TORM plc (NASDAQ:TRMD) Q2 2023 Earnings Call Transcript

So you will see that the SG&A is higher in the coming period, but it is noncash and it is a provision for that retention program, and that will expire in 2026. It is a one-off program so. But well spotted. Thank you very much.

Andreas Abildgaard-Hein: Yes. One more question for you, Jacob. There’s a widespread conversation regarding challenges post 15 years, yet how substantial are the expenses associated with extending a ship’s service life.

Jacob Meldgaard: Yes. So we are very comfortable with the calculations that we are doing. Obviously, we have a significant number of vessels in our fleet today that are over 15 years, and we also have experience with previous vessels having them operating efficiently in our fleet when they are over 15. So the way we see it is actually that it is quite dependent on the general maintenance of the individual vessel. So I don’t think you can like put a one-to-one and say on every vessel, it’s going to be X or Y. But what we see is that in order to pass what is called the CAP 1 requirements when you are 15 years old, there is an extra associated cost, a CapEx of between $0.5 million to $1 million that can be dependent to that. But of course, you are also extending the useful life towards the general market, the same market of a vessel that is below 15 years by doing it.

And so far, we’ve been very pleased with the results that we get out of it on the One Torm platform. I don’t think that it can be easily replicated. So I don’t think that what I’m explaining here necessarily fits one-to-one with other operational platforms. But all in all, the NPV for us of making this additional investment at 15 years have made sense.

Andreas Abildgaard-Hein: Thank you very much. There are no further questions. So this concludes the earnings conference call regarding the results for the second quarter and first half year of 2023. Thank you for participating.

Operator: You may now all disconnect.