TORM outlines “balanced approach” towards IMO 2020 compliance
Pure play product tanker firm TORM on Monday (14 May) said 44% of its fleet will be scrubber-equipped by the first quarter of 2020 as part of a “balanced approach” towards IMO 2020 compliance.
“As part of TORM's preparations for the IMO 2020 regulation, the company has recently decided to install 13 additional scrubbers bringing our total to 34 scrubbers,” said Chief Financial Officer Christian Sogaard-Christensen in a recent earnings call.
“We expect that 30 of these will be installed in 2019 and the remaining 2 in the first quarter of 2020. This corresponds to 44% of our fleet.
“TORM is committed to a balanced approach toward compliance with IMO 2020 regulations and supporting the preparations we currently have two scrubbers already in operation. We will gain valuable experience in advance of the 2020 deadline.”
Sogaard-Christensen noted the majority of TORM scrubbers will be produced by ME Production China, a joint venture TORM established in 2018 along with scrubber manufacturer ME Production and Guangzhou Shipyard International Company Limited (GSI).
“Our entry into this joint venture was both important strategically as well as timely. Scrubber retrofit capacity has become a bottleneck with yard's production capacity tied up across the industry,” he explained.
“Also, one of the most significant risks with scrubber installation relates to quality control and the capability of the manufacturers.
“Due to our strategic partnership, we have secured the required production slots and deliveries are on schedule. Delivery and installation schedule will ensure that TORM is ready to reap the benefits of the increased demand of these important products expected from the implementation of the IMO 2020 regulation.”
TORM posted net profit of $23.2 million during the first quarter (Q1) of 2019, significantly higher than profit of $700,000 during the similar quarter last year.
“TORM’s results in the first quarter reflect the Company’s strong operating performance in a product tanker market where a significant recovery started in the fourth quarter of 2018,” notes Executive Director Jacob Meldgaard.
“We made a profit before tax of USD 23.5m in the first quarter of 2019, the strongest quarterly result in three years, and the bookings so far in the second quarter indicate a continued positive product tanker market.
“We have extended our scrubber commitment with an additional 13 units, which will bring the total number of scrubber-fitted vessels to 34, or close to half of our fleet.
“With this balanced approach, TORM is well-positioned to reap the benefits of the increased demand for clean petroleum products expected from the implementation of the IMO 2020 regulation.”
Related: TORM takes stake in Chinese scrubber joint venture
Photo credit: TORM
Published: 15 May, 2019
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