Presentation of Q2 2010 results - Torm · -2 24-5 0 5 10 15 20 25 30 35 Tanker Division Bulk...
Transcript of Presentation of Q2 2010 results - Torm · -2 24-5 0 5 10 15 20 25 30 35 Tanker Division Bulk...
1
Presentation of Q2 2010 results
Matters discussed in this presentation may constitute forward-looking statements.
Such statements reflect TORM's current expectations and are subject to certain risks and uncertainties that could negatively impact
TORM's business.
To understand these risks and uncertainties, please read TORM's announcements and filings with The US Securities and Exchange
Commission.
The presentation may include statements and illustrations concerning risks, plans, objectives, goals, strategies, future events or
performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking
statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, TORM's examination of historical operating trends, data contained in our records and other data available from
third parties. As many of these factors are subject to significant uncertainties and contingencies which are difficult or impossible to predict
and are beyond our control, TORM makes no warranties or representations about accuracy, sequence, timeliness or completeness of the
content of this presentation.
Safe Harbour Statement
2
Financial Highlights for Q2 2010
Financials (USDm)
EBITDA of USD 24m in Q2 2010 compared to USD
31m in Q2 2009
• The Tanker Division is positively impacted by
higher spot rates and lower expenses in Q2
2010
• The Bulk Division is impacted by better spot
rates in Q2 2010. Q2 2009 was impacted by
USD 13m from sale of vessels
Achieved spot rates exceed benchmarks
• Large and high quality fleet
• Strong worldwide customer base
• Cooperation on key functions
Highlights
Finance
Tanker marketDry bulk market
CSR
3
19
13
-1
31
23
3-2
24
-5
0
5
10
15
20
25
30
35
Tanker Division Bulk Division Non-allocated Total
Q2 2009 Q2 2010
EBITDA in Tanker and Bulk Division
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
LR2 LR1 MR
Pool Benchmark
USD/day TORM Pool spot earnings vs benchmarks Q2 2010
19%
31%51%
*Benchmarks are based on:
• LR2: TC1 (Ras Tanura-> Chiba) spot earnings from Clarksons
• LR1: TC5 (Ras Tanura-> Chiba) spot earnings from Clarksons
• MR: Avg. of spot earnings on TC2 (Rotterdam->NY), TC4 (Singapore-> Chiba) and Curacao->NY from Clarksons
Summary
4
4
Strong foundation – organisation in place and commercial
relationships intact
A strong team in place
• New forces with international
outlook and with many years of
tanker experience
• Tina Revsbech, Head of Tanker
Division
• Jan Nørgaard Lauridsen,
Regional Managing Director
Asia-Pacific and Head of
Singapore office
• New Management in the Bulk
Division to be announced
• Complement our current
organisation which has
demonstrated strength and
effectiveness during this
transition period
Manage a fleet of 128 product
tankers and 11 Bulk carriers at
30 June 2010
Fleet development since Q1:
• 14 vessels to leave the pools
• 8 new vessels added to the
TORM fleet during Q2 and Q3
4
Highlights
Finance
Tanker marketDry bulk market
CSRSummary
Organisation in place Large fleet
Well positioned to
exploit improving
product tanker
market going
forward
0
10
20
30
40
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10
LR1 and LR2 spot rates and 1 year T/C rates
LR1 spot rates (TC5) LR1 1 year T/C rates
LR2 spot rates (TC1) LR2 1 year T/C rates
LR1 (TC5) spot avg. 2005-2009 LR2 (TC1) spot avg 2005-2009
USDt
0
10
20
30
Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10
MR spot rates and 1 year T/C rates
MR spot rates (TC2)
MR 1 year T/C rates
TC2 spot avg 2005-2009
USDt
5
Improved but fragile conditions on the product tanker market
Freight rates (MR and LRs)
Rates generally low in Q2 2010 – but stronger than
Q2 2009
• Seasonal - coming out of the winter market
• Improved underlying fundamentals
Positive
• Continued naphtha demand
• Some strength in emerging routes,
• Transatlantic MR strength late June as arbitrage
opens
Negative
• Continued high influx of tonnage
• New deliveries (net 2%) although with significant
