TORM plc (NASDAQ:TRMD) Q1 2026 Earnings Call Transcript

TORM plc (NASDAQ:TRMD) Q1 2026 Earnings Call Transcript May 13, 2026

TORM plc misses on earnings expectations. Reported EPS is $1.18 EPS, expectations were $1.33.

Operator: Thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the TORM First Quarter 2026 Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Jacob Meldgaard, CEO, you may begin.

Jacob Meldgaard: Thank you, and welcome to everyone joining us today. We started 2026 with a very strong first quarter, delivering results that demonstrate both the earnings power of our platform and the strength of our execution in a supportive freight market. This morning, we released our Q1 2026 results, and we are pleased with the performance. However, before I go into the details of the quarter, I would like to take a step back and briefly talk about TORM and the foundation that underpins these results and continues to differentiate us in the market. Again, our performance was driven by a combination of strong freight rates, disciplined execution and the One TORM platform. While we remain attentive to global developments, we continue to align ourselves with market changes and believe we have a unique ability to react quickly to movements in spot prices.

This is something we are often asked about. The answer is that it represents a quantifiable advantage over our peers, what we refer to as the One TORM advantage. It is now embedded in the way we operate and is a capability our competitors would undoubtedly like to replicate. Importantly, this advantage is the result of a journey over many years, a journey that continues to evolve. We are able to track this across a range of performance indicators. For example, over a 3-year period, our MR fleet generated TCE revenue that exceeded the peer average by approximately USD 200 million, reflecting the strength and efficiency of our operating model through higher utilization, disciplined cost control and strong commercial execution. This culture of operational excellence is supported by our centralized management platform that coordinates and accelerates our decision-making.

This is good news for our investors because it means we are now extremely well placed for the complex landscape ahead, and we remain confident that the shifting stance of geopolitical uncertainty continue to present opportunities for us. Thus, it’s no surprise to us that TORM share are currently in focus among the investment community as a rout to unlock value from this uncertainty. And now please to Slide #4. As always, I’ll start with the key financial outcomes for the quarter to give you a clear picture of how the business is developing. During the first quarter, we delivered TCE of USD 286 million, representing a clear continuation of the positive earnings trajectory seen over recent quarters. This was significantly higher than the same quarter last year, driven by consistently firm freight rates throughout the period, which strengthened further towards quarter end.

These additions reflect a value chain currently characterized by abnormal trade flows and structural inefficiencies, resulting in elevated margins, not only for tanker companies like us, but also for our customers who are capturing strong profitability across the trading and refining segments. That top line performance translated into an EBITDA of USD 201 million and a net profit of USD 122 million, reflecting both the strength of the market environment and our ability to convert rates into earnings through disciplined commercial execution and operational leverage. Supported by the continued strength we see across our markets and the solid momentum entering the remainder of the year, we are therefore increasing our full year guidance to USD 1.15 billion to USD 1.45 billion, underscoring our confidence in sustaining profitable growth.

Also, we continued active fleet renewal, adding younger secondhand vessels and committing further acquisitions while divesting older tonnage. After quarter end, we also agreed to acquire 6 MR resales with expected delivery of 4 in 2027 and 2 in 2028. These acquisitions further enhance fleet flexibility and earnings capacity while preserving a prudent age profile. As of quarter end, our fleet consisted of 95 vessels. Once all the beforementioned transactions are completed, the fleet will increase to 103 vessels on a fully delivered basis. Please turn to Slide 5. Before moving to the broader market, let me briefly address our current operating status. Safety remains our highest priority. We currently have 1 vessel inside the Persian Gulf, and I’m pleased to say that the crew are doing well, morel is high and provisions are not an issue.

As we will describe on this call, the market impact has been significant, tightening effective supply and contributing to the sharp increase in freight rates. Bunker prices have also moved higher, although availability remains secure. Throughout this period, our approach has been clear and unchanged. We take a safety-first approach in all operating decisions. Please turn to Slide 7. Following a strong close to 2025, product tanker markets entered the first quarter of 2026 with rates stabilizing at levels well above historical averages. This strength was supported by broader momentum in the crude tanker market, which benefited from record volumes of cargo on the water as well as the return of Venezuelan exports to the compliant fleet and generally more cautious use of sanctioned vessels globally.

