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Torm results below expectations

Torm results below expectations
Danish shipowner Torm has admitted its results were not as good as expected as it reported a $33m pre-tax loss for the second quarter 2009.

Danish shipowner Torm has admitted its results were not as good as expected as it reported a $33m pre-tax loss for the second quarter 2009.

Danish shipowner Torm has admitted its results were not as good as expected as it reported a $33m pre-tax loss for the second quarter 2009.

This led to a pre-tax profit of $7m for the first half of the year. This compares with a first-half pre-tax profit a year ago of $198.5m.

Torm operates over 115 product tankers in a medium-range pool and two long-range pools with its partners. It also has a fleet of about 17 owned panamax dry bulk vessels.

The Copenhagen-listed group said the poor performance was due to weak freight rates and negative mark to market non cash adjustments of $25m, of which $20m was associated with writedowns on options related to vessel values.

Additionally the company"s tanker division was hit by the dramatic reduction in demand for the transport of oil products coupled with the large number of newbuildings that have been delivered.

Bunker costs have also increased substantially, the company said in a statement to the market.

It also said that based on broker valuations the market value of the fleet was below book value as of the end of June this year, although the illiquidity of the tanker market makes these valuations uncertain.

However, Torm said that the value decrease is not of a lasting nature and future earnings from the fleet would substantiate the book value.

The company sold three vessels during the second quarter for a profit of $27m, although the profits of two of the vessels will be recorded on the financial statements for the next quarter.

Earlier in the month the company lowered its forecast for the year from a profit of $100m-$140m to about breakeven due to the difficulties faced in the tanker markets.

www.TurkishMaritime.com.tr

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