Presentation of f Q4 2010 results Safe Harbour Statement Matters - PowerPoint PPT Presentation

Presentation of f Q4 2010 results

Safe Harbour Statement Matters discussed in this presentation may constitute forward-looking statemen ents. Such statements reflect TORM's current expectations and are subject to certai tain risks and uncertainties that could negatively impact TORM's business. To understand these risks and uncertainties, please read TORM's announcem ments and filings with The US Securities and Exchange Commission. The presentation may include statements and illustrations concerning risks, pla plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are oth ther than statements of historical facts. The forward-looking statements in this presentation are based upon various assumptions, many of f which are based, in turn, upon further assumptions, including without limitation, TORM's examination of historical operating trends, s, data contained in our records and other data available from third parties. As many of these factors are subject to significant uncertainties a and contingencies which are difficult or impossible to predict and are beyond our control, TORM makes no warranties or representations ab about accuracy, sequence, timeliness or completeness of the content of this presentation. 2

Highlights Highlights Q4 2010 Tanker market Dry bulk market Finance Summary • Q4 loss before tax of USD 37 37m, before USD 35m impairment charge and USD 16m vessel sale adjustm tment Result • Full year 2010 loss before tax ax of USD 85m, before impairment charge and vessel sale adjustment, i , in line with latest forecast • Continued difficult trading con onditions - ample supply Tanker • Only periodic arbitrage oppor • Only periodic arbitrage oppor ortunities ortunities • Weaker rates following Austra tralian flooding Dry Bulk • Orderbook concern • TORM forecasts a loss before ore tax of USD 100 – 125 million for 2011 Forecast • Maintain long-term positive vi view on the product tank segment 3 3

Highlights Financial highlights Q4 2010 Tanker market Dry bulk market Finance Summary Financials USD million Q4 2010 Q4 2009 2010 2009 P&L Gross profit 33 52 180 243 Q4 2010 loss before tax of USD 88m, Sale of vessels -16 -0 2 33 and USD 37m excl. impairment loss on FR8 stake and vessel sale EBITDA -5 32 97 203 adjustment, in line with latest Impairment loss on FR8 stake -35 -20 -35 -20 expectations Profit before tax -88 -30 -136 -19 Q4 2010 EBITDA of USD -5m, Q4 2010 EBITDA of USD -5m, Profit before tax excl. impairment charge Profit before tax excl. impairment charge -53 -53 -10 -10 -101 -101 1 1 compared to USD 32m in Q4 2009 Balance primarily due to lower coverage in Q4 Equity 1,115 1,247 1,115 1,247 2010 relative to Q4 2009 and USD - 16m from vessel sale adjustment NIBD 1,875 1,683 1,875 1,683 Cash and cash equivalents 120 122 120 122 Development in NIBD primarily driven by investments in the Cash flow statement newbuilding programme Operating cash flow -43 21 -1 116 Investment cash flow -93 -21 -187 -199 4

Highlights TORM’s strategy – “Changing Trim” Tanker market Dry bulk market Finance Summary Customer Leadership Resilience S Sophistication Tank Bulk Ship owning and S&P Build on strength as global leader Expand profitably in all m ll markets Leverage relations & experience to to benefit from a market recovery conditions become a leading asset player Consistently outperforming spot Ensuring a positive prof ofit margin Creating value through optionality market benchmarks market benchmarks under all market conditio under all market conditio itions itions � Two long-term MR vessels T/C- � Five year COA with Ch � Sale of two Kamsarmaxes in China Nickel in Resources Holdings C Company Q4 2010 for a total Ltd. consideration of USD 90m � Reorganisation of Technical � Three long-term Pana � Sale of one old MR vessel for a division amax (new eco design) T/C-in, tw two with consideration of USD 12m � Transformation of pool set-up to purchase options strategic partnerships � One long-term Handym ymax T/C-in � A number of short term rm T/C-in deals in the Bulker seg egment � Development of Customer value proposition � Establishment of office in Brasil 5 Note: Includes activities up to March 2010

