Operating earnings (EBITDA) were USD 23 million (USD 36 million) in the third quarter. Market conditions in both Dry Cargo and Tankers were significantly worse than in the same period last year.
Cash flows from operations were USD 29 million in the third quarter.
Earnings in the Dry Cargo Department were on average 35% above the market due to high coverage at good rate levels. EBITDA in Dry Cargo was USD 26 million (USD 35 million) in the quarter, whereas earnings in Tankers were 7% below the 1-year T/C rates but still above the spot market. In the third quarter, the Tanker Department realised an operating loss of USD 1 million against a profit of USD 3 million in the same period last year.
In the first 9 months of the year, NORDEN generated a total EBITDA of USD 104 million (USD 124 million). Adjusted for non-recurring income, operating earnings are 11% down from last year.
As a result of lower earnings and higher depreciation, NORDEN realised an operating loss (EBIT) of USD 1 million in the third quarter. For the first 9 months of the year, EBIT (before write-downs) amounted to USD 34 million.
NORDEN continues to optimise the core fleet through sales and contracting of new fuel efficient tonnage. Since the beginning of the third quarter, the Company has sold 7 dry cargo vessels and contracted 2 Handysize tanker vessels and 1 ice-class Panamax dry cargo vessel.
The market values of vessels dropped by further 6% during the third quarter. NORDEN's total theoretical Net Asset Value (NAV) decreased by 13% to DKK 198 per share in the third quarter. However, this calculation is excluding significant coverage contracts which are estimated at a value of USD 215 million or DKK 30 per share. If the freight rate curve and vessel prices change by 10%, the theoretical NAV will change by 18%.
In the Dry Cargo Department, coverage for 2013 has increased from 44% to 56%, primarily in the two main vessel types Panamax and Handymax where total coverage is now approximately 100%. In Tankers, the Company is still very exposed to the spot market. However, it is expected that the winter market will provide an opportunity for increasing coverage for 2013.
NORDEN maintains its expectations for a full-year EBITDA of USD 110-150 million. Previous expectations
President and CEO Carsten Mortensen says:
"I am very pleased that NORDEN generates a positive cash flow from operations of USD 29 million in the third quarter despite challenging market conditions. This is what counts in times like these. We are financially strong, and the Company continues to optimise the fleet through i.a. contracting yet another fuel efficient vessel this time a Panamax ice-class vessel, which has been secured employment for 5 years."
NORDEN press release