Q2 2025 Torm PLC Earnings Call
Speaker #3: Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Torm second quarter 2025 conference call.
Lacey: Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the TORM plc Second Quarter 2025 conference call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Jacob Meldgaard, CEO. You may begin.
Speaker #3: All lines have been placed on mute to prevent background noise. After the speakers are marked, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad.
Speaker #3: If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Jacob Meldgaard, CEO.
Speaker #3: You may begin.
Speaker #4: Yeah, thank you very much. And, a warm welcome here to everyone joining us on TORM's Q2 2025 conference call. Earlier this morning, we did release our interim results for the second quarter of '25.
Jacob Meldgaard: Thank you very much. A warm welcome here to everyone joining us on TORM's Q2 2025 conference call. Earlier this morning, we did release our interim results for the second quarter of 2025, and I am pleased that again, we can report market-leading performance. In the quarter, we witnessed a continuation of the more stable operating environment established in the first quarter, offering a clear contrast to the freight rate volatility seen in the latter part of last year. Our Time Charter Equivalent came in at $208 million, broadly consistent with both the last quarter of 2024 and the first quarter of 2025. This translated into a net profit of $59 million, leading to another quarter with an attractive dividend distribution of $0.40 per share. We also advanced our fleet optimization strategy by divesting one LR2 vessel and two MR vessels, all built in 2008.
Speaker #4: I'm pleased that, again, we can report market-leading performance. In the quarter, we witnessed a continuation of the more stable operating environment established in the first quarter.
Speaker #4: Offering a clear contrast to the freight rate volatility seen in the latter part of last year. Our TCE came in at $208 million US dollars, broadly consistent with both the last quarter of 2024 and the first quarter of 2025.
Speaker #4: This translated into a net profit of $59 million, leading to another quarter with attractive dividend distribution of $0.40 per share. We also advanced our fleet optimization strategy by divesting one LR2 vessel and two MR vessels, all built in 2008.
Speaker #4: This aligns with our ongoing approach of phasing out older tonnage to maintain a modern, high-quality, and commercially attractive fleet. These well-placed transactions underscore the strong condition and upkeep of our vessels and do reinforce our commitment to operating an efficient and competitive platform.
Jacob Meldgaard: This aligns with our ongoing approach of phasing out older tonnage to maintain a modern, high-quality, and commercially attractive fleet. These well-placed transactions underscore the strong condition and upkeep of our vessels and do reinforce our commitment to operating an efficient and competitive platform. Looking ahead, the macro environment continues to be fast-moving and marked by geopolitical uncertainty, but market sentiment remains broadly positive. We have entered the third quarter with strong momentum, supported by firming rates across our vessel segments and an encouraging degree of visibility into our upcoming fixtures. Despite the external challenges, both the underlying fundamentals and the forward curve for freight rates, they remain positive. Based on this and the rates we have already secured, we have raised our full-year guidance to reflect a stronger earnings outlook for the remainder of this year. As always, we remain vigilant and agile.
Speaker #4: Looking ahead, the macro environment continues to be fast-moving and marked by geopolitical uncertainty. But market sentiment remains broadly positive. We have entered the third quarter with strong momentum, supported by firming rates across our vessel segments and an encouraging degree of visibility into our upcoming fixes.
Speaker #4: Despite the external challenges, both the underlying fundamentals and the forward curve for freight rates, they remain positive. Based on this and the rates we have already secured, we have raised our full-year guidance to reflect a stronger earnings outlook for the remainder of this year.
Speaker #4: As always, we remain vigilant and agile. With that, let us turn to the key drivers shaping the market and our positioning going forward.
Jacob Meldgaard: With that, let us turn to the key drivers shaping the market and our positioning going forward. Please turn to slide number five. Let me just go into first, it is a snapshot of the market landscape, and product tanker rates have remained both stable and attractive across the board. Here, as illustrated in this graph, benchmark earnings for MR and LR2 vessels, they show resilience and with recent figures reflecting a healthy uptick. This stability is underpinned by increased trade flows and the limited net growth in CPP trading fleet. Please turn to slide six; I will elaborate on that. Trade volumes have surged recently. They reached a 16-month high at the start of Q3. This growth has been driven by increased east-to-west middle distributed flows. For the past two quarters, we have been pointing out that low trade volumes on this route have not been sustainable.
Speaker #4: Yeah, please turn to slide number five. Yeah. let me just go into first, it's a snapshot of the market landscape and product anchor rates have remained both stable and attractive across the board.
Speaker #4: And here, as illustrated in this graph, benchmark earnings for MR and LR2 vessels, they show resilience and with recent figures reflecting a healthy uptick.
Speaker #4: This stability is underpinned by increased trade flows and the limited net growth in the CPP trading fleet. And here, please turn to slide six. I'll elaborate on that.
Speaker #4: trade volumes have surged recently, reached a 16-month high at the start of Q3. This growth has been driven by increased east-to-west middle distillate flows and for the past two quarters, we've been pointing out that low trade volumes on this route have not been sustainable.
Speaker #4: With inventories in northwest Europe falling into the lower end of the five-year range, we have recently seen a surge in east-to-west middle distillate trades.
Jacob Meldgaard: With inventories in Northwest Europe falling into the lower end of the five-year range, we have recently seen a surge in east-to-west middle distributed trades, further supported by strong exports from the United States. This has lifted ton miles again to levels well above what we saw before the Red Sea disruption. At the same time, crude cannibalization has normalized at more historical levels. Looking further ahead, the product tanker market is expected to continue to be driven by geopolitical factors, high uncertainty, but we expect market fundamentals to continue to support trade flows and vessel utilization. Please turn to slide seven. Since the start of this year, two refineries in Northwest Europe have closed, with two more expected to close by the end of the year.
Speaker #4: Further, supported by strong exports from the United States. This has lifted ton miles again to levels well above what we saw before the Red Sea disruption.
Speaker #4: At the same time, crude cannibalization has normalized at more at the historical levels. Looking further ahead, the product anchor market is expected to continue to be driven by geopolitical factors high uncertainty, but we expect market fundamentals to continue to support trade flows and vessel utilization.
Speaker #4: And please turn to slide seven. Since the start of this year, two refineries in northwest Europe have closed with two more expected to close by the end of the year.
Speaker #4: These closures combined correspond to 6% of the recent region's refining capacity, leading to a lower local product supply and increased need for middle for imported middle distillates in an environment where product supply is already tight.
