"A number of the contracts we concluded on chartered vessels 3-6 years ago will probably not be profitable in their duration," Norden interim ceo Klaus Nyborg stated in a release. The company has made the decision to take all of its losses in one hit as opposed to stringing them out over the three to four years remaining on the contracts.
At the end of last year the shipowner was positioning itself to take advantage of an expected recovery of rates in the dry bulk sector through 2014 and 2015. Despite the expectations from Norden and many others in the dry bulk sector, rates worsened in 2014 and even annual seasonal improvements were lacklustre.
"It was not a stand-alone factor that ruined the dry cargo market in 2014," Nyborg explained. "The Indonesian export ban on a number of raw materials resulted in a large number of unemployed vessels entering a market which was already strained by too much capacity. At the same time, coal transports suffered under weather conditions decreasing the demand for coal and political actions limiting the import of coal into the very important Chinese market."
Earlier this year Norden's ceo Carsten Mortensen announced a surprise departure for BW Group and Nyborg was put in place as interim ceo. His permanent replacement, Pacific Basin coo Jan Rindbo, will take up the helm in the middle of 2015.
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