Q3 2025 Torm PLC Earnings Call

Operator: This time, I would like to welcome everyone to the TORM Q3 2025 Results Conference Call. Thank you. I would like to turn the call over to Jacob Meldgaard, CEO. Please go ahead.

<unk> third quarter 2025 results conference call all lines have been placed on mute to prevent any background noise. After the speakers' 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.

Operator: This time, I would like to welcome everyone to the TORM Q4 2025 results conference call. All lines have been placed on mute to prevent any 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 like to turn the call over to Jacob Meldgaard, CEO. Please go ahead.

If you would like to withdraw your question Press Star one again, thank you I would like to turn the call over to Jacob Mill Guard C. E. O. Please go ahead.

Yes, Thank you and also welcome to everyone.

Jacob Meldgaard: Thank you. Also, welcome to everyone joining us here today from me. This morning, we released our interim results for Q3 2025, delivering another strong set of numbers that underscored TORM's ability to generate market-leading performance. In Q3, we continued to operate in a relatively stable market environment despite ongoing geopolitical tensions. Trade rates firmed compared to the first half of the year, driving a TCE of $236 million above the levels achieved in the previous quarters. This, in turn, resulted in a net profit of $78 million, enabling us to declare a dividend of $0.62 per share, clearly reflecting how stronger earnings translate into higher shareholder returns. Also, we advanced our fleet optimization strategy with the acquisition of five vessels, four 2014-built MRs, and one 2010-built LR2, while divesting a 2007-built MR.

Jacob Meldgaard: Yeah. Thank you. Also, welcome to everyone joining us here today from me. This morning, we released our interim results for Q3 2025, delivering another strong set of numbers that underscore TORM's ability to generate market-leading performance. In Q3, we continued to operate in a relatively stable market environment despite ongoing geopolitical tensions. Freight rates firmed compared to H1, driving a TCE of $236 million, above the levels achieved in the previous quarters. This, in turn, resulted in net profit of $78 million, enabling us to declare a dividend of $0.62 per share, clearly reflecting how stronger earnings translate into higher shareholder returns.

Joining us today from me. This morning, we released our interim results for the third quarter of 2025.

Delivering another strong set of numbers that on this call at home's ability to generate market leading performance.

In Q3, we continue to operate in a relatively stable market environment, despite ongoing geopolitical tensions.

Freight rates compared to the first half of the year driving a TCE of U S dollar $236 million.

Above the levels achieved in the previous quarters.

This in turn resulted in a net profit of your sort of thing.

8 million, enabling us to declare a dividend of 62 per share clearly.

Fixing how stronger earnings translate into higher shareholder returns.

Also we advanced our fleet optimization strategy with the acquisition of five vessels for 2014, but they are often one 2010 built in or to.

Jacob Meldgaard: We advanced our fleet optimization strategy with the acquisition of 5 vessels: 4 2014-built MRs and 1 2010-built LR2, while divesting a 2007-built MR. We also agreed a 3-year time charter for the 2009-built MR vessel, Torm Lily, to a European refiner at a daily rate of $22,234, thus above the prevailing market rate for such vintage. These transactions support our ongoing focus on maintaining a modern, high quality, and commercially attractive fleet. Looking ahead, while the macro environment remains dynamic and shaped by geopolitical uncertainty, market sentiment is broadly positive. We enter the final months of the year with solid momentum, supported by firm rates across all vessel segments and good visibility on our upcoming fixtures.

Divesting a 2017 to pay more.

We also agreed a three year time charter.

Jacob Meldgaard: We also agreed a three-year time charter for the 2009-built MR vessel TORM Lili to a European refiner at a daily rate of $22,234, thus above the prevailing market rate for such vintage. These transactions support our ongoing focus on maintaining a modern, high-quality, and commercially attractive fleet. Looking ahead, while the macro environment remains dynamic and shaped by geopolitical uncertainty, market sentiment is broadly positive. We enter the final months of the year with solid momentum, supported by firm rates across all vessel segments, and good visibility on our upcoming fixtures. Based on this and the coverage we have already secured, we further increase the midpoint of our guidance and narrow the range to reflect a high level of transparency on earnings with relatively few uncovered days for the remainder of 2025. As always, we remain disciplined and agile in our execution.

For the 2019 MRV until nearly to a European refiner at a daily rate of 22234 U S dollar to us above the prevailing market rates for such vintage.

These transactions support our.

Our ongoing focus on maintaining a modern high quality and commercially attractive Pete.

Looking ahead, while the macro environment remains dynamic and shaped by geopolitical uncertainty.

Market sentiment is broadly positive.

We enter the final months of the year with solid momentum supported by firm rates across all vessel segments and good visibility on our upcoming features based.

Based on this and the coverage we have already secured we further increased the midpoint of our guidance and narrowed the range to reflect a high level of transparency on earnings with relatively few uncovered days for the reminder of 2025.

Jacob Meldgaard: Based on this and the coverage we have already secured, we further increase the midpoint of our guidance and narrow the range to reflect a high level of transparency on earnings with relatively few uncovered days for the remainder of 2025. As always, we remain disciplined and agile in our execution. With that, let's turn to the key market drivers and how we are positioned for the quarters ahead. Here, please turn to slide 5. Here, let's start with a snapshot of the market landscape. Product tanker rates have remained both stable and attractive across the board. While recent figures reflect the onset of refinery maintenance season in the Atlantic and the Middle East, benchmark earnings for MR and LR2 vessels continue to show resilience. This overall rate stability is supported by consistent demand and limited growth in the CPP trading fleet.

As always we remain disciplined and agile in our execution and with that let's turn to the key market drivers and how we are positioned for the quarters ahead.

Jacob Meldgaard: Let's turn to the key market drivers and how we are positioned for the quarters ahead. Here, please turn to slide five. Let's start with a snapshot of the market landscape. Product tanker rates have remained both stable and attractive across the board. While recent figures reflect the onset of refinery maintenance season in the Atlantic and the Middle East, benchmark earnings for MR and LR2 vessels continue to show resilience. This overall rate stability is supported by consistent demand and limited growth in the CPP trading fleet. Let's turn to slide six. As we've noticed for some time, the low levels of east-to-west trade volumes observed earlier this year were unsustainable. Indeed, in Q3, trade volumes increased significantly, driven by higher middle distillate flows from east to west, supported by transatlantic movements.

Please turn to slide five.

And let's start with a snapshot of the market landscape.

Rates had remained stable.

Stable and attractive across the board.

Recent figures reflect the onset of refinery maintenance season in the Atlantic and the Middle East benchmarks earnings for MA and electrical businesses continue to show resilience.

This ore rates stability is supported by consistent demand and limited growth in the CPP trade it.

Let's turn to slide six.

Jacob Meldgaard: Let's turn to slide 6. As we've noticed for some time, the low levels of east to west trade volumes observed earlier this year were unsustainable. Indeed, in Q3, trade volumes increased significantly, driven by higher middle distillate flows from east to west, supported by trans-Atlantic movements. This lifted ton-miles well above the level seen before the Red Sea disruption, while crude cannibalization stabilized at historically normal levels. At the start of Q4, trade flows have eased slightly as refineries in the West and the Middle East undergo seasonal maintenance. However, as maintenance concludes, trade flows are expected to resume, further supported by refinery closures in the West, which increase the need to source products from alternative locations. Please turn to slide 7 to elaborate on that.

