HELLERUP, Denmark, August 20 /PRNewswire-FirstCall/ -- "The result for
the first six months of the year is the best in the history of TORM when
excluding the sale of TORM's shareholding in the shipping company Norden. We
have been favoured by high rates in the tanker market, and taking the market
situation and our coverage into consideration, the positive development seems
to continue in the near future," says CEO Klaus Kjaerulff. "The integration
of new employees and vessels from OMI has been smooth, however, we are still
very focused on creating a global organisation that is geared for further
growth."
- The pre-tax profit for the first six months of 2008 was USD 199
million. The result is better than expected and highly satisfactory. The
pre-tax profit for the second quarter of 2008 was USD 146 million.
- At 30 June 2008, equity amounted to USD 1,211 million (DKK 5,726
million), equivalent to USD 17.5 per share (DKK 82.7 per share)
excluding treasury shares.
- The market value of TORM's fleet, including the order book, exceeded
book value by USD 1,723 million at 30 June 2008, equivalent to USD 24.9
per share (DKK 117.7 per share), excluding treasury shares.
- At the end of the second quarter, product tanker rates were
significantly higher than expected. In particular, the global demand for
transport of crude oil, imports of gasoline to the USA and imports of
naphtha to the Far East contributed positively. As a result of the high
fuel prices, TORM has, like other shipping companies, reduced the speed
of its vessels, which is expected to continue into 2009. This has reduced
the supply of available tonnage on the market. As at 31 July 2008, TORM
had hedged 57% of the remaining earning days in the Tanker Division at
USD 23,494 per day.
- Bulk rates were also higher than expected in the second quarter. This
is primarily due to growing Chinese imports of iron ore combined with
growing global demand for coal. As at 31 July 2008, TORM had hedged 83%
of the remaining earning days in the Bulk Division at USD 50,039 per day.
- TORM has sold TORM Gotland in the third quarter, leading to an upgrade
of the full-year profit forecast on 18 July 2008 (announcement no.
15/2008). TORM has also sold the MR vessel TORM Wabash in the third
quarter. The combined profit from these two sales was USD 30.5 million.
- In the third quarter, TORM has ordered two MR vessels, with an option
for an additional two MR vessels, to be delivered in 2011 and 2012
respectively. The total order book incl. options for the two MR vessels
amounts to 23 vessels.
- TORM forecasts a pre-tax profit for 2008 of USD 355 - 370 million as
announced on 11 August 2008 when the full-year forecast was upgraded
(announcement no. 16/2008).
- At 31 July 2008, TORM had hedged a fourth of the total fleets' earning
days for 2009.
Teleconference A teleconference and webcast (http://www.torm.com) will
take place today, 20 August 2008, at 17:00 Copenhagen
time (CET). To participate, please call 10 minutes
before the call on tel.: +45-3271-4607 (from Europe) or
+1-334-323-6201 (from the USA). A replay of the
conference will be available from TORM's website.
Key figures
Million USD Q2 2008 Q2 2007 Q1-Q2 Q1-Q2 2007
2008 2007
Income statement
Net revenue 286.6 179.5 541.6 341.3 773.6
Time charter equivalent
earnings (TCE) 235.9 139.5 436.0 265.0 604.3
Gross profit 146.4 79.8 257.0 148.5 333.9
EBITDA 181.7 70.3 276.2 130.5 294.1
Operating profit 158.0 53.5 220.0 99.1 199.0
Profit before tax 146.4 59.0 198.5 739.2 804.2
Net profit 145.4 66.0 197.6 740.4 791.7
Balance sheet
Total assets 3,211.1 2,904.1 3,211.1 2,904.1 2,958.9
Equity 1,210.6 1,375.4 1,210.6 1,375.4 1,081.2
Total liabilities 2,000.5 1,528.7 2,000.5 1,528.7 1,877.7
Invested capital 2,888.2 2,346.1 2,888.2 2,346.1 2,618.5
Net interest bearing debt 1,689.3 981.4 1,689.3 981.4 1,548.3
Cash flow
From operating activities 89.2 72.6 152.9 119.9 187.9
From investing activities -7.4 -319.8 -228.6 -365.3 -356.6
Thereof investment in
tangible fixed assets -78.2 -115.2 -181.1 -144.0 -252.2
From financing activities -80.3 615.1 49.0 635.4 242.1
Net cash flow 1.5 367.9 -26.7 390.0 73.4
Key financial figures
Margins:
TCE 82.3% 77.7% 80.5% 77.6% 78.1%
Gross profit 51.1% 44.5% 47.5% 43.5% 43.2%
EBITDA 63.4% 39.2% 51.0% 38.2% 38.0%
Operating profit 55.1% 29.8% 40.6% 29.0% 25.7%
Return on Equity (RoE)
(p.a.)*) 36.4% 19.1% 30.0% 63.1% 67.1%
Return on Invested Capital
(RoIC) (p.a.)**) 16.7% 11.6% 14.1% 11.9% 10.2%
Equity ratio 37.7% 47.4% 37.7% 47.4% 36.5%
Exchange rate USD/DKK,
end of period 4.73 5.51 4.73 5.51 5.08
Exchange rate USD/DKK,
average 4.78 5.53 4.87 5.61 5.44
Share related key figures
Earnings per share,
EPS USD 2.1 1.0 2.9 10.7 11.4
Diluted earnings
per share, DEPS USD 2.1 1.0 2.9 10.7 11.4
Cash flow per share,
CFPS USD 1.3 1.0 2.2 1.7 2.7
Share price, end of
period
(per share of DKK 5 each)
DKK 167.1 207.6 167.1 207.6 178.2
Number of shares,
end of period Mill. 72.8 72.8 72.8 72.8 72.8
Number of shares (excl.
