TORM Stock

TORM plc operates as a pure-play product tanker company.

The company is one of the world's largest carriers of refined oil products. Its activities are primarily the transportation of clean petroleum products, such as gasoline, jet fuel, kerosene, naphtha and gas oil; and occasionally dirty petroleum products, such as fuel oil. The company is active in all larger vessel segments of the product tanker market from Medium Range (MR) to Long Range 2 (LR2) tankers.

The company has an extensive in-house operating and management platform, which performs commercial, administrative and technical management for its vessels. Through this integrated platform, the company handles the commercial management of all its vessels and the technical management of all its owned vessels, other than three vessels managed by an unaffiliated third party. In addition, the company conducts all vessel sale and purchase activities in-house, leveraging relationships with shipbrokers, shipyards, financial institutions and other shipowners.

As of December 31, 2022, the company’s fleet consisted of 55 owned vessels, 23 chartered-in and leaseback vessels.

Strategy

The company’s strategy is to employ its vessels worldwide primarily in the spot market.

Sale and Leaseback Transactions

In the third quarter of 2022, the company took delivery of the second-hand LR2 vessel (TORM Hannah) purchased in Q2 2022 and subsequently entered into a sale and leaseback financing transaction, which included purchase options during the lease period.

Customers

The company generates revenue by charging customers for the transportation of primarily refined oil products and occasionally crude oil. Many of the company’s largest customers in the product tanker segment are companies operating in the oil industry, such as major oil companies, state-owned oil companies and international trading houses.

Customer Concentration

During 2022, the company’s 20 largest customers accounted for approximately 74% of its total revenue, of which one customer accounted for 12% of the company’s revenue.

Vessel Acquisitions

On August 9, 2022, the company took delivery of TORM Hannah, a secondhand LR2 vessel, which it purchased during the second quarter ended June 30, 2022. TORM Hannah was financed by a sale and leaseback agreement.

Scrubber Investments

As of December 31, 2022, the company had successfully installed scrubbers on 58 of its vessels, with another 10 installations scheduled to be completed by February 28, 2024. Upon completion, 68 vessels will be fitted with scrubbers, with the remaining vessels continuing to use compliant fuels with 0.5% sulfur content.

Patents, Licenses and Trademarks

The company has trademark registered the rights to the company's name (TORM) and logo (the TORM flag) in all relevant jurisdictions, including Denmark, the European Union, Bahrain, Brazil, Singapore, the United Arab Emirates, and the United States. The company has registered its primary domains, such as www.torm.com, www.torm.dk, and www.torm.eu.

Environmental and Other Regulations in the Shipping Industry

A variety of government and private entities subject the company’s vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities, such as the United States Coast Guard (USCG), harbor masters or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require the company to obtain permits, licenses, certificates and other authorizations for the operation of its vessels.

In 1997, the International Maritime Organization (IMO) adopted Annex VI to MARPOL (the International Convention for the Prevention of Pollution from Ships of 1973, as amended) to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits ‘deliberate emissions’ of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. Emissions of ‘volatile organic compounds’ from certain tankers and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs), are also prohibited. All the company’s vessels are compliant in all material respects with these regulations.

The company’s vessels are in substantial compliance with the Safety of Life at Sea of 1974 (SOLAS) and LLMC (the Convention of Limitation of Liability for Maritime Claims) standards.

Under Chapter IX of the International Convention for the Safety of Life at Sea of 1974, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the ‘ISM Code’), the company’s operations are also subject to environmental standards and requirements.

The company has obtained applicable documents of compliance for its offices and safety management certificates for all of its vessels for which the certificates are required by the IMO.

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships, or the ‘Anti-fouling Convention’. The company has obtained Anti-fouling System Certificates for all of its vessels that are subject to the Anti-fouling Convention.

Both the U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act impact the company’s operations.

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (CAA) requires the U.S. Environmental Protection Agency (EPA) to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. The company’s vessels are subject to vapor control and recovery requirements for certain cargos when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. The CAA also requires states to draft State Implementation Plans (SIPs) designed to attain national health-based air quality standards in each state. The company’s vessels operating in such regulated port areas with restricted cargos are equipped with vapor recovery systems that satisfy these existing requirements.

The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on the company’s vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict its vessels from entering the U.S. Waters.

History

TORM plc was founded in 1889. The company was incorporated under the laws of England and Wales in 2015.