And on top of this, the development was further supported by the consolidation of the ownership in the VLCC segment. The outbreak of the U.S., Israel, Iran war in late February and the subsequent closure of the Strait of Hormuz marked a further and unprecedented escalation in tanker rates. This is clearly reflected in our commercial performance with Q2 average bookings to date above USD 70,000 per day across vessel sizes. Taken together, these dynamics have created one of the strongest cross-segment market environments we’ve seen in several years, underpinned by both structural and event-driven factors. And kindly turn to the next slide, turn to Slide 8, please. The closure of the Strait of Hormuz had an immediate and profound impact on global energy flows.

Approximately 14% of global clean petroleum product volumes and around 30% of crude oil movements that would normally transit the Strait were suddenly constrained. Combined, this corresponds to approximately 20% of global daily oil consumption. In scale and immediacy, this represents the largest oil supply disruption the market has ever experienced. On the clean product side, the impact was uneven. Naphtha and jet fuel were disproportionately affected, reflecting the Persian Gulf’s central role in global exports, accounting for 37% of global naphtha exports and 21% of jet fuel under normal conditions. Diesel and gasoline were relatively less exposed. As the next slide will show, only a fraction of these lost volumes have been replaced so far, underscoring how structural this shock has been.

Please turn to Slide 9. In crude markets, part of the lost Persian Gulf supply has been mitigated through pipeline redirection from Saudi Arabia and the UAE alongside increased flows from the Atlantic Basin. However, reduced crude availability at Asian refineries has forced meaningful run costs, which in turn has sharply reduced clean petroleum product exports from the region. By the end of April, global clean petroleum product trade was down by roughly 16% as incremental supply from Western markets proved insufficient to offset the loss of Middle Eastern and Asian exports. Crude oil trade saw a decline of similar magnitude. Despite this contraction in traded volumes, product tanker rates remained elevated. Some of this reflects longer replacement voyages and urgency premiums.

But the more important explanation lies on the tonnage supply side, which I’ll address on the next slide. And here, please turn to the next slide to Slide 10. The closure of the Strait of Hormuz cuased significant vessel dislocation with more than 200 crude and product tankers stranded inside the Persian Gulf. This equates to roughly 3% of the global product tanker fleet and 6% of the crude fleet. As vessels were rerouted towards regions with replacement volumes, we saw higher ballast ratios and materially increased inefficiencies. In simple terms, ships spending more time sailing empty to reach their next cargo. In the MR segment, increased East to West ballasting was partially offset by stronger West to East cargo flows as Asian product supply tightened.

At the same time, we saw an unprecedented shift of LR2 vessels into crude trading, the so-called dirty-ups. By the end of April, the number of LR2s trading clean products had fallen by more than 50 vessels compared with the start of the year despite the delivery of 27 newbuildings. As a result, effective CPP trading fleet capacity declined by around 4% even before accounting for the vessels stranded in the Gulf. Please turn to Slide 11. It is, however, important to recognize that this migration of LR2s into crude trading began well before the Strait of Hormuz closure. Since 2025, the Aframax and LR2 segments have faced extensive vessel sanctioning, largely linked to Russian crude trades. In 2025 alone, more than 200 Aframax and LR2 vessels were sanctioned.

This has created a growing disconnect between newbuilding deliveries and effective fleet growth. Since the start of 2025, nominal product tanker capacity is up 8%, yet the capacity actually trading in today is around 4% lower. The scale of sanctions is notable. 1 in 4 vessels in the combined Aframax LR2 segment is currently under U.S., EU or U.K. sanctions. This comes on top of an already balanced order book due to the high share of older vessels. With 60% of the sanctioned fleet older than 20 years, the prospect of these ships returning to the mainstream clean market, even if sanctions were lifted, appears increasingly limited. And now turn to Slide 12. Let me frame this slide with one central point. What we are facing is not a return to normal, but a structural market reset.

First, on timing. The duration and persistence of the closure of the Strait of Hormuz remain uncertain despite recent diplomatic attempts to end the conflict. Currently, tanker transits through the Strait of Hormuz remain more than 95% below the pre-conflict levels. We don’t know when transit will resume, and we’re not speculating on the timing. That uncertainty is real, and we are managing the business responsibly with that reality in mind. What is equally important, however, is what happens after reopening. When transits resume, the market does not simply switch back to where it was. There will be tonnage dislocation and significant vessel repositioning as assets reenter trade lanes that have been disrupted for an extended period. That creates friction, inefficiency and volatility, conditions where agile operators outperform.

