In the third quarter, NORDEN realised an Adjusted Result for the period of USD -12 million, in a historically poor tanker market, which overshadowed a healthy dry cargo market.
The third quarter result corresponds to an EBIT of USD -7 million. Cash flow from operating activities amounted to USD 5 million for the quarter, a significant im- provement compared to the same period last year (USD -16 million) and the contri- bution margin was USD 17 million.
“Good performance in Dry Operator delivering another positive result cannot make up for the severe headwinds, we are facing in the tanker market. Dry Operator has responded well to changing trade flows following trade tensions between the US and China and has during the third quarter protected value in positions that will benefit results in the fourth quarter. Dry Owner continues to benefit from an improving market and has increased cover. In Tankers, a gradual improvement in 2019 is expected as the market prepares for the IMO sulphur regulation. With a modern fleet, NORDEN is well prepared for this.”
NORDEN maintains expectations for the full financial year 2018, expecting an Ad- justed Result for the year of USD 0 – 30 million.
Status on the business units
Dry Operator generated a contribution margin of USD 11.5 million and an Ad- justed Result of USD 2.3 million for the period, an improvement compared to the same period in 2017. The unit is well posi- tioned for the fourth quarter.
In the third quarter, Dry Owner realised an Adjusted Result of USD 4 million. Dry Owner has continued to increase the cover for 2019 and has covered 100% of the capacity the next 6 months. NORDEN still expects a healthy dry cargo market in 2019, leaving the short-term exposure to be managed by Dry Operator while Dry Owner will benefit from locked-in revenue.
In the historically weak third quarter of 2018, NORDEN’s tanker business generated an Adjusted Result of USD -18 million, with spot rates being the lowest seen in a decade. While high oil prices continue to dampen oil demand growth, slowing sup- ply growth and normal seasonality imply that rates are expected to improve in the fourth quarter. Looking into 2019, additions to refinery capacity, low fleet growth and a better crude tanker market are expected to lead to improving product tanker rates.
New candidates to the board of directors
In connection with the interim report, NORDEN announced that the board of directors proposes election of 2 new can- didates to the board: Helle Østergaard Kristiansen, CFO in Danske Commodi- ties, and Stephen John Kunzer, former CEO of Eastern Pacific, who currently heads one of the world’s largest private family ship owners. Both were elected to the board at the December Extraordinary General Meeting.
Share buy-back programme
The interim report also unveiled plans to carry out a share buy-back of up to a to- tal of USD 10 million, to adjust the capital structure of the company