Danish carrier of refined oil products TORM is reaping fruits from one of the strongest starts of a year for the product tanker market recorded in over a decade.
TORM ascribed the high freight rates to market robustness and the company’s preparations for the IMO 2020 regulation.
“This has been achieved despite the uncertainty caused by COVID-19, which we continue to monitor closely, together with the last days’ extraordinary development in the oil market that, so far, has provided further support to an already strong underlying product tanker market.
“Each of these two events represent new and unique challenges, risks and opportunities in the markets in which we operate,” says Executive Director Jacob Meldgaard.
TORM’s preparations for the IMO 2020 have been driven a great deal by scrubber installations, as the company committed to installing 49 scrubbers. The scrubbers are set to be delivered from its joint venture with scrubber manufacturer ME Production and Guangzhou Shipyard International (GSI).
Last year, TORM conducted 18 scrubber installations on its ships and by the end of the year, 20 vessels were operating with scrubbers.
As of today, 30 of TORM’s vessels are operating with scrubbers and 17 vessels are intended to be fitted with scrubbers in 2020.
The last two scrubbers will be delivered when the LR2 newbuildings are delivered in the fourth quarter of 2021.
The remaining of the company’s fleet is using compliant fuel.
In 2019, TORM realized an EBITDA of USD 202 million, against USD 121 million a year earlier, supported by a strong market rebound.
The profit before tax amounted to USD 167 million, against a loss of USD 33 million booked in 2018.
TCE rates also marked a recovery from the 2018 equivalent of USD/day 12,982 to USD/day 16,526 in 2019.
Last year was also a period of fleet modernization for TORM as the company took delivery of five MR newbuildings and four second-hand MR vessels while offloading eight older vessels collecting USD 65 million.
TORM’s fleet consists of 68 owned vessels, 11 vessels under sale and leaseback arrangements, one MR vessel with expected delivery in the second quarter of 2020 and two LR2 vessels with expected delivery in the fourth quarter of 2021.