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 November 2002
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 Statement No. 31 - 2002 issued
by A/S STEAMSHIP COMPANY TORM (the "Company") to The Copenhagen Stock Exchange
on November, 12 2002 - Third Quarter 2002 results. Numbers have been adapted
from European to American format.
Exhibit 1
Kobenhavns Fondsbors
(The Copenhagen Stock Exchange)
Nikolaj Plads 6
1067 Copenhagen K
November 12, 2002 Statement No. 31 - 2002
Contact Person: N. E. Nielsen, Chairman
(Phone: +45 72 27 00 00)
Contact Person: Klaus Kjaerulff, CEO (Phone: +45 39 17 92 00)
A/S Dampskibsselskabet TORM, third quarter 2002 results
Enclosed please find the financial report for the first nine months 2002 adopted
by the Board of Directors of the Company on November 12, 2002.
Yours faithfully,
A/S Dampskibsselskabet TORM
Klaus Kjaerulff
CEO
TORM reports nine months' results in line with expectations and maintains
outlook for the year.
o Profit before tax was DKK 90 million for the first nine months, or DKK 12
million net of an unrealised DKK 15 million gain on NORDEN shares and the
DKK 63 million gain from the sale of TORM Lines.
o Net profit was DKK 451 million for the first nine months including DKK 360
million from reversal of deferred tax in connection with the introduction
of the Danish tonnage taxation.
o EBITDA(1) was DKK 248 million for the first nine months. Net of a gain of
DKK 63 million from the sale of TORM Lines, EBITDA for the first nine
months was DKK 185 million.
o Third quarter 2002 showed EBITDA(1) of 113 million or DKK 50 million net of
the gain from the sale of TORM Lines and a profit before tax of DKK 93
million, or DKK 15 million net of the gain on NORDEN shares and the sale of
TORM Lines.
o Expectations for the full year net profit after tax are maintained at DKK
430-440 million, before any unrealized net gain or loss on the NORDEN
shares.
o TORM's tanker division had net earnings from shipping activities (Gross
profit) of DKK 229 million for the first nine months, in a weak tanker
market.
o TORM's bulk division was loss-making with net earnings from shipping
activities (Gross profit) of DKK -17 million for the first nine months. The
division did not benefit from an increasing market in the third quarter as
its rates were largely fixed.
o As part of a strategic decision to focus on product tankers and dry bulk
operations, TORM Lines was sold with effect from September 16, 2002 to
companies in the A.P. M0ller Group. Net earnings from shipping activities
(Gross profit) for the period from 1 January 2002 to the date of the sale
were DKK 21 million.
o As of September 30, 2002, the Company's holding in Dampskibsselskabet
"NORDEN" A/S was 33.35% when excluding treasury shares. TORM remains
committed to achieve a successful combination of the two companies and
create a substantial Danish shipping entity.
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There are no changes to the accounting policies in the quarter. As per standard,
the quarterly accounts are not audited.
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(1) EBITDA is defined as earnings before income taxes, financial items,
depreciation and amortizations. This does not represent a measure under
Generally Accepted Accounting (GAAP) principles. EBITDA does not represent
and should not be considered as an alternative to net income or cash flow
from operations as determined by generally accepted accounting principles,
and our calculation thereof may not be comparable to that reported by other
companies. We believe that it is widely accepted that EBITDA provides
useful information regarding a company's ability to service and incur
indebtedness. EBITDA does not take into account our working capital and
debt service requirements, and accordingly is not necessarily indicative of
amounts that may be available for discretionary use.
