tonnage tax regimes could materially affect the company's future performance and financial position[179]. Cybersecurity and Fraud Risks - Cybersecurity incidents could negatively impact the company's operations and financial position, despite the implementation of a 24/7 Security Operations Center for monitoring[194]. - The company has established internal controls to mitigate fraud risks, but there is no assurance that these measures will be sufficient to prevent future fraudulent behavior[192]. Shareholder and Governance Risks - The majority of Class A common shares are held by a limited number of shareholders, including Njord Luxco, which holds approximately 41.49% of the shares, potentially leading to conflicts of interest[214]. - The company cannot guarantee the declaration of dividends, as the Board of Directors has discretion over dividend payments based on available funds[221].

Group 1 - The global tanker market is experiencing key crosscurrents, with a lack of increased volume in the Red Sea despite an Israeli ceasefire [1] - There is a potential for lower tanker rates in the market, indicating a shift in demand dynamics [1]

Core Insights - Recent events have the potential to significantly impact the crude and refined product tanker markets, particularly following the US Treasury Department's sanctions issued on January 10th [1] Group 1: Industry Events - The US Treasury Department imposed sanctions on over a dozen entities, which could lead to shifts in market dynamics for crude and refined product tankers [1] Group 2: Market Implications - The sanctions may alter trade routes and shipping patterns, affecting supply and demand in the tanker market [1]

Investment Opportunity - TORM plc (NASDAQ: TRMD) stock was rated as a "Buy" in April 2023 due to its low debt and attractive valuation multiples [1] - The company's stock is currently held through beneficial long positions, including stock ownership, options, or other derivatives [1] Analyst Background - Daniel Sereda is the chief investment analyst at a family office with investments across continents and diverse asset classes [1] - He specializes in filtering vast amounts of data to extract critical investment ideas and runs the investing group Beyond the Wall Investing [1] - The group provides access to the same information prioritized by institutional market participants in their analysis [1] Subscription Offer - Beyond the Wall Investing offers a free trial and a special 10% discount for new subscribers [1] - The subscription provides access to the latest and highest-quality analysis of Wall Street buying and selling ideas [1]

Core Article Summary - The article discusses TORM plc (NASDAQ: TRMD) and highlights reasons why the stock is considered a buy, including its valuation being perceived as cheap [1] Disclosure and Context - The author of the article holds a beneficial long position in TRMD through stock ownership, options, or other derivatives [1] - The article represents the author's personal opinions and is not influenced by compensation or business relationships with the mentioned company [1] - Seeking Alpha clarifies that the views expressed in the article may not reflect those of the platform as a whole and that its analysts are third-party authors, including both professional and individual investors [2]

Core Insights - The global energy sector is experiencing significant changes driven by the increasing influence of renewable technology and decreasing prices, alongside rising consumer demand for greener energy sources [1] Group 1: Industry Trends - Renewable technology is becoming more influential in the energy sector as prices decline [1] - There is a growing consumer demand for greener forms of energy, indicating a shift in market preferences [1] Group 2: Analyst Background - The analyst has nearly 10 years of experience in trading and investing, focusing on technology and energy companies [1] - The analyst has a strong track record, sitting in TipRanks' Top 10% of Financial Bloggers with a 75% success rate and 19% average return [1]

Group 1 - The articles written in September highlighted a bullish outlook on the clean product trade for TORM plc and Hafnia Limited, emphasizing the ongoing polarization of the global market [1] - The author utilizes professional knowledge from the Nuclear Power industry to assess potential equities for long-term investment, focusing on income-producing equities and rental real estate for cash flow and appreciation [1] Group 2 - The author has a beneficial long position in the shares of TORM plc and PSX, indicating confidence in these investments [2]

Core Viewpoint - The article discusses TORM Plc (NASDAQ: TRMD), highlighting its strengths in fleet, balance sheet, dividend policy, and market catalysts for product tankers, while noting that it traded at 118% of its PNAV, leading to a "Hold" rating due to limited upside potential [1]. Group 1: Company Strengths - TORM Plc has a strong fleet and balance sheet, which are critical for its operational efficiency and financial stability [1]. - The company maintains a favorable dividend policy, appealing to income-focused investors [1]. - Market catalysts in the product tankers sector are identified as potential growth drivers for TORM Plc [1]. Group 2: Investment Strategy - The author emphasizes a preference for overlooked investment opportunities that offer asymmetric risk-reward profiles and attractive dividend yields [1]. - The analytical approach combines fundamental analysis with technical analysis to optimize market timing [1]. - The focus is primarily on shipping and mining enterprises, although the author is open to exploring other industries that align with their investment style [1].

07 NOVEMBER 2024 THIRD QUARTER 2024 Safe Harbor Statement As to The Future Matters discussed in this release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, ...

Financial Data and Key Metrics Changes - TORM reported time charter equivalent (TCE) earnings of US$263 million and EBITDA of US$191 million for Q3 2024, despite lower-than-expected freight rates towards the end of the quarter [2][23] - The net profit for the quarter was US$131 million, slightly up compared to the same quarter last year [23] - The average TCE rates were approximately US$34,000 per day, with LR2s at nearly US$41,000, LR1s over US$33,000, and MRs above US$31,000 [24] - The return on invested capital was 20.3%, indicating a healthy business environment [25] Business Line Data and Key Metrics Changes - The fleet had 8,253 earning days in Q3 2024, an increase from 7,949 days in the previous year, with a larger share attributed to LR2s [25] - The overall TCE rate per day increased by US$700 compared to Q3 2023 [25] Market Data and Key Metrics Changes - Clean petroleum product (CPP) trade volumes increased by 2% year-to-date, supported by rising global oil demand and changes in the refinery landscape, leading to a 10% increase in ton-mile demand [7] - However, actual loaded volumes trended down, falling below year-ago levels in October, with Middle East exports down 8% month-on-month [8][10] - The share of global CPP trade transiting the Suez Canal declined from 12% to 4%, with redirected trade taking longer routes [6] Company Strategy and Development Direction - TORM is focused on fleet renewal, having acquired eight second-hand MR vessels for US$340 million, with six already delivered [3][4] - The company aims to maintain a strong cash position and financial flexibility to seize market opportunities [34] - TORM plans to distribute 100% of free cash after debt repayments to shareholders, reinforcing trust in its long-term business model [36] Management's Comments on Operating Environment and Future Outlook - Management noted that geopolitical tensions have reshaped product tanker trade towards longer distances, impacting rates and demand [5][6] - The company expects TCE earnings for 2024 to be between US$1.11 billion and US$1.16 billion, with EBITDA projected between US$810 million and US$860 million [33] - Management acknowledged the current softness in rates due to lower demand from refinery outages and maintenance [40] Other Important Information - TORM declared a dividend of US$1.20 per share for Q3 2024, with a payout ratio of 89% relative to basic EPS [28] - The net interest-bearing debt remained flat at US$825 million, with a net loan-to-value ratio of 23.1% [26][27] Q&A Session Summary Question: Thoughts on the product market and impact of VLCCs and Suezmaxes - Management indicated that Q3 was affected by crude cannibalization, but normalization is occurring in Q4, with lower volumes from the Middle East contributing to rate softness [38][40] Question: Future fleet renewal transactions - Management stated that they are staying agile and could engage in either acquiring or selling assets, but no specific plans are in place currently [41] Question: Strategy for share-based vessel acquisitions - Management clarified that current public market pricing does not support the type of share-based deals previously executed, indicating a need for market adjustments before considering such transactions again [43]