Good morning, and welcome, everyone, to this webcast