D/S Norden (Buy, TP: DKK139.00) - Heading for lower end of guidance
D/S Norden reported a softer than expected Q3, and we believe the company is heading for full-year results at the lower end of guidance. We forecast 2018 adjusted net profit of USD-1m, versus Bloomberg consensus of USD12m and mid-point guidance of USD15m, as we are below guidance for tankers and now also dry bulk following recent market weakness. We have also added earnings potential for 2020e from scrubber investments. We reiterate our BUY and DKK139 target price.Dampskibsselskabet Norden is a holding company. Co., through its subsidiaries, is an internationally operating shipping group. Co. operates a fleet of 238 vessels. In dry cargo, Co. operates in Panamax and Handymax, in addition to growing activities in Handysize and Post-Panamax vessel types as well as activities in Capesize. In tankers, Co. activities comprise Handysize, MR and LR1 product tankers. Co.'s product tankers are commercially operated under the 50%-owned Norient Product Pool. Co.'s core fleet consists of owned vessels and vessels on long-term charter with purchase option, the core fleet is supplemented by vessels chartered on a short-term basis or for single voyages.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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