Diamond S Shipping Inc. Announces Strategic Product Tanker Partnership With NORDEN
Diamond S Shipping Inc. announced a strategic partnership with NORDEN A/S (CPH:DNORD), DiaNor, to facilitate the commercial consolidation of two of the world’s largest owner/operators of product tankers. Diamond S will initially contribute 28 medium range (MR2) product tankers to the endeavor, which will be marketed and operated through the Norient Product Pool (“NPP”). Diamond S also intends to contribute its existing in-house commercial expertise in the product tanker space to the global network of NPP. Pro forma the contribution of DiaNor ships, the Norient Product Pool will manage approximately 150 tankers and become one of the largest operators of medium range (MR) product tankers in the world.
Craig Stevenson Jr., CEO & President of Diamond S, commented, “We are pleased to further continue the much needed consolidation of the tanker industry. The DiaNor partnership is an exciting new chapter for Diamond S. We believe it will create substantial value for both our shareholders and our customers. We have worked with Norden and NPP in the past and believe that they represent a state-of-the-art, world-class commercial organization. Adding our considerable capabilities to their extensive network should produce a clear leader in the product tanker space.”
NORDEN CEO Jan Rindbo says of the partnership, “We are delighted to enter this partnership with Diamond S, which will further strengthen our ability to provide efficient global transport solutions to our product tanker customers. Diamond S has been a valued partner of Norden in the past and we look forward to what we can create together in the future.”
DiaNor enables Diamond S and NORDEN to continue to serve their valued and existing clients via the NPP platform even better, by creating a well-managed, homogeneous fleet, ensuring flexibility and quality service to all parties. The combined fleet will create scale, expediting further development of the digital solutions already in play in both organizations as well as optimization including fuel efficiency, bunker purchasing and vendor contracts around the world.
“We are convinced that the scale created by the combined fleets as well as the people competencies will create great value to our stakeholders,” says Søren Huscher, Head of Tanker Operations at NORDEN. “The strong values upon which we are both built will be the backbone of our joint efforts.”
The management of the combined fleet of around 90 MR2 product tankers will be handled from NORDEN’s existing office locations in the U.S., Singapore and Denmark and become one of the largest within the segment.
NORDEN Reports Best First Quarter Since 2015
Annual Report 2019
• Adjusted Result* for Q1 2020: USD 29 million (Q1 2019: USD 7 million)
• Asset Management: USD 7 million (USD 0 million)
• Dry Operator: USD 4 million (USD -3 million)
• Tanker Operator: USD 18 million (USD 10 million)
Loss from sale of vessels: USD 2 million
EBIT Q1 2020: USD 37 million (USD 6 million)
* ”Profit/loss for the period” adjusted for “Profit/loss from sale of vessels, etc.
Outlook 2020
• NORDEN raises its guidance for 2020 to USD 30 to 80 million which is up from the previously announced guidance of USD 30 to 70 million. This is based on expectations of strong tanker spot rates and another good result from Tanker Operator in the second quarter but a challenging market in the second half-year. Previous expectations
CEO Jan Rindbo in comment:
STRONG START TO THE YEAR
“Despite the challenging environment, NORDEN realised an Adjusted Result of USD 29 million – the best first quarter result since 2015. The Dry Operator unit showed the strength of its business model, delivering a solid performance in a weak market. The newly formed Tanker Operator unit had a very positive start to the year due to good positioning in a strong market. All in all, all three business units delivered a profit for the quarter, and NORDEN raises its guidance for 2020 to USD 30-80 million.”
NORDEN’s Fourth Quarter One of the Best in Years
NORDEN reported its fourth quarter results yesterday.
Some highlights:
Annual Report 2019
• Adjusted Result* for the year 2019: USD 23 million (2018: USD 20 million)
• Dry Operator: USD 8 million (USD 30 million)
• Dry Owner: USD 2 million (USD 18 million)
• Tankers: USD 13 million (USD -28 million).
EBIT 2019: USD 57 million (USD 39 million)
* ”Profit/loss for the period” adjusted for “Profit/loss from sale of vessels, etc.
Outlook 2020
• Despite challenging markets and an uncertain outlook due to the outbreak of the COVID-19 virus, NORDEN expects to deliver improved earnings with an expected Adjusted Result for 2020 in the range of USD 30 to 70 million. Previous expectations
CEO Jan Rindbo in comment:
TRADING TO THE NEXT LEVEL
“With the best quarterly result in almost five years, NORDEN finished the year with a strong performance in the fourth quarter delivering a USD 23 million profit for 2019. Despite challenging markets and an uncertain outlook for the global economy, NORDEN expects to deliver improved earnings with an expected Adjusted Result for 2020 in the range of USD 30 to 70 million.”
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