keerthiprasad Posted May 12, 2020 Share Posted May 12, 2020 Starting a new thread, since the previous one was light and the company has gone through restructuring since then. TORM is a clean tanker company that trades in the US and Denmark. It is lightly followed and 65% owned by Oaktree Capital. Relatively modern fleet, mostly MR's. Q4 2019 the company booked at an average of 18,111 / day. In early March, the coverage for Q1 2020 was 87% at day 23,818/day. Company previously stated that for every +$5000 in average 2020 bookings, an additional 126M in cash flow would be generated. Clean tanker spot rates have since gone up considerably (spot LR2 rates have been above 100k/day, MR rates above 30k/day). Q1 will be very good and Q2 will be amazing. Keep in mind that bookings completed now while likely be spilling over into Q3. A couple other pros: trades at ~ 60% of NAV. Small dividend. Completed buybacks earlier this year. Cons: lightly followed tanker valuations are volatile and don't always make sense. Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 14, 2020 Author Share Posted May 14, 2020 Q1 earnings today... https://investors.torm.com/static-files/e0aa2d88-b236-48c5-a6b9-d564b3057085 Q1 earnings: 56.8M (EPS = 0.76) Q2 covereage 69% @ 29188 USD. Expect ~30M increased cashflow for Q2 compared to Q1. NAV - 1.041B (bk value/ share = 14.2 USD) No major debt due until 2026 share price - 7.6 Mkt cap - 560M Indicated on the call that return of cash to shareholders will be considered in August, as scheduled. Seem to prefer dividends but not ruling out buybacks. Company is cautious with cash and wont make any decisions until more long term clarity is available. Long term, the world product tanker fleet is ageing and the order book is very low. Many product tankers moved to crude last year too. Overall the supply/demand for product tankers is favorable long term. At these prices, they could not make any money the second half of the year and it would still be cheap. I really hope they just do some buybacks. Portion not owned by oaktree = 200M USD. It would not be hard to move the stock price with buybacks. At 60% of NAV, the cheapest boats to buy are their own! Link to comment Share on other sites More sharing options...
gfp Posted May 20, 2020 Share Posted May 20, 2020 Looks like Oaktree added some shares recently - https://www.sec.gov/Archives/edgar/data/1403525/000095014220001372/eh2000752_13da2-torm.htm vs. previous 13d from 3/27/2020: https://www.sec.gov/Archives/edgar/data/1403525/000095014220000934/eh2000548_13da1-torm.htm Link to comment Share on other sites More sharing options...
gfp Posted May 20, 2020 Share Posted May 20, 2020 keerthiprasad - or others that follow Torm closely - what occurred on April 21st? Was there a newsletter article or something? Link to comment Share on other sites More sharing options...
bskptkl Posted May 20, 2020 Share Posted May 20, 2020 keerthiprasad - or others that follow Torm closely - what occurred on April 21st? Was there a newsletter article or something? It's also listed in Copenhagen - last price 54.9 DKK. Someone might have been confused and entered a 55 bid in US markets? Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 20, 2020 Author Share Posted May 20, 2020 Its unclear. Tanker stocks were being pumped in several places (including reddit) around this time. Low float + a bunch of market orders? Link to comment Share on other sites More sharing options...
gfp Posted May 20, 2020 Share Posted May 20, 2020 Thanks for the reply. It looks like the type of thing we used to call the "Agora effect." Someone must have pumped it. I don't think it was an accident followed by millions of similar accidents. Too bad - now all those weak traders are going to be hanging around till the last one gives up Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 20, 2020 Author Share Posted May 20, 2020 Thanks for the reply. It looks like the type of thing we used to call the "Agora effect." Someone must have pumped it. I don't think it was an accident followed by millions of similar accidents. Too bad - now all those weak traders are going to be hanging around till the last one gives up Yeah I think the draw down of these traders has contributed to most tanker shares dropping over the last month. Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 21, 2020 Author Share Posted May 21, 2020 Looks like Oaktree added some shares recently - https://www.sec.gov/Archives/edgar/data/1403525/000095014220001372/eh2000752_13da2-torm.htm vs. previous 13d from 3/27/2020: https://www.sec.gov/Archives/edgar/data/1403525/000095014220000934/eh2000548_13da1-torm.htm Yes about a 1M shares. For reference Oaktree owns about 50M now. Remaining float is about 25M. I don't really understand why this hasn't been taken private. I'm guessing having public shares gives it a valuation? The CEO recently mentioned that they are interested in maintaining liquidity in the public shares and that is a consideration with buybacks.. Link to comment Share on other sites More sharing options...
gfp Posted May 28, 2020 Share Posted May 28, 2020 There is an audio interview with the CEO and CFO here - https://seekingalpha.com/article/4349219-torm-plcs-management-team-on-product-tanker-market-podcast Link to comment Share on other sites More sharing options...
given2invest Posted May 28, 2020 Share Posted May 28, 2020 Oaktree keeps adding, now 67% from 66.27% Link to comment Share on other sites More sharing options...
keerthiprasad Posted May 28, 2020 Author Share Posted May 28, 2020 Oaktree keeps adding, now 67% from 66.27% It's interesting. Also there are some takeover rumors of ASC floating around. Sector would definitely benefit from consolidation... Link to comment Share on other sites More sharing options...
keerthiprasad Posted June 5, 2020 Author Share Posted June 5, 2020 Oaktree at 68 % now. Link to comment Share on other sites More sharing options...
gfp Posted June 19, 2020 Share Posted June 19, 2020 I saw another Oaktree filing on the 17th, but what happened there in the final 10 minutes today? Anyone? Link to comment Share on other sites More sharing options...