GROUP FINANCIAL HIGHLIGHTS
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QI-Q3 2002(a) QI-Q3 2001(a)
DKKm USDm DKKm USDm
(in millions, except Key Figures)
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PROFIT AND LOSS STATEMENTS
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Net turnover 1,661.9 206.6 1,981.0 238.4
Operating costs -1,430.0 -177.8 -1,351.0 -162.6
---------------------- ----------------------
Net earnings from shipping activities (Gross Profit) 231.9 28.8 630.0 75.8
Profit from sale of vessels and interests 76.1 9.5 87.0 10.5
Administrative expenses -94.5 -11.8 -82.0 -9.9
Other operating income 34.2 4.2 44.0 5.3
---------------------- ----------------------
Profit before depreciation (EBITDA) 247.6 30.8 679.0 81.7
Depreciation -105.3 -13.1 -123.0 -14.8
---------------------- ----------------------
Profit before financial items (EBIT) 142.4 17.7 556.0 66.9
Financial items -52.0 -6.5 -74.0 -8.9
---------------------- ----------------------
Profit before tax 90.3 11.2 482.0 58.0
Tax 360.2 44.8 -144.0 -17.3
---------------------- ----------------------
Net profit 450.5 56.0 338.0 40.7
====================== ======================
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BALANCE SHEET
------------------------------------------------------------------------------------------------------------
Fixed assets 2,947 391 2,259 257
Total assets 3,784 502 3,642 414
Shareholders' equity 1,493 198 1,076 122
Provisions 12 2 342 39
Total liabilities 2,279 303 2,224 253
Invested capital 2,598 345 1,803 205
Net interest bearing debt 1,405 187 801 91
Cash and bonds 444 59 843 96
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KEY FIGURES
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Margins: 14.0% 31.8%
Gross margin (1)
EBITDA margin (2) 14.9% 34.3%
EBIT margin (3) 8.6% 28.1%
Per share data*
Share price, end of period (DKK and USD) 49.6 6.6 50.0 5.7
Millions of shares, end of period 17.3 18.2
Earnings per share (DKK and USD) 34.7 (5) 3.5 18.6 2.1
Ratios: 41.6% (5) 41.8%
RoE (4)
RoIC (4) 28.5% (5) 25.5%
Equity ratio 39.5% 29.5%
Exchange rate DKK/USD. end of period: 7.53 8.12
Investments in tangible assets 732 97 665 76
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(1) Defined as Net earnings from shipping activities
(Gross profit) divided by net turnover.
(2) EBITDA Margins am defined as Profit before divided
by net interest, taxes, depreciation and
amortisation turnover.
(3) EBIT Margins am defined as Profit before interest,
taxes, depreciation and amortisation divided by
net turnover.
(4) Based on Net profit for the period, annualised.
(5) Includes write-back of deferred lax in connection
with introduction of the Danish tonnage tax.
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Shareholders' equity DKK million
Balance at January 1, 2002 1,392
Transitional adjustment -291
--------
Adjusted balance at January 1, 2002 1,102
Exchange adjustment of shareholders' equity
in subsidiaries and associated companies 23
Exchange adjustment of loans to independent units 0
Adjustment of derivatives and own shares -13
Dividend to shareholders -69
Net profit from profit and loss statement 451
Shareholders' equity at September 30, 2002 1,493
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a) The results of operations presented have not been restated to reflect the
sale of TORM Lines on September 16, 2002. These financial statements will
be restated prior to the issuance of TORM's annual results. This
restatement will result in a significant change to certain financial
statement captions, but will not have an impact on net profit.
FINANCIAL RESULTS FOR THE FIRST NINE MONTHS OF 2002
EBITDA for the first nine months of 2002 was DKK 248 million, or DKK 185 million
net of the DKK 63 million gain from the sale of TORM Lines.
Profit before tax was DKK 90 million for the nine-month period, or DKK 12
million, net of a gain of DKK 63 million from the sale of TORM Lines and a DKK
15 million unrealized net gain from the Dampskibsselskabet "NORDEN" A/S
("NORDEN") shareholding.
Net profit was DKK 451 million for the first nine months including DKK 360
million from a reversal of deferred tax in connection with the introduction of
the Danish tonnage taxation.