delay
• Reduced floating storage
• Low US demand for gasoline
• No swap of LRs into dirty due to the weak market
Into Q3
• Closure of the transatlantic arbitrage
• General increase in demand across segments
• Steady naphtha demand
*Source: Clarksons
Finance
Tanker marketDry bulk market
CSR
LR2 vessel size (Long Range): Aframax tanker 85-120,000 dwt
LR1 vessel size (Long Range): Panamax tanker 60-85,000 dwt
MR vessel size (Medium Range):Handymax tanker 40-60,000 dwt
SR vessel size (Short Range): Handysize tanker – 30-40,000 dwt
Highlights
Summary
For MR’s emerging cargoes and trades were explored
6
Alternative trading patterns
Late June, the price difference of gasoline in
Europe and USA widened
Increased demand for vessels on the continent ,
which were scarce due to the emerging trades
The traditional transatlantic MR trade route (TC2)
rate weakened into mid-June why owners sought
alternative cargoes and destinations
• Distilled products (Gasoline and Gasoil) to
South America
• Gasoline due to price difference to Ethanol
• Gasoil for heating
• Vegetable oil to Asia
• Palm oil to Europe
Reduced number of ships on the continent
The price gap between Europe and the USA widened
Finance
Tanker marketDry bulk market
CSR
Classic TC2 trading route
Emerging trading routes
-20
0
20
40
60
80
100
Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10
$/T
Price difference USA minus Europe
Gasoline price difference in $/T
Highlights
Summary
0
10
20
30
40
50
60
Jul-09 Oct-09 Jan-10 Apr-10 Jul-10
Dif
fere
nce in
pri
ce
6 month vs 1 month future
6 month vs. - 1 month future
0
10
20
30
40
LR1 LR2 Smax VLCCNo of vessels (26 Jul 20010)
Floating storage volumes*No of vessels
0
20
40
60
80
100
120
Jul -09 Oct -09 Jan -10 Apr -10 Jul -10
mbbl Clean products on floating storage*
Floating storage – reduced to natural level during Q2 2010
7
Floating storage has been reduced significantly…
..as price differential has decreased
*Source: Inge Steensland and TORM research
Finance
Tanker marketDry bulk market
CSR
• Floating storage has decreased from significant
level in 2009
• Adding significant tonnage into the market during
both Q2 and Q1 2010
• By end Q2 2010, the level has been reduced to
~3% of the global fleet compared to ~12% by
year end 2009
• Floating storage is among others impacted by the
steepness of the contango curve on the various
products
Highlights
Summary
Product Tanker market -
demand will outgrow supply from 2010 to 2012
Demand and supply development (2010 - 2012)
Swing factors:
• Order book delays
• Delays in refineries
• Floating storage
• Slow steaming
• Changes in transport
patterns
*All effects are recalculated into MR units – to enable comparision based on their volume relative to MR
8
Source: Torm research
• Refinery expansions in the Middle East and
India
• Increased oil demand
• Increasing port days due to increased
activity/bottlenecks
• Arbitrage
• Delivery of 107 MR equivalents in Q1
• LR into dirty
• Some LR1 vessels are replacing Panamax
phaseouts in crude
• 30% of LR2 vessels are trading in the crude
• Phase-out of single hulls and scrapping of old
tonnage
Demand primarily driven by Supply primarily driven by
Changed assumptions:
• Cancellation set to 10%
• Impact from SR fleet
development now
neutral
107
272
44750 41
84
371
53182
121 64
0
250
500
750
Ref
iner
y ex
pan
sio
ns
Gro
wth
in o
il d
eman
d
Incr
easi
ng p
ort
d
ays
Arb
itrag
e/cr
oss
tr
ade/
…
Tota
l dem
and
in
crea
se
Sw
ing
fac
tors
Tota
l sup
ply
in
crea
se
Pha
se o
ut &
S
crap
pin
g
LR in
to d
irty
mar
ket
Est
. C
ance
llatio
ns
Del
iver
ed +
O
rder
bo
ok
gro
ssNu
mb
er o
f ve
ssel
s*
Demand Supply
Finance
Tanker marketDry bulk market
CSR
Highlights
Summary
Improved underlying economic fundamentals
Asia main driver for oil demandOil demand coming back to pre 2008
levels
Modest but steady pace in
economic upturn
• Asia, mainly China key driver for
increase
• US slowly regaining
• Europe and Japan lagging
• One of the deepest cycles in record
• Oil demand back to 2008 levels
• Repeated upwards adjustments from
EIA
