TRMD Thames Riv. C$

COPENHAGEN, November 22 /PRNewswire-FirstCall/ -- The expectations for the profit before tax excluding restructuring costs for 2007 are maintained at the level of USD 800-820 million. "At USD 773 million, the profit before tax for the first three quarters was better than expected and highly satisfactory. The integration of our largest acquisition is well under way, and we are pleased to report that the integration process is proceeding smoothly. With the acquisition of OMI we have met the most important elements of our Greater Earning Power strategy. Therefore, as part of the integration we are updating our strategy to secure TORM's long-term growth", announces Klaus Kjaerulff, CEO. Highlights - Profit before tax for the first three quarters of 2007 was USD 773 million (DKK 4,282 million). Profit after tax was USD 771 million (DKK 4,273 million). - Equity was USD 1,059 million (DKK 5,569 million) at 30 September 2007, equivalent to USD 15.3 per share (DKK 80.5 per share) excluding treasury shares. In September, DKK 2,002 million (USD 367 million) was paid in dividend. - The market value of the Company's vessels, including the order book, exceeded book value by USD 1,482 million at 30 September 2007, equalling USD 21.4 per share (DKK 112.6 per share), excluding treasury shares. This amount does not include the value of 19 purchase options, which are exercisable from 2008. TORM has not sold second-hand tonnage in 2007. - The product tanker market was very satisfactory during the first three quarters of 2007. Rates fell back over the summer, as expected. The end of the third quarter was marked by great volatility and falling rates. Going into the fourth quarter, the rates have been unseasonably low, and the demand for heating products for the winter market is weaker than expected, indicating a great transport demand later in the winter season. The period tanker market remains strong, which reflects the sustained strong demand and optimism among our customers. At 30 September 2007, the Company had covered 59% of the remaining earning days in 2007 at USD 21,937 per day. - The bulk market has seen an upward trend throughout the year as a result of the increasing demand for transport of primarily iron ore and coal. At 30 September 2007, the Company had covered 100% of the remaining earning days in 2007 at USD 26,800 per day and 61% of the earning days in 2008 at USD 37,600 per day. - Following TORM's and Teekay's takeover of OMI, the company's assets were distributed at 1 August 2007, with TORM taking over 26 of OMI's product tankers as well as OMI's technical organisation in India and part of its organisation in the USA. The future management structure in India and the USA has now been finalised, and the integration of employees, vessels and customer portfolios is proceeding according to plan and meeting expectations from an operational as well as a financial perspective. The expected annual cost synergies resulting from the acquisition of OMI remain in the order of USD 10-15 million. - Expectations for the profit before tax excluding restructuring costs for 2007 are maintained at the level of USD 800-820 million. Restructuring costs are expected to amount to approximately USD 15 million. Teleconference TORM's Management will review the report on the third quarter of 2007 in a teleconference and webcast (http://www.torm.com/) today, 22 November 2007, 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. Q3 2007 Q3 2006 Q1-Q3 Q1-Q3 Million USD 2007 2006 2006 Income statement Net revenue 221.2 158.0 581.6 456.8 603.7 Time charter equivalent earnings (TCE) 173.2 115.8 455.0 348.2 455.4 Gross profit 92.9 66.8 251.4 212.6 271.4 EBITDA 73.4 97.8 211.6 252.2 301.0 Operating profit 45.2 83.4 149.4 207.9 242.1 Financial items -11.5 -10.3 623.6 5.3 -1.0 Profit before tax 33.7 73.1 773.0 213.2 241.1 Net profit 30.9 66.9 771.3 205.4 234.5 Balance sheet Total assets 2,835.9 1,892.4 2,835.9 1,892.4 2,089.0 Equity 1,058.8 1,045.3 1,058.8 1,045.3 1,280.8 Total liabilities 1,777.1 847.1 1,777.1 847.1 808.2 Invested capital 2,509.9 1,224.1 2,509.9 1,224.1 1,298.5 Net interest bearing debt 1,462.1 616.6 1,462.1 616.6 662.0 Cash flow From operating activities 79.1 62.7 193.2 203.0 232.5 From investing activities -36.5 43.8 -278.3 -42.7 -117.6 Thereof investment in tangible fixed assets -36.5 -18.4 -202.2 -194.9 -262.4 From financing activities -397.9 -55.8 181.4 -216.5 -238.6 Net cash flow -355.3 50.7 96.3 -56.2 -123.7 Key financial figures Margins: TCE 78.3% 73.3% 78.2% 76.2% 75.3% Gross profit 42.0% 42.3% 43.2% 46.5% 44.9% EBITDA 33.2% 61.9% 36.4% 55.2% 49.8% Operating profit 20.4% 52.8% 25.7% 45.5% 40.1% Return on Equity (RoE) (p.a.)