TORM Loss Down in Q1 After Restructuring

CEO Jacob Meldgaard said the company positioned itself to take advantage of market improvements

Danish shipping firm TORM A/S [NASDAQ:TRMD] (TORM) says it reduced its loss and brought its earnings before interest, taxes, depreciation, and amortisation (EBITDA) into positive territory in the first quarter of the year thanks to both the company's restructuring and improvement in the product tanker segment.

TORM reported a loss of $16.3 million on revenues of $278.2 million for the quarter, compared with a $78.7 million loss and revenues of $310.6 million for Q1 2012.

EBITDA was a gain of $35.8 million, compared with a loss of $7.1 million in the period last year.

"The seasonally strong first quarter in the product tanker segment was the best we have seen since the beginning of the financial crisis," said CEO Jacob Meldgaard.

"TORM positioned itself well to take advantage of the market improvements, and we saw the positive effects of TORM's restructured time charter fleet and the cost program."

Product tanker freight rates were "as expected at seasonally high levels," the company said, with unusually cold weather in North Asia and increased Australian imports on the back of reduced refinery capacity helping to boost the rates to their highest level in four years.

Still, the company said, the rates continued to be volatile.

TORM, which completed a restructuring agreement last year, said its cost program reduced its administrative expenses 14 percent to $14 million in the quarter.

For the full year, the company forecasts a loss before tax of $100 million to $130 million and a positive EBITDA of $80 million to $110 million.