Q2 2026 Dampskibsselskabet Norden AS Earnings Call

August 13, 2026

Operator: Welcome, everyone, to this webcast with a presentation of the Q2 2026 report from Norden that was published this morning. In the first part of the presentation, you will be in a listen-only mode, which will be followed by a Q&A session. During the Q&A session, if you have dialed in by phone, you will be able to ask questions verbally by pressing pound or hashtag followed by 5 on your phone's keypad. If you are watching this webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but the operator will read them aloud. With that, I will hand over to CEO Jan Rindbo and CFO Martin Badsted from Norden. Please go ahead.

Operator: Welcome, everyone, to this webcast with a presentation of the Q2 2026 report from Norden that was published this morning. In the first part of the presentation, you will be in a listen-only mode, which will be followed by a Q&A session. During the Q&A session, if you have dialed in by phone, you will be able to ask questions verbally by pressing pound or hashtag followed by five on your phone's keypad. If you are watching this webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but the operator will read them aloud. With that, I will hand over to CEO Jan Rindbo and CFO Martin Badsted from Norden. Please go ahead.

Speaker #1: Welcome everyone to this webcast with a presentation of the Q2 2026 report from Norden, which was published this morning. In the first part of the presentation, you'll be in listen-only mode, which will be followed by a Q&A session.

Speaker #1: During the Q&A session, if you have dialed in by phone, you'll be able to ask questions verbally by pressing the pound or hashtag key followed by 5 on your phone's keypad. If you're watching this webcast online through a browser, you can ask your written questions in the chat below.

Speaker #1: Those questions will not be published, but the operator will read them aloud. With that, I'll hand over to CEO Jan Rindbo and CFO Martin Badsted from Norden.

Speaker #1: Please go ahead.

Speaker #2: 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’s also one of our better quarters in terms of financial performance.

Jan Rindbo: Thank you very much. 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. 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 largest carriers. We operate a fleet now of just under actually 500 vessels. We transport around 130 million tons of these essential raw materials on an annual basis.

Speaker #2: So, we'll dive, obviously, into that a little bit later. I'd like to just start by setting the scene, just giving you a short introduction to Norden.

Speaker #2: 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 all these commodities underpin the modern living that we all know.

Speaker #2: Norden is one of the world's largest carriers. We operate a fleet now just under, actually, 500 vessels, and we transport around 130 million tons of these essential raw materials on an annual basis.

Speaker #2: This scale gives us extensive market insight, gives us strong access to our customers, and it gives us the flexibility to optimize our fleet across all these various vessel segments that Norden is in and across all the regions that we operate in.

Jan Rindbo: This scale gives us extensive market insight, gives us strong access to our customers, and it gives us the flexibility to optimize our fleet across all these various vessel segments that Norden are in and across all the regions that we operate in. Our model combines, on one hand, customer solutions with very disciplined exposure management and flexible capital deployment. That enables us to manage the shipping cycles, but also retaining strong cyclical upside. When you look at that approach, that has generated, over the last 5 years, a return on invested capital of 25%. That demonstrates our ability to create attractive returns through these changing markets. As we now move on with the slides, let me explain the business model behind our results, how that actually works. Norden is more than just an owner of vessels.

Jan Rindbo: This scale gives us extensive market insight, gives us strong access to our customers, and it gives us the flexibility to optimize our fleet across all these various vessel segments that Norden are in and across all the regions that we operate in. Our model combines, on one hand, customer solutions with very disciplined exposure management and flexible capital deployment. That enables us to manage the shipping cycles, but also retaining strong cyclical upside. When you look at that approach, that has generated, over the last five years, a return on invested capital of 25%. That demonstrates our ability to create attractive returns through these changing markets. As we now move on with the slides, let me explain the business model behind our results, how that actually works. Norden is more than just an owner of vessels.

Speaker #2: So our model combines, on one hand, customer solutions with very disciplined exposure management and flexible capital deployment. That enables us to manage the shipping cycles, but also to retain strong cyclical upside.

Speaker #2: And when you look at that approach, that has generated, over the last five years, a return on invested capital of 25%. That demonstrates our ability to create attractive returns through these changing markets.

Speaker #2: So as we now move on with the slides, let me explain how the business model behind our results actually works. So, Norden is more than just an owner of vessels.

Speaker #2: We combine three closely connected capabilities: commercial operations, exposure management, and asset allocation. This commercial platform connects all the essential cargo that we carry with the right vessel capacity.

Jan Rindbo: We combine three closely connected capabilities: commercial operations, exposure management, and asset allocation. This commercial platform connects all the essential cargo that we carry with the right vessel capacity and enables us to optimize voyages, trading patterns, and the fleet utilization. We manage this exposure through a combination of owned, leased, and short-term charter capacity. It allows us to adjust our fleet to markets and also to customer requirements as they change. We allocate our capital across segments, vessels, owned, leased, short-term charters, purchase options, in order to seek attractive risk-adjusted returns while we have the flexibility to recycle capital back into the business. Together, when you combine all this, these capabilities create an integrated and capital-efficient model that is built around the customer solutions that we deliver, the market insight that we have, and then this disciplined execution.

Speaker #2: And it enables us to optimize voyages, trading patterns, and fleet utilization. We manage this exposure through a combination of owned, leased, and short-term chartered capacity.

Speaker #2: And it allows us to adjust our fleet to markets and also to customer requirements as they change. So we allocate our capital across segments, vessels—owned, leased, short-term charters, purchase options—in order to seek attractive risk-adjusted returns, while we have the flexibility to recycle capital back into the business.

Speaker #2: And together, when you combine all this, these capabilities create an integrated and capital-efficient model that is built around the customer solutions that we deliver, the market insight that we have, and then this disciplined execution.

Speaker #2: This model becomes particularly valuable when trade flows are complex and customers place a premium on reliability. That's the kind of market backdrop we are in today.

Jan Rindbo: This model becomes particularly valuable when trade flows are complex and customers place a premium on reliability. That is the kind of market backdrop we are in today. I would like just on this slide to just highlight the market fundamentals that we see increasingly favoring this Norden model. The supply side outlook is positive. We are seeing that particularly in dry cargo where we have an aging global fleet and where the order book actually still remains modest. At the same time, we see the geopolitical disruptions and strained supply chains are making trade routes longer, less predictable, and operations are becoming even more complex. These conditions, they support vessel demand, but they also increase the importance on flexibility, scale, and execution capabilities.

Speaker #2: So I'd like to take a moment on this slide to highlight the market fundamentals that we see increasingly favoring the Norden model. The supply side outlook is positive.

Speaker #2: We are seeing that particularly in dry cargo, where we have an aging global fleet and where the order book actually still remains modest. And at the same time, we see the geopolitical disruptions and strain supply chains are making trade routes longer, less predictable, and operations are becoming even more complex.

Speaker #2: And these conditions, they support vessel demand, but they also increase the importance of flexibility, scale, and execution capabilities. And here we see that customers increasingly are preferring large, professional, and reliable operators that can secure capacity and manage their complex logistics across multiple regions.

Jan Rindbo: Here we see that customers increasingly are preferring large, professional, and reliable operators that can secure capacity and manage their complex logistics across multiple regions. This is where Norden stands out with our fleet of just under 500 vessels, global commercial network, and this customer-centric approach that we have. Therefore, we are actually really well-positioned to benefit from these structural trends, not just through our freight market exposure, but also by helping our customers managing these complex supply chains. With that introduction, I would like to hand you over to Martin to translate this into financial numbers here in the second quarter. Martin.