• GDP forecast for the global
economy held relatively steady
• Economic activity has continued to
increase
• But modest and
• some activity slow down at the
end of Q2 2010
Finance
Tanker marketDry bulk market
CSR
Sources: EIA, (July) EcoWin
9
Oil demand ... driven by china Momentum remainsmb/d
82
83
84
85
86
87
88
2007 2008 2009 2010 2011
Index
-0,4-0,20,00,20,40,60,81,01,21,41,6
Growth in oil demand, 2011mb/d
Highlights
Summary
10%
6%
4%
2%
-1%
1%
3%
5%
7%
9%
11%
13%
15%
0
20
40
60
80
100
120
140
160
2009 2010 2011 2012
% growth in MR
equivNo of vessels
Net fleet growth in product tankers*
LR2 LR1 MR Total by MR Equivalent
272
204
0
50
100
150
200
250
300
Planned delivery 1/1-09 Actual delivery
2009 order book (ex. SR)
25%
No of vessels
0
10
20
30
40
50
60
70
80
90
100
Q1 10 Q2 10 Q3 10 Q4 10
Planned delivery 1/1-10 Actual delivery
Newbuildings (LR2, LR1 & MR)
No of vessels
50%
48%
Supply continues to be affected by significant slippage
10
Slippage is continuing…
Slippage expected to continue
• 30% expected in 2010 and 2011
• No slippage from 2012 as there is free yard
capacity compared to orders this year
TORM now estimates 10% cancellations
• As very few cancellations have been seen
Phase-out expected to be accelerated
• Older tonnage - due to the low freight rates
• Single-hulls - legislative phase-out requirements
from 2010
Total net growth in the fleet declines from 10%
in 2009 to app. 2% in 2012
Significant slippage continues
• 2009, slippage of 25%
• Q2 2010, delivery of 28 vessels, 48% less than
planned
Declining order book from 2010
• But some newbuilding order activity has been
seen in 2010
…and net fleet growth is declining
*Note: Net fleet growth: Gross order book adjusted for scrapping, slippage, phase out of
single hulls and vessels going into dirty
Source: Inge Steensland and TORM
Source: Inge Steensland and TORM
Finance
Tanker marketDry bulk market
CSR
Highlights
Summary
0
20
40
60
80
100
120
140
160
180
200
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
MR - 1 year T/C and second-hand prices (indexed)
MR 5 year old secondhand prices (index)
1 Year Time charter Rate 47-48,000 Modern Products Tanker - index
20
25
30
35
40
45
50
55
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
MR newbuilding and second-hand prices
MR DWT Products Tanker Newbuilding Prices
MR 5 year old second-hand prices
MR 5 year old second-hand prices historic avg (2005-2009)
USDm
Product tanker vessel prices have stabilised and increased -
continued limited S&P activity
Vessel price development*
*Source: Clarksons and TORM research
11
Newbuilding and second-hand prices have
continued to increase during Q2 2010
Cautious newbuilding order activity in Q2
Slight increase in S&P activity, ~20 MRs
sold during Q2 2010
T/C rates and second-hand prices are
relatively well correlated
The T/C rates have stabilised in Q2
Whereas vessel prices have continued to
increase during Q2 but flatten into Q3
Finance
Tanker marketDry bulk market
CSR
1/1-2005 = index 100
Highlights
Summary
20
30
40
50
60
70
80
90
100
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Panamax newbuilding and secondhand prices
75-77,000 DWT Panamax bulk carrier Newbuild ing Prices (RHS)
Panamax 76K bulk carrier 5 Year Old Secondhand Prices
USDm
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
Panamax spot rates and 1 year T/C rates
Panamax dry bulk spot rates Panamax dry bulk 1 year T/C rates
USDt
Dry bulk market remained at a relatively strong level in Q2
Freight rate development
Panamax rates were volatile in Q2 2010 with a peak
in mid-May
Rates supported by
• Chinese coal and iron ore imports and
• High congestion
At the end of Q2 and into Q3 significant rate
decrease
• High influx of new tonnage
• Declining Chinese coal demand
• Potential weaker Chinese demand for iron ore
TORM relatively unaffected by rate volatility
• At the end of June 2010, TORM has covered
81% of the remaining earning days in 2010
*Source: Clarksons
12
Vessel price development
Substantial amount of second-hand sales activity
resulting in increasing prices
Large number of orders for newbuildings, especially