Jacob Meldgaard: These closures combined correspond to 6% of the region's refining capacity, leading to a lower local product supply and increased need for imported middle distillates in an environment where product supply is already tight. According to our calculations, if all this supply were replaced by imported diesel and jet from the Middle East Gulf, this would translate into an additional demand of 15 to 24 LR2 equivalents per year, depending on whether vessels transit the Red Sea or sail around the Cape of Good Hope. To put it into perspective, this corresponds to 6% to 10% of the current CPP trading LR2 fleet. Refining closures are not limited to Europe. In less than one year from now, two refineries with a combined 11% of the region's capacity will close on the US West Coast.
Speaker #4: According to our calculations, if all this supply were replaced by imported diesel and jet, from the middle east Gulf, this would translate into an additional demand of 15 to 24 LR2 equivalents per year, depending on whether vessels transit the Red Sea or sail around the Cape of Good Hope.
Speaker #4: To put it into perspective, this corresponds to 6 to 10% of the current TPP trading LR2 fleet. Refinery closes are not limited to Europe.
Speaker #4: In less than one year from now, two refineries with a combined 11% of the region's capacity will close on the US West Coast. This, we expect, to lead to increased need for gasoline and jet imports which, according to our calculations, will translate into an additional demand of more than 25 MR equivalents on a round-trip basis if they all come from Asia.
Jacob Meldgaard: This we expect to lead to increased need for gasoline and jet imports, which according to our calculations will translate into an additional demand of more than 25 MR equivalents on a round-trip basis if they all come from Asia. Please turn to slide eight. Geopolitical developments remain a key driver in the market. In its latest sanctions package against Russia, the EU introduced a ban on third country petroleum products obtained from Russian crude oil from January next year, which mainly affects diesel imports from India and Turkey. We do not expect any significant effect on ton miles from this, with alternative sources available from the same distance, but there will be a slight positive impact if imports are replaced by supplies from further away.
Speaker #4: Please turn to slide eight. Geopolitical developments remain a key driver in the market. In its latest sanctions package against Russia, the EU introduced a ban on third-country petroleum products obtained from Russian crude oil from January next year.
Speaker #4: Which mainly affects diesel imports from India and Turkey. We do not expect any significant effect on ton miles from this with alternative sources available from the same distance, but there will be a slight positive impact if imports are replaced by supplies from further away.
Speaker #4: While it is still unclear whether President Trump's threat of additional tariffs on India will force Indian refineries to shift away from Russian crude, potential reshuffling of crude flows with China taking more Russian oil and India more Middle East or Western oil is likely to be positive for larger crude tankers while negative for the aforementioned segment.
Jacob Meldgaard: While it is still unclear whether President Trump's threat of additional tariffs on India will force Indian refineries to shift away from Russian crude, potential reshuffling of crude flows with China taking more Russian oil and India more Middle Eastern Western oil is likely to be positive for larger crude tankers while negative for the Aframax segment. Nevertheless, we expect the demand laws for Aframaxes to be offset by a substantial share of sanctioned Aframaxes not returning to the mainstream trades. Clearly, it is still highly uncertain what the U.S. administration's next move vis-a-vis Russia is, but we do not foresee any reversal of EU sanctions anytime soon. Please turn to slide nine. Let's take a look at the tonnage supply side.
Speaker #4: Nevertheless, we expect the demand lowers for aforementioned to be offset by a substantial share of sanctioned aforementioned not returning to the main stream trades.
Speaker #4: Clearly, it is still highly uncertain what the US administration's next move with this Russia is, but we do not foresee any reversal of EU sanctions anytime soon.
Speaker #4: Please turn to slide nine. And let's take a look at the tonnage supply side. And as we pointed out earlier, the relatively high product anchor order book should be seen in combination with the fact that the average age of the fleet is the highest in two decades.
Jacob Meldgaard: As we pointed out earlier, the relatively high product tanker order book should be seen in combination with the fact that the average age of the fleet is the highest in two decades. In addition, a large share of especially older fleet is sanctioned, which is expected to support exits from the market. This is especially the case for the combined LR2 Aframax fleet, where every fourth vessel in the global fleet is under either OFAC, EU, or UK sanctions. It is especially the OFAC sanctions that have had a strong impact on fleet utilization, with our data showing that ton mile on vessels sanctioned since January has declined by 75%. Lower utilization on sanctioned Aframaxes has incentivized LR2s to move to dirty trades, as a result of which we have seen a 2% decline in the CPP trading fleet over the past 12 months.
Speaker #4: In addition, a large share of especially older fleet is sanctioned, which is expected to support exits from the market. This is especially the case for the combined LR2 aforementioned fleet where every fourth vessel in the global fleet is under either OFAC, EU, or UK sanctions.
Speaker #4: It is especially the OFAC sanctions that had a strong impact on fleet utilization without data showing that ton miles on vessels sanctioned since January has declined by 75%.
Speaker #4: Lower utilization on sanctioned aforementioned has incentivized LR2s to move to dirty trades, as a result of which we have seen a 2% decline in the CPP trading fleet over the past 12 months.
Speaker #4: This is while the nominal product anchor fleet has grown by 4% driven by new building deliveries. Please turn to slide 10. Looking ahead, several factors will continue to shape the product anchor market, including ongoing geopolitical uncertainty.
Jacob Meldgaard: This is while the nominal product tanker fleet has grown by 4%, driven by new building deliveries. Please turn to slide 10. Looking ahead, several factors will continue to shape the product tanker market, including ongoing geopolitical uncertainty, additional EU sanctions against Russia, evolving U.S. trade policy, and continuing Red Sea disruption. In addition, returning crude output from OPEC is indirectly supporting our market. On the demand side, oil consumption remains robust, and changes in the refinery landscape are increasing ton miles. On the supply side, increased new build deliveries need to be seen in combination with the increasing number of scrapping candidates, alongside reduced trading on the sanctioned fleet. This will influence tonnage availability and market balance. I am certain that TORM is well positioned to maneuver in this environment through our conservative capital structure, the operational leverage, and the integrated platform.
Speaker #4: Additional EU sanctions against Russia, evolving US trade policy, and continuing Red Sea disruption. In addition, returning crude output from OPEC is indirectly supporting our market.