Speaker #2: And this is where Norden stands out, with our fleet of just under 500 vessels, a global commercial network, and the customer-centric approach that we have.

Speaker #2: And therefore, we are actually really well positioned to benefit from these structural trends, not just through our freight market exposure, but also by helping our customers manage these complex supply chains.

Speaker #2: So, with that introduction, I'd like to hand you over to Martin to sort of translate this into financial numbers here in the second quarter.

Speaker #2: So Martin?

Speaker #3: Thank you very much. So Norden had a good quarter in Q2. As you can see from the graph on the left-hand side here in the dark blue bar, we made a net profit of $101 million in the second quarter.

Martin Badsted: Thank you very much. Norden had a good quarter in Q2. As you can see from the graph on the left-hand side here in the dark blue bar, we made a net profit of $101 million in the second quarter. That means that our return on invested capital grew to 11% when measured over a 12-month basis. Asset values actually continued to increase, leaving our NAV at the end of the quarter at 466 kroner per share, which implies an increase of 23% since the beginning of the year. Finally, we continue to distribute cash to our shareholders, now distributing $34 million in line with what we also did after Q1. Those $34 million are composed of a dividend of 2 kroner per share and a share buyback of $25 million. Looking at the development in the two segments, there were improvements in both of them.

Speaker #3: That means our return on invested capital grew to 11%, when measured over a 12-month basis. Asset values actually continued to increase, leaving our NAV at the end of the quarter at 466 kroner per share, which implies an increase of 23% since the beginning of the year.

Speaker #3: And finally, we continued to distribute cash to our shareholders, now distributing $34 million, in line with what we also did after Q1. And those $34 million were composed of a dividend of 2 kroner per share and a share buyback of $25 million.

Speaker #3: Looking at the development in the two segments, there were improvements in both of them. As you see from the graph here, the tanker division made $81 million in the second quarter, which was up some $30 million compared to the year before.

Martin Badsted: As you see from the graph here, the tanker division made $81 million in the second quarter, which was up some $30 million compared to the year before. That was based on a very strong spot market, driven, of course, by geopolitical disruptions and uncertainty, and not least, good performance in the chartering teams. Dry cargo delivered an EBIT of $8 million, which of course is not enough, but it was a huge improvement over the -$45 million delivered in Q1. As we discussed in Q1, we invested in fleet repositioning, i.e., moving vessels from the Pacific into the Atlantic, despite the incurring costs in that respect, but in anticipation of better rates in the Atlantic going forward. That has panned out as expected and has resulted in benefits from the fleet position in Q2, which we expect to continue during the rest of the year.

Speaker #3: That was based on a very strong spot market, driven, of course, by geopolitical disruptions and uncertainty. And not least, good performance from the chartering teams.

Speaker #3: Dry Cargo delivered an EBIT of $8 million, which, of course, is not enough, but it was a huge improvement over the minus $45 million delivered in Q1.

Speaker #3: As we discussed in Q1, we invested in fleet repositioning; that is, moving vessels from the Pacific into the Atlantic despite the costs incurred, but in anticipation of better rates in the Atlantic going forward.

Speaker #3: That has panned out as expected and has resulted in benefits from the fleet position in Q2, which we expect to continue during the rest of the year.

Speaker #3: Another important factor when interpreting these numbers is that within dry cargo, we had a number of ships get stuck in the Persian Gulf, and that, in our estimation, added some $30 million of extra costs in the first half of the year. Of course, without these extraordinary costs, performance would have been even stronger.

Martin Badsted: Another important factor when interpreting these numbers is that within dry cargo, we had a number of ships getting stuck in the Persian Gulf, and that, in our estimation, added some $30 million of extra costs in the H1 of the year. Without these extraordinary costs, performance would have been even stronger. We continue to proactively manage our core fleet. The management team has been super active in the H1 of the year, doing 29 sale and purchase transactions. The overall intention with this is, of course, to take money off the table because the asset values are so high. It is actually also a movement of the exposure within our portfolio away from the commoditized and large vessels such as Capesize and Panamax and MRs, and moving the capital into the smaller segments where specialized capabilities and customer relations are more important.

Speaker #3: We continue to proactively manage our core fleet. The asset management team has been very active in the first half of the year, executing 29 sale and purchase transactions.

Speaker #3: The overall intention with this is, of course, to take money off the table because the asset values are so high. But it is actually also a movement of the exposure within our portfolio away from the commoditized and large vessels such as Capesize and Panamaxes and MRs, and moving the capital into the smaller segments where specialized capabilities and customer relations are more important.

Speaker #3: So we are investing in handy size and multipurpose vessels, and that actually means that even though we are taking sales gains off the table with our vessel sales, we are still investing in the fleet and maintaining a core fleet of around 80 units, and maintaining a large amount of purchase options, providing good upside going forward.

Martin Badsted: We are investing in Handysize and multipurpose vessels. That actually means that even though we are taking sales gains off the table with our vessel sales, we are still investing in the fleet and maintaining a core fleet of around 80 units and maintaining a large amount of purchase options, providing good upside going forward. With the fleet changes and the improvements in asset values, we saw our NAV, as I said, improve to 466 kroner per share or an increase of 23% since the beginning of the year. As you can see in the pie chart, around two-thirds of the NAV is concentrated in dry cargo, 19% in tankers, and the rest in other net assets with 14%, covering, of course, balance sheet debt, cash, and other investments.

Speaker #3: And with the fleet changes and the improvements in asset values, we saw our net asset value, as I said, improve to 466 kroner per share, an increase of 23% since the beginning of the year.

Speaker #3: As you can see in the pie chart, around two-thirds of the NAV is concentrated in dry cargo, 19% in tankers, and the rest in other net assets, with 14% covering, of course, balance sheet debt, cash, and other investments.

Speaker #3: And on the right-hand side, we provide some sensitivity analysis indicating that if the asset values and forward rates increase, for instance, by or change by 20%, that will either, if it’s a decline, lead to an NAV of 333 kroner per share, or if it’s an improvement, to an NAV of 625 kroner per share.

Martin Badsted: On the right-hand side, we provide some sensitivity analysis indicating that if the asset values and forward rates increase, for instance, by a change by 20%, that will either, if it's a decline, lead to an NAV of 333 kroner per share, or if it's an improvement to an NAV of 625 million kroner per share. Turning to the market developments, it was overall strong markets in both dry and tankers. You can see here from the two top graphs that spot rates increased in dry by some 70% year-on-year, and in MR about 63% year-on-year. That improvement was, of course, also visible in asset values, which increased both by 27% to 28% across the different segments.

Speaker #3: Turning to the market developments, it was overall strong markets in both dry and tankers. You can see here from the two top graphs that spot rates increased in dry by some 70% year on year, and in MR by about 63% year on year.

Speaker #3: That improvement was, of course, also visible in asset values, which increased by 27 to 28% across the different segments. The supramax or the dry cargo market strength was driven by an actually strong demand picture.

Martin Badsted: The Supramax or the dry cargo market strength was driven by an actually strong demand picture, especially in thermal coal, iron ore, and minor bulks, whereas the bauxite imports were a little bit weak despite having been a growth driver in the most recent quarters. The outlook for dry, in our view, is actually quite firm. We expect 2027 that is probably similar, slightly lower than 2026, which has been a good year so far, driven again by strong demand, but certainly also by a modest supply outlook. The order book is increasing as people are chasing these returns in the market, but so far we don't think it's alarming and there is still an aging of the fleet which will provide decent scrapping potential to offset the higher fleet growth going forward.

