NORDEN 3 rd QUARTER RESULTS 2009 Copenhagen, 19 November 2009 THE PREFERRED PARTNER IN GLOBAL TRAMP SHIPPING. UNIQUE PEOPLE. OPEN MINDED TEAM SPIRIT. NUMBER ONE. Dampskibsselskabet NORDEN A/S 52 Strandvejen DK-2900 Hellerup www.ds-norden.com 1
TODAY S AGENDA Q3 2009 Group highlights Business review and market outlook Dry Cargo Tanker Financial highlights Full-year expectations Q & A Session
Q3 2009 HIGHLIGHTS Group financials Segment EBITDA, (USDm) Dry Cargo Tanker Key messages Dry Cargo market surprises positively Dry Cargo earnings improved as planned and will improve again significantly in Q4 37 32 9 15 9-4 -1-6 2008 Q4 2009 Q1 2009 Q2 2009 Q3 Guidance (USDm) 150-160 135-145 67 Value of assets and book in 2010 increases with strong period market Tanker market worse than expected and few signs of improvement A good window of opportunity is opening up for new investments Full year EBIT guidance narrowed to USD 150-160m -5 Dry Cargo EBITDA Tanker EBITDA Vessel sales Group EBIT
DRY CARGO MARKET China continues strong import of iron ore and coal 2009 levels are unprecedented and bound for energy and metal production 70 Chinese Iron Ore imports (mill tonnes) 18 China coal import (mill tonnes) 16 60 14 50 52 mt 12 9.6 mt 10 40 37 mt 8 30 32 mt 6 4 4.3 mt 3.4 mt 20 2 Nov/06 Feb/07 May/07 Aug/07 Nov/07 Feb/08 May/08 Aug/08 Nov/08 Feb/09 May/09 Aug/09 Nov/06 Feb/07 May/07 Aug/07 Nov/07 Feb/08 May/08 Aug/08 Nov/08 Feb/09 May/09 Aug/09 Sources: China Customs, Bloomberg 4
DRY CARGO MARKET Global steel industry recovering also outside China Steel industy represents ~50% of drycargo market Stock liquidation and firm production indicate strong end-user demand 80 Chinese iron ore inventories (mill tonnes) 75 70 65 60 55 50 45 140 Steel production (mill tonnes) 130 120 110 100 90 80 70 60 50 40 30 140 130 120 110 100 90 80 70 60 50 40 30 40 20 10 China World Ex China World 20 10 35 Nov/07 Feb/08 May/08 Aug/08 Nov/08 Feb/09 May/09 Aug/09 0 Nov/06 May/07 Nov/07 May/08 Nov/08 May/09 0 Sources: China Customs, IISI, Bloomberg 5
DRY CARGO MARKET Orderbook of 60% of existing world fleet over-reported Q3 saw deliveries rise again; still 30% short falls Financing still the key issue 30 Dry bulk deliveries 25 24 45% 40% 35% 20 19 30% 15 10 5 7 6 6 7 6 6 10 7 13 7 14 9 13 25% 20% 15% 10% 5% - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 0% Planned (m. dwt) Actual (m. dwt) Short falls (Pct) (right axis) Source: RS Platou 6
TANKER MARKET Mid- and long-term outlook remains positive as oil demand picks up, distances increase and emering markets drive growth Going forward, oil demand growth is expected to return to historical average Oil demand (mill barrels per day) 50 45-1.7% +1.4% 40 35 30 25 2008 2009 2010 2011 2012 2013 2014 OECD Non OECD CAGR 1996-2002: 1.4% CAGR 2002-2008: 1.6% CAGR 2009-2014: 1.4% Sources: IEA MTOMR 2009 7
TANKER MARKET Fleet growth is high, but somewhat behind schedule: ~15 % in Q3 Phase-out of single hull vessels (15% of fleet) may reduce fleet growth Attractive window of opportunity opening up 8 7 6 2009 Tanker deliveries 7.1 35% 30% 6 5 4 4 5 5 4 4 5 4 4.7 25% 20% 3 3 3 15% 2 10% 1 5% - Jun Jul Aug Sep Oct Nov Dec 0% Actual (ytd) Planned (as of May) Short falls (Pct) (right axis) Source: Clarksons 8
Q3 2009 - KEY FINANCIALS Q3 Financials Earnings (USDm) 2009 Q3 YTD EBITDA Dry Cargo 37 78 Tanker -6 1 Net profit 37 169 Capex 2009-12 (30 Sep 2009) Cash position of USD 776m USD 215m proceeds from vessel sales in 2009-2010 Net outstanding N/B installments of USD 545m in 2009-2012 Group O/A reduced by 32% y-o-y Net outstanding N/B installments, USDm Daily OPEX improved by 7.5% 297 No impairments required - fleet values intact 19 207 22 Theoretical NAV: DKK 261 per share 2009 2010 2011 2012 9
2009 FULL YEAR GUIDANCE Revised guidance Key assumptions USDm EBITDA Dry Cargo 135-145 Tanker -5 Total 120-130 Capacity covered in Q4: Dry Cargo: 112% Tanker: 45% Profit from vessel sales EBIT 67 150-160 No significant counterparty issues No major settlements of on-going claims or litigation cases Net CAPEX -110 Only known vessel sales are included in guidance 10
ATTRACTIVE COSTS AND COVERAGE Average Dry Cargo fleet costs will be halved from 2009 to 2012 Average costs for 2010 in all vessel types below current spot rates Current high market improves value of forward book and assets Very attractive margins locked in through coverage 17,000 Cash cost (USD per day) 16,273 Dry Cargo Tanker 20,000 1 year TC, USD per day (HMX, 52,000 DWT)* 15,000 13,000 15,470 18,000 11,000 9,000 7,000 9,488 7,956 16,000 14,000 5,000 2009 2010 2011 2012+ 12,000 Jul 2009 Nov 2009 20,000 Gross margin (USD per day) 15,000 Dry Cargo 10,000 Tanker 5,000-2009 2010 2011 2012+ * Source: Clarksons 11
FORWARD LOOKING STATEMENTS This presentation contains certain forward-looking statements reflecting the management s present judgment of future events and financial results. Statements relating to the remainder of 2009 and subsequent years are subject to uncertainty, and NORDEN s actual results may therefore differ from the projections. Factors that may cause such variance include, but are not limited to, changes in macro-economic and political conditions, particularly in the Company s principal markets; changes to the Company s rate assumptions and operating costs; volatility in rates and tonnage prices; regulatory changes; any disruptions to traffic and operations as a result of external events, etc. The presentation should not be interpreted as a recommendation to trade shares in Dampskibsselskabet NORDEN A/S. 12
Q & A Carsten Mortensen, CEO Dampskibsselskabet NORDEN A/S Michael Tønnes Jørgensen, CFO Martin Badsted, SVP 52 Strandvejen DK-2900 Hellerup Denmark T: +45 3315 0451 F: +45 3315 6199 www.ds-norden.com 13
THANK YOU FOR YOUR ATTENTION Q&A Session 14