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CEO's Column - NORDEN News Magazine Spring 2010

2009 rounded off nicely and 2010 off to a good start

The annual financial statements for 2009 were reported with an annual profit of DKK 1.2 billion. Earnings did not reach the same level as in 2007 and 2008 when most companies had the wind at their backs and great conditions for growth. The wind changed when the financial crisis from the autumn of 2008 turned into a regular economic crisis in 2009 resulting in negative growth in the world economy.

The dry cargo market had a difficult start to the year, but China's great appetite for especially coal and iron ore meant that the market improved in the second quarter and became fairly good.

The crisis resulted in problems of financing which meant that only less than 60% of the planned newbuildings were delivered to the dry cargo market in 2009 due to cancellations.

The tanker market started the year at a reasonable level but gradually became weaker as the year went by. Demand decreased as the economic crisis evolved while the supply of vessels increased significantly.

Bearing these market conditions in mind, we are pleased with NORDEN's result for 2009. Our business model provides us with the opportunity to continuously adjust the business to changing market conditions, and in 2009, it proved to be an effective tool for weathering the storm and steering clear of the rocks.

Most important to me is that NORDEN's solidity was improved during the year and that we strengthened systems, processes and competences so that we today are a stronger company both in relative and absolute terms.

Now, we are looking ahead to 2010, and we have had a really good start to the year. We have increased 2010 coverage in Dry Cargo from 65% to almost 80% at the beginning of March, and tanker rates have increased significantly due to the cold winter, even though 2010 still looks challenging in tankers. We have bought 3 new product tankers at attractive prices, which we expect to make attractive yields on when the market improves. At the moment, the order book counts 29 newbuildings and long-term charters in Dry Cargo and 5 in Tankers for delivery in 2010, so regardless of what adjustments that may come along the way, 2010 will be the most busy delivery year ever in NORDEN's history. Court cases have been concluded, and the portfolio of vessels and cargoes has generally improved during the first quarter.

2010 will be a volatile market, and we welcome that. We have a business model which has proved its worth and means that particularly fluctuations provide opportunities for a Company like NORDEN - and just as important: we have the right people to handle them.There will still be a lot of challenges, but right now, we are exactly where we want to be.

CARSTEN MORTENSEN

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