treasury shares),
average Mill. 69.2 69.2 69.2 69.2 69.2
*) The gain from the sale of the Norden shares is not annualized when
calculating the Return on Equity for Q1-Q2 2007,and the gain from sale of
vessels not is annualized when calculating the Return on Equity in 2008.
**)The gain from sale of vessels is not annualized when calculating the
Return on Invested Capital in 2008 Profit by division
Million USD Q2 2008
Tanker Bulk Not
Division Division Allocated Total
Revenue 215.0 71.6 0.0 286.6
Port expenses, bunkers and commissions -56.9 -2.5 0.0 -59.4
Freight and bunkers derivatives 8.7 0.0 0.0 8.7
Time charter equivalent earnings 166.8 69.1 0.0 235.9
Charter hire -30.6 -13.7 0.0 -44.3
Operating expenses -41.2 -4.0 0.0 -45.2
Gross Profit 95.0 51.4 0.0 146.4
Profit from sale of vessels 0.0 52.0 0.0 52.0
Administrative expenses -18.1 -1.7 0.0 -19.8
Other operating income 3.1 0.0 0.0 3.1
Depreciation and impairment losses -29.1 -2.0 0.0 -31.1
Share of results of jointly
controlled entities 1.6 0.0 5.8 7.4
Operating profit 52.5 99.7 5.8 158.0
Financial items - - -11.6 -11.6
Profit/(Loss) before tax - - -5.8 146.4
Tax - - -1.0 -1.0
Net profit - - -6.8 145.4
(continued)
Q1-Q2 2008
Million USD
Tanker Bulk Not
Division Division Allocated Total
Revenue 415.8 125.8 0.0 541.6
Port expenses, bunkers and commissions -108.7 -5.2 0.0 -113.9
Freight and bunkers derivatives 8.3 0.0 0.0 8.3
Time charter equivalent earnings 315.4 120.6 0.0 436.0
Charter hire -61.7 -28.6 0.0 -90.3
Operating expenses -80.8 -7.9 0.0 -88.7
Gross Profit 172.9 84.1 0.0 257.0
Profit from sale of vessels 0.0 52.0 0.0 52.0
Administrative expenses -36.2 -3.3 0.0 -39.5
Other operating income 6.7 0.0 0.0 6.7
Depreciation and impairment losses -58.0 -3.8 0.0 -61.8
Share of results of jointly
controlled entities 2.8 0.0 2.8 5.6
Operating profit 88.2 129.0 2.8 220.0
Financial items - - -21.5 -21.5
Profit/(Loss) before tax - - -18.7 198.5
Tax - - -0.9 -0.9
Net profit - - -19.6 197.6
"Not-allocated" includes the activity that TORM owns in a 50/50 joint
venture with Teekay, as well as the activity that relates to TORMs 50% share
in FR8.
Tanker Division
The Tanker Division achieved an operating profit of USD 52.5 million in
the second quarter of 2008 against USD 35.7 million in the first quarter of
2008. The share of results of jointly controlled entities includes FR8 with
USD 8.6 million and OMI with USD -2.9 million.
Following a sluggish first quarter during which much of the winter market
failed to materialise, the demand for tonnage increased substantially in the
second quarter, boosting freight rates more than expected. In particular, the
rates in the LR2 segment were high in the second quarter, but also the rates
in the LR1 and MR segments grew more than expected. The rates in the LR1 and
LR2 segments have continued to rise in the early part of the third quarter,
whereas rates for the smaller MR and SR vessels remain at a high level.
The tanker market was affected by the following substantial factors in
the second quarter of 2008:
Positive impact:
- Strong demand for transport of crude oil increased earnings, especially
for the large LR1 and LR2 product tankers.
- Increased demand for naphtha in the Far East, partly from Europe,
resulted in higher earnings from the LR1 and LR2 product tankers.
- Increased imports of refined oil products to West Africa.
- A more balanced distribution of cargo volumes, primarily of gasoline to
the USA and diesel from the USA to Europe, increased capacity utilisation
on the smaller MR vessels.
- As a result of the high fuel prices, TORM and other shipping companies
have reduced the speed of their vessels, reducing fuel consumption and
also the supply of available tonnage on the market to the benefit of
freight rates.
- Increase in the number of port days in 2008, which has increased by
approximately 3% for TORM's fleet, has been an important factor in the
balance between supply and demand.
Negative impact:
- Declining economic growth, especially in the USA, but also in other
parts of the world.
- Declining growth in the global demand for oil.
- Although the high fuel costs have indirectly had a favourable impact on
the market, as mentioned above, fuel costs in general were higher in the
second quarter.
