TORM (TRMD) Stock

A few months ago, I wrote an article giving positive coverage to TORM PLC, a Danish tanker company. At the time, I rated the stock a strong buy on the basis of the fact that it was trading at low multiples while performing well as a business. Many readers took the article poorly, noting the stock's selloff after the article published.

The global energy sector is evolving, but traditional energy sources remain crucial; TORM plc's tanker fleet is vital for global energy distribution. Despite a 30% decline in TORM's share price due to market volatility, I am bullish on its long-term prospects. TORM's strategic initiatives, like the One TORM platform and fleet renewal, position it well against competitors and ensure operational efficiency.

Considering the weaker seasonality, TORM plc delivered adequate results for 3Q24. YoY revenue grew by 3.9% while net income by 4.8%. TRMD has 59.4% Total Debt to Equity and 40.2% Total Liabilities to Total Assets. For 3Q24, gross interest payments were $18.4 million. In 3Q24, TORM agreed to acquire eight MR tankers built in 2014-2015. The company took delivery of six of the ships.

TORM plc (NASDAQ:TRMD ) Q3 2024 Earnings Conference Call November 7, 2024 9:00 AM ET Company Participants Jacob Meldgaard – Chief Executive Officer Kim Balle – Chief Financial Officer Conference Call Participants Emily Harkins – Jefferies Operator Hello, my name is Audra and I will be your conference operator today. At this time I would like to welcome everyone to the TORM Third Quarter 2024 Results Conference Call.

Value Investor's Edge Live hosted TORM CEO Jacob Meldgaard for an exclusive interview on Sept. 19. TORM plc is one of the largest US-listed product tanker firms with a $3.1B market capitalization. Jacob provides evenhanded industry commentary and is a well-trusted source. We reviewed current market conditions, and ongoing shipping disruptions, and discussed the potential for a strong seasonal rally starting in October.

Last week, TORM plc stock crashed as oil prices collapsed worldwide. As an oil tanker, TORM's business is impacted by the supply and demand for oil. However; it doesn't depend on high oil prices the same way that E&Ps do. The demand for oil and size of the tanker fleet are the more relevant factors here.

TORM plc's share price dropped 15% due to market sell-off and seasonality, but maintains an 18% dividend yield with potential upside in Q4. Global refinery shifts away from Europe to the Middle East and Africa will enhance clean product trade, benefiting TRMD. Increased vessel supply from crude to clean trades has capped rates, but the TMX pipeline and seasonality will reverse this trend, supporting future rates.

TORM plc offers a high 22% dividend yield, but this is likely unsustainable long-term despite current profitability. The company has a growing fleet of 96 vessels, with an average age of 11-12 years, and a strong balance sheet. Geopolitical tensions have boosted product tanker rates, significantly increasing TORM's profits and enabling high dividends.

TORM plc (NASDAQ:TRMD ) Q2 2024 Earnings Conference Call August 15, 2024 9:00 AM ET Company Participants Jacob Meldgaard - Executive Director and Chief Executive Officer Kim Balle - Chief Financial Officer Conference Call Participants Jon Chappell - Evercore Omar Nokta - Jefferies Clement Mullins - Value Investors Edge Peter Hagen - ABG Operator Good day, and thank you for standing by. Welcome to the TORM First Six Months and Second Quarter 2024 Results Call.