Kamsarmaxes and Capesize
• Only slight change in newbuilding prices
Finance
Tanker marketDry bulk market
CSR
Highlights
Summary
“Greater Efficiency Power” has lead to significant savings
13
Efficiency programme “Greater Efficiency
Power” launched by the end of 2008
Key initiatives:
• Restructuring of the fleet management set-
up
• Standardising repair and maintenance
processes
• Centralising back-office including IT and
standardising the IT platform
• Strengthening and centralising the global
procurement function
• Reorganising the global land-based
organisation
On track to deliver savings of USD 50m in
2010
• 15% reduction of vessel operating
costs/vessel day relative to 2008
• 20% reduction in administrative expenses
relative to 2008
Realised H1 2010 compared to 2008
average
• Vessel operating cost per vessel day
reduced by 17% - 25%
• Administration expenses reduced by 21%
Status on Greater Efficiency Power
Finance
Tanker marketDry bulk market
CSR
10
12
14
16
18
20
22
24
2008 qtr. avg. 2009 qtr. avg 2010 H1 avg
Administrative expenses per quarterUSD m
3.000
4.000
5.000
6.000
7.000
8.000
9.000
LR2
LR1
MR
SR
Pa
na
ma
x
Development in operating cost per day (USD/day)
2008 2009 H1 2010
Highlights
Summary
75193
188
703
647
1807
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2010 2011 2012 2013 After 2013 Total debt
Repayment profileUSDm
Financing – no loan to value covenants and solid cash and
credit facilities
14
TORM has a solid financial position
• TORM’s total cash and unused credit facilities
totalled USD 600m as per 30 June 2010
• Remaining capex of USD 372m relating to the
newbuilding program as per 30 June 2010
• Net debt USD 1,691m by the end of Q2 2010
compared to USD 1,621m by the end of Q1 2010
• TORM has no loan to value covenants
• TORM’s main debt covenants:
• Minimum book equity ratio of 25%
• Minimum book value of equity of DKK 1.25bn
(app. USD 250m)
• No less than USD 60m in liquidity
Finance
Tanker marketDry bulk market
CSR
115
165
83
8
372
600
-
100
200
300
400
500
600
700
2010 2011 2012 2013 Total CAPEX Cash and unused credit
facilities
Remaining capex and liquidity USDm
Highlights
Summary
TORM maintains its forecast for 2010
15
2010 Guidance
Sensitivity – change in profit
with change in freight rates
• TORM forecasts a loss before tax of USD 40m to 60m for 2010
Coverage (% and USD/day)
Finance
Tanker marketDry bulk market
CSR
15
33%11%
3%81%12%
0%0%
50%
100%
2010 2011 2012
Tanker Division Bulk Division
16,399
19,725
17,182 16,507 16,298
Highlights
Summary
USDm
Segment -2,000 -1,000 1,000 2,000
Tanker Division -21.9 -10.9 10.9 21.9
Bulk Division -0.9 -0.5 0.5 0.9
Total -22.8 -11.4 11.4 22.8
Change in freight rates (USD/day)
Dry bulk market
16
Focus on environment has never been
bigger and shipping has a key role
• Increasing political focus on environmental
regulation globally and regionally
• TORM as part of the Shipowners
Association is pushing for regulation in the
International Maritime Organisation, which
works to set standards for the sector
• Shipping accounts for 80 - 90% of all
transportation of goods
1. Global shipping accounts for around
3% of global CO2 emissions
• Shipping is the most energy-efficient form
of transportation compared to plane, train
or truck
..therefore TORM has decided on an
ambitious CSR strategy with green focus
• TORM signed the UN Global Compact in
2009 as the first Danish shipowner
• TORM’s climate strategy:
• Reduction of CO2 air emissions
per vessel by 20% in 2020
compared to 2008
• Reduction of CO2 air emissions
at the office locations by 25% per
employee in 2020 compared to
2008
• TORM participates in project Virtual Arrival
(OCIMF and Intertanko)
• TORM will publish its first CSR report in
August 2010
• TORM participates in the Carbon
Disclosure Project (CDP),and was top 20 in
the Nordic Leadership Index
• In 2009, TORM received BP’s Shipping
Award for outstanding environmental
achievement
Corporate Social Responsibility
• TORM regards high environmental
standards as a business opportunity and
an integral part of risk management (e.g.
