Torm Stock Surges on Q2 2025 Results and Upwardly Revised Guidance

Torm Plc reported Q2 2025 financial results, beating analysts' bottom-line estimates and revising 2025 EBITDA guidance upward. Shares are up 7.7% as management projects TCE earnings of $800-$950 million and EBITDA of $475-$625 million. Investors should consider Torm's volatile quarterly dividend, which has steadily declined over the past three years, before investing.

TORM Plc (NASDAQ: TRMD) has reported its second-quarter 2025 financial results, showcasing a robust performance despite global uncertainties. The company's adjusted EBITDA for the period was USD 129.0 million, marking a decline of USD 122.1 million compared to the same period in 2024. However, this decrease is attributed to a normalization of freight rates from the exceptionally high levels observed in the first half of 2024. The company's net profit for the period amounted to USD 58.7 million, down from USD 194.2 million in the same period last year.

TORM's time charter equivalent earnings (TCE) for the second quarter of 2025 were USD 208.2 million, including unrealized losses on derivatives of USD -2.2 million. This figure represents a significant drop of USD 117.7 million compared to the same period in 2024. The company's TCE rates averaged USD 26,672 per day, down from USD 42,057 in the same period last year. Despite these declines, TORM's vessel class LR2 achieved TCE rates of USD 35,459 per day, while LR1 and MR vessels posted rates of USD 27,371 and USD 23,345 per day, respectively.

The company's Return on Invested Capital (ROIC) for the second quarter of 2025 was 10.0%, a notable decrease from the 29.5% reported in the same period last year. This decline is primarily due to the lower freight rates observed in the second quarter of 2025. Basic earnings per share (EPS) for the period amounted to USD 0.60, down from USD 2.08 in the same period last year.

TORM's Board of Directors has approved an interim dividend of USD 0.40 per share for the second quarter of 2025, to be paid on September 3, 2025. This dividend represents an expected total payment of USD 39.2 million and is equivalent to 67% of the company's net profit for the period.

Looking ahead, TORM has raised its full-year 2025 guidance for TCE earnings to the range of USD 800 - 950 million and for EBITDA to the range of USD 475 - 625 million. The company's financial outlook reflects the current fleet size and the expected market conditions for the remainder of the year. The company's shares are currently trading up by 7.7% following the announcement of these results and the revised guidance.

Investors should note that TORM's quarterly dividend has been volatile and has steadily declined over the past three years. The company's dividend pay-out ratio has decreased from 87% in 2024 to 67% in 2025, reflecting the company's focus on maintaining a strong financial position.

References:
[1] https://www.prnewswire.com/news-releases/torm-plc-q2-2025-results-dividend-distribution-and-financial-outlook-2025-302529888.html