Investor

Financial Highlights

Table of content

Highlights of 2010
Highlights of 2009
Highlights of 2008
Highlights of 2007
Highlights of 2006
Highlights of 2005
Highlights of 2004

1. Highlights of 2010

Earnings increased sharply in 2010 with EBITDA growing 91% and EBIT 42%. Results were well above the original March estimate and in the upper end of the range recently announced by NORDEN in November.

Growth was mainly generated by Dry Cargo where NORDEN’s daily earnings were 7% higher than spot rates thanks to good coverage and operator activities. In addition to solid basic earnings, Dry Cargo had non-recurring income of USD 78 million. Exclusive of this non-recurring income, EBITDA rose by 23% in Dry Cargo.

Tankers recorded improved earnings as well. Results were significantly higher than the original March estimate and in the middle of the range announced by NORDEN in November. Spot rates rose during the year, and revenue from coverage and optimisations also contributed to Tankers’ daily earnings being 23% above the 1-year T/C rates.

Profit from the sale of vessels was USD 28 million (and USD 4 million in joint ventures), considerably lower than recent years. This is due to, among other things, a strategic decision to expand the core fleet by purchasing tanker vessels and the fact that vessel prices made sales less attractive. Investments in vessels and newbuildings amounted to USD 663 million, while vessel sales generated proceeds of USD 296 million.

In Dry Cargo, EBITDA increased to USD 249 million and in Tankers to USD 0 million.
NORDEN’s EBITDA increased by 91% to USD 240 million, and EBIT was up 42% to USD 223 million.
Net profit increased by 13% to USD 245 million. Profit per share was DKK 33 (DKK 28).
Net profit generated a return on equity of 13% (12%).
Equity grew by 11% to USD 2 billion.
Cash flows from operating activities went up by 86% to USD 298 million.
The Board of Directors proposes a dividend of DKK 8 per share (DKK 7), and moreover, a share buyback programme has been initiated.

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2. Highlights of 2009

The Dry Cargo Department’s EBITDA fell by 70% to USD 139 million.
The Tanker Department’s EBITDA fell by 105% to USD -4 million.
NORDEN’s total EBITDA fell by 75% to USD 126 million.
NORDEN’s total EBIT fell by 80% to USD 157 million.
Net financials represented income of USD 7 million (USD 29 million).
Positive fair value adjustment of USD 61 million of certain hedging instruments (USD -81 million).
Net profit of USD 217 million, representing a return on equity of 12% (47%).
Cash and cash equivalents amounted to USD 711 million (USD 807 million).
Theoretical NAV decreased by 4% to DKK 268 per share.
The Board of Directors proposes a dividend of DKK 7 per share (DKK 13).

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3. Highlights of 2008

Although below expectations, NORDEN’s profit was the largest to date. The Dry Cargo Department’s EBITDA rose during the first three quarters but fourth quarter earnings dropped although the long-term coverage of the fleet provided some protection against the extremely low spot rates toward the end of the year. The Tanker Department’s earnings rose following a major addition of tonnage which was employed at attractive rates. NORDEN realised significant profits from the sale of vessels during the year.

The Dry Cargo Department's EBITDA was down 9% to USD 455 million.
The Tanker Department's EBITDA was up 26% to USD 67 million.
NORDEN’s total EBITDA was down 6% to USD 506 million.
Profits from the sale of vessels, etc. rose 78% to USD 290 million.
EBIT rose 13% to USD 773 million, corresponding to an EBIT margin of 18%.
Downward fair value adjustment of certain hedging instruments of USD 81 million.
Net financials represented income of USD 29 million.
The net profit for the year was up approximately 1% to USD 708 million or DKK 3,609 million.
The return on equity was 47% (70%).
Cash and cash equivalents rose by USD 187 million to USD 807 million.
The equity ratio rose approximately 2 percentage points to 83%.
The Board of Directors proposes a dividend of DKK 13 (DKK 35) per share.

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4. Highlights of 2007

The profit for the year was USD 703 million (2006: USD 177 million), equalling DKK 3,830 (DKK 1,050 million) translated at the average exchange rate for the year. This profit is four times the profit for the previous year and provides a return on average equity of 70% (27%).
The main explanations for the increased profit for the year is a higher operating profit in the Dry Cargo Department and larger profits from the sale of vessels (USD 163 million against USD 55 million).
The Dry Cargo Department’s profit before depreciation (EBITDA) was USD 497 million (USD 126 million), constituting a 296% increase. The increase was primarily explained by a good positioning and a very strong dry cargo market.
The Tanker Department’s EBITDA was up by 10% to USD 53 million (USD 48 million), driven by a higher level of activity and higher realised T/C equivalents in an otherwise weaker market.
Positive cash flows from operations were generated in the amount of USD 467 million (USD 123 million).
Equity grew to USD 1,311 million (USD 714 million).
The active fleet of owned and part owned vessels remained stable at 14 vessels, while the number of owned and part owned vessels for delivery rose from 14 to 35.
At the end of the year, the Company’s total theoretical NAV per share was estimated at DKK 614 (DKK 305). Of this, the value of the Company’s 75 (71) charter parties with purchase option amounted to DKK 323 per share (DKK 154). The calculation of Theoretical Net Asset Value is subject to significant uncertainty, however.
In the Company’s risk model, the gearing was reduced from 1.4 to 0.4 in the course of 2007. The main reasons for this reduction are a combination of larger equity and reduced net liabilities as a result of the sale of vessels and the conclusion of long-term coverage contracts at attractive levels.
The Board proposes a dividend of DKK 35 (DKK 5) per share, corresponding to a 44% (23%) payout ratio for the year.