TORM's Tanker Division achieved freight rates in the second quarter of
2008 which were 7% lower than in the second quarter of 2007 for the LR1
segment and 18% lower for the MR segment, whereas the rates obtained for the
LR2 segment were 10% higher. As a result of the acquisition of OMI and the
extensive newbuilding programme, capacity and thus the number of earning days
for TORM's aggregate product tanker fleet increased by 70% in the second
quarter of 2008 compared with the same period of 2007.
Tanker Division Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Change 12
month
Q1 07 avg.
- Q1 08
LR2 (Aframax,
90-110,000 DWT)
Available earning days 767 906 903 908 926 21%
TCE per earning day(1) 29,073 21,841 23,316 28,538 32,084 10% 26,479
Operating days 713 818 864 865 896 26%
Operating expenses per
operating day(2) 8,144 6,471 6,466 8,270 7,906 -3% 7,295
LR1 (Panamax
75-85,000 DWT)
Available earning days 1.319 1.577 1.702 1.822 1.764 34%
TCE per earning day(1) 29,059 27,448 26,548 23,533 27,036 -7% 26,080
Operating days 633 685 695 682 687 9%
Operating expenses per
operating day(2) 6,188 4,955 5,336 6,538 7,028 14% 5,962
MR (45,000 DWT)
Available earning days 1,652 2,223 2,497 2,490 2,576 56%
TCE per earning day(1) 28,143 22,978 21,715 22,716 23,158 -18% 22,636
Operating days 1,456 2,089 2,393 2,368 2,533 74%
Operating expenses per
operating day(2) 7,480 6,147 8,224 8,260 7,885 5% 7,679
SR (35,000 DWT)
Available earning days n.a. 732 1,104 1,088 1,092 n.a.
TCE per earning day(1) n.a. 16,129 17,121 21,034 21,036 n.a. 19,065
Operating days n.a. 732 1,104 910 911 n.a.
Operating expenses per
operating day(2) n.a. 5,460 7,255 8,182 7,898 n.a. 7,287
(1) Time Charter Equivalent (TCE) = Gross freight income less bunker,
commissions and port expenses. In the second quarter un-allocated earnings
amounts to USD 7.3 million and comprise of fair value adjustment of freight
and bunkers derivatives, which are not designated as hedges, and gains and
losses on freight and bunkers derivatives, which are not entered for hedge
purposes.
(2) Operating expenses is related owned vessels. In the second quarter
un-allocated expenses amounted to USD 2.2 million and comprised expenses not
relating to the daily operation of our vessels.
Bulk Division The Bulk Division achieved an operating profit of USD
99.7 million in the second quarter of 2008, of which
USD 52 million related to the sale of TORM Marlene.
The bulk rates continue to be dependent on developments
mainly in the Chinese markets, but also in India, Japan
and South America. The rates were better than expected
in the second quarter, primarily as a result of growing
Chinese steel production and imports of iron ore
combined with increasing global demand for coal.
The number of available earning days in TORM's Panamax
segment was 12% higher in the second quarter of 2008
than in the second quarter of 2007. Earnings per day
have almost doubled since the second quarter of 2007
as a result of higher freight rates.
Bulk Division Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Change 12
month
Q1 07 avg.
- Q1 08
Panamax (60-80,000 DWT)
Available earning days 1,222 1,258 1,287 1,394 1,367 12%
TCE per earning day(1) 25,467 27,019 27,443 36,909 50,568 99% 35,787
Operating days 493 546 559 565 585 19%
Operating expenses per
operating day(2) 5,562 4,580 5,392 6,940 6,647 20% 5,909
(1) TCE = Gross freight income less bunker, commissions and port expenses.
(2) Operating expenses is related owned vessels. In the second quarter
un-allocated expenses amounted to USD 0.1 million and comprised expenses not
relating to the daily operation of our vessels.
Other activities Other (non-allocated) activities for the first six
months of 2008 consist of share of result in jointly
controlled entities of USD 2.8 million, financial
items of USD -21.5 million and tax of USD -0.9
million.
Fleet development At the end of the second quarter of 2008, TORM's owned
fleet totalled 64 vessels, 58 of which were product
tankers and six bulk carriers. For the remainder of
2008, TORM has chartered in approximately 15 product
tankers and approximately 9 bulk carriers leading to a
total fleet of 88 vessels.
Own vessels T/C Total
vessels
31 March Additions Disposals 30 June 2008 30 June
2008 2008
LR2 / 1.4 11.9
Aframax 9.5 1.0 - 10.5
LR1 / 10.9 18.4
Panamax 7.5 - - 7.5
MR 29.0 1.0 - 30.0 0.8 30.8
SR 10.0 - - 10.0 2.0 12.0
Tanker 56.0 2.0 0.0 58.0 15.1 73.1
Panamax 7.0 - 1.0 6.0 9.1 15.1
Bulk 7.0 0.0 1.0 6.0 9.1 15.1
Total 63.0 2.0 1.0 64.0 24.2 88.2
Planned TORM has ordered two MR vessels in the third quarter, with
fleet an option for an additional two fleet changes MR vessels,
changes for delivery in 2011 and 2012 respectively.