Speaker #4: On the demand side, oil consumption remains robust, and changes in the refinery landscape are increasing ton-miles. On the supply side, increased new-build deliveries need to be seen in combination with the increasing number of scraping candidates.
Speaker #4: Alongside reduced trading on the sanctioned fleet. This will influence tonage availability and market balance. Uncertain that TORM is well positioned to maneuver in this environment through our conservative capital structure, the operational leverage, and the integrated platform.
Speaker #4: So with that, I'll hand it over to you, Kim, who you will walk us through the financials.
Jacob Meldgaard: With that, I will hand it over to you, Kim Balle, who will walk us through the financials.
Speaker #5: Thank you, Jacob. Now, please turn to slide 12 for an overview of the financials. In the second quarter, our TCE amounted to $208 million, and based on this, we achieved $127 million in EBDA and $59 million in net profit.
Kim Balle: Thank you, Jacob. Please turn to slide 12 for an overview of the financials. In the second quarter, our Time Charter Equivalent amounted to US dollar 208 million, and based on this, we achieved US dollar 127 million in EBITDA and US dollar 59 million in net profit. Fleet-wide, we averaged Time Charter Equivalent rates of US dollar 26,772 per day, with LR2s above US dollar 35,000, LR1s slightly above US dollar 27,000, and MRs around US dollar 23,000. Thus, freight rates during the quarter remained broadly in line with the previous two quarters, underpinned by solid market fundamentals. This stability provides a strong base as we progress through the year, with our earnings continuing to reflect performance well above market rates. Please move to slide 13. This slide illustrates our revenue progression quarter by quarter since Q2 2024.
Speaker #5: Fleet Y, we averaged TCE rates of US$26,772 per day with LR2s above 35,000 US dollars, LR1s slightly above 27 thousand US dollars, and MRs around 23 thousand US dollars.
Speaker #5: Thus, freight rates during the quarter remained broadly in line with the previous two quarters, underpinned by solid market fundamentals. This stability provides a strong base as we progress through the year, with our earnings continuing to reflect performance well above market rates.
Speaker #5: And now, please move to slide 13, please. This slide illustrates our revenue progression quarter by quarter since Q2 2024. With this quarter's results, we now mark three consecutive quarters with stable freight rates and earnings highlighting a period of sustained performance and consistent market conditions.
Kim Balle: With this quarter's results, we now mark three consecutive quarters with stable freight rates and earnings, highlighting a period of sustained performance and consistent market conditions. Despite continued geopolitical uncertainty, underlying ton mile demand remains solid, though we stay alert to how quickly market dynamics can evolve. Against this backdrop, we delivered a satisfying result, generating Time Charter Equivalent of US dollar 208 million and EBITDA of US dollar 127 million, based on a fleet-wide range rate of US dollar 26,672 per day. Adjusting for gain on sold vessels, EBITDA amounted to US dollar 122 million, thus at par with the US dollar 126 million realized in the previous quarter.
Speaker #5: Despite continued geopolitical uncertainty, underlying ton mile demand remains solid, though we stay alert to how quickly market dynamics can evolve. Against this backdrop, we delivered a satisfying result, generating TCE of US$208 million and EBDA of US$127 million based on a fleet-wide range rate of US$26,672 per day.
Speaker #5: Adjusting for gain on sold vessels, EBDA amounted to US$122 million; thus, at par with the US$126 million realized in the previous quarter. With our current operational leverage, we are well positioned to benefit from any future improvement in freight rates.
Kim Balle: With our current operational leverage, we are well positioned to benefit from any future improvement in freight rates. For every US dollar 1,000 increase in daily rates, our quarterly EBITDA could rise by approximately US dollar 8 million, based on around 8,000 earning days, highlighting the meaningful earning upside should the market strengthen further. Slide 14, please. Here, we show the quarterly development in net profit and key share-related ratios, which closely follow the trend in EBITDA. As a result, earnings per share for the second quarter amounted to US dollar 0.60. Our approach to shareholder return remains clear and consistent. We continue to distribute excess liquidity on a quarterly basis while maintaining a disciplined financial buffer to safeguard our balance sheet. For the second quarter, this approach has led to a declared dividend of US dollar 0.40 per share, representing a payout ratio of 67%.
Speaker #5: So for every $1,000 increase in daily rates, our quarterly EBDA could rise by approximately US$8 million, based on around 8,000 earning days, highlighting the meaningful earning upside should the market strengthen further.
Speaker #5: Slide 14, please. Here, we show the quarterly development and net profit and key share-related ratios. Which closely follow the trend in EBDA, as a result, earnings per share for the second quarter amounted to 60 US cents.
Speaker #5: Our approach to shareholder return remains clear and consistent. We continue to distribute excess liquidity on a quarterly basis while maintaining a disciplined financial buffer to safeguard our balance sheet.
Speaker #5: So for the second quarter, this approach has led to a declared dividend of 40 US cents per share, representing a payoff ratio of 67%.
Speaker #5: This aligns with our free cash flow after debt repayments and reflects both our solid earnings performance and our ongoing commitment to responsible capital allocation.
Kim Balle: This aligns with our free cash flow after debt repayments and reflects both our solid earnings performance and our ongoing commitment to responsible capital allocation. Please turn to slide 15. As illustrated on this slide, following several quarters of steadily rising vessel values, broker valuations for our fleet were at $2.9 billion at the end of the quarter, reflecting both lower vessel valuation as well as our described divestment of vessels. Although vessel values were down around 7% across the fleet, it is worth noticing that this number is heavily influenced by older tonnage from 2010 to 2012, while newer tonnage has held up relatively well, showing only low single-digit declines.
Speaker #5: And now, please turn to slide 15. As illustrated on this slide, the following several quarters of steadily rising vessel values broker valuations for our fleet were at US$2.9 billion at the end of the quarter, reflecting both lower vessel valuation as well as our described divestment of vessels.
Speaker #5: Although vessel values were down around 7% across the fleet, then it is worth noticing that this is this number is heavily influenced by older tonnage from 2010 to 2012, while newer tonnage has held up relatively well.
Speaker #5: Showing only low single-digit declines. Turning to the center chart, our net interest-bearing debt now stands at $767 million, with a stable net loan-to-value of 27%, consistent with the levels prevailing for the last couple of quarters and underscoring the strength of our conservative capital structure.
