FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August, 2004
A/S STEAMSHIP COMPANY TORM
(Translation of registrant's name into English)
Marina Park
Sundkrogsgade 10
DK-2100 Copenhagen 0
Denmark
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Set forth herein as Exhibit 1 is a copy of a Announcement No. 10 - 2004
TORM - Results for second quarter 2004 issued by A/S STEAMSHIP COMPANY TORM to
The Copenhagen Stock Exchange on August 11, 2004.
Exhibit 1
ANNOUNCEMENT NO. 10 - 2004
TORM - results for first half 2004
12 August 2004
o First half 2004 profits better than expected - expectations for 2004 profit
before tax and value adjustment on NORDEN shares increased to DKK 875-925
mill.
o Profit from own activities in the second quarter 2004 in itself was DKK 245
mill.
o Profit from own activities in the first half 2004 was DKK 494 mill. after
tax - better than originally expected.
o Profit after tax in the second quarter 2004 after value adjustments on the
shares in Dampskibsselskabet 'NORDEN' A/S and dividend received from NORDEN
was DKK 23 mill.
o Profit after tax for the first half 2004 was DKK 1,119 mill., including
value adjustment on the NORDEN shares of DKK 552 mill. and dividend
received from NORDEN of DKK 73 mill. The result is considered highly
satisfactory.
o Cash flow from operating activities was DKK 680 mill. in the first half
2004 (DKK 233 mill.)
o Return on invested capital was 30.6% p.a. and return on equity was 76.7%
p.a. in the first half 2004.
o Earnings per share (EPS) for the first half 2004 were DKK 32.2 (DKK 6.8).
o The market value of the Company's fleet including newbuilding contracts
exceeded the book value by DKK 1,811 mill. as of 30 June 2004.
Shareholders' equity was DKK 3,374 mill. as of 30 June 2004.
o Freight rates in the bulk market have improved considerably earlier than
expected, which combined with the tanker market rates have caused TORM to
upgrade its expectations for profit before tax for 2004 from min. DKK
750-800 mill. announced in the first quarter 2004 report to DKK 875-925
mill. before any value adjustments on the NORDEN shares. The value
adjustment on the NORDEN shares in 2004 was DKK 775 mill. as of 11 August
2004.
Telephone conference and webcast (www.torm.com) reviewing the results will take
place on 12 August 2004, 17.00 Danish time. To participate, please call 10
minutes prior to the start of the telephone conference on +45 32 71 46 11 (from
Europe) or +1 334 323 6203 (from the USA).
A/S Dampskibsselskabet TORM
Contact persons: Klaus Kjaerulff, CEO (tel.: +45 39 17 92 00)
Klaus Nyborg, CFO (tel.: +45 39 17 92 00)
KEY FIGURES FOR THE GROUP
----------------------------------------------------------------------------------------------------------------------
DKK mill. Change Full
First half First half first half year
2004 2003 2003-04 2003
----------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net revenue 1,216 939 29% 1,928
Time Charter equivalent earnings 990 612 62% 1,307
Gross profit 680 300 127% 647
Profit before depreciation 641 259 147% 572
Profit before financial items 540 173 212% 395
Net gain from other investments
and securities 551 56 884% 682
Other financial items 28 7 300% -25
Profit before tax 1,119 236 374% 1,052
Net profit after tax for the period 1,119 236 374% 1,051
----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
Total assets 6,214 4,079 52% 4,894
Shareholders' equity 3,374 1,721 96% 2,464
Liabilities 2,840 2,358 20% 2,430
Invested capital 3,878 2,821 37% 3,186
Net interest bearing debt 2,034 1,447 41% 1,698
----------------------------------------------------------------------------------------------------------------------
CASH FLOW
From operating activities 680 233 192% 494
From investing activities -693 -306 126% -1,008
thereof investment in tangible fixed assets -693 -420 65% -1,122
From financing activities 107 125 -14% 471
--- --- ---
Net cash flow 94 52 81% -43
----------------------------------------------------------------------------------------------------------------------
KEY FIGURES
Gross margin 55.9% 31.9% 33.6%
Profit before depreciation/Net revenue 52.7% 27.6% 29.7%
Profit before financial items/Net revenue 44.4% 18.4% 20.5%
RoE (p.a.) 76.7% 28.2% 51.4%
RoIC (p.a.) 30.6% 12.2% 13.1%
Equity ratio 54.3% 42.2% 50.3%
Share price, end of period (DKK)* 149.8 42.8 250% 90.3
Millions of shares, end of period* 36.4 36.4 0% 36.4
Earnings per share (DKK)* 32.2 6.8 373% 30.3
Exchange rate USD/DKK, end of period 6.11 6.50 -6% 5.96
Exchange rate USD/DKK, average 6.07 6.74 -10% 6.59
----------------------------------------------------------------------------------------------------------------------
* The comparative figures are restated to reflect the issue of bonus shares in
May 2004.
