Episode Details

TORM plc (TRMD) Q2 2026 — Q2 2026 (quarter ended June 30, 2026): revenue $662.8m, UP 110.28%; TCE earnings $512.0m; net profit $338.3m vs $58.7m; basic EPS $3.31, diluted $3.25. TCE per ship per day $59,301 vs $26,672. Announced BEFORE the bell Aug 26 (6-K accepted 06:06 ET, call 09:00 ET); shares opened -0.16% and closed -4.42% on 3.55x median volume. TORM plc reported the largest quarter in its 137-year history: TCE per ship per day of $59,301 against $26,672, net profit of $338.3m against $58.7m, and NO gain on selling ships in it at all. Then the shares fell 4.42%. The reason is on page two of the same document: as of August 18, TORM had already fixed 73% of the September quarter - 6,431 of 8,834 available days - at $38,606 a day, 34.90% BELOW the rate that produced the record. Only 2,403 days are still open. THE CALL: HOLD (3/5, THE NEXT QUARTER IS ALREADY 73% SOLD AT A THIRD LESS) — base-case value ~$30.30 vs ~$30.08 today. KEY METRICS: - THE FORWARD BOOK: as of August 18, 6,431 of the September quarter's 8,834 available days were already fixed at $38,606/day - 73% of the quarter, at 34.90% below the $59,301/day that made the record. Every class: LR2 -26.5%, MR -38.2%, LR1 -43.3%. - THE CEILING: only 2,403 days remain open. If they repeat the record exactly, September still blends to $44,235/day, 25.4% under June. To MATCH June they must average $114,686/day - 1.93x the $59,296 record spot rate. - THE GUIDANCE AGREES: raised $200m to TCE of $1,400-1,600m. Strip out the $798.0m already delivered and the RAISED range implies a second half of $34,230-$45,602/day, a midpoint 32.7% below the June quarter. - THE RECORD IS CLEAN: profit from selling ships was ZERO, there was no impairment, and non-recurring items were -$1.7m on a $338.3m result. Tax was $0.8m on $339.1m of pre-tax profit - a 0.24% rate under tonnage tax. - THE PAYOUT IS A RESIDUAL: $2.40/share, $245.7m, described as 73% of net profit. The stated policy pays liquidity above $1.8m per vessel (=$174.6m on 97 ships) PLUS a Board discretionary element - and the Board held back $383.8m beyond the rule, 2.20x the rule itself. - THE SHIPS: valuers marked the fleet at $4,056m on June 30, 39.0% above the $2,918.8m carrying value, against 13.8% six months earlier. Per ship that is $41.8m vs $33.4m in December, +25.0% in half a year. Stated NAV $36.50/share. - EPS BASIS PROVED TWICE: $1.21 + $3.31 = $4.52 basic and $1.18 + $3.25 = $4.43 diluted, both exactly the filed half-year. The widely quoted 'EPS miss' compares the diluted actual to a figure that IS the basic line. What to watch: UP: the strait shut again in early Q3, the Houthis resumed attacks, rerouting Saudi barrels could nearly double voyage distances, and net debt is 22.4% of ship values. DOWN: the RAISED guidance itself implies a second half 32.7% below June, and the $4,056m valuer mark was set at the top of the same cycle. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.