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Research Tree provides access to ongoing research coverage, media content and regulatory news on D S NORDEN. We currently have 7 research reports from 1 professional analysts.
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D S NORDEN
D S NORDEN
Slow improvement in dry cargo, downturn in tankers
02 Mar 17
Norden ended a difficult 2016 following a horrible 2015. The adjusted net loss was $-35m, in line with guidance ($-60/-20m). Although the difficulties are not yet behind the group, some improvement is assumed in dry cargo, its main business, in 2017 but not in tankers before 2018. FY2016 figures. Norden posted revenue of $1,251m (-24%). Revenue declined in both divisions (-22% to $920m in dry cargo, -31% to $330m in tankers). EBITDA increased to $30.6m (vs $20.5m in 2015) and included the reversal of provisions for onerous contracts of $119m in dry cargo (vs $80m in 2015). The fleet operating costs were reduced by $15m. The negative contribution decreased in the Dry cargo division ($-24m vs $-118m in 2015) and EBITDA collapsed in the Tankers division ($54.5m vs $138m in 2015). The EBIT loss was below expectations at $-64m (vs $-102m before the write-downs on vessels of $-180m in 2015) after higher net losses from the sale of vessels ($-45m vs $-31m in 2015). Reported net loss was $-46m (vs $-285m in 2015), including a positive change of $34.5m in the fair value adjustments of hedging instruments (vs $+9m in 2015). The adjusted result (restated from the gain/loss on the sale of vessels, the change in the fair value adjustments of hedging instruments) was $-35m (vs $-263m in 2015). The operating cash flow was negative at $-79.7m (vs $76.9m in 2015). It reflected the low rates in dry cargo and tankers. The investments in vessels and prepayments on newbuildings decreased to $75m (-53%) and were covered by the proceeds from the sale of vessels of $172m. The repayment of the existing borrowings amounted to $85m. At year-end 2016, the group had a net cash position of $47m (o/w gross debt of $216m in the balance sheet, cash and cash equivalents of $264m) and total equity amounted to $801m. Norden continued to reduce net commitments. Taking into account T/C liabilities and prepayments related to the purchase of vessels, net commitments amounted to $620m in 2016 (-37%). This reduction was attributable to the disposal of vessels, the postponement of the time of delivery of new vessels and prepayments on chartered vessels, and, finally, the signing of four contracts for the transportation of biomass and coal. Norden has undrawn credit facilities of $250m above the outstanding commitments on vessels and newbuildings of $244m at year-end 2016.
Affected this time by the tankers market
09 Nov 16
Norden had a bad Q3 16 due to the deterioration of the results in the Tankers division. Q3 16 figures: Revenue decreased to $314m (-21%) due to the dry cargo and tankers businesses (respectively -20% and -27%). EBITDA plunged to $4.1m (vs $41.5m in Q3 15). This was due to the collapse of the contribution from the Tankers division to $6m (vs $41.9m in Q3 15) while the Dry cargo division remained negative at $-1.9m (vs $-0.4m in Q3 15). EBIT turned negative to $-12.9m (vs $20.9m in Q3 15) after losses on the disposal of vessels of $-5.8m (vs $-3.1m in Q3 15). Reported net loss was $-14.1m (vs $+10.1m in Q3 15) after a positive change of $3.4m in the fair value adjustments of hedging instruments (vs $-4.6m in Q3 15). The adjusted result was negative at $-11.7m (vs $+17.8m in Q3 15). The operating cash flow was negative at $-29m (vs $-3m in Q3 15). The investment in vessels and prepayments on newbuildings were reduced to $3.6m (vs $28.4m in Q3 15), while the proceeds from the sale of two Handysize tankers brought in $61m. 9 months 2016: Based on revenue of $922m (-28%), EBITDA dropped to $27.8m (vs $140.5m in 9m 15), EBIT turned negative to $-48.2m (vs $86.7m in 9m 15) and the group net loss was $-33.6m (vs $+92m in 9m 15) after a positive change of $25.9m in the fair value adjustments of hedging instruments (vs $17.9m in 9m 15). The operating cash flow was negative at $-38.4m (vs $58.6m in 9m 15). The investments in vessels and prepayments on newbuildings decreased to $70.4m (-33%) and were covered by the proceeds from the sale of vessels of $134.9m. On 30 September 2016, the group had a net cash position of $67m (o/w gross debt of $225m in the balance sheet) and total equity of $813m. Taking into account T/C liabilities and prepayments related to the purchase of vessels, net commitments amounted to $752m. Norden has undrawn credit facilities of $285m above the outstanding net commitments of $179m related to the newbuilding programme.