Speaker #3: Especially in thermal coal, iron ore, and minor bulks, whereas the bulk-side imports were a little bit weak despite having been a growth driver in the most recent quarters.

Speaker #3: The outlook for dry, in our view, is actually quite firm. We expect '27 to be probably similar or slightly lower than '26, which has been a good year so far.

Speaker #3: Driven again by strong demand, but certainly also by a modest supply outlook. The order book is increasing as people are chasing these returns in the market, but so far we don't think it's alarming, and there is still an aging of the fleet, which will provide decent scrapping potential to offset the higher fleet growth going forward.

Speaker #3: On the tanker side, what is happening is, of course, disruptions in trade flows that are keeping spot rates high, even though fundamentals are looking weaker by the week here.

Martin Badsted: On the tanker side, what is happening is, of course, disruptions in trade flows that are keeping spot rates high, even though fundamentals are looking weaker by the week here. You have actually seen ton-mile growth being quite negative, and you have seen order books growing quite a lot, especially in crude. That, of course, starts to imply that maybe there is some more uncertainty on the level of tanker rates going forward. Also in tankers, we see a very strong order book development. Even though there is also aging of the fleet there, it seems like the order book acceleration is somewhat running ahead of that aging so that the scrapping potential is not enough perhaps to support the market fully.

Speaker #3: So, you have actually seen ton-mile growth being quite negative, and you have seen order books growing quite a lot, especially in crude. And that, of course, starts to imply that maybe there's some more uncertainty regarding the level of tanker rates going forward.

Speaker #3: Also, in tankers, we see a very strong order book development. And even though there is also aging of the fleet there, it seems like the order book acceleration is somewhat running ahead of that aging.

Speaker #3: So that the scrubbing potential is not enough, perhaps, to support the market fully. That then means that if we look at our guidance, we actually increased our guidance back in the early parts of July, based on a strong performance in Q2.

Martin Badsted: That then means that if we look at our guidance, we actually increased our guidance back in the early parts of July based on a strong performance in Q2, and we issued there a guidance of $120 to $190 million. Now, after also a good performance over the summer, we have decided to increase the bottom to $140 million, narrowing the interval to $140 to $190 million of net profits for the full year. We are, in terms of open capacity, mainly exposed to dry cargo with some 4,500 open days, and less in the tankers, where we have around 1,200 open days. Overall, for the next coming years, we are fairly highly covered in both the large dry cargo vessels types and within MR, with a cover of 80% over the coming couple of years.

Speaker #3: And we issued there a guidance of $120 to $190 million. And now, after also a good performance over the summer, we have decided to increase the bottom to $140 million, narrowing the interval to $140 to $190 million of net profits for the full year.

Speaker #3: We are, in terms of open capacity, mainly exposed to dry cargo. There are some 4,500 open days, and less in tankers where we have around 1,200 open days.

Speaker #3: But overall, for the next coming years, we are fairly highly covered in both the large dry cargo vessel types and within MR, with a cover of 80% over the coming couple of years.

Speaker #3: With that, I will hand you back to Jan for final words.

Martin Badsted: With that, I will hand you back to Jan and final words.

Speaker #1: Thank you very much. So, in terms of the strategy, our strategic direction is clear. We want to reduce earnings volatility while maintaining the high returns that have characterized Norden.

Jan Rindbo: Thank you very much. In terms of the strategy, our strategic direction is clear. We want to reduce the earnings volatility while maintaining the high returns that have characterized Norden. Firstly, we are deepening our customer relationship. We are building more recurring cargo flows that will support a broader and more predictable earnings base going forward. Secondly, we are expanding into more specialized areas. This includes multipurpose vessels, project cargo, minor bulks, and maritime logistics. This is where expertise and operational capabilities and that complexity that we are solving for our customers, that creates a greater differentiation to what we can offer our customers compared to the rest of the industry. At the same time, we will preserve the agility that is fundamental to Norden. We will continue to capture attractive market opportunities, but it is within clear risk/reward guardrails.

Speaker #1: So, firstly, we are deepening our customer relationships. We are building more recurring cargo flows, which will support a broader and more predictable earnings base going forward.

Speaker #1: And secondly, we are expanding into more specialized areas. This includes multipurpose vessels, project cargo, minor bulk, and maritime logistics. This is where expertise and operational capabilities—and that complexity that we are solving for our customers—creates a greater differentiation in what we can offer our customers compared to the rest of the industry.

Speaker #1: At the same time, we will preserve the agility that is fundamental to Norden. We will continue to capture attractive market opportunities, but it will be within clear risk-reward guardrails.

Speaker #1: So the ambition here is not to remove cyclicality, but to combine a more resilient earnings base with disciplined exposure management to the cyclical upside that we see.

Jan Rindbo: So the ambition here is not to remove cyclicality, but to combine a more resilient earnings base with disciplined exposure management to the cyclical upside that we see. If you take that together, the strategy reinforces what we believe is a differentiated and actually attractive investment proposition. So when you look at the equity story for Norden, we are combining, on one hand, strong fundamentals which Norden obviously offers exposure to. We have constrained vessel supply, increasing complex trade flows, and that favors large, reliable operators such as Norden. Our flexible and capital-efficient model allows us to combine both short-term capacity, leased vessels, owned assets, and all the embedded purchase options that we have, and allows us to adjust to markets as they change. Importantly, this model has actually delivered.

Speaker #1: And if you take that together, the strategy reinforces what we believe is a differentiated and actually attractive investment proposition. So, when you look at the equity story for Norden, we are combining, on one hand, strong fundamentals, which Norden obviously offers exposure to.

Speaker #1: We have constrained vessel supply and increasingly complex trade flows, and that favors large, reliable operators such as Norden. Our flexible and capital-efficient model allows us to combine both short-term capacity—leased vessels, owned assets—and all the embedded purchase options that we have, enabling us to adjust to markets as they change.

Speaker #1: And, importantly, this model has actually delivered. When you look at our average return on invested capital over the past five years, we have generated a 25% annual average over that period.

Jan Rindbo: When you look at our average return on invested capital over the past five years, we have generated 25% annual average over that period. We also see significant underlying value. Martin highlighted our NAV at 466 kroner per share, and that is somewhat higher than the current share price we see for Norden. When you look at the returns that we have given, we have a strong record of that. We have returned $1.2 billion to our shareholders over the last five years. So to summarize that, Norden represents a differentiated shipping investment. It is asset-light, it is commercially agile, and it is focusing on generating attractive returns through the cycle. With those words, that concludes the presentation, and we can now move to the Q&A session.

Speaker #1: We also see significant underlying value, with margin highlighting our NAV at 466 kroner per share. And that is somewhat higher than the current share price we see for Norden.

Speaker #1: And when you look at the returns that we have given, we have a strong record of that. We have returned $1.2 billion to our shareholders over the last five years.

Speaker #1: So, to summarize that, Norden represents a differentiated shipping investment. It's asset-light, commercially agile, and focused on generating attractive returns through the cycle.

Speaker #1: So, with those words, that concludes the presentation, and we can now move to the Q&A session.

Speaker #2: Thank you, Jan and Martin. And yes, we are now ready for the Q&A session. And just to repeat from earlier, you can get in line to ask questions by pressing your pound key or hashtag, followed by five.