Pools At 30 June 2008, the three product tanker pools TORM
participates in comprised 81 vessels. To this should be
added 23 vessels which TORM operates outside pools. At the
end of 2008, the three pools are expected to comprise a
total of 94 vessels.
Results
Second quarter 2008
The second quarter of 2008 showed a gross profit of USD 146 million,
against USD 80 million for the corresponding quarter of 2007. Profit before
depreciation (EBITDA) for the period was USD 182 million, against USD 70
million for the second quarter of 2007. The increase in both gross profit and
EBITDA is primarily due to a larger number of earning days in the Tanker
Division and higher earnings in the Bulk Division.
In the second quarter of 2008, depreciation amounted to USD 31 million.
The operating profit for the second quarter of 2008 was USD 158 million,
against USD 53 million in the same quarter of 2007. The Tanker and Bulk
Divisions contributed USD 53 million and USD 100 million respectively,
whereas USD 6 million is unallocated.
In the second quarter of 2008, financial items amounted to USD -12
million, against USD 6 million in the same quarter of 2007. The difference is
explained by interest income in the second quarter of 2007 following TORM's
sale of its stake in Norden.
Profit after tax in the second quarter was USD 145 million, including a
gain of USD 52 million from the sale of vessels, against USD 66 million in
the second quarter of 2007.
Assets
Total assets rose in the second quarter of 2008 from USD 3,153 million to
USD 3,211 million.
Liabilities
In the second quarter of 2008, the Company's net interest bearing debt
decreased from USD 1,706 million to USD 1,689 million. The item primarily
includes higher net debt in connection with the delivery of vessels, the
effect on liquidity from the distribution of dividend and the positive cash
flow from operations during the period.
The Company has considerable undrawn loan facilities at its disposal.
Equity
In the second quarter of 2008, equity rose from USD 1,130 million to USD
1,211 million, which was the result of earnings during the period less
dividends paid. Equity as a percentage of total assets increased from 35.8%
at 31 March 2008 to 37.7% at 30 June 2008.
At 30 June 2008, TORM held 3,556,364 treasury shares, corresponding to
4.9% of the Company's share capital, which was unchanged from 31 March 2008.
Subsequent In the third quarter of 2008, TORM has sold TORM Gotland for
events USD 36.1 million and TORM Wabash for USD 63.4 million. The
combined profit was USD 30.5 million.
Expectations TORM forecasts a pre-tax profit for 2008 of USD 355 - 370
million as announced on 11 August 2008 (announcement no.
16/2008).
Sensitivity At 31 July 2008, approximately 83% of the earning days of
the Company's Panamax bulk carriers were covered for the
remainder of the year. For the Tanker Division,
approximately 57% of the remaining earning days were
covered for the rest of the year.
At 31 July, TORM had hedged the price of 28% of the remaining bunker
requirement for the remainder of 2008 and the market value of the contracts
was USD 0.9 million.
Safe Harbor Matters discussed in this release may constitute
Forward-looking forward-looking statements. Forward-looking statements
statements reflect our current views with respect to future events
and financial performance and may include statements
concerning 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 release are based upon various assumptions, many
of which are based, in turn, upon further assumptions,
including without limitation, Management's examination
of historical operating trends, data contained in our
records and other data available from third parties.
Although TORM believes that these assumptions were
reasonable when made, because these assumptions are
inherently subject to significant uncertainties and
contingencies which are difficult or impossible to
predict and are beyond our control, TORM cannot assure
you that it will achieve or accomplish these
expectations, beliefs or projections.
Important factors that, in our view, could cause actual
results to differ materially from those discussed in
the forward looking statements include the strength of
world economies and currencies, changes in charter hire
rates and vessel values, changes in demand for "tonne
miles" of oil carried by oil tankers, the effect of
changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in
demand that may affect attitudes of time charterers to
scheduled and unscheduled dry-docking, changes in
TORM's operating expenses, including bunker prices,
dry-docking and insurance costs, changes in
governmental rules and regulations including
requirements for double hull tankers or actions taken
by regulatory authorities, potential liability from
pending or future litigation, domestic and
international political conditions, potential
disruption of shipping routes due to accidents and
political events or acts by terrorists. Risks and
uncertainties are further described in reports filed by
TORM with the US Securities and Exchange Commission,
including the TORM Annual Report on Form 20-F and its
reports on Form 6-K.
Forward looking statements are based on management's
current evaluation, and TORM is only under obligation
to update and change the listed expectations to the
extent required by law.
The TORM share
The price of a TORM share was DKK 167.1 as of 30 June 2008, against DKK
140.5 at the beginning of the second quarter - equivalent to an increase of
DKK 26.6 (19%).
In the second quarter, the Company distributed a dividend of DKK 4.5 per
share. The total return to shareholders for the second quarter of 2008 was
DKK 31.1 per share (calculated excluding reinvestment), corresponding to a
total return of 22%.