*) 10.2% 27.9% 63.8% 28.1% 21.5% Return on Invested Capital (RoIC) (p.a.) 7.2% 26.8% 10.4% 23.1% 19.6% Equity ratio 37.3% 55.2% 37.3% 55.2% 61.3% Exchange rate USD/DKK, end of period 5.26 5.89 5.26 5.89 5.66 Exchange rate USD/DKK, average 5.41 5.86 5.54 6.00 5.95 Share related key figures**) Earnings per share, EPS USD 0.4 1.0 11.1 3.0 3.4 Cash flow per share, CFPS USD 1.1 0.9 2.8 2.9 3.3 Share price, end of period (per share of DKK 5 each) DKK 214.2 151.3 214.2 151.3 186.0 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 69.5 69.4 *) The gain from the sale of the Norden shares is not annualized when calculating the Return on Equity. **)Adjusted for the share split in May 2007. Profit by division Million USD Q3 2007 Not Tanker Bulk Division Division OMI *) allocated Total Net revenue 165.5 35.6 20.1 0.0 221.2 Port expenses, bunkers and commissions -43.9 -1.6 -2.8 0.0 -48.3 Freight and bunker derivatives 0.3 0.0 0.0 0.0 0.3 Time charter equivalent earnings (TCE) 121.9 34.0 17.3 0.0 173.2 Charter hire -25.6 -15.7 -3.6 0.0 -44.9 Operating expenses -27.3 -2.6 -5.5 0.0 -35.4 Gross Profit 69.0 15.7 8.2 0.0 92.9 Profit from sale of vessels 0.0 0.0 0.0 0.0 0.0 Administrative expenses -12.4 -1.9 -8.7 0.0 -23.0 Other operating income 2.9 0.0 0.6 0.0 3.5 Depreciation and impairment losses -22.2 -1.6 -4.4 0.0 -28.2 Operating profit 37.3 12.2 -4.3 0.0 45.2 Financial items - - - -11.5 -11.5 Profit/(Loss) before tax - - - -11.5 33.7 Tax - - - -2.8 -2.8 Net profit - - - -14.3 30.9 Q1-Q3 2007 Million USD Not Tanker Bulk OMI Division Division *) allocated Total Net revenue 445.5 97.0 39.1 0.0 581.6 Port expenses, bunkers and commissions -117.1 -4.1 -5.9 0.0 -127.1 Freight and bunker derivatives 0.5 0.0 0.0 0.0 0.5 Time charter equivalent earnings (TCE) 328.9 92.9 33.2 0.0 455.0 Charter hire -64.6 -45.9 -7.3 0.0 -117.8 Operating expenses -68.8 -7.5 -9.5 0.0 -85.8 Gross Profit 195.5 39.5 16.4 0.0 251.4 Profit from sale of vessels 0.0 0.0 0.0 0.0 0.0 Administrative expenses -32.9 -5.5 -11.5 0.0 -49.9 Other operating income 8.5 0.0 1.6 0.0 10.1 Depreciation and impairment losses -49.4 -4.6 -8.2 0.0 -62.2 Operating profit 121.7 29.4 -1.7 0.0 149.4 Financial items - - - 623.6 623.6 Profit/(Loss) before tax - - - 623.6 773.0 Tax - - - -1.7 -1.7 Net profit - - - 621.9 771.3 *) Contains the result of the acitvity that TORM owns in a 50/50 joint venture with Teekay. Tanker and Bulk Tanker Division The Tanker Division achieved a profit before financial items of USD 37.3 million in the third quarter of 2007 against USD 45.7 million in the second quarter of 2007. The lower profit in the third quarter was a consequence of the low rates during the quarter, which were projected in the profit forecast. After a satisfactory first half of 2007, rates dropped over the summer, as expected. The end of the third quarter was characterised by great volatility in the western market, while the eastern market was more stable, although falling slightly. Moreover, earnings were under pressure from rising costs, particularly in the bunker market, but also from the weak USD, which meant higher port expenses outside the USA. During the third quarter, TORM had a large coverage and a reduced number of ballast days, and the Company's earnings consequently exceeded the market average. The tanker market was affected by the following factors in the third quarter of 2007: Positive impact: - The US petrol reserves are lower than the five-year average, indicating that the USA will be forced to import petrol. - Expectations for a colder winter than last year's. - The Iran/Ceyhan oil pipeline was reopened, improving the market for LR2 tankers in the Mediterranean. Negative impact: - Bunker expenditure rose, directly impacting earnings. - The US heating oil inventories are higher than the five-year average. - Increased taxation of petrol in Iran and China, which reduced short-term consumption and the related import/transport demand. As a result of the weak demand for tankers relative to the strong demand seen in 2006 as a result of