Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the TORM Plc First Quarter 2023 Results Conference Call. All lines have been placed on mute to prevent any background in a way. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Andreas Abildgaard-Hein, Head of Investor Relations. Please go ahead.

Thank you and welcome to TORM's conference call. We are pleased to have you with us and we have been looking forward to presenting to you the results for the first quarter of 2023. We will refer to the page numbers that we present during our presentation. And at the end you can ask questions if you are on the phone conference. If you are joining via webcast you have access to ask questions during the presentation as well. After this conference you'll be able to listen to a recording and as usual you can find our presentation and other resident data on our website. Please turn to slide two, before we start presenting the results, I would like to draw your attention to the Safe Harbor statement. Please turn to slide three. Today's presenters are as usual, Executive Director and CEO, Jacob Meldgaard; and CFO, Kim Balle. Please turn to slide four, I will now hand over to Jacob.

Thank you, Andreas, and good afternoon, good morning to all. Thanks for connecting with us today for our first quarter 2023 results presentation. During here, the first quarter of 2023, the product tanker market has remained strong with continued high volatility. We have achieved an EBITDA of $199 million and a profit before tax of $155 million, both of which are reduced by $15 million due to unrealized losses on FFA contracts that we have incurred to secure strong earnings on part of our earning days here in 2023 and into early 2024. Return on invested capital ended at 29.2% for the quarter, and our balance sheet remains strong at net LTV of 26% and available liquidity of $575 million. This morning, TORM's Board of Directors approved a dividend of $1.46 per share based on the first quarter and we expect that we'll distribute around $121 million here in early June. As of today, we have taken delivery of all of the seven LR1 vessels that we acquired a little earlier this year back in January. We expect that the three MR vessels that we announced to be acquired here in March will be delivered to us by the end of this month. As of the 5th of May, we have covered 64% of the second quarter tonnage days at $40,086 per day. And here, please turn to slide five. Since the start of the Russian invasion of Ukraine now back in February 2022, we've seen strong improvements in product tanker rates, increased trade growth, longer trade distances, mainly due to the EU sanctions on Russia, but partly also due to more fundamental factors such as the oil demand recovery recent refinery closures and consequently increased import needs. This has moved the product tanker fleet closer to the point of…

Thank you, Jacob. Please turn to slide 13. Despite the strong TCE rates achieved on average in 2022, we have achieved even higher TCE rates in the first quarter of 2023. We increased our rate from $34,154 per day in 2022 to above $41,700 per day over a total of 6,732 earning days in the first quarter across the fleet. For MRs the average rates for the first quarter ended at $36,461 per day, LR1s at $42,047 per day and for LR2s at $65,551 per day. Once again the ones owned platform demonstrated a very strong performance also when comparing to our peers. Based on our rates and coverage for as of 5th May 2023, we had effected a total of 64% of our days at $40,086 per day in the second quarter across the fleet. For MR 68% were fixed at $35,804 per day for MRs 62% was fixed at $45,578 per day for LR1s and 51% were fixed at $59,197 per day for LR2s. Part of the coverage has been made with SFA contracts and as for 5th May 2023 the cover for the second quarter of 2023 was 744 days fixed at $42,026 per day for the third quarter 1,116 days were fixed at $42,199 per day. And for first quarter 1,116 days were fixed at $42,402 -- sorry $42,405 per day and as per first quarter of 2024, 443 days were fixed at $41,849 per day. These contracts are accounted for in CCE and FX on net results. In the first quarter of 2023, they gave an unrealized loss of $15.2 million and we expect unrealized gains and losses on these contracts impacting our P&L, while they are outstanding. As of 11th May 2023, the market value of our FFAs and related bunker hedges was a…

[Operator Instructions] Our first question will come from the line of Jon Chappell with Evercore. Please go ahead.

