Q2 2026 Dampskibsselskabet Norden A/S Earnings Call Transcript
Key Points
- Strong Q2 net profit of $101 million, with return on invested capital at 11% over 12 months.
- Net asset value increased 23% since the start of the year to DKK 466 per share.
- Dry cargo EBIT improved significantly from -$45 million in Q1 to $8 million in Q2, with expectations of continued improvement.
- Tanker division delivered strong EBIT of $81 million, up $30 million year-over-year, driven by high spot rates.
- Proactive fleet management with 29 sale and purchase transactions, taking profits on high asset values and reallocating to specialized segments.
- Increased full-year guidance to $140-$190 million, reflecting confidence in continued performance.
- High coverage of tanker capacity (over 80% for next three years) provides downside protection.
- Expansion into specialized areas like multipurpose vessels and project cargo, with 25 newbuildings expected to deliver by 2029.
- Strong shareholder returns with $1.2 billion returned over the last five years, including $34 million in Q2.
- Constructive outlook for dry cargo market, with expectations of similar or slightly lower rates in 2027.
- Dry cargo EBIT of $8 million is still low, and performance was impacted by $30 million in extra costs from ships stuck in the Persian Gulf.
- Tanker market fundamentals are weakening, with negative ton-mile growth and a growing order book, especially in crude.
- Guidance for the full year ($140-$190 million) is conservative relative to Q2 alone, due to expected lower sales gains and tanker rates in H2.
- Operating cash flow in Q2 was only $30.6 million, with negative free cash flow of -$126.4 million, due to working capital absorption.
- Asset values are at high levels, and the company is selling into strength, but it is also buying vessels, which could be risky if values decline.
- Geopolitical disruptions, such as the Strait of Hormuz closure, create uncertainty and could lead to reduced oil transport if hostilities continue.
- Order book in dry cargo is increasing, which could pressure rates in the future, though not alarming yet.
- The company is not operating in the Persian Gulf due to safety concerns, limiting access to certain trade routes.
- OpEx inflation of 3-4% adds to cost pressures.
- The company's strategy to reduce volatility may limit upside in strong markets, as it locks in rates and sells assets.
Good morning, and welcome, everyone, to this webcast with a presentation of the Q2 2026 report from NORDEN that was published this morning. (Operator Instructions)
I will hand over to CEO Jan Rindbo and CFO Martin Badsted from NORDEN. Please go ahead.
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Thank you very much, and from my side also, welcome to our Q2 presentation. I think this quarter is probably one of the most complicated in terms of operations, but it is also one of our better quarters in terms of the financial performance. So we will dive obviously into that a little bit later. I would like to just start by setting the scene, just giving you a short introduction to NORDEN. As you know, our purpose is to enable smarter global trade. We transport all the essential raw materials that you use in energy, construction, manufacturing, and manufacturing. All these commodities underpin the modern living that we all know. NORDEN is one of the world's
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