FIRST HALF 2004 RESULTS
Profit after tax for the first half 2004 was DKK 1,119 mill., including value
adjustment on the NORDEN shares of DKK 552 mill. and dividend received from
NORDEN of DKK 73 mill. The result is highly considered satisfactory
Gross profit in the first half was DKK 680 mill. (against DKK 300 mill. in the
first half 2003). The increase is mainly attributable to a combination of
increasing freight rates in the Bulk division and an increased number of
operating days in the Tanker division, countered by a 10% lower average
USD/DKK-exchange rate.
Profit before depreciation was DKK 641 mill. (DKK 259 mill.).
Depreciation was DKK 101 mill. in the first half 2004 (DKK 86 mill.). The
increased depreciation is due to the expansion of the Company's fleet through
the delivery of four new and one second-hand product tankers and three
second-hand bulk carriers in the period July 2003 - June 2004, countered by the
lower USD/DKK-exchange rate.
Net financial items were positive by DKK 579 mill. (DKK 63 mill.) This includes
net gains on securities - primarily the NORDEN shares - of DKK 551 mill.,
dividend received on the NORDEN shares of DKK 73 mill., net interest expenses of
DKK 35 mill. and other financial items of negative DKK 11 mill.
Profit before and after tax was DKK 1,119 mill. (DKK 236 mill.). Thereof the
Tanker division's profit after tax was DKK 228 mill. (DKK 177 mill.), while the
Bulk division's profit after tax was DKK 267 mill. (DKK 6 mill.). Other
activities - mainly Unallocated financial items - showed a profit after tax of
DKK 624 mill. (DKK 53 mill.).
Cash flow from operating activities was positive by DKK 680 mill. in the first
half of 2004, primarily consisting of cash earnings and the dividend from NORDEN
of DKK 73 mill.
Cash flow from investment activities was negative by DKK 693 mill. This amount
comprises investments in fixed assets, primarily vessels.
Cash flow from financing activities was DKK 107 mill. in the first half 2004.
This amount consists mainly of loan draw-downs in connection with the delivery
of newbuildings and second hand vessels of DKK 711 mill., less repayments on
mortgage and leasing debt of DKK 341 mill., payment of dividend to TORM's
shareholders of DKK 210 mill. and net settlement of share options of DKK 53
mill.
Consequently, the total cash flow in the first half 2004 was DKK 94 mill. The
Company's cash and bond holdings were DKK 573 mill. against DKK 479 mill. at the
end of 2003.
Total assets increased in the first half 2004 from DKK 4,894 mill. to DKK 6,214
mill., mainly due to the increase in fixed assets from DKK 4,169 mill. to DKK
5,398 mill. This was positively impacted by the delivery of two LR1
newbuildings, one second-hand MR newbuilding, two second-hand bulk carriers, the
value adjustment related to the NORDEN shareholding and the increased
USD/DKK-exchange rate in the first half 2004, countered by depreciation during
the period. The investment in NORDEN is valued at DKK 2,064 per share, the
closing price on Copenhagen Stock Exchange on 30 June 2004.
Net interest bearing debt increased in the first half 2004 from DKK 1,698 mill.
to DKK 2,034 mill. The increase is due to net borrowing in connection with the
delivery of vessels countered by the positive operating cash flow during the
period.
During the first half 2004, shareholders' equity increased from DKK 2,464 mill.
to DKK 3,374 mill., mainly as a result of the earnings in the period less
dividend payments. Shareholders' equity as a percentage of total assets
increased from 50.3% at 31 December 2003 to 54.3% at 30 June 2004.