Kim Balle: Turning to the center chart, our net interest bearing debt now stands at $767 million, with a stable net loan-to-value of 27%, consistent with the levels we've been rating for the last couple of quarters and underscoring the strength of our conservative capital structure. On the right side of the slide, you can see our debt maturity profile. Over the next 12 months, we only have $157 million in borrowing maturing, just around 14% of our total debt, and we face no significant maturities until 2029, giving us ample runaway and financial stability. To further strengthen our capital structure, TORM has secured commitments for up to $857 million on the most attractive refinancing terms in our history. This refinancing package covers two existing syndicated loan facilities and our lease agreements.
Speaker #5: So, on the right side of the slide, you can see our debt maturity profile. Over the next 12 months, we have only $157 million in borrowing maturing, just around 14% of our total debt. We face no significant maturities until 2029, giving us ample runway and financial stability.
Speaker #5: But to further strengthen our capital structure, TORM has secured commitments for up to 857 million US dollars on the most attractive refinancing terms in our history.
Speaker #5: This refinancing package covers two existing syndicated loan facilities, and our lease agreements. The new structure will be divided between term loans and revolving credit facilities enhancing our liquidity and giving us greater financial flexibility.
Kim Balle: The new structure will be divided between term loans and revolving credit facilities, enhancing our liquidity and giving us greater financial flexibility. The package also extends the maturity profile with the new financing running into 2030. Our loan facilities are expected to be refinanced in Q3 2025, while the lease agreements will be refinanced on a rolling basis as buyback options are exercised, with final completion expected before Q2 2026. Altogether, our solid financial foundation gives us flexibility to navigate current market conditions and to pursue value creating opportunities as they arise. Please turn to slide 16 for the outlook. Our strong performance in the first half of the year sets a solid foundation for the remainder of the year. As of August 4th, we have secured 56% of our earnings days in the third quarter at an average Time Charter Equivalent (TTE) of 30,617 per day across the fleet.
Speaker #5: Thus, the package also extends the maturity profile, with the new financing running into 2030. Our loan facilities are expected to be refinanced in Q3 2025, while the lease agreements will be refinanced on a rolling basis as buyback options are exercised.
Speaker #5: With final completion expected before Q2 2026, our solid financial foundation gives us the flexibility to navigate current market conditions and to pursue value-creating opportunities as they arise.
Speaker #5: And now, please turn to slide 16 for the outlook. Our strong performance in the first half of the year sets a solid foundation for the remainder of the year.
Speaker #5: As of August 4th, we have secured 56% of our earnings days in the third quarter at an average of TCE of 30,677, per day across the fleet.
Speaker #5: For the full year 2025, we are fixed 66% of our earning days, at an average TCE of US$27,833 per day. These levels provide us with solid earnings visibility and reflect continued market strength across our vessel segments.
Kim Balle: For the full year 2025, we have fixed 66 of our earning days at an average Time Charter Equivalent of $27,833 per day. These levels provide us with solid earnings visibility and reflect continued market strength across our vessel segments. While geopolitical volatility remains a factor, we are seeing improved sentiment in the market environment. On that basis, we are confident in both increasing and narrowing our full-year guidance range. We now forecast Time Charter Equivalent earnings of $800 to $950 million compared to our previous guidance of $700 to $900 million. Similarly, we raise our expectations for EBITDA for the year to $475 to $625 million, up from $400 to $600 million previously. This revision reflects our secured coverage and the future market expectations, while acknowledging the potential for continued fluctuations. Overall, we remain well positioned to deliver strong results in 2025.
Speaker #5: While geopolitical volatility remains a factor, we are seeing improved sentiment in the market environment. And on that basis, we are confident in both increasing our and narrowing our full-year guidance range.
Speaker #5: We now forecast TCE earnings of US$800 to $950 million, compared to our previous guidance of US$700 to $900 million. And similarly, we raise our expectations for EBDA for the year to US$475 to $625 million, up from $400 to $600 million US dollar previously.
Speaker #5: This revision reflects our secured coverage, and the future market expectations. While acknowledging the potential for continued fluctuations. Overall, we remain well positioned to level to deliver strong results in 2025.
Speaker #5: So with this, I will conclude my remarks and hand over the mic to the operator.
Kim Balle: With this, I will conclude my remarks and hand over the mic to the operator.
Speaker #3: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad.
Lacey: At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of John Chappelle with Evercore ISI. You may go ahead.
Speaker #3: We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of John Chappelle with Evercore ISI.
Speaker #3: You may go ahead.
Speaker #4: Thank you. Good afternoon. Jacob, on page 13, the TCE fleet-wide TCE chart, the consistency over the last three quarters is really noticeable, especially for an industry that's notoriously volatile, and especially given all the geopolitics and macro uncertainty that you mentioned in your prepared remarks.
Speaker 6: Thank you. Good afternoon. Jacob, on page 13, the Time Charter Equivalent (TCE) fleet-wide TCE EBITDA chart, the consistency over the last three quarters is really noticeable, especially for an industry that is notoriously volatile, and especially given all the geopolitics and macro uncertainty that you mentioned in your prepared remarks. What do you think has caused this consistency over the last nine months or so, and does that restrict you at all with the things that you could do with TORM, whether it is positioning vessels or S&P activity or charter in, charter out? Does it kind of restrict some of your flexibility?
Speaker #4: What do you think's caused this consistency over the last nine months or so, and does that restrict you at all with the things that you could do with TORM, whether it's positioning vessels or S&P activity or charter in, charter out?
Speaker #4: Does it kind of restrict some of your flexibility?
Speaker #6: Well, that's a good question. I think I've I agree with the fact that it is really a remarkable stability that we've seen our say, let's say, over the last three quarters, predominantly.
Jacob Meldgaard: That is a good question. I think I agree with the fact that it is really a remarkable stability that we have seen, I would say, over the last three quarters predominantly, but it really does not restrict us of any. I always see these markets as that we need to establish, I am going to say, a clear view on where is the market kind of headed and what range we are in. I think we have been rangebound for some time here. I think that, as also in my prepared remarks, that I think that we illustrate that I think there is some option of that things could change. The dynamic could change to the upside, obviously, of course.
Speaker #6: But it really doesn't restrict us in any kind. I always see these markets as something we need to establish. I'm going to say we need a clear view on where the market is kind of headed and what range we are in.