Operator: Thank you, Jan and Martin. Yes, we are now ready for the Q&A session. Just to repeat from earlier, you can get in line to ask questions by pushing your pound key or hashtag followed by 5 on your phone's touch pad, and that is if you dial in by phone. Should you wish to withdraw from the line, you can push the pound key or hashtag followed by 6. If you are watching this webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but the operator will read them aloud to management. We will first have a questions on your guidance here, and the question goes here.

Speaker #2: On your phone's touchpad and then that is if you dial in by phone. And should you wish to withdraw from the line, you can push the pound key or hashtag followed by six.

Speaker #2: And if you're watching this webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but they are read aloud to management.

Speaker #2: And we will first have a questions on your guidance here. And the question goes here. Is it to be on the safe side or somewhat conservative that you're only guiding for annual earnings of 140 to 190 million US dollars when Q2 alone generated around 100 million US dollars?

Operator: Is it to be on the safe side or somewhat conservative that you are only guiding for annual earnings of $140 to $190 million when Q2 alone generated around $100 million? Could you elaborate a bit more on what is driving this and, as it says here, in my view, relative low guidance?

Speaker #2: Could you elaborate a bit more on what is driving this and, as it says here, in my view, relatively low guidance?

Speaker #1: I can put a few words to that. I think, obviously, Q2 seen in isolation was a very, very strong quarter. I think, as usual in shipping, you have to see our financial performance over several quarters, and here, if you combine Q1 and Q2, you obviously get a slightly different picture than just looking at the second quarter.

Jan Rindbo: I can put a few words to that. I think obviously Q2, seen in isolation, was a very strong quarter. I think as usual in shipping, you have to see our financial performance over several quarters. Here, if you combine Q1 and Q2, you obviously get a slightly different picture than just looking at the second quarter. I think what is important to understand in our numbers when you look at the H1 figures is that we have already delivered $61 million of sales profits in H1, therefore we are guiding towards $79 million for sales profits for the total year. That means we have much less contribution from sales gains in H2. That is clearly one important driver. I think the other one I would highlight is that the tanker market was exceptionally strong in the second quarter.

Speaker #1: I think what is important to understand in our numbers, when you look at the first half figures, is that we have already delivered $61 million of sales profits in the first half.

Speaker #1: And therefore, we are guiding towards 79 for sales profits for the total year. That means we have much less contribution from sale gains in the second half.

Speaker #1: So, that is clearly one important driver. I think the other one I would highlight is that the tanker market was exceptionally strong in the second quarter.

Speaker #1: And that was obviously driven by the panic in the market right after the Houthi missiles closed. And some of that panic has subsided, and that means also rates are, if not normalizing, they're still high, but they are not as high as we saw in the second quarter.

Jan Rindbo: That was obviously driven by the panic in the market right after the Houthi was closed. Some of that panic has subsided, that means also rates are, if not normalizing, they are still high, but they are not as high as we saw in the second quarter. I think the tanker tailwind will be less pronounced in H2. That is certainly embedded into our expectations. Having said that, we do expect the turnaround that we have seen in dry. We do expect that to continue into the coming quarters. We have had a very positive development in the dry cargo business here through the second quarter where, as Martin highlighted, we are back in black, first of all, but it actually also includes some fairly significant one-off costs that has hit the dry cargo bottom line in the second quarter.

Speaker #1: So, I think the tanker tailwind will be less pronounced in the second half. That is certainly embedded into our expectations. Having said that, we do expect the turnaround that we've seen in dry.

Speaker #1: We do expect that to continue into the coming quarters. We've had a very positive development in the dry cargo business here through the second quarter, where as Martin highlighted, we are back in the black.

Speaker #1: First of all, but it actually also includes some fairly significant one-off costs that have hit the Dry Cargo bottom line in the second quarter.

Speaker #1: So, the underlying performance is actually even better than the numbers suggest. And we expect this momentum to continue into the second half of the year.

Jan Rindbo: The underlying performance is actually even better than the numbers suggest. We expect this continued momentum continuing into H2 of the year. Then maybe just a final comment. We did lift our guidance back in July. We are now lifting the bottom end of the guidance again. I think also the guidance here supports that positive development that we are seeing in the business.

Speaker #1: And then maybe just a final comment. We did lift our guidance back in July, and we are now lifting the bottom end of the guidance again.

Speaker #1: So, I think also the guidance here supports that positive development that we are seeing in the business.

Speaker #2: Thank you. And then, another follow-up on this: can you explain the graph under your guidance? It says 450 vessels, but I don't know, and have notably fewer vessels.

Operator: Thank you. Then another follow-up on this. Can you explain the graph under your guidance? It says 450 vessels, but Norden do not have notably less vessels?

Speaker #3: No, I think actually that recently we have seen tremendous growth in our activity levels, which actually means that we have employed around 470 vessels on average in the most recent quarter.

Martin Badsted: No, I think actually that recently we have seen tremendous growth in our activity levels, which actually means that we have employed around 470 vessels on average in the most recent quarter. So activity levels are quite high. But you can see here, of course, in terms of exposure, most of this is covered in Q3 also because we are sort of almost in the middle of Q3. Otherwise, it does indicate how much open capacity we have in the two segments, dry cargo and tankers, for both the remainder of the year and for the coming years.

Speaker #3: So, activity levels are quite high. But you can see here, of course, in terms of exposure, most of this is covered in Q3, also because we are almost in the middle of Q3.

Speaker #3: But otherwise, it does indicate how much open capacity we have in the two segments, Dry Cargo and Tankers, for both the remainder of the year and for the coming years.

Speaker #2: And then there's a question related to the low water situation in some of the rivers in Europe, and the price increases on the Panama Canal.

Operator: Then there is a question related to sort of the low water situation in some of the rivers in Europe and the price increases on the Panama Canal. Can the price increase for using it be passed on to the customers 100%? Are you seeing, like with Maersk, that it actually lifts your margins? What about the rivers in Europe? Can you say a few words about the situation here?

Speaker #2: Can the price increase for using it be passed on to the customers 100%? Are you seeing, like DSV and Maersk, that it actually lifts your margins?

Speaker #2: And what about the rivers in Europe? Can you say a few words about the situation here?

Speaker #1: Yeah, I think, I mean, it's all part of this El Niño effect that we do see impacting our business. And the Panama Canal, what we're seeing here is a reduced number of transits because of declining water levels.

Jan Rindbo: Yeah, I think it is all part of this El Niño effect that we do see impacting our business. The Panama Canal, what we are seeing here is a reduced number of transits because of declining water levels, and we actually expect them to continue to decline in the coming months. We see more congestion on both sides of the canal, so more waiting time. All this builds into the fact that the world needs more ships to move the same volume of cargo because if you take one of our core trading routes, grains from the US Gulf to Asia, typically a lot of that traffic would go through the Panama Canal. There is one alternative, that is to go through the Red Sea. That is not so popular now, and the Suez Canal.

Speaker #1: And we actually expect them to continue to decline. In the coming months, we see more congestion on both sides of the canal, so more waiting time. All this builds into the fact that the world needs more ships to move the same volume of cargo, because if you take one of our core trading routes—grains from the US Gulf to Asia—typically, a lot of that traffic would go through the Panama Canal.

Speaker #1: There's one alternative, which is to go through the Red Sea—that is not so popular now—and the Suez Canal. And that means, again, it's a good example of ships going on longer routes, carrying the same volume of cargo.

Jan Rindbo: That means, again, it is a good example of ships going on longer routes carrying the same volume of cargo. So yes, we absolutely see this supportive of both Norden and our markets. It is just one of the sort of bottlenecks that are growing in the supply chains that we are an important part of. So yes, it has an impact.

