Norden has revised its guidance for its year-end result upwards by an extra $10m after reporting another solid quarterly profit, with all three of its business units finishing in the black.
The Danish operator recorded adjusted profit of $29m for the first three months of 2020, compared to a result of $7m at the same point last year.
Chief executive Jan Rindbo said the period was Norden's best first quarter since 2015.
Norden, which owns and operates bulkers and tankers, said the result demonstrated the strength of its new business unit structure in the face of economic shocks from the Covid-19 pandemic, IMO 2020 marine fuel transition and oil price war.
The company this year reorganised its business units into asset management, dry operator and tanker operator segments.
"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," Rindbo said in the firm's quarterly report.
The tanker unit booked a $17.7m profit during the first quarter, the asset management division posted profit of $5.6m and the Dry Operator segment saw a net result of $4.4m.
During the same period of last year, only Norden's tanker operating segment made a profit.
That said, Norden recognised a $4.4m loss incurred from Polar Navigation, its 50% owned tanker joint venture with trader Glencore.
Norden has made a provision of $2.3m, which relates to "onerous" time-charter contracts for the JV that were locked in at high levels some years ago.
Revised guidance
Norden has raised its guidance for 2020 to a range of $30m to 80m, which hikes the upper limit from the previous guidance of $70m.
The ship operator said its guidance had been revised in light of strong tanker spot rates and another good result from its tanker unit in the second quarter to date, but the firm expects to see a "challenging market" in the second half of 2020.
It also noted the "high degree of uncertainty" for the outlook, given "the unprecedented nature of Covid-19 and lack of visibility with respect to reopening of economies", according to its quarterly report.
Fleet developments
Norden has reduced its exposure to the dry-cargo market by selling a supramax bulk carrier and chartering out two scrubber-fitted panamax bulkers for three years.
The two panamax charters commence this quarter and come with a "significant" scrubber premium to the contracted rate, the company said, but did not supply further details.
Norden did not name the divested supramax but brokers' reports show that Norden sold the 60,400-dwt ultramax Nord Everest (built 2016) in mid-March to Chiba Shipping of Japan for $23m and has chartered the vessel back for three years.
Meanwhile, Norden has signed new leases for three newbuildings due for delivery next year.
The Danish company has entered into agreements to lease a medium-range tanker and a supramax bulker, each for five years.
The company has also agreed a five-year lease for a handysize bulker that Norden said would be used to service its "extensive" biomass contracts.
All three of the vessels are scheduled to be delivered by 2021 and the leases have "significant" options attached, said Norden, without providing details.