On 30 June 2004, TORM owned 1,566,612 own shares corresponding to 4.3% of the
Company's share capital, a reduction of 196,124 own shares from 31 December
2003.
SECOND QUARTER 2004 RESULTS
Second quarter 2004 gross profit was DKK 347 mill. Profit before depreciation
for the second quarter was DKK 324 mill., while profit before financial items
was DKK 273 mill. Of this amount, the Tanker and Bulk divisions contributed DKK
119 mill. and DKK 154 mill., respectively.
Profit from own activities in the second quarter 2004 was DKK 245 mill.
Financial items were negative by DKK 250 mill. due to a negative value
adjustment on the NORDEN shares of DKK 295 mill. in the second quarter 2004,
which was only partly countered by the dividend payment received on the NORDEN
shares of DKK 73 mill. Isolated, second quarter 2004 profit after tax was DKK 23
mill.
---------------------------------------------------------------------------------------------------------------------------
Segment information First half 2004 Q2 2004
(DKK mill.)
Tanker Bulk Tanker Bulk
division division Unallocated Total division division Unallocated Total
---------------------------------------------------------------------------------------------------------------------------
Net revenue 691 525 0 1,216 337 269 0 606
Port expenses and bunker -173 -53 0 -226 -88 -15 0 -103
-------------------------------------------------------------------------------------
Time charter equivalent earnings 518 472 0 990 249 254 0 503
Charter hire -40 -130 0 -170 -21 -65 0 -86
Operating expenses -108 -32 0 -140 -53 -17 0 -70
-------------------------------------------------------------------------------------
Gross Profit 370 310 0 680 175 172 0 347
Profit on sale of vessels
and interests 0 0 0 0 0 0 0 0
Administrative expenses -52 -17 -1 -70 -28 -9 0 -37
Other Operating income 31 0 0 31 14 0 0 14
-------------------------------------------------------------------------------------
Profit before depreciation 349 293 -1 641 161 163 0 324
Depreciation -84 -17 0 -101 -42 -9 0 -51
-------------------------------------------------------------------------------------
Profit before financial items 265 276 -1 540 119 154 0 273
Net gain/(loss) form other
investments and securities 0 0 551 551 0 0 -300 -300
Other financial items -37 -9 74 28 -16 -8 74 50
-------------------------------------------------------------------------------------
Profit/(Loss) before tax 228 267 624 1,119 103 146 -226 23
Tax 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------
Net profit for the period 228 267 624 1,119 103 146 -226 23
---------------------------------------------------------------------------------------------------------------------------
TANKER DIVISION
The Tanker division's profit after tax was DKK 228 mill. in the first half 2004.
Freight rates in the product tanker market were at a high level in the first
half 2004. This is normally the case in the winter months, but in 2004 the firm
freight rate level continued into the second quarter. Growth in the world
economy in general coupled with a high oil price were contributing factors
behind continued low inventories of refined products, which led to good - and
better than expected - freight rate levels in the product tanker market
throughout the first half.
Earnings data for the Tanker division
2003 2004 2004 Change
-----------------------
q2 q1 q2 q2-q2
LR2/Aframax vessels
---------------------------------------------------------------------------------------------------------------
Available earning days 272 455 450 65%
TCE per earning day (USD/day)*) 32,804 32,012 27,896 -15%
OPEX per earning day (USD/day) **) -5,816 -4,453 -4,898 -16%
Operating C/F per earning day (USD/day) ***) 18,479 21,697 17,061 -8%
---------------------------------------------------------------------------------------------------------------
LR1/Panamax vessels
---------------------------------------------------------------------------------------------------------------
Available earning days 194 288 319 64%
TCE per earning day (USD/day)*) 26,507 28,270 23,028 -13%
OPEX per earning day (USD/day) **) -7,070 -6,141 -5,267 -26%
Operating C/F per earning day (USD/day) ***) 19,436 22,130 17,761 -9%
---------------------------------------------------------------------------------------------------------------
MR vessels
---------------------------------------------------------------------------------------------------------------
Available earning days 1,000 1,047 1,067 7%
TCE per earning day (USD/day)*) 19,369 21,491 20,288 5%
OPEX per earning day (USD/day) **) -4,575 -5,927 -5,367 17%
Operating C/F per earning day (USD/day) ***) 14,794 15,565 14,920 1%
---------------------------------------------------------------------------------------------------------------
*) TCE = Time Charter Equivalent Earnings = Gross freight income less port
expenses, bunker and commissions.
