Bunker Hedging Helps NORDEN to a Third Quarter Profit

NORDEN says it's focusing on adding more fuel-efficient vessels

Dampskibsselskabat NORDEN A/S (NORDEN) said today that bunker hedging, in conjunction with rising bunker prices, helped it to a profit of $16.1 million in the third quarter of 2012, compared with a loss of $21.1 million in Q3 2011.

NORDEN had a loss from operations of $580,000, but adjustments of of $17.9 million on the fair value of its bunker hedging instruments lifted it into the black.

Revenues for the period rose 3.4% from $537.2 million in Q3 2011 to $555.2 million in a period where "market conditions in both Dry Cargo and Tankers were significantly worse than in the same period last year."

The company, which has already announced a strategy of focusing on eco-tonnage, said it has been adjusting its core fleet by adding more fuel-efficient vessels, including contracting two Handysize tankers and one ice-class Panamax dry cargo vessel during the quarter, while selling seven dry cargo vessels.

"We are financially strong, and the Company continues to optimise the fleet through i.a. contracting yet another fuel efficient vessel – this time a Panamax ice-class vessel, which has been secured employment for 5 years," said Carsten Mortensen, president and CEO.

NORDEN said that despite global economic difficulties, dry cargo demand has been "relatively reasonable," growing by around 8 percent in the first half of the year, with China driving the market by increasing imports.

The company said Europe's importing of oil products fell in the third quarter because European refineries stepped up production to make use of cheap low-sulfur West African crude oil, which the U.S. has largely stopped importing because its refineries are now using more domestic shale oil.