At the same time, depleted strategic and commercial inventories will need to be rebuilt, a multiyear process that supports sustained activity rather than a temporary outlet. The UAE’s recent exit from OPEC enables higher production, which is likely to accelerate the replenishment of global oil stocks. It’s also important to remember that tanker market strength was already evident before the Strait of Hormuz closure. Those fundamentals were paused, not erased. From our perspective, the key is readiness. We have deliberately built an agile business platform that allows us to react immediately. So when the trade opens, we are well positioned to benefit from the market reset. Please turn to Slide 13. Now to conclude on the market, the tanker industry today is operating in an environment shaped by an unusually large and growing number of geopolitical factors.

Trade routes, cargo flows, sanctions regimes and security considerations are all contributing to greater market inefficiency. Importantly, this is not new, but it has intensified. Since 2022, the number of geopolitical variables we are navigating has increased significantly, adding friction and complexity to global energy transportation. For the industry, inefficiency translates into longer voyages, dislocated tonnage and volatility. For well-positioned operators like us, it also creates opportunity, provided you have the scale, agility and discipline to navigate it effectively. And with that, I’ll now hand it over to Kim, who will walk us through the numbers.

Kim Balle: Thank you, Jacob. Now please turn to Slide 15, and let me walk you through some of the drivers behind our performance. The product tanker market entered 2026 on a strong footing, and this momentum was sustained throughout the first quarter, supporting another solid set of results for TORM. For the first quarter, we delivered TCE of USD 286 million, translating into EBITDA of USD 201 million and a net profit of USD 122 million. These results reflect firm freight markets across the quarter and our continued ability to consistently capture this across the fleet. On a fleet-wide basis, average TCE was USD 34,937 per day. And by segment, LR2 earnings exceeded USD 41,000 per day, MRs earned just under $33,000 per day, while LR1s came in around USD 35,000 per day, i.e., up significantly compared to the freight rates we had a year ago.

Our TCE earnings were affected by timing issues related to IFRS 15. Under IFRS 15, we recognize freight revenue from when cargo is loaded until it is discharged, not from when the voyage is agreed and hence influenced by changes in balance patterns. It does not impact our underlying cash earnings or the economic performance of the vessels. Again, the realized earnings level highlight the continued strength of the underlying market, supported in part by very firm crude tanker rates, which again influenced product tanker dynamics positively. With that overview in place, let me turn to Slide 16, where we break down earnings down in more detail and walk through the underlying drivers. This slide illustrates our quarterly earnings development since the first quarter of 2025.

And what stands out very clearly is a step-up we see in the most recent quarter. For the Q1 results, we delivered a meaning uplift in earnings, continuing and accelerating the positive trajectory we have seen over recent quarters. This reflects the strength of the freight market and confirms that the supportive market conditions are translating directly into financial performance. For the quarter, we generated TCE of UAD 286 million and EBITDA of USD 201 million, making this our strongest quarterly result since the second quarter of 2024. It is a clear validation of both the market environment and our ability to capitalize on it. The primary driver was firm freight rates supported by strong spillover from the crude tanker sector and continued geopolitical disruptions in the Middle East, which have introduced additional inefficiencies into the market.

Importantly, given the inherent operational leverage in our business model, incremental rate improvements translate efficiently into higher earnings. This sets out a solid foundation as we move through the remainder of the year. Please turn to Slide 17. On this slide, we show the quarterly development in net profit alongside earnings and dividends per share. Starting with earnings. Net profit increased to USD 122 million, corresponding to earnings per share of USD 1.21. Turning to free cash flow generation and capital return. It is important to note that the combination of high freight rates and elevated bunker prices resulted in a net working capital increase of around USD 30 million during the quarter. Against this backdrop, the Board has declared a dividend of USD 0.7 per share, equivalent to a payout ratio of 58%.

This reflects the free cash flow generated after accounting for the working capital build. Absent to this effect, the implied payout ratio would have been in the range of 80% to 85%. We believe this once again demonstrates that our capital return framework strikes the right balance, remaining clear and disciplined while being firmly anchored in strong and sustainable underlying cash earnings generation. And now please turn to Slide 18. As shown on this slide, broker valuations for our fleet stood at USD 3.6 billion at the end of the quarter. This reflects a continued positive sentiment across the tanker asset market and results in an increase in our net asset value to USD 3.1 billion. Importantly, average broker valuations for the fleet increased by 9.7% during the first quarter, with particularly strong appreciation seen in the LR2 and LR1 segments.

