The 13 dry cargo newbuildings and four MR product tankers are all of modern eco-designs and follow Norden's recent announcement that it was putting its cash to work on renewing its dry bulk fleet, having successfully modernised the tanker fleet.
The vessels, all due to be built at Japanese shipyards, have $250m of outstanding payments remaining, and although the company has $498m in cash and securities and $160m in undrawn credit, it is in discussions with lenders for 10-year credit deals to finance the vessels and take advantage of attractive interest rates.
Speaking at the company's first quarter earnings call, president and ceo Carsten Mortensen stated that the company was in no rush to invest its remaining cash in new ships and that it will instead wait for the right opportunity to present itself, "the larger portion of this year's orders is behind us," he added.
First quarter earnings at Norden reflected the company's transition from high income, high cost charters, to low income, low cost operations. Earnings on an EBITDA basis fell to $10m in 2013 from $50m in the same period of 2012.
Norden maintains its estimate of a full year EBITDA of between $15m and $45m, with the tanker division expected to pull in $25m-$45m whilst dry cargo breaks even.
"The company will... be in a strong position when the markets become more balanced. Scrapping of dry cargo vessels is still at a high level with around 7.5m dwt. in the first quarter, and we can be pleased that the tanker department has generated good earnings in an otherwise bleak first quarter. But as already announced, 2013 will be a very difficult year earnings-wise," added Mortensen.
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