Annual Report 2007
Dampskibsselskabet "NORDEN" A/S
Dampskibsselskabet "NORDEN" A/S
Financial performance
The Dry Cargo Department realised an EBITDA of USD 497 million (USD 126 million), which is a quadrupling relative to the previous year. This result was positively affected by the very strong freight market and the Company’s flexible business model. Despite a 70% coverage of the known capacity going into 2007, the Company was able to profit significantly from the rise in freight rates. The Company recognised profits from the sale of 4 Handymax bulkcarriers, including a 50%-owned vessel, in the total amount of USD 63 million (USD 55 million). Accordingly, the overall operating profit (EBIT) was DKK 548 million (USD 170 million).
The strong expansion of the Company’s fleet capacity during the year meant a 45% increase in the total activity in the Dry Cargo Department to 60,425 (41,724) ship days. The capacity increase mainly related to the Panamax segment, where a large fleet of vessels on short-term charters contributed to doubling the capacity relative to the previous year. The Company’s new activity in the smallest dry cargo segment, Handysize, also brought about a strong increase in activity.
In 2006, the Company established an FFA activity in order to exploit the potential in the Company’s comprehensive market knowledge. The department takes controlled positions in the FFA market within clearly defined limits, independently of the Company’s portfolio of vessels. The contribution margin for 2007, which was the first full year of derivatives trading, was USD 5 million.
NORDEN’s good positioning combined with a very strong freight market throughout the year, contributed to the Company realising T/C equivalents significantly higher than the 2006 level. With the exception of the Capesize segment, the realised T/C equivalents were between 51% and 93% higher than in 2006. The Capesize segment is materially different from the other segments in that all vessels are chartered out on longterm contracts, and NORDEN’s T/C equivalent in this segment is therefore more constant.
