Reviewing the company's 2012 performance, a bottom line $279m loss including vessel write downs of $300m, chairman Mogens Hugo saw the EBITDA of $148m as a great achievement in an overtonnaged, weak market, and the supply situation is not dampening the company's appetite for expansion.
In his chairman's statement, Hugo, said: "It is correct that there are too many dry cargo vessels at sea here and now. But scrapping and a low number of new building orders will reduce overcapacity… this will take a few years and it is exactly in these years – where continued lower rates are also expected – that we will have our new vessels built."
The initial steps in the programme have already been taken, including selling off older tonnage and entering long term charters with purchase options for modern eco-ships. Between late 2012 and early 2013, Norden ordered 11 dry cargo newbuildings, putting some its $529m of cash and securities to work, a reserve that looks set to be part-invested in efficient ships to promote future fuel savings. The chairman cited the example of four product tankers, ordered in 2011 and delivered in 2012 which boast fuel savings of $2,000 - $3,000 per day when compared to vessels delivered as recently as 2007.
An insight into Norden's predictions on upcoming market recovery, the new bulk vessels are due to be delivered in 2015 where, according to Hugo "we expect reduced overcapacity and, consequently, higher rates. It is a market like this which we will enter with brand new, fuel efficient dry cargo vessels, which will lower our costs and position us extremely well to profit as much as possible from an increasing market."
"Investments will primarily take place in the handymax and panamax vessel types," he added.
While the long-term outlook for the company is one of growth and investment, the short term looks less hopeful. "Unfortunately, the outlook within our largest business segment, dry cargo, is not that good for 2013, even though there has been a bit of spring mood in some of the vessel types in the last couple of months compared to the end of last year. As I said earlier, 2013 will also be marked by the far too large supply of new vessels particularly seen in 2012. This means that we expect rates to be under pressure in the coming year as well," Hugo predicted.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