Despite weak tanker markets, the Tanker division contributed the majority of
profits in the period with net earnings from shipping activities (Gross Profit)
of DKK 229 million in the first nine months of 2002.
The Bulk division saw improving world market rates in the second half of the
third quarter. However, due to the division's decision to fix rates for the
majority of the tonnage in the period, the improving rates will not be reflected
in the division's results until 2003. Net earnings from shipping activities
(Gross Profit) were -DKK 17 million for the nine-month period.
In the period to 16 September 2002 (when it was sold), TORM Lines generated Net
earnings from shipping activities (Gross Profit) of DKK 21 million.
Exchange rate adjustments (mainly related to the USD) as at September 30, 2002
were DKK -43 million, while net gains on the Company's bond and share portfolios
(including the holdings of NORDEN) were DKK 23 million in the first 9 months.
Results for each of the first three quarters 2002 can be found in appendix 1.
Net Earnings (Gross Profit) from Shipping Activities(1)
Nine Months Ending
-----------------------------------------
DKK millions sep-02 % of total sep-01 (2) % of total
Product Tankers 229 99% 557 88%
Dry Bulk -17 -7% 40 6%
TORM Lines 21 9% 18 3%
Offshore -1 0% 16 3%
--- --- --- ---
Total 232 100% 630 100%
(1) Gross Earnings minus operating costs, which comprise port expenses,
bunkers, commissions, crewing, maintenance etc. and hire, but excluding
administration, interest and depreciation.
(2) Restated to reflect changed accounting principles.
PRODUCT TANKERS
Details of earnings (in USD) in respect of the Company's product tankers in the
three pools for the first three quarters, by category, were as follows:
2001 2002
--------------------------------------- % Change
Full year 1st quarter 2nd quarter 3rd quarter q2-q3
LR2/Aframax vessels
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Available earning days 962 270 273 268 -1.9%
Average number of vessels 2.6 3.0 3.0 2.9 -1.9%
TCE per earning days (*) 36,303 19,875 21,565 22,656 5.1%
OPEX per earning days (**) -4,925 -4,732 -4,548 -6,454(***) -41.9%
Operating C/F per earning days (****) 19,896 4,668 6,302 7,104 12.7%
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LR1/Panamax vessels
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Available earning days 1,570 357 240 251 4.3%
Average number of vessels 4.3 4.0 2.6 2.8 4.3%
TCE per earning days (*) 25,480 17,569 15,021 15,731 4.7%
OPEX per earning days (**) -4,920 -6,951 -6,408 -7,677(***) -19.8%
Operating C/F per earning days (****) 10,091 5,958 6,550 6,273 -4.2%
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MR vessels
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Available earning days 2,539 523 550 690 25.5%
Average number of vessels 7.0 5.8 6.0 7.6 25.5%
TCE per earning days (*) 19,970 15,305 14,731 12,754 -13.4%
OPEX per earning days (**) -4,104 -5,046 -4,904 -5,023 -2.4%
Operating C/F per earning days (****) 15,274 10,166 9,800 7,731 -21.1%
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(*) TCE = Time Charter Equivalent Earnings = Gross freight income less
bunker, commissions and port expenses.
(**) Operating expenses for own vessels.
(***) Q3 extraordinary high due to one-off expenses.
(****) TCE earnings less operating expenses and charter hire.
The three tanker pools again achieved good results as against the market
overall, which suffered considerably from reduced demand and excess capacity.
The uncertainty surrounding the situation in Iraq, coupled with rising oil
prices, negatively affected arbitrage possibilities and as such, most oil
traders took a cautious approach throughout the period, leading to less demand
for tonnage.
The LR2 Aframax pool achieved very satisfactory rate levels during the quarter
as compared to the overall tanker market, principally as a result of strong
demand for naphtha in the Far East. Concurrently, improved levels of gas oil
shipments from the Far East to the western hemisphere helped to create a more
balanced tonnage supply picture overall.
