Torm A/S: Strategisk analyse - værdiansættelse

Morten Grinder Boel

Student thesis: Diploma thesis

Abstract

The purpose for my thesis is to complete an analysis and valuation of the Danish shipping company Torm A/S. My purpose is to reach to a conclusion of whether the global financial crisis has effected on the future strategically opportunities of Torm, and if these changes has effected the valuation of Torm. An internal analysis of Torm has been performed in order to determine Torm A/S´ internal strengths and weaknesses. The analysis showed that Torm has made great investments in the time of financial turbulence, and has strengthened their internal possibilities for the future. The analysis also showed that Torm financially is below the competitors operating margins and market shares, which shows that Torm for the future has to use its new internal investments in order to fulfill the vision of the company - being the most profitable player in the market. The external environment has been analyzed through a PESTEL and Porters Five Forces analysis. My analysis concludes the fact that the market for shipping oil and bulk are much affected by the external supply/demand factors. This has affected Torm financially, as their turnover depends on the freight rates set by the supply/demand factors, which had the lowest freight rates under the financial crisis not seen for many years. There are good opportunities in the market, especially in China and India due to rising personal income. The financial analysis showed that Torms operating margins are below its competitors, but they still manage good margins. The analysis also showed that the financial crisis had made major impact on the revenue and turnover the last years, which affects the Equity negatively. A budget is made due to my financial conclusions. The budget is used to estimate the future valuation of Torm. The market value of Torm A/S was estimated to USD 2.4 bill which is the equivalent to a closing stock price of DKK 33.26. This means that the overall conclusion on this thesis is that the official closing stock price of Torm A/S is underestimated by 2.46 DKK, which I find is due to the fact of Torms investments made under the financial crisis.

EducationsGraduate Diploma in Financial and Management Accounting, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages91