Norden Posts Loss amid Disappointing Dry Cargo Market

Danish shipping company Dampskibsselskabet Norden A/S reported a USD 416 million loss in its annual results for 2014 amid severely worsened dry cargo market.

The results were also affected by value adjustments on hedging instruments winding down in USD 61 million loss, Norden said.

The group’s EBITDA constituted a loss of USD 261 million due to significant influence of the provision for onerous time charter contracts of USD 230 million made at the end of 2014.

Thus, underlying operations amounted to an EBITDA of USD 31 million loss.

The unsatisfactory results have prompted the company’s Board of Directors to suspend payment of dividend, for the first time since the 1990s.

 ”Contrary to expectations, the dry cargo market in 2014 went from bad to worse. NORDEN launched a number of initiatives and cleared up in old contracts, which affected results for the year significantly. The Tanker Department generated the best operating profit in 6 years. In spite of a continued very difficult dry cargo market, the initiatives, along with a good start in Tankers, will ensure a significant improvement in NORDEN’s results for 2015,” Interim CEO Klaus Nyborg said in a comment.

Norden expects a continued difficult market for dry cargo in 2015.

“Although demand is expected to develop in a slightly more positive manner than seen during the weak end to 2014, it is unlikely that growth will reach the levels seen in the last 10 years. Demand will consequently not be able to absorb the continued fleet growth,” the company predicts.

The slight increase can be expected to be driven by demand from India, however; the uncertainty is expected to linger as China ‘s import demand decreases.

On the other hand, the situation in Norden’s tanker segment in 2014 was completely different, as the company reported the best operating tanker profit since 2008. The company’s tanker department generated an EBITDA of USD 44 million in 2014, an increase of 13% when compared to figures from 2013.

Norden expects the tanker market to be on the same level as in 2014, as high rates from the end of 2014 have continued into the first months of 2015. However, rates are expected to settle along with growth in the newbuilding deliveries.

As a result, Norden expects the EBIT of USD -40 million to USD 40 million (USD -335 million) for 2015.

 

Share this article

Follow World Maritime News

Posted on March 4, 2015 with tags .

In Depth>

Events>

<< Feb 2019 >>
MTWTFSS
28 29 30 31 1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 1 2 3

GREENTECH IN SHIPPING GLOBAL FORUM

The mindset of sustainability and efficiency is the key to unlocking successful business…

read more >

LNG2019

LNG2019 features the largest number and highest level of LNG industry leaders.

read more >

Singapore Maritime Week (SMW) 2019

very year, SMW gathers the international maritime community for a week of flagship conferences…

read more >