XML 61 R32.htm IDEA: XBRL DOCUMENT
v3.25.4

DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended
--- | ---
Dec. 31, 2025
DERIVATIVE FINANCIAL INSTRUMENTS |
Derivative financial instruments | NOTE 23 – DERIVATIVE FINANCIAL INSTRUMENTS Please refer to Note 25 for further information on fair value hierarchies.
USDm |  | 2025 |  | 2024 |  | 2023
Fair value of derivatives: |  |  |  |  |  |
Derivative financial instruments regarding freight and bunkers: |  |  |  |  |  |
Forward freight agreements — fair value through profit and loss |  | 2.0 |  | 7.8 |  | 1.7
Bunker swaps — fair value through profit and loss |  | (0.8) |  | 0.3 |  | (0.2)
Bunker swaps — hedge accounting |  | — |  | 0.1 |  | (0.5)
Derivative financial instruments regarding interest and currency exchange rate: |  |  |  |  |  |
Forward exchange contracts — hedge accounting |  | 0.9 |  | (2.3) |  | 0.5
Interest rate swaps — hedge accounting |  | 8.3 |  | 24.7 |  | 35.3
Fair value of derivatives as of December 31 |  | 10.4 |  | 30.6 |  | 36.8
Derivative financial instruments are presented as below on the balance sheet:
|  | Financial |  | Financial
USDm |  | assets |  | liabilities
2025 |  |  |  |
Offsetting financial assets and financial liabilities: |  |  |  |
Gross amount |  | 11.6 |  | (1.2)
Offsetting amount |  | (0.7) |  | 0.7
Net amount presented in the balance sheet |  | 10.9 |  | (0.5)
|  | Financial |  | Financial
USDm |  | assets |  | liabilities
2024 |  |  |  |
Offsetting financial assets and financial liabilities: |  |  |  |
Gross amount |  | 32.9 |  | (2.3)
Offsetting amount |  | — |  | —
Net amount presented in the balance sheet |  | 32.9 |  | (2.3)
|  | Financial |  | Financial
USDm |  | assets |  | liabilities
2023 |  |  |  |
Offsetting financial assets and financial liabilities: |  |  |  |
Gross amount |  | 37.7 |  | (0.9)
Offsetting amount |  | (0.1) |  | 0.1
Net amount presented in the balance sheet |  | 37.6 |  | (0.8)
Derivative financial instruments assets are offset against derivative financial instruments liabilities where the counterparty is identical, where TORM has legal right to offset and intends to settle on a net basis. Hedging of risks with derivative financial instruments is made with a ratio of 1:1 and where hedge items can be a portion of exposure. Sources of ineffectiveness are mainly derived from differences in timing and interest base rate. Any ineffective portions of the cash flow hedges are recognized in the income statement as financial items. Value adjustments of the effective part of cash flow hedges are recognized directly to other comprehensive income. Gains and losses on cash flow hedges are transferred upon realization from the hedging reserve into the income statement. NOTE 23 - continued FFAs are used to mitigate fluctuations in the freight rates of vessels with a duration of 0-24 months. The FFAs are not designated for hedge accounting. Forward exchange contracts with a fair value of $0.9m (net gain) are designated as hedge accounting relationships to hedge a part of TORM payments in 2026 regarding administrative and operating expenses denominated in DKK with a notional value of DKK 341.3m (2024: DKK 348.9m 2023: DKK 325.5m). Interest rate swaps with a fair value of $8.3m (net gain) applying the USD Secured Overnight Financing Rate ("SOFR") compounded in arrears are designated as hedge accounting relationships to fix a part of TORM's interest payments during the period 2026-2030 with a notional value of $414.2m (2024: $498.7m, 2023: $923.0m). Bunker swaps with a fair value $0.0m are designated as hedge accounting relationships and are used to reduce the exposure to fluctuations in bunker prices for fixed voyages denominated in MT with a notional value of MT 2,400 (2024: MT 9,000, 2023: MT 9,600). At year-end 2025, 2024, and 2023, TORM held the following derivative financial instruments designated as hedge accounting:
2025 |  | Notional value |  | Unit |  | 2026 |  | 2027 |  | After 2027
Forward exchange contracts (USD/DKK) ¹⁾ |  | 341.3 |  | DKKm |  | 341.3 |  | — |  | —
Interest rate swaps ²⁾ |  | 414.2 |  | USDm |  | 20.2 |  | 124.4 |  | 269.5
Bunker swaps ³⁾ |  | 2,400.0 |  | MT |  | 2,400.0 |  | — |  | —
1) The average hedge of USD/DKK currency was 6.4 2) The average interest rate was 2.76% p.a. plus margin 3) The average price of the hedging instruments was $391.0
Hedge accounting |  |  |  |  |  | Expected maturity
2024 |  | Notional value |  | Unit |  | 2025 |  | 2026 |  | After 2026
Forward exchange contracts (USD/DKK) ¹⁾ |  | 348.9 |  | DKKm |  | 348.9 |  | — |  | —
Interest rate swaps ²⁾ |  | 498.7 |  | USDm |  | 134.5 |  | 95.2 |  | 268.9
Bunker swaps ³⁾ |  | 9,000.0 |  | MT |  | 9,000.0 |  | — |  | —
1) The average hedge of USD/DKK currency was 6.8 2) The average interest rate was 1.29 p.a. plus margin. 3) The average price of the hedging instruments was $391.0
Hedge accounting |  |  |  |  |  | Expected maturity
2023 |  | Notional value |  | Unit |  | 2024 |  | 2025 |  | After 2025
Forward exchange contracts (USD/DKK) ¹⁾ |  | 325.5 |  | DKKm |  | 325.5 |  | — |  | —
Interest rate swaps ²⁾ |  | 923.0 |  | USDm |  | 103.3 |  | 172.0 |  | 647.7
Bunker swaps ³⁾ |  | 9,600.0 |  | MT |  | 9,600.0 |  | — |  | —
1) The average hedge of USD/DKK currency was 6.8 2) The average interest rate was 1.45 p.a. plus margin. 3) The average price of the hedging instruments was $539.2 TORM only enters into interest derivatives under established ISDA agreements supported with or without credit support annexes with predefined credit thresholds. Cash collateral of $5.4m (2024: $11.3m, 2023: $27.9m) has been provided as security for the agreements relating to derivative financial instruments, which does not meet the offsetting criteria in IAS 32, but which can be offset against the net amount of the derivative asset and derivative liability in case of default, and insolvency, or bankruptcy in accordance with associated collateral arrangements. NOTE 23 - continued TORM did not enter into any enforceable netting arrangements. Further details on derivative financial instruments are provided in Notes 24 and 25. The table below shows realized amounts as well as fair value adjustments regarding derivative financial instruments recognized in the income statements and equity in 2025, 2024 and 2023.