controlling number of incidents and being
ahead of legislation)
• TORM founding member of the World
Ocean Council, an organisation that
works for sustainable use of the ocean
across sectors
16
Finance
Tanker market
CSR
Highlights
Summary
Dry bulk market
17
17
Key achievements in Q2
• Result in line with expectations
• Q2 spot earnings exceed benchmarks
• Strong organisation in place
• Large fleet of high quality – continuously adjusted when deemed favourable
• Well positioned to exploit improving product tanker market going forward
17
Finance
Tanker market
CSR
Highlights
Summary
Appendix
USD m H1 2010 2009 2008 2007
Revenue 407 862 1.184 774
EBITDA 79 203 572 288
Net income -22 -17 360 792
NIBD 1.691 1.683 1.550 1.548
Equity 1.220 1.247 1.279 1.081
Introduction to TORM
Global footprint based on regional power and presence
Seafarers – app. 2,900:
350 Danish seafarers
100 Croatian/Italian seafarers
1,400 Indian seafarers
1,050 Philippine seafarers
Offices – app. 300:
170 in Copenhagen
20 in Singapore
20 in Manila
80 in Mumbai
10 in USA (Stamford)
19
Strategy and key facts
Company facts
A world leading product tanker company
•Among leading owners in size
•120 years of history
Strategy
•Superior advantage through modern product
tanker fleet, sizeable market share through pool
cooperation, excellent quality delivery model and
global reach
Large and modern fleet ~140 vessels (30/6-2010)
• 68 owned vessels with an avg. age of 6 years
• 66 product tankers
• 2 dry bulkers
• 36 vessels on T/C-in:
• 25 product tankers
• 11 dry bulkers
• 37 product tankers in Pools/com mngt.
•Orderbook of 13 newbuildings (fully financed)
• 9 product tankers (MR tankers)
• 4 bulk carriers (Kamsarmax)
Listings
•NASDAQ OMX Copenhagen
•NASDAQ in New York
Market cap
•Approximately USD 500 -700m
Key financials
Large and modern fleet (as per 30 June 2010)
20
Company facts
No of vessels Avg. age Avg. DWT
Owned
Product tankers
LR2 12.5 5.6 106,372
LR1 7.5 5.3 74,087
MR 35.0 6.2 47,341
SR 11.0 7.0 36,620
Total Product tankers 66.0 6.1 59,773
Bulk 2.0 6.0 75,054
Total Fleet - Owned 68.0 6.1 60,223
TC in
Product tankers
LR2 0.5 12.5 99,997
LR1 15.0 3.6 75,288
MR 10.0 3.9 48,130
SR - - -
Total Product tankers 25.5 3.9 65,081
Bulk 11.0 2.7 77,786
Total Fleet - TC in 36.5 3.5 68,913
Owned and TC in
Product tankers
LR2 13.0 5.6 106,372
LR1 22.5 5.8 75,615
MR 45.0 5.7 47,516
SR 11.0 7.0 36,620
Total Product tankers 91.5 5.5 61,251
Bulk 13.0 3.2 75,899
Total Fleet - Owned and TC in 104.5 5.2 63,383
Commercial management
Product tankers 37
Detailed key figures overview
21
Key figures overview
Finance
USD million H1 2010 2009 2008 2007 2006 2005
P&L
Revenue 407 862 1.184 774 604 586
EBITDA 79 203 572 288 301 351
Net income -22 -17 361 792 235 299
Balance
Total assets 3.210 3.227 3.317 2.959 2.089 1.810
Long term assets 2.958 2.944 2.913 2.703 1.970 1.528
Equity 1.220 1.247 1.279 1.081 1.281 905
NIBD 1.691 1.683 1.550 1.548 663 632
Cash and cash equivalents 121 122 168 105 32 157
Cash flow statement
Operating cash flow 21 116 385 188 232 261
Investment cash flow -27 -199 -262 -357 -118 -473
Financing cash flow 6 37 -59 242 -239 303
Financial related key figures
EBITDA margin 19% 24% 48% 37% 50% 60%
Equity ratio 38% 39% 39% 37% 61% 50%
Return on invested capital (ROIC) -2% 2% 16% 10% 20% 34%
Stock related key figures
Earnings per share (EPS) (0,30) (0,30) 5,21 11,44 3,38 4,29
Cash flow per share, CFPS (USD) 0,30 1,70 5,56 2,71 3,33 3,74
Proposed dividend per share (DKK) - - 4,00 4,50 5,75 11,50
Earning days, TC cost and coverage for 2010