given2invest Posted June 19, 2020 Share Posted June 19, 2020 market on close order of 18,300 took market by surprise and ripped it to fill it. it will give back the entire move monday at open. wish i saw it and sold into but did not. Link to comment Share on other sites More sharing options...
bskptkl Posted June 21, 2020 Share Posted June 21, 2020 market on close order of 18,300 took market by surprise and ripped it to fill it. it will give back the entire move monday at open. wish i saw it and sold into but did not. I saw that - was lucky to have a limit order in for a 5 lot. What'dya think - short covering? I can't imagine Oaktree would be buying sloppy like that. I also have a 15 limit order - remember it previously traded 45 or something. You never know, not much float and all... Link to comment Share on other sites More sharing options...
keerthiprasad Posted June 21, 2020 Author Share Posted June 21, 2020 On Thurs, trmd short interest was almost 30%... Which is really stupid lol. Dropped down quickly friday though and doesn't line up with this trade. .. Link to comment Share on other sites More sharing options...
given2invest Posted June 21, 2020 Share Posted June 21, 2020 was likely just part of some rebalancing. it will reverse on monday and go right back to low 7's sadly. Link to comment Share on other sites More sharing options...
keerthiprasad Posted June 21, 2020 Author Share Posted June 21, 2020 was likely just part of some rebalancing. it will reverse on monday and go right back to low 7's sadly. yeah it will. Link to comment Share on other sites More sharing options...
DooDiligence Posted August 18, 2020 Share Posted August 18, 2020 Revenues & earnings up significantly & declared a dividend of $0.85 +/- USD. Sold 7 older vessels for $66m & will use a portion of the proceeds to pay down $37m in debt. --- TORM expects to install a total of 49 scrubbers. As of 30 June 2020, TORM had installed 37 scrubbers, and as of 17 August 2020 TORM has installed 40 scrubbers. Of the remaining nine installations, five are expected to be conducted in the third quarter this year, one in the fourth quarter this year and one in the third quarter of 2021. The remaining two scrubbers will be installed on the two LR2 new buildings to be delivered in the fourth quarter of 2021. After the quarter ended, TORM received commitment for financing of scrubbers and ballast water treatment systems on four vessels from an international financing institution. The drawdown of the debt will be approx. USD 12m and will be made when all installations are finalized later in 2020. After the quarter ended, TORM furthermore received commitment from Hamburg Commercial Bank to refinance USD 35m in senior secured debt covering five older vessels. The refinancing will postpone the debt maturity related to these vessels from 2021 to 2025, thereby providing additional financial flexibility. During the second quarter of 2020, TORM conducted a capital reduction of USD 900m in the parent company TORM plc. The capital reduction will not reduce the underlying net assets of the Company but increase the distributable reserves by USD 900m, thereby providing TORM with additional flexibility to undertake share buybacks or dividend payments. In June, TORM also increased its share capital by 67,132 A-shares (corresponding to a nominal value of USD 671.32) as a result of the exercise of a corresponding number of Restricted Share Units. On 13 July 2020, TORM’s 4,701,864 warrants expired. TORM’s Board of Directors has decided to declare an ordinary dividend of USD 63.2m, equivalent to USD 0.85 per share. Payment is expected on 10 September 2020 to shareholders of record on 27 August 2020, with the ex-dividend date on 26 August 2020. The distribution corresponds to 50% of net income for the six months ended 30 June 2020 and is in line with the Company’s Distribution Policy. As of 30 June 2020, 18% of the remaining total earning days in 2020 were covered at an average rate of USD/day 23,027. As of 13 August 2020, the coverage for the third quarter of 2020 was 68% at USD/day 17,928. For the individual segments, the coverage was 86% at USD/day 22,357 for LR2, 69% at USD/day 21,003 for LR1, 64% at USD/day 16,633 for MR and 63% at USD/day 7,100 for Handy. --- • The unprecedented decline in oil product demand has resulted in limited storage space at terminals and refineries, resulting in a spate of logistical floating storage • At its peak in early May, 14% of the clean trading tonnage was tied up in floating storage, with ~90% of this is in logistical floating storage with the remainder being committed floating storage • Currently, 6% of the clean trading tonnage is in floating storage, slightly above the “normal” level of ~4% • While MR floating storage has almost cleared (currently 4% of the MR fleet), LR2 floating storage has been more resilient and is currently estimated at 14% of the fleet (down from 18% at the peak) • Potentially, a temporary pick-up in floating storage demand could occur, although at a lower magnitude than seen over April-June Link to comment Share on other sites More sharing options...
Saluki Posted August 18, 2020 Share Posted August 18, 2020 I have a small position in this (part of a basket) and I always appreciate good news, but it seems like most things that float are making money hand over fist this year and are still not going up. Link to comment Share on other sites More sharing options...
DooDiligence Posted August 18, 2020 Share Posted August 18, 2020 I have a small position in this (part of a basket) and I always appreciate good news, but it seems like most things that float are making money hand over fist this year and are still not going up. Markets are voting "no" on nearly everything oil related. They just declared a nice fat dividend & if the capital reduction leads to buybacks, there's not much float left. Link to comment Share on other sites More sharing options...
keerthiprasad Posted August 18, 2020 Author Share Posted August 18, 2020 This may be the world's slowest take-under. Link to comment Share on other sites More sharing options...
DooDiligence Posted September 19, 2020 Share Posted September 19, 2020 Not necessarily a sustainable bump but who knows, Howard Marks smells something & he's supposed to be the king of MOS. https://gcaptain.com/demand-to-store-a-glut-of-diesel-at-sea-is-rising-fast/ Link to comment Share on other sites More sharing options...
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