Danish owner-operator Norden had another profitable year in 2023 but was far from the blockbuster levels seen the previous year.
The firm, which owns and operates bulkers and product tankers, said freight rates for both generally declined last year against a challenging backdrop of weaker economic growth, unwinding of supply chain bottlenecks and rising geopolitical events.
Norden booked an annual result of $400m last year, down from $743.5m in 2022 — the best annual profit in its 151 years.
Of this profit, $133m was generated by Norden’s freight services and trading business unit, which handles its operated fleet. Its assets and logistics unit, which looks after its owned vessels, generated $267m of the annual total.
Norden chief executive Jan Rindbo said 2023 was the fifth best in its history and shows a 32% return on invested capital, with $436m distributed to shareholders through dividends and share buybacks.
“While we have delivered solid financial performance throughout the year, we have at the same time executed well on the strategic agenda by expanding our business offering to our customers with capesize operations, successfully integrated the acquired Projects & Parcelling activities and accelerated our decarbonisation initiatives, including a reduction in our emissions [EEOI] by 9% [year on year],” he said.
The firm filed $43m in net profit during the fourth quarter, down from $204.6m in the last three months of 2022.
Norden’s board of directors has proposed a dividend of DKK 10 ($1.44) per share, on top of the combined DKK 35 per share paid for the first three quarters.
But Norden said the uncertain economic outlook means profitability will likely take a hit this year.
“Entering 2024, the macroeconomics and geopolitical situation in Ukraine and the Middle East are still expected to impact the market outlook in relation to dry cargo and tankers, adding to higher uncertainty and volatility than usual,” the company said in its annual report.
Norden said it expects a softer annual result of between $150m and $200m for this year, including $59m in gains from vessel sale transactions that have already been agreed.
But the company said earnings and returns would be “significantly higher” this year than before the pandemic.
“This is as margins in dry cargo are set to be weaker due to near-term market dynamics, while tanker market conditions will support attractive margins,” the firm said.
The record year in 2022 enabled Norden to make strategic moves to expand its service offering.
The firm made the first business acquisition in its history last year when it bought out project cargo vessel operator Thorco Projects, which has become Norden’s projects and parcelling division.
The deal means Norden now has the capacity to handle small parcels of cargo up to 200,000-tonne shipments on board newcastlemaxes.
It has also moved into port logistics through its manganese trans-loading facility in Gabon and has enhanced its focus on offering “greener” freight to customers.
Norden has been building up its operated capesize and newcastlemax fleet since September and currently has 11 vessels in operation, five of which are owned by the company.
Last week, Rindbo told TradeWinds that Norden will likely buy more capesizes if the right opportunities arise.