Norden has recorded its best quarter in 10 years on the back of strong bulker markets — but the owner-operator has adjusted its profit guidance for 2021. The Danish firm, which owns and operates bulkers and product tankers, has also announced it will repurchase up to $40m of its shares in a new buy-back scheme. Chief executive Jan Rindbo said Norden “capitalized on a favorable position in very strong dry-cargo market conditions” to achieve its best quarterly result since 2011. The firm recorded net profit of $65m for the third quarter, up from $26.5m in the same period a year ago.

“The market value of Norden’s dry-cargo vessel portfolio continues to rise and we are capturing this value through cover contracts and vessel sales,” Rindbo added in the firm’s financial report. Norden has tweaked its profit guidance for the full year now that it has more visibility for how the rest of 2021 will play out, Rindbo told TradeWinds. He said the company is “well on track to deliver Norden’s best annual result in 11 years”. The firm expects its adjusted result for 2021 to fall between $150m and $200m, a narrower range compared to its August estimate of between $140m and $220m. “When we guide on our results, that is excluding ship sales and therefore, when we do sell ships, then there is some operating income that will disappear from the adjusted result, but we will then be locking in some pretty big profits on sales gains,” Rindbo said.

Norden will recognize a $13m in gains from vessel sales during the third quarter and the same again in the final three months of the year. Freight rates for bulkers have plunged this quarter so far, but Norden is still expecting a “strong” end to the year for its dry operator division, which looks after its operated fleet of bulkers. Rindbo said Norden had already “neutralized” its dry-cargo exposure for the final quarter ahead of recent rate declines. Spot rates increased by 15% for supramax bulkers and by 28% for handysizes during the third quarter, Norden said. The firm said it expects the dry-cargo market to remain “at strong levels” moving into 2022.

Meanwhile, drawdowns on global oil inventories continued during the third quarter, but Norden’s product tankers came up against competition from crude carriers in the spot market. “Poor spot rates further exacerbated, with MR Atlantic spot rates decreasing significantly,” Norden said in its report. The firm said it is “sacrificing short-term operating earnings” by taking on more time-charter coverage for its tankers.

Norden has seen the market value of its owned and leased ships rise to $1.4bn during the third quarter, up from $1.3bn in the previous three-month period. The price of a five-year-old supramax increased by 17% during the third quarter, Norden said. The company has sold seven bulkers to capture these rising values. It has also taken on more time-charter coverage for its bulkers, which it said will benefit its 2022 results. Tanker values are going up too, even though freight rates are not. The price of a five-year-old MR tanker increased by 4% during the third quarter, according to the company.