EMEA News
Norden Downgrades 2014 Earnings Forecast by $230M on Weak Dry Cargo Market, Loss Expected
Dampskibsselskabet NORDEN A/S (Norden) Wednesday announced a $230 million downgrade to its 2014 earnings forecast.
The company said it had provided $230 million in its accounts following a review of freight rates for its dry cargo sector, though there was no cash impact for the company.
Norden said its loan agreements were not impacted either.
The review concluded that certain contracts, which the company entered into between three and six years ago, should be classified as "onerous" and provided against.
As a result of the provision, Norden's revised earnings before interest, tax, depreciation, and amortisation (EBITDA) guidance now predicts a loss of between $290 million and $230 million, down from a best case break-even scenario.
Similar reviews were also carried out of its owned dry cargo and tanker segments, which concluded that the company's forecasts should remain in tact.
The company offered some good news in relation to its tanker business.
"Underlying operations remain within the previously issued guidance with the tanker segment approaching the high end of its range due to the recent spot market improvement," said Norden.
Norden said the material part of the provision would be released in the coming three to four years, with a third of this taking place in 2015.
Norden was last week reported to be on a list of companies in receipt of claims from Dutch bank ING over unpaid OW Bunker bills.