As we've noted for some time the low levels of east West trade volumes observed earlier. This year were unsustainable indeed in the third quarter trade volumes increased significantly driven by higher middle distillate flows from east to west supported by trends.

Lansing movements.

This Mr Tomasz, well above the levels seen before the receipt disruption, while crude cannibalization stabilized at historically normal levels.

Jacob Meldgaard: This lifted ton-miles well above the level seen before the Red Sea disruption, while crude cannibalization stabilized at historically normal levels. At the start of Q4, trade flows have eased slightly as refineries in the west and the Middle East undergo seasonal maintenance. However, as maintenance concludes, trade flows are expected to resume, further supported by refinery closures in the west, which increase the need to source products from alternative locations. Please turn to slide seven to elaborate on that. Here, since the start of this year, two refineries in Northwest Europe have closed, with two more scheduled to shut by end year. Together, these closures represent 6% of the region's refining capacity, reducing local product supply and increasing reliance on imported middle distillates in an already tight market.

At the start of the fourth quarter trade flows have eased slightly as refineries in the west and the middle east undergo seasonal maintenance.

However, as maintenance concludes trade flows are expected to resume further supported by refinery closest in the west.

Increase the need to source products from alternative locations.

Please turn to slide seven to elaborate on that.

And since the start of this year two refineries in northwest Europe are close with two more scheduled to shop by midyear.

Jacob Meldgaard: Since the start of this year, 2 refineries in Northwest Europe have closed, with 2 more scheduled to shut by end year. Together, these closures represent 6% of the region's refining capacity, reducing local product supply and increasing reliance on imported middle distillates in an already tight market. If this supply were fully replaced by imports from the Middle East Gulf, an additional 15 to 24 LR2 equivalents per year would be required, depending on whether vessels transit the Red Sea or sail around the Cape of Good Hope. To put this in perspective, this represents 6% to 10% of the current CPP trading LR2 fleet.

Together these closures represent 6% of the regions refining capacity.

Reducing lower product supply and increasing reliance on imported middle distillate in an already tight market.

Is this supply we're fully replaced by imports from the Middle East Gulf and additional 15 to 20 482 equivalents per year would be required depending on where the business transient.

Jacob Meldgaard: If this supply were fully replaced by imports from the Middle East Gulf, an additional 15 to 24 LR2 equivalents per year would be required, depending on whether vessels transit the Red Sea or sail around the Cape of Good Hope. To put this in perspective, this represents 6% to 10% of the current TPP trading LR2 fleet. Beyond Europe, two refineries on the US West Coast representing 11% of the region's capacity are expected to close within the next six months. This will likely drive increased demand for gasoline and jet fuel imports, translating into a need for more than 25 MR equivalents on a round-trip basis if sourced from Asia. Here, I kindly ask you to turn to slide eight. Geopolitical developments continue to be a key market driver. Since our last quarterly call, several new measures have emerged.

<unk> or sale around the Cape of good hope.

To put this in perspective this.

Represent 6% to 10% of the curtain TPP trading electric fleet.

Beyond Europe to refineries on the U S West coast, representing 11% of the region's capacity are expected to close within the next six months.

Jacob Meldgaard: Beyond Europe, two refineries on the US West Coast, representing 11% of the region's capacity, are expected to close within the next six months. This will likely drive increased demand for gasoline and jet fuel imports, translating into a need for more than 25 MR equivalents on a round-trip basis if sourced from Asia. Here, I kindly ask us to turn to slide 8. Geopolitical developments continue to be a key market driver. Since our last quarterly call, several new measures have emerged. While the duration of these measures remain uncertain, inefficiencies caused by the Red Sea disruption and sanctions on Russia continue to support the tanker market. Earlier this year, OPEC+ began unwinding production cuts, the impact on crude tanker rates only became apparent at the end of the Q3.

This will likely drive increased demand for gasoline and jet fuel imports translating into a need for more than 25 equivalents on a round trip basis, if sourced from Asia.

And here I kindly ask you to turn to slide eight.

Gil political developments continue to be a key market driver.

Our last quarterly call. Several new measures have emerged was the duration of these measures remain uncertain inefficiencies caused by the rescue disruption and sanctions in Russia continue to support the tanker market.

Jacob Meldgaard: While the duration of these measures remains uncertain, inefficiencies caused by the Red Sea disruption and sanctions on Russia continue to support the tanker market. Earlier this year, OPEC Plus began unwinding production cuts, but the impact on crude tanker rates only became apparent at the end of Q4. We expect the positive effect of strong VLCC rates on product tankers to become more visible once the refinery maintenance season concludes. Sanctions against Russia have intensified in recent months. The EU import ban on third-country petroleum products derived from Russian crude effective 1 January 2025 is not expected to significantly affect product tanker ton-miles as alternative sources are available at similar distances, or could slightly increase demand if imports are sourced from farther away. Meanwhile, intensified drone attacks on Russian refineries have reduced Russian clean petroleum product flows, boosting flows from the US Gulf.

Earlier this year OPEC plus began on Whiting.

Dr <unk> cuts.

But the impact on crude tanker rates only became apparent.

And.

The third quarter.

We expect the positive effect of strong VLCC rates on product tankers to become more visible once the refinery maintenance season concludes.

Jacob Meldgaard: We expect the positive effect of strong VLCC rates on product tankers to become more visible once the refinery maintenance season concludes. Sanctions against Russia have intensified in recent months. The EU import ban on third country petroleum products derived from Russian crude, effective January 2025, is not expected to significantly affect product tanker ton-miles, as alternative sources are available at similar distances or could slightly increase demand if imports are sourced from farther away. Intensified drone attacks on Russian refineries have reduced Russian clean petroleum product flows, boosting flows from the US Gulf. Recent OFAC sanctions on Rosneft and Lukoil may further lower Russian crude export.

Sanctions against Russia had.

Intensified in recent months.

Do you import ban on third country petroleum products derived from Russian crude effected January next year is not expected to significantly affect product tanker ton miles as alternative sources are available are similar distances or could slightly increase demand if imports.

Ah sourced from farther away.

Meanwhile, Yep.

And intensified drone attacks on Russian refineries have reduced rushing clean petroleum product tools boosting close from English golf.

Reason OPEC sanctions on Rosneft Nucor made further lower Russian crude export.

Jacob Meldgaard: Recent OPEC sanctions on Rosneft and Lukoil may further lower Russian crude export. While the direct loss of Russian barrels is limited to the sanctioned fleet, replacement barrels from other regions would provide additional demand support for the conventional crude tanker fleet in an already strong-rate environment, indirectly benefiting the product tanker market. Regarding US-China reciprocal port fees, these are now off the table for another 12 months. While such measures could have added inefficiencies to the broader tanker market, TORM would have seen limited impact due to exemptions and the flexibility of our fleet. Finally, the IMO postponement of the net zero framework in October does not affect the market today, but signals that oil will continue to play a role in the maritime industry for the foreseeable future. Please turn to slide nine. Let me turn to the TORM supply side.

The thyroid levels of Russian barrels is limited to the sanction fleet replacement barrels from other regions.

