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Norden records most profitable quarter since 2011

Norden records most profitable quarter since 2011
Norden has announced its most profitable quarter since 2011 as tanker rates stayed strong and its dry bulk fleet outperformed the market.

The group's $43.4m profit compares to a $41.6m loss in the second quarter 2014, and brings first half profit to $82m, reversing a $68.2m loss in the first six months of last year.

Norden's active dry bulk fleet of almost 200 vessels recorded a $16.7m profit for the quarter, including a one-off $6m settlement related to a COA dispute from 2010. The market remains depressed by oversupply and low demand, but Norden outperformed the one year timecharter rate by 45% and the Baltic Exchange's average spot rates by 83% thanks to high coverage early in the quarter.

One key driver of the dry cargo slump is China's falling demand for both coal and iron. A 33% year-on-year drop in coal import volumes has seen the country fall from the world's largest importer of coal to its fourth, behind India, Korea and Japan.

A low oil price and high demand for oil and products kept tanker earnings high during the second quarter. Norden did warn that the tanker market might cool in the second half of the year as stockpiling eases and significant refinery maintenance programmes begin in the coming months.

The tanker fleet of 44 handysize and MR vessels earned a net profit of $32.8m in the second quarter. Norden is continuing a strategy of high spot exposure for its tanker fleet, with 25% of remaining days fixed for the rest of 2015.

Jan Rindbo, president and ceo, commented: ”Norden has performed well during the first half of 2015. Our tanker business has utilised the particularly strong markets to generate its best quarterly operating result ever. At the same time, as a result of good coverage and sound business acumen, our dry cargo business has made it decently through an otherwise historically poor first half-year for the dry cargo market."

Yesterday Norden announced it was cutting positions from its executive management and combining roles in a bid to simplify its structure.