**) Operating expenses for own vessels. ***) TCE earnings less operating
expenses and charter hire.
Compared to the second quarter 2003 the rates achieved in the second quarter
2004 were 15% and 13% lower and 5% higher for the LR2, LR1 and MR segments,
respectively. Second quarter 2004 was not to the same extent as 2003 impacted by
one-off factors such as the general strike in Venezuela and the build-up to the
war in Iraq, but despite this and despite the delivery of many newbuildings the
market showed very firm freight rates for the season.
The total activity level in the Tanker division, measured by the number of
available earning days, increased by 25% in the second quarter 2004 compared to
the second quarter 2003. In the LR2 segment the number of available earning days
increased by 65% due to the delivery of two newbuildings towards the end of
2003. In the LR1 segment the increase in the number of available earning days
was 64% due to delivery of TORM Estrid in January 2004. The increase in the
number of earning days in the MR segment is due to the delivery of TORM Alice in
February 2004.
BULK DIVISION
The Bulk division profit after tax for the first half 2004 was DKK 267 mill.
The freight rates in the bulk market were at an extraordinarily high level in
the first quarter 2004. Towards the end of the second quarter, freight rates
fell rapidly. It was primarily strong Chinese demand coupled with increased
waiting time in many ports that formed the background for the firm freight rate
level in the first quarter. Following this, the Chinese slowdown in the economy
in the second quarter led to the rapidly falling freight rates in the second
quarter.
Earnings data for the bulk division
2003 2004 2004 Change
-----------------------
Panamax vessels q2 q1 q2 q2-q2
-----------------------
-----------------------------------------------------------------------------------------------------------------
Available earning days 1,286 1,383 1,352 5%
TCE per earning day (USD/day)*) 11,905 23,219 26,501 123%
OPEX per earning day (USD/day) **) -4,592 -5,501 -5,810 27%
Operating C/F per earning day (USD/day) ***) 3,331 14,327 17,523 426%
-----------------------------------------------------------------------------------------------------------------
Handysize vessels
-----------------------------------------------------------------------------------------------------------------
Available earning days 351 303 302 -14%
TCE per earning days (USD/day)*) 7,781 15,963 16,320 110%
OPEX per earning days (USD/day) **) -3,180 -3,112 -3,302 4%
Operating C/F per earning day (USD/day) ***) 3,392 11,187 11,082 227%
-----------------------------------------------------------------------------------------------------------------
*) TCE = Time Charter Equivalent Earnings = Gross freight income less port
expenses, bunker and commissions.
**) Operating expenses for own vessels.
***) TCE earnings less operating expenses and charter hire.
However, freight rates for TORM's Panamax vessels were higher in the second
quarter 2004 compared to the first quarter of 2004 due to charters entered into
in the first quarter 2004 only showing full effect in the second quarter.
Compared to the second quarter 2003, freight rates for the second quarter 2004
were 123% and 110% higher for TORM's Panamax and Handysize vessels,
respectively.
Compared to the second quarter 2003, the number of available earning days
increased by 5% for TORM's Panamax vessels, while TORM in the Handysize segment
has redelivered a vessel in 2003, which explains the reduction in the number of
available earning days by 14% in this segment.
UNALLOCATED
Unallocated items were DKK 624 mill., mainly consisting of unallocated financial
items, including an unrealized gain on the NORDEN shares of DKK 522 mill. and
dividends received from NORDEN of DKK 73 mill. and various minor items,
primarily adjustments related to the Liner activity, which were sold in 2002.
FLEET DEVELOPMENT
During the first half 2004 TORM took delivery of two newbuildings - both LR1
product tankers - and exercised options to purchase the two Panamax bulk
carriers, TORM Baltic and TORM Marlene at favourable prices. These two vessels
were delivered in the second quarter of 2004. In addition to this, during the
first half 2004, TORM has acquired the MR product tanker TORM Alice from the
pool partner Rederi AB Gotland and the MR product tanker "Zorca" (built 1999),
which will be delivered around 1 October 2004. Following these deliveries,
TORM's owned product tanker fleet measured in DWT will have increased by 20%
during 2004, while the owned bulk carrier fleet has increased by 42%.
