Torm Net Loss Widens on Low Freight Rates, Restructure Costs

Danish shipping company Torm A/S (TORM.KO) said Wednesday that its third quarter net loss widened as lower freight rates and restructuring costs continued to weigh.


-CEO Jacob Meldgaard says “The financial results in the third quarter of 2012 were again negatively affected by the challenging market conditions as well as Torm’s financial situation. Looking forward, the recently completed restructuring agreement will enable Torm to become cash flow positive even at the current rate levels.”

-Torm still forecasts a loss before tax of $350 million-$380 million for the financial year 2012 excluding accounting effects from the execution of the restructuring, further vessel sales and potential impairment charges.

-The guidance includes special items of -$107 million derived from impairment losses of $42 million related to shipping company FR8 and $65 million in restructuring costs - primarily fees to advisors to the company’s creditors and Torm.

-Due to the complexity, Torm has asked the Danish Securities Council for a ruling on the accounting effects of the restructuring.

-Revenue $256 million, from $331.8 million.

-Operating loss $46.4 million, from a loss of $53.1 million.

-Net loss $78.5 million, from a loss of $70.4 million.

-At 1254 GMT shares traded 11% lower at DKK2.22.

[I]- Dominic Chopping, © 2012 Dow Jones & Company[/I]