Accounting policies
The interim report for the first half of 2008 has been prepared using the
same accounting policies as for the Annual Report 2007, except that the
Company has changed its accounting policy for the recognition of investments
in joint ventures so that these are recognised according to the equity
method. Previously, joint ventures were recognised on a pro rata basis. The
change in accounting policy is due to the fact that the Company finds it
inappropriate to aggregate the items of joint ventures with items of entities
that form an integral part of the Company's activities. The change in
accounting policies has no effect on the income statement or on equity, but
the profit for the year of joint ventures and the investment in these are
presented in a single line item in the income statement and the balance
sheet, respectively. In addition, the pre-acquisition balance sheet
associated with the acquisition of 50% of OMI in June 2007 has now been
finalized. As a result of the change in accounting policies and the
finalization of the OMI pre-acquisition balance sheet, the operating profit
and net cash flows for 2007 were reduced by USD 5.9 million and USD 11.6
million, respectively, and invested capital at 31 December 2007 was increased
by USD 12.5 million.
TORM has also implemented IAS 34, "Interim Financial Reporting". The
implementation has not led to any changes in the income statement or equity,
but has caused minor changes to the presentation and a few additions to the
disclosures.
The accounting policies are described in more detail in the Annual Report
2007.
The financial report for the first half of 2008 is unaudited, in line
with the normal practice.
Information
Teleconference
TORM will host a teleconference for financial analysts and investors on
20 August 2008 at 17:00 Copenhagen time (CET), reviewing the interim report
for the second quarter of 2008. The conference call will be hosted by Klaus
Kjaerulff, CEO, Mikael Skov, COO and Roland M. Andersen, CFO and will be
conducted in English.
To participate, please call 10 minutes before the conference on tel.:
+45-3271-4607 (from Europe) or +1 334 323 6201 (from the USA). The
teleconference will also be webcast via TORM's website http://www.torm.com.
The presentation material can be downloaded from the website.
Next reporting
TORM's financial report for the third quarter of 2008 will be released on
21 November 2008.
Statement by the Board of Directors and Management on the Interim Report
The Board of Directors and Management have considered and approved the
interim report for the period 1 January - 30 June 2008.
The interim report, which is unaudited, has been prepared in accordance
with the general Danish financial reporting requirements governing listed
companies, including the measurement and recognition provisions in IFRS which
are expected to be applicable for the Annual Report 2008.
We consider the accounting policies applied to be appropriate, and in our
opinion the interim report gives a true and fair view of the Group's assets,
liabilities, financial position and of the results of operations and
consolidated cash flows.
Copenhagen, 20 August 2008
Management Board of Directors
Klaus Kjaerulff, CEO Niels Erik Nielsen, Chairman
Mikael Skov, COO Christian Frigast, Deputy Chairman
Roland M. Andersen, CFO Peter Abildgaard
Lennart Arrias
Margrethe Bligaard
Bo Jagd
Gabriel Panayotides
Michael Steimler
Nicos Zouvelos
About TORM
TORM is one of the world's leading carriers of refined oil products as
well as a significant participant in the dry bulk market. The Company
operates a combined fleet of more than 125 modern vessels, principally
through a pooling cooperation with other respected shipping companies who
share TORM's commitment to safety, environmental responsibility and customer
service.
TORM was founded in 1889. The Company conducts business worldwide and is
headquartered in Copenhagen. TORM's shares are listed on the OMX Nordic
Exchange Copenhagen (symbol: TORM) and on NASDAQ (symbol: TRMD). For further
information, please visit http://www.torm.com.
Income Statement
Million USD Q1-Q2 Q1-Q2
Q2 2008 Q2 2007 2008 2007 2007
Revenue 286.6 179.5 541.6 341.3 773.6
Port expenses, bunkers
and commissions -59.4 -39.2 -113.9 -76.5 -172.2
Freight and bunkers derivatives 8.7 -0.8 8.3 0.2 2.9
Time charter equivalent earnings 235.9 139.5 436.0 265.0 604.3
Charter hire -44.3 -36.1 -90.3 -70.5 -154.9
Operating expenses -45.2 -23.6 -88.7 -46.0 -115.5
Gross profit (Net earnings
from shipping activities) 146.4 79.8 257.0 148.5 333.9
Profit from sale of vessels 52.0 0.0 52.0 0.0 0.0
Administrative expenses -19.8 -12.8 -39.5 -24.0 -55.0
Other operating income 3.1 3.3 6.7 6.0 15.2
Depreciation and impairment
losses -31.1 -15.1 -61.8 -29.9 -89.1
Share of results of jointly
controlled entities 7.4 -1.7 5.6 -1.5 -6.0
Operating profit 158.0 53.5 220.0 99.1 199.0
Financial items -11.6 5.5 -21.5 640.1 605.2
Profit before tax 146.4 59.0 198.5 739.2 804.2
Tax -1.0 7.0 -0.9 1.2 -12.5
Net profit 145.4 66.0 197.6 740.4 791.7
Earnings per share, EPS
Earnings per share, EPS (USD) 2.1 1.0 2.9 10.7 11.4
Earnings per share, EPS (DKK) (*) 9.9 5.3 13.9 59.9 62.3
(*) The key figures have been translated from USD to DKK using the
average USD/DKK exchange change rate for the period in question.
