D/S Norden Reports Q3 Loss, Keeps 2014 Guidance

Danish shipping company D/S Norden reported a smaller-than-expected third-quarter operating loss on Wednesday and maintained its full-year earnings guidance.

D/S Norden said its loss before interest and tax was $27.6 million in July-September, against a forecast for a loss of $33.4 million in a Reuters poll. The firm lost $700,000 before interest and tax in the year earlier period.

"We see Q3 results as a bit of relief after a very weak quarter for both dry bulk and tankers, with rates hitting the lowest levels for several years," shipping analyst Stig Frederiksen from Nordea wrote in a note to clients.

Management in the shipping company maintained expectations for 2014 earnings before interest, taxes, depreciation and amortization (EBITDA) of between break-even and a loss of $60 million. The firm operates mainly in the dry bulk market but also has a fleet of 46 refined oil product tankers,

"The challenging market conditions in dry cargo continued, and the tanker market experienced good activity with further improvement at the beginning of the fourth quarter," interim Chief Executive Klaus Nyborg said in a statement.

He said D/S Norden outperformed the market in both segments by getting better rates for its shipments. The company uses a fleet of 196 dry cargo vessels, with most chartered from other owners.

Since the financial crisis began in 2008 the shipping industry has been hit by low freight rates due to overcapacity and too few goods to move but there are signs of a better balance as fewer ships are being delivered.

During the third quarter, vessels to the equivalent of 10.5 million deadweight tonnes were delivered to the global market, the lowest quarterly level since the second quarter of 2009.

"Total net fleet growth in the third quarter amounted to 1 percent. This supports an annual net fleet growth in the expected interval of 4 to 6 percent," D/S Norden said referring to the global market.

At the same time, orders for new vessels have remained at a low level throughout the third quarter.

By 1228 GMT shares in D/S Norden were down 2.84 percent while the Copenhagen main index was 0.5 percent lower.

Reporting by Ole Mikkelsen