hurricane fears, the freight rates achieved by TORM's Tanker Division in the third quarter of 2007 were 21% lower for the LR2 segment, 10% lower for the LR1 segment and 13% lower for the MR segment compared with those of the third quarter of 2006. The number of earning days in the LR2 segment was up by 43% on the third quarter of 2006, and the number of earning days in the LR1 and MR segments was up by 44% and 45%, respectively. The increase in earning days in the MR segment is principally due to the acquisition of OMI, while the increase in the LR1 and LR2 segments is due to a combination of delivered newbuildings and chartered vessels. Tanker Division Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Change Q3 06 - Q3 07 LR2 (Aframax, 90-110,000 DWT) Available earning days 642 703 720 799 920 43% Per earning day (USD): Earnings (TCE)*) 27,282 25,940 26,738 27,926 21,519 -21% Operating expenses**) -7,141 -5,614 -7,542 -8,204 -6,392 -10% Operating cash flow***) 17,333 18,674 17,076 17,864 13,230 -24% LR1 (Panamax, 75-85,000 DWT) Available earning days 1,194 1,193 1,279 1,392 1,714 44% Per earning day (USD): Earnings (TCE)*) 28,843 25,588 27,784 28,521 25,949 -10% Operating expenses**) -6,450 -5,109 -6,793 -7,785 -5,302 -18% Operating cash flow***) 13,105 11,526 12,279 12,423 10,395 -21% MR (45,000 DWT) Available earning days 1,642 1,627 1,654 1,684 2,373 45% Per earning day (USD): Earnings (TCE)*) 25,306 21,861 24,520 27,621 22,082 -13% Operating expenses**) -6,660 -6,197 -7,288 -6,503 -5,997 -10% Operating cash flow***) 19,392 16,365 16,987 20,674 16,223 -16% SR (35,000 DWT) Available earning days n.a. n.a. n.a. n.a. 732 n.a. Per earning day (USD): Earnings (TCE)*) n.a. n.a. n.a. n.a. 16,129 n.a. Operating expenses**) n.a. n.a. n.a. n.a. -5,019 n.a. Operating cash flow***) n.a. n.a. n.a. n.a. 691 n.a. *) TCE = Gross freight income less bunker, commissions and port expenses. Operating expenses are on own vessels. **) Operating expenses is related owned vessels. ***) Operating cash flow = TCE less operating expenses and charter hire. Bulk Division The earnings of the Bulk Division rose to USD 12.2 million in the third quarter from USD 10.3 million in the second quarter. TORM charters out a major part of its vessels on long-term charters, which means that the Company does not gain the full benefit of the rising bulk rates in 2007. In the third quarter, freight rates rose further in the Panamax segment and reached a historical high at the end of the quarter, equalling approximately USD 75,000 per day for a one-year charter. The development in bulk rates remains largely dependent on the development in single markets, primarily China and Australia, as well as India, Japan and South America. In the third quarter of 2007, freight rates in the bulk market were positively affected by increased transports of iron ore, coal and grain in particular. Due to insufficient port capacity, waiting periods in Australian ports were long, if fluctuating, pushing rates up further. The demand for tonnage was so great that the bulk market was more than able to absorb the relatively large addition of newbuildings in 2007. Many newbuilding orders were placed during the year, and the global newbuilding order book is thus historically high. The number of available earning days in the Panamax segment was up by 4% in the third quarter of 2007 compared with the third quarter of 2006. Bulk Division Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Change Q3 06 - Q3 07 Panamax (60-80,000 DWT) Available earning days 1,234 1,234 1,260 1,274 1,288 4% Per earning day (USD): Earnings (TCE)*) 18,402 20,272 22,102 24,404 24,951 36% Operating expenses**) -5,662 -4,020 -5,099 -5,303 -4,696 -17% Operating cash flow***) 6,872 9,846 8,170 10,711 10,796 57% *) TCE = Gross freight income less bunker, commissions and port expenses. Operating expenses are on own vessels. **) Operating expenses is related owned vessels. ***) Operating cash flow = TCE less operating expenses and charter hire. Other activities Other (non-allocated) activities consists of financial items of USD -12 million and tax of USD -3 million. Fleet development In the third quarter of 2007, TORM took delivery of 11 MR vessels and 10 SR vessels from the former OMI fleet. Owned 30 June 2007 Addition Disposal 30 September 2007 vessels LR2 / 9.0 - - 9.0 Aframax LR1 / 7.5 - - 7.5 Panamax MR 18.0 11 - 29 SR 0.0 10 - 10 Tank 34.5 21 - 55.5 Panamax 6.0 - - 6.0 Bulk 6.0 - - 6.0 Total 40.5 21 - 61.5 Planned fleet changes TORM's planned expansion of the fleet comprises 18.5 vessels for delivery between the fourth quarter of 2007 and 2010. The planned investment amounts to USD 650 million. 