Interim report – first quarter 2012
Attached please find the full report as PDF file.
Dampskibsselskabet NORDEN A/S
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Announcement no. 11
15 May 2012
Interim report – first quarter 2012
Today, the Board of Directors approved the interim report for the first quarter of 2012. The full report is attached as PDF file and contains the following highlights:
| Key figures and ratios (USD million) | ||
| Q1 2012 | Q1 2011 | |
| EBITDA | ||
| Group | 50 | 48 |
| EBITDA | ||
| Dry Cargo | 40 | 44 |
| Tankers | 12 | 7 |
| EBIT (before write-downs) | ||
| Group | 25 | 30 |
| Write-downs | ||
| Vessels, etc. | -300 | |
| EBIT (after write-downs) | ||
| Group | -275 | 30 |
| Theoretical NAV | ||
| DKK per share | 237 | 275 |
| Coverage | 2012 | 2013 |
| Dry Cargo | 81% | 40% |
| Tankers | 20% | 7% |
| Outlook for 2012 | ||
| EBITDA | 110-150 | |
| EBIT (before write-downs) | 20-60 | |
As expected, NORDEN generated solid operating earnings of USD 50 million in a weak market in the first quarter of 2012 against USD 62 million in the fourth quarter of 2011 and USD 48 million in the first quarter of 2011. This performance was a result of high coverage in Dry Cargo at levels significantly above the market and earnings in Tankers on par with the budget rates for 2012.
In the first quarter, operating earnings (EBITDA) in the Dry Cargo Department were USD 40 million while operating earnings in Tankers were USD 12 million. Adjusted for non-recurring income, earnings in Tankers and Dry Cargo are up USD 7.5 million and USD 4.5 million, respectively, in the first quarter of the year compared to the same period last year.
Cash flows from operations were USD 40 million in the first quarter of 2012.
The operating profit (EBIT) before write-downs was USD 25 million (USD 30 million) in the first quarter, which was in line with expectations.
The market values of vessels have dropped significantly during the quarter, and as a result, broker valuations of the Company's vessels were USD 361 million below the carrying amounts and costs of newbuildings at the end of March against USD 217 million at the beginning of the year. The Company has performed an impairment test and has concluded that there is a need for write-downs totalling USD 300 million. The write-downs do not affect operating earnings, cash flows or loan agreements, and NORDEN still holds a very strong financial position with an equity ratio of 85% and cash and securities of USD 450 million.
As a consequence of declining vessel prices, total theoretical Net Asset Value (NAV) decreased to DKK 237 per share against DKK 258 at the beginning of the year. Total theoretical NAV is now on par with equity per share after write-downs.
Coverage in Dry Cargo remains high at 81% for the rest of 2012, whereas the Tanker Department is positioned for increasing freight rates with only 20% coverage for the rest of 2012.
NORDEN maintains its expectations for an EBITDA of USD 110-150 million. As a result of the write-down of vessels, depreciation for the year is reduced, and the expectations for EBIT before write-downs are therefore increased to USD 20-60 million.
President and CEO Carsten Mortensen in comment: "We can only be pleased with the fact that NORDEN had a good start to 2012 and is improving operating earnings and cash flows in very difficult markets. We maintain our expectations for full-year operating earnings (EBITDA) of USD 110-150 million and have furthermore written down the fleet to carrying amounts, which are more in line with the estimated values. This is a natural step in light of the squeezed markets and decreasing vessel prices and reflects that NORDEN contracted vessels also in the high markets in 2007-08. On the other hand, the current low vessel prices create special opportunities for a financially strong shipping company such as NORDEN."
A telephone conference will be held today at 15:30 hours (CET) where CEO Carsten Mortensen, CFO Michael Tønnes Jørgensen and Senior Vice President Martin Badsted will comment on the report. By 15:25 hours (CET) at the latest, Danish participants should dial +45 3271 4767 while participants from abroad should dial +44 (0) 207 509 5139 or +1 718 354 1226. The telephone conference can be followed live at www.ds-norden.com where the accompanying presentation is also available.
Further information: CEO Carsten Mortensen, tel. +45 3315 0451.
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Dampskibsselskabet NORDEN A/S
52, Strandvejen
DK-2900 HELLERUP
CVR no. 67758919
www.ds-norden.com