Interim report – First quarter 2020 – Revised Guidance

ANNOUNCEMENT NO. 12 - 5 MAY 2020

Attached please find the full interim report as PDF file

Today, the Board of Directors approved the interim report for the first quarter 2020. The report contains the following highlights:

Results

Adjusted Result* for Q1 2020: USD 29 million (Q1 2019: USD 7 million)

• Asset Management: USD 7 million (USD 0 million)
• Dry Operator: USD 4 million (USD -3 million)
• Tanker Operator: USD 18 million (USD 10 million)

Loss from sale of vessels: USD 2 million

EBIT Q1 2020: USD 37 million (USD 6 million)

*”Profit/loss for the period” adjusted for “Profit from sale of vessels etc.”

Markets

• Weaker underlying fundamentals due to COVID-19 lockdowns.
• Dry Cargo: Very weak spot market with Supramax and Panamax rates 16-18% lower than Q1 2019.
• Tankers: Strong spot market despite weak oil demand. Rates spiking due to floating storage demand.

Performance

• Assets Management: Benefitting from high coverage in Dry Cargo and increased exposure to tanker market. Scrubber values lower due to tightening fuel spreads.
• Dry Operator: Good performance in a declining market.
• Tanker Operator: Very strong start to the year due to good positioning in a strong market.

Vessel Values

NORDEN owned vessel values

• Dry Cargo: -7%
• Tankers: -2%

Downward pressure on Dry Cargo asset values and T/C rates. Improvements in tanker spot rates have not translated into higher asset values due to increased market uncertainty.

Guidance

NORDEN Expects an Adjusted Result for 2020 in the range of USD 30 to 80 million, which is up from the previously announced guidance range of USD 30 to 70 million. This is based on expectations of strong tanker spot rates and another good result from Tanker Operator in the second quarter but a challenging market in the second half-year.
There is a high degree of uncertainty attached to our outlook due to the unprecedented nature of COVID-19 and lack of visibility with respect to reopening of economies.

STRONG START TO THE YEAR
“Despite the challenging environment, NORDEN realised an Adjusted Result of USD 29 million - the best first quarter result since 2015. The Dry Operator unit showed the strength of its business model, delivering a solid performance in a weak market. The newly formed Tanker Operator unit had a very positive start to the year due to good positioning in a strong market. All in all, all three business units delivered a profit for the quarter, and NORDEN raises its guidance for 2020 to USD 30-80 million.“
CEO Jan Rindbo

A telephone conference will be held today at 3:30 p.m. (CET), where CEO Jan Rindbo and CFO Martin Badsted will comment on the interim report. It is requested that all participants have joined the meeting by latest 3:25 p.m. (CET) – international participants please dial in on +44 (0) 207 769 6470 or +1 718 354 1229, Danish participants please dial in on +45 7026 5045. Passcode is 5256489#. The accompanying presentation will be available on NORDEN’s website.

For further information:
Jan Rindbo, CEO, tel.: +45 3315 0451