Speaker #6: And I think we've been rangebound for some time here. And I think that as also in my prepared remarks that I think the real strength that I think there is some option of that things could change or the dynamic could change to the upside, obviously, of course.
Speaker #6: If we look at, for instance, additional oil coming to market, the fact that trade routes will, everything has been equal, still remain stretched and there's further closure of refineries in the parts of the world where we already have a need for import.
Jacob Meldgaard: If we look at, for instance, the additional oil coming to market, the fact that trade routes will, everything has been equal, still remains stretched, and there is further closure of refineries in the parts of the world where we already have a need for import. I think that sort of the headwinds that we have seen, which have sort of put a cap on the market, could, in the coming quarters, change the dynamics so that we have more tailwind. So, I see it more from that perspective that this is really a solid, solid, I would say, foundation for creating more upside potential as the oil markets also will change their dynamic, I think, especially with the OPEC change in sort of turning on the taps.
Speaker #6: I think that sort of the headwinds that we've seen which have sort of put a cap on the market could in the coming quarters change the dynamics so that we have more tailwind.
Speaker #6: So I see it more from that perspective that this is really a solid foundation for creating more upside potential as the oil markets also will change their dynamic, I think, especially with the OPEC change in sort of turning on the taps.
Speaker #4: Okay, thank you. And then just to follow up, Kim, I think it needs to be asked – I understand you have a calculation for your dividend policy.
Speaker 6: Okay. Thank you. Then, just to follow up, Kim Balle, I think it needs to be asked. I understand you have a calculation for your dividend policy. The payout ratio thus far this year has been lower than it was last year. Now that you have completed this tremendous financing, do you think that the calculation, if we kind of look beyond the leases, maybe Q4 or Q1 next year, becomes a bit more favorable in the magnitude of payout ratio?
Speaker #4: The payout ratio, thus far this year, has been lower than it was last year. Now that you've completed this, tremendous financing, do you think that the calculation if we kind of look beyond the leases, maybe fourth quarter or first quarter next year, becomes a bit more favorable?
Speaker #4: In the magnitude of payout ratio?
Speaker #6: Yes, I do. That is our expectation. So our expectation is that when we look into 2026, for several reasons, our cash flow break-even will decrease.
Jacob Meldgaard: Yes, I do. That is our expectation. Our expectation is that when we look into 2026, for several reasons, our cash flow breakeven will decrease notably. With that, you should expect, of course, it depends on where we are in the markets, but you should expect the payout ratio, or the dividends, to be higher, but the payout ratio also to, in itself, be higher. We would expect that.
Speaker #6: Notable and with that, you will also you should expect, of course, it depends on where we are in the markets, but you should expect the payout ratio to or the dividend to be higher, but the payout ratio also to in itself be higher.
Speaker #6: Yeah, I would expect we would expect that.
Speaker #4: Do you have any sense on what the magnitude might look like? Is it kind of 75 to 80 again, similar to what it was in '24?
Speaker 6: Do you have any sense on what the magnitude might look like? Is it kind of 75% to 80% again, similar to what it was in 2024?
Speaker #6: Good question, but probably yes. I would imagine that now I'm going out on a little limb here because I don't have a calculator for this meeting, John, but I would expect that 75 to 80 would be a fine place to be.
Jacob Meldgaard: Good question, but probably yes. I would imagine that now I am going out on a little limb here because I do not have it calculated for this meeting, John, but I would expect that 80 would be a 75, 80 would be a fine place to be.
Speaker #4: Okay, great. Thanks, Kim. Thanks, Jacob.
Speaker 6: Okay. Great. Thanks, Kim. Thanks, Jacob.
Speaker #6: Yeah, thanks. Thanks, John.
Jacob Meldgaard: Yeah, thanks. Thanks, John.
Speaker #3: Your next question comes from the line of Omar Nokda with Jeffries. You may go ahead.
Lacey: Your next question comes from the line of Omar Noqda with Jeffries. You may go ahead.
Speaker #4: Thank you. Hi, Jacob and Kim. Thanks for the update. Yeah, nice to hear kind of the thoughts of, you know, lower break-even and a potential higher payout ratio.
Speaker 6: Thank you. Hi, Jacob and Kim. Thanks for the update. Nice to hear the thoughts of lower cash flow breakeven and a potential higher dividend payout ratio as we look into next year. I wanted to maybe just ask about what we are seeing here in the third quarter. Obviously, some pretty good guidance in terms of your bookings, but especially on the MRs where you are showing $28,000, which is quite a bit above peers, but also what you had been capturing the prior few quarters. This is interesting because LR2s and LR1s are flattish, just slightly higher, but it is really the MRs that have gone up. Can you maybe just talk about what is driving that upside and what can we expect from here for the rest of the year to the extent you can say?
Speaker #4: As we look into next year, I wanted to maybe just ask about kind of what we're seeing here in the third quarter. Obviously, some pretty good guidance in terms of your bookings.
Speaker #4: But, you know, especially on the MRs where you're showing 28,000, which is quite a bit above kind of peers, but also what you have been capturing, the prior few quarters.
Speaker #4: And which is interesting because the LR2s and LR1s are kind of flattish to slightly higher, but it's really the MRs that have have gone up.
Speaker #4: Can you maybe just talk about what's driving that upside? And, you know, what can we expect from here for the rest of the year to the extent you can say?
Speaker #6: Yeah, so I think at a granular basis, what I've been thinking about, and I think it's the right question, is, okay, what has been driving this?
Jacob Meldgaard: Yeah, so I think on a granular basis, what I have been thinking about, and I think it is the right question, is, okay, what has been driving this? Really, as we look at the data points, the fact that CPP on the water now has, going into the third quarter, gone up to, you know, the highest that we have seen for more than a year is significant in combination with that if we go back exactly 12 months. I think we were all sort of a bit puzzled by the fact that crude tankers, predominantly Suez, but also some VLC, were really turning their attention to the CPP market, taking away, you know, demand for about 8% or so. Now we are back to 1% of the trading Suez and VLC being in our minds.
Speaker #6: And really, as we look at the data points, the fact that CPP on the water now has gone into the third quarter gone up to, you know, the highest that we've seen for more than a year, is significant in combination with that if we go back exactly 12 months, I think we were all sort of a bit puzzled by the fact that crude tankers, predominantly Suez but also some VLCC, were really turning their attention to the CPP market.