Jacob Meldgaard: The direct loss of Russian barrels is limited to the sanctioned fleet, replacement barrels from other regions would provide additional demand support for the conventional crude tanker fleet in an already strong rate environment, indirectly benefiting the product tanker market. Regarding US-China reciprocal port fees, these are now off the table for another 12 months. Such measures could have added inefficiencies to the broader tanker market, TORM would have seen limited impact due to exemptions and the flexibility of our fleet. Finally, the IMO's postponement of the IMO Net-Zero Framework in October does not affect the market today, signals that oil will continue to play a role in the maritime industry for the foreseeable future. Please turn to slide 9. Let me turn to the ton supply side.

Provide additional demand support for conventional crude tanker fleet in an already strong rate environment indirectly benefiting the product tanker market.

Regarding U S China.

See cocoa port fees. These are now off the table for another 12 months, while soft meshes could have added inefficiencies to the product tanker market, Tom would have seen limited impact due to assumptions and the flexibility of our fleet.

Finally, the <unk> postponement of the Nib silver framework in October does not affect the market today, but signals that oil will continue to play a role in the maritime industry for the foreseeable future.

Please turn to slide nine.

Let me turn to the tonnage supply side this.

This year's higher nominal fee growth has been largely absorbed by significant shift of pillar II into dirty trades as OPEC sanctions continue to limit the productivity of sanctioning from axis.

Jacob Meldgaard: This year's higher nominal fleet growth has been largely absorbed by a significant shift of LR2s into dirty trades as OPEC sanctions continue to limit the productivity of sanctioned Aframaxes. Over the past year, nearly 50 new-built LR2s have joined the fleet, yet the number of LR2s trading clean has declined by around 10 vessels. As a result, total clean product tanker capacity has fallen by roughly 1% despite a 5% increase in the nominal product tanker fleet. Looking ahead, the relatively high order book for the next two to three years should be viewed in the context of an aging fleet. The average age is now at a two-decade high, and the share of vessels approaching scrapping age is almost equivalent to the current order book. Furthermore, a significant portion of the older fleet remains under sanctions, which is expected to accelerate exits from the market.

Jacob Meldgaard: This year's higher nominal fleet growth has been largely absorbed by a significant shift of LR2s into dirty trades as OFAC sanctions continue to limit the productivity of sanctioned Aframaxes. Over the past year, nearly 50 newbuild LR2s have joined the fleet. Yet, the number of LR2s trading clean has declined by around 10 vessels. As a result, total clean product tanker capacity has fallen by roughly 1% despite a 5% increase in the nominal product tanker fleet. Looking ahead, the relatively high order book for the next 2 to 3 years should be viewed in the context of an aging fleet. The average age is now at a 2-decade high, and the share of vessels approaching scrapping age is almost equivalent to the current order book. Furthermore, a significant portion of the older fleet remains under sanctions, which is expected to accelerate exits from the market.

Over the past year.

50, Newbuild Ela tools have joined the fleet yet the number of EDA tools trading clean it declined by around 10 vessels.

As a result.

Total team product tanker capacity afforded by roughly 1% despite a 5% increase in the nominal product tanker fleet.

Looking ahead, the relatively high order book for the next two to three years should be viewed in the context of an aging fleet.

The average age is now at a two decade high and the share of vessels approaching scrapping age is almost equivalent to the current order book.

Furthermore, a significant portion of the older fleet remains under sanctions, which is expected to accelerate exits from the market.

This is particularly evident in the combined data to Aframax segment well.

Jacob Meldgaard: This is particularly evident in the combined LR2 Aframax segment, where one in four vessels globally is under OPEC, EU, or UK sanctions. Kindly turn to slide 10. To summarize, the key factors shaping the market this year are expected to continue into next year, including ongoing geopolitical uncertainty, the Red Sea disruption, and sanctions on Russia. In addition, higher crude output from OPEC is indirectly supporting the product tanker market. On the demand side, oil consumption remains solid, and structural changes in the global refinery landscape continue to support ton-miles growth for TORM. On the supply side, a wave of new-built deliveries will be offset by an increasing number of scrapping candidates and reduced trading activity among sanctioned vessels, factors that will influence overall TORM's availability and market balance.

Jacob Meldgaard: This is particularly evident in the combined LR2/Aframax segment, where one in four vessels globally is under OFAC, EU, or UK sanctions. Kindly turn to slide 10. To summarize, the key factors shaping the market this year are expected to continue into next year, including ongoing geopolitical uncertainty, the Red Sea disruption, and sanctions on Russia. In addition, higher crude output from OPEC is indirectly supporting the product tanker market. On the demand side, oil consumption remains solid, and structural changes in the global refinery landscape continue to support ton-mile growth. On the supply side, a wave of newbuild deliveries will be offset by an increasing number of scrapping candidates and reduced trading activity among sanctioned vessels, factors that will influence overall ton availability and market balance.

One in four basis globally is Andre OPEC, EU or U K sanctions.

Kindly turn to slide 10.

To summarize the key factors shaping the market. This year are expected to continue into next year, including ongoing geopolitical uncertainty the red sea disruption and sanctions on Russia.

In addition, higher crude output from OPEC is indirectly supporting the product tanker market.

On the demand side oil consumption remained solid and structural changes in the global refinery landscape continue to support ton mile growth.

On the supply side.

Newbuild deliveries will be offset by an increasing number of scrubbing candidates and reduced trading activity among sanction vessels.

Yes.

Influenced or tonnage availability and market guidance.

I'm confident that Tom is well positioned to navigate this environment.

Jacob Meldgaard: I'm confident that Torm is well-positioned to navigate this environment of elevated uncertainty, supported by our strong capital structure, operational leverage, and fully integrated platform. With that, I will now hand it over to Kim, who will walk us through the financials.

Jacob Meldgaard: I'm confident that TORM is well-positioned to navigate this environment of elevated uncertainty, supported by our strong capital structure, operational leverage, and fully integrated platform. With that, I'll now hand it over to Kim, who will walk us through the financials.

The weighted uncertainty supported by our strong capital structure.

Operational leverage and fully integrated platform.

And with that I'll now hand, it over to Kim who will.

Walk us through the financials. Thank you Jacob and please turn to slide 12 for an overview of the financials.

Kim Balle: Thank you, Jacob. Please turn to slide 12 for an overview of the financials. In Q3, we generated TCE revenues of $236 million, resulting in an EBITDA of $152 million and a net profit of $78 million. On a fleet-wide basis, we achieved TCE rates of $31,012 per day. Breaking it down by vessel class, LR2s earned well above $38,000, LR1s around $29,500, and MRs exceeded $28,000 per day. Compared to previous quarters, freight rates have strengthened, supported by solid market fundamentals. Once again, the rates we secured reflect our continued outperformance relative to the broader market. Now move to slide 13, please. This slide shows our quarterly revenue progression since Q3 2024.

Kim Balle: Thank you, Jacob. Please turn to slide 12 for an overview of the financials. In Q4, we generated TCE revenues of $236 million, resulting in an EBITDA of $152 million and a net profit of $78 million. On a fleet-wide basis, we achieved TCE rates of $31,012 per day. Bringing it down by vessel class, LR2s earned well above $38,000, LR1s around $29,500, and MRs exceeded $28,000 per day. Compared to previous quarters, trade rates have strengthened, supported by solid market fundamentals. Once again, the rates we secured reflect our continued outperformance relative to the broader market. Now move to slide 13, please. This slide shows our quarterly revenue progression since Q3 2024. With this quarter's results, we've seen meaningful uptake, adding to the stable trade rates and earnings of prior quarters. This further highlights the favorable market conditions we are operating in.