Income statement by quarter
Million USD Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
Revenue 179.5 208.1 224.2 255.0 286.6
Port expenses, bunkers and commissions -39.2 -46.0 -49.7 -54.5 -59.4
Freight and bunkers derivatives -0.8 0.3 2.4 -0.4 8.7
Time charter equivalent earnings 139.5 162.4 176.9 200.1 235.9
Charter hire -36.1 -42.4 -42.0 -46.0 -44.3
Operating expenses -23.6 -29.9 -39.6 -43.5 -45.2
Gross profit (Net earnings from
shipping activities) 79.8 90.1 95.3 110.6 146.4
Profit from sale of vessels 0.0 0.0 0.0 0.0 52.0
Administrative expenses -12.8 -14.3 -16.7 -19.7 -19.8
Other operating income 3.3 3.0 6.2 3.6 3.1
Depreciation and impairment losses -15.1 -26.6 -32.6 -30.7 -31.1
Share of results of jointly
controlled entities -1.7 -4.1 -0.4 -1.8 7.4
Operating profit 53.5 48.1 51.8 62.0 158.0
Financial items 5.5 -10.4 -24.5 -9.9 -11.6
Profit before tax 59.0 37.7 27.3 52.1 146.4
Tax 7.0 -2.9 -10.8 0.1 -1.0
Net profit 66.0 34.8 16.5 52.2 145.4
Assets
Million USD 30 June 30 June
2008 2007 31 December 2007
NON-CURRENT ASSETS
Intangible assets
Goodwill 89.2 0.0 89.2
Other intangible assets 3.9 1.7 7.5
Total intangible assets 93.1 1.7 96.7
Tangible fixed assets
Land and buildings 3.9 0.4 4.2
Vessels and capitalized dry-docking 2,168.7 1,251.6 2,169.8
Prepayments on vessels 313.6 164.2 259.4
Other plant and operating equipment 6.5 3.7 5.9
Total tangible fixed assets 2,492.7 1,419.9 2,439.3
Financial fixed assets
Investment in jointly controlled entities 109.0 1.3 0.0
Loans to jointly controlled entities 111.8 940.1 110.0
Other investments 11.7 10.7 11.0
Other financial assets 46.0 0.0 46.0
Total financial assets 278.5 952.1 167.0
TOTAL NON-CURRENT ASSETS 2,864.3 2,373.7 2,703.0
CURRENT ASSETS
Bunkers 26.1 16.3 19.7
Freight receivables, etc. 101.9 63.3 90.0
Other receivables 79.9 24.2 37.0
Prepayments 7.9 5.0 4.2
Cash and cash equivalents 78.3 421.6 105.0
294.1 530.4 255.9
Non-current assets held for sale 52.7 0.0 0.0
TOTAL CURRENT ASSETS 346.8 530.4 255.9
TOTAL ASSETS 3,211.1 2,904.1 2,958.9
Equity and Liabilities
Million USD 30 June 30 June
2008 2007 31 December 2007
EQUITY
Common shares 61.1 61.1 61.1
Treasury shares -18.1 -18.1 -18.1
Revaluation reserves 5.2 7.2 7.3
Retained profit 1,154.1 1,316.1 953.6
Proposed dividends 0.0 0.0 64.5
Hedging reserves 4.1 4.9 8.7
Translation reserves 4.2 4.2 4.1
TOTAL EQUITY 1,210.6 1,375.4 1,081.2
LIABILITIES
Non-current liabilities
Deferred tax liability 55.4 56.0 55.6
Mortgage debt and bank loans 1,572.4 770.6 884.6
Acquired liabilities related to
options on vessels 31.6 0.0 31.6
Acquired time charter contracts 8.8 0.0 16.0
TOTAL NON-CURRENT LIABILITIES 1,668.2 826.6 987.8
Current liabilities
Mortgage debt and bank loans 195.2 632.4 768.7
Trade payables 48.6 21.5 42.6
Current tax liabilities 14.1 11.3 14.5
Other liabilities 59.4 35.5 44.2
Acquired time charter contracts 12.7 0.0 16.0
Deferred income 2.3 1.4 3.9
TOTAL CURRENT LIABILITIES 332.3 702.1 889.9
TOTAL LIABILITIES 2,000.5 1,528.7 1,877.7
TOTAL EQUITY AND LIABILITIES 3,211.1 2,904.1 2,958.9
Equity 1 January - 30 June 2008
Million USD Common Treasury Retained Proposed
shares shares profit dividends
Equity at 1 January 2008 61.1 -18.1 953.6 64.5
Changes in equity Q1-Q2 2008:
Exchange rate adjustment
arising on translation
of entities using a measurement
currency different from USD - - - -
Reversal of deferred gain/loss
on hedge instruments
at the beginning of year - - - -
Deferred gain/loss on hedge
instruments at the end
of the period - - - -
Fair value adjustment on
available for sale investments - - - -
Transfer to profit or loss on
sale of available for sale
Investments - - - -
Net gains/losses recognised
directly in equity 0.0 0.0 0.0 0.0
Net profit for the period 197.6
Total recognized income/
expenses for the period 0.0 0.0 197.6 0.0
Purchase treasury shares, cost - - - -
Disposal treasury shares, cost - - - -
Dividends paid - - - -68.6
Dividends paid on treasury shares - - 3.3 -
Exchange rate adjustment on
dividends paid - - -4.1 4.1
Share-based compensation - - 3.7 -