Speaker #6: Taking away, you know, demand for about 8% or so. And now we are back to 1%. Off the trading Suez and VLCC. Being in our market.
Speaker #6: So I think the combination of that, really you've seen a trading uptick, sort of in general, you've seen these the cannibalization, at least for now, having more or less evaporated.
Jacob Meldgaard: I think the combination of that, really, you have seen a trading uptick sort of in general. You have seen the cannibalization, at least for now, having more or less evaporated from a very high, historically unusual high level. That really just trickles down more into the MRs because you only have that many LR2s trading. As I alluded to, it is a little fascinating that I think we have all been following the order book of LR2s, watching it and thinking, okay, that seems to be quite a hefty order book. But the fact is actually that even, I think, numbers say that there is 50 vessels that have been delivered over the last three quarters or so, the trading fleet of LR2s is the same sort of in broad strokes.
Speaker #6: From a very high historically unusual high level, and that really just trickles down more into the MRs because you only have that many LR2s trading as I alluded to.
Speaker #6: It is a little fascinating that I think we have all been following the order book of LR2s watching and thinking, okay, that seems to be quite a hefty order book.
Speaker #6: But the fact is actually that even I think numbers, let's say that there's 50 vessels that have been delivered over the last three quarters or so, the trading feet of LR2s is the same.
Speaker #6: Sort of in broad strokes. So I think it's just this filtering down into that there's just more. There have been more trades at a granular basis in the MRs, and that we've also then been assisted by the fact that in the larger segments, that CPP has simply not been moving on our sister vessels or the sister segment to the extent that it was.
Jacob Meldgaard: I think it is just this filtering down into that there is just more, there has been more trade at a granular basis in the MRs and that we have also then been assisted by the fact that in the larger segments that CPP has simply not been moving on our sister vessels or the sister segment in crude to the extent that it was. It has been very, I think the fact that it is so widespread demand is extremely positive because I think it demonstrates a very solid market when you see that. It is not, it is not like almost a demo, but it is like that we should count just, okay, how many cargoes are there of NAFTA out of the AT to Asia? I mean, that will not tell you the dynamic and the strength of the market.
Speaker #6: So, it's been very positive. I think the fact that the demand is so widespread is extremely encouraging. Because I believe it demonstrates a very solid market when you see that.
Speaker #6: It's not like don't misunderstand me, but it's like that we should count just, okay, how many cargoes are there of NASA out of the AT to Asia?
Speaker #6: I mean, that will not tell you the dynamic and the strength of the market. It is actually a lot of pockets of strength. And that's what inequitably leads us to that we've got more CPP on the water now than at any point in time over the last 16 months.
Jacob Meldgaard: It is actually a lot of pockets of strength, and that is what in aggregate leads us to that we have got more CPP on the water now than at any point in time over the last 16 months. It is really that underlying strength that translates into the MR rates that you have seen.
Speaker #6: And it's really that underlying strength that translates into the MR rates that you've seen.
Speaker #4: Thanks, Jacob. That's very helpful. To get a good lay of the land there. And so I guess maybe just with that backdrop, you know, a lot more cargo on the water and less cannibalization.
Speaker 6: Thanks, Jacob. That is very helpful to get a good lay of the land there. I guess maybe just with that backdrop, a lot more cargo on the water, less cannibalization, so the fleet in general is seemingly tighter. You talked in the presentation just about values having been softer. You are obviously very transaction-oriented with the acquisitions and the sales. What are you seeing right now in terms of the S&P market? Are values finding a floor? Is there any potential for them to rise just given this improvement in rates? Any color you are able to share on that front?
Speaker #4: So the fleet, in general, is seemingly tighter. You talked in the presentation just about values having been softer. You know, you're obviously very transaction-oriented with the acquisitions and the sales.
Speaker #4: What are you seeing right now in terms of the S&P market or values finding a floor? Is there any potential for them to rise just given this improvement in rates?
Speaker #4: Any color you're able to share on that front?
Speaker #6: Yeah, I think it's a very it's a very good question. Our thinking is that in these markets, the first thing that to observe is obviously if spot rates drop, they can as we all understand, following the volatility and trend over the last three years, you know, spot rates are very volatile and they can change really fast.
Jacob Meldgaard: Yeah, I think it is a very good question. Our thinking is that in these markets, the first thing to observe is obviously if spot rates drop, they can, as we all understand, following the volatility and trend over the last three years, spot rates are very volatile and they can change really fast. That is what they actually did over the last year is that they kind of also from the slide that was referenced before on the EBITDA, it seems as if actually rates have been stable over at least three quarters, whereas asset values have been like slowly coming down. I think this is a little like you would expect also in, let us say, a real estate market. It is rare that you like certainly get that everybody puts the price down of their asset at the same time.
Speaker #6: And that's what they actually did over the last year is that they kind of also from the slide that was referenced before, on the EBITDA, it seems as if actually rates have been stable over at least three quarters.
Speaker #6: Whereas asset prices have been like slowly coming down. And I think this is a little like you would expect also in, let's say, a real estate market or it's rare that you like certainly get that everybody puts the price down of their asset.
Speaker #6: At the same time, it takes a little time to sort of get the clearance prices and I think we've reached in our opinion, we're sort of at that flexing point where rates have stabilized for a longer period.
Jacob Meldgaard: It takes a little time to sort of get the clearance prices. I think we have reached, in our opinion, we are sort of at that flexion point where rates have stabilized for a longer period. It has meant that asset values have also been creeping down, but that right now, if we sort of take a snapshot, I would argue that they are probably stabilizing around the prices that we have seen also reflected in our Q2, end of Q2 numbers, and that now it remains to be seen what happens over the course of this quarter and the next quarter. I think that there is potential if freight rates, they start to climb up in a general sense that asset values could either stay or go up from where they are now. That would be the logic.
Speaker #6: It has meant that asset prices have also been creeping down, but that right now if we sort of take a snapshot, I would argue that they're probably stabilizing around the prices that we've seen also reflected in our Q2 end of Q2 numbers.
Speaker #6: And that now it remains to be seen what happens over the course of this quarter and the next quarter and I think that there is potential if freight rates they start to climb up in a general sense, that asset prices could either stay or go up from where they are now.
Speaker #6: That would be the logic.
Speaker #4: Okay, very interesting. Thank you, Jacob, again for that. I'll turn it back.