Income statement |  |  | Other comprehensive income |  | Equity
USDm | Port expenses, bunkers, and commissions | Financial items | Operating expenses | Admini- strative expenses |  | Transfer to income statement | Fair value adjustment |  | Hedging reserves as of December 31
2025 |  |  |  |  |  |  |  |  |
Forward freight agreements | (6.7) | — | — | — |  | — | — |  | —
Bunker swaps | — | — | — | — |  | (0.1) | (0.2) |  | (0.1)
Forward exchange contracts | — | — | 0.7 | 0.5 |  | (1.2) | 4.4 |  | 0.9
Interest rate swaps | — | 13.5 | — | — |  | (12.6) | (3.1) |  | 7.8
Total | (6.7) | 13.5 | 0.7 | 0.5 |  | (13.9) | 1.1 |  | 8.6
2024 |  |  |  |  |  |  |  |  |
Forward freight agreements | 8.2 | — | — | — |  | — | — |  | —
Bunker swaps | (0.1) | — | — | — |  | 0.1 | 0.5 |  | 0.1
Forward exchange contracts | — | — | (0.6) | (0.5) |  | 1.1 | (4.0) |  | (2.3)
Interest rate swaps | — | 22.5 | — | — |  | (20.9) | 10.5 |  | 23.7
Total | 8.1 | 22.5 | (0.6) | (0.5) |  | (19.7) | 7.0 |  | 21.5
2023 |  |  |  |  |  |  |  |  |
Forward freight agreements | 23.0 | — | — | — |  | — | — |  | —
Bunker swaps | 1.0 | — | — | — |  | 0.3 | (0.8) |  | (0.5)
Forward exchange contracts | — | — | — | (0.1) |  | 0.1 | 0.1 |  | 0.5
Interest rate swaps | — | 24.7 | — | — |  | (22.3) | 3.7 |  | 34.1
Total | 24.0 | 24.7 | — | (0.1) |  | (21.9) | 3.0 |  | 34.1
The hedging reserves as of December 31 relates to derivatives used for cash flow hedge for open hedging instruments, only. Certain interest rate swaps fair value change are considered ineffective and is recognized in "Financial expenses" in the income statement. Please refer to page F-57 for a full overview of the fair value of hedge instruments. Please refer to Note 21 for further information on commercial and financial risks. NOTE 23 - continued Accounting Policies Derivative financial instruments and hedge accounting Derivative financial instruments, primarily forward currency exchange contracts, forward freight agreements, interest rate hedges, and forward contracts regarding bunker purchases are entered into to mitigate risks relating to future fluctuations in prices and interest rates, etc. on future committed or anticipated transactions. TORM applies hedge accounting under the specific rules on cash flow hedges, when appropriate, as described below for each type of derivative. Changes in the fair value of derivative financial instruments designated as cash flow hedges and deemed to be effective are recognized directly in “Other comprehensive income”. When the hedged transaction is recognized in the income statement, the cumulative value adjustment recognized in “Other comprehensive income” is transferred to the income statement and included in the same line as the hedged transaction. Portion of the changes in fair value deemed to be ineffective is recognized immediately in the income statement. Changes in the fair value of derivative financial instruments not designated as hedges are recognized in the income statement. While effectively reducing cash flow risk in accordance with the Company’s Risk Management Policy, certain forward freight agreements and forward contracts regarding bunker purchases do not qualify for hedge accounting. Changes in fair value of these derivative financial instruments are therefore recognized in the income statement under “Financial income” or “Financial expenses” for interest rate swaps and under “Port expenses, bunkers and commissions” for forward freight agreements and forward bunker contracts.

X
- Definition The disclosure of derivative financial instruments. [Refer: Derivatives [member]] + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Note Expiry date 2027-01-01 -Name IAS -Number 1 -IssueDate 2025-01-01 -Paragraph 10 -Subparagraph e -URI https://taxonomy.ifrs.org/xifrs-link?type=IAS&num=1&code=ifrs-tx-2025-en-b&anchor=para_10_e&doctype=Standard -URIDate 2025-03-27 + Details
Name: | ifrs-full_DisclosureOfDerivativeFinancialInstrumentsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | dtr-2022:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | trmd_DisclosureOfDerivativeFinancialsInstrumentsExplanatoryAbstract
Namespace Prefix: | trmd_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration