Torm (NASDAQ:TRMD) Releases Earnings Results

Key Points

• TORM beat earnings and revenue expectations: It reported EPS of $1.91 versus the $1.55 consensus and quarterly revenue of $499.4 million versus estimates of $330.95 million.
• The company raised its full-year outlook: TORM lifted the low end of its TCE earnings guidance by $50 million, to $1.75 billion–$1.9 billion, citing strong fourth-quarter coverage.
• Management cited a supportive tanker market and announced an interim dividend: It pointed to strong Q4 booking rates and a shrinking actively trading clean-products fleet, and declared a $1.35-per-share interim dividend.

Torm (NASDAQ:TRMD - Get Free Report) issued its earnings results on Wednesday. The company reported $1.91 earnings per share for the quarter, beating analysts' consensus estimates of $1.55 by $0.36, Zacks reports. Torm had a return on equity of 27.24% and a net margin of 35.51%. The firm had revenue of $499.40 million for the quarter, compared to the consensus estimate of $330.95 million.

Here are the key takeaways from Torm's conference call:

• Q3 earnings rose substantially year over year: TCE earnings were $353 million, EBITDA was $274 million and net profit was $199 million. Average fleet TCE was about $40,100 per day, though earnings were lower than in the exceptional second quarter.
• TORM raised the low end of its full-year guidance by $50 million: It now expects TCE earnings of $1.75 billion–$1.9 billion and EBITDA of $1.35 billion–$1.5 billion, citing strong Q4 coverage and market expectations.
• Management sees supportive tanker-market fundamentals: Q4 bookings included rates of about $78,000 per day across vessel classes, while the company said the fleet actively trading clean products had contracted roughly 4% year to date despite growth in the nominal fleet. It also pointed to potential demand from inventory rebuilding.
• Shareholders will receive a $1.35-per-share interim dividend, totaling $138 million, at a 78% payout ratio. TORM reported a 25.9% net loan-to-value ratio, which management said already includes committed newbuilding investments.
• Fleet investment commitments are substantial: The company cited about $650 million of committed newbuilding CapEx and plans for additional MR and LR2 vessels. Management also emphasized that shipping is cyclical and freight-market conditions can change quickly.

Torm Price Performance

Shares of TRMD traded down $2.71 during trading hours on Wednesday, reaching $37.55. The stock had a trading volume of 2,122,917 shares, compared to its average volume of 1,034,330. Torm has a 12 month low of $19.30 and a 12 month high of $43.31. The stock has a market capitalization of $3.83 billion, a PE ratio of 6.19 and a beta of 0.05. The company has a debt-to-equity ratio of 0.33, a quick ratio of 1.97 and a current ratio of 2.27. The company's 50-day moving average is $37.21 and its two-hundred day moving average is $30.75.

Torm Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Thursday, September 24th. Stockholders of record on Thursday, September 10th were issued a dividend of $2.40 per share. This represents a $9.60 annualized dividend and a dividend yield of 25.6%. This is a boost from Torm's previous quarterly dividend of $0.70. The ex-dividend date was Thursday, September 10th. Torm's dividend payout ratio (DPR) is currently 115.49%.

Insider Buying and Selling at Torm

In related news, CFO Kim Balle sold 7,533 shares of the business's stock in a transaction on Tuesday, September 22nd. The stock was sold at an average price of $36.35, for a total transaction of $273,824.55. Following the sale, the chief financial officer owned 510 shares in the company, valued at $18,538.50. The trade was a 93.66% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. Over the last 90 days, insiders sold 42,533 shares of company stock worth $1,643,225. Company insiders own 0.37% of the company's stock.

Wall Street Analysts Forecast Growth

A number of research firms have recently commented on TRMD. Evercore reissued an "outperform" rating on shares of Torm in a report on Tuesday, October 27th. Wall Street Zen raised Torm from a "buy" rating to a "strong-buy" rating in a research note on Saturday, September 19th. Finally, Weiss Ratings upgraded Torm from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday, October 9th. One investment analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and one has issued a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Buy" and a consensus price target of $38.00.

About Torm

TORM plc is a maritime transportation company that owns and operates a fleet of product tankers. The company primarily transports refined petroleum products, including gasoline, diesel, jet fuel and naphtha, connecting refineries, storage facilities and distribution markets around the world.

TORM's fleet serves the global clean-product tanker market and includes vessels in several size categories, such as long-range and medium-range tankers. Its vessels operate on international trade routes, supporting the movement of energy products between major production and consumption regions.

Founded in Denmark in 1889, TORM has grown into an international shipping company headquartered in Copenhagen.

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