30 September 2008 2009 2010 Total 2007 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Order book LR2 9 0.5 - 1 - 1 1 - - - - - - - 3.5 LR1 7.5 - - - - - - - - - - - - - - MR 29 - - - 1 1 1 2 1 1 2 2 2 - 13 SR 10 - - - - - 1 - - - - - - - 1 Panamax 6 - 1 - - - - - - - - - - - 1 Total 61.5 0.5 1 1 1 2 3 2 1 1 2 2 2 0 18.5 TORM has chartered-in 22 product tankers on long-term charters, 16 of which already form part of the fleet, and three comprise purchase options exercisable between 2009 and 2014. TORM has chartered-in 21 Panamax bulk carriers, eight of which already form part of the fleet, and 16 of the charters include purchase options exercisable between 2007 and 2018. Pools At 30 September 2007, the three product tanker pools comprised 91 vessels. In addition to these, TORM at the end of the third quarter had 28 product tankers, primarily from the former OMI fleet, operating outside the pool. At the end of 2007, the three pools are still expected to comprise a total of 91 vessels. Results Third quarter 2007 The third quarter of 2007 showed a gross profit of USD 93 million, against USD 67 million in the third quarter of 2006. The difference is mainly due to the acquisition of OMI and an increased number of earning days from the newbuildings delivered during the period. Profit before depreciation and amortisation (EBITDA) for the period was USD 73 million, against USD 98 million in the third quarter of 2006. The difference was mainly due to the sale of three bulk vessels during the third quarter of 2006 at a profit of USD 35 million. Depreciation was USD 28 million during the third quarter of 2007. The operating profit for the third quarter of 2007 was USD 45 million, against USD 83 million in the same quarter of 2006. Of this amount, the Tanker and Bulk Divisions contributed USD 37 million and USD 12 million, respectively, and TORM's share of the OMI joint venture contributed USD -4 million. As the OMI joint venture has very limited operating activities after 1 August, the results for the third quarter are negative due to the restructuring costs incurred. The activities in the OMI joint venture will cease during 2008. Financial items were USD -12 million, against USD -10 million in the same quarter of 2006. Profit after tax was USD 31 million, against USD 67 million in the third quarter of 2006. Assets Total assets decreased from USD 3,196 million to USD 2,836 million in the third quarter, primarily as a result of the extraordinary distribution of dividend of DKK 2,002 million in September. Liabilities During the third quarter of 2007, the Company's net interest bearing debt rose from USD 1,152 million to USD 1,462 million, also as a result of the extraordinary dividend distribution. The Company has considerable undrawn loan facilities at its disposal. Equity During the third quarter of 2007, equity fell from USD 1,375 million to USD 1,059 million. This was the result of two opposite effects of the earnings and dividend distribution during the period. Mainly as a result of the dividend distribution, equity as a percentage of total assets dropped from 43.0% at 30 June 2007 to 37.3% at 30 September 2007. At 30 September 2007, TORM held 3,564,364 treasury shares, corresponding to 4.9% of the Company's share capital, which is unchanged compared to 30 June 2007. OMI In June 2007, TORM acquired the US tanker shipping company OMI in a 50/50 joint venture with Teekay Corporation. TORM's 50% ownership interest in OMI is recognised on a pro rata basis in TORM's consolidated financial statements effective from 1 June 2007 by aggregating items similar in nature. Consequently, OMI is included in the interim financial statements for the third quarter at 50%, presented as a separate segment in the profit by division, and at 50% of the balance sheet total at 30 September 2007. Following the sale of the most significant activities to TORM and Teekay at 1 August 2007, the assets in this balance sheet primarily consist of two vessels chartered out on T/C contracts and two newbuildings. The activities transferred from