Norden sees increase in 2010 core profit

Danish shipping firm D/S Norden said core earnings should rise this year driven mainly by economic growth in China, disappointing analysts who had expected a stronger outlook.

Shares in the dry cargo and tanker shipping company, which posted 2009 profit in line with forecasts yesterday, fell as analysts said the 2010 outlook was towards the low end of market expectations.

Norden's proposed dividend for 2009 was also below the bottom-end estimate in a poll of analysts.

"The global economy is expected to regain some strength in 2010," Norden said, pointing out that the sharp global economic downturn in 2009 had led to "a major reduction of global trade for the first time since the Second World War".

For the group, Norden said it expects a higher operating income (Ebitda) compared with 2009. "Although the global economy is expected to recover gradually, both dry cargo and tankers are subject to greater uncertainty than normal," it added.

Norden forecast group 2010 Ebitda in a range of $155-205 million (Dh569m-Dh753m). Ebitda estimates in a Reuters poll of 12 analysts had ranged between $112m and $337m.

"The forecast is on the weak side," Jyske Bank said in a note.

At 1052GMT, Norden's shares were down 2.5 per cent, having gained almost 20 per cent between February 15 and March 8.

Last year, Norden's group Ebitda fell 75 per cent to $125.6m, in line with the Reuters poll's average of $12m. Revenue fell 60 per cent last year.

Danish rival AP Moller-Maersk, which operates the world's number one container shipping line, saw its first ever annual loss in 2009 and forecast a "modest" profit in 2010. Norden said tanker rates fell heavily in March 2009 and remained until December at a level which in many trades did not cover daily vessel operating costs.

It has adjusted to the challenging market conditions by reducing its dry cargo capacity by one-third.

Shipping began to recover in the fourth quarter and both dry cargo, which achieved "reasonable rates", and tankers, thanks to "strong demand as a result of the cold winter weather in northern Europe and the United States", continued to show strength in the first two months of 2010, Norden said.

Norden's active fleet counted 137 dry cargo vessels at end-2010.


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