Deterioration in the tanker market
17 Aug 16
Q2 16 was a difficult quarter due to a poor dry cargo market despite some improvement in the Chinese imports of coal and iron ore and a weaker tanker market than expected. Q2 16 results. - Group revenue decreased to $312m (-26%) due to both divisions (-22% in dry cargo and -37% in tankers). Norden continued to be affected by weak rates in the dry cargo market and had to deal with lower rates in all vessel segments in the tanker market. - EBITDA collapsed to $12m (-76%), reflecting the negative turnaround of the dry cargo division to $-4.5m (vs $17.3m in Q2 15) and a lower contribution from the tankers division to $16.7m (-51%). - EBIT was negative at $-34m (vs $35.8m in Q2 15) after significant losses on the disposal of vessels in the dry cargo division ($-33.8m). - Net losses were $-24m (vs $+43.3m in Q2 15) after a positive change of $13.4m in the fair value adjustment of hedging instruments (vs $+12.6m in Q2 15). The adjusted net result was $-3.6m (vs $28.9m in Q2 15). H1 16 figures. Based on revenue of $608m (-31%), EBITDA dropped to $23.7m (-76%) due to the negative contribution of the dry cargo division ($-17m vs $31.2m in H1 15) and a lower EBITDA from the tankers division ($40.7m, -40%). EBIT was a negative $35.2m (vs $65.8m in H1 15) after significant losses on the disposal of vessels in the dry cargo division ($-33m) and net loss was $-19.4m (vs $82m in H1 15) after a similar positive change in the fair value adjustment of hedging instruments ($+22.5m vs $+22.6m in H1 15). The operating cash flow was negative at $-9.4m (vs $62.1m in H1 15). The investments in vessels and prepayments on newbuilding were reduced to $66.7m (-13%) and were covered by the proceeds from the sale of vessels ($73.9m, -34%). There was no dividend paid to shareholders and no share buy-backs. The repayment of the existing debt amounted to $19m. On 30 June 2016, the group had a lower net cash situation at $65m (vs $124m on 30 June 2015), o/w gross debt of $280m in the balance sheet and total equity of $835m. Net commitments were down $66m to $908m at the end of Q2 16 and gearing increased to 1.09x at the end of Q2 16. Norden has undrawn credit facilities of $285m.
Challenging dry cargo, lower rates in tankers
05 May 16
Q1 16 earnings Based on revenue of $296m (-35%, o/w -42% in dry cargo, -18% in tankers), EBITDA dropped to $11.4m (-76%) due to the negative contribution of the dry cargo division ($-12.5m vs $14m in Q1 15) and lower EBITDA from the tankers division at $23.9m (-28%). EBIT was slightly negative at $-1.3m (vs $30m in Q1 15) after depreciation costs of $13m (-23%). The reported net profit was $4.6m (vs $38.6m in Q1 15) after a positive change of $9.1m (vs $9.9m in Q1 15) in the fair value adjustment of hedging instruments. The adjusted net result was negative at $-5.3m (vs $27.2m in Q1 15) restated from the gain/loss on the sale of vessels and the change in the fair value adjustment of hedging instruments. The operating cash flow was positive ($6.6m) thanks to a positive change in WCR. The investments in vessels and prepayments on newbuilding amounted to $51.9m and were below the proceeds from the sale of vessels for $73.8m. All in all, FCF was positive at $14.7m. The group had a net cash situation of $82m (excluding the share of cash in JVs for $20m), o/w gross financial debt of $294m in the balance sheet and total equity of $859m on 31 March 2016. Net commitments were reduced by $15m to $974m at the end of Q1 16 and Norden has undrawn credit facilities of $297m.
