Nordic Shipholding’s Results Fall Short of Expectations

The third quarter of 2014 was disappointing for Copenhagen-listed shipowner Nordic Shipholding that posted a loss before tax of USD 4.6 million compared to a larger loss of USD 6.3 million in the same period last year. 

The smaller loss was due mainly to lower interest expenses of USD 2.6 million (USD 5.4 million), Nordic said.

Despite marginal rise in TCE earnings, lower freight rates in the first 9 months had a partial impact on the earnings when compared to 2013.

The handy tanker spot market rates for the first 9 months were lower than anticipated, according to Nordic Shipholding. As a result, the average TCE rates earned by the vessels in the Handytankers pool were lower than the forecasted daily rate of USD 14,000.

For the same period, the LR1 spot market also performed lower than anticipated and hence below the forecasted daily TCE rate of USD 15,200, the company added.

“However, during October and November both the handy tanker and the LR1 spot markets have experienced material improvement in the rates,” the shipowner’s results show.

The pool operators now expect the average daily TCE rates for 2014 to be in line with Nordic Shipholding’s originally budgeted TCE rates.

The average daily TCE rates for 2014 is  expected to be USD 14,000 for handy tankers and USD 15,200 for LR1.

“Despite the disappointing result for Q3 2014 the Board now expects revenue for 2014 as originally budgeted, but due to increased one-off costs the outlook published in the Interim Report H1 2014, is maintained. For 2014, the group expects EBITDA (earnings before interest, tax, depreciation and amortisation) to be in the range of USD 5.0-8.0 million,” Nordic added.

The group’s cash flows is expected to be USD -3.0- -1.0 million for 2014, after repaying the outstanding short-term working capital loan.

Nordic’s management has recently agreed main terms of a minimum 3-year time-charter fixture for Nordic Anne on a profitable basis.

The time-charter is expected to commence in early 2015.

During the first 5 months of 2014, all the vessels of the group were transferred to separate wholly-owned legal entities in Singapore as part of the restructuring.

At the same time, the change of technical managers for all the six vessels was also completed with Columbia Shipmanagement and Thome Ship Management managing three vessels each.

Press Release