This development is an acceleration of what we observed in the previous quarter and further underlies both the improving market backdrop and the quality of our asset base. Turning to the center chart, you can see our net interest-bearing debt, which now stands at USD 894 million, and this corresponds to a net loan-to-value ratio of 25.1%, keeping us comfortably within the range we have maintained for many quarters. This highlights the strength of our conservative capital structure, maintaining stable leverage at these levels provide us with significant financial flexibility, allowing us to pursue value-accretive opportunities as we have demonstrated this quarter, while at the same time, preserving balance sheet resilience through market cycles.

Finally, on the right side, you see our debt maturity profile. We have USD 287 million in borrowings maturing over the next 12 months and beyond that maturities are modest and well distributed across the subsequent years. Overall, our solid balance sheet positions us well to navigate current market conditions with confidence while preserving the ability to act decisively on attractive opportunities as they emerge. And now please turn to Slide 19, where I will walk you through our outlook for 2026. Based on the strong start to the year and the earnings visibility we now have in the near term, we are upgrading our full year 2026 guidance. For the full year, we now expect TCE of USD 1.15 billion to USD 1.45 billion, up from our previous guidance range from USD 850 million to USD 1,250 million.

At the same time, we upgrade our EBITDA guidance to USD 800 million to USD 1.1 billion compared with the previous USD 500 million to USD 900 million. Market conditions have reached exceptionally strong levels in the second quarter, supported by tight tonnage balance and continued trade dislocations. As a result, we have already secured 57% of our earning days in Q2 at a fleet-wide average of TCE USD 71,494 per day. A significant share of this quarter is therefore fixed at very attractive rate levels, providing a high degree of near-term earnings visibility. This strong coverage gives us a very solid foundation for the year and reflects the positive traction we have seen across all vessel segments. Thus, this upgrade reflects 2 main factors: First, the strong earnings performance delivered in the first quarter; and second, the very strong coverage we have secured for the second quarter at rate levels that are unprecedented for the product tanker market.

For the uncovered days, we have, as usual, used the forward derivatives market as a reference. And as always, the updated guidance remains subject to market volatility, geopolitical developments and potential changes in trade patterns, particularly as we move into the second half of the year. That said, we believe our upgraded guidance properly reflects both the strength of the current market backdrop and the visibility we have today. And with this, I will hand it back to the operator.

Q&A Session

Operator: [Operator Instructions] And your first question comes from the line of Jon Chappell with Evercore ISI.

Jonathan Chappell: Kim, I want to go back to the dividend slide. You mentioned it briefly, the 58% payout ratio, but would have been 83.5%. Can you remind us what that difference was? And then if it’s associated with the new builds, how do we think about the payout ratio going forward? Is it closer to this 58%, which was the lowest payout ratio since 3Q ’22? Or does it return something to that 80%-ish range that it’s been for much of the last 3 years?

Kim Balle: Jon, thank you very much for that question. What I tried to communicate was that when we saw the market rate increase during March. We will have DSOs, freight days outstanding of around, let’s say, 45 to 50 days. So meaning — so we booked the cargo, the fixing, but we will get the liquidity those days later. So i.e., it means that we will not get the liquidity in the same month of March, we will get that booking in April as an example. So in that sense, we build up net working capital. And if you add the increase in bunker prices, i.e., the effect on our bunker inventory, that in itself — those 2 in itself equated to around USD 30 million. And that was why I added it to the earnings — or sorry, to the dividend we paid out.

And if you add that, you will get to the 80% to 85%. So it has nothing to do per se with the resales that we bought. It is just a reflection of the net working capital buildup when markets react as it did over 1 month and then over a quarter end where we report.

Jonathan Chappell: So does that mean that there’s a catch-up, so to speak, in the second quarter, assuming rates stabilize or maybe even pull back a little bit from the highs, does that net working capital then work in your favor, whereas the second quarter or maybe some quarter in the second half, the ratio is well over the 80% to kind of make that timing even out?

Kim Balle: Yes, exactly. I think you should think about it. So say that things were steady now throughout the next quarter, you would get it back. Would it increase — rates increase further, you would probably tie up a bit more on net working capital. Would it decrease, you would get it even more released. So that’s how we think about it.