Total changes in equity Q1-Q2 2008: 0.0 0.0 200.5 -64.5
Equity at 30 June 2008 61.1 -18.1 1,154.1 0.0
(continued)
Million USD Revaluation Hedging Translation Total
reserves reserves reserves
Equity at 1 January 2008 7.3 8.7 4.1 1,081.2
Changes in equity Q1-Q2 2008:
Exchange rate adjustment
arising on translation
of entities using a
measurement currency different
from USD - - 0.1 0.1
Reversal of deferred gain/
loss on hedge instruments
at the beginning of year - -8.7 - -8.7
Deferred gain/loss on hedge
instruments at the end
of the period - 4.1 - 4.1
Fair value adjustment on
available for sale investments -2.1 - - -2.1
Transfer to profit or loss on
sale of available for sale
Investments - - - 0.0
Net gains/losses recognised
directly in equity -2.1 -4.6 0.1 -6.6
Net profit for the period 197.6
Total recognized income/
expenses for the period -2.1 -4.6 0.1 191.0
Purchase treasury shares, cost - - - 0.0
Disposal treasury shares, cost - - - 0.0
Dividends paid - - - -68.6
Dividends paid on treasury shares - - - 3.3
Exchange rate adjustment on
dividends paid - - - 0.0
Share-based compensation - - - 3.7
Total changes in equity
Q1-Q2 2008: -2.1 -4.6 0.1 129.4
Equity at 30 June 2008 5.2 4.1 4.2 1,210.6
Equity 1 January - 30 Juni 2007
Million USD Common Treasury Retained Proposed
shares shares profit dividends
Equity at 1 January 2007 61.1 -18.1 574.5 73.9
Changes in equity Q1-Q2 2007:
Exchange rate adjustment arising
on translation
of entities using a measurement
currency different
from USD - - - -
Reversal of deferred gain/loss
on hedge instruments
at the beginning of year - - - -
Deferred gain/loss on hedge
instruments at the end
of the period - - - -
Fair value adjustment on available
for sale investments - - - -
Transfer to profit or loss on sale
of available for sale
Investments - - - -
Net gains/losses recognised
directly in equity 0.0 0.0 0.0 0.0
Net profit for the period 740.4
Total recognized income/expenses
for the period 0.0 0.0 740.4 0.0
Purchase treasury shares, cost - - - -
Disposal treasury shares, cost - - - -
Dividends paid - - - -76.4
Dividends paid on treasury shares - - 3.7 -
Exchange rate adjustment on dividends
paid - - -2.5 2.5
Total changes in equity Q1-Q2 2007: 0.0 0.0 741.6 -73.9
Equity at 30 June 2007 61.1 -18.1 1,316.1 0.0
(continued)
Million USD Revaluation Hedging Translation Total
reserves reserves reserves
Equity at 1 January 2007 579.8 5.6 4.0 1,280.8
Changes in equity Q1-Q2 2007:
Exchange rate adjustment arising
on translation
of entities using a measurement
currency different
from USD - - 0.2 0.2
Reversal of deferred gain/loss
on hedge instruments
at the beginning of year - -5.6 - -5.6
Deferred gain/loss on hedge
instruments at the end
of the period - 4.9 - 4.9
Fair value adjustment on
available for sale investments 70.7 - - 70.7
Transfer to profit or loss on
sale of available for sale
Investments -643.3 - - -643.3
Net gains/losses recognised
directly in equity -572.6 -0.7 0.2 -573.1
Net profit for the period 740.4
Total recognized income/
expenses for the period -572.6 -0.7 0.2 167.3
Purchase treasury shares, cost - - - 0.0
Disposal treasury shares, cost - - - 0.0
Dividends paid - - - -76.4
Dividends paid on treasury shares - - - 3.7
Exchange rate adjustment on
dividends paid - - - 0.0
Total changes in equity
Q1-Q2 2007: -572.6 -0.7 0.2 94.6
Equity at 30 June 2007 7.2 4.9 4.2 1,375.4
Cash flow statement
Million USD Q2 Q2 Q1-Q2 Q1-Q2
2008 2007 2008 2007 2007
Cash flow from operating activities
Operating profit 158.0 53.5 220.0 99.1 199.0
Adjustments:
Reversal of profit from sale
of vessels -52.0 0.0 -52.0 0.0 0.0
Reversal of depreciation and
impairment losses 31.1 15.1 61.8 29.9 89.1
Reversal of share of results of
jointly controlled entities -7.4 1.7 -5.6 1.5 6.0
Reversal of other non-cash
movements -2.4 -3.5 -7.0 2.8 2.7
Dividends received 1.2 1.1 1.4 1.3 1.3
Dividends received from joint
controlled entities 0.2 2.0 1.5 2.0 2.6
Interest received and exchange
rate gains 2.8 13.8 12.5 14.3 19.9
Interest paid -18.4 -14.1 -42.3 -23.5 -70.8
Income taxes paid -0.3 0.1 -1.6 0.8 -9.5
Change in inventories, accounts
