Interim report – Second quarter and first half-year of 2018
Attached please find the full interim report as PDF file.
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Announcement no. 11
15 August 2018
Today, the Board of Directors approved the interim report for the second quarter and first half-year of 2018. The report contains the following highlights:
Results
Adjusted Result* for Q2 2018: USD 4 million (Q2 2017: USD -3 million)
• Dry Operator: USD 8 million
• Dry Owner: USD 3 million
• Tankers: USD -8 million (USD 3 million)
EBIT Q2 2018: USD 8 million (USD -3 million)
* ”Profit/loss for the period” adjusted for “Profit from sale of vessels etc.”
Markets
• Dry Cargo: Improvements in rates driven by stronger global economic activity combined with lower fleet growth
• Tankers: Oversupply and weak demand growth resulting in one of the most challenging markets in a decade. Basis for significant improvement towards 2020
Performance
• Dry Operator: USD 23 million in Adjusted Result after first 12 months as a separate business unit
• Dry Owner: Further focusing the ownership of vessels on Supramax and Panamax – remaining Post-Panamax redelivered
• Tankers: TCE earnings 4% above benchmark
Vessel values
Significant investment in scrubbers
• Secured installation of 26 scrubbers representing a cost of app. USD 54 million. Net positive cash flow effect of USD 40 million over the first 5 years.
Vessel values
• Dry Cargo: +2%
• Tankers: +1%
Guidance
NORDEN expects the dry cargo market to improve in the fourth quarter. Dry Owner is fully covered for the rest of 2018, as NORDEN’s short-term dry cargo exposure is now managed in Dry Operator, which is well positioned to benefit from short-term rate improvements. In Tankers, however, rates have been lower than expected and a significant improvement in rates is not expected until 2019. On that basis, expectations for the Adjusted Result for the year were on 8 August revised to USD 0 to 30 million (previous USD 10 to 50 million).
WEAK TANKER MARKET AND STRONG PERFORMANCE IN DRY OPERATOR
“Good performance in the dry cargo business cannot make up for the tanker market conditions that are worse than expected. On that basis, the overall expectations for the Adjusted Result for the year were revised downwards on 8 August. In the second quarter of 2018, Dry Operator and Dry Owner together generated a positive result of USD 11 million which outweighs the loss generated by the tanker business operating in one of the most challenging tanker markets in a decade. During the first 12 months since being established as a separate business unit, Dry Operator has now generated a very satisfactory result of USD 23 million, highlighting the potential of this asset light business unit.”
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)330 336 9411 or +1 929 477 0324, Danish participants please dial in on +45 3515 8121. The telephone conference will be shown live at www.ds-norden.com, where the accompanying presentation also will be available.
For further information: CEO Jan Rindbo, tel. +45 3315 0451.
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DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, CVR NO. 67758919