DS Norden, the listed Danish dry bulk and product tanker company, has significantly raised its 2015 operating result forecast on improved freight rates.
The group now expects operating EBIT result for 2015 of USD50 million to USD90 million against previously expected negative by USD40 million to positive by USD40 million.
“The upward adjustment is a result of a tanker market which continues to be influenced by a broadly based upswing with strong rates in all regions. On that background, the tanker business is expected to generate an EBIT result of USD75 million to USD100 million against previously expected USD35 million to USD65 million,” the company said in a statement.
“Furthermore, through good operation and coverage, Norden’s Dry Cargo Department has secured higher earnings than expected at the beginning of the year, even though the first months of 2015 offered a historically poor dry cargo market,” the company said.
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Dry cargo is now expected to generate an EBIT result of negative by USD25 million to break even compared to previously expected negative by USD60 million. “Fleet values in dry cargo continue to be under pressure as a result of the challenging markets, and the company will perform a routine impairment test in connection with the publication of the interim report for the first half-year,” Norden said.
Norden operates a fleet of 221 dry bulk vessels and like many other companies in the business it expected the market to recover from early 2014 and it adjusted its strategy accordingly. However, as the recovery failed to materialise, it had to revise its strategy again and it e.g. renegotiated lower lcharter rates for many of the vessels it operates on long-term contracts. This helped to bring down break even costs of the ships.
In addition to the dry bulkers, Norden operates 48 product tankers.