Speaker #1: So yes, we absolutely see this as supportive of both Norden and our markets. And it's just one of the bottlenecks that are growing in the supply chains, of which we are an important part.

Speaker #1: So yes, it has an impact.

Speaker #2: Thank you. And then there's a question related to your net asset value slide—let's go to the slides. It says here net asset value is DKK 466 per share, and you have been buying back at an average of DKK 313.

Operator: Thank you. Then there is a question related to your net asset value. Go to the slides. What does it says here? Net asset value is 466 per share, and you have been buying back at an average of DKK 313. Why is the new buyback only at $25 million if you believe the share trades well below value?

Speaker #2: Why is the new buyback only at $25 if you believe the share trades well below value?

Speaker #1: Yeah, that's actually a good question.

Martin Badsted: Well, that is actually a good question. We firmly believe that it is a good idea to buy back shares with the current share price compared to the NAV. But we buy back our shares under something called safe harbor regulation to avoid conflicts in relation to inside information. Part of those regulation is that there are limits to how much you can actually buy back on any given day. The $25 million is sort of the maximum amount that we can actually buy back over the course of the period here. So there is actually not so much more we can do on this front.

Speaker #3: We firmly believe that it's a good idea to buy back shares at the current share price compared to the NAV. But we buy back our shares under something called the safe harbor regulation to avoid conflicts related to inside information.

Speaker #3: And part of those regulations is that there are limits to how much you can actually buy back on any given day. And the $25 million is sort of the maximum amount that we can actually buy back over the course of the period here.

Speaker #3: So, there's actually not so much more we can do on this front.

Speaker #1: Maybe if I can just add one thing on the NAV, and I think what is interesting is that actually, if we turn to this, we had a slide with the pie chart here.

Jan Rindbo: Maybe if I can just add one thing on the NAV, I think what is interesting is that actually, if we turn to this, we had a slide with the pie chart here. What is interesting here, I think, is that we have a significant part of our NAV that is cash, so therefore not actually exposed or at risk in terms of the markets. We have 19% of our NAV here tied to tankers. But we have very large coverage of our tanker capacity for the next three years. So here, actually, we are well covered. Then within the dry cargo NAV, as Martin mentioned earlier, we are taking cover, locking in profits on the more volatile elements of that on the larger vessels.

Speaker #1: I mean, what is interesting here, I think, is that we have a significant part of our NAV that is cash, so therefore not actually exposed or at risk in terms of the markets.

Speaker #1: We have 19% of our NAV here tied to tankers. But we have very large coverage of our tanker capacity for the next three years.

Speaker #1: So here, actually, we are well covered. And then, within the dry cargo NAV, as Martin mentioned earlier, we are taking cover—locking in profits on the more volatile elements of that, on the larger vessels.

Speaker #1: And that means that increasingly, the NAV exposure is more towards the more specialized vessels, where actually we think that it's not just a question of having market exposure.

Jan Rindbo: That means that increasingly, the NAV exposure is more towards the more specialized vessels, where actually we think that it is not just a question of having market exposure. We like that is good. But it is also a question of having those capabilities. Those ships are typically servicing customers with more complex requirements, and that is typically where the ability to earn higher margins is also better than it is on the more larger commoditized parts of the shipping segments.

Speaker #1: We like that. That's good. But it's also a question of having those capabilities. Those ships are typically servicing customers with more complex requirements, and that's typically where the ability to earn higher margins is also better than it is on the larger, more commoditized parts of the shipping segments.

Speaker #2: Thank you. And then a question related to the Strait of Hormuz. I assume all of Norden's operated vessels are now out of the Strait of Hormuz and no longer stuck there.

Operator: Thank you. Then a question related to the Strait of Hormuz. I assume all D/S Norden's operated vessels are now out of the Strait of Hormuz and no longer stuck here. How will you handle voyages there going forward? Are you avoiding the Strait entirely, and what are the consequences of that?

Speaker #2: How will you handle voyages there going forward? Are you avoiding the strait entirely, and what are the consequences of that?

Speaker #1: Yeah. So, first of all, the seven ships that we had in the Persian Gulf when the hostilities broke out are now out. So, we managed to take advantage of one of the relatively short peace periods there to get the ships out.

Jan Rindbo: Yeah. First of all, the seven ships that we had in the Persian Gulf when the hostilities broke out are now out. We managed to take advantage of one of the relatively short peace periods there to get the ships out. We no longer have any ships that are stuck in there. That's obviously positive, and we are happy to get the ships out safely and the crew. We are not currently operating into the area for the same reason. Safety is not good enough for us to operate in the region. We are awaiting what a peace deal could look like, and then obviously waiting to see if it's sufficiently solid to regain confidence that it is safe to sail into the region. Right now we are not operating in the area, and that means that we are seeing an increased traffic into nearby countries.

Speaker #1: So we no longer have any ships that are stuck in there, so that's obviously positive. And we're happy to get the ships out safely, and the crew.

Speaker #1: We are not currently operating in the area for the same reason. Its safety is not good enough for us to operate in the region.

Speaker #1: So, we are awaiting what a peace deal could look like, and then obviously waiting to see if it's sufficiently solid to regain confidence that it is safe to sail into the region.

Speaker #1: So, right now we're not operating in the area, and that means we are seeing increased traffic into nearby countries. And there is definitely more overland transportation.

Jan Rindbo: There is definitely more overland transportation. Again, it's a good example of these much more complex supply chain challenges that our customers are facing. Again, it typically leads to longer routes. I think on the tanker side, one thing to watch there, of course, is that the longer a lot of the world's oil production is basically shut in, then there is less oil in the market. There's also less oil to transport. It is one of the headwinds, perhaps, that could be seen in tankers here in the H2 if these hostilities continue.

Speaker #1: Again, it's a good example of these much more complex supply chain challenges that our customers are facing. And again, it typically leads to longer routes. I think on the tanker side, one thing to watch there, of course, is that the longer a lot of the world's oil production is basically shut in.

Speaker #1: Then there is less oil in the market. There's also less oil to transport. So it is one of the sort of headwinds, perhaps, that could be seen in tankers here in the second half if these hostilities continue.

Speaker #2: And a question related to this: you are also entering the second half with about 196 open tanker days and 223 open dry cargo days. How much of the guidance depends on the Strait of Hormuz staying open?

Operator: A question related to this. You are also entering the H2 with about 196 open tanker days and 223 open dry cargo days. How much of the guidance depends on the Strait of Hormuz staying open, and what happens to the range if it closes again?

Speaker #2: And what happens to the range if it closes again?

Jan Rindbo: That is a very difficult question to answer because what is open and what is closed? I think actually in dry cargo, we probably see that the Strait of Hormuz will not have a huge impact because there are both vessels getting trapped and cargoes not moving. I do not think that will have a big impact. But on the tanker side, we have seen that this open up, closing, open and closing actually has a tendency to continue to create noise and disruption in trade flows. That could have a positive effect on tanker forward rates or spot rates, and therefore add some extra dollars to the earnings going forward. But it is incredibly hard to project.

Martin Badsted: That is a very difficult question to answer because what is open and what is closed? I think actually in dry cargo, we probably see that the Strait of Hormuz will not have a huge impact because there are both vessels getting trapped and cargoes not moving. I do not think that will have a big impact. But on the tanker side, we have seen that this open up, closing, open and closing actually has a tendency to continue to create noise and disruption in trade flows. That could have a positive effect on tanker forward rates or spot rates, and therefore add some extra dollars to the earnings going forward. But it is incredibly hard to project.

