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CEO's Column - NORDEN News Magazine Summer 2010

Better late than never

Finally, "Bryghuset" was officially inaugurated. At the end of May, we had a housewarming party for around 400 people, who were shown around NORDEN's new head office, and later on dinner and entertainment. High spirits and happy people partied late into the night.

To me, it makes good symbolic sense that we had the party now – and not in December 2008 as originally planned. But in the fourth quarter of 2008, uncertainties in the shipping industry and world economy were at its highest, and it was not the right time to party. Therefore, we then postponed the party until better times.

Since then, a good deal of uncertainties has been cleared away. It is probably still too early to completely call off the economic crisis, but the world economy has fortunately started to grow again, and growth will gradually increase transport volumes. We are heading towards better times, and therefore, it felt like the right time to party. And we got the attendance and great atmosphere that we could only wish for to have a festive inauguration of our head office. Better late than never!

NORDEN had a good start to 2010. We have increased coverage in Dry Cargo and Tankers so that we have both increased our expectations to earnings this year and secured a good cash flow beyond 2010. The business is also growing according to plan: in Dry Cargo, we are now operating 165-170 vessels, and we have become more active as operators. In Tankers, we have purchased a handful of vessels, and we are still looking for interesting investment opportunities.

Until now, we have committed USD 510-550 million to investments this year. This is partly payments on the newbuilding programme in Dry Cargo and partly the purchase of the abovementioned tanker vessels. We can lift these investments ourselves with our cash balance and proceeds from agreed vessel sales, and it is nice to have both the will and the prerequisites to pursue the opportunities for profitable growth.

But there is no risk of NORDEN getting overexcited. We do not forget for a second that globally, a lot of dry cargo vessels have been ordered for delivery in 2010, and this growth in supply is likely to give some large bumps in the road, which we have to steer clear of. The tanker market also reminds us that the world is still on its way out of the crisis – and is not out yet. But we are convinced that the tanker rates will also increase when the economic growth really gets going, and growth in supply subsides.

Some people believe in miracles – at NORDEN, we believe in sound business practice, a thoroughly tested business model, a strong organisation and hard work. This got us through the crisis. Now, the important thing is to stay focused and stay on course.

I wish you all great and hopefully sunny summer.

CARSTEN MORTENSEN

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