Hello, my name is Audra and I will be your conference operator today. At this time I would like to welcome everyone to the TORM Third Quarter 2024 Results Conference Call. Today’s conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. [Operator Instructions] At this time, I would like to turn the conference over to Jacob Meldgaard, Chief Executive Officer. Please go ahead.

Thank you and a warm welcome to everyone joining us on the call today. This morning we released our third quarter results and I’m pleased to share that TORM has once again delivered a strong financial performance. Let me start by highlighting some of the key takeaways for the quarter. Our time charter equivalent earnings rose to US$263 million and EBITDA amounted to US$191 million although freight rates have been lower than expected in the last part of the quarter. We continue to see the market dynamics we’ve experienced in recent quarters driven by ongoing geopolitical tensions from both the Ukraine-Russia conflict and escalating issues in the Middle East. These factors have resulted in vessel rerouting, longer voyages and higher ton-mile demand, contributing to a tight supply-demand balance in the product tanker market. However, in the quarter we have also seen that a significant part of the increased CPP volumes has been carried on uncoated VLCCs and suezmaxes and this has shifted the balance and put a temporary cap on rates. Looking ahead, we believe the key fundamentals supporting a positive rate environment will remain in place, although we recognize that the market is very susceptible to changes in both the geopolitical scenario and potential cannibalization from crude carriers. As mentioned by our CFO back in August we acquired eight second-hand MR vessels for US$340 million in a partly share based transaction. These vessels built at Hyundai Mipo Dockyard between 2014 and 2015 are part of our ongoing program to replenish our fleet and so far we’ve taken delivery of six of the vessels and are expected to take over the remaining two before the end of the year. With this strategy, we believe TORM is set to continue to create significant value for our shareholders also in the years…

Thank you, Jacob. Now please turn to Slide 11 for the financial highlights. In the third quarter, TCE amounted to US$263 million. And based on this, we achieved US$191 million in EBITDA and US$131 million in net profit, i.e., slightly up compared to same quarter last year. Fleet-wide, our average TCE rates were close to US$34,000 per day while LR2s putting in close to US$41,000, LR1 set over US$33,000 and MRs at more than US$31,000. While rates were strong early in the quarter, they softened significantly in September due to seasonal factors as well as crude tankers taking some of the additional ton-mile demand. Overall, we had 8,253 earning days this quarter, up from 7,949 days last year, with LR2s making up a larger share of the total. We are proud of these results, which reflect a TCE rate per day increase of US$700 compared to Q3 2023. Moreover, our return on invested capital amounted to 20.3%, demonstrated a very healthy business environment in the third quarter. Once again, our business is developing substantially profit and cash flow, and we are committed to continuing our practice of returning a significant portion of these earnings to our shareholders. Now, please turn to Slide 12. The chart in the upper left corner show how vessel values have steadily risen over recent quarters, bringing the total value of up to US$3.9 billion. The growth in net asset value mirrors broker valuations of our vessels as well as the expansion of our fleet. On the lower left, we’ve highlighted the trend in our net interest-bearing debt, which now stands at US$825 million, i.e., flat relative to the same quarter last year despite the fleet expansion that we’ve made. Right now, our net loan-to-value ratio is at 23.1%, i.e., lower than the same quarter last…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We’ll take our first question from Emily Harkins at Jefferies.

This is Emily on for Omar. Thank you for taking our question. I’d first like to ask how are you thinking about the product market thus far into 4Q, the cannibalization by the VLCCs and Suezmaxes impacted product tanker demand in 3Q, but those ships are now going back to their normal trades. However, product rates have fallen. So what do you make of that?

Yes. Good morning Emily. Thanks for bringing up that. So I think we tried to illustrate also in the prepared remarks that we think that Q3 was affected by crude cannibalization and that is more or less so far, at least a Q3 story. So we are seeing that here in the fourth quarter there is no over and above utilization of crude tankers in the CPP trade from what we would normally experience. So there’s a normalization taking place. So why have rates not reacted well? At least as I mentioned, one factor to look at is that the absolute volumes out of the largest market for – of exports of CPP globally is the Middle East, and that market we can see that actual volumes here in October fell by about 8%. So I think it’s quite logical that yes, we’ve had a dent from cannibalization from the crude carriers that is not so much longer the case. However, when you then prolong sort of the softness in the rate environment by the fact that we have lower volumes to transport. So one softening of rates could be seen as a factor of supply, whereas the current softness in rates we would attribute more to the demand having been lower due to refinery outages and refinery maintenance.

Thank you so much. And as a follow-up, you tended to be active with fleet renewal on an ongoing basis, including the 8 MRs that you mentioned that you acquired this past summer. Do you have your eyes set on more transactions? Or do you prefer to take a wait and save approach given the softer market now?

I think it’s clear that the buyers and sellers in a market where we’re sort of reestablishing where we headed that we need to see new sort of clearance prices of assets before we can actually engage both on buying or selling of assets. So far there’s not much actual transactions taking place. So I think we are staying agile. We could do either or we could be in dialogue potentially on acquiring share-based cash – share-based transaction further assets. But we could also potentially of course look at letting go and selling of assets. Currently there’s no specific plans around this, Emily.

Thank you so much. I’ll turn it over.

Thanks.

We’ll go next to [indiscernible] at Clarksons Securities AS.

Thank you. Just building on the previous question here, you’ve previously been successful at use lighting your share less currency in vessel acquisition, which was great and a creative way to grow while keeping the LTV stable when you were priced at sort of a higher level. But with the recent, I would say with the product anchor space trading down recently, how are you thinking about sort of this strategy going forward?

I think thanks for that. And to be very clear, we don’t see that as a very potent tool in the toolbox given the current discrepancy between the public market pricing and our NAV. So to your point, if the snapshot that we see today of the price in the public market would persist, then it’s not realistic for us to contemplate the type of deals that we, for instance did earlier this year and also last year. I think something needs to give before that would be on the – on the table again.

Okay, thank you. I’ll return to you. Thank you.

Thank you.

And we do have a follow up from Emily Harkins at Jefferies. And Ms. Harkins, your line is open. Please go ahead.

Oh, sorry, I don’t have a follow-up.

Okay, thank you.

I’m – no further questions. That concludes our Q&A session. And we’ll now turn the conference back over to Jacob for closing remarks.

Yes, thank you very much. Thanks for listening in here to the Q3 2024. Wish you all a great day. Thank you.

And this concludes today’s conference call. Thank you for your participation. You may now disconnect.