Interim report first half-year 2009

Transcription

1 NASDAQ OMX Copenhagen A/S Nikolaj Plads 6 DK-1067 Copenhagen K Announcement no August 2009 Interim report first half-year 2009 First half-year highlights The profit for the first half-year of 2009 was USD 133 million corresponding to DKK 742 million. The result includes profits from the sale of vessels of USD 39 million and positive fair value adjustments of certain hedging instruments of USD 65 million. The total EBITDA for the first half-year was USD 44 million, which is achieved on the basis of an EBITDA in the Dry Cargo Department and the Tanker Department of USD 41 million and USD 8 million, respectively. In the second quarter, the Dry Cargo Department continued the progress from the first quarter and achieved an EBITDA of USD 32 million, which was 275% higher than the first quarter of 2009, but 81% lower than the second quarter of 2008 when the market rates were considerably higher. NORDEN's vessel types performed better than the spot market in the first half-year. The Tanker Department's EBITDA in the second quarter was a loss of USD 1 million, which is significantly below both the second quarter of 2008 and the first quarter of 2009 due to the substantially worse market conditions. In the first half-year, NORDEN's earnings in MR and Handysize were 11% and 13%, respectively, above the average 12-month T/C rates in the market. The adjustment of the Dry Cargo fleet has now been completed, and NORDEN is well equipped for future challenges in the market. At the end of the first half-year, NORDEN operated 118 active bulk carriers against 193 bulk carriers at the end of the first half-year of In total, 99% of the capacity in the last part of 2009 is employed at average earnings of USD 26,725. In the first half-year, the Company's operations generated a positive cash flow of USD 109 million. After payment of dividends of USD 98 million, prepayments on newbuildings and proceeds from sale of vessels, the total cash and cash equivalents (including securities) decreased to USD 800 million from USD 829 million at the turn of the year. The theoretical Net Asset Value (including purchase options) is estimated to be DKK 275 per share at the end of the half-year. The expectations for 2009 have not changed since the guidance on 13 August: EBIT is expected to be USD million, including profit from sale of vessels of approximately USD 67 million, and EBITDA is expected to be USD million. The Dry Cargo Department expects an EBITDA of USD million, whereas the Tanker Department's EBITDA is expected to be USD 0-20 million. The uncertainty regarding expectations is still more significant than usual. Mogens Hugo Chairman of the Board Carsten Mortensen President & CEO Today at hours (CET), NORDEN will hold an information meeting at 52, Strandvejen, DK-2900 Hellerup, where CEO Carsten Mortensen, CFO Michael Tønnes Jørgensen and Senior Vice President Martin Badsted will comment on the report for the first half-year and the expectations for the whole year. Furthermore, a telephone conference will be held at hours (CET). By hours (CET) at the latest, Danish participants should dial while participants from abroad should dial +44 (0) or The telephone conference can be followed live at where the accompanying presentation also is available. Further information: CEO Carsten Mortensen, tel DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, CVR-NO /24

2 Contents Page Key figures and ratios for the Group 3 INTERIM REPORT Comments on the development of the period for the Group 4 Activity and earnings 4 Cash flows 4 Equity 4 Net commitments 4 Fleet development 5 Fleet values and theoretical value of purchase options 6 Valuation of options 6 Impairment test for vessels and newbuildings 6 The share 7 Risks and uncertainty factors 7 Segment information 8 Dry Cargo 10 Market trends 10 Financial highlights 10 Business development 10 Tankers 11 Market trends 11 Financial highlights 11 Business development 11 Expectations 12 Expectations for Capacity and coverage 13 INTERIM REPORT FIRST HALF-YEAR 2009 THE GROUP Statement 14 Income statement 15 Statement of comprehensive income 15 Income statement per quarter 16 Statement of comprehensive income per quarter 16 Statement of financial position 17 Statement of cash flows 18 Statement of changes in equity 19 Notes to the financial statements 21 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 2/24

3 Key figures and ratios for the Group Key figures are in USD ' /1-30/ /1-30/6 Change first half /1-31/12 INCOME STATEMENT Revenue 806,038 2,228,120-64% 4,246,815 Costs -762,126-1,925,308-60% -3,741,146 Profit before depreciation, etc. (EBITDA) 43, ,812-85% 505,669 Profit from sale of vessels, etc. 39, ,110-78% 289,972 Profit from operations (EBIT) 66, ,611-86% 772,591 Fair value adjustment of certain hedging instruments 64, ,158-37% -81,133 Net financials 4,813 32,984-85% 29,067 Profit before tax 136, ,753-77% 720,525 Profit for the period 132, ,808-78% 707,830 Profit for the period for the NORDEN shareholders 132, ,809-78% 707,832 STATEMENT OF FINANCIAL POSITION Non-current assets 973, ,340 15% 922,519 Total assets 1,922,384 1,809,964 6% 2,041,664 Equity (including minority interests) 1,714,401 1,580,338 8% 1,700,378 Non-current liabilities 90,316 94,303-4% 91,710 Current liabilities 117, ,323-13% 249,576 Invested capital 980,196 1,129,667-13% 940,436 Net interest-bearing assets 734, ,671 63% 759,942 Cash and securities 800, ,521 47% 828,739 CASH FLOWS From operating activities 109, ,403-66% 540,921 From investing activities, including vessels -18, ,764 82% -56,732 From financing activities -110, ,422 67% -364,922 Change in cash and cash equivalents for the period -18, ,783 84% 119,267 FINANCIAL AND ACCOUNTING RATIOS Share related key figures and ratios: Number of shares of DKK 1 each (excluding treasury shares) 42,039,501 42,384,889-1% 42,387,394 Earnings per share (EPS) (DKK) 3.2 (18) 14.0 (68) -78% 16.7 (85) Diluted earnings per share (diluted EPS) (DKK) 3.1 (18) 13.9 (68) -77% 16.7 (85) Intrinsic value per share (excluding treasury shares) (DKK 1) ) 41 (215) 37 (176) 9% 40 (212) Share price at period-end, DKK % 183 Price/intrinsic value % 0.86 Net Asset Value per share excl. purchase options for vessels (DKK 1) ) 42 (222) 65 (308) -35% 43 (227) Theoretical Net Asset Value per share 2) (DKK 1) ) 52 (275) 138 (652) -62% 54 (287) Other key figures and ratios: EBITDA ratio 5.5% 13.6% -60% 11.9% ROE 16.1% 96.9% -83% 47% Equity ratio 89.2% 87.3% 2% 83.3% Total no. of ship days for the Group 27,813 38,790-28% 77,448 USD rate at period-end % Average USD rate % ) Translated at the USD/DKK rate at period-end. 2) Please note that the calculation is subject to significant uncertainty. See the section "Fleet development" for further information with regard to calculation model and assumptions. The ratios were computed in accordance with the 2005 guidelines issued by the Danish Association of Financial Analysts, entitled "Anbefalinger og nøgletal 2005" except from Theoretical Net Asset Value, which is not defined in the guidelines. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 3/24

