Since the start of the rationalization of Ukraine in February of this year, we've seen strong improvements in product tanker rates, increased tradeshows, longer trade distances, more inefficient trading patterns, partly due to the EU sanctions on Russia and partly due to more fundamental factors such as oil demand recovery and increased import needs. This has moved the product tanker fleet closer to the point of full utilization. This also means that at the current utilization level, even small changes in the underlying demand and supply can create strong volatility in freight rates, as we have also experienced here over the past months. Due to the high utilization, these more volatile freight rates are higher on average. Here, please turn to the next slide, to slide six, please.

The approaching deadline for the EU sanctions against Russian oil products has been one of the drivers behind strong freight rates. The EU ban on Russian oil products leads to a need to recalibrate the whole all product tanker trade ecosystem with Europe having to source more diesel from regions further afield, while Russia also needs to find new markets for diesel in regions further way. According to our own internal estimates, a full recalibration of the diesel trade close would add around 7% to the ton-mile demand for product tankers. This bar Europe has cut its import - product imports from Russia by around 40% compared to the high base in February 2022, meaning that 60% still needs to be redirected within the next three months. So far, Europe has replaced lower diesel growth from Russia with increased flows from the Middle East with the increase in the latter more than offsetting the fall in the former.

Consequently, our calculations show that around 3% of the expected 7% ton-mile increase has already materialized while the remaining 4% supported by a ramp-up of new refining capacity in the Middle East. We've recently seen that China has allocated new higher product export quotas and this cannot only facilitate the full trade recalibration effect but also raise the ton-mile estimates given the extra long distance to Europe. Please turn to slide seven. The geopolitical tensions in Europe, the sanctions against Russia are no doubt the main drivers of the strong freight rate environment. However, fundamental drivers not directly related to the geopolitical situation in Europe such as cases in the refinery landscape are also significant contributors.

Since 2020, more than 2 million barrels per day of refining capacity has been closed down permanently and a further $0.6 million is scheduled to be closed down during this year and into 2023. Some of that, another 1 million barrels per day of capacity is at risk of being shut down. Most of the affected capacity is located in regions with already large importers of refined oil products with Australia, New Zealand and South Africa as some of the most prominent examples. According to our calculations, increased imports to these regions are set to increase the ton-mile demand for product tankers by 2% this year. Given the fact that all demand in these regions is still lagging behind the pre-COVID-19 levels, the full aspect of refinery closures is yet to be seen.

On the other hand, these refinery closures coincide with more than 4 million barrels a day of new capacity coming online mainly in the Middle East, China and India, regions which already today are large exporters of oil products. Both these developments are positive for tradeshows and ton-mile in the coming years with only a few projects which are not positive for trade. And here, I will turn to slide eight. The first demand side factor we see as a key driver in the market is the need to replenish oil inventories. Since the summer of 2020, port inventories have declined as refinery production has left the recovery in oil demand. This is especially the case for diesel, where inventories in main training hubs have fallen to 20% below normal seasonal levels, the same magnitude as the excess stock seen in the early months of the COVID-19 pandemic.

The need to replenish the stocks to at least pre-COVID-19 levels translates into higher fuel transportation needs, adding at least 2% to the ton-mile demand for product tankers. The exact timing of this effect is, however, uncertain given the current tight supply-demand situation for diesel and the backwardated price structure. But we can say that with such a low stock level, any imminent increase in demand beyond domestic supply needs to be met by imports. And even if demand should decline in the current reason and macroeconomic environment, the decline in demand could, in fact, accelerate stock building. Please turn to slide nine. The positive outlook for the demand for product tankers in the next 2 to 3 years coincides with the supply side, which is the most supportive it has been for more than 2 decades.

With record high new building prices and limited CPR space, tanker ordering so far this year has been very low, corresponding than 1% of the existing fleet. This is five to six times less than what we have seen in recent years. Consequently, the order book to feed ratio for product tankers is at a historically low level of 5%. This is further supported by a similarly historically low 4% or book-to-fleet ratio for crude tankers. With the shipyards filled with container vessels and targeting other vessel segments, for instance, L&T, which leaves basically that the earliest delivery date for potential products and orders at Renouard is in a few cases towards the end of 2024, but generally, it's 3 years from now in second half 2025. This will effectively limit the fleet growth over the next 2 years.

