Product tanker owner Torm has announced record profits for 2022, but is already forecasting an improvement this year.
“2022 was a year for Torm where we captured the full value of a strong market,” said chief executive Jacob Meldgaard.
“The changing market dynamics have lifted rates to new highs.”
Ebitda for 2022 was $743m, the Danish company’s best ever, and up from $137m the year before.
Net profit hit $562.6m, turning around a loss of $42.1m in 2021, while revenue jumped to $1.44bn from $619.5m.
For the fourth quarter, net earnings were $222m, Torm said, without giving a comparative figure.
The owner is paying out $212m of this as a dividend, which Meldgaard called “a high payout ratio to our shareholders”.
Following the invasion of Ukraine, Torm decided not to sail to Russian ports or take on new business from Russian customers.
But it has capitalised on longer tonne-miles as trades were transformed by sanctions and bans.
Rates on the rise
Across last year, the fleet of 88 ships produced average time charter equivalent earnings of $34,154 per day, up from $13,703 in 2021.
LR2s came in at $39,612 per day from $15,422 previously, and the LR1 vessels managed $36,879 per day, up from $14,365.
The MR tankers averaged $32,795 per day, more than doubling from $13,395 last year.
Handysizes rose to $12,995 per day from $9,709, but Torm has now exited this sector by selling two ships built in 2005 and 2009.
At the end of 2022, 4% of total earning days in 2023 had been covered at an average rate of $59,918 per day.
This has risen to 31%, but at a lower level of $42,759 per day, as of 12 March.
First-quarter coverage is 89% at $43,002 per day.
LR2s have 90% of days fixed for the first three months at $65,950, with LR1s at $44,135 for 86% of days and MRs on $37,730 for 89%.
Volatile times ahead
“We have very low visibility on TCE rates that are not yet fixed with our customers,” Torm said.
The company warned there could be big variations in a volatile market, but it is forecasting TCE earnings of between $1.025bn and $1.375bn for this year, against $981.5m in 2022.
Ebitda is expected to be in the range of $750m to $1.1bn.
Torm’s fleet was valued at $2.65bn at the end of the year, but it has since agreed to buy seven LR1s for $233m and three MRs for $97m.