Probably at a bottom but a long recovery in perspective
02 Mar 16
"2015 was yet another horror year in dry cargo, and Norden put a large number of tools to use to mitigate the effect of an historically miserable dry cargo market" said CEO Jan Rindbo. +FY2015 figures+: 2015 was really an awful year. Norden posted revenue of $1,653m (-19%, o/w -27% in Dry cargo, +10% in Tankers). EBITDA was positive and better than expected at $20.5m (vs $-261m in 2014), including the provision for onerous contracts of $-145m (vs $-230m in 2014). EBITDA was negative in the Dry cargo division ($-111m vs $-293m in 2014 - while we expected $-137m) and positive EBITDA surged in the Tankers division ($142m vs $44m in 2014) in line with our estimate. Negative EBIT was $-282m (vs $-335m in 2014) including the depreciation and write-downs of $-249m (vs $-68m in 2014) and losses from the sale of vessels of $-31m. Group net losses were significant at $-285m (vs $-416m in 2014) roughly in line with expectation. It included a positive fair value adjustment on hedging instruments of $9m (vs $-62m in 2014). The good news was the positive operating cash flow of $77m after two consecutive negative years (reminder: $-46m in 2014, $-9m in 2013, $122m in 2012). Cash out-flows included higher gross capex at $159m (vs $110m in 2014) while the sale of vessels/newbuildings and prepayments received on sold vessels brought $156m in cash (vs $19m in 2014). There was no dividend paid in respect of FY2014. The net cash situation in the balance sheet improved very slightly at year-end 2015 ($-67m vs $-8m in 2014). Securities/cash and cash equivalents increased to $366m (vs $238m in 2014) while gross financial debt increased to $298m (vs $231m in 2014). Taking into account lease liabilities and prepayments related to the purchase of vessels, net commitments were reduced by 21% to $989m. Logically, no dividend in respect of FY2015 is proposed.
The tide is turning
20 Apr 17
Any investor worth their salt knows it is impossible to precisely call a bottom in a particular stock. For Gattaca, though, we believe this moment has now passed given the compelling valuation (6.9x EV/EBIT vs 9.8x sector average), attractive 9.8% unlevered cashflow yield and constructive secular trends supporting its specialist markets. Sure, Net Fee Income (NFI) like-for-likes (LFL) have fallen of late, yet equally there are now early indications that organic growth may soon turn positive.
19 Apr 17
We take a look at the supply and demand dynamics of the world’s largest diamonds. Less than 200 very large (>200 carat) gem quality diamonds have ever been found, yet 23 of these have been found in the past three years. This dramatic increase is being driven by a combination of the rapid increase in the number of billionaires and hence price and demand, combined with technological developments that have improved large diamond recovery and a certain amount of geological good luck.
19 Apr 17
Lombard Risk Management* (LRM): Beats demanding growth and profit forecasts (CORP) | Frontier Developments* (FDEV): Steaming ahead (CORP) | Tax Systems* (TAX): Right place, right time (CORP) | Acal (ACL): Stronger H2 and brighter outlook (BUY) | Fenner (FENR): Interim results signal upgrades (BUY) | Minds + Machines* (MMX): US and Europe domain sales (CORP)
Small Cap Breakfast
19 Apr 17
Global Ports Holding—Intention to float on Standard List. International cruise ports operator. Seeking $250m raise including $75m primary offer. Dorcaster—Schedule One Update. Admission now expected 3 May. RTO of Escape Hunt raising £14m at 135p Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May. Eddie Stobart Logistics— Schedule 1. Admission expected 25 April but capital raising details TBC. ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May. Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.