TORM's orderbook consists of five LR2 newbuildings with delivery from April 2006
to January 2008 with a combined value of almost USD 200 mill.
Since the end of 2003 vessel values in general have increased considerably, both
in the tanker and bulk markets, and as of 30 June 2004 the market value of the
Company's fleet valued by two individual shipbrokers exceeded the book value of
vessels and newbuildings by DKK 1,811 mill.
ASIA/CHINA
The Asian market, especially China, but also other Asian countries, including
Japan and India are important markets for the shipping industry and TORM. It is
therefore positive that the Asian market, not least India, grows considerably,
and that the Japanese market grows again.
During the first half, the Chinese market was - especially in the bulk market -
a significant factor behind the swings in the freight market. The large
increases in the bulk market towards the end of 2003 and in the first quarter
2004 were especially due to increasing Chinese import of raw materials such as
iron ore and coal, which led to build-up of raw material stocks. In the second
quarter of 2004 China introduced a number of measures to avoid overheating its
economy, which especially impacted the type of raw materials normally
transported on bulk carriers. TORM believes that after a period of stock
reduction, in the third quarter 2004, the Chinese market will again increase the
import of raw materials. This is expected to have a positive impact on freight
rate levels.
China's demand is not as crucial for the freight market for product tankers.
China is today the World's second largest consumer of oil, but the import of
refined products is so far relatively limited, although increasing rapidly. A
gradual liberalization of the import of refined products, which will be
transported in product tankers, is expected to increase this import
significantly.
CAPITAL STRUCTURE
TORM's shareholders' equity was 54% of total assets at the end of the second
quarter 2004, but longer term TORM aims for a capital structure with
shareholders' equity to total assets of about 30-40%. TORM's current investment
program has limited liquidity requirements in the second half of 2004 and in
2005 and consequently it is likely that significant liquidity will be generated.
The current market price levels for vessels are relatively high, but due to the
low interest rates it is still possible to selectively find investments that
meet TORM's required returns. TORM continuously evaluates opportunities for
investments in single vessels, fleets or companies, but given the cyclical
nature of the shipping industry, the timing of larger investments is very
significant.
After the end of the second quarter 2004Teekay Netherlands European Holdings BV
sold its holding of app. 16% of TORM's shares to Danish and international
investors, mainly institutional, which has increased the free float of TORM
shares considerably.
ISPS
On 1 July 2004 the International Ship and Port Facility Security code (ISPS)
came into force. ISPS stipulates that ship owners and ports introduce, maintain
and test a number of procedures. As of 1 July 2004 71% of the vessels in
Intertanko, the tanker vessel owners organisation, were certified. It is
expected that the majority of the remaining tankers trading internationally will
be certified in the third quarter 2004. In accordance with its tradition for
quality, TORM was certified well before the 1 July deadline. The introduction of
ISPS has not had any significant influence on the markets for TORM's vessels,
but led to a direct cost of around DKK 2 mill. for TORM.
PROCUCT TANKER POOLS
The three product tanker pools consisted of a total of 68 vessels by 30 June
2004. During the first half 2004 net growth was seven vessels. Based on the
delivery of already ordered vessels the three pools will consist of 74 vessels
by the end of 2004.
There are continuing discussions with potential poolpartners.
NEW MAIN OFFICE
In June 2004, TORM moved to a new head office in Tuborg Havn, Hellerup. The new
office address is: Tuborg Havnevej 18, DK-2900 Hellerup. Telephone numbers etc.
remain unchanged.
EXPECTATIONS FOR 2004
Tanker divisionen
Freight rates in the Tanker division for the first half 2004 and into third
quarter 2004 have been higher than forecasted in the 2003 Annual Report. The
background is higher global economic growth, which increases the oil
consumption. According to IEA, global oil consumption is expected to increase by
2.9% in 2004 up from 0.3% in 2002 and 2.3% in 2003. This has caused increased
use of refined oil products, which combined with historically low inventories
have led to increasing requirements for product tankers to transport refined
products.