The third quarter, we generated TCE revenues of USD $236 million, resulting in an EBITDA of USD 152 million and a net profit of USD $78 million.

On a fleet wide basis, we achieved TCE rates of U S dollar 31012 per day.

Bringing it down.

Visit class a truce earn well above 38000, once around 29500 and Amos exceeded.

40000 U S dollars per day.

Compared to previous quarters freight rates have strengthened supported by solid market fundamentals. Once again the race, we secure reflect our continued outperformance relative to the broader market.

And now move to slide 13 please.

This slide shows our quarterly revenue progression since Q3 2024.

But this quarters results, we see meaningful uptake, adding to the stable freight rates and earnings of prior quarters. This further highlights the favorable market conditions, we are operating in.

Kim Balle: With this quarter's results, we see meaningful uptick, adding to the stable freight rates and earnings of prior quarters. This further highlights the favorable market conditions we are operating in. We delivered a satisfactory result with TCE of $236 million and an EBITDA of $152 million, $25 million higher than previous quarter. This improvement reflects a $4,340 per day increase in fleet-wide TCE rates. Given our current operational leverage, we are well-positioned to benefit from the already very attractive freight rates. Please turn to slide 14. Here we present the quarterly development in net profit and key share related metrics, which closely track the trend in EBITDA. For Q3, earnings per share came in at $0.79. Our approach to shareholder returns remain clear and consistent.

We deliver a.

Satisfactory result, with TCE of $236 million and an EBITDA of $152 million.

Kim Balle: We delivered a satisfactory result with TCE of $236 million and an EBITDA of $152 million, $25 million higher than previous quarter. This improvement reflects a $4,340 per day increase in fleet-wide TCE rates. Given our current operational levels, we are well-positioned to benefit from the already very attractive trade rates. Please turn to slide 14. Here we present the quarterly development in net profit and key share-related metrics, which closely track the trend in EBITDA. For Q4, earnings per share came in at $0.79. Our approach to shareholder returns remained clear and consistent. We continue to distribute excess liquidity on a quarterly basis, while maintaining a prudent financial buffer to protect our balance sheet. For Q3, this has resulted in a declared dividend of $0.62 per share, representing a payout ratio of 78%.

<unk> 5 million higher than previous quarter.

This improvement reflects a USD 4340 per day increase in fleet wide TCE rates given our current operational leverage we are well positioned to benefit from the already very attraction fragrance.

Please turn to slide 14.

Here, we present the quality development in net profit and key share related metrics, which closely track the trend in EBITDA.

For the third product earnings per share came in at 79 U S cents.

Our approach to shareholder returns remain clear and consistent we continue to distribute excess liquidity on a quarterly basis, while maintaining a prudent financial buffer to protect our balance sheet.

Kim Balle: We continue to distribute excess liquidity on a quarterly basis while maintaining a prudent financial buffer to protect our balance sheet. For Q3, this has resulted in a declared dividend of $0.62 per share, representing a payup ratio of 78%. This aligns with our free cash flow after debt repayments and reflects both our strong earnings and our ongoing commitments to responsible capital allocation. Please turn to slide 15. As shown here, broker valuation for our fleet stood at $2.9 billion at quarter end. This reflects generally stable vessel values with a slightly positive sentiment amongst other factors resulting in a NAV increase of approximately $100 million to $2.4 billion.

For Q3. It says resulted in a declared dividend of 62 U S cents per share representing a payout ratio of 78%.

This aligns with our free cash flow after debt prepayments and reflect.

Kim Balle: This aligns with our free cash flow after debt repayments and reflects both our strong earnings and our ongoing commitments to responsible capital allocation. Please turn to slide 15. As shown here, broker valuations for our fleet stood at $2.9 billion at quarter end. This reflects generally stable vessel values, with a slightly positive sentiment amongst other factors, resulting in a net increase of approximately $100 million to $2.4 billion. In the central chart, you will see our net interest-bearing debt now stands at $690 million, corresponding to around 24%, roughly the same level as the same time last year, underscoring the strength of our conservative capital structure. On the right, our debt maturity profile shows that only $122 million in borrowings will mature over the next 12 months, and that we will have no significant maturities until 2029. This provides us with ample financial runway and stability.

Both our strong earnings and our ongoing commitment to responsible capital allocation.

Please turn to slide 15.

As shown here broker valuation for our fleet stood at USD, two 9 billion at quarter end. This prefixed generally stable vessel values with a slightly positive sentiment amongst other factors, resulting in a net increase of approximately you have started 100 million to U S dollar $2 4 billion.

In the Central chart, you will see our net interest bearing debt now stands at USD 619 million corresponding to around 24% roughly.

Kim Balle: In the center chart, you will see our net interest-bearing debt now stands at $690 million, corresponding to around 24%. Roughly the same level as the same time last year, underscoring the strength of our conservative capital structure. On the right, our debt maturity profile shows that only $122 million in borrowings will mature over the next 12 months, and that we will have no significant maturities until 2029. This provides us with ample financial runway and stability. As we mentioned in August, we have secured an attractive refinancing package to replace two syndicated loan facilities and our lease agreements. To date, TORM has repurchased 13 out of 22 leaseback vessels, and two additional purchase options have been exercised, with 1 vessel expected in Q4 2025 and the other in Q1 2026.

Roughly the same level as the last at the same time last year underscoring the strength of our conservative capital structure.

On the right our debt maturity profile shows that only you were still at $122 million in borrowings when mature over the next 12 months and that we will have no significant maturities until 'twenty switching on.

This provides us with ample financial runway and stability.

As we mentioned in August we have secured an attractive refinancing package to replace two syndicated loan facilities and all of these agreements.

Kim Balle: As we mentioned in August, we have secured an attractive refinancing package to replace two syndicated loan facilities and our lease agreements. To date, TORM has repurchased 13 out of 22 leaseback vessels, and two additional purchase options have been exercised, with one vessel expected in Q4 2025 and the other in Q1 2026. The remaining vessels are scheduled for repurchase during 2026. Altogether, our strong financial position gives us the flexibility to navigate current market conditions and pursue value-creating opportunities. Now, please turn to slide 16 for the outlook. Our strong performance in the first three quarters provides a solid foundation for the remaining part of the year. As of 31 October, we have secured 55% of our Q4 earnings days at an average of TCE $30,156 per day.

So has repurchased 13 out of 22 leaseback.

And through addition of purchase options have been exercised with one vessel expected in Q4 2025 and the other in Q1 2026.

The remaining vessels are scheduled for repurchase during 2026.

Kim Balle: The remaining vessels are scheduled for repurchase during 2026. Altogether, our strong financial position gives us the flexibility to navigate current market conditions and pursue value-creating opportunities. Now, please turn to slide 16 for the outlook. Our strong performance in the first three quarters provides a solid foundation for the remaining part of the year. As of 31 October, we have secured 55% of our Q4 earnings days at an average of TCE $30,156 per day. For the full year 2025, 89% of our earning days are fixed at an average TCE of $28,281 per day. These levels provide solid earnings visibility and reflects continued market strength across our vessel segments. While geopolitical volatility remains a factor, market sentiment is firm.

Altogether, our strong financial position gives us the flexibility to navigate current market conditions and pursue value creating opportunities.