4 Comments on the development of the period for the Group Activity and earnings In the first half-year, the Company's freight income (revenue) was USD 806 million, a 64% decrease compared to the same period last year. The decrease is due to lower realised T/C equivalents in both Dry Cargo and Tankers as a result of the fact that the market conditions have been significantly worse than in the first half-year of Furthermore, the number of ship days decreased by 28% to 27,813 as a result of the continuing adjustment of the capacity in the Dry Cargo Department. The profit before depreciation and profit from sale of vessels (EBITDA) was USD 44 million in the first half-year, which is a decrease of 85% compared to the same period last year. The EBITDA margin for the first half-year amounted to 5% (14%). In the first half-year, the profit from operations (EBIT) was USD 67 million (USD 469 million), including profit from the sale of vessels amounting to USD 39 million (USD 177 million). Net financials amounted to USD 5 million (USD 33 million) in the first half-year. This includes realised and unrealised loss on foreign currency translation of USD 5 million. Rising oil prices since the turn of the year have resulted in a positive value adjustment of hedging instruments of net USD 65 million (USD 103 million) in the first half-year. This includes realised bunker hedging contracts of USD 29 million which are reclassified and charged to the income statement under primary activities. See also specification in note 2 to the financial statements. All contracts concern hedging of vessels and cargoes. The profit for the first half-year was USD 133 million (USD 598 million). The result yields a rate of return on equity of 16% p.a. Cash flows The change in cash and cash equivalents for the period amounted to USD -19 million (USD -118 million). The Company's operations generated positive cash flows of USD 109 million (USD 323 million). The cash flows from the investing and financing activities were USD -18 million (USD -103 million) and USD -110 million (USD -338 million), respectively. The investing activity mainly relates to investments in vessels and newbuildings of USD -269 million and net proceeds from the sale of vessels etc. of USD 254 million. The financing activity primarily relates to payment of dividends of USD 98 million. Equity The Company's equity amounted to USD 1,714 million (USD 1,580 million) at the end of the half-year and has thus been increased by USD 14 million during the period. The change in equity since the beginning of the year is primarily due to the comprehensive income for the period of USD 119 million, acquisition of treasury shares of USD 10 million and payment of dividends. Net commitments At the end of the first half-year, the Company's total net commitments were USD 879 million against USD 1,266 million at the same time last year. The decrease in net commitments is a result of the fact that expected future outgoing and ingoing payments have decreased by 29% and 28%, respectively. On the whole, net commitments remain unchanged compared to the end of the first quarter. Net commitments are defined as the present value of future payments in respect of, among other things, timecharters, lenders and shipyards, less expected known ingoing freight payments and cash and cash equivalents. Equity development 1 January - 30 June USD ' Equity at 1 January 1,700,378 1,311,200 Comprehensive income forthe period 118, ,435 Acquisition/sale of treasury shares -9,817-23,660 Paid dividend -97, ,531 Share-based payment 2,590 3,894 Equity at period-end 1,714,401 1,580,338 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 4/24

