Danish owner-operator Norden is kicking off a new $30m share buyback scheme, after filing third-quarter results that were profitable but reflected weaker freight markets for both bulkers and product tankers.
The Copenhagen-listed company said it will repurchase up to 1.2m of its shares until February 2024 under the new programme, which commences today.
Norden said the aim of the share buyback programme is to adjust its capital structure and to hedge the company’s obligations under employee incentive schemes.
Its share price has fallen by around 10% this year to date but remains around three times higher than the five-year rolling average.
Norden recorded net profit of $98.6m, or DKK 19 ($2.70) in earnings per share for the third quarter.
This is down from $243.1m in the same period of 2022, when earnings per share were DKK 51.
Revenue dipped 40% year on year to $899.3m for the quarter on the back of weaker markets for both product tankers and bulkers compared to last year.
CEO Jan Rindbo said the net result was “in line with our expectations driven by our focus on derisking the portfolio through high coverage”.
“The start of the integration of Projects & Parcelling has been successful with commercial and cost synergies realised and the team bringing new expertise to the organisation,” he said in the firm’s third-quarter report.
“In uncertain market conditions we benefit from the asset-light business model contributing to 27% ROE and high cash distribution to our shareholders with an interim dividend of DKK 10 per share and a share buyback programme of $30m.”
Profit from vessel sales contributed $7m to the quarterly result and gains from sub-leases related to long-term charters generated $31m.
The firm expects its annual profit for 2023 to fall between $380m and $420m. Previous guidance had given $360m as the lowest estimate.
Norden’s assets and logistics division, which oversees its owned fleet and leased vessels, contributed $69m to the third-quarter bottom line.
Its freight services and trading segment contributed $30m and Norden’s daily operating margins show the firm is feeling the squeeze of lower markets.
The trading arm generated a margin of $738 per vessel day during the quarter, which Norden said was driven primarily by tanker earnings, although bulker income was also positive.
Norden’s operating activities have generated an annual average of $1,332 per vessel day since 2019, or $757 excluding the bumper year 2022.
The company expects its daily margin to shrink further this quarter and going into next year. It expects to generate a daily profit “significantly lower” than $757 per vessel day during the first half of 2024.
“For the rest of the year and moving into 2024, Norden has secured high dry cargo and tanker coverage at profitable rates, focusing on lowering the exposure to the dry cargo market,” the company said in its report.
Norden operated 327 bulkers and 112 product tankers on average during the third quarter.
The firm’s acquisition of Thorco Projects was completed during the third quarter, which contributed $7m in Ebitda plus commercial and cost synergies.
Norden reportedly sold the 60,400-dwt ultramax Nord Everest (built 2016) to Unity Bulk Carriers for a price said to be over $24m in August.
Norden this week said it has hired Anne Jensen as chief operating officer of its assets and logistics division to help grow what the company described as “integrated freight solutions” to customers, including port logistics and lower emission services.