Speaker 6: Okay, very interesting. Thank you, Jacob Meldgaard, again for that. I will turn it back.
Speaker #6: Yeah, thanks.
Jacob Meldgaard: Yeah, thanks.
Speaker #3: Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Trody Moretto with Clarkson Securities.
Lacey: Again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from the line of Srody Morato with Clarkson Securities. You may go ahead.
Speaker #3: You may go ahead.
Speaker #7: Thank you. Hi, guys. This is Trody Moretto with Clarkson. Just looking at this slide you provided on page five, or six, I think. On the CPP, somewhere else it sounded like it was trade volumes driving that up.
Speaker 7: Thank you. Hi guys, this is Srody Morato with Clarkson Securities. Just looking at this slide you provided on page five or six, I think, on the CPP fund miles, it sounded like it was trade volumes driving that up. The question is really, have you seen any change to the miles component? I feel like a lot of it has been more like a regionalized trade for a while, and we've basically been waiting for, let's say, the interbasin trade to pick up on the LR2s, right? Are you seeing any change there? Yes, trade volumes as a result is trading, exactly as we say on slide number six, I believe it is, has gone up.
Speaker #7: So the question is really, have you seen any change to the miles component? I feel like a lot of the it has been more like regionalized trade for a while.
Speaker #7: And we've basically been waiting for, let's say, the interbasin trade to pick up on the LR2s, right? So are you seeing any change there?
Speaker #6: Yeah. So yes, trade volumes as a trade exactly as you say on slide number six, I believe it is, has gone up. The ton mile on this is reflected also in the fact that the incentive to bring middle distillates from especially Middle East Eastern Hemisphere into the West has also increased in this period.
Speaker 7: The ton mile on this is reflected also in the fact that the incentive to bring middle distributed from especially the Middle East, the Eastern Hemisphere, into the West has also increased in this period. It means that everything has been equal. We'll both have an effect on volume, but also on the distances sailed. It is a combination of both because of the restocking, you could say, of middle distributed into the inventories in Northwest Europe. I think we were, if you followed our last couple of calls, I think we have been a little puzzled that that sort of from a strategic point of view that the suppliers of middle distributed were not, to a larger degree, still maintaining their inventories at higher levels.
Speaker #6: So it means that everything has been equal. We'll both have an effect on volume but also on the distances sailed. So, it is a combination of both.
Speaker #6: Because of the restock you could say of middle distillates into the inventories in Northwest Europe. I think we were if you followed our last couple of calls, I think we have been a little puzzled that that sort of from a strategic point of view, that the suppliers of middle distillates were not to a larger degree still maintaining their inventories at higher levels but, you know, towards the end of the second quarter, it was then clear that now you could no longer just eat out of inventory and that you needed to replenish.
Speaker 7: But, towards the end of the second quarter, it was then clear that now you could no longer just eat out of inventory and that you needed to replenish. That was done predominantly from the Middle East and also the US Gulf, but also the Middle East driving up volumes and miles.
Speaker #6: And that was done predominantly from Middle East and also from US Golf. But also Middle East driving up volumes and miles.
Speaker #4: Great.
Jacob Meldgaard: Great. On the next slide, which was also great, the refinery closures, right? Can you talk a bit more? You said it already, but what is the timeline here? When can we expect this positive effect to kick in?
Speaker #7: And then on the next slide, which was also great, the refinery closures, right? Can you talk a bit more maybe talk that you said it already, but what's the timeline here?
Speaker #7: When can we expect this positive effect to kick in?
Speaker #6: Yeah, so we believe that at the end of 2025 already, so within this year, we will see the European refiners be closing down. So they have been I would say moving along at a slow pace, but the decision has been made for them to finally close business.
Speaker 7: We believe that at the end of 2025 already, within this year, we will see the European refiners closing down. They have been moving along at a slow pace, but the decision has been made for them to finally close business and are no longer viable. That will already be from the end of this year, whereas in the US West Coast, as I mentioned, that will be in about a year's time from now.
Speaker #6: And at a little longer viable. So that will already be from the end of this year, whereas in the US West Coast, as I mentioned, that will be in about a year's time from now.
Speaker #4: Okay.
Jacob Meldgaard: Okay.
Speaker #6: That's real US West Coast time. It's middle of next year. Expected.
Speaker 7: is one US West Coast time. It is middle of next year, expected.
Speaker #4: Yeah, mid next year.
Jacob Meldgaard: Yeah, yeah, mid-next year.
Speaker #6: But it's obviously the greater picture around that. If I just may add a little comment, it is that from a political standpoint, it is the ambition to close the local refineries down in, for instance, Western Europe and also the US West Coast.
Speaker 7: It is obviously the greater picture around that, if I just may add a little comment, is that obviously from a political standpoint, it is the ambition to close the local refineries down in, for instance, Northwest Europe and also the US West Coast. But it has just proven that those actions have sort of accelerated compared to how fast the transition on the demand for exactly the product that they are producing is. So, it may be that the consumption, let's say, on the US West Coast is slowly going down, but the pace of closures is much faster than that. And that means that we will be called upon in the broader product tanker market to carry more cargoes, actually.
Speaker #6: But it has just proven that those actions have sort of accelerated compared to how fast the transition on the demand for exactly the products that they're producing is.
Speaker #6: So it may be that the consumption, let's say, on the US West Coast is slowly going down, but the pace of closures is much faster than that.
Speaker #6: And that means that we will be called upon in the broader product anchor market to carry more cargoes, actually.
Speaker #4: Yeah.
Jacob Meldgaard: Yeah, indeed.
Speaker #6: Indeed.
Speaker #7: I guess my final question is on the this Russian price cap change. Specifically, I guess I mean, there's a lot of LR2s that are trading into dirty trades, right?
Speaker 7: I guess my final question is on the discussion price cap change. Specifically, I guess, there are a lot of LR2s that are trading into dirty trades, right, because of the impostors. When the EU lowers the price cap, you might see Aframaxes that are trading legally Russian crude today will lose that compliance, and then they have to move out of that trade and into the conventional market, which would put downward pressure on Aframax crude rates, probably. Do you see that as a threat to that switching for LR2s or not?
Speaker #7: Because it's been positive. But then when the EU lowers the price cap, you might see aforementioned, right? That our trading of legally Russian crude today will lose that compliance and then they have to move out of that trade and into the conventional market.