Although to an extent affected by limited arbitrage opportunities, the LR1
Panamax Pool also benefited from improved demand for naphtha, as well as a
slight improvement in the demand for jet fuel from the Middle East.
The MR Pool, which is the most vulnerable to arbitrage business, saw a
substantial fall in earnings during the quarter and the outlook for this segment
remains difficult.
As of November 1, 2002, the part of total available capacity for the fourth
quarter which has been fixed is: 49% for the LR2 pool, 41% for the LR1 pool and
41% for the MR pool.
BULK
The Bulk division was loss-making in the third quarter, despite world freight
market rates improving ahead of expectations during the quarter, especially in
the latter part of the period. The division's generally cautious approach by
covering forward for most of 2002 meant that the market improvement was not
reflected in the division's results, which are expected to remain unsatisfactory
for the remainder of the year.
TORM LINES
Following an extensive strategic review in 2001, the Company decided to focus on
two core business areas, tank and bulk, wherein critical mass and a meaningful
market position can be achieved. As a result, serious consideration was given to
how best to secure the longer-term future of TORM Lines.
An agreement was reached with the A.P. M0ller Group who acquired TORM Lines with
effect from September 16, 2002. Certain working capital items were retained by
TORM.
The sale generated a net gain of DKK 63 million and will over time release DKK
25-30 million of working capital to TORM. TORM Lines' EBITDA for the period to
September 16, 2002 was DKK 22 million and net turnover was approximately DKK 407
million. A total restatement of TORM's accounts to exclude the effect of TORM
Lines will be made in connection with the announcement of full year results
2002.
OFFSHORE
The one remaining vessel, TORM KESTREL, which will be redelivered in 2003,
continues to trade profitably.
FINANCIAL ITEMS
Financial items were DKK -52 million in the first nine months. This included a
net gain from the NORDEN shares of DKK 15 million and a gain of DKK 8 million on
the Company's bond portfolio, a net interest expense of DKK 31 million. Currency
exchange rate effects was DKK -43 million, which is a slight improvement on
first half 2002.
The average interest rate paid on loans and currency swaps for the first nine
months of 2002 was 3.96% incl. margin. For 2002 and 2003, approximately 99% and
57% of the Company's interest rate exposure is hedged, respectively. A change in
interest rates of 1% on the remaining variable debt would result in a change in
interest expense of DKK 0.2 million for 2002.
As of September 30, 2002, the Company had holdings in Danish bonds with a market
value of DKK 322 million. The annualised return for the period was 7.70%. If
interest rates at year-end 2002 were to change by 1%, the fair value of the
bonds would change by DKK 12.9 million.
As of July 1, 2002 the Company sold bonds with a value of DKK 250 million in
order to purchase the shares in NORDEN.
TORM has more than adequate financial resources to take a long-term approach to
reach a satisfactory solution with NORDEN, including an undrawn DKK 500 million
6-year committed credit facility.
OWN FLEET
TORM currently owns and long-term charters 3 LR2 product tankers, 2.5 LR1
product tankers and 8 MR product tankers, with a total deadweight of 1,005,000
dwt. TORM's owned bulk carrier fleet consists of two Panamax bulkers and two
Handysize vessels with a total deadweight of 195.000 dwt.
Following delivery in June of TORM MARY and TORM VITA, both 45,800 dwt MR
product tankers built by the STX Yard in Korea, the Company's orderbook
currently stands at 8 vessels, of which two will be delivered in November and
December 2002 with the remainder being delivered in 2003 and 2004.
In addition to the owned tonnage, TORM currently has increased its capacity with
one Panamax product tanker, nine Panamax bulkers and three Handysize bulkers on
time charter. In addition, from time to time, TORM may take short-term time
charters to cover specific voyages.
POOLS
Apart from TORM's own vessels participating in the pools, the other pool vessels
are only managed by TORM, and not owned or chartered. However, management
believes that the increased market presence and the fact that it allows TORMs
customers to do "one-stop shopping" leads to improved earnings for TORM and its
pool partners' vessels.