Jonathan Chappell: That’s super important. And then Jacob, kind of strategic outlook. You talked about the opportunities that you have if there is a normalization, also just thinking about the strategy, you obviously bought the resales. There’s been a lot of time charter activity, especially in the bigger ships, LR2s. Are you still kind of fully exposed to the spot market? Or do you think there’s some opportunities at some of these elevated levels and maybe some charters and traders reaching out for some term to get some fixed cash flows for 1 to 5 years?

Jacob Meldgaard: Yes. So we have done a few charters, 1 year, 3 years. We’ve done some forward cover for next year on derivatives when markets were a little half year. That’s an efficient way for us to sort of capture value, protect the level, but still have, let’s say, the operational flexibility on our assets. So we’ve been doing that the way you describe it. Of course, it’s a trade-off between, as you can see, the elevated rate environment that we have currently and then the forward projection. But we like to do a little of all in this environment. So some a little shorter, 1 year, some a little longer, 3 years and somewhat forward covering 2027 already now on some derivatives trades.

Jonathan Chappell: Okay. One last one for me. Sorry if this is too many. Obviously, the resales make sense in the framework of modernizing the fleet. You’ve been pretty active in some older vessel sales. And given the fact that older asset prices, at least on paper, seem to be even higher, it was maybe a little surprising that some of those resales weren’t offset with older vessel dispositions. So is that just a function of trying to maintain as much leverage to the market as possible? Or is the liquidity in the secondhand market for older vessels maybe not as robust as it’s been recently?

Jacob Meldgaard: I think definitely it’s robust. But we’ve simply just done — yes, done simple math. We feel that our balance sheet is in pristine shape, as Kim alluded to. So I think we are of the opinion that the asset base we have longevity and optionality and also the way the market behaves with quite high volatility, it means that, that can be attractive earnings in — yes, in many scenarios that we look at going forward. I think it’s going to be volatile and choppy. In many ways, we’ve seen that here over the first and second quarter. I think that will continue. But fundamentally, we believe that this is offering a lot of opportunity for our platform. But we do evaluate exactly as you described, Jon, what is the better sort of net present value that we will get selling an asset or keeping it with the rate environment that we predict.

Operator: Your next question comes from the line of Frode Morkedal with Clarksons Securities.

Frode Morkedal: I wanted to follow up on the acquisition of the 6 MRs. I’m not sure if you talked about the price. Maybe you could talk about the price level versus, let’s say, older ships, right? That’s probably how you thought about it, resale value in 2027 versus somewhat older. And yes, that’s it.

Jacob Meldgaard: That we have come to the decision of the purchase of the 6 resale MRs is exactly, as you point to that we evaluate what is the earning that we will be having on various assets and various age profiles in the coming years. We then also compare it — basically, you could say there are 3 buckets that you could invest in if you are looking to make an investment, it would be existing ships on the water with whatever age profile that you could dream up. It would be resales with relatively early delivery or it would be that you go to a shipyard and do complete new contracts, so newbuilding contracts. And — right now, what we found was that we did find kind of a gap where we saw the market being attractive from the pricing and timing of the delivery of these resales being better than paying, let’s say, the same price for a deferred delivery out in 3 years out compared to having a resale 3 quarters out was just simply a better, more attractive solution for us and also better than identifying vessels on the water where prices, as also Jonathan pointed to, have been creeping up as of late.

So it’s simple math that has driven us to this price point and delivery point is, in our opinion, the better of the 3 choices if you are looking at it. And we found that this one also meet our return criteria for making the risk-adjusted return that we are looking for in any of our investments.

Frode Morkedal: Yes, interesting. What kind of risk-adjusted returns are you talking about? I mean I understand it on your comments here, you basically are acquiring these ships, let’s say, probably less than $60 million, right, per ship and then a 5-year-old ship today is probably at similar level, right? So you’re arguing that you get more modern, better ships at the same price, something like that, right? And maybe you could tie it into the required MR rate to get a decent return on it?

Jacob Meldgaard: Sure. Yes. So I mean, we don’t disclose our forward thinking. But the way we model is exactly the way you more or less describe it. We would, of course, put in, yes, let’s say, financing, our operating cost, et cetera. And at the end of the day, we would then compare with our earning potential. And I think to say that in our modeling, we probably look about 5 years out, and then we’ll look at sort of a residual risk basis exactly what you also described, what would be a 5-year-old residual sort of market value at that point in time. And what I then described is that the hurdle on that return on that invested capital is, of course, internal for us, but this way of making the investment exceeds our sort of hurdle for believing that, that’s a good investment. So we think it’s a good investment for our shareholders, and that is an asset that will be appreciated, obviously, by our customers at the time.

