D/S Norden A/S, Europe’s largest publicly traded commodities-shipping line, aims to reduce expenses to prepare for a “challenge” next year as more vessels join fleets and Europe’s debt crisis curbs growth.
“We must maintain high quality and bring costs down,” Chief Executive Officer Carsten Mortensen said in a column for a company news magazine published today on Norden’s website. “I think it is safe to say that in 2012 we will not be sailing on smooth waters.”
Deliveries of new ships that haul dry-bulk raw materials such as coal will peak next year, according to the CEO. “We can hope” that demand for tankers may strengthen or companies in the industry will combine, he said.
Net income at Hellerup, Denmark-based Norden will drop 42 percent to $57.6 million next year, estimates from 10 analysts compiled by Bloomberg show. Profit will plunge 60 percent to $99 million this year, according to 10 estimates. Norden reported a third-quarter net loss of $21.1 million on Nov. 15.
Weak demand has caused tanker rates to plunge, Mortensen said, adding that some European nations are near or already experiencing “an abrupt slowdown.” While Norden’s business focuses on other parts of the world, links between economies are strong enough that “an ongoing pause in growth in the Western Hemisphere may have global consequences,” he said.
Norden operates a fleet of 216 dry-bulk vessels and tankers. The dry-bulk division generated 85 percent of third- quarter sales.
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