• TCE Earnings: $1.135 billion for the full year 2024.
• Fleet-wide Rates: $39,626 per day for the first three quarters; decreased to $25,775 per day in Q4.
• Net Profit: $612 million for the full year 2024.
• Return on Invested Capital: 24.3% for the full year 2024.
• EBITDA: $851 million for the full year 2024; $142 million in Q4.
• Q4 TCE: $215 million.
• Q4 Net Profit: $77 million.
• Basic Earnings Per Share (Q4): $0.77 per share.
• Dividend (Q4): $0.60 per share, with a payout ratio of 75%.
• Net Interest-Bearing Debt: $948 million at the end of 2024.
• Debt Maturity: $168 million maturing in 2025.
• 2025 TCE Earnings Forecast: $650 million to $950 million.
• 2025 EBITDA Forecast: $350 million to $650 million.

• Warning! GuruFocus has detected 9 Warning Signs with CRMT.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TORM PLC (NASDAQ:TRMD) achieved a new all-time high in TCE earnings of $1.135 billion for 2024.
• The company reported a net profit of $612 million and a return on invested capital of 24.3% for the full year.
• Fleet efficiency, disciplined cost management, and a well-executed commercial strategy are key strengths for TORM PLC (NASDAQ:TRMD).
• The company has a strong capital structure and operational leverage, positioning it well to navigate market uncertainties.
• TORM PLC (NASDAQ:TRMD) is committed to sustainability, having achieved a 40% reduction in carbon intensity by the end of 2024, meeting the IMO 2030 target ahead of schedule.

Negative Points

• Freight rates decreased in the fourth quarter of 2024, with fleet-wide rates dropping to $25,775 per day.
• The normal seasonal strengthening of the market did not materialize in the fourth quarter, impacting earnings.
• Geopolitical risks and market uncertainties introduce a wide range of potential earnings outcomes for 2025.
• The company's earnings per share for Q4 decreased significantly to $0.77 compared to $2.18 in the same period last year.
• The U.S. proposal to tax Chinese-built tonnage could impact TORM PLC (NASDAQ:TRMD)'s operations and market strategy.

Q & A Highlights

Q: How does TORM's strategy change in light of increased market uncertainty and a lower starting point for the year? A: Jacob Meldgaard, CEO, stated that there is no change in strategy. TORM will maintain its operational agility to adapt to geopolitical changes, continue its fleet strategy of selling older vessels, and uphold its financial strategy of capital returns. The company remains comfortable with its capital structure and leverage.

Q: What is the current impact of crude tankers encroaching on product trades, and is this trend likely to continue? A: Jacob Meldgaard, CEO, explained that crude tankers carrying clean products is not typical but occurred due to specific circumstances like the Red Sea disruption. Currently, 3% of CPP on water is on VLCCs and Suezmaxes, down from 8% at the peak. This is seen as a normalized level, and such occurrences are not expected to be a regular trend.

Q: How does TORM view seasonality in the market given the current geopolitical uncertainties? A: Jacob Meldgaard, CEO, indicated that while seasonality is a factor, the focus is more on geopolitical impacts and other market dynamics. The company does not have a specific view on how seasonality will play out this year due to the high level of uncertainty.

Q: What is TORM's response to the U.S. proposal of taxing Chinese-built tonnage? A: Jacob Meldgaard, CEO, noted that 41% of TORM's fleet is Chinese-built, with no newbuilds. The U.S. trade accounts for about 20% of TORM's overall trade. The company is assessing whether the potential costs of the fee would necessitate redirecting vessels, but no immediate changes are planned.

Q: What is TORM's outlook on fleet growth and market transactions given the recent slowdown in activity? A: Jacob Meldgaard, CEO, stated that market liquidity was low in Q4 due to recalibration of prices. As prices and earning potentials stabilize, transaction volumes are expected to increase. TORM recently sold three older vessels, indicating some market activity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.