Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the TORM plc Third Quarter 2020 Results Call. Throughout today's recorded presentation, all participants are in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Andreas Abildgaard-Hein, Head of Investor Relations. Please go ahead.

Welcome to TORM's conference call on the results for the third quarter and first nine months of 2022. I am Andreas Abildgaard-Hein, and I'm heading Investor Relations for TORM. As usual, we will refer to the slides as we speak. At the end of the presentation, we will open up for questions. Subsequent to this conference call, you'll be able to listen to a recording of the call and as usual, fine the presentation and other relevant material on our website. Please turn to slide two. Before commencing, I would like to draw your attention to our safe harbor statement. Please turn to slide three. The results will, as usual, be presented by Executive Director and CEO, Jacob Meldgaard; and CFO, Kim Balle. Please turn to slide four. I will now hand the call over to Jacob.

Thank you, Andreas, and good morning or good afternoon to all, and thank you for connecting with us here today. We have - as I'm sure you've seen, today, presented the strongest results from our operations on record. For the third quarter of 2022, we achieved an EBITDA of US$262 million and a profit before tax of US$217 million. Our TCE for the quarter ended at $44,376 per day across the fleet and above $40,000 per day across our MR business, which is the largest segment in Hovik [ph] At the last Friday, TORM had fixed 55% of our open days in the fourth quarter of the year at US$45, 257 per day. And the market is currently trading at similar levels. TORMs for the record has approved a dividend of US$1.46 per share based on the third quarter results. We expect to distribute just around US$119 million, which brings us to a total of around US$166 million of distributed 2022 earnings thus far. The distributions are in line with the distribution policy, which we announced earlier in the year. Here, during the third quarter, we sold one MR vessel which has already delivered to its new owners here in September, and the net proceeds related to the sale of this vessel were US$10 million. Further, we finalized all the previously communicated business transactions with delivery in Q2 2022, and now we had no vessels held for sale. As of date, we have installed 55 scrubbers, are of a total of 68 planned scrubbers, rainy [ph] scrubber installations will come due within the next 12 months. Please turn to slide five. Since the start of the rationalization of Ukraine in February of this year, we've seen strong improvements in product tanker rates, increased tradeshows, longer trade distances, more inefficient trading…

Please turn to slide eight - slide 11, sorry, As Jacob mentioned, we have seen continuous rate increases in the tanker market in the third quarter of 2022 with our TCE rates reaching US$44,376 per day, an increase of 165% from the first quarter of 2022. During the quarter, we have seen higher volatility in non-vessel classes, but all of them have decreased significantly with LR rates going up more than 200% since Q1 2022. During October and November 2022, the strong markets have continued. And as per 6th of November 2022, 49% of our Q4 2022 tanker days for LR2s were fixed at US$55,105 per day, 44% of our LR1s fixed at US$47,661 per day and 58 of our [indiscernible] fixed at US$43,268 per day. Across the fleet, we have thus fixed 55% of our tanker days at US$45,257 per day. With the rest of the days in Q4 being unfixed, our Q4 results will be impacted by the rates we can fix for the rest of the quarter naturally. And currently, the markets are trading at around similar levels. Please turn to slide 12. The strong performance in TCE leads to the highest EBITDA from our operations on record. And EBITDA of US$262 million in Q3 was almost as high as the very strong full year of 2020. In the surge in freight environment, a logical consequence is that our net working capital will increase as the merge and freight receivables increase. During the third quarter of 2022, our net working capital does increase with US$312 million [ph] primarily driven by the increase in trade receivables to US$248 million, but which logically will be released to cash later. The cash conversion rate is, in general, lower in an increasing freight environment compared to a stable or declining market.…

Thank you. Good afternoon, everyone. Kim, if I can start...

Good morning, Jon.

Yeah. If I could start, you came on slide 12, as you noted, this LTV ratio, the lowest you've been pretty much over [ph] and TORM's come a really long way in the last six months from a capital structure perspective. It's amazing what a cycle can do. Is there a target type of balance sheet or capital structure that you think about as we go through the cycle, especially at the high point right now? And given the outlook that you've laid out, where there's a part of the capital structure you'd like to maximize and then there's kind of spare liquidity you can do for more offensive measures?