Bulk division
In the Bulk market, freight rates for the first quarter 2004 were very high, but
fell in the second quarter 2004. At the start of the third quarter 2004, rates
again increased rapidly after China increased its import of agricultural
products and iron ore. TORM expects that the bulk markets in the months to come
will remain firm, but volatile.
When the market fell in the second quarter TORM benefited from a relatively high
degree of coverage of the Company's operating days in 2004. This coverage will
gradually expire in the third and especially fourth quarter of 2004, and
consequently the coverage for 2005 is currently limited. In light of the high
degree of volatility in the bulk markets, TORM plans to renew its current
coverage as it expires in the second half, whereby the coverage will extend into
2005. It is therefore positive that freight rate levels since the end of June
2004 have improved significantly. TORM expects to have a slightly lower number
of operating days in 2005 compared to 2004.
84% of the operating days for the Company's Panamax bulk vessels in 2004 were
covered at an average level of USD 24,490 per day as of 31 July 2004.
Financial expectations
Due to the above market expectations, TORM increases its expectations of the
2004 result before tax from minimum DKK 750-800 mill. as announced in the first
quarter 2004 report to DKK 875-925 mill. before any value adjustments related to
the NORDEN shares. The unrealized gain on the NORDEN shares in 2004 as of 11
August 2004 was DKK 775 mill. based on a NORDEN share price on the Copenhagen
Stock Exchange of DKK 2,370.
The expectations for the result in the remaining part of 2004 are based on a
USD/DKK- exchange rate of 6.00 and the following freight rates and activity
levels for TORM's vessels, which should be considered as a guidance only:
Expected TCE freight rates and operating days for TORM in 2004
2004
--------------------------------------------------------------------
2003 q11 q21 q32 q42 Full year3
LR2
TCE rates (USD/day) 27,185 32,012 27,896 28,532 23,718 28,040
# of days 1,231 455 450 455 455 1,815
LR1
TCE rates (USD/day) 22,429 28,270 23,028 23,509 19,841 23,307
# of days 847 288 319 402 410 1,419
MR
TCE rates (USD/day) 17,307 21,491 20,288 18,229 15,714 18,910
# of days 4,015 1,047 1,067 1,070 1,078 4,262
Panamax
TCE rates (USD/day) 11,695 23,219 26,501 23,949 23,880 24,381
# of days 5,147 1,383 1,352 1,343 1,355 5,433
Handysize
TCE rates (USD/day) 8,706 15,963 16,320 13,281 13,542 14,980
# of days 1,258 303 302 234 212 1,051
---------------------------------------------------------------------------------------------------------------
1 Actual freight rates.
2 Expected freight rates.
3 TCE rates are weighted average of the four quarters.
SAFE HARBOUR STATEMENT - FORWARD LOOKING STATEMENTS
Matters discussed in this release may constitute forward-looking statements.
Forward-looking statements reflect our current views with respect to future
events and financial performance and may include statements concerning plans,
objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical
facts.
The forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, management's examination of historical operating
trends, data contained in our records and other data available from third
parties. Although TORM believes that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond our control, TORM cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ
materially from those discussed in the forward-looking statements include the
strength of world economies and currencies, changes in charter hire rates and
vessel values, changes in demand for "tonne miles" of crude oil carried by oil
tankers, the effect of changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in demand that may affect
attitudes of time charterers to scheduled and unscheduled dry-docking, changes
in TORM's operating expenses, including bunker prices, dry-docking and insurance
costs, changes in governmental rules and regulations including requirements for
double hull tankers or actions taken by regulatory authorities, potential
liability from pending or future litigation, domestic and international
political conditions, potential disruption of shipping routes due to accidents
and political events or acts by terrorists.
Risks and uncertainties are further described in reports filed by TORM with the
US Securities and Exchange Commission, including the TORM Annual Report on Form
20-F and its reports on Form 6-K.
ACCOUNTING POLICIES
The consolidated accounts for the first half 2004 have been prepared using the
same accounting policies as for the 2003 Annual Report.
The accounting policies are described in more detail in the 2003 Annual Report.
The Company expects to present its accounts in USD from first quarter 2005 in
accordance with the revised Danish Financial Statements Act.