And now please turn to slide 16 for the outlook.

Our strong performance in the first three quarters provides a solid foundation for the remaining part of the year.

As of 31st October.

Secured 55% of our Q4 earnings space at all.

Of TCE $30156 per day for.

For the full year 2025, 89% of our earning days are fixed at an average TCE of you were started <unk> thousand 281 pretty.

Kim Balle: For the full year 2025, 89% of our earning days are fixed at an average TCE of $28,281 per day. These levels provide solid earnings visibility, and reflect continued market strength across our vessel segments. While geopolitical volatility remains a factor, market sentiment is firm. On this basis, we are confident in increasing the midpoint of our TCE guidance by $25 million to $900 million, while further narrowing our full-year guidance. Thus, we now expect TCE earnings of between $875 to 925 million compared to our previous range of $800 to 950 million. Similarly, we increase the midpoint and narrow our EBITDA guidance to $540 to 590 million compared to the prior range of $475 to 625 million. This revision reflects both our secured coverage and current market expectation, while acknowledging the potential for continued fluctuations.

These levels provide solid earnings visibility and reflects continued market strength across our business segments.

While geopolitical volatility remains effector market sentiment is for.

On this basis, we are confident in increasing the midpoint of our TCE of guidance, but you were sort of 25 million to 900 million U S dollars.

Kim Balle: On this basis, we are confident in increasing the midpoint of our TCE guidance by $25 million to $900 million while further narrowing our full year guidance. Thus, we now expect TCE earnings of between $875 to 925 million compared to our previous range of $800 to 950 million. Similarly, we increase the midpoint and narrow our EBITDA guidance to $540 to 590 million, compared to the prior range of $475 to 625 million. This revision reflects both our secured coverage and current market expectation while acknowledging the potential for continued fluctuations. With that, I will conclude my remarks and hand it back to the operator.

Further narrowing our full year guidance.

Thus, we now expect TCE earnings of between 875 to 925 million U S dollars compared to our previous range of 800 to 950 million U S dollars.

Similarly, we increased the midpoint and narrowed our EBITDA guidance to use the $540 million to $590 million pay.

Pay up to the prior range of U S dollar from $75 million to $625 million.

This revision reflects both our secured courage and current market expectation, while acknowledging depreciation for continued fluctuations.

And with that I will conclude my remarks, and hand, it back to the operator.

Kim Balle: With that, I will conclude my remarks and hand it back to the operator.

At this time, if you would like to ask a question press star one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.

Operator: We'll pause for just a moment to compile the Q&A roster. Your first question comes from line of Frode Mørkedal with Clarksons.

Operator: At this time, if you would like to ask a question, press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Frody Markendale with Clarksons.

Yeah.

Your first question comes from the line of <unk> Martin deal with Clarksons.

Okay. Thank you.

Got it.

Frode Mørkedal: Okay. Thank you. Hi, guys.

Frody Markendale: Okay. Thank you. Hi, guys.

Hi, there.

Yes, Greg.

Kim Balle: Hi there.

Kim Balle: Hi there. Yeah. I just read TradeWinds where you talked about, you know, a 2009-built MR charted out for three years at $22,000 per day, which is like a fantastic rate given the age, right? Basically, three and a half times even the dark, as I see it. The question is really, you know, how do you manage to pull that off? How repeatable is it to chart out for such long duration for that type of age?

Trained.

Frode Mørkedal: Yeah. I just read, TradeWinds where you talked about, you know, 2009 built MRs, charter out for 3 years at $22,000 a day, which is like a fantastic rate given the age, right? Basically 3 and a half times even it up, as I see it. The question is really, you know, how do you manage to pull that off? And how repeatable is it to charter out for such long duration for that type of age?

Where are you talked about.

You know 2009, and Mars shooter genre for three years to get done for today.

Which is like a fantastic race, given the age right.

Basically.

Three and a half times EBITDA.

Ah I see it.

The question is really you know.

Uh Huh, how do you manage to pull that off and how repeatable is this.

To jump out.

For such long duration.

Or that type of edge.

Yeah, well, thank you for noticing.

It also mentioned it in the remarks here.

Jacob Meldgaard: Well, thank you for noticing. I did also mention it in the remarks here. I think there are two things. One is the enabler to be able to charter out ships that are, in this case, more than 15 years of age. Then how many opportunities are there? If we take it the first point first, I think the point about having an integrated platform. Really, our customers, I would argue, is not really age-focused in their dealings with us because we have a platform where all our assets are living up to the same standards. If you come to human behavior, safety, et cetera, it's exactly the same people on board a vessel that is, let's say, straight out of the yard or one that is built in 2009.

Jacob Meldgaard: Yeah. Well, thank you for noticing. I did also mention it in the remarks here. I think there are two things. One is being able to be able to chart out ships that are, in this case, more than 15 years of age. How many opportunities are there? If we take the first point first, I think the point about having an intricate platform, really, our customers, I would argue, are not really age-focused in their dealings with us because we have a platform where all our assets are living up to the same standards. If you come to human behavior, safety, etc., it's exactly the same people on board a vessel that is, let's say, straight out of the yard or one that is built in 2009.

Here.

I think there's two things one is the enabler to be able to.

The chatter out there.

The ships that are in this case more than 15 years.

H.

And then how many opportunities are there it will take the first.

One person I think the point about having an integrated platform.

Really our customers.

I would argue is not really a focused in their dealings with us because we have a platform where all our assets are living up to the same standards. If you come to human behavior safety et cetera. It is exactly the same people on board a vessel that is let's say straight out of the yard or one that.

He is a build in 2009 and although on efficiency.

Jacob Meldgaard: Also, on efficiency, you know, all the things that we do to make it a TORM vessel when we own and control it is the same across the fleet. I think my point being, I don't see this as unique because our customers will look at TORM delivering the same type of service for any of our vessels. To your question, how many are there? I mean, this is a European refinery, A1. Will there be more? Time will tell. We are in negotiations on several of our ships on longer duration. Clearly, with the market that we are experiencing right now, it is so that we are in more frequent dialogue with customers around longer-term deals than what we were six months ago. It is, you know, quite a game of that we are only going to do this if it makes financial sense.

Jacob Meldgaard: Also on efficiency, you know, all the, all the things that we do to make it a TORM vessel when we own and control it is the same across the fleet. I think my point being, I don't see this as unique because our customers will look at TORM delivering the same type of service for any of our vessels. To your question, how many are there? I mean, this is, this is a European refiner, A one. Will there be more? Time will tell. We are in negotiations on several of our ships on longer duration. Clearly, with the market that we are experiencing right now it is, it is so that we are in more frequent dialogue with customers around longer-term deals than what we were 6 months ago.

All the all the things that we do to make it a ton listen when we own and control. It is the same across the fleet.

So I think my point being.

I don't see this really as unique because our customers will look at towards delivering the same type of service for any of our vessels.

To your question how many other.

This is this is a European refiner or a one.

Would that be more.

Automotive we are in negotiations on.

Several of our ships on longer duration clearly.

With the market that we are experiencing right now it is it is so that we are in more frequent dialogue with customers around longer term deals than what we were six months ago.

But it is it is it.

Quite a game of that we are we only going to do this if if it makes financial sense, we don't need to take the cover because of obviously the financial strength on the balance sheet that can I think went through in detail.

