Danish line Norden has written down the value of its dry bulk fleet by $180m as well as making a provision of $160m for losses on long-term chartered dry cargo vessels. The total of $340m will be included in the annual results for 2015, which are expected to be heavily in the red.
“The market values of dry cargo vessels and the forward rates for the coming years dropped drastically in the fourth quarter of 2015,” Norden chairman Klaus Nyborg said in a statement.
“The transition of the Chinese economy and the consequently lower growth and significantly reduced development in demand for dry cargo transports has resulted in a considerable overcapacity in the market for dry cargo transports. On this basis, management expects continued weak rates on a level with the current FFA rates for the coming two years,” Nyborg added.
Following the write-down and the provision, the book value of group equity of $0.9bn is in line with the likely value of future cash flows based on management’s current market assumptions, Norden claimed.