Highlights The product tankers freight rates Tanker market Dry bulk market Finance Summary Freight rates (MR, LR1 and LR2) in USDt/day 90 LR2 (TC1) 80 70 60 TORM continue to outperform the benchmarks 50 • Q4: LR2 +48%, LR1 +38% and MR +52% 40 • 2010: LR2 +14%, LR1 +22% and MR +46% 30 20 10 Q4 2010 positive impacts: 0 • Support to the LR from west to east Naphtha jan feb mar apr apr may june july aug sep oct nov dec arbitrage in November and December 2009 2010 2011 • Transatlantic MR strength from Gasoline arbitrage 70 LR1 (TC5) opportunity 60 • Chinese diesel demand 50 • Cold weather stimulating heating oil demand • Cold weather stimulating heating oil demand 40 40 30 Q4 2010 negative impacts: 20 • High influx of tonnage, 8% net fleet growth for 10 2010 0 • Declining US gasoline import jan feb mar apr apr may june july aug sep oct nov dec • Continued low level of floating storage 2009 2010 2011 50 MR (TC2) • Weak dirty market 40 Into Q1 2011 30 • Ample tonnage 20 • Non fundamental demand from oil price volatility 10 0 jan feb mar apr apr may june july aug sep oct nov dec LR2 vessel size (Long Range): Aframax tanker 80-120,000 dwt 2005 - 2009 range 2009 2010 2011 LR1 vessel size (Long Range): Panamax tanker 60-80,000 dwt 6 MR vessel size (Medium Range):Handymax tanker 30-60,000 dwt Source: Clarksons, until 4. March 2011

Highlights Tanker market Flourishing trading routes as dislocatio ion continues Dry bulk market Finance Summary China Europe 1000 Net refinery capacity 0 800 -50 2009 2010 2011 2012 2013 2014 2015 20 USA 600 1,000 barrels -100 400 -150 600 200 -200 400 0 -250 200 -300 2009 2010 2011 2012 2013 2014 2015 Japan Middle East 0 2009 2010 2011 2012 2013 2014 2015 0 -200 1000 800 2009 2010 2011 2012 2013 2014 2015 -50 -400 600 -100 400 -150 200 -200 0 -250 2009 2010 2011 2012 2013 20 2014 2015 India -300 400 300 200 100 0 Brazil 2009 2010 2011 2012 2013 2014 2015 500 400 300 200 100 0 2009 2010 2011 2012 2013 2014 2015 Source: JBC Energy • New refineries in the Middle East and Ind ndia are producing at high utilization rates driven by cost advantages • Increasing US product exports 7 • South America relying on import to satisfy sfy growing demand • China remains a positive swingfactor

Highlights Supply continues to be affected by sign nificant slippage Tanker market Dry bulk market Finance Slippage is continuing… Summary Newbuildings (LR2, LR1, MR & SR) No. of vessels 120 100 Significant slippage continues 51% • Q4 2010, slippage of 42% 80 • In 2010 delivery of 174 vessels, 44% less 27% 42% 54% 60 than planned 40 • 2010 net fleet growth of 8% 20 0 Q1 Q2 Q3 Q4 Expected decliveries Actual deliveries Source: Inge Steensland and TORM Orderbook stands at 19% of the fleet on water …and net fleet growth is declining No % yoy Slippage expected to continue 300 12% • 30% in 2011 and 2012 250 10% 10% • No slippage from 2013 as there is free yard capacity 200 8% 8% compared to orders this year 150 6% 100 TORM estimates 10% cancellations 5% 4% 4% • Limited cancellations 4% 50 2% 0 Assumed new ordering of 40 MR (2013 delivery) 2009 2010 2011 2012 2013 -50 0% LR2 LR1 Total net growth in the fleet declines from 8% in 2010 to app. 4% in 2013 MR SR New ordering est. Total by MR equivalent 8 Note: Net fleet growth: Gross order book adjusted for scrapping, slippage, phase out of single hulls and new ordering Source: Inge Steensland and TORM

Highlights Product Tanker market - Tanker market Dry bulk market Finance demand will outgrow supply from 2011 t 1 to 2013 Summary Demand and supply development (2011 - 2013) Demand Supply 750 Swing factors: Number of vessels* • Order book delays • Delays in refineries 500 40 40 • Floating storage 75 74 403 • Slow steaming 68 72 250 54 404 • Changes in transport 206 258 patterns 0 • Embargoes & strikes Growth in oil Increasing port Total demand Phase out & Total supply LR into dirty Refinery and transportation e/ triangulation Swing factors Cancellations New ordering der book gross bitrage/cross Scrapping • Blockage of water ways increase demand market increase and ports days • Disruptions to refinery production production R N Inc S C tr Arbit T Orde trade/ • Hurricanes Source: Torm research *All effects are recalculated into MR equivalents – to enable comparision based on their volum me relative to MR Demand primarily driven by Supply primar arily driven by • LR into dirty • Refinery expansions in the Middle East and • Some LR1 vesse ssels are replacing Panamax India & changes in transport patterns phase outs in cr crude • Increased oil demand • 30% of LR2 vesse essels are trading in the crude • Increasing port days due to increased • Phase-out of sing ngle hulls and scrapping of old activity/bottlenecks tonnage • Arbitrage • Additional new or ordering of 2013 deliveries • Improving US exports 9