Jacob Meldgaard: It is, it is a, you know, quite a game of that we are, we are only gonna do this if it makes financial sense. We don't need to take the cover because of, obviously, the financial strength on the balance sheet that Kim, I think, went through in detail.

Jacob Meldgaard: We don't need to take the cover because of, obviously, the financial strength on the balance sheet that Kim, I think, went through in detail.

Interesting I mean, yeah for sure I mean.

Frode Mørkedal: Interesting. I mean, yeah, for sure. I mean, you know, 30% cash return on such a deal is certainly means ship values should increase, right? Which brings me to the next question really is about, you also announced before MRs, so you're buying ships, and one LR2, I guess. You also sold older ships. Just like, you know, broadly speaking, how's your thought process, when you made those decisions? Like, you know, are you looking at some type of return hurdle, cash break even, or maybe the time charter opportunities? Yeah.

You know 30%.

Kim Balle: Interesting. I mean, yeah, for sure. I mean, you know, 30% cash return on such a deal certainly means ship value should increase, right? Which brings me to the next question, really, is about you also announced the four MRs. You are buying ships and one LR2, I guess. You also sold all the ships. Just like, you know, broadly speaking, how's your thought process when you made those decisions? You know, are you looking at some type of return hurdle, cash back even, or maybe the time charter opportunities? Yeah.

Ashford.

Certainly I mean, she found it should.

Greece, right, which brings me to the next question really is about you also announced before Mr's.

You're buying ships Uh huh.

Hello to.

You also sold the oldest ships I'm just like.

Broadly speaking how is your thought process.

When you made those decisions.

Are you looking on some type of return hurdle.

Cash breakeven or maybe the time charter opportunities.

Yeah.

Yeah. Good question I think I think the answer is all of the above.

Jacob Meldgaard: Good, I think the answer is all of the above. We don't only look at one metric, but of course it needs to qualify for that our internal hurdle for what we deem to be a proper IRR and also return on invested capital. Given that we are in volatile markets and we are spot operations, of course it needs to pass on that parameter when we look at asset acquisitions. I think, again, I'll make the same point here. Probably I'm a little repetitive, but I think we also have the benefit of that when we make investment analysis, we are not picky on vessel age or the vessel segment. What we're really sticking on is that it meets the return requirements, the hurdles that we have set for ourselves.

Jacob Meldgaard: Yeah. Good question. I think the answer is all of the above. We do not only look at one metric, but of course, it needs to qualify for our internal hurdle for what we deem to be a proper IRR and also return on invested capital, given that we are in volatile markets and we are a spot operation. It needs to pass on that parameter when we look at asset acquisitions. I think, again, I'll make the same point here. Probably I'm a little repetitive, but I think we also have the benefit that when we make investment analysis, we are not sticky on vessel age or the vessel segment. What we're really sticking on is that it meets the return requirements, the hurdles that we have set for ourselves, because we are in a business that is volatile.

So.

We don't only look at Wotton matrix, but of course it needs to qualify for that our internal.

Thirdly for what we deem to be a proper IR and also return of capital given that we are in volatile market than we have thought aberration of course it needs to pass on that parameter when we look at asset acquisitions, but I think again I'll make the same point here.

So probably I'm, a little repetitive, but I think we are also.

We have the benefit of that when we make investment.

Analysis.

We are not.

E on vessel H O. The vessel segment, what we are really sticky on is that it meets the return requirements. The hubs that we have set for ourselves because we are in a business that is volatile. So of course, we need to have a decent return in order for us to utilize our capital against.

Jacob Meldgaard: We are in a business that is volatile, so of course, we need to have a decent return in order for us to utilize our capital against the asset. The luxury we have because of the platform that I also described about the charter opportunities is so that I feel very comfortable that our organization can generate maximum value out of whether it's an MR built in, you know, 5 years of age or 10 or 15, or whether it's one of the other segments. That, of course, offers me more investment opportunities to study and look at IRRs and ultimately return on invested capital from not only one angle and not only one particular type of ship. We really have the ability with our integrated platform to accommodate all of this.

Jacob Meldgaard: Of course, we need to have a decent return in order for us to utilize our capital against the asset. The luxury we have, because of the platform that I also described about the charter opportunities, is so that I feel very comfortable that our organization can generate maximum value out of whether it's an MR built in, you know, five years of age or 10 or 15, or whether it's one of the other segments. That, of course, offers me more investment opportunities to study and look at IRRs and ultimately return on invested capital from not only one angle and not only one particular type of ship, because we really have the ability with our integrated platform to accommodate all of this.

Yes, but the luxury we have because of the platform that I also described about the China opportunity is so that I feel very comfortable that our organization can generate maximum value out of whether it's M. M. R built in.

Finally, as 40 years of age or 10 or 15.

Whether it's one of the other segments and then of course office mean more investment opportunities to study and look at us and ultimately return on invested capital from not only one.

The angle and not only one particular type of ship because we really have the ability with our integrated platform to accommodate all of this.

So obviously coming to your point.

Jacob Meldgaard: Obviously, coming to your point, the four, actually five vessels we've acquired, they, in our opinion, all of them individually meet the return hurdles that we have. Whereas if we looked at the one that we sold, that was an asset where we could see that it was actually the NPV of that sale was better than maintaining it in our fleet and operating it. It was not that we could not do it, but we had an offer that was better than what our business plan would dictate that you could get.

Jacob Meldgaard: Obviously, coming to your point, the 4, actually 5 vessels we've acquired, they, in our opinion, all of them individually meet the return hurdles that we have. If we looked at the one that we sold, that was an asset where we could see that it was actually the NPV of that sale was better than maintaining it in our fleet and operating it. It was not that we could not do it, but we had an offer that was better than what our business plan would dictate that you could get.

There for five.

Basically we've acquired they in our opinion all of them individually meet the return hurdles that we had whereas if we looked at the ones that we sold that wasn't added where we could see that it was actually the NPV of that sale was better than maintaining it in our feeder and operating it. It was not that we cannot do it but we had an offer that was.

Better than what our business plan would dictate that you could get.

Interesting.

Can you remind us I guess on how the one term platform actually works in practice I guess.

Frode Mørkedal: Interesting. Can you remind us, I guess, on how the one TORM platform actually works in practice, I guess, you know, the way you pull intelligence, I don't know, cargo opportunities, positioning? Essentially, why that translates into the higher TCE than the arguably peers are getting?

Kim Balle: Interesting. Can you remind us, I guess, on how the one TORM platform actually works in practice? I guess, you know, the way you pull intelligence, I don't know, cargo opportunities, positioning, essentially why that translates into the higher TCE than arguably peers are getting.

The way you Fool intelligence, I dunno cards opportunity positioning, especially of why that translates into the higher.

TCE than arguably there are getting.

Yeah, very happy too so.

Basically I think you should look a little away from.

Jacob Meldgaard: Yeah. Very happy to. Basically, I think you should look a little away from from the fact that we are chartering the ships and start by looking at the ships themselves, where we have an integrated platform where we hire all of our seafarers. We can dictate which seafarers are on what ships at what time. We can, of course, dictate the quality, but also the focus area and incentivize these to work for the same thing as I just described, i.e., the return on invested capital at the end. Because they are not motivated by a particular ownership structure inside of a ship management company. They are all integrated. I think it starts on board the ships, and it also starts with all the technicalities that we can apply on the ships.