The quarterly report for the first half of 2004 is unaudited in line with normal
practice.
TELEPHONE CONFERENCE AND WEBCAST
TORM invites financial analysts and investors to a telephone conference, where
the quarterly report for first half 2004 will be discussed on 12 August 2004, at
17.00 Danish time. The telephone conference will be conducted in English and be
hosted by CEO Klaus Kjaerulff and CFO Klaus Nyborg. To participate, please call
10 minutes before the start of the conference on tel: +45 32 71 46 11 (from
Europe) or +1 334 323 6203 (from the US). The telephone conference will also be
accessible via the Internet (www.torm.com), from where the presentation used in
the telephone conference can also be downloaded.
Income statement
1 January - 30 June 2004
First half 2004 First half 2003 2003
DKK mill.
Net revenue 1,216 939 1,928
Port expenses and bunkers -226 -327 -621
-----------------------------------------------------------
Time Charter Equivalent Earnings 990 612 1,307
Charter hire -170 -191 -405
Technical running costs -140 -121 -255
-----------------------------------------------------------
Gross profit 680 300 647
Profit on sale of vessels and interests 0 0 0
Administrative expenses -70 -67 -126
Other operating income 31 26 51
-----------------------------------------------------------
Profit before depreciation 641 259 572
Depreciation -101 -86 -177
-----------------------------------------------------------
Profit before financial items 540 173 395
Net gain/(loss) from other investments and securities 551 56 682
Other financial items 28 7 -25
-----------------------------------------------------------
Profit before tax 1,119 236 1,052
Tax 0 0 -1
-----------------------------------------------------------
Net profit for the period 1,119 236 1,051
-----------------------------------------------------------
Balance sheet
30 June 2004 31 December 2003
DKK mill.
ASSETS
FIXED ASSETS
Tangible fixed assets
Leasehold improvements 0 2
Land and buildings 2 3
Vessels and capitalized dry-docking 3,711 2,944
Prepayment on vessels under construction 138 229
Other plant and operating equipment 17 15
-----------------------------------------------
3,868 3,193
-----------------------------------------------
Financial fixed assets
Other investments 1,530 976
-----------------------------------------------
1,530 976
-----------------------------------------------
TOTAL FIXED ASSETS 5,398 4,169
-----------------------------------------------
CURRENT ASSETS
Inventories
Inventories of bunkers 25 26
-----------------------------------------------
Accounts receivables
Freight receivables, etc. 156 147
Other receivables 41 51
Prepayments 21 22
-----------------------------------------------
218 220
-----------------------------------------------
Securities
Bonds 322 316
-----------------------------------------------
Cash at bank and in hand 251 163
-----------------------------------------------
TOTAL CURRENT ASSETS 816 725
-----------------------------------------------
TOTAL ASSETS 6,214 4,894
-----------------------------------------------
Balance sheet
30 June 2004 31 December 2003
DKK mill.
SHAREHOLDERS' EQUITY
Common shares 364 182
Own shares -46 -52
Retained profit 3,056 2,116
Proposed dividend 0 218
-------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 3,374 2,464
-------------------------------------------
LIABILITIES
Long-term liabilities
Mortgage debt and bank loans 2,281 1,701
Capitalized lease obligations 0 0
-------------------------------------------
2,281 1,701
-------------------------------------------
Current liabilities
Next year's repayments on mortgage debt and bank loans 326 295
Capitalized lease obligations 0 181
Trade accounts payable 79 96
Other liabilities 104 102
Accruals 50 55
-------------------------------------------
559 729
-------------------------------------------
TOTAL LIABILITIES 2,840 2,430
-------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 6,214 4,894
-------------------------------------------
Cash flow statement
First half 2004
DKK mill.