Thank you, Jon. I think that's a very relevant and good question. We don't have a specific target that we aim for. We are very pleased with, of course, as you said, in this strong cycle that we are bringing down our leverage quarter-by-quarter. I also think it's fair to say that in a market we have right now, it is wise to consider if you should potentially bring it down a bit more utilizing the market and the window that is right now. Hopefully, it will stay here for quite a while, but in these - in our industry, you never know. So the way we think about it is we know it will - or everything else being equal, gradually decline over the coming quarters. But if we were to do anything, we would probably lower it a bit more, if possible. But we don't have a specific target, but if we were to do anything, we will probably lower a bit more.

Okay. And it kind of leads me to my next question, Jacob. Obviously, again, you've done a lot of heavy lifting since you started there and kudos to you for being balanced in your views of the market, but it certainly looks very strong, even though we have some macro risks here. As you think about the next, call it, 2 years, what's your strategy for TORM? Is it just kind of harvest mode right now? Do you look to get more long-term coverage to kind of protect you throughout the cycle? Do you continue to prune older ships and maybe just make this a 4-parter. Any commentary on your appetite for existing assets given the fact that prices have moved so far so fast.

Yeah. Thanks, Jon. Jacob here. So I think we are a little early in sort of this cycle to make conclusive remarks about how it should play out over the next 2 years. But we do believe that the actions that we've taken leading up to this searching freight rate environment that they have been prudent. I think we've done two things. We've shied away from smaller vessels and migrated sort of our balance sheet into larger ships. We are very pleased with that. So now we have LR2, LR1 and MR as our core segments. We have also decided already before this upturn to become, how going to say, more spot-oriented so that we basically to the way all cohort - we have currently – currently we have one vessel on TC out, out of 78 and that is expiring here in the first quarter of next year. So I think those are the two strategic choices that we have made being ready for a better market and obviously, the strength of the market that we currently see is not something that we had predicted. But then if you sort of then say my major reaction right now is to really harvest but to be very nimble around the opportunities that would be to supplement our fleet with existing vessels and most likely you saw in Kim's presentation, we do have a small reservation for earmarked proceeds it could also potentially utilize our stock like we did in the [indiscernible] So I think we've got plenty of room to do things without a real necessity. We feel that we have of course pace away here for quite a long runway with the existing platform and the size of it.

Yeah. That makes sense. Thanks, Jacob. Thanks, Kim.

[Operator Instructions] The next question on the line is Anders Karlsen with Kepler Cheuvreux. Please go ahead.

Yeah. Thank you. Much of my questions were really answered. But I was thinking at what level do you think that it will be sensible to enter into term charters? I mean, today's levels are quite good. But at what level are you tempted, can you give any guidance on that?

Yeah. Thank you, Anders. Obviously, we need to reflect on that constantly. Currently, we are not tempted. We don't think that the pressure that we are experiencing in our daily sort of trending our ships and where the utilization really is that, that is currently reflected in the term rates. And we will probably, today, look towards going slightly longer. We are not that concerned. Of course, there could be something of a black swan event that we don't know of. But currently, we are not really news about being open for the foreseeable future. So it makes not much sense to go short charters like 1, 2 years. I really think that you need to see time charter rates for longer, more strategically 3, 5 years to really move up from where they are before we are tempted. I don't have a precise number, but it's not where they are now.

Okay. No, that's fine. And in terms of potential acquisitions, you mentioned you could use your share, you also have the MR proceeds. Where would you kind of focus that, would that be in the MR segment or in the bigger segments?

So I think we don't - I mean, we are in constant dialogue in the market. And clearly, what we tried to do over the last - not since the market has jumped, but let's say before was to move for the larger sizes. So our preference would be to go for 2L1 [ph] But at the same time, I think we have a really strong platform in MR. So we wouldn't be shy to also look at that if it's the right assets. But probably slight preference if I had the luxury of choice to go for larger ships.

Okay. That's all for me. Thank you.

Thank you, Anders.

[Operator Instructions] There are no further questions on the phone. I will hand over to Andreas for any web questions.

Thank you. We have one question on the web here. So you have reclassified two vessels that were held for sale. Can you elaborate some more on that decision? How do you look at your fleet going forward?

Yes, that's correct that we had two vessels that we had assets for sale. In the current environment, we simply found that the earning potential from operating the vessels in comparison with the straight sale that is more attractive for us to maintain the vessels in the fleet. So that was a decision that we have made deliberately during the quarter. And as I mentioned before, we are actually quite pleased with the fleet the way it is right now and feel we've got the right tools in the toolbox to harvest in the current environment.

Jacob, I think we covered the remaining - any questions already. So this concludes the earnings conference call regarding the results for the third quarter and the first 9 months of 2022. Thank you for participating.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephones. Thank you very much for joining, and have a pleasant day. Good bye.