Jacob Meldgaard: Yeah, very happy to. Basically, I think you should look a little away from the fact that we are chartering the ship and start by looking at the ships themselves, where we have an integrated platform where we hire all of our seafarers. We can dictate which seafarers are on what ships at what time. We can, of course, dictate the quality, but also the focus area, and incentivize these to work for the same thing as I just described, i.e., the return on invested capital at the end, because they are not motivated by a particular ownership structure inside of a ship management company. They are all integrated. I think it starts on both the ships, and it also starts with all the technicalities that we can apply on the ships.

From the fact that we are chartering the ship and start.

By looking at the ships themselves, where we have anticipated.

The platform, where we hire all of our seafarers the weekend dictate which seafarers are on what ships at what time, we can of course dictate the quantity, but also the focus area and anticipate IC to work for the same thing as adjusted crack I E. The return on invested capital.

Because they are not motivated by a.

Particular ownership structure inside of a ship management companies, they're all integrated with I think it starts with both the ships and it also starts with all the technical technicality that we can apply on the ships. If we take a horse here, we will probably add 20 different.

Jacob Meldgaard: If we take over a ship, we will probably add 20 different investments that is physically changing the ships from how they are today into the type of vessels with the fuel efficiency that we would like to have. It is sort of the broader picture of that we see, of course, ultimately that it is the dialogue with the customers that dictates the price. Before you get to that, there's a whole company that is working towards enabling the chartering team to get the best rates. I think in that sense, it is different than the business models that we see in other companies where you are more of a steel owner, but where you outsource control of various functions. We actually have everything in-house, and the discipline we can create by that is that we actually have common KPIs.

Jacob Meldgaard: If we take over a ship, we will probably add 20 different investments that is physically changing the ships how they are today into the type of vessels with the fuel efficiency that we would like to have. It's sort of the broader picture of that we see, of course, ultimately, that it is the dialogue with the customers that dictates the price. Before you get to that, there's a whole company that is working towards enabling the chartering team to get the best rates. I think in that sense, it is different than the business models that we see in other companies where you are more of a steel owner, but where you outsource control of various functions. We actually have everything in-house.

Yeah.

Investments.

That is physically changing the shifts from what they are today into the type of issues with the fuel efficiency that we would like to have.

And then it it is sort of the broader picture that we see of course ultimately it is the dialogue with the customers.

The that dictates the price, but before you get to that as a whole.

The company that is working towards enabling the chartering team to get the best.

And I think in that sense. It is different than the business models that we see in other companies, where you have more of a steel owner.

Where you outsource control of various pumps, if we actually have everything in house.

And the discipline, we can create by that is that we actually have common kpis everybody in the organization. It is driven by the same.

Jacob Meldgaard: The discipline we can create by that is that we actually have common KPIs. Everybody in the organization is driven by the same KPIs. I think that is the secret sauce in this. Then underneath the hood, there's, of course, many other things you also point to. You need to be in the right markets at the right time. You need to be really clever about how you position your fleet and think forward. Of course, we use tools in order to inform us about what do we believe is the best position that you can come in to maximize earnings over a longer period. I'm happy that I think we really recognize that the value of the platform is that we are delivering TCE earnings ultimately that exceeds our peers.

Jacob Meldgaard: Everybody in the organization is driven by the same KPIs. I think that is the secret sauce in this. Underneath the hood, there's, of course, many other things you also point to. You need to be in the right markets at the right time. You need to be really clever about how you position your fleet and think forward. Of course, we use tools in order to inform us about what do we believe is the best position that you can come into maximize earning over a longer period. I'm happy that you really recognize that the value of the platform is that we are delivering TCE earning. Ultimately, that exceeds obvious.

Kpis.

I think that is the secret sauce and it.

And then underneath the Hood of course, many others Haynesville also point to you need to be in the right markets at the right time, you need to be really clever about how you position your feet and think forward and of course, we use tools in order to inform us about what do we believe.

Is the best position that you can comment to maximize everything over a longer period.

And I'm happy that you I mean, we really recognized that the value of the platform is that we are delivering.

TCE earnings ultimately getting that exceeds all piece.

Yes exactly.

Thank you guys that's very good.

Frode Mørkedal: Yes, exactly. Thank you, guys. That is very good.

Kim Balle: Yes, exactly. Thank you, guys. That's very good.

Thank you.

Again, if you would like to ask a question Press Star then the number one on your telephone keypad.

Jacob Meldgaard: Thank you.

Jacob Meldgaard: Thank you.

Operator: Again, if you would like to ask a question, press star, then 1 on your telephone keypad. Your next question comes from the line of Omar Nokta with Jefferies.

Operator: If you would like to ask a question, press star, then the number one on your telephone keypad. Your next question comes from the line of Omar Nukta with Jefferies.

And your next question comes from the line of Omar <unk>.

Uh Huh with Jefferies.

Thank you Hey, guys.

Good afternoon.

Omar Nukta: Thank you. Hey, guys. Good afternoon. Good update. Obviously, very strong figures. I just had a couple of questions, maybe just in terms of capital deployment. You bought the four MRs, the LR2. Those ships are somewhat older, but it looks like perhaps maybe they're in that sweet spot of return on investment. Just want to get a sense from you. Does this mark maybe a difference in how you're going to start deploying capital? Do you think going younger makes sense, or is this the right age profile where we are in the cycle, and I guess maybe where TORM is in its life cycle? Is this the right age to be going after at this point?

Omar Nokta: Thank you. Hey, guys. Good afternoon. Good update. Obviously, very strong figures. I just had a couple of questions, maybe just in terms of capital deployment. You bought the 4 MRs, the LR2. Those ships are somewhat older, but it looks like perhaps maybe they're in that sweet spot of, you know, return on investment. Just want to get a sense from you. Does this mark maybe a difference in how you're gonna start deploying capital? Do you think going younger makes sense, or is this the right age profile where we are in the cycle, and I guess maybe where TORM is in its life cycle? Is this the right age to be going after at this point?

Good update obviously very strong figures I just had a couple of questions.

Maybe just in terms of capital deployment are you about the forum ours the LR to.

Ships are somewhat older but it looks like perhaps maybe they are in that sweet spot of return on.

On investment, but just wanted to get a sense from you is this.

Does this mark maybe a difference in how you're going to start deploying capital do you think going younger makes sense or is this the right age profile, where we are in the cycle and I guess, maybe where <unk> is in its lifecycle is this the right age to be going after.

At this point.

Yeah, I think coming back to the right age.

Jacob Meldgaard: Yeah. I think coming back to the right age is the age where you get the highest return on invested capital. We are not concerned about the age of these assets. We would obviously not have looked that way. Yes, I think it's, it's absolutely the right thing. Could it be that we could supplement with younger tonnage? Yes. When and if the price curve gives us the opportunity to buy the right type of assets that are younger, we will absolutely look that way also, Omar. You know, for now, I feel very comfortable with the choices that we have made, we are very open for business on any potential additional to our fleet.

Jacob Meldgaard: Yeah, I think coming back to the right age is the age where you get the highest return on invested capital. We are not concerned about the age of these assets. We would obviously not have looked that way. Yes, I think it's absolutely the right thing. Could it be that we could supplement with younger talent? Yes. When and if the price curve gives us the opportunity to buy the right type of assets that are younger, we will absolutely look that way also, Omar. For now, I feel very comfortable with the choices that we have made. We are very open for business on any potential additional to our fleet.

