Major Drybulk Ship Operator Lowers 2014 Expectations

Posted by George Backwell
Wednesday, August 13, 2014
Bulk carrier: File photo

Danish shipping company D/S Norden, one of the biggest dry bulk shipping companies in the world, said it would not make a profit this year after posting a loss in the second quarter due to low freight rates and falling demand in Asia.

The firm's loss before interest, tax, depreciation and amortisation (EBITDA) increased to $7 million against $3.9 million in losses a year ago and compared to the $19.3 million-loss expected by analysts polled by Reuters.

The company lowered its EBITDA forecast for 2014 to range of a loss of $60 million and breaking even, from a previous guidance of a loss of $40 million loss to a profit of $60 million.
"The market situation went from bad to worse in the quarter. Currently it cannot be worse in the spot market," Executive Vice President Martin Badsted told Reuters by telephone.

As other shipping companies, D/S Norden was hit hard by an Indonesian export ban of bauxite and nickel while China reduced its transportation needs by drawing on its mineral stocks.

China also increased its hydroelectric generation and increased coal production for its steel industry -- both factors reducing the country's needs for coal imports that companies such as D/S Norden would have benefitted from.

"The good progress Norden experienced at the start of 2014 won't repeat soon as the weakness in the market continues in third quarter. But it has adjusted its short-term strategy by reducing its fleet size, which is a sign of common-sense and moderation," Sydbank analyst Jacob Pedersen said.

The bulk of the company's fleet of 255 vessels is comprised of small and mid-range ships in segments such as handysize, supramax and Panamax and many vessels are located in the Atlantic. Freight rates have fallen the most for small and mid-range ships and in the Atlantic.
D/S Norden operates with a large share of short-term charters, which has allowed it to cut the fleet size by 25 vessels in the quarter.

The downward adjustment of outlook for the full year is mainly due to the weak development in the dry cargo unit. The company's tanker business is expected to deliver EBITDA of between $15 and $45 million for the year.

Norden's shares were down 2.7 percent at 164.60 Danish crowns at 0748 GMT, underperforming the main Copenhagen blue-chip index which is up 0.4 percent.

(By Ole Mikkelsen)

Maritime Reporter February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

USCG Free Boat from Ice Near Woods Hole

A Coast Guard crew responded to a fishing vessel trapped in ice in Woods Hole Passage, Woods Hole, Massachusetts, Saturday. At about 3 p.m., the crew of the fishing boat Capt.

Tug Boat Owner Jailed After Crew Man Dies

A tug boat owner was today was given an 8 month custodial sentence after his crew member died trying to reattach a tow line in a violent storm. During today’s hearing at Southampton Crown Court,

COMPIT to Showcase Smarter Ships, Systems & Solutions

The 14th International Conference on Computer and IT Applications in the Maritime Industries (COMPIT) will take place from 11th to 13th May 2015 in Ulrichshusen, Germany.

Contracts

Chassis Pools for Port of Long Beach

Three companies that own the vast majority of chassis serving the San Pedro Bay ports are on track to activate a “gray chassis fleet” of truck-trailers on March 1,

Davie Building LNG-powered Ferries

Canadian shipbuilder Davie held a keel laying ceremony for MV Armand-Imbeau II, marking the beginning of the hull assembly for this first of two sisterships under

Lithuania Looks to U.S. for Gas

Lithuanian liquefied natural gas (LNG) importer Litgas has signed a preliminary agreement with a U.S. supplier, looking to lessen the Baltic nation's dependence on Russia.

Bulk Carrier Trends

ClassNK's Structural Rules for Bulkers & Tankers

The Nippon Kaiji Kyokai (ClassNK) has announced the establishment of its “Common Structural Rules for Bulk Carriers and Oil Tanker” (Rules for the Survey and

Jinhui Shipping Plummets to Loss

Norway listed dry bulk shipper Jinhui Shipping said the tough market that owners faced last year will become tougher in 2015.   Dry bulk shipping market Environment

Berenberg in $1.1bln Box Bid

The world's second-oldest bank Joh. Berenberg Gossler & Co. KG is lining up a new fund worth EUR 1bn ($1.1bn) for the containership sector.   A report appeared

Finance

Indian Ports to Set Sail on Corporatization

Indian Finance Minister Arun Jaitley said in Union Budget 2015 that government-run ports in India will be encouraged to corporatize and become companies under the Companies Act.

Zvezda Shipyard Comes Up Despite Western Sanctions

German and Finnish partners continue to build Russia’s Far Eastern “Zvezda” shipyard for Arctic oil exploration ships, in spite of Western sanctions, reports Sputnik.

ADB Okays $30mln for Pak LNG Terminal

The Asian Development Bank (ADB) has approved a $30 million project loan to Engro Elengy Terminal Private Limited, a special purpose company which will build Pakistan’s

 
 
Maritime Security Naval Architecture Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair Ship Simulators Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1954 sec (5 req/sec)