Frode Morkedal: Yes. Understood. Yes, you probably a $50 million investment, you probably only need like $23,000 per day over time to get like a 10% to 12% return or something like that, right. Anyway, shifting gears on the market, I wanted to hear your thoughts on the drivers here. Clearly, it’s been very, very strong start to Q2, right? Maybe you could talk a little bit about the trade flow adjustments, right? We’ve seen refineries closing down, obviously, in the Middle East, but also in Asia. And now even Gulf has come up and ramped up exports and clearly adding to ton miles. But then again, at the same time, you’ve seen freight rates come off the boil, so to speak, recently. So maybe you could talk a little bit about how you think rates will develop now in the short term? Do you think like there’s more normalization to rates? Or could it let’s say touch or find a bottom now?

Jacob Meldgaard: Yes. Okay. So as you point to, then this sort of dislocation of the sourcing for many buyers have led to longer ton mile. We’ve already discussed that is — that also translated into higher margins for our customers. It translated into higher freight rates for ourselves and the ecosystem of transportation. And just recently, we’ve seen that the — I think our freight rates is driven by our customers and basically by how the arbitrages work. And you had a period where the arbitrage west to east was wide open. obviously leading to that when the [indiscernible] is open that customers in, let’s say, in Asia, Australia, East Africa, these areas that would normally be looking towards the Middle East for their supply, they were bidding up cargoes that were available in the Western Hemisphere.

This has come off a little. Right now, there’s been a period where our understanding is that the end users have been a little more reluctant. I think they’ve been looking at the situation in the Strait of Hormuz and sort of valuing, hey, if we get cargo out there, it’s going to come faster and it’s going to come cheaper. So maybe let’s just cool the jets a little. So margins have come in less attractive. And of course, then volumes come down because the sellers of the product will then have also competing areas, more local areas that will also call — make a call on exactly the same tons of products. Let’s see whatever — I think 1 or 2 would happen in the near term, either the Strait of Hormuz actually opens and cargo volumes will increase and flow through the Strait due to that.

If it doesn’t, I think the call on products from the Western Hemisphere to the Eastern Hemisphere will yet again increase. Margins will widen again, and you’ll see that trade. That is how I think that’s the most likely that one of these two scenarios will play out. The current where there’s no let’s say, call on products from either Strait of Hormuz because it’s impossible or from the West because the margins are not, how to say, sufficiently high. I don’t think that is a long-term trend.

Operator: Your next question comes from the line of Bendik Folden from Danske Bank.

Bendik Nyttingnes: I’ll just turn to your guidance for the second quarter, obviously, extremely strong. But I want to know if there’s any effects we should be aware of here, sort of unpaid balance days, anything like that, that might sort of mess up our modeling on the quarter?

Kim Balle: Yes. It’s important for us to stress we use the methodology here. So we take Q1 and we take the coverage that we have for Q2. And then we have [indiscernible] as I said, to the forward market to take that as the benchmark. So you should not sort of see it necessarily as this is how we foresee the markets month by month. We very much on the freight markets see that we observe in the market. Of course, we have the Q2, but then [indiscernible] on fixed days [indiscernible] based on. I hope that clarifies it. So it’s a guidance that we are obliged to present an update, and we have defined this methodology. And perhaps I should add that we do that and then we stress it with a plus/minus TCE around that. For this quarter, it’s plus/minus 7,500. It’s very mathematically easy to both explain and understand, but that’s how we do it. So plain and simple model for that. Hope it makes sense.

Bendik Nyttingnes: And for the second quarter, specifically, utilization-wise, has it been like some ballasting or something like that?

Jacob Meldgaard: Yes. So there’s nothing that distracts the numbers as you point to, Bendik. So the numbers for Q2 includes ballast when and if a vessel has had to have a longer ballast prior to the employment. So all of our numbers includes the previous [indiscernible] included in the daily.

Operator: There are no further questions. I will now turn the call back over to Jacob for closing remarks.

Jacob Meldgaard: Well, thank you very much. There has been very good questions. Thanks for listening in. And this ends the Q1 2026 report for TORM. Thank you.

Operator: That concludes today’s call. Thank you all for joining. You may now disconnect.