The age where you get the highest return on invested capital we are not concerned.

About the age of these assets are then we would obviously not have looked that way and.

So yes, I think it's a it's a it's absolutely the right thing could it be that we could supplement with with younger tonnage yes.

When and if the price curve.

It gives us the opportunity to to buy the right type of assets at a younger we will absolutely look that way also.

But it for us.

Now I feel very comfortable with.

With the choices, we have made and then we are very open for business on the on any potential.

Additional to our fleet.

Okay very good and then second question I have is on the dividend.

Omar Nukta: Very good. The second question I have is on the dividend. Looks like you bumped the payout ratio from, say, 70 up to 78. I know it's not a meaningful change, but it's noticeable. Anything you're willing to share in terms of how you think about dividends going forward from here? Do you want to keep it in that 70 to 78% range? Do you think it's more on the higher end going forward? Anything you're willing to share?

Omar Nokta: Okay. Very good. Second question I have is on the dividend. Looks like you bumped the payout ratio from, say, 70 up to 78. I know it's not a meaningful change, but it's noticeable. Anything you're willing to share in terms of how you think about dividends going forward from here? Do you wanna keep it in that 70% to 78% range? Do you think it's more on the higher end, going forward? Anything you're willing to share?

It looks like you bumped the payout ratio from say 70 up to 78, I know, it's not a meaningful change, but it's noticeable.

Anything youre willing to share in terms of how you think about dividends going forward from here you want to keep it in that 70% to 78% range.

I think it's more on the higher end.

Going forward.

Anything you're willing to share.

Yeah. Thank you but of course it all we were asked the same question last time, you remember that and if we have to grow.

Kim Balle: Yeah. Thank you for that question, Omar. We were asked the same question last time. You remember that?

Kim Balle: Yeah. Thank you for that question, Omar. We were asked the same question last time. You remember that? If we go to S5 to 80, and I think we were supposed to say, yes, we'll get there. Luckily, we are there already this quarter. You know, that is not how we have designed our distribution policy. It's not designed to hit a PE or payout ratio. It's designed to distribute free liquidity we generate throughout the quarter. Of course, it is correlated to our cash flow break-even levels. As they go down, and I'm just taking the network capital impact out of the equation, all that being equal, of course, as our cash flow break-even decreases, the ability to pay out more, of course, increases likewise. Hopefully, we will look into some coming quarters where we can keep it at this level.

If Australia. The I think we were supposed to say, yes, we will get there. Luckily we are there already this quarter you know that is not that's not how we have decided our you know what distribution policy you start to sign two to hit a P. Oh payout ratio is designed to distribute free liquidity we.

Omar Nokta: Yeah.

Kim Balle: If you go, yes, to 520, and I think we were supposed to say, yes, we'll get there. Lovely. We are there already this quarter. You know, that's not how we have designed our, you know, our distribution policy. It's not designed to hit a PE or payout ratio. It's designed to distribute free liquidity we generate throughout the quarter. Of course, it is correlated to our cash flow breakeven levels. As they go down, and I'm just taking the net working capital impact out of the equation. All that being equal, of course, as our cash flow breakeven decreases, the ability to pay out more, of course, increases likewise.

Iterate throughout the quarter.

But of course, it is correlated to our cash flow breakeven levels and as they go down.

And I'm, just taking the Midwood capital.

The impact out of the equation, but all.

All that being equal of course as our cast over even the decreases the ability to pay off more of course increases.

Likewise, so hopefully we will look into the coming quarters, where we can keep it at this level.

Kim Balle: Hopefully, we will look into some coming quarters where we can keep it at this level. Also, I think I alluded to last time potentially higher, but let's just call it these levels is very satisfactory. It's not an aim we have on a payout ratio. It is the free liquidity we're generating that is the outset of when we propose dividends to our board, and then they decide from that.

Also I think I alluded to last time potentially higher but let's just call. It at these levels is a very satisfactory.

Kim Balle: I also, I think I alluded to last time, potentially higher, let's just call it at these levels is very satisfactory. It is not an aim we have on a payout ratio. It is the free liquidity we're generating that is the outset of when we propose dividends to our board, and then they decide from that.

But it is not it's not that we have on our payout ratio. It is the free liquidity. We were generating that we are that is that is the outfit up when we proposed dividends to our board and then they decide from there.

Okay. Thank you that's helpful.

Omar Nukta: Okay. Thank you. That's helpful. Last question, just in terms of the reported interest expense, was a bit higher than the prior few quarters. Just wondering, is that an accounting treatment? Is that a timing of a coupon payment?

Omar Nokta: Okay. Thank you. That's, that's helpful. Then last question, just in terms of the reported interest expense was a bit higher than the prior few quarters. Just wondering, is that an accounting treatment? Is that a timing of a coupon payment?

And then.

Last question just in terms of the reported interest expense.

Expense was a bit higher than the prior few quarters I'm. Just wondering does that is that an account the accounting treatment is that a timing of a coupon payment.

So it's the refinancing so is the country in regard to refinance.

Kim Balle: No, it's the refinancing. It's the accounting of the refinance and the upfront-- or the fees that are generated there. You're just hitting-.

Kim Balle: No, it's the refinancing. It's the account treatment of the refinancing and the upfront or the fees that are generated there. You're just hitting a quarter where we did a.

The upfront or the fees that are generated there.

So you're just saying, okay, what would you do that.

Yep.

Kim Balle: Okay.

Kim Balle: All those data.

Okay. So it smooths out the kind of back to more of a more in a more normalized level in <unk>.

Omar Nokta: Yep. Okay. It smooths out kind of back to on a more normalized level in Q4.

Omar Nukta: Yep. Okay. It smooths out kind of back to a more normalized level in Q4.

They really are we going to have a talk about that all know if you want.

Kim Balle: Definitely. Yeah. We can have a talk about that, Omar, if you want some more details on that. That's the accounting effect.

Kim Balle: Definitely. We can have a talk about that, Omar, if you want some more details on that. That's the accounting effect.

Some more details on that but that's the accounting effect.

Okay very good thanks, guys. That's it for me.

Omar Nukta: Okay. Very good. Well, thanks, guys. That's it for me.

Omar Nokta: Okay. Very good. Well, thanks, guys. That's it for me.

Thanks Omar.

Jacob Meldgaard: Thanks, Omar.

Jacob Meldgaard: Thanks, Omar.

Again, if you would like to ask a question press star one on your telephone keypad.

Operator: Again, if you would like to ask a question, press star 1 on your telephone keypad. At this time, there are no further questions. I will now turn the call back over to Jacob for closing remarks.

Operator: If you would like to ask a question, press star one on your telephone keypad. At this time, there are no further questions. I will now turn the call back over to Jacob for closing remarks.

And at this time there are no further questions I will now turn the call back over to Jacob for closing remarks.

Yeah. Thank you everyone for listening to the Q3 2025.

Jacob Meldgaard: Yeah. Thank you, everyone, for listening to the Q3 2025 report from TORM. Have a great day.

Jacob Meldgaard: Yeah. Thank you, everyone, for listening to the Q3 2025 report from TORM. Have a great day.

<unk> report from two of them have a great day.

Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Yeah.

[music].

Hum.