At 30 June 2010, TORM had
covered 33% of the remaining
earning days for 2010 in the
Tanker Division at USD
16,470/day and 81% of the
remaining earning days in the
Bulk Division at USD 19,725/day
Earning days, TC cost and coverage
22
Finance
2010 2011 2012 2010 2011 2012 Owned days
LR2 2.196 4.380 4.392 LR1 1.282 2.555 2.562 MR 6.754 14.758 15.690 SR 1.966 4.015 4.026 Tanker division 12.198 25.708 26.670 Bulk division 366 1.437 1.495
Total 12.564 27.145 28.165
T/C in days T/C in costs (USD/day)LR2 - - - - - - LR1 2.559 5.303 4.334 21.879 22.219 22.485 MR 1.647 3.619 3.108 16.976 17.007 16.399 SR - - - - - - Tanker division 4.206 8.922 7.442 19.959 20.105 19.943 Bulk division 2.003 3.581 4.228 15.793 15.477 15.954
Total 6.209 12.503 11.670 18.615 18.780 18.498
Total physical days Covered daysLR2 2.196 4.380 4.392 610 456 40 LR1 3.841 7.858 6.896 1.109 365 366 MR 8.401 18.377 18.798 2.517 1.775 412 SR 1.966 4.015 4.026 1.228 1.059 40 Tanker division 16.404 34.630 34.112 5.464 3.655 858 Bulk division 2.369 5.018 5.723 1.907 581 -
Total 18.773 39.648 39.835 7.371 4.236 858
Coverage % Coverage rates (USD/day)LR2 28 10 1 24.184 28.648 32.660 LR1 29 5 5 16.145 15.690 15.690 MR 30 10 2 15.768 16.283 15.348 SR 62 26 1 14.055 14.268 15.128 Tanker division 33 11 3 16.399 17.182 16.298 Bulk division 81 12 - 19.725 16.507 -
Total 39 11 2 17.259 17.089 16.298
Fair value of freight rate contracts that are mark-to-market in the income statement (USD m):Contracts not included above -1,2Contracts included above 0,2
Notes
Actual no of days can vary from projected no of days primarily due to vessel sales and delays of vessel deliveries. T/C in
costs do no include potential extra payments from profit split arrangements.
% out of total fixtures ( % out of total previous 4 quarters) with major cargo group
Saudi Arabia, India & UAE
Taiwan, South Korea & Japan
15% (18%)
(Naphtha)
North Africa Italy & France
13% (15%)
(Crude Oil)
Europe USA
10% (12%)
(Unl. Gasoline)Intra-Asia Trading
8% (6%)
(Gasoil & Fueloil)Europe Nigeria & other
4% (5%)
(Unl. Gasoline)
Intra-AG trading
8% (7%)
(Gasoil)
North America Trading
9% (5%)
(Diesel)
USA Brazil & Chile
5% (1%)
(Gasoline and Gasoil)
Source: MSI, Torm data
Major trading routes in Q2 2010Finance
Tanker marketDry bulk market
CSR
Highlights
Summary
70
7580859095
100
% o
f to
tal
cap
aci
ty
av
ail
ab
le
Europe US
Refinery utilisation rates (%)
Refinery dis-location improve long-term prospects
24
World
Closures (1/1-09 - ): 2.5
Additions (2010-2012): 8.0
Total capacity (EoY) 84.6
US:
Closures (1/1-09 - ): 1.2
Additions (2010-2012): 1.4
Total capacity: 21.0
Europe:
Closures (1/1-09 - ): 0.8
Additions (2010-2012): 0.2
Total capacity: 14.2
Middle East:
Closures (1/1-09 - ): -
Additions (2010-2012): 1.0
Total capacity: 7.8
Asia:
Closures (1/1-09 - ): 0.5 (Japan)
Additions (2010-2012): 3.6
Total capacity: 24.6
..led to additions in Asia and the Middle East (all figures in m bpd)
• Positive tonnes-miles, even with flat oil demand development
• Reduced refinery sector profitability in the European and the US refinery sector
• New refineries in the Middle East and India are producing at high utilisation rates driven by their cost advantages
Capacity figures only include refineries with capacity above 0.075 m bpd
8.0009.000
10.00011.00012.00013.00014.00015.000
Mil
l. m
etr
ic t
on
/ d
ay
India
Refinery throughput
Source: Torm research
Source: EcoWin
Increasing output in new locations…Low utilisation rates due to pressure
on refinery margins…
Finance
Tanker marketDry bulk market
CSR
Highlights
Summary
25