Currently, TORM's pools include 15 MR product tankers, 18.5 LR1 (Panamax)
product tankers, 12 LR2 (Aframax) product tankers, 12 Panamax bulkers and 5
Handysize bulkers.
During the quarter, the MR Pool reached agreement with LGR di Navigazione
S.p.A., Italy, whereby 3 modern vessels from this company will join the MR Pool
along with two newbuildings to be delivered. The vessels are all sister vessels
to the six vessels being built for TORM at the STX yard and are an important
addition to the expanding MR Pool.
As previously announced, the Company together with partners signed a firm
contract for the construction of 8 high specification LR1 product tankers in
June, to be built at Hyundai Heavy Industries in Korea for delivery in 2004. Of
these, two will be owned by TORM. During the third quarter, the well-known
Hamburg based shipowning group, Bernhard Schulte ordered an additional LR1
tanker. The newbuilding concerned will, like the other 8 vessels, join the Torm
LR1 panamax pool upon delivery.
Further additions to the pools are expected to be announced during the fourth
quarter.
TORM remains confident of its target of reaching 100 product tanker vessels in
the pools by the end of 2004.
DAMPSKIBSSELSKABET "NORDEN" A/S
Having reached a holding of 33.35% in NORDEN, TORM remains committed to
effecting a successful merger in order to create a substantial Danish shipping
company, offering a solid platform for further growth, and able to compete in
the international market place.
Both companies enjoy a first class reputation in the international shipping
market and TORM's vision calls for the identity of the two names to be retained
with the tanker activity being operated under the TORM name and the bulk
activity under the NORDEN banner. The combined company would not only exploit
operating synergies but should also generate greater interest among investors.
The worldwide trend towards consolidation, both among competitors and customers,
makes the commercial rationale obvious and against this background, TORM will
continue to explore ways to achieve a satisfactory solution for all concerned.
In TORM's accounts, the shareholding in NORDEN is for the time being treated as
a portfolio holding. Consequently, the NORDEN stake is valued at the NORDEN
share price of 385 DKK/share as quoted on the Copenhagen Stock Exchange on 30
September 2002. An unrealised net gain on NORDEN shares of DKK 15 million after
transaction costs is included in the result for the first nine months 2002.
OWN SHARES
The Board of Directors of the Company has been authorised by the Annual General
Meeting to purchase up to 10% of the TORM's shares. The Company currently owns
4.84 % of the share capital in TORM today.
OUTLOOK FOR THE REMAINDER OF THE YEAR
Expectations for the full year net profit after tax are maintained at DKK
430-440 million as announced on September 9, 2002. In addition to this, an
unrealized net gain or loss on the NORDEN shares will be included in the full
year results.
The outlook is generally stronger for the product tanker activity for the fourth
quarter of 2002. Increased demand for middle distillates during the winter
months traditionally boosts the products market but the highly volatile and
unpredictable situation in the Middle East and a doubtful economic recovery in
the global economy including the United States increase the uncertainty.
The result of the Bulk activity is expected to remain largely unchanged during
the fourth quarter, compared to third quarter.
Given the more positive outlook for 2003, however, the Bulk division chartered
in further tonnage during the quarter and has maintained a policy of having
several vessels available for charter in 2003 to take advantage of expected
further improved trading conditions.
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SAFE HARBOUR STATEMENT - FORWARD LOOKING STATEMENTS
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This release contains forward-looking statements (as defined in Section 21E of
the Securities Exchange Act of 1934, as amended) concerning future events and
the Company's operations, performance and financial conditions, including, in
particular, statements regarding: TCE rates in the near term, net operating
days, tanker and bulker supply and demand, supply and demand for oil and refined
products, expectations about the Company's future capital requirements and
capital expenditures, the Company's growth strategy and how it is implemented,
environmental changes in regulation, cost savings and other benefits. Words such
as "expects", "intends", "plans", "believes", "anticipates", "estimates",
"outlook" and variations of such words and similar expressions are intended to
identify forward-looking statements.
These statements involve known and unknown risks and are based on a number of
assumptions and estimates, which are inherently subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Company. In addition to the factors and matters discussed elsewhere in this
report, important factors that, in TORM's view, could cause actual results to
differ materially from those discussed in the forward looking statements include
the strengths of world economies and currencies, general market conditions,
including fluctuations in charter hire rates and vessel values, changes in
demand in the shipping market, including the effect of changes in OPEC's
petroleum production levels and worldwide oil consumption and storage, changes
in the Company's operating expenses, including bunker prices, dry-docking and
insurance costs, changes in governmental rules and regulations or actions taken
by regulatory authorities, potential liability from pending future litigation,
general domestic and international political conditions, potential disruption of
shipping routes due to accidents or political events, and other important
factors described from time to time in the reports filed by TORM with the
Copenhagen Stock exchange and the Securities and Exchange Commission.
TORM expressly disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with respect thereto or any
change in events, conditions or circumstances on which any statement is based.
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RECONCILIATION TO US GAAP
Reconciliation to United States Generally Accepted Accounting Principles (US
GAAP), as of September 30, 2002
PROFIT AND LOSS STATEMENTS Nine months 2002
DKKm USDm(*)
(in millions)
------ ------
Profit reported under Danish GAAP before taxes (restated) 90.3 12.0
Provision for repair and reversal of capitalization of docking costs -18.2 -2.4
Unrealised gains on marketable securities -15.1 -2.0
Foreign currency translation 35.9 4.8
Derivative financial instruments -15.7 -2.1
------ ------
Net income in Accordance with US GAAP before taxes 77.2 10.3
Profit reported under Danish GAAP (restated) 450.5 59.8
US GAAP adjustment as specified above -13.1 -1.7
Deferred taxes (tonnage taxation) -440.4 -58.5
------ ------
Net profit -3.0 -0.4
Basic and diluted earnings per shares (DKK and USD) -0.17 -0.02
(*) For the translation into USD, the DKK/USD exchange rate at September 30,
2002 of 7.5329 is used.
APPENDIX 1
GROUP FINANCIAL HIGHLIGHTS - 2002 quarter by quarter
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PROFIT AND LOSS STATEMENTS 2002
-------------------------------------------
DKK Millions q1 q2 q3 9 months
------- ------- ------- -------
Net turnover 519.8 498.5 643.7 1,661.9
Operating costs -444.8 -411.8 -573.4 -1,430.0
------- ------- ------- -------
Net earnings from shipping activities (Gross Profit) 74.9 86.7 70.2 231.9
Profit from sale of vessels and interests 4.8 4.7 66.5 76.1
Administrative expenses -29.2 -30.7 -34.5 -94.5
Other operating income 12.3 11.1 10.8 34.2
------- ------- ------- -------
Profit before depreciation (EBITDA) 62.8 71.8 113.1 247.6
Depreciation -33.3 -34.1 -38.0 -105.3
------- ------- ------- -------
Profit before financial items (EBIT) 29.6 37.7 75.1 142.4
Financial Items -21.0 -49.4 18.4 -52.0
------- ------- ------- -------
Profit before tax 8.5 -11.6 93.4 90.3
Tax -2.4 362.6 0.0 360.2
------- ------- ------- -------
Net profit 6.1 351.0 93.4 450.5
Margins:
Gross margin (1)
14.4% 17.4% 10.9% 14.0%
EBITDA Margin 12.1% 14.4% 17.6% 14.9%
EBIT Margin 5.7% 7.6% 11.7% 8.6%
(1) Defined as net earnings from shipping activities (Gross Profit) divided by
net turnover.
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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: November 12, 2002 By: /s/ Klaus Nyborg
--------------------------
Klaus Nyborg
Chief Financial Officer
03810.0001 #363068