Bloomberg News

Torm Loss to Exceed Forecast; Shares Plunge Most Since 1994

November 01, 2011

(Updates with closing share price in second paragraph.)

Oct. 31 (Bloomberg) -- Torm A/S, Europe’s biggest listed operator of tankers carrying refined oil products, said it will lose more money this year than forecast as a glut of ships and weaker demand weigh on earnings.

Torm plunged 27 percent, the most since at least 1994, to 5.90 kroner by the 5 p.m. close in Copenhagen trading. That cut the company’s market value to 429.5 million kroner ($80.5 million). Investors bought and sold 1.03 million shares, 7.5 times the daily average over the past six months, figures compiled by Bloomberg show.

The global fleet of tankers carrying gasoline and other refined oil products is set to expand 6.7 percent this year, according to Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. That’s more than double its prediction for a 3 percent gain in demand for the vessels. Torm shares have plunged 85 percent this year.

“Demand for product tankers has not been as strong as expected, and the oversupply of vessels has continued,” Herman Hildan, an Oslo-based analyst at investment bank RS Platou Markets AS, said by phone today.

The annual pretax loss will be between $175 million and $195 million, Hellerup, Denmark-based Torm said in a statement today, compared with a previous estimate of $100 million to $175 million. The stock is on course for a fifth annual drop and this year’s third-worst performer in the KFMX Index of 163 medium- sized companies, sliding 85 percent.

Returns for ships hauling 37,000 metric tons of gasoline on the benchmark route to the U.S. from northwest Europe tumbled 91 percent from the 2011 high of $22,187 a day on April 28 to the low for the year of $2,077 on Sept. 8, according to data from the Baltic Exchange in London.

--Editors: Dan Weeks, Claudia Carpenter.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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