And yes, please turn to slide 10. Now concluding remarks on the product tanker market, we see the main demand and supply drivers on the product tanker markets continuing to be very supportive. As already mentioned, the key demand driver is expected to be the EU ban on Russian oil products and the corresponding need to recalibrate the whole all product trade ecosystem towards longer trade distances. This comes on top of the changes in the refinery landscape with recent refinery closures in importing regions and new capacity additions in exporting regions. Further support is expected from the need to replenish inventories. We feel it's important not to disregard the fact that the current environment has high inflationary pressure on the global economy, which is likely to slow down the growth base of the global oil demand.

Nevertheless, we do believe that the effects of the redistribution of the energy supply chain will outweigh the potential effects caused by slower demand growth. As we also discussed, the process demand side is complemented by the supportive supply side situation, securing a low fleet growth for at least the next 2 years.

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Kim Balle: Please turn to slide eight - slide 11, sorry, As Jacob mentioned, we have seen continuous rate increases in the tanker market in the third quarter of 2022 with our TCE rates reaching US$44,376 per day, an increase of 165% from the first quarter of 2022. During the quarter, we have seen higher volatility in non-vessel classes, but all of them have decreased significantly with LR rates going up more than 200% since Q1 2022. During October and November 2022, the strong markets have continued. And as per 6th of November 2022, 49% of our Q4 2022 tanker days for LR2s were fixed at US$55,105 per day, 44% of our LR1s fixed at US$47,661 per day and 58 of our fixed at US$43,268 per day. Across the fleet, we have thus fixed 55% of our tanker days at US$45,257 per day.

With the rest of the days in Q4 being unfixed, our Q4 results will be impacted by the rates we can fix for the rest of the quarter naturally. And currently, the markets are trading at around similar levels. Please turn to slide 12. The strong performance in TCE leads to the highest EBITDA from our operations on record. And EBITDA of US$262 million in Q3 was almost as high as the very strong full year of 2020. In the surge in freight environment, a logical consequence is that our net working capital will increase as the merge and freight receivables increase. During the third quarter of 2022, our net working capital does increase with US$312 million primarily driven by the increase in trade receivables to US$248 million, but which logically will be released to cash later.

The cash conversion rate is, in general, lower in an increasing freight environment compared to a stable or declining market. In addition to the strong operational results, the development of balance sheet has also been quite favorable. During the third quarter of 2022, TORM's net loan to value decreased to the lowest level on rate. Our net LCV decreased to 31% end of Q3 from 43% end of Q2 2022, which was largely driven by the 20% increase in vessel values now exceeding US$2.5 billion and our strong cash generation. As Jacob mentioned, we will declare a dividend amount of around US$119 million. And if we correct for this amount, TORM's net LCV will instead be 36%. Lastly, I can inform you that TORM has low CapEx commitments of US$23 million in the third quarter of 2022, which predominantly is related to our scrubber investments.

Please turn to slide 13. We will distribute a large part of the debt cash added during the third quarter of 2022 as dividends. Consistent with our distribution policy announced in May 22, our distribution is based on a cash position of US$334 million, including the net working capital facility of US$95 million, less restricted cash primarily related to financial instruments of US$15 million. This year marked proceeds of US$57 million, less cash balance from our marine exhaust activities less US$2 million and the minimum cash reserve for 78 vessels of US$114 million. For this quarter, going forward, we will keep the cash per vessel at US$1.8 million. So in conclusion, so we'll distribute dividends per share of US$1.46 or approximately US$119 million.

And we have so far in total distributed US$166 million based on our 2022 results. Please turn to slide 14. TORM has a very conservative debt profile. We have no significant maturities on our debt until 2026, and we have hedged a large part of our debt on fixed interest rates. TORM is thus very resistant to the interest rate increases we currently see globally and has seen globally and especially in the U.S. As per end of Q3 2022, we have fixed 89% of the interest rate exposure over the coming 5 years at 1.38% excluded margin and the 5-year interest rate swap in U.S. dollars is currently trading around 4.33%. As for the coming 3 years, we have actually fixed 93% of the interest rate exclusion. During the third quarter of 2022, we repaid debt of US$94 million, including US$52 million on our RCF and an RCF can be redrawn if preferred.

We further repaid US$19 million in mortgage-related debt to sold vessels. And for the funding of TORM Henne we took on additional sale and leaseback financing. Net of repayment on leasing, we took on an additional financing of US$28 million. Looking at our maturity profile, we have low financial leverage and year mark proceeds, which provides us with the financial flexibility and strategic flexibility to pursue value-enhancing opportunities in the market. We are very pleased with our stable maturity profile. And as of the third quarter of 2022, TORM is in compliance with all of its financial covenants. And with that, we will let the operator move for questions.

Q - Jon Chappell: Thank you. Good afternoon, everyone. Kim, if I can start...

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