Nine-month profit exceeds the whole of 2024

TORM reported net profit of US$659.8 million for the first nine months of 2026, up 231.2% year on year, while securing strong fourth-quarter earnings coverage and expanding its newbuilding pipeline. Its results, released on 4 November, show 53% of fourth-quarter earning days covered at an average time charter equivalent (TCE) rate of US$78,419 per day. The company's confidence in product tankers rests on several connected developments: capacity tied up in shuttle operations, vessels moving between clean and dirty trades, and the potential for recovering exports and inventory rebuilding to generate additional transport demand.

TORM earned US$199.1 million in the third quarter, compared with US$77.6 million a year earlier, while EBITDA reached US$274.1 million. For the first nine months, TCE earnings totalled US$1.151 billion and EBITDA US$890.6 million. Together with net profit of US$659.8 million, all three measures exceeded their full-year 2024 levels. The comparison puts the recovery into perspective: annual net profit fell from US$611.5 million in 2024 to US$286 million in 2025 before rebounding strongly in 2026.

Quarterly performance shows how sharply conditions have shifted. Fleet-wide average TCE exceeded US$42,000 per day in both the first and second quarters of 2024, before falling to US$25,775 in the fourth quarter. In the first half of 2025, average earnings were around US$26,700 per day and quarterly net profit approximately US$60 million, followed by a recovery in the second half. TORM's second quarter of 2026 then produced average TCE of US$59,301 per day and net profit of US$338.3 million, which the company described as its strongest quarterly result on record.

The latest improvement reflects both higher vessel earnings and more earning days. Fleet-wide average TCE rose 59.2% year on year to US$44,803 per day in the first nine months of 2026, while available earning days increased 7.7% to 25,643. Against the same period of 2024, net profit was still approximately 23.5% higher and average TCE about 13.1% higher. Quarterly volatility remains substantial, however: third-quarter average TCE and net profit fell approximately 32.4% and 41.1%, respectively, from the exceptional second-quarter levels.

Fourth-quarter coverage points to stronger earnings

Following that sequential decline, fourth-quarter coverage provides evidence of renewed strength. As of 28 October, TORM had covered 4,512 of its 8,571 expected earning days for the quarter, or approximately 53%, at an average rate of US$78,419 per day. LR2 coverage stood at 68% at US$112,150 per day, LR1 coverage at 38% at US$106,271, and MR coverage at 49% at US$59,722. Strong earnings were therefore evident across several vessel classes.

On the report's coverage basis, which includes both the physical fleet and forward freight agreements (FFAs), multiplying the 4,512 covered days by the average coverage rate gives an equivalent TCE amount of approximately US$354 million. That is close to the US$352.8 million of TCE earnings generated across the entire third quarter. It indicates the earnings value of the covered portion; the final quarterly outcome will also depend on rates achieved for uncovered days and actual vessel operations.

Supported by this coverage and its expectations for the remainder of the quarter, TORM raised the lower end of both its full-year TCE and EBITDA guidance by US$50 million. It now expects TCE earnings of US$1.75 billion to US$1.90 billion and EBITDA of US$1.35 billion to US$1.50 billion. Subtracting the nine-month EBITDA result from that annual guidance implies fourth-quarter EBITDA of approximately US$459 million to US$609 million, substantially above the third-quarter result.

Shuttle operations absorb more vessel time

The organisation of oil transport has become central to TORM's market assessment. During the third quarter, increasing volumes of crude left the Persian Gulf through dedicated shuttle tankers and ship-to-ship transfers in the Gulf of Oman. TORM estimated that more than 60 VLCCs were deployed in shuttle operations by the start of the fourth quarter, while clean petroleum product shuttle activity involved close to 20 LR2s. By the end of September, crude flows from the Persian Gulf had recovered to approximately 14 million barrels per day, around 13% below pre-conflict levels and sharply above less than 2 million barrels per day in May.

This network has helped restore oil flows while changing the amount of vessel capacity required. According to the report, loading some Saudi crude in the Persian Gulf shortened the voyage to Asia, but the inefficiencies created by shuttle and ship-to-ship operations more than offset that reduction in distance. Moving cargo through a relay of vessels consumes time in positioning, waiting and transfers, making vessel utilisation an essential part of the supply-demand calculation.

The crude market is also drawing LR2 capacity away from clean products. TORM estimated that roughly two-thirds of the wider LR2 fleet continued to trade dirty cargoes during the third quarter. In the company's assessment, the shift reduced clean petroleum product carrying capacity by approximately 4% compared with the start of the year. Crude tanker earnings consequently affect the product tanker market through the movement of vessels between cargo categories.

Recovering crude supply could support product exports

Crude and refined products have recovered at different speeds. TORM said Persian Gulf product exports remained below half their pre-conflict level during the third quarter. On the earnings call, TORM Chief Executive Officer Jacob Meldgaard explained that clean product flows were around 1 million barrels per day, approximately 40% of the 2.5 million barrels per day seen before the conflict. Security risks to refinery operations and the transportation of refined fuels continued to constrain regional exports.

More reliable crude supplies to refiners in Asia and elsewhere can support greater processing and export activity. Meldgaard said TORM had benefited from a recovery in such activity over the preceding one to two months. The quarterly report also noted that product exports from the United States and Asia had partly compensated for reduced Middle Eastern and Russian supply. Assessing product tanker demand therefore requires following the crude supply chain through to refinery operations and refined product exports.

Meldgaard also agreed on the earnings call that, if refineries could safely produce and export clean products, the additional volumes could generate a significantly greater uplift in ton-mile demand than the support currently provided by inefficiencies in clean tanker shuttle operations. Inventory rebuilding offers another potential source of demand. As market conditions permit, depleted commercial and strategic stocks will need replenishment, creating possible additional import and shipping requirements. These links between crude availability, refinery activity, product exports and inventories underpin TORM's market outlook.

A 22-vessel pipeline through 2030

TORM is using the strong earnings environment to advance investments extending several years ahead. Its disclosed programme comprises six MR resale newbuildings acquired in the second quarter, six MR newbuildings announced in the third quarter, and another two MRs for which options were exercised. After the quarter ended, the company agreed eight LR2 newbuildings through a 50/50 joint venture, with delivery expected in 2029 and 2030. Together, these projects involve 22 vessels, alongside options secured for two additional MR newbuildings.

The delivery schedules and ownership arrangements vary. The six MR resales are scheduled to arrive in 2027 and 2028, while the eight LR2s will be held through the joint venture. Meldgaard highlighted fleet age as a direct reason for investment: approximately half of TORM's LR2 fleet is expected to reach 20 years of age over the next few years, requiring continued renewal to maintain its market position. Bringing the vessels into the integrated One TORM operating platform after delivery is also an important consideration in its partnership arrangements.

At 30 September, TORM's operating fleet comprised 95 vessels: 22 LR2s, nine LR1s and 64 MRs. During the third quarter, it sold the 2007-built LR1 TORM Venture and the 2008-built MR TORM Laura. Disposals, secondhand acquisitions, resale purchases and newbuilding investments are jointly shaping the size and composition of the future fleet.

Cash generation supports dividends and investment

Operating cash flow reached US$719.9 million in the first nine months, compared with US$363.9 million a year earlier. TORM paid US$388.7 million in cash dividends during the period and separately declared a third-quarter dividend of US$1.35 per share, representing an expected total payment of approximately US$138.7 million on 2 December. That distribution corresponds to 75% of third-quarter net profit excluding non-recurring items.

Net interest-bearing debt has continued to decline, from US$947.6 million at the end of 2024 to US$848.4 million at the end of 2025 and US$697.2 million at 30 September 2026. Cash and cash equivalents, including restricted cash, stood at US$448.7 million at the end of September. A further US$350 million of undrawn facilities brought total liquidity to approximately US$798.7 million, supporting vessel operations and future contractual payments.

Capital commitments are also increasing. At the end of September, outstanding commitments for newbuildings and secondhand vessels were US$608.8 million, compared with US$126 million at the end of 2025; the eight LR2s agreed in October were subsequent events. Broker valuations put the operating fleet's market value at US$4.333 billion, approximately US$1.494 billion above the carrying value of vessels and capitalised dry-docking. On the company's valuation basis, NAV per share reached US$39.60, up from US$25.70 at the end of 2025, adding asset values to the factors influencing financing and investment decisions.

The report also disclosed an ownership change: Oaktree Capital Management and its affiliates sold their remaining TORM shares in early October, after which Christopher Boehringer stepped down from the board.

Cargo flows and effective capacity will shape the next phase

TORM's results over the past two years illustrate the interaction of several market forces. Red Sea rerouting lengthened voyages in 2024, while weaker flows on affected routes and competition between vessel types weighed on earnings in 2025. In 2026, shuttle operations, changes in oil supply chains and LR2 migration into dirty trades tightened the capacity available to conventional product tanker trades. More earning days allowed TORM to benefit more fully from that stronger market.

Those conditions remain variable. Improving shuttle efficiency would release vessels, while changes in crude tanker earnings would affect LR2 deployment. Recovering product exports and inventory rebuilding could add cargo demand. TORM's new ships are scheduled to begin arriving in 2027, with the joint-venture LR2 deliveries extending into 2029 and 2030. Its renewal programme must therefore connect today's cash generation and the remaining earning potential of older vessels with the market conditions that will prevail when the new ships enter service.