5 Net present values At period-end in USD million H H Future payments -2,979-4,197 Expected known ingoing payments including cash and cash equivalents 2,100 2,931 Net commitments ,266 Fleet development The gross fleet, consisting of the active fleet as well as vessels for delivery, counted 229 vessels at the end of the first halfyear against 242 vessels at the end of the first quarter of 2009 and 317 vessels at the end of the first half-year of The core fleet of owned vessels and vessels on charter for more than three years counted 164 vessels of which 81 are part of the active fleet, while the Company has 35 owned newbuildings and 48 long-term chartered vessels for future delivery. During the quarter, the active Dry Cargo fleet was reduced by 11 vessels and counted 118 units at the end of the quarter. In the second quarter, NORDEN delivered 4 sold vessels to the new owners, 3 Handymax bulk carriers and 1 Panamax bulk carrier. The continued reduction of the active Dry Cargo fleet is part of the adjustment to the changed market conditions in the dry cargo market. The active core fleet in Tankers counted 26 vessels at the end of the second quarter and has thus been reduced by 1 vessel compared to the end of the first quarter of At the end of the second quarter, the 50%-owned Norient Product Pool operated a total of 72 active units, 31 of which are ice-class vessels. At the same time, the total order book of the two pool partners comprised 16 units. NORDEN has not entered into any newbuilding contracts or contracts on long-term chartering of vessels with or without purchase option in the second quarter. In the third quarter, the Company expects to take delivery of 4 newbuildings: 1 Handysize product tanker, 1 Handymax bulk carrier and 2 Handysize bulk carriers. NORDEN's fleet At 30 June 2009 Dry Cargo Department Tanker Department Total Capesize Post-Panamax Panamax Handymax Handysize Aframax LR1 MR Handysize Vessel type Total Total Size (dwt) >150, , , , , , , , ,000 Vessels in operation Owned vessels Chartered vessels with purchase option 2 0 A Chartered vessels, for at least three years D 10 E Total active core fleet Other chartered vessels Total active fleet Vessels to be delivered to core fleet Newbuildings (owned) B Chartered vessels with purchase option C F Chartered vessels, for at least three years Total for delivery to core fleet Total gross fleet A Of which 1 unit sold D Of which 1 unit 50%-owned B Of which 4 units sold, of this 1 unit 50%-owned E Of which 1 units 50%-owned C Of which 2 units 50%-owned F Of which 2 units 50%-owned Fleet values (before tax) At 30 June 2009 USD million Owned (active and newbuildings) Carrying amount/ cost Calculated value of charter parties with purchase and extension option Purchase and extension option Value of charter party and option Market Added Charter Theoretical Dry cargo Number value* value Number party NAV Capesize Post-Panamax Panamax Handymax Handysize Product tanker MR Handysize Total 51 1,737 1, DKK per share Equity excl. minority interests per share 215 Total theoretical Net Asset Value per share 275 * Including charter party, if any. The determination of the theoretical value of the charter parties including purchase option is subject to considerable uncertainty, the value being dependent on the future development in freight rates and tonnage values as well as deviations in other assumptions. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 5/24

6 Fleet values and theoretical value of purchase options Based on collected broker estimates from three independent brokers, the Company's Net Asset Value (NAV) (excluding charter parties with purchase option) was calculated to be DKK 222 per share at 30 June against DKK 233 per share at the end of March. Furthermore, at the same time, the Company's longterm chartered vessels with purchase or extension option were estimated to have a theoretical value of USD 424 million or DKK 53 per share against DKK 59 per share at the end of March. Thus, at the end of the first half-year, NORDEN's total theoretical NAV was estimated to be DKK 275 per share. This corresponds to a decrease of approximately 6% since the end of the first quarter of In the same period, the USD rate has decreased by approximately 6% compared to DKK. Valuation of options NORDEN's valuation of purchase and extension options follows standard pricing of American options, which simulates future scenarios for T/C rates and vessel prices under assumptions of price volatility and correlation between the change in T/C rates and the change in vessel prices. In each segment, the volatility and the correlation are assumed to be constant over time and are estimated based on historical T/C rates and vessel prices. An important input to the model is the T/C rate curve for each segment. The curve consists of three elements: market rates for the first five years, a linear interpolated rate curve between year 5 and year 10 and a longterm constant rate level from year 10 onwards based on the median of the historical T/C rates since In addition, market prices are used for interest rates, exchange rates and operating costs. On the basis of the future scenarios for T/C rates and vessel prices, the optimum value of the purchase and extension option for each vessel is determined. The theoretical value of the charter parties with purchase or extension option depends on the level of the model's market rate input during the first 5 years. If this level is assumed to be 10% higher or 10% lower, the theoretical value could be estimated to be 39% higher and 39% lower, respectively. Purchase options under which the price of the vessel is stated in JPY are translated at the forward USD/JPY rate before the pricing. Changes in the core fleet First half-year 2009 Contracted NORDEN's during Vessel type Delivery share Newbuildings Long-term charters with purchase option Long-term charters without purchase option Sale Q2 Panamax bulk carrier Q % Q2 3 x Handymax bulk carrier Q % Impairment test for vessels and newbuildings If there are indications that the carrying amount of assets exceeds the value of future cash flows from the asset (recoverable amount), an impairment test must be carried out. The recoverable value is calculated as the highest value of the net selling price (fair value less cost to sell) and the value in use at continued use. If the market values (fair value less cost to sell) of the Company's vessels and newbuildings, expressed by the average of three broker estimates, are lower than the carrying amounts and the contract values, an impairment test must thus be carried out. The impairment test is carried out within NORDEN's two cash flow generating units (CGUs), Dry Cargo and Tankers, DKK per share Share price and liquidity Jan Feb Mar May Turnover Share price Million DKK DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 6/24