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5. Highlights of 2006

The profit for the year was USD 177 million (2005: USD 336 million), equalling DKK 1,050 million (DKK 2,019 million) translated at the average exchange rate for the year. The return on average equity was 27% (71%).
The principal explanations for the reduced profit for the year are lower profits from the sale of vessels (USD 55 million against USD 128 million), lower fair value adjustment of certain hedging instruments (USD -27 million against USD 26 million) and a USD 50 million drop in EBITDA.
The Dry Cargo Department’s profi t before depreciation, etc. (EBITDA) was USD 126 million (USD 165 million), constituting a 24% decrease. The lower performance was mainly due to lower realised T/C equivalents as a result of hedging transactions previously entered into and a weak freight market in the first half-year.
The Tanker Department’s EBITDA dropped by 16% to USD 48 million (USD 57 million). This development was explained by an increased expense level due to a larger proportion of chartered vessels to owned vessels.
Cash flows from operations amounted to USD 123 million (USD 245 million).
Equity grew to USD 714 million (USD 611 million).
The fleet of owned and part owned vessels was expanded from 10 to 14. The fleet and the 14 owned vessels under construction are estimated to have an added value of USD 440 million over the carrying amounts of the vessels and the expected newbuilding prices. The Company’s Net Asset Value (NAV) per share was DKK 3,008 per share at the end of the year, excluding the value of the Company’s charter parties with purchase option.
The Company’s 71 charter parties with purchase option had a value of USD 1,183 million (USD 533 million) at the beginning of 2007, based on a theoretical valuation. This corresponds to DKK 3,090 per share. Accordingly, at the end of the year, the Company’s total theoretical Net Asset Value (NAV) per share was DKK 6,098. The calculation of theoretical value is subject to significant uncertainty, however.
The Board proposes a dividend of DKK 100 (DKK 200) per share, corresponding to a 23% (22%) payout ratio for the year.

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6. Highlights of 2005

2005 proved the best year in the Company’s history with a profit for the year of USD 336 million, equalling DKK 2,019 million translated at the average exchange rate for the year, (2004: USD 264 million) including a USD 128 million (USD 50 million) profit from the sale of vessels and fair value adjustments of certain hedging instruments of USD 26 million (USD 0 million).
Revenue was up by 11% to USD 1,296 million. This rise was primarily attributable to an increased number of ship days and higher daily earnings for the product tankers.
The Dry Cargo Department’s profit before depreciation (EBITDA) amounted to USD 165 million (USD 198 million), constituting a 17% decrease. Long-term employment stabilised the bulkcarriers’ earnings in a declining market.
The Tanker Department’s profi t before depreciation (EBITDA) rose by 37% to USD 57 million (USD 42 million) as a result of a higher level of activity and a strong spot market.
Cash flows from operations amounted to USD 245 million (USD 191 million). The change in cash and cash equivalents for the year was USD 179 million (USD 75 million).
Equity grew to USD 611 million (USD 340 million). The return on average equity was 71% (101%).
The Board of Directors propose a dividend of DKK 200 per share, against DKK 275 in 2004, which corresponds to a payout-ratio of 22%.
The fleet of owned vessels expanded from 7 to 10. The fleet and the 9 owned vessels under construction are estimated to have an added value of USD 246 million over the carrying amounts of the vessels and the expected newbuilding prices.
The Company’s 56 charter parties with extension and purchase options had a value of USD 533 million before tax at the beginning of 2006, based on a theoretical valuation. This corresponds to DKK 1,559 per share (USD247). Note, however, that the calculation of theoretical value is subject to significant uncertainty.

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7. Highlights of 2004

2004 proved the best year in the history of the Company with a profit for the year of USD 264 million compared to USD 72 million in 2003. Included in this amount is a USD 50 million profi t from the sale of
vessels, compared to USD 3 million for the previous year.
The operating profit amounted to USD 269 million against USD 72 million in 2003. The profit margin was therefore increased from 15% to 23%.
Cash flows from operations for the year amounted to USD 190 million (2003: USD 65 million). The change in cash and cash equivalents for the year was USD 75 million (2003: USD 20 million).
Equity grew by USD 151 million to USD 336 million from USD 185 million in 2003. The return on average equity was 101% (2003: 49%).
The total number of ship days rose by 44% to 39,197 – the highest number in the history of the Company.
The Board of Directors proposes a dividend of DKK 100 per share, bringing the total dividend for the year to DKK 275 per share from DKK 100 per share in 2003. The total return on shares before tax – in the form of price increases and shareholder dividends – was 130% against 256% the previous year.
The entire fleet and the orders for the 10 newbuildings have a total estimated added value of USD 235 million over their carrying amount.
For 2005, NORDEN expects profi t after tax in the range of USD 250 million. The expectation includes profit of USD 75 million from 6 already realised sales of vessels, including m.t. Nordpacific, which has now been sold for delivery to the new owners in the 4th quarter of 2005.