receivables and payables -23.6 2.9 -35.8 -8.3 -52.4
Net cash inflow/(outflow) from
operating activities 89.2 72.6 152.9 119.9 187.9
Cash flow from investing activities
Investment in tangible fixed assets -78.2 -115.2 -181.1 -144.0 -252.2
Investment in equity interests and
securities -15.1 0.3 -133.5 -0.2 0.0
Loans to jointly controlled
entities 0.0 -909.1 0.0 -925.4 -31.3
Acquisition of enterprises and
activities 0.0 0.0 0.0 0.0 -810.2
Sale of equity interests and
securities 17.4 704.2 17.4 704.2 736.9
Sale of non-current assets 68.5 0.0 68.6 0.1 0.2
Net cash inflow/(outflow) from
investing activities -7.4 -319.8 -228.6 -365.3 -356.6
Cash flow from financing activities
Borrowing, mortgage debt and other
financial liabilities 869.8 795.4 1,007.4 820.9 1,807.9
Repayment/redemption, mortgage debt -884.8 -107.6 -893.1 -112.8 -1,141.8
Dividends paid -65.3 -72.7 -65.3 -72.7 -424.0
Purchase/disposals of treasury
shares 0.0 0.0 0.0 0.0 0.0
Cash inflow/(outflow) from financing
activities -80.3 615.1 49.0 635.4 242.1
Increase/(decrease) in cash and
cash equivalents 1.5 367.9 -26.7 390.0 73.4
Cash and cash equivalents,
beginning balance 76.8 53.7 105.0 31.6 31.6
Cash and cash equivalents,
ending balance 78.3 421.6 78.3 421.6 105.0
Cash flow statement per quarter
Million USD Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
Cash flow from operating activities
Operating profit 53.5 48.1 51.8 62.0 158.0
Adjustments:
Reversal of profit from sale
of vessels 0.0 0.0 0.0 0.0 -52.0
Reversal of depreciation and
impairment losses 15.1 26.6 32.6 30.7 31.1
Reversal of share of results of
jointly controlled entities 1.7 4.1 0.4 1.8 -7.4
Reversal of other non-cash
movements -3.5 0.5 -0.6 -4.6 -2.4
Dividends received 1.1 0.0 0.0 0.2 1.2
Dividends received from joint
controlled entities 2.0 0.1 0.5 1.3 0.2
Interest received and exchange rate
gains 13.8 9.1 -3.5 9.7 2.8
Interest paid -14.1 -27.4 -19.9 -23.9 -18.4
Income taxes paid 0.1 -0.2 -10.1 -1.3 -0.3
Change in inventories, accounts
receivables and payables 2.9 -54.6 10.5 -12.2 -23.6
Net cash inflow/(outflow) from
operating activities 72.6 6.3 61.7 63.7 89.2
Cash flow from investing activities
Investment in tangible fixed assets -115.2 -16.5 -91.7 -102.9 -78.2
Investment in equity interests and
securities 0.3 0.2 0.0 -118.4 -15.1
Loans to jointly controlled
entities -909.1 906.0 -11.9 0.0 0.0
Acquisition of enterprises and
activities 0.0 -808.6 -1.6 0.0 0.0
Sale of equity interests and
securities 704.2 32.7 0.0 0.0 17.4
Sale of non-current assets 0.0 0.0 0.1 0.1 68.5
Net cash inflow/(outflow) from
investing activities -319.8 113.8 -105.1 -221.2 -7.4
Cash flow from financing activities
Borrowing, mortgage debt and other
financial liabilities 795.4 873.8 113.2 137.6 869.8
Repayment/redemption, mortgage
debt -107.6 -977.7 -51.3 -8.3 -884.8
Dividends paid -72.7 -351.3 0.0 0.0 -65.3
Purchase/disposals of treasury shares 0.0 0.0 0.0 0.0 0.0
Cash inflow/(outflow) from financing
activities 615.1 -455.2 61.9 129.3 -80.3
Increase/(decrease) in cash and
cash equivalents 367.9 -335.1 18.5 -28.2 1.5
Cash and cash equivalents,
beginning balance 53.7 421.6 86.5 105.0 76.8
Cash and cash equivalents,
ending balance 421.6 86.5 105.0 76.8 78.3
Final OMI opening balance
USD million Fair value
Intangible assets 13.4
Tangible fixed assets 963.8
Other financial assets 46.2
Freight receivables, etc. 30.0
Other receivables 3.0
Prepayments 9.7
Cash and cash equivalents 41.9
Mortgage debt and bank loans -276.1
Acquired liabilities related to options on vessels -31.6
Other financial liabilities -2.1
Trade payables -13.2
Acquired timecharter contracts -42.3
Other liabilities -45.3
Deferred income -4.5
Net assets acquired 692.9
Goodwill 89.2
Cash consideration paid 782.1
The pre-acquisition balance sheet as per August 1, 2007 of the
OMI Corporation acquisition is now final. Changes from 31
December 2007 relate to the valuation of certain derivative
financial instruments and have resulted in a net increase in
goodwill of USD 1.5 million.
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