7 as the vessels within these two segments can usually be handled on a portfolio basis. The impairment test is done by estimating the recoverable amount at value in use calculated as the present value of the total expected cash flows during the rest of the vessels' economic lives including entered COAs, timecharters and by using estimated rates on the basis of historical data for non-employed capacity. If the value in use is lower than the carrying amounts, the asset is written down for impairment. See also note 1 "Significant accounting policies" in the consolidated annual report for 2008 for a more detailed description. At the end of the first half-year, NORDEN's 5 largest counterparties constitute approximately 31% of the remaining revenue in Dry Cargo in Thus, at the end of the second quarter of 2009, fleet values including timecharters from three independent brokers were collected for Dry Cargo and Tankers. The brokers estimated that the fleet values in Dry Cargo were approximately USD 46 million higher than the carrying amounts (excluding joint venture vessels and vessels for sale). Therefore, there was no further need for calculating the recoverable amount as only one of the two mentioned above, net selling price (fair value less cost to sell) and the value in use, must exceed the carrying amount. The market value of the Company's tankers was USD 5 million lower than the carrying amounts, and as a consequence, an analysis of the value of use has been carried out. On the basis of this analysis, it is estimated that there is no further need for impairment of tankers and tanker newbuildings. The share The price of the NORDEN share fell by 1% from the turn of the year to the end of the second quarter, when the price was DKK 182 per share. Disregarding Rasmussengruppen's sale of shares, the average daily trading volume was DKK 73 million. The NORDEN share is currently the 12 th most traded share in OMX C20. Risks and uncertainty factors During the half-year, the Company made a number of settlements with counterparties in Dry Cargo, and since the end of the first quarter of 2009, no new significant disputes have arisen. Thus, in the coverage overview on page 13, only coverage with counterparties who are not involved in ongoing disputes regarding COAs or timecharters has been included as in the interim report for the first quarter of On the whole, the amount of ongoing legal disputes remains unchanged compared to the end of the first quarter. In cases where satisfactory settlements could not be made, disputes have been referred to the court or arbitration. As previously, NORDEN does not expect that the outcome of these cases will be decided during DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 7/24

8 Segment information Second quarter 2009 Second quarter 2008 USD '000 Not Not Dry Cargo Tankers allocated Total Dry Cargo Tankers allocated Total Revenue services rendered 349,992 40, ,742 1,106,389 62, ,168,800 Voyage costs -96, , ,386-3, ,814 Contribution margin I 253,834 40, , ,003 58, ,986 Other operating income, net , ,527 Vessel operating costs -214,600-40, , ,941-38, ,116 Costs -7,368-1,230-2,245-10,843-17,012-2,084-8,498-27,594 Profit before depreciation, etc. (EBITDA) 32,143-1,112-2,245 28, ,488 18,749-8, ,749 Profit from sale of vessels, etc. 22, , , ,984 Depreciation and impairment -4,144-3, ,567-3,905-1, ,332 Share of results of joint ventures 1, , , ,236 Profit from operations (EBIT) 52,385-4,013-3,115 45, ,862 17,979-9, ,637 Fair value adjustment of certain hedging instruments 10, , , ,234 Financial income 0 0 3,914 3, ,972 1,972 Financial costs 0 0 3,165 3, ,665-1,665 Tax for the period -1, ,338-1, ,485-3,541 Profit for the period 60,560-4,136 3,586 60, ,115 17,904-10, ,637 First half-year 2009 First half-year 2008 USD '000 Not Not Dry Cargo Tankers allocated Total Dry Cargo Tankers allocated Total Revenue services rendered 715,479 90, ,038 2,113, , ,228,120 Voyage costs -198, , ,450-8, ,324 Contribution margin I 517,101 90, ,517 1,760, , ,865,796 Other operating income, net , ,465 Vessel operating costs -461,034-80, ,542-1,437,334-74, ,512,240 Costs -15,975-2,509-4,343-22,827-29,539-3,655-13,085-46,279 Profit before depreciation, etc. (EBITDA) 40,724 7,531-4,343 43, ,447 27,430-13, ,812 Profit from sale of vessels, etc. 39, , , ,110 Depreciation and impairment -8,602-6,635-1,602-16,839-8,411-3, ,789 Share of results of joint ventures , ,478 Profit from operations (EBIT) 71,523 1,286-5,944 66, ,482 25,315-14, ,611 Fair value adjustment of certain hedging instruments 64, , , ,158 Financial income ,029 11, ,898 36,898 Financial costs 0 0-6,216-6, ,914-3,914 Tax for the period -3, ,054-3, ,970-6,945 Profit for the period 133,365 1,041-1, , ,815 25,165 15, ,808 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 8/24

9 Segment information (continued) Second quarter 2009 Second quarter 2008 USD '000 Not Not Dry Cargo Tankers allocated Total Dry Cargo Tankers allocated Total Vessels 217, , , , , ,632 Prepayments on vessels and newbuildings 374,086 53, , , , ,268 Other tangible assets ,554 55, ,412 56,246 Investments in joint ventures 27,336 4, ,535 20,897 4, ,194 Non-current assets 620, ,507 54, , , ,092 55, ,340 Current assets 132,159 16, , , ,625 21, , ,624 - hereof tangible assets held for sale 9, ,399 18,703 26, ,511 Total assets 752, , ,962 1,922, , , ,933 1,809,964 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 9/24

