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Poor dry bulk market drags Norden into the red in Q1

Poor dry bulk market drags Norden into the red in Q1
Denmark’s shipowner Norden has been hit by a first quarter net loss, dragged down by the loss-making dry bulk business despite a profitable tanker business.

Net loss for the quarter ended 31 March 2016 was recorded at $5.3m, as against the profit of $27.2m in the same period of 2015.

The quarterly revenue decreased by 35% year-on-year to $296.2m.

“Norden’s tanker business still brings home reasonable results, which contributes to cushion the effects of a historically poor quarter in the dry cargo market,” said Jan Rindbo, ceo of Norden.

“The dry cargo index the Baltic Dry Index reached a new low in February, and despite a record number of scrappings of dry cargo vessels, this could not make up for the many deliveries of new vessels. Based on the increase in Chinese imports, the dry cargo market saw a slight improvement in March,” Rindbo commented.

The company’s dry cargo segment posted a loss of $19.8m during the first quarter, as opposed to the profit of $14.5m for its tanker business.

Looking ahead, Norden expects a 2016 full year result ranging between a $60m loss to a $30m profit, a break down from the dry cargo loss of $85-25m and the tanker gain of $25-55m.

The dry bulk shipping market is projected to continue to struggle with overcapacity for the rest of 2016, while the tanker shipping market will see healthy market conditions on the back of decent spot rates.

“Norden is optimising its fleet, utilising its flexible business model and chartering more vessels for single trips than before, in order to get maximum value out of the markets,” Rindbo said.

At the end of the first quarter, Norden’s active fleet stood at 275 ships, which is 47 vessels more than at the end of 2015.