OMI to 100% ownership by TORM at 1 August 2007 are included in the Tanker Division from this date. In accordance with TORM's accounting policies, the recognition is based on a preliminary takeover balance sheet at 1 June 2007, which is presented below. Million USD Preliminary takeover balance sheet at 1 June 2007(1) TORM's 50% ownership interest in OMI Intangible assets 3.7 Tangible fixed assets 1,009.4 Freight receivables, etc. 30.0 Other receivables 3.0 Prepayments 9.7 Marketable securities 28.5 Cash and cash equivalents 100.7 Mortgage debt and bank -276.1 loans Other financial -16.2 liabilities Trade payables -13.2 Other liabilities -51.5 Deferred income -4.5 Net assets acquired 823.5 Goodwill 85.8 Cash consideration paid 909.3 Cash and cash equivalents, -100.7 acquired Net cash outflow 808.6 (1) The preliminary takeover balance sheet is calculated at 50% of the total OMI takeover balance sheet. The valuation of the assets and liabilities already recognised in OMI's balance sheet, including vessels, recognised at USD 1,001 million under tangible fixed assets above and thus constituting approximately 85% of total assets excluding goodwill in the preliminary takeover balance sheet, is subject to great certainty. Add to this the recognition of assets and liabilities, which were not previously recognised in OMI's balance sheet, including T/C contracts, purchase options and other commercial agreements as well as customer and supplier relations. The takeover balance sheet is still expected to be finalised in connection with the preparation of the annual report for 2007 at the latest. If the sum of the acquired net assets is increased relative to the takeover balance sheet, goodwill will be reduced correspondingly. Compared with the preliminary takeover balance sheet, which formed the basis of the interim report for the first half of 2007, there have been minor adjustments, which have reduced goodwill by a total of USD 3.5 million. Integration of OMI TORM's and Teekay Corporation's acquisition of OMI was completed on 8 June 2007. After the finalisation of the acquisition of OMI, the company's assets were distributed at 1 August 2007, with TORM taking over 26 product tankers, including one newbuilding and one vessel, which will however remain in the possession of OMI until the beginning of 2008. In addition to giving TORM a very modern and uniform product tanker fleet and ensuring TORM's presence in the US market, the acquisition of OMI improves TORM's global competitiveness. In addition, TORM acquired OMI's organisation in India and part of OMI's organisation in the USA. The future management structure in India and the USA has now been finalised, and the integration of employees, vessels and customer portfolios is proceeding according to plan and meeting expectations from an operational as well as a financial perspective. The expected annual cost synergies resulting from the acquisition of OMI remain in the order of USD 10-15 million. Subsequent events In the fourth quarter, TORM contracted two Kamsarmax (82,000 dwt) bulk carriers for delivery in 2010 and 1011, respectively, at a total price of USD 105 million. Expectations TORM maintains the profit forecast for 2007 of USD 800-820 million before tax, excluding restructuring costs relating to the acquisition of OMI. Restructuring costs are expected to be approximately USD 15 million. Sensitivity At the end of the third quarter 2007, 59% of the earning days remaining in the year for the Tanker Division were covered at USD 21,937 per day. For the Company's Panamax bulk carriers, 100% of the earning days remaining in the year were covered at USD 26,800 per day. At 30 September, TORM had hedged the price of 11.3% of the remaining bunker requirement for 2007, and the market value of the contracts was USD 0.3 million. The TORM share The price of a TORM share was DKK 214.2 at 30 September 2007, against DKK 207.6 at the beginning of the quarter - an increase of DKK 6.6. In the third quarter, the Company distributed a dividend of DKK 27.5 per share, equalling DKK 2,002 million. The total return to shareholders for the third quarter of 2007 was thus DKK 34.1 per share (calculated excluding reinvestment), corresponding to a total return of 16.4% in the quarter. Accounting policies The report for the third quarter of 2007 has been prepared using the same accounting policies as for the Annual Report 2006. The accounting policies are described in more detail in the Annual Report 2006. The interim report for the third quarter is unaudited, in line with the normal practice. Information Next reporting TORM's Annual Report 2007 will be published on 14 March 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 September 2007. 