Earnings before interest and tax (EBIT) fell to $23 million in October-December from $61 million in the same quarter a year earlier, the dry-bulk and tanker shipping company said.
The result beat an average expectation of a drop to $19.5 million in a Reuters survey of analysts but was within the range of estimates.
"2011 looks to be a mediocre year in terms of earnings with challenging markets in both dry cargo and tankers," Chief Executive Carsten Mortensen said in a statement, adding that Norden's earning potential is strong once rates rise again.
Norden guided for 2011 EBIT in a range of $55 million to $95 million, less than half the $223 million in EBIT for 2010. It forecast earnings before interest, tax depreciation and amortisation (EBITDA) this year of $135 million to $175 million.
Nordea Markets analyst Finn Petersen said the fourth-quarter results were slightly better than consensus but the company's EBITDA guidance was at the low end, which he expected to lead to a 5-10 percent reduction in analysts' estimates.
Full-year 2010 earnings rose from 2009 roughly in line with analysts' estimates.
"In 2010, we got back on the growth track as planned, with growth in business and earnings and increasing investments," Mortensen said in the statement.
While container shipping, which is largely transport of consumer goods, rebounded in 2010 from a deep plunge in 2009 caused by the global economic crisis, dry-bulk shipping has continued to suffer from weak rates due to capacity expansion.
The dry cargo market may become "very challenging" until it has absorbed the "massive increase in supply" that has hit rates, said Norden whose active fleet at end-2010, including chartered vessels, consisted of 209 ships.
Mortensen told Reuters that he expected a gradual improvement in the tanker market but dry cargo rates this year are likely to fall below the 2010 level.
But he said the company was well-positioned because the contract coverage for its fleet had helped its vessels earn more than daily spot rates.
"In both segments, we beat the market in 2010," he told Reuters. "In tankers we have sailed at between 19 and 28 percent over one-year time charter rates, and in dry bulk we sailed at 7 percent above spot rates throughout the year."
The company said that its dry cargo fleet started 2011 with 85 percent contract coverage but its tankers, with just 36 percent coverage stands to benefit from a market where spot rates are seen gradually improving.
In 2011-13, Norden aims to increase its dry cargo volumes by 15 percent annually while expanding the core fleet, and it intends to take advantage of low vessel prices to expand its tanker fleet to 25 owned vessels, Norden said. (Reuters)
