By Ole Mikkelsen
COPENHAGEN, May 12 (Reuters) – Danish shipping company D/S Norden beat first-quarter operating profit forecasts on Tuesday, boosting its shares by as much as 9 percent.
One of the world’s largest dry bulk shipping company, D/S Norden has been hit like others in the industry by low freight rates due to overcapacity and a faltering global economy.
However, its quarterly results were lifted by its tanker vessels.
Earnings before interest and tax (EBIT) swung to $30 million in January-March from a loss of $22.6 million in the first quarter of last year, topping the average forecast for a loss of $1 million in a Reuters poll of analysts.
The Copenhagen-based still expects a full-year operating result between a loss of $40 million and a profit of $40 million.
“It is a conservative guidance for the year but is understandable since the dry bulk market is doing so poorly,” Sydbank analyst Jacob Pedersen said.
He has a “buy” recommendation on the shares and points to the fact D/S Norden only needs to make an additional operating profit of $10 million in the rest of the year to reach the high end of its guidance.
With 203 owned and chartered vessels carrying goods such as grain, iron ore and timber, D/S Norden competes with companies including China Cosco, operator of the country’s largest dry bulk fleet, and Hong Kong-based Pacific Basin.
The $30 million profit was driven by its 48 tanker vessels, carrying refined products, contributing $28 million.
The poor dry bulk market has encouraged shipping companies to scrap more of their vessels in the first four months of 2015 than in the same period last year in a bid to cut capacity.
By 0803 GMT shares in D/S Norden were up 7.44 percent while the Copenhagen main index were down 1.16 percent. (Editing by Mark Potter)
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