TORM plc Q4 FY2025 earnings call

• TORM's ownership model and culture provide clarity of purpose. - One TORM platform is a point of difference, using real-time data and insights. - Active in S&P market in Q4, adding 8 vessels and divesting 1, fleet to be 95 vessels by start of 2026. - Product tanker market dynamics: freight rates returned to 2022 - 2024 average, crude market strength spilling over, Red Sea rerouting impact neutral, vessel sanctions, and geopolitical developments shaping market. - Q4 performance driven by firm freight rates and positive spillover from crude tanker segment. - Shareholder returns: Q4 dividend $0.70 per share, payout ratio 82%.

In Q4, TCE was USD 251 million, net profit was USD 87 million, and dividend was $0.70 per share. Average TCE across the fleet was USD 30,658 per day, with LR2 above USD 35,000, LR1s above $31,000, and MRs just under USD 29,000 per day. Full year TCE was USD 910 million, EBITDA was USD 571 million, net profit was USD 286 million, and total dividends returned were USD 212 million. Broker valuations for the fleet were USD 3.2 billion at year-end with NAV increase to USD 2.6 billion, and net interest-bearing debt was USD 848 million with net LTV of 29.4%.

• In Q1, 70% of earnings days secured at average TCE of USD 34,926 per day. - Expect TCE earnings of USD 850 million to USD 1.25 billion and EBITDA of USD 500 million to USD 900 million for full year 2026. - Guidance based on coverage of fixed days in Q1 and forward curve for remaining days, with stress applied based on TCE levels.

• Geopolitical developments increase uncertainty and inefficiencies, such as EU sanctions on Russian oil and oil products, and potential maritime services ban. - Vessel sanctions with a large number of Aframax and LR2 vessels sanctioned, many being older and unlikely to return to mainstream market even if sanctions lifted. - Market volatility and uncertainty in freight rates and vessel availability.

Q: On EBITDA guidance, what's the spot rate assumption and methodology?

A: Methodology is taking covered days in Q1 and applying unfixed days with forward curve for remainder, getting midpoint TCE and deducting normal cost to get EBITDA, with stress based on TCE levels.

Q: How does crude market strength impact products?

A: Strength in crude segments has direct impact on LR2 fleet behavior, with financial incentive to switch, fewer compliant vessels due to sanctions, pushing rates higher.

Q: Thoughts on acquisition timing and further opportunities?

A: Timing of Q4 acquisitions was good as assets appreciated, but asset prices moving fast, need to follow methodology.

Q: Portion of LR2 fleet trading dirty and LR1 impact?

A: 10% - 20% of LR2s trading spot dirty, LR1s not significantly affected by dirty market.

Q: Administrative expenses attributable to chartering team?

A: Not accounted for in that isolated way, success related to whole structure.