Presentation

TORM is a large-scale pure play product tanker owner and operator with 130 years of experience within the industry. The company is one of the world’s leading carriers of refined oil products such as gasoline, jet fuel, naphtha and diesel oil. TORM is fully integrated with in-house commercial and technical ship management services. The company is headquartered in Copenhagen and is dual-listed there and on Nasdaq, with a market capitalization of USD 530m and net debt of USD 720m as of Q2’20. The company is controlled by majority shareholder Oaktree Capital Management (69% stake).

TORM currently owns a fleet of 75 product tankers on the water (including leases), consisting of two handysize vessels, 54 MRs and 19 LRs. The company also has two LR2s under construction with expected delivery in 2021e. As of Q2’20, 40 of the planned 49 scrubbers have been installed. TORM also sold seven vessels with an average age of 19 years during the start of the quarter at the height of broker valuations, capitalizing on the strong market.

TORM has a strategy of high operational leverage, focusing mainly on the spot market. The company has used the recent surge in tanker rates to cover ~70% of Q3’20 operating days at USD ~18,000/day on average, an attractive level compared with our estimate of USD 15,000/day for product tankers. From Q4’20e, TORM is almost 100% exposed to the spot market.