NORDEN is well-positioned to capitalise on a historically strong dry cargo market through significant increases in fleet values and by building strong positions for the remainder of 2021.
For Q1 2021, NORDEN reports an Adjusted Result of USD -6 million (Q1 2020: USD 29 million) and raises its guidance for the Adjusted Annual Result to USD 75-125 million, based on a strong performance in the Dry Operator business unit, which is expected to bring significantly increased earnings in the remainder of 2021.
The strong dry cargo market has led to an increase in the value of NORDEN’s portfolio of USD 106 million in Q1.
CEO Jan Rindbo says: “NORDEN raises its guidance for the year to USD 75-125 million, expecting significantly higher earnings from Q2 onwards. The Q1 result should be seen in light of the substantial increase in the market value of NORDEN’s fleet as well as the strong position created in Dry Operator in a soaring dry cargo market. This will benefit earnings significantly during the rest of 2021”.
Asset Management: Extraordinary increases in dry asset values
Asset Management – which handles the long-term exposure of NORDEN’s owned and leased fleet through buying, selling and leasing vessels – reports an Adjusted Result of USD 2 million (Q1 2020: USD 7 million), and has seen the market value of its owned and leased vessels increase by USD 106 million.
Over the past year, Asset Management has gradually increased exposure to dry cargo, which the business unit is now able to capitalise on based on the strong growth in dry cargo asset prices. Among several asset trades made during Q1, the business unit sold a dry cargo vessel just a few months after purchase, generating a strong return.
Dry Operator: Soaring dry market rates prompted quick repositioning
Dry Operator reports an Adjusted Result of USD 0 million in Q1 (Q1 2020: USD 4 million)
Having entered the year with a short position (more cargoes than tonnage) in anticipation of a weak Q1, the business unit was very quick to build a significant long position (more tonnage than cargoes) as the dry market rates continued to increase throughout Q1. This will benefit earnings significantly from Q2 onwards.
Dry Operator has continued to increase its activity, operating an average of 322 vessels during the quarter – an increase of 31% on the same period the previous year – and has made strong use of short-term regional positioning opportunities in the market.
Tanker Operator: Preparing for second half-year improvements
Tanker Operator reports an Adjusted Result for Q1 of USD -8 million (Q1 2020: USD 18 million).
The tanker market continued to be challenged by low global oil demand due to COVID-19. Coupled with rising bunker prices, this led to unprecedented low freight levels during the first quarter.
Tanker Operator was able to mitigate the worst effects of the weak spot market with high coverage on its managed fleet. Meanwhile, USD 3 million was generated in commercial management fees for vessels in the Norient Product Pool.
However, improvements are expected later in the year as the world economy enters a gradual recovery from COVID-19. Tanker Operator is therefore preparing for increased activity, creating an optimal vessel portfolio for the second half of 2021 and beyond.
Conference call and audiocast
A telephone conference as well as an audiocast will be held on 6 May 2021 at 10:30 a.m. (CET), where CEO Jan Rindbo and CFO Martin Badsted will comment on the first quarter 2021 report.
Participants can join the audiocast to view and listen to the live presentation, while conference call participants are able to ask questions at the end of the call. The audiocast will be recorded and made available on NORDEN's website subsequently. The accompanying presentation will be available on NORDEN’s website prior to the conference call and audiocast.