10 Dry Cargo Market trends The first half of 2009 showed positive trends compared to the dramatic development in the fourth quarter of The dry cargo markets, measured by Baltic Dry Index (BDI), increased in the second quarter compared to the first quarter of 2009, and thus, the average for the second quarter was 74% above the first quarter. At the end of the second quarter, BDI was on index 3,757 or 133% above the level at the end of the first quarter (source: Baltic Exchange). However, compared to the first half-year of 2008, BDI was 75% lower on average. The dominant driving factor for the dry cargo market in the first half of 2009 was China's import of iron ore and coal. The import of iron ore was 298 million tonnes, that is 29% higher than the same period last year. China's import of coal set a record in June with 16 million tonnes and reached 48 million tonnes for the half-year, which is 123% higher than the same period last year (source: Bloomberg). The increased Chinese import and the consequential increased demand for tonnage had a very positive effect on the freight rates, especially for the large vessel types, Capesize and Panamax. In the second quarter, the average T/C equivalents for Capesize rose by 105% to USD 47,384 per day compared to the first quarter, while Panamax rose by 82% to USD 18,149 per day. The increasing demand for tonnage for the large vessels also resulted in increasing rates within the smaller vessel types. Compared to the first quarter of 2009, Handymax rose by 53% to USD 16,596 per day while Handysize rose by 50% to USD 10,958 per day. The first half of 2009 saw a fleet growth rate, measured in dead weight tonnes (dwt), of net total 3.9%. The growth rate was primarily driven by net growth in Capesize (7.7%) and Handymax (4.6%). In Handysize, which is the vessel type where NORDEN has most newbuildings for delivery, the fleet has decreased by 2.1% in the first half-year. The total fleet growth rate is a result of an inflow of new vessels of 17.5 million dwt and a considerable fleet deletion of 6.8 million dwt. The actual deliveries in the first half of 2009 are significantly below the expected and scheduled deliveries. Inadequate funding for financing of newbuildings, many cancellations and delays at the yards have resulted in a 40% lower inflow to the dry cargo fleet than scheduled. At the end of the second quarter, the accumulated order book amounted to 68% of the existing fleet (source: Clarksons). Financial highlights In the first half-year, the Dry Cargo Department's EBITDA was USD 41 million (USD 288 million). The considerable decrease compared to the same period last year is caused by substantially lower realised T/C equivalents and fewer ship days. The EBITDA margin dropped from 14% to 6%. Fleet capacity measured by the number of ship days decreased by 34% compared to the same period last year. This was primarily caused by a reduction in the activity in the Panamax vessel type by 48%. The realised T/C equivalents in the Company's two largest vessel types, Panamax and Handymax, were 58% and 59% below the level for the first half-year of 2008, respectively. As a result of the Company's business model with long-term coverage of the capacity, all vessel types performed significantly better than the spot market in the first half-year. Business development In the first half-year, the Company has continued adjusting the level of costs in the Dry Cargo fleet. The majority of the expensive chartered vessels from 2008 have been redelivered, and new vessels have been added to the fleet at considerably lower rates. Thus, the average cost for the Dry Cargo fleet will decrease to approximately USD 13,200 per day in In the vessel types Handysize and Post-Panamax, preparations for the new pools which are expected to commence operations in the first months of 2010 are continuing. Since the turn of the year, new and large COAs have been entered into in Handymax and Panamax of which the most significant concern aggregates and salt. 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Baltic Dry Index Jan Mar May Jun Aug Oct Dec Employment and rates, Dry Cargo Number of ship days in NORDEN Incl. single voyages Excl. single voyages NORDEN T/C equivalent (USD per day) Spot T/C avg. market* NORDEN T/C vs. spot First half 2009 Capesize ,359 35,031 69% Panamax 9,339 7,129 25,220 13,985 80% Handymax 9,515 6,195 19,027 13,689 39% Handysize 2,990 2,205 9,455 9,092 4% Total 22,836 16,521 First half 2008 Capesize , ,286-64% Panamax 18,107 16,490 59,713 66,413-10% Handymax 11,868 10,901 46,208 55,299-16% Handysize 3,407 3,127 35,796 38,454-7% Total 34,370 31,506 First half 2009 vs. first half 2008 Capesize 0% 0% 11% -76% Panamax -48% -57% -58% -79% Handymax -20% -43% -59% -75% Handysize -12% -29% -74% -76% Total -34% -48% * Source: Baltic Exchange. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 10/24

