Torm (NASDAQ:TRMD) reported higher third-quarter earnings as strong product tanker markets lifted freight rates across its fleet, while the company expanded its newbuilding pipeline and raised the low end of its full-year guidance.
Third-quarter time-charter equivalent, or TCE, earnings rose to $353 million from $236 million a year earlier. EBITDA increased to $274 million from $152 million, while net profit reached $199 million, compared with $78 million in the third quarter of 2025.
Basic earnings per share were $1.94, up from $0.79 a year earlier. Torm’s board approved an interim dividend of $1.35 per share, representing a total distribution of $138 million, compared with a $0.62-per-share distribution for the same quarter last year.
Fleet earnings remain elevated
Chief Financial Officer Kim Balle said the company achieved an average fleet-wide TCE rate of about $40,100 per day during the quarter, compared with approximately $31,000 per day a year earlier. LR2 vessels earned about $52,600 per day, LR1s earned approximately $38,700 per day, and medium-range, or MR, vessels earned about $36,100 per day.
While results moderated from an exceptionally strong second quarter, Balle said the third-quarter figures demonstrated the earnings capacity of the company’s operating platform amid favorable product tanker conditions.
Operating expenses were $7,894 per day, primarily reflecting higher crew-change expenses and consumable costs, according to Balle.
CEO Jacob Meldgaard said Torm’s “One TORM” platform integrates its commercial, technical and operational capabilities, allowing it to manage vessels through their life cycles rather than disposing of ships solely because they reach a certain age. He said the company’s MR fleet generated more than $200 million in additional TCE earnings compared with the peer average from 2023 through 2025, with outperformance continuing in 2026.
Newbuilding program expands
Torm sold two older vessels during the quarter: the 2007-built LR1 TORM Venture and the 2008-built MR TORM Laura. Following those sales, the company had 95 vessels on the water.
The company also continued its fleet renewal and expansion plans. After acquiring six MR resale vessels in the second quarter and previously ordering six MR newbuildings, Torm exercised options for two additional MR newbuildings during the third quarter.
After quarter-end, the company agreed to invest in eight LR2 newbuildings through a 50/50 joint venture and secured options for two more MR newbuildings. The projects create a delivery pipeline extending through 2030.
Meldgaard said the program represents fleet renewal rather than a change in Torm’s broader capital-allocation strategy. About half of the company’s LR2 fleet will reach 20 years of age over the next several years, he said, requiring investment to maintain Torm’s market position.
He added that the company could sell additional older vessels when sale values exceed the conservatively estimated earnings potential of retaining them, though asset sales are not required to fund the newbuilding program.
Market conditions and outlook
Meldgaard described the product tanker market as exceptionally strong, citing constrained effective vessel supply, sanctions and geopolitical developments that have created logistical inefficiencies. Torm said fourth-quarter bookings secured to date averaged $78,000 per day across vessel classes.
The company said nominal product tanker fleet growth can overstate actual capacity available to clean petroleum product trades. While the nominal product tanker fleet has grown about 7% year to date, Torm said the fleet actively trading clean products has contracted by roughly 4%, partly because more LR2s have shifted into dirty-product trades.
Torm also said more than one-quarter of the combined LR2 and Aframax fleet is sanctioned and effectively removed from conventional trading patterns. Meldgaard said the company expects the market impact from any return of sanctioned tonnage to be limited by the relatively small pool of younger vessels that could return to mainstream trades.
Regarding Persian Gulf trade flows, Meldgaard said clean-product exports remained around 1 million barrels per day, compared with approximately 2.5 million barrels daily before the conflict. He said crude exports had recovered more substantially, allowing refiners in other regions to increase utilization and potentially raise clean-product exports.
Torm estimates that rebuilding strategic and commercial oil inventories could add roughly 1% to 2% to global oil trade volumes over the next 12 months. The company said it believes tanker fundamentals could remain supportive even as disruptions normalize, citing resilient trade activity, inventory rebuilding, constrained effective supply and longer trade distances associated with European Union sanctions on Russia.
Guidance raised and balance sheet position
For the fourth quarter, Torm said it had covered 656 LR2 spot days at approximately $185,000 per day, contributing to average LR2 coverage of about $112,000 per day. The company cited coverage of roughly $106,000 per day for LR1 vessels and approximately $60,000 per day for MRs.
Based on that coverage and its outlook for continued market strength through the remainder of the fourth quarter, Torm raised the lower end of its full-year guidance by $50 million.
- Full-year TCE guidance: $1.75 billion to $1.9 billion, from $1.7 billion to $1.9 billion previously.
- Full-year EBITDA guidance: $1.35 billion to $1.5 billion, from $1.3 billion to $1.5 billion previously.
At quarter-end, Torm had net interest-bearing debt of approximately $697 million and a net loan-to-value ratio of 25.9%. Balle said the ratio incorporates committed newbuilding investments, including about $650 million of committed newbuilding capital expenditures. Total loans and commitments were about $1.3 billion, measured against total vessel values of roughly $5 billion, including vessels under construction.
About Torm (NASDAQ:TRMD)
TORM plc is a maritime transportation company that owns and operates a fleet of product tankers. The company primarily transports refined petroleum products, including gasoline, diesel, jet fuel and naphtha, connecting refineries, storage facilities and distribution markets around the world.
TORM’s fleet serves the global clean-product tanker market and includes vessels in several size categories, such as long-range and medium-range tankers. Its vessels operate on international trade routes, supporting the movement of energy products between major production and consumption regions.
Founded in Denmark in 1889, TORM has grown into an international shipping company headquartered in Copenhagen.
