Continued implementation and execution of the strategy Focus and Simplicity

Strategic focus in 2017.

In line with the overall strategy, NORDEN will have special strategic focus on the following in 2017:

  • In Dry Cargo: Continued strengthening of operator activities

  • In Dry Cargo: Maintain exposure towards possible market improvements

  • In Tankers: Positioning towards possible market improvements after 2017

2016, NORDEN has focused on implementing the strategy Focus & Simplicity, which implies an operational focus on the vessel types Supramax, Panamax and Handysize in Dry Cargo and Handysize and MR in Tankers, as well as a simplification of internal business procedures to support activity growth. At the same time, the Company has actively worked at securing a continued solid capital and cash base, and even after the investments and long-term charters which NORDEN made in markets with significantly higher rates, the Company continues to be financially strong and in possession of a solid cash base.

Market conditions are challenging, and NORDEN has concentrated its efforts in areas where the organisation may generate value in spite of these market conditions.

Core fleet optimisation

The Company has continued the optimisation of its portfolio of newbuildings and long-term charters. By postponing deliveries, changing vessel types and making pre-payments on T/C hire (see “Asset Management” for further details), NORDEN has managed to create significant value. The optimisation is carried out based on NORDEN’s financial strength and strong ties to Japanese shipowners and yards, and in the future the Company will continue to seek a close dialogue with these parties inorder to improve the portfolio on a continuous basis and to adjust it to current and expected market conditions.

Dry Cargo

At the beginning of 2017, NORDEN owned 27.5 dry cargo vessels, and in addition to this, the Company has significant exposure to the longterm market development through 61.5 longterm charters. Total exposure is considered appropriate given the market outlook and the Company’s financial position.

NORDEN stands out from most other listed shipping companies in dry cargo by having considerable operator activities. These are activities which NORDEN will strengthen in coming years. Earnings from operator activities are made up of the difference in what the customer pays for the transportation and what NORDEN pays to charter a vessel for a shorter period of time or just a single voyage to carry
out the transportation.

In a very dynamic market, NORDEN’s operator activities can quickly be adjusted in positioning to any market outlook: If, for example, NORDEN expects more negative market developments than other market players, NORDEN can position itself accordingly by contracting more cargo than capacity.

As the combination of vessels with cargoes in the operator business happens within a relatively short time frame, the market exposure is more limited than that of long-term cargo contracts (COAs) and long-term charters or
vessel ownership.

Good and efficient operator activities require close relationships with both cargo customers and tonnage suppliers in the global market, and with its global presence and solid brand NORDEN is therefore well positioned to create value through increased operator activities. At the same time, a strong focus on costs and efficiency is crucial since value is to be ensured through considerable activity with a relatively small margin. Here, NORDEN is also well positioned with its experienced organisation and efficient systems geared for growth.


In 2016, focus within Tankers centred to a great extent on benefiting from the favourable market in the first half-year and reducing exposure to expected weaker markets in 2017. As rates decreased towards the end of 2016, NORDEN adjusted its market exposure and began entering into short-term charter agreements for vessels (up to 1 year) no longer seeking to increase coverage.

The operation of NORDEN’s product tankers continues to be managed by Norient Product Pool (NPP), of which NORDEN owns 50%. During its 12 years of existence, NPP has grown to become one of the largest product tanker pools in the world. With an extensive fleet, a strong brand and a global network of offices staffed by talented employees, the pool has managed to consistently generate earnings which lie significantly above market average. In recent years, NPP has incorporated vessels from the shipping company Diamond S, which doubled its number of vessels in NPP to 16 in 2016 and thereby strengthened NPP's market position.

  More details on NORDEN’s strategy in the Annual Report 2016 pages 8 to 9

 Tanker newbuildings
 Tanker fleet

 Dry Cargo newbuildings
 Dry Cargo fleet
 Dry Cargo