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 2007. 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, 22 November 2007 Management Board of Directors Klaus Kjaerulff, CEO Niels Erik Nielsen, Chairman Mikael Skov, COO Christian Frigast, Deputy Chairman Peter Abildgaard Lennart Arrias Margrethe Bligaard Gabriel Panayotides Nicos Zouvelos About TORM TORM is one of the world's leading carriers of refined oil products as well as being a significant participant in the dry bulk market. The Company operates a combined fleet of more than 130 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, Denmark. TORM's shares are listed on the Copenhagen Stock Exchange (ticker TORM) as well as on the NASDAQ (ticker TRMD). For further information, please visit http://www.torm.com/. Safe Harbor Forward looking statements Matters discussed in this release may constitute forward-looking statements. Forward-looking 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. Income Statement Million USD Q3 2007 Q3 2006 Q1-Q3 2007 Q1-Q3 2006 2006 Revenue 221.2 158.0 581.6 456.8 603.7 Port expenses, bunkers and commissions -48.3 -36.4 -127.1 -110.5 -148.9 Freight and bunkers derivatives 0.3 -5.8 0.5 1.9 0.6 Time Charter Equivalent Earnings (TCE) 173.2 115.8 455.0 348.2 455.4 Charter hire -44.9 -28.5 -117.8 -74.5 -106.3 Operating expenses -35.4 -20.5 -85.8 -61.1 -77.7 Gross profit 92.9 66.8 251.4 212.6 271.4 Profit from sale of vessels 0.0 34.8 0.0 54.2 54.4 Administrative expenses -23.0 -6.4 -49.9 -22.3 -34.6 Other operating income 3.5 2.6 10.1 7.7 9.8 Depreciation and impairment losses -28.2 -14.4 -62.2 -44.3 -58.9 Operating profit 45.2 83.4 149.4 207.9 242.1 Financial items -11.5 -10.3 623.6 5.3 -1.0 Profit before tax 33.7 73.1 773.0 213.2 241.1 Tax -2.8 -6.2 -1.7 -7.8 -6.6 Net profit 30.9 66.9 771.3 205.4 234.5 Earnings per share, EPS *) Earnings per share, EPS (USD) 0.4 1.0 11.1 3.0 3.4 Earnings per share, EPS (DKK)**) 2.4 5.7 61.7 17.7 20.1 *) The comparative figures for EPS are restated to reflect the share split carried out in May 2007. **) Calculated from USD to DKK at the average USD/DKK exchange rate for the relevant period. Income statement by quarter Million USD Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Revenue 158.0 146.9 162.0 198.4 221.2 Port expenses, bunkers and commissions -36.4 -38.4 -36.9 -41.9 -48.3 Freight and bunkers derivatives -5.8 -1.3 1.0 -0.8 0.3 Time charter equivalent earnings 115.8 107.2 126.1 155.7 173.2 Charter hire -28.5 -31.8 -34.4 -38.5 -44.9 Operating expenses -20.5 -16.6 -22.6 -27.8 -35.4 Gross profit (Net earnings from shipping activities) 66.8 58.8 69.1 89.4 92.9 Profit from sale of vessels 34.8 0.2 0.0 0.0 0.0 Administrative expenses -6.4 -12.3 -11.2 -15.7 -23.0 Other operating income 2.6 2.1 2.5 4.1 3.5 Depreciation and impairment losses -14.4 -14.6 -14.8 -19.2 -28.2 Operating profit 83.4 34.2 45.6 58.6 45.2 Financial items -10.3 -6.3 634.6 0.5 -11.5 Profit before tax 73.1 27.9 680.2 59.1 33.7 Tax -6.2 1.2 -5.8 6.9 -2.8 Net profit 66.9 29.1 674.4 66.0 30.9 Assets Million USD 30 30 31 September September December 2007 2006 2006 NON-CURRENT ASSETS Intangible assets Goodwill 85.8 0.0 0.0 Other intangible assets 0.0 0.0 0.0 Total intangible assets 85.8 0.0 0.0 Tangible fixed assets Land and buildings 0.4 0.4 0.4 Vessels and capitalized dry-docking 2,259.3 1,108.1 1,136.4 Prepayments on vessels 207.8 151.9 183.3 Other plant and operating equipment 9.2 2.9 3.6 Total tangible fixed assets 2,476.7 1,263.3 1,323.7 Financial fixed assets Other investments 11.0 437.8 644.4 TOTAL NON-CURRENT ASSETS 2,573.5 1,701.1 1,968.1 CURRENT ASSETS Inventories of bunkers 17.8 11.5 12.1 Freight receivables, etc. 77.6 48.9 49.7 Other receivables 26.6 24.6 21.5 Prepayments 11.0 5.8 4.6 Cash and cash equivalents 129.4 100.5 33.0 262.4 191.3 120.9 Non-current assets held for sale 0.0 0.0 0.0 TOTAL CURRENT ASSETS 262.4 191.3 120.9 TOTAL ASSETS 2,835.9 1,892.4 2,089.0 Liabilities and Equity Million USD 30 30 31 September September December 2007 2006 2006 