NORDEN generated a net profit of USD 25 million in the third quarter of 2024 (USD 99 million), impacted by weaker than expected markets in both dry cargo and tankers.
·EBITDA of USD 115 million (USD 177 million)
·Earnings per share of DKK 6 (DKK 19)
•Margins in Freight Services & Trading continued to be negative, driven by weaker tanker rates, whilst earnings from the dry cargo activities are improving. As expected, Assets & Logistics enjoyed stable contribution from high coverage.
·Freight Services & Trading: USD -18 million (USD 30 million)
·Assets & Logistics: USD 43 million (USD 69 million)
•NORDEN’s net profit for the first nine months of 2024 was USD 133 million (USD 357 million).
•Return on invested capital (ROIC) in the last twelve months (LTM) was 15% (43%).
Business highlights
•Following a strong development in asset values, NORDEN optimised the vessel portfolio by entering into agreements to sell five vessels at expected future gains of USD 25 million, whereof USD 21 million is expected to be realised in 2024. Two of the five vessels were from declared purchase options in line with the NAV value.
•NORDEN’s estimated Net Asset Value (NAV) of Assets & Logistics was DKK 433 per share by end of Q3 2024. The Assets & Logistics unit holds NORDEN’s owned fleet, its leased fleet and purchase options.
•Long-term market fundamentals remain positive due to an ageing global fleet and limited available shipyard capacity, which are expected to continue to support asset values in both dry cargo and tankers.
•NORDEN’s aqcusition of Norlat Shipping was approved by the authorities during the quarter. The business activities are being integrated into the Freight Services & Trading unit.
Guidance
•NORDEN narrows its expected full-year net profit guidance for 2024 to USD 160-210 million (previously USD 160-240 million), due to weaker tanker spot rates. The guidance for 2024 includes gains from sale of vessels from already signed and agreed transactions of USD 83 million (previously USD 61 million).
•For the remainder of 2024, Assets & Logistics are expected to continue to generate stable earnings from high coverage. In Freight Services & Trading, the margins in the dry cargo activities are expected to continue to improve, whereas margins in the tanker activities are likely to decline as a result of weaker tanker rates.
•By end of October 2024, NORDEN had a total of 1,800 open tanker vessel days and 240 open vessel days in dry cargo, across both business units for the remainder of 2024.
•In line with NORDEN’s pay-out policy, the Board has decided to return USD 21 million through an interim dividend of DKK 2 per share and a new share buy-back programme of USD 12 million, which will run until the end of January 2025.
“NORDEN generated a net profit of USD 25 million in the third quarter. The reported Net Asset Value of NORDEN’s Assets & Logistics unit at the end of the quarter was DKK 433 per share. To capitalise on strong asset values, we have committed to selling five vessels with sales profits expected in the coming quarters. Due to a weaker tanker market, we narrow the full-year guidance to the range of USD 160-210 million.”
CEO Jan Rindbo
Full Report
Source: NORDEN