Torm's second-quarter report reveals it has completed a six-vessel sale and leaseback deal with counterparties in China and Japan.
Meanwhile, the MR tanker owner has had a profitable second quarter, despite adverse conditions in the product tanker market.
An unnamed "Chinese counterpart" has acquired the four 2011-built MR tankers that Torm bought in June and will lease them back to the Danish company, according to Torm's second-quarter report.
Torm said the deal, which includes a purchase obligation in 2025, will generate proceeds of $66m. The four MRs are expected to be delivered this month.
Separately, the 49,800-dwt MR tankers Torm Torino and Torm Titan (both built 2016) have been sold to two separate Japanese counterparts, which were not named.
The deal is expected to generate total proceeds of $52m, of which $18m will be used to repay existing debt on the vessels, Torm said.
The deal includes a purchase obligation in 2024 for Torm Torino and in 2026 for Torm Titan.
Getting results
Torm posted $5.2m in net profit for the second quarter, a drastic improvement compared to a year ago, when it suffered a $8.9m net loss.
The net result was aided by better time charter equivalent (TCE) rates during the second quarter, compared to a year earlier.
Its fleet achieved an average TCE rate of $15,405 per day in the quarter, up 19% compared to the same period in 2018.
"Our profit before tax of $28.7m in the first half of 2019 represented the strongest half-year result in three years," Torm's executive director, Jacob Meldgaard, said in the firm's second-quarter report.
"We are pleased to be able to generate a profit also in the second quarter of year that has been negatively impacted by an unusually high and prolonged refinery maintenance period."
Product tanker rates hit a three-year high during the first quarter, before softening as refineries underwent maintenance in spring.
"The volume of global refinery capacity that was offline was 23% higher than during the same period last year," Torm said in its report.
Meldgaard is looking forward to 2020, which he said will have a positive effect on the market.
“We believe the IMO 2020 regulation will drive increased demand for product tankers and that TORM is well positioned to take advantage of these new market dynamics," he said in the firm's report.
Fleet developments
Torm took delivery of three MR newbuildings since the end of March.
It also sold the MR vessel Torm Gunhild (built in 1999) for $6m, of which $4m was used to repay debt on the vessel.
Torm confirmed that it has sold two other tankers — the 47,000-dwt Torm San Jacinto (built in 2002) and the 36,900-dwt handy vessel Torm Saone (built in 2004) — for a total consideration of $16m.
Some $9m of the sales price till be used to repay the vessels' debt, Torm said.