------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
Profit before financial items 540
Interest income, exchange rate gains and dividends
received 84
Interest expenses -45
---------------------
579
Adjustments:
Reversal of depreciation and impairment loss 101
Reversal of other non-cash movements 17
Change in inventories, accounts receivables and payables -17
---------------------
Net cash inflow from operating activities 680
---------------------
CASH FLOW FROM INVESTING ACTIVITIES
Investment in tangible fixed assets -693
Investment in equity interests and securities 0
Sale of fixed assets 0
including profit on sale of vessels 0
(included in operating activities)
---------------------
Net cash inflow/(outflow) from investing activities -693
---------------------
CASH FLOW FROM FINANCING ACTIVITIES
Borrowing, mortgage debt 711
Repayment/redemption, mortgage debt -181
Repayment/redemption, lease liabilities -160
Dividends paid -210
Purchase/disposals of own shares 6
Net settlement share options -59
---------------------
Cash inflow/(outflow) from financing activities 107
---------------------
Increase/(decrease) in cash and cash equivalents 94
Cash and cash equivalents,
including bonds, at 1 January 479
---------------------
Cash and cash equivalents,
including bonds, at 30 June 573
------------------------------------------------------------------------------
Shareholders' equity
DKK mill. First half 2004
-----------------------------------------------------------------------------
Balance at 1 January 2004 2,464
Exchange rate adjustment arose upon translation
from measurement currency
to presentation currency 28
Fair value adjustment of derivative financial instruments 25
Exercise share options -59
Disposal of own shares at cost 6
Dividends paid -218
Dividends on own shares 9
Net profit for the period 1,119
----------
Balance at 30 June 2004 3,374
-----------------------------------------------------------------------------
Reconciliation to United States Generally Accepted Accounting Principles (US
GAAP) as of 30 June 2004:
Shareholders'
DKK mill. Net Income equity
Net income/Shareholders' equity as reported under Danish GAAP 1,119 3,374
Dry dock costs 0 -41
Reversal of write-down of vessels 0 -11
Unrealised gains/losses on marketable securities -551 0
Derivative financial instruments 18 0
Share options -61 -5
Deferred tax 10 -345
------------------------
Net income/Shareholders' equity in accordance with US GAAP 536 2,972
A review of principles and methods used in the reconciliation, please refer to
the Annual Report for 2003.
Quarter-by-quarter income statement
2004
Q1 Q2
DKK mill.
-----------------------------------------------------------------------------------------
Net revenue 610 606
Port costs and bunker -123 -103
-----------------------------
Time Charter Equivalent Earnings 487 503
Charter hire -84 -86
Technical running costs -70 -70
----------------------------
Gross profit 333 347
Profit on sale of vessels and interests 0 0
Administrative expenses -33 -37
Other operating income 17 14
----------------------------
Profit before depreciation 317 324
Depreciation -50 -51
----------------------------
Profit before financial items 267 273
Net gain/(loss) from other investments and securities 851 -300
Other financial items -22 50
----------------------------
Profit before tax 1,096 23
Tax 0 0
----------------------------
Net profit for the period 1,096 23
----------------------------
Quarter-by-quarter cash flow statement
2004
q1 q2
DKK mill.
------------------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
Profit before financial items 267 273
Interest income, exchange rate gains and dividends received 6 78
Interest expenses -22 -23
----------------------------
251 328
Adjustments:
Reversal of depreciation and impairment loss 50 51
Reversal of other non-cash movements -6 23
Change in inventories, accounts receivables and payables 13 -30
----------------------------
Net cash inflow from operating activities 308 372
CASH FLOW FROM INVESTING ACTIVITIES
Investment in tangible fixed assets -311 -382
Investment in equity interests and securities 0 0
Sale of fixed assets 0 0
including profit on sale of vessels 0 0
(included in operating activities)
----------------------------
Net cash inflow/(outflow) from investing activities -311 -382
CASH FLOW FROM FINANCING ACTIVITIES
Borrowing, mortgage debt 425 286
Repayment/redemption, mortgage debt -181 0
Repayment/redemption, lease liabilities -69 -91
Dividends paid 0 -210
Purchase/disposals of own shares 6 0
Net settlement share options -27 -32
----------------------------
Cash inflow/(outflow) from financing activities 154 -47
----------------------------
Increase/(decrease) in cash and cash equivalents 151 -57
Cash and cash equivalents,
including bonds, beginning balance 479 630
-------------------------------
Cash and cash equivalents,
including bonds, ending balance 630 573
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
A/S STEAMSHIP COMPANY TORM
(registrant)
Dated: August 16, 2004 By: /s/ Klaus Nyborg
--------------------------
Klaus Nyborg
Chief Financial Officer
03810.0001 #505865