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CEO's Column - NORDEN News Magazine Winter 2012

A year of challenges – and opportunities

Yet another year in NORDEN’s 141-year long history is drawing to a close. As predicted, 2012 was an exciting yet challenging year with record-low freight rates, dropping vessel prices and far too many newbuilding deliveries to the world fleet.

In NORDEN, we have sought to prepare for these conditions, and we are therefore using the time to become even stronger. A sharp focus on organisation and costs has reduced administrative expenses by about 10%, investment in a new shipping system is streamlining working procedures and a watchful eye on every fingertip ensures that new opportunities are seen and cultivated.
And the outcome of these efforts has not failed to appear. During the first 9 months of the year, we have generated a positive cash flow from operations of USD 101 million. Making cash on operations is what counts in times like these, as it indicates that even in trying times NORDEN is a healthy business that can handle the challenges of a market under pressure.

Like everyone else in the business, NORDEN is also affected by the slump. Thus, in the first quarter we wrote down fleet values by USD 300 million in order for the book values to correspond better with the estimated market value. But this write-down not only reflects that we want to provide an accurate picture of our values – it also reflects that the current market is one of opportunities. When vessel prices are low, great deals can be made, and this is something for NORDEN to look into. We have cash to invest in new, fuel efficient vessels, and thus we continue our efforts to optimise our fleet composition. Focus on fuel efficiency provides a competitive edge both in the current difficult markets but also when the markets recover.

At the same time, we make sure that also in terms of employees NORDEN has the right competences required to perform the utmost. This applies not only to the new head of Dry Cargo, Ejner Bonderup, who you can meet on pages 4-7, but also to our new Shipping Trainee campaign which has just been launched and which you can learn more about on pages 8-9 (see also www.shippingtrainee.dk and www.facebook.com/shippingtrainee, both in Danish). In the coming months, the campaign will ensure that NORDEN again this year will be sought out by young talents passionate about international trade and the fascinating world of shipping.

NORDEN holds a strong position in this world. We will put this to good use in order to profit from the new year and the many new opportunities which the future holds.

CARSTEN MORTENSEN

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