EQUITY Common shares 61.1 61.1 61.1 Treasury shares -18.1 -18.1 -18.1 Revaluation reserves 7.4 373.2 579.8 Retained profit 995.8 619.4 574.5 Proposed dividends 0.0 0.0 73.9 Hedging reserves 8.5 5.8 5.6 Translation reserves 4.1 3.9 4.0 TOTAL EQUITY 1,058.8 1,045.3 1,280.8 LIABILITIES Non-current liabilities Deferred tax liability 55.9 62.9 62.8 Mortgage debt and bank loans 829.1 663.2 639.1 TOTAL NON-CURRENT LIABILITIES 885.0 726.1 701.9 Current liabilities Mortgage debt and bank loans 762.4 53.9 55.9 Other financial liabilities 1.1 0.0 0.0 Trade payables 24.6 18.6 18.7 Current tax liabilities 14.2 9.6 4.6 Other liabilities 74.1 37.6 26.0 Deferred income 15.7 1.3 1.1 TOTAL CURRENT LIABILITIES 892.1 121.0 106.3 TOTAL LIABILITIES 1,777.1 847.1 808.2 TOTAL EQUITY AND LIABILITIES 2,835.9 1,892.4 2,089.0 Equity 1 January - 30 September 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-Q3 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 771.3 Total recognized income/expenses for the period 0.0 0.0 771.3 0.0 Purchase treasury shares, cost - - - - Disposal treasury shares, cost - - - - Extraordinary dividends paid - - -369.2 - Dividends paid - - - -76.4 Dividends paid on treasury shares - - 21.7 - Exchange rate adjustment on dividends paid - - -2.5 2.5 Exercise of share options - - - - Total changes in equity Q1-Q3 2007: 0.0 0.0 421.3 -73.9 Equity at 30 September 2007 61.1 -18.1 995.8 0.0 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-Q3 2007: 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 - -5.6 - -5.6 Deferred gain/loss on hedge instruments at the end of the Period - 8.5 - 8.5 Fair value adjustment on available for sale investments 70.9 - - 70.9 Transfer to profit or loss on sale of available for sale Investments -643.3 - - -643.3 Net gains/losses recognised directly in equity -572.4 2.9 0.1 -569.4 Net profit for the period 771.3 Total recognized income/expenses for the period -572.4 2.9 0.1 201.9 Purchase treasury shares, cost - - - 0.0 Disposal treasury shares, cost - - - 0.0 Extraordinary dividends paid - - - -369.2 Dividends paid - - - -76.4 Dividends paid on treasury shares - - - 21.7 Exchange rate adjustment on dividends paid - - - 0.0 Exercise of share options - - - 0.0 Total changes in equity Q1-Q3 2007: -572.4 2.9 0.1 -222.0 Equity at 30 September 2007 7.4 8.5 4.1 1,058.8 Equity 1 January - 30 September 2006 Million USD Common Treasury Retained Proposed shares shares profit dividends Equity at 1 January 2006 61.1 -7.7 415.3 132.4 Changes in equity Q1-Q3 2006: 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 - - - - Reversal of fair value adjustment on available for sale investments at the beginning of the year - - - - Fair value adjustment on available for sale investments at period end - - - - Net gains/losses recognised directly in equity 0.0 0.0 0.0 0.0 Net profit for the period 205.4 Total recognized income/ expenses for the period 0.0 0.0 205.4 0.0 Purchase treasury shares, cost - -10.4 - - Disposal treasury shares, cost - 0.0 - - Dividends paid - - - -140.1 Dividends paid on treasury shares - - 6.0 - Exchange rate adjustment on dividends paid - - -7.7 7.7 Exercise of share options - - 0.4 - Total changes in equity Q1-Q3 2006: 0.0 -10.4 204.1 -132.4 Equity at 30 September 2006 61.1 -18.1 619.4 0.0 Million USD Revaluation Hedging Translation Total reserves reserves reserves Equity at 1 January 2006 296.4 3.3 3.9 904.7 Changes in equity Q1-Q3 2006: Exchange rate adjustment arising on translation of entities using a measurement currency different from USD - - 0.0 0.0 Reversal of deferred gain/loss on hedge instruments at the beginning of year - -3.3 - -3.3 Deferred gain/loss on hedge instruments at the end of the period - 5.8 - 5.8 Reversal of fair value adjustment on available for sale investments at the beginning of the year -296.4 - - -296.4 Fair value adjustment on available for sale investments at period end 373.2 - - 373.2 Net gains/losses recognised directly in equity 76.8 2.5 0.0 79.3 Net profit for the period 205.4 Total recognized income/ expenses for the period 76.8 2.5 0.0 284.7 Purchase treasury shares, cost - - - -10.4 Disposal treasury shares, cost - - - 0.0 Dividends paid - - - -140.1 Dividends paid on treasury shares - - - 6.0 Exchange rate adjustment on dividends paid - - - 0.0 Exercise of share options - - - 0.4 Total changes in equity Q1-Q3 2006: 76.8 