Værdiansættelse af TORM A/S: Strategisk og Regnskabsmæssig analyse

Peter Christian Lintrup

Student thesis: Master thesis

Abstract

The purpose of this thesis is to make a valuation of the Danish Shipping firm TORM A/S, and to analysis if the stock price pr. 13th of March 2013 is under or overestimated. Furthermore this thesis will examine the consequences of the valuation of TORM A/S in the fluctuations in freight rates. The strategic analyze focuses on internal and surrounding factors, which have a significant impact on the company. The internal factors in TORM A/S, show that there was several initiatives wich should lead the company to a stronger financial situation; continuing training of their employees, and the improvement of their ships efficientcy. The weaknesses in the firm are mainly to the short term debt, and the valuation of their fleet. The future can therefore contain an increase in depreciations connected to the fleet value. The surrounding factors show that there are a number of possibilities for the firm in the future based on the growth in BNP for several vitale countries, which should lead to an increase in demand for shipping. The fluctuations in freight rates, is primarily due to various natural disasters such as, the Tsunami in Japan and the floods in Western Australia, which is a continious threat in the future. The competitive intensity in the shipping industry concludes to be high, mainly because of the overcapacity of vessels and strong competitors on the market. The financial analyze concludes a negative fluctuation on all 3 levels of the Dupont Model. Since 2007 TORM A/S has generated a decreasing profit every year. In 2011 ROE was calculated at -54 %, ROIC -15 %, FGEAR 207 % and OG -31 %. Based on the strategic and the financial analyze, the thesis includes a budget for the next 5 years. The budget is the basis for the valuation of TORM A/S, and is made in accordance to the FCFF model. The valuation shows that the firms’ stock price has been underestimatet on the market. The value of the firm was calculated to 2.164.353 USD’000 with a stock price of 5, 35 USD. Whilst the stock price according to Nasdaq OMX, was on the 13th March 2013 at 1, 73 USD. Investing in TORM A/S is high risk, primarily because of the many uncertainties regarding the future of the firm. The sensitivity analysis showed that future growth in sale, as a consequence of increasing freight rates will have a material effect on the value of TORM A/S.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2013
Number of pages98