Norden had its best first quarter since 2015

Although the first quarter of this year was characterised by weak spot rates in dry cargo and strong spot rates in tankers, Danish shipping company Dampskibsselskabet Norden A/S delivered an adjusted result of $29 million, compared to $7 million seen in Q1 2019.

Despite extreme market conditions, Norden saw its strongest first-quarter result since 2015. 

Image Courtesy: Norden

EBIT stood at $7 million in Q1 2020, compared to a negative EBIT of $2 million posted in Q1 2019.

As informed, the quarter saw profit from all three business units of the company despite “large shocks” caused by COVID-19, IMO 2020 transition and oil price war. 

Performance of Norden’s business units

Looking at Norden’s business units, Asset Management posted a result of $7 million for the first quarter of 2020, against $0 million reported in the corresponding period last year. The business unit is now benefitting from actions taken during the last two years where exposure has been increased significantly in tankers and lowered in dry cargo.

“The diversification benefit of operating in both dry cargo and tankers is enabling active management of cyclical market exposures, not just within but also across the two segments which is key to superior long-term returns in the Asset Management business unit,” Jan Rindbo, Norden’s CEO, explained.

This business unit maintains a significant cover portfolio and has, therefore, limited market exposure for the rest of the year, according to Rindbo.

Furthermore, Dry Operator generated a result for the first quarter of this year of $4 million, compared to a negative result of $3 million recorded in Q1 2019.

Despite a very weak dry cargo market, Dry Operator captured good value from short-term trading activity and was well-positioned to benefit from a declining market.

Looking ahead, the macro-economic weakness driven by the global lockdown is expected to continue to hamper commodity demand. Both time charter rates and asset values are expected to recover but there may not be any meaningful recovery before 2021, where infrastructure spending by governments could boost dry cargo activity, Norden CEO continued. 

In a strong spot market, Tanker Operator got off to a strong start and saw a result of $18 million in Q1 2020, against $10 million reported in the same quarter a year earlier.

Specifically, the result was generated by a combination of strong spot rates and active management of the position, where this business unit benefitted from chartering additional tonnage in the previous quarters.

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Spot rates are expected to remain supported by storage demand through the second quarter of the year where Tanker Operator is said to be “well-positioned to exploit a strong market”. However, with very weak underlying demand fundamentals, the market is expected to decline later in the second half of the year due to a combination of demand headwinds and declining storage requirements.


Amid these uncertain markets, Norden raised its guidance for 2020 to the range of $30 to 80 million which is up from the previously announced guidance of $30 to 70 million.

“The Dry Operator unit showed the strength of its business model, delivering a solid performance in a weak market. The newly formed Tanker Operator unit had a very positive start to the year due to good positioning in a strong market. All in all, all three business units delivered a profit for the quarter, and Norden raises its guidance for 2020 to $30-80 million,” Rindbo commented.

The company said that the guidance is based on expectations of strong tanker spot rates and another good result from Tanker Operator in the second quarter but a challenging market in the second half-year. Moreover, the dry cargo market is expected to remain challenging.

Rindbo concluded that there is a high degree of uncertainty attached to Norden’s outlook due to the unprecedented nature of the coronavirus pandemic.