Interim report - first half of 2013


Some highlights:

  • In the second quarter, NORDEN generated operating earnings (EBITDA) of USD 4 million (USD 31 million). The earnings were in line with expectations and contributed to an EBITDA of USD 13 million (USD 81 million) for the first half-year.

  • The market remains challenging, not least within dry cargo, but there are some signs of improvement i.a. in the form of an improved spot market. Cash flows from operating activities constituted USD 35 million (USD 72 million) for the first half-year.

  • NORDEN’s utilisation of the attractive newbuilding prices is manifested in payments on newbuildings of USD 106 million in the first half-year. After accounting for proceeds from sale of vessels, cash flows from investing activities amounted to a total of negative USD 76 million (negative USD 51 million).

  • The Company continues to invest in fuel efficient ECO vessels. In addition to the newbuilding contracts mentioned in the interim report for the first quarter, the Company has long-term chartered an additional 3 Panamax vessels with purchase option of which 2 are owned in a joint venture. Thus, 19 newbuildings have been contracted since October 2012, and the total ECO fleet on order now comprises 28 vessels.  

  • At the end of the quarter, NORDEN had cash and securities of USD 485 million and undrawn credit facilities of USD 197 million.

  • After depreciation of USD 19 million, EBIT constituted an expected loss of USD 16 million (profit of USD 10 million) in the second quarter.

  • The Dry Cargo Department capitalised on the positioning of vessels to the South American harvest, which was carried out in the first quarter of 2013. EBITDA constituted a loss of USD 2 million in the second quarter, reflecting higher underlying earnings than in the first quarter, which was positively affected by non-recurring income of USD 9 million. The improved earnings are expected to continue into the third quarter.

  • For the second quarter, the Tanker Department’s EBITDA was USD 8 million, which was better than expected. The earnings are a result of an improved spot market where the recurring seasonal slowdown was less pronounced than usual. MR spot earnings were approximately USD 15,798 per day in the second quarter.

  • As a consequence of the improved spot market in both segments, ship values have stabilised. Broker valuations of vessels owned by NORDEN during the entire quarter are unchanged, and there are early signs in the market suggesting that ship values are increasing.

  • NORDEN expects gradually improved markets in both segments and has therefore not increased its coverage compared to the end of the first quarter. Especially the large vessel types Capesize and Post-Panamax are well positioned to benefit from an expected increasing market towards the end of the year and in 2014.

  • NORDEN maintains its expectations for the results for the year with a group EBITDA of USD 15-45 million. 


Announcement no. 30


"As expected, 2013 is a challenging year. Following a brutal first quarter, earnings have, however, slightly improved in the second quarter, and this trend has continued into the third quarter. While rates are under pressure, NORDEN takes advantage of the low newbuilding prices and continues investing in new ECO vessels, which will provide a significant competitive advantage when they are delivered and rates have normalised.” President and CEO Carsten Mortensen