Speaker #3: That is a very, very difficult question to answer because what is open and what is closed? I think actually in dry cargo we probably see that the Strait of Hormuz will not have a huge impact, because there are both vessels getting trapped and cargoes not moving.

Speaker #3: So I don't think that will have a big impact. But on the tanker side, we have seen that this opening, closing, opening and closing actually has a tendency to continue to create noise and disruption in trade flows.

Speaker #3: So that could have a positive effect on tanker forward rates or spot rates, and therefore add some extra dollars to the earnings going forward.

Speaker #3: But it's incredibly hard to project.

Speaker #2: Thank you. And a question related to dry cargo: Is the continued improvement we began to see in the previous quarter still being confirmed? And can you generally put some words on your expectation and forecast for dry cargo over the coming years?

Operator: Thank you. A question related to dry cargo. Is the continued improvement we began to see in the previous quarter still being confirmed? Can you generally put some words on your expectation and forecast for dry cargo over the coming years? Are we facing a really good period ahead, as is being suggested in several places in the market and with other companies?

Speaker #2: Are we facing a really good period ahead, as is being suggested in several places in the market and with other companies?

Speaker #3: Yeah. Yeah. So if I can touch a little bit upon the market in dry cargo, we actually think that the strong market, to some extent, will continue.

Jan Rindbo: Yeah. If I can touch a little bit upon actually the market in dry cargo. We do actually think that the strong market to some extent will continue. So we expect rates similar to 2026, but maybe slightly lower. Demand actually continues to develop quite positively, and we see perhaps a little movement away from the big commodities like iron ore and bauxite over to the more minor bulks that will be good for the Handysize and multipurpose vessels. That continues to develop quite well. Then, as I also mentioned during the update, the order book in dry is growing, but it is actually not accelerating to the extent that it is something to be super worried about.

Martin Badsted: Yeah. If I can touch a little bit upon actually the market in dry cargo. We do actually think that the strong market to some extent will continue. So we expect rates similar to 2026, but maybe slightly lower. Demand actually continues to develop quite positively, and we see perhaps a little movement away from the big commodities like iron ore and bauxite over to the more minor bulks that will be good for the Handysize and multipurpose vessels. That continues to develop quite well. Then, as I also mentioned during the update, the order book in dry is growing, but it is actually not accelerating to the extent that it is something to be super worried about.

Speaker #3: So we expect rates similar to 2026, but maybe slightly lower. So demand actually continues to develop quite positively, and we see perhaps a little movement away from the big commodities like iron ore and bauxite.

Speaker #3: Over to the more minor box—that will be good for the handy size and multipurpose vessels. So that continues to develop quite well. And then, as I also mentioned during the update, the order book in dry is growing, but it's actually not accelerating to the extent that it's something to be super worried about.

Jan Rindbo: As I said, there are also a lot of old ships, and what typically happens is that when these new buildings arrive in the market, depressing rates, people will scrap the old ships, and then actually there is room for rates to improve again. So I think it is fair to say we have a constructive view on the future in dry cargo. Based on this, we have also said in our commenting on the guidance that in dry, we do expect gradual improvement going forward. So one example is this vessel repositioning that we talked about, where we moved vessels from the Pacific into the Atlantic in expectation of higher rates. That has impacted positively in Q2, and we expect it to continue to impact positively for the rest of the year.

Martin Badsted: As I said, there are also a lot of old ships, and what typically happens is that when these new buildings arrive in the market, depressing rates, people will scrap the old ships, and then actually there is room for rates to improve again. So I think it is fair to say we have a constructive view on the future in dry cargo. Based on this, we have also said in our commenting on the guidance that in dry, we do expect gradual improvement going forward. So one example is this vessel repositioning that we talked about, where we moved vessels from the Pacific into the Atlantic in expectation of higher rates. That has impacted positively in Q2, and we expect it to continue to impact positively for the rest of the year.

Speaker #3: As I said, there are also a lot of old ships. And what typically happens is that when these new buildings arrive in the market, depressing rates, people will scrap the old ships, and then actually there's room for rates to improve again.

Speaker #3: So I think it's fair to say we have a constructive view on the future in dry cargo. And based on this, we have also said in our comments on the guidance that in dry, we do expect gradual improvement going forward.

Speaker #3: So, one example is this vessel repositioning that we talked about, where we moved vessels from the Pacific into the Atlantic in expectation of higher rates.

Speaker #3: And that has impacted positively in Q2, and we expect it to continue to impact positively for the rest of the year.

Speaker #2: Thank you. And then, a question related to China: can you give a specific update on how voyages and business related to China are developing?

Operator: Thank you. Then a question related to China. Can you give a specific update on how voyages and business related to China are developing? Is activity high, low, rising, falling? What do you expect from the market over the next year or so?

Speaker #2: Is activity high or low? Is it rising or falling? What do you expect from the market over the next year or so?

Speaker #1: I can say a few words just on—I mean, China. We continue to see relatively weak, sort of inland or domestic demand in the Chinese economy.

Jan Rindbo: I can say a few words just on. I mean, China, we continue to see relatively weak inland or domestic demand in the Chinese economy. Nevertheless, China continues to import vast volumes of raw materials. We see that coming out in terms of increased exports. I think steel production is a great example. We have seen a significant decline in property, building, construction in China. You would normally expect that would impact steel production very negatively, but actually steel production has been relatively resilient. That has been backed by increased manufacturing and then obviously also steel exports, especially here in Q2, we have seen a significant increase again in Chinese steel exports, predominant to the rest of Asia. Iron ore is another example.

Speaker #1: But nevertheless, China continues to import vast volumes of raw materials. And we see that coming out in terms of increased exports. I think steel production is a great example.

Speaker #1: We've seen a significant decline in property building construction in China, and you would normally expect that would impact steel production very negatively. But actually, steel production has been relatively resilient. That has been backed by increased manufacturing and then obviously also steel exports. Especially here in the second quarter, we've seen a significant increase again in Chinese steel exports, predominantly to the rest of Asia.

Speaker #1: So, iron ore is another example—obviously, a commodity used for steel production. Despite the fact that steel production in China is pretty stable, not really growing, we have seen increased iron ore imports.

Jan Rindbo: Obviously, a commodity used for steel production, that despite that the steel production in China is pretty stable, not really growing, we have seen increased iron ore imports. We have also seen a little bit of inventory building both on iron ore and aluminum, which is related to bauxite imports, that have also been very strong in China. China has actually not been importing that much coal. When coal prices move up, China tends to step out and with the Houthi hostilities, we have seen other Asian countries, Korea, Japan, and Taiwan as examples, stepping in and then buying coal. I would say that it is a bit of a mixed picture on China.

Speaker #1: We've also seen a little bit of inventory building, both on iron ore and aluminum, which is related to bauxite imports. But they've also been very strong in China.

Speaker #1: China has actually not been importing that much coal. When coal prices move up, China tends to step out. And with the Hormuz hostilities, we've seen other Asian countries—Korea, Japan, and Taiwan, as examples—stepping in and buying coal.

Speaker #1: But I would say that it's a bit of a mixed picture on China. I think, overall, it's fair to say that with the weakness we've seen in the Chinese domestic economy now for some years, and the weakness also in steel demand, I think most shipping analysts would have expected more headwinds on Chinese commodity imports.

Jan Rindbo: I think overall, I think it is fair to say that with the weakness we have seen in the Chinese domestic economy now for some years, the weakness also in steel demand, I think most shipping analysts would have expected more headwinds on Chinese commodity imports and that we have not seen, but there is still strong import. Now actually importing a lot of soybeans, also from both US and South America. China is still going despite the sort of relatively weakness we see in the economy there.

Speaker #1: And that we have not seen. There's still strong import, and now actually importing a lot of soybeans also from both the US and South America.

Speaker #1: So China is still going, despite the sort of relative weakness we see in the economy there.

Speaker #2: Thank you. And a question on OPEX. How much OPEX rise is being experienced over the year, if any?

Operator: Thank you. A question on OpEx. How much OpEx rise are being experienced over the year, if any?

Speaker #3: In terms of OPEX on own vessels, I believe there is still some inflation—I'd say around 3% to 4%. So, nothing out of the ordinary.

Martin Badsted: In terms of OpEx on own vessels, I believe there is still some inflation, I would say around 3% to 4%. So nothing out of the ordinary.

Speaker #2: Thank you. And then a question on your vessels—number of vessels. You have added 20 vessels to the core fleet this year while selling 9.

Operator: Thank you. Then a question on your vessels, number of vessels. You have added 20 vessels to the core fleet this year while selling 9. This is a net expansion into a market where you also say values are at the top. Why is buying at this level consistent with a company that built its reputation on selling into strength?

Speaker #2: This is a net expansion into a market where you also assess values are at the top. Why is buying at this level consistent with a company that built its reputation on selling into strength?

Speaker #1: Well, I think that this is a good question. We are clearly realizing a lot of profits on asset sales. This includes both ships that we own and ships where we have purchase options.

Jan Rindbo: Well, I think that is a good question. So we are clearly realizing a lot of profits on asset sales. This is both ships that we own and where we have purchase options that we can exercise and then sell the vessels. Where we are selling is more in these, what we consider more commoditized and more closer to sort of peak cycle levels. So MR tankers is one example. Capesize ships could be another one. This is where we have been selling capacity. So that is more market driven. Fundamentally, we still actually believe in a good outlook for dry cargo, as we have explained. So it is not that we necessarily want to move out of that dry cargo exposure just yet, but we are moving it into the segments where we, in addition to the market exposure, also have what we call this base margin.

Speaker #1: That we can exercise and then sell the vessels. Where we are selling is more in these, what we consider more commoditized and more closer to sort of peak cycle levels.

Speaker #1: So MR tankers are one example. Capesize ships could be another one. And this is sort of where we have been selling capacity, so that is more market-driven.

Speaker #1: But eventually, we still actually believe in a good outlook for dry cargo, as we have explained. So it's not that we necessarily want to move out of that dry cargo exposure just yet.

Speaker #1: But we are moving it into the segments where we, in addition to the market exposure, also have what we call this base margin—the ability to generate additional margins on top of just the market development.

Jan Rindbo: The ability to generate additional margins on top of just the market development. That typically is on the smaller vessels where we carry more complex cargoes. That is why you are seeing this movement from the larger vessels and then into the smaller vessels. But we retain a lot of upside. We have still a lot of purchase options, also still on Capesize and MR. It should not be seen as a big move to move out of those segments in terms of the market exposure. But we think it is prudent to take profits along the way. We have seen strong increases just under 30% year on year asset price increases on Capesize and on MR tankers. We like to pocket some of that.

Speaker #1: And that typically is on the smaller vessels, where we carry more complex cargos. And that's why you're seeing this movement from the larger vessels and then into the smaller vessels.

Speaker #1: But we retain a lot of upside. We still have a lot of purchase options, also still on Capesize and MR. So it should not be seen as a big move to move out of those segments in terms of market exposure.

Speaker #1: But we think it's prudent to take profits along the way. We've seen strong increases—just under 30% year-on-year asset price increases on Capesize.

Speaker #1: And on MR tankers, we like to pocket some of that. And I think historically, when you look over the last five years, one of the reasons why we have this industry-high return on invested capital is the fact that we are not just buying and holding tonnage.

Jan Rindbo: I think historically, when you look over the last five years, one of the reasons why we have this industry high return on invested capital is the fact that we are not just buy and holding tonnage. We are actively selling and taking these opportunities to capture the profits along the way. That is what we are doing now on some of the MRs and Capesize ships. But we certainly do not think that the dry cargo market is entering into a weak period. But we are a little bit more concerned on Capesize, much higher order book relative to the smaller vessels. So we are just moving within the segment into ship types we believe have better upside from current levels.

Speaker #1: We are actively selling and taking these opportunities to capture the profits along the way. And that is what we're doing now on some of the MRs and cape size ships.

Speaker #1: But we certainly don't think that the dry cargo market is entering into a weak period. But we are a little bit more concerned on cape size, with a much higher order book relative to the smaller vessels.

Speaker #1: So we're just moving within the segment into ship types we believe have better upside from current levels.

Speaker #2: Thank you. And we'll just do a couple of last questions before we finalize. There's a question here on related to the cash flow net profit was around 101 million US dollars but operating cash flow only 30.6 million US dollars with free cash flow being negative at 126.4 million US dollars.

Operator: Thank you. We will just do a couple of last questions before we finalize. There is a question here related to the cash flow. Net profit was around $101 million, but operating cash flow only $30.6 million, with free cash flow being negative at -$126.4 million. What exactly absorbed the $107.1 million in working capital, and when does it come back?

Speaker #2: What exactly absorbed the US dollar 107.1 million in working capital and when does it come back?

Speaker #3: Yeah, very relevant question. So if you look into the cash flow statements, you will see cash from operations being around $30 million, as you say, for Q2.

Martin Badsted: Very relevant question. So if you look into the cash flow statements, you will see cash from operations being around $30 million, as you say, for Q2. But actually, when you look at the full H1, cash from operations was actually over $100 million. So what happens is really timing differences between whether these cash flows are just in Q1 or in Q2 or where they specifically arrive. Then I would say there is some underlying tendency for higher working capital based on two factors. One is that we are growing our activity levels, and the other is that oil prices are quite high, and that actually costs cash flow. When you start up new vessels, you have to buy the bunkers on board, which then you can see that the inventory in the balance sheet is growing.

Speaker #3: But actually, when you look at the full half-year, cash from operations was actually over $100 million. So what happens is really timing differences between whether these cash flows are just in Q1 or in Q2, or where they specifically arrive.

Speaker #3: Then I would say there is some underlying tendency for higher working capital based on two factors. One is that we are growing our activity levels and the other is that oil prices are quite high.

Speaker #3: And that actually costs cash flow when you start up new vessels. You have to buy the bunkers on board, which then you can see that the inventory in the balance sheet is growing.

Speaker #3: These are oil inventories aboard the ships, which are growing along with prices and activity levels. So that is the reason, and so cash flow will come back as soon as we sort of start operating the ships or redelivering the ships when they're done with their charter period.

Martin Badsted: These are oil inventories aboard the ships, which were growing along with prices and activity levels. That is the reason, so cash flow will come back as soon as we start operating the ships or redelivering the ships when they are done with their charter period.

Speaker #2: Thank you. And then a question related to CAPEX and payout policy: capital expenditures of around $200 to $95 million are committed through 2028, while the payout policy stays at a minimum of half of profit.

Operator: Thank you. Then a question related to CapEx and payout policy. Capital expenditures of around $295 million is committed through 2028, while the payout policy stays at a minimum of half of profit. Which one gives way in a weak year?

Speaker #2: Which one gives way in a weak year?

Speaker #3: We are committed to maintaining our dividend policy of minimum 50%. So it would have to be a very bad year before we sort of abandon that.

Martin Badsted: We are committed to maintaining our dividend policy of a minimum 50%, so it would have to be a very bad year before we abandon that. So we stick to that.

Speaker #3: So we stick to that.

Speaker #2: And then a question on your fleet also: How much of your fleet is spot versus time charter, and what is your strategy going forward?

Operator: Then a question on your fleet also. How much of your fleet is spot versus time charter, and what is your strategy going forward?

Speaker #1: Yeah so on if we start on the tanker side we actually do release as part of our sort of information pack for the quarterly results.

Jan Rindbo: Yeah. So if we start on the tanker side, we actually do release as part of our information pack for the quarterly results. We do release what we call our capacity cover table. And there you will see that on the tanker side, we have large cover. We have, over the next 3 years, on average, over 80% covered already of that capacity. So here, clearly our strategy is to log in earnings, take advantage of the strong markets, get more visibility into a segment where market development is primarily driven by geopolitics right now. Also not forgetting that the order book for tanker vessels is now, for the total segment, including crude, is now at 25% of the current fleet. So that just gives us some downside protection on the tanker side.

Speaker #1: We do release what we call our capacity cover table. And there you will see that on the tanker side we have large cover. We have over the next three years on average over 80% covered already of that capacity.

Speaker #1: So here clearly our strategy is to log in earnings take advantage of the strong markets get more visibility into a segment where market developments primarily driven by geopolitics right now.

Speaker #1: And of course also not forgetting that the order book for tanker vessels is now for the total segment including crude is now at 25% of the current fleet.

Speaker #1: So that just gives us some downside protection on the tanker side. On the dry cargo side, Martin mentioned earlier the strategy is to be relatively high covered on the larger vessels.

Jan Rindbo: On the dry cargo side, Martin mentioned earlier, strategy is to be relatively high covered on the larger vessels. Right now there are opportunities to log in good profits on that part of the fleet, but then stay relatively open on the smaller vessels, where, first of all, those larger vessels are more exposed towards China, typically carrying bauxite, iron ore, commodities that are mainly focused on China. Whereas the smaller vessels tend to be more broadly exposed to world GDP, and therefore a little bit less risky, perhaps. And obviously exposed to the cargo types that are more complex, where we are not just relying on the market development, but also have this ability to add some operating margin that we call base margin on top of those market-driven rates. So that's the sort of overriding strategy.

Speaker #1: Right now, there are opportunities to log in good profits on that part of the fleet, but then stay relatively open on the smaller vessels.

Speaker #1: First of all, those larger vessels are more exposed towards China, typically carrying bauxite, iron ore, and other commodities that are mainly focused on China. Whereas the smaller vessels tend to be more broadly exposed to world GDP and therefore a little bit less risky, perhaps, and obviously exposed to cargo types that are more complex, where we are not just relying on market development but also have this ability to add some operating margin that we call base margin on top of those market-driven rates.

Speaker #1: So that's the sort of overriding strategy. Then, of course, we stay agile—like, in every quarter, if there are opportunities for us, we have also added in shorter-term MR tonnage when we see opportunities to do that.

Jan Rindbo: Then, of course, we stay agile, like in every quarter if there are opportunities for us to. We have also added in shorter-term MR tonnage when we see opportunities to do that. So that's what we look at in the operating units to add value along the way. But in the broad, bigger picture, you should expect us to be de-risking the more commoditized vessel types, the larger dry bulk and MR tankers, and then building more exposure towards the vessel types that have this sort of base margin. Here, just to add that we have now built a fleet of 25 MPP newbuildings that will start to deliver at the end of this year and then through to 2029.

Speaker #1: So that's what we look at in the operating units—to add value along the way. But in the broader, bigger picture, you should expect us to be de-risking the more commoditized vessel types, like the larger dry bulk and MR tankers.

Speaker #1: And then building more exposure towards the vessel types that have this sort of base margin. And here, just to add, we have now built a fleet of 25 MPP newbuildings that will start to deliver at the end of this year and then through to 2029.

Speaker #1: And we're really looking forward to getting these ships, because they carry a lot of cargo types that are in high demand right now—windmill blades, batteries, but also construction materials for the oil industry.

Jan Rindbo: And we're really looking forward to get these ships because they carry a lot of cargo types that are in high demand right now, windmill blades, batteries, but also construction for the oil industry. Here again, the higher oil price is supporting maintenance and development in the oil and gas industry. So we have high expectations on that part of the fleet as that deliver.

Speaker #1: And here again, the higher oil prices are supporting maintenance and development in the oil and gas industry. So we have high expectations on that part of the fleet as that delivers.

Speaker #2: Thank you. And then one final question here, looking a little bit into the future. What are the most important things you're focused on when you look ahead for DS Norden's business over the next six to twelve months?

Operator: Thank you. Then one final question here, looking a little bit into the future. What is the most important things you are focused on when you look ahead for D/S Norden's business over the next 6 to 12 months?

Speaker #1: Yeah, I can start and say that this turnaround in Dry is important to us, because this has been the part of our business where we have had a lot of volatility in our earnings.

Jan Rindbo: Yeah, I can start and say that this turnaround in dry is important to us, because this has been the part of our business where we have had a lot of volatility in our earnings. So actually, if you look at our earnings over the last 5 years in dry cargo, they have been fantastic. But we have had some extraordinary good years and then some pretty disappointing years in terms of also looking at our own performance. So we like the average, but we do not like the volatility. So a big part of our strategy is to focus on having more stable earnings while, of course, maintaining the same long-term high average on the invested capital that we have. So, the dry cargo business has obviously a clear focus for us to ensure that the positive development that we have seen in Q2, that continues into the coming quarters.

Speaker #1: So actually, if you look at our earnings over the last five years in dry cargo, they have been fantastic. But we've had some extraordinarily good years and then some pretty disappointing years.

Speaker #1: In terms of also looking at our own performance. So we like the average but we don't like the volatility. So a big part of our strategy is to focus on having more stable earnings while of course maintaining the same long term high average on the invested capital that we have.

Jan Rindbo: So we like the average, but we do not like the volatility. So a big part of our strategy is to focus on having more stable earnings while, of course, maintaining the same long-term high average on the invested capital that we have. So, the dry cargo business has obviously a clear focus for us to ensure that the positive development that we have seen in Q2, that continues into the coming quarters.

Speaker #1: So the dry cargo business has obviously a clear focus for us to ensure that the positive development that we have seen in the second quarter, that that continues into the coming quarters.

Speaker #1: And here we have good confidence that that will continue. So I think that is one big priority.

Jan Rindbo: And here we have good confidence that will continue. So I think that is one big priority.

Speaker #2: Thank you. That was the last question for today. I'll hand over to management for a final remark.

Operator: Thank you. That was the last question for today. I will leave the word to management for a final remark.

Speaker #1: Okay, well, thank you very much. And first of all, thank you for all the great questions. I think we sort of got around the entire business and our segments and our markets and our business.

Jan Rindbo: Well, thank you very much. First of all, thank you for all the great questions. I think we sort of got around the entire business and our segments and our markets and our business. I appreciate the interest and the good questions, and we look forward to connecting again when we present the Q3 results later this year.

Speaker #1: We appreciate the interest and the good questions, and we look forward to connecting again when we present the Q3 results later this year.

Operator: Thank you.

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Q2 2026 Dampskibsselskabet Norden AS Earnings Call

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