Thank you. Good morning or good afternoon. Jacob, I want to start with the market one. Just a little bit of clarification but also a little bit of recency. I thought it was interesting that you said the 7% of ton-mile benefit that you foresaw, let's call it 12 to 15 months ago from what's going on in Europe. You had 6% of that already. But then you'd also laid out another 3% from kind of refinery dislocation, et cetera. So, when we put it all together, the 10% I guess aggregate ton-mile benefit you think you're already 60% of the way there. Is that an accurate assessment if we add it all together? And then the second part of that is given some of the recent volatility maybe to the downside, can you explain some of maybe the seasonality or some of the other issues that you think have caused a little bit of downward volatility of late.

Yes absolutely. So the way we think about this clearly the sanctions are working the way that they intended to. So oil is flowing as crude out of Russia. And you're seeing that Europe is replenishing on the refined product side with products from further away. What we have not seen so far is that the volumes that we are experiencing are lower than what they were on average last year at this stage, because there's been some stockpiling taking place towards the end of last year. So the differentiator here is that actually the trade recalibration we say it's 6% so far, but there's more to come. And that more to come stems from a normalization in the import levels. So that is what it hinges is a volume game that is a little different. So actually the fact that we calculated 7% that was based on those volumes. We are not seeing exactly 7% yet, but only 6% because of volumes being down but transportation distances being slightly higher. So we think it's exact, but it's of course hinting on that you would see that imports into EU would grow from where they are now. So that's number one. Number two to some of the recent weakness, which is primarily seen from our perspective actually a European MR or Atlantic MR game. Much of that has to do with what we don't have so much insight into, which is the Russian refinery sector being closed down for maintenance. I think that is the one key component into I would say understanding the seasonality of the rate environment for MRs in the Atlantic that currently some of the vessels that would be engaged in export out of Russian refiners. They are now reentering so to say the market that we've been operating in and many of our peers all along, which is non-Russian trades. Our opinion is that Russia will not necessarily come back to exactly where they were on their exports but close to. And at that point that will take tonnage up and the efficiency in our market will in that sense go down leading to a higher freight rate environment. I'm not seeing big signs of change currently in the eight years. It is, of course, on a day-to-day it's quite sensitive, but I don't think that's a good indicator of what is taking place. We saw that MR rates, for instance, in AT [ph] were let's say in the low to mid-20s yesterday and today they're in the low to mid-30s. But is that a sign of that there's any dramatic change in the underlying freight not really. It's just that there's a little more cargoes coming in the market and then immediately freight rates react. And I think we will see a lot of that almost intraday or intraweek rates will be quite volatile.

That's a very good perspective. My second question, I think the strategy has been very clear over the last couple of years or so. You've been selling quite well. You've been adding to the fleet, getting good returns on new tonnage, the refinancing of the balance sheet, the dividend policy. There's a little confusion this morning I think around your numbers because of that FFA exposure. I'm just wondering why? There's 88 ships you have a lot of exposure to the market already. Why are you getting involved in FFAs? And when does that unwind fully?

So I can answer that. We already laid out in the last reporting that we are using FSA as a tool to hedge the forward when we see that there is value in it. So what we did was that we took the rolling 12 months. I think on LR1 it was around 45, on MRs around 40. And we use the FFA as an instrument to hedge part of it. Now on an intraday basis again the mark-to-market of that could be lower it could be higher. Now on the day of issuance is $15 million unrealized loss. If we did it again, today it's positive around $20 million positive. So that's a swing of that we have on paper created €35 million. But we don't look at it that way. This is just -- it's actually a head instrument, but it's being mark-to-market in our accounting. We will continue to realize this way when we see that as value. But I cannot -- how to say -- avoid that there will be a -- on the day that we are reporting we will have these mark-to-market -- and we are very cool around that to be honest. We think we're doing the right thing.

Okay, that's very helpful. Thanks for all the perspective, Jacob.

[Operator Instructions] We have no further audio questions at this time. Andreas, I'll hand the call back to you.

Thank you. We have no further questions now. So this concludes the earnings conference call, regarding the results for the first quarter of 2023. Thank you for participating.

Ladies and gentlemen, that does conclude today's meeting. Thank you all for joining. You may now disconnect.