11 Tankers Market trends The pressure on the rates in product tankers continued in the second quarter. Fleet growth and declining demand for tonnage caused the Baltic Clean Tanker Index (BCTI) to decrease by 25% in the first half of 2009 to index 465. Earnings were also negatively influenced by increasing bunker prices which caused daily earnings for a typical MR product tanker to decrease by 30% to USD 5,403 USD per day in the second quarter. The decrease since the end of 2008 is 77% (source: Baltic Exchange). A higher future oil price than the spot oil price positively contributed to the demand for tonnage in the second quarter which firmed the markets as tonnage was used as floating storage capacity. Otherwise, the first half of 2009 was characterised by declining oil demand especially from the traditional consumption areas, USA and Europe and lower rates of utilisation in the refineries especially in the OECD countries. IEA estimates growth in global oil demand in 2009 to be -2.9% for the full year the largest decrease since 1983 (source: IEA). The significant drop in oil prices in 2008 led to the fact that OPEC determined a maximum daily production of 24.8 million barrels per day, which put further pressure on the demand for tonnage especially within the large crude oil vessel types. In the first half of 2009, net fleet growth in the tanker vessel types was 5.2% and was driven by MR (8.9%), LR2/Aframax (6.7%) and VLCC (5.2%), while Handysize NORDEN's most considerable vessel type experienced a negative growth rate of 2.9% of the existing fleet. Delivery of newbuildings totalled 30.1 million dwt, while 2.4 million dwt were scrapped in the first half of Thus, the major rate drop has not yet resulted in considerably more scrapping. At the end of the second quarter, the total order book for future delivery amounted to million dwt or 33% of the existing fleet (source: Clarksons). Financial highlights In the first half-year, the Tanker Department's EBITDA was USD 8 million (USD 27 million), equalling an EBITDA margin of 8%. The Tanker Department had 13% more ship days compared to the same period last year, which were employed at significantly lower rates due to the market conditions. Growth in capacity took place within Handysize and LR1, whereas the business volume in MR on the whole remained unchanged compared to the same period last year. The realised T/C equivalents in Handysize and MR were 25% and 22%, respectively, below the level in the first half-year of 2008, while, on the other hand, NORDEN's earnings in the two vessel types were 13% and 11%, respectively, higher than the average 12-month T/C rates in the market. Business development During the first half-year, the Tanker Department has kept its focus on long-term coverage of capacity. At the end of the first half-year, 44% of the remaining capacity in 2009 was secured employment at approximately USD 19,000 per day. During the first half of the year, the Tanker Department has worked intensively on the development of a system for operational performance control, which, in the long term, will optimise operations and be an advantage to the environment. 1,600 1,400 1,200 1, Baltic Clean Tanker Index Jan Mar May Jun Aug Oct Dec * Break in data chain in time series at the turn of the year due to introduction of new flat rates. Employment and rates, Tankers Number of ship days in NORDEN Total number of ship days Of which, employed in the spot market NORDEN T/C equivalent (USD per day) 12-month T/C avg. market* NORDEN T/C vs. 12-month T/C First half 2009 Aframax ,409 - Product tanker - LR ,536 20,784-16% Product tanker - MR 1, ,917 17,096 11% Product tanker - Handysize 3,362 2,194 18,065 16,029 13% Total 4,971 3,292 First half 2008 Aframax ,431 31,981 14% Product tanker - LR ,906 26,962 4% Product tanker - MR 1, ,389 23,087 6% Product tanker - Handysize 2,825 1,843 23,993 21,538 11% Total 4,420 3,033 First half 2009 vs. first half 2008 Aframax Product tanker - LR1 245% 245% -37% -23% Product tanker - MR -2% -18% -22% -26% Product tanker - Handysize 19% 19% -25% -26% Total 12% 9% * Source: ACM Shipbroker Ltd. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 11/24

12 Expectations Expectations for 2009 The Group On the basis of the sale of NORD EMPATHY, NORDEN made an upward adjustment of the expected operating profit (EBIT) for 2009 to USD million against previous USD million on 13 August. This expectation is maintained. The expectations are based on the capacity which was at the Company's disposal at the end of June. The uncertainty regarding expectations is still more significant than usual because of the global financial crisis. The cash flow effect from investments is expected to amount to net USD -180 million to USD -220 million against previous USD -200 million to USD -240 million. The cash flow effect is calculated as investments in newbuildings and owned vessels less proceeds from sale of vessels. Forward-looking statement The report includes forward-looking statements reflecting the management's current perception of future trends and financial performance. The statements for the rest of 2009 and the years to come naturally carry some uncertainty, and NORDEN's actual results may therefore differ from the expectations. Factors that may cause the results achieved to differ from the expectations are, among other things, but not exclusively so, changes in the macro-economic and political conditions especially in the Company's key markets changes in NORDEN's assumptions of rate development and operating costs, volatility in rates and vessel prices, changes in legislation, possible interruptions in traffic and operations as a result of external events, etc. The interim report is not intended to be a solicitation to purchase or trade in shares in Dampskibsselskabet NORDEN A/S. Expectations for 2009 USD million Dry Cargo Tankers Total EBITDA Realised profits from sale of vessels (app.) 67 EBIT Dry Cargo A number of unsettled disputes regarding cargo contracts are still pending. The counterparties have not been willing to meet their obligations, and therefore, NORDEN has subsequently referred the disputes to the court or arbitration. As mentioned in the interim report for the first quarter of 2009, NORDEN has decided to exclude expected contractual income from these contracts from the expected profit for This is solely due to the time-wise uncertainty relating to when cases are expected to be settled and is not a result of an estimation of the expected court decision. The Company has not experienced any new significant counterparty disputes after the end of the first quarter. Tankers The outlook in the product tanker market for the rest of 2009 is still weak. Based on an unchanged assumption of a Handysize/MR spot market of approximately USD 11,000 per day for the rest of 2009, expectations for an EBITDA of USD 0-20 million in the Tanker Department are maintained. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 12/24

13 Capacity and coverage, at 1 July 2009 Dry Cargo Ship days Costs and revenue (USD per day) Gross capacity Costs for gross capacity Capesize 925 1,825 1,825 13,688 11,331 11,331 11,331 9,242 Post-Panamax 0 1,366 3,292 43, ,046 19,201 12,623 Panamax 5,021 5,696 5,654 37,152 21,575 13,765 11,262 8,877 Handymax 5,915 11,709 12,058 94,178 15,868 13,749 12,672 7,724 Handysize 2,819 6,825 9, ,465 14,072 12,082 9,561 6,357 Total 14,680 27,421 32, ,041 17,189 13,191 12,114 8,028 Coverage Revenue from coverage Capesize 856 1,416 1,460 1,199 47,494 48,890 48,249 65,664 Post-Panamax ,952 24,200 0 Panamax 5,385 4,796 2,121 7,032 31,919 25,198 28,977 24,507 Handymax 7,266 4,194 2,374 3,411 21,847 28,172 22,664 19,944 Handysize 1, ,214 17,601 16,455 0 Total 14,590 11,248 6,696 11,642 26,725 29,130 30,394 27,409 Net capacity Capesize ,489 Post-Panamax ,567 43,558 Panamax ,533 30,120 Handymax -1,351 7,515 9,684 90,767 Handysize 1,736 6,708 9, ,465 Total 90 16,173 25, ,399 Coverage in % Capesize 93% 78% 80% 9% Post-Panamax 0% 53% 22% 0% Panamax 107% 84% 38% 19% Handymax 123% 36% 20% 4% Handysize 38% 2% 0% 0% Total 99% 41% 21% 4% * Expected daily running costs are included in the costs of the owned vessels. Thus, the total average costs show the expected cash costs per day of the known fleet. Tankers Ship days Costs and revenue (USD per day) Gross capacity Costs for gross capacity LR ,900 27,950 27,950 0 MR 1,373 3,318 4,931 37,586 14,820 15,244 14,649 11,912 Handysize 3,315 5,813 3,570 46,166 13,979 13,311 9,792 8,252 Total 5,214 9,496 8,513 83,752 15,907 14,549 12,631 9,895 Coverage LR ,876 Revenue from coverage MR 748 1, ,332 17,873 17,600 17,884 Handysize 1,427 1, ,377 20,092 20,868 0 Total 2,316 3,221 1, ,077 19,092 18,076 17,884 Net capacity LR MR 625 1,867 3,993 37,542 Handysize 1,888 4,043 3,410 46,166 Total 2,898 6,275 7,415 83,708 Coverage in % LR1 27% 0% 0% 0% MR 54% 44% 19% 0% Handysize 43% 30% 4% 0% Total 44% 34% 13% 0% DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 13/24