2.5 0.0 140.6 Equity at 30 September 2006 373.2 5.8 3.9 1,045.3 Cash flow statement Million USD Q3 2007 Q3 2006 Q1-Q3 Q1-Q3 2006 2007 2006 Cash flow from operating activities Operating profit 45.2 83.4 149.4 207.9 242.1 Adjustments: Reversal of profit from sale of vessels 0.0 -34.8 0.0 -54.2 -54.4 Reversal of depreciation and impairment losses 28.2 14.4 62.2 44.3 58.9 Reversal of other non-cash movements 7.2 -2.5 11.7 5.2 6.0 Dividends received 0.0 0.0 1.3 26.4 26.4 Interest income and exchange rate gains 9.2 1.3 19.8 8.7 10.1 Interest expenses -24.3 -10.2 -48.9 -31.2 -40.7 Income taxes paid -0.1 0.0 0.6 0.0 -3.1 Change in inventories, accounts receivables and payables 13.7 11.1 -2.9 -4.1 -12.8 Net cash inflow/(outflow) from operating activities 79.1 62.7 193.2 203.0 232.5 Cash flow from investing activities Investment in tangible fixed assets -36.5 -18.4 -202.2 -194.9 -262.4 Purchase of enterprises and activities *) 0.0 0.0 -808.6 0.0 0.0 Sale of/investment in equity interests and marketable securities 0.0 0.0 732.4 0.2 0.2 Sale of non-current assets 0.0 62.2 0.1 152.0 144.6 Net cash inflow/(outflow) from investing activities -36.5 43.8 -278.3 -42.7 -117.6 Cash flow from financing activities Borrowing, mortgage debt and other financial liabilities 889.0 2.9 1,695.8 101.8 162.1 Repayment/redemption, mortgage debt -935.6 -58.7 -1,090.4 -173.7 -256.2 Dividends paid -351.3 0.0 -424.0 -134.2 -134.1 Purchase/disposals of treasury shares 0.0 0.0 0.0 -10.4 -10.4 Cash inflow/(outflow) from financing activities -397.9 -55.8 181.4 -216.5 -238.6 Increase/(decrease) in cash and cash equivalents -355.3 50.7 96.3 -56.2 -123.7 Cash and cash equivalents, beginning balance 484.6 49.8 33.0 156.7 156.7 Cash and cash equivalents, ending balance 129.3 100.5 129.3 100.5 33.0 *) See preliminary opening balance for OMI at page 7. Quarterly cash flow statement Million USD Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Cash flow from operating activities Operating profit 83.4 34.2 45.6 58.6 45.2 Adjustments: Reversal of profit from sale of vessels -34.8 -0.2 0.0 0.0 0.0 Reversal of depreciation and impairment loss 14.4 14.6 14.8 19.2 28.2 Reversal of other non-cash movements -2.5 0.8 6.3 -1.8 7.2 Dividends received 0.0 0.0 0.2 1.1 0.0 Interest income and exchange rate gains 1.3 1.4 0.6 10.0 9.2 Interest expenses -10.2 -9.5 -9.4 -15.2 -24.3 Income taxes paid 0.0 -3.1 0.7 0.0 -0.1 Change in inventories, accounts receivables and payables 11.1 -8.7 -10.7 -5.9 13.7 Net cash inflow/(outflow) from operating activities 62.7 29.5 48.1 66.0 79.1 Cash flow from investing activities Investment in tangible fixed assets -18.4 -67.5 -45.3 -120.4 -36.5 Purchase of enterprises and activities *) 0.0 0.0 0.0 -808.6 0.0 Sale of/investment in equity interests and marketable securities 0.0 0.0 0.0 732.4 0.0 Sale of non-current assets 62.2 -7.4 0.1 0.0 0.0 Net cash inflow/(outflow) from investing activities 43.8 -74.9 -45.2 -196.6 -36.5 Cash flow from financing activities Borrowing, mortgage debt and other financial liabilities 2.9 60.3 25.5 781.3 889.0 Repayment/redemption, mortgage debt -58.7 -82.4 -5.2 -149.6 -935.6 Dividends paid 0.0 0.0 0.0 -72.7 -351.3 Purchase/disposals of treasury shares 0.0 0.0 0.0 0.0 0.0 Cash inflow/(outflow) from financing activities -55.8 -22.1 20.3 559.0 -397.9 Increase/(decrease) in cash and cash equivalents 50.7 -67.5 23.2 428.4 -355.3 Cash and cash equivalents, beginning balance 49.8 100.5 33.0 56.2 484.6 Cash and cash equivalents, ending balance 100.5 33.0 56.2 484.6 129.3 *) See preliminary opening balance for OMI at page 7. Reconciliation to United States Generally Accepted Accounting Principles (US GAAP) Million USD Net income Equity Q1-Q3 2007 30 September 2007 As reported under IFRS 771.3 1,058.8 Adjustments: Deferred gain on a sale/lease back 3.2 -9.9 Deferred tax -1.2 2.5 Total adjustments 2.0 -7.4 According to US GAAP 773.3 1,051.4 For a review of principles and methods used in the reconciliation, please refer to the TORM Annual Report for 2006. Contact A/S Dampskibsselskabet TORM Telephone +45-39-17-92-00 Tuborg Havnevej 18 Klaus Kjaerulff, CEO DK-2900 Hellerup - Denmark DATASOURCE: A/S Dampskibsselskabet TORM CONTACT: Contact: A/S Dampskibsselskabet TORM, Tuborg Havnevej 18, DK-2900 Hellerup - Denmark, Telephone +45-39-17-92-00, Klaus Kjaerulff, CEO

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