Speaker #7: Which would put downward pressure on the aforementioned crude rates probably. Do you see that as a threat to that switching for LR2s or not?
Speaker #6: Yeah, I think that it is clearly the jury's out. On the real effect of this, I think that the fact that these vessels, especially if you look at the type of vessels that have been sanctioned which in many cases also would be the vessels that you point to, whether they can easily bolt from sort of a commercial point of view be accepted back in the trades that we operate in as number one, and whether they are also actually maintained in that is what I would probably argue that on the margin a lot of vessels will not easily come back.
Jacob Meldgaard: Yeah, I think that it is clearly the jury's out on the real effect of this. I think that the fact that these vessels, especially if you look at the type of vessels that have been sanctioned, which in many cases also would be the vessels that you point to, whether they can easily, both from a commercial point of view, be accepted back in the trades that we operate in as number one, and whether they are also actually maintained in that is what I would probably argue that on the margin, a lot of vessels will not easily come back. I think quite a lot of vessels are actually not maintained to a standard where it makes sense for them to be retrofitted into the standard of our type of customers.
Speaker #6: And I think quite a lot of vessels are actually not maintained to a standard where it makes sense for them to sort of be retrofitted into the standard of our type of customers.
Speaker #6: So obviously, the jury's out. But it does seem to me as if when investments have been made by people into the gray fleet or the dark fleet, and they then subsequently get sanctioned, they are not looking for a long-term investment.
Jacob Meldgaard: Obviously, the jury's out, but it does seem to me as if when investments have been made by people into the gray fleet or the dark fleet and that they then subsequently get sanctioned, they are not looking for a long-term investment. They're looking for the short-term gains of being in a trade that few people want to touch, and the operating earning is what they're looking at. It's not the maintenance of the vessel. That is the main focus. So, the jury's out. I think that it could be negative, as you point to, for mid-sized vessels and more positive for VLCCs as this trade goes on.
Speaker #6: They're looking for the short-term gains of being in a trade that few people want to touch. And the sort of the operating earning is what they're looking at.
Speaker #6: It's not the maintenance of the vessel. That is the main focus. So the jury's out. I think that it could be negative as you point to for mid-sized vessels and more positive for VLCCs as this trade goes on.
Speaker #6: But most likely there is quite a part of this, let's say, crude trading LR2/aforementioned older vintage that is already sanctioned and will have a hard time coming back.
Jacob Meldgaard: But most likely, there is quite a part of this, let's say, crude trading LR2s/Afromaxes of older vintage already sanctioned that will have a hard time coming back either for commercial reasons or because of after a period of time that they are substandard.
Speaker #6: Either for sort of commercial reasons or because of after a period of time that they are substandard.
Speaker #4: Okay.
Speaker 7: Okay. Great. All right. Thank you, guys.
Speaker #7: Good comment. Thank you guys.
Speaker #6: Thanks. Thanks for the good questions.
Jacob Meldgaard: Thanks. Thanks for the good questions.
Speaker #3: Your final question comes from the line of Clement Molins with Value Investors Edge. You may go ahead.
Lacey: Your final question comes from the line of Clement Mullins with Value Investors Edge. You may go ahead.
Speaker #8: Hi, good afternoon and thank you for taking my questions. I wanted to start by following up on John's question on the cash break-even. Could you talk a bit about the average margin on the sale and lease backs you're buying back relative to the margin on the new financing facilities?
Speaker 7: Hi, good afternoon, and thank you for taking my questions. I wanted to start by following up on John's question on the cash breakeven. Could you talk a bit about the average margin on the sale and leasebacks you are buying back relative to the margin on the new financing facilities?
Speaker #6: I think it is I think you can actually find it in our 20th. I would recommend you check the recent 20th where you can find both you can find the full overview of our leasing arrangement, the reason why I'm saying that it is a split on the specific arrangements.
Jacob Meldgaard: I think it is, I think you can actually find it in our 20F. I would recommend you check the recent 20F where you can find a full overview of our leasing arrangement. The reason why I am saying that is it is a split on the specific arrangements, and of course, it is a fixed rate there. The comparison here is when you then look into the syndicated facilities we have made, that will also be published. We have not published what the rate is. It will also be visible in our upcoming 20F for 2025. But it is notably lower than what you can see that we have in our current syndicated facilities that are around 1.85, 1.9. So, it is significantly lower than that.
Speaker #6: And of course, it's a lot of course, but it is fixed rate there. So the comparison here is when you then look into the syndicate facilities we've made, that will also be published.
Speaker #6: We've not published it, but the rate is it will also be visible in our upcoming 20th for 2025. But it is notably lower than what you can see that we have in our current syndicated facilities.
Speaker #6: That are around 1.85, 1.9. So it's significantly lower than that.
Speaker #8: Makes sense. Thanks for the color. And you saw the 2008 bill term "discover" and the term "voyageur." Could you disclose the selling price for modeling purposes?
Speaker 7: Makes sense. Thanks for the color. You sold the 2008 build TORM Discoverer and the TORM Voyager. Could you disclose the selling price for modeling purposes?
Speaker #6: We We have agreed not to disclose the prices for those vessels. With the with the buyout of them. So we will not do that.
Jacob Meldgaard: We have agreed not to disclose the prices for those vessels with the buyer of them. So, we will not do that.
Speaker #8: All right. I had that right. Thank you for taking my question.
Speaker 7: All right. I had to try. Thank you for taking my question.
Speaker #6: Yeah, that's fine. How is it?
Jacob Meldgaard: Yeah, it's just how it is.
Speaker #8: That's fair.
Speaker 7: That's fair.
Speaker #6: Of Of Of course. Any more questions?
Jacob Meldgaard: Of course. Any more questions?
Speaker #3: That concludes today's question and answers session. I would now like to turn the call back over to Jacob Meldgaard for closing remarks. You may go ahead.
Lacey: That concludes today's question and answer session. I would now like to turn the call back over to Jacob Meldgaard for closing remarks. You may go ahead.
Speaker #4: Yeah, thank you very much. And I just want to say thanks to all of you for being interested in TORM and for listening in today.
Jacob Meldgaard: Yeah, thank you very much. I just want to say thanks to all of you for being interested in TORM and for listening in today. Have a great day. Thank you.
Speaker #4: Have a great day. Thank you.
Lacey: This concludes today's conference call. You may disconnect.