14 INTERIM REPORT THE FIRST HALF-YEAR THE GROUP Statement The Board of Directors and the Board of Management today reviewed and approved the interim report for the first half-year of 2009 of Dampskibsselskabet NORDEN A/S. The interim report is prepared in accordance with the International Financial Reporting Standard IAS 34 on interim reports and the general Danish financial disclosure requirements. In line with previous policies, the interim report is not audited or auditor-reviewed. We consider the accounting policies applied to be appropriate and the accounting estimates made to be adequate. Furthermore, we find the overall presentation of the interim report to present a true and fair view. Besides what has been disclosed in the interim report, no other significant changes in the Company's risk and uncertainty factors have occurred relative to what was disclosed in the consolidated annual report for In our opinion, the interim report therefore gives a true and fair view of the assets and liabilities of the Group, the financial position as well as the result of the Group's activities and cash flows for the interim period. Furthermore, the management's review gives a true and fair view of the Group's activities and financial position as well as a description of material risks and uncertainties, which the Group faces. Copenhagen, 19 August 2009 Board of Management Carsten Mortensen President & CEO Michael Tønnes Jørgensen Executive Vice President & CFO Board of Directors Mogens Hugo Chairman Alison J. F. Riegels Vice Chairman Erling Højsgaard Karsten Knudsen Arvid Grundekjøn Bent Torry Sørensen Lars Enkegaard Biilmann Benn Pyrmont Johansen DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 14/24

15 Income statement USD ' /1-30/6 1/1-30/6 1/4-30/6 1/4-30/6 Revenue 806,038 2,228, ,742 1,168,800 Costs -762,126-1,925, , ,051 Profit before depreciation, etc. (EBITDA) 43, ,812 28, ,749 Profits from sale of vessels, etc. 39, ,110 22, ,984 Depreciation and impairment -16,839-12,789-8,567-6,332 Share of results of joint ventures 680 1,478 2,371 1,236 Profit from operations (EBIT) 66, ,611 45, ,637 Fair value adjustment of certain hedging instruments note 2) 64, ,158 10, ,234 Net financials 4,813 32,984 7, Profit before tax 136, ,753 62, ,178 Tax on the profit for the period -4,054-6,945-2,338-3,541 Profit for the period 132, ,808 60, ,637 Attributable to: Shareholders of NORDEN 132, ,809 60, ,638 Minority interests Total 132, ,808 60, ,637 Earnings per share (EPS), USD Diluted earnings per share, USD Statement of comprehensive income Profit for the period, after tax 132, ,808 60, ,637 Value adjustment of hedging instruments* -13,843 1,824 2,279-5,125 Fair value adjustment of securities* ,793 0 Income and expenses recognised directly in equity -13,644 1,627 6,072-5,125 Comprehensive income for the period, after tax 188, ,435 66, ,512 Attributable to: Shareholders of NORDEN 118, ,436 66, ,513 Minority interests Total 118, ,435 66, ,512 * There is no significant tax tied to value adjustment of hedging instruments and securities. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 15/24

16 Income statement per quarter USD ' nd quarter 1 st quarter 4 th quarter 3 rd quarter 2 nd quarter Revenue 390, , ,633 1,262,062 1,168,800 Costs -361, , ,423-1,065, ,051 Profit before depreciation, etc. (EBITDA) 28,786 15,126 6, , ,749 Profit from sale of vessels, etc. 22,667 16,445 30,672 82, ,984 Depreciation and impairment -8,567-8,272-11,880-6,961-6,332 Share of results of joint ventures 2,371-1,691 5,640 1,462 1,236 Profit from operations (EBIT) 45,257 21,608 30, , ,637 Fair value adjustment of certain hedging instruments note 2) 10,012 54,882-40, , ,234 Net financials 7,079-2,266 1,695-5, Profit before tax 62,348 74,224-8, , ,178 Tax on the profit for the period -2,338-1,716-2,034-3,716-3,541 Profit for the period 60,010 72,508-10, , ,637 Attributable to: Shareholders of NORDEN 60,010 72,509-10, , ,638 Minority interests Total 60,010 72,508-10, , ,637 Earnings per share (EPS), USD Diluted earnings per share, USD Statement of comprehensive income per quarter Profit for the period, after tax 60,010 72,508-10, , ,637 Value adjustment of hedging instruments* 2,279-16,122 14,860-3,101-5,125 Fair value adjustment of securities* 3,793-3,594-4, Income and expenses recognised directly in equity 6,072-19,716 10,361-3,101-5,125 Comprehensive income for the period, after tax 66,082 52, , ,512 Attributable to: Shareholders of NORDEN 66,082 52, , ,513 Minority interests Total 66,082 52, , ,512 * There is no significant tax tied to value adjustment of hedging instruments and securities. DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 16/24

17 Statement of financial position USD ' /6 30/6 31/12 ASSETS Land and buildings 48,328 49,296 48,142 Vessels note 3) 458, , ,865 Fixtures, fittings and equipment 7,090 6,950 8,821 Prepayments on vessels and newbuildings note 4) 427, , ,836 Investments in joint ventures 31,535 25,194 30,855 Non-current assets 973, , ,519 Inventories 16,736 35,151 23,172 Receivables and prepayments 122, , ,874 Receivables from joint ventures 0 5,017 8,508 Securities 22,221 26,522 22,022 Cash and cash equivalents 778, , , , ,113 1,072,293 Tangible assets held for sale note 5) 9,399 45,511 46,852 Current assets 949, ,624 1,119,145 Total assets 1,922,384 1,809,964 2,041,664 EQUITY AND LIABILITIES Share capital 7,087 7,087 7,087 Reserves -1,098 5,286 12,546 Retained earnings 1,708,341 1,567,892 1,680,673 Equity (NORDEN's shareholders) 1,714,330 1,580,265 1,700,306 Minority interests Equity 1,714,401 1,580,338 1,700,378 Bank debt 61,016 66,203 63,610 Prepayments received on vessels for resale 29,300 28,100 28,100 Non-current liabilities 90,316 94,303 91,710 Current portion of non-current debt 5,187 5,187 5,187 Trade payables 40,486 54,097 91,237 Liabilities with joint ventures 4, Other payables and deferred income 59,122 48, , , , ,510 Liabilities relating to tangible assets held for sale 8,300 27,712 34,066 Current liabilities 117, , ,576 Liabilities 207, , ,286 Total equity and liabilities 1,922,384 1,809,964 2,041,664 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 17/24

18 Statement of cash flows USD ' /4-30/6 1/4-30/6 1/1-30/6 1/1-30/6 1/1-31/12 Profit for the period 60, , , , ,830 Reversal of items with no effect on available funds -17, ,931-80, , ,046 Cash flows before change in working capital 42, ,706 52, , ,784 Change in working capital 6,558-2,281 57,161-8,820 19,137 Cash flows from operating activities 48, , , , ,921 Investments in vessels, etc. -60,888-67, , , ,549 Investments in joint ventures ,961-2,961 Additions in prepayments on newbuildings -59, ,567-80, , ,383 Additions in prepayments received on sold vessels -6,150-12,940-24,566-7,747 22,273 Hereof held in restricted accounts 6, ,350-11,500-17,650 Acquisition of securities ,564-23,564 Sale of securities 0-23, Proceeds from sale of vessels, etc. 98, , , , ,880 Cash flows from investing activities -22,199-37,450-18, ,764-56,732 Dividend paid to shareholders -97, ,531-97, , ,531 Payment to Vækstfonden concerning treasury shares 0-22, ,997-37,997 Sale of treasury shares , ,337 14,337 Acquisition of treasury shares 0 0-9, Instalments on bank loans and vessel loans 0-1,025-2,594-4,231-30,731 Cash flows from financing activities -97, , , , ,922 Change in cash and cash equivalents for the period -70, ,109-18, , ,267 Cash and cash equivalents at period-begin 812, , , , ,788 Exchange rate adjustments -1,312-23,350-13,212 5,894 50,412 Change in cash and cash equivalents for the period -70, ,109-18, , ,267 Cash and cash equivalents at period-end 740, , , , ,467 Tied-up cash and cash equivalents 37,600 28,100 37,600 28,100 34,250 Cash and cash equivalents according to the statement of financial position 778, , , , ,717 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 18/24

19 Statement of changes in equity USD '000 Share Reserves Retained Equity capital earnings (NORDEN's shareholders) Minority interests The Group's equity Equity at 1 January ,087 12,546 1,680,673 1,700, ,700,378 Total comprehensive income for the period 0-13, , , ,874 Acquisition of treasury shares 0 0-9,960-9, ,960 Sale of treasury shares Distributed dividends , , ,117 Dividends, treasury shares 0 0 5,493 5, ,493 Share-based payment 0 0 2,590 2, ,590 Changes in equity 0-13,644 27,668 14, ,023 Equity at 30 June ,087-1,098 1,708,341 1,714, ,714,401 Equity at 1 January ,087 3,659 1,300,380 1,311, ,311,200 Total comprehensive income for the period 0 1, , , ,435 Payment to Vækstfonden concerning treasury shares ,997-37, ,997 Sale of treasury shares ,337 14, ,337 Distributed dividends , , ,647 Dividends, treasury shares ,116 15, ,116 Share-based payment 0 0 3,894 3, ,894 Changes in equity 0 1, , , ,138 Equity at 30 June ,087 5,286 1,567,892 1,580, ,580,338 DAMPSKIBSSELSKABET NORDEN A/S, 52, STRANDVEJEN, DK-2900 HELLERUP, DENMARK, 19/24