EBITDA earnings at the company rose from a $7m loss in the first quarter of 2012 to a $36m gain in 2013, while pre-tax losses fell from $79m in 2012 to $16m in 2013. Cash flow from operating activities also rose from negative $57m in the first three months of 2012 to $11m in 2013.
Net interest bearing debt at the company still stands at $1.8bn.
"In the first quarter of 2013, the product tanker freight rates were as expected at seasonally high levels. In addition arbitrage opportunities and for instance the unusually cold weather in North Asia resulted in the highest quarterly freight rates in four years, despite high volatility," Torm said in its earnings release.
"The freight rates in all bulk segments started at historically low levels in the seasonally weak January. Later in the first quarter of 2013, freight rates for panamax and handymax increased to approximately $9,000 a day mainly due to the South American grain season and mineral activity from the US Gulf," it went on.
For 2013 the company predicts a pre-tax loss of $100m-$130m, including a $5m loss from the recent sale of five vessels. Torm expects to stay within the boundaries of its financial covenants for this year, but stressed that with 17,924 unfixed earning days for the remainder of the year, the company's earnings will be strongly tied to freight rates.
"The forecasts are before potential further vessel sales and impairment charges. Torm expects to be operating cash flow positive after interest payment. The uncertainties and sensitivities about freight rates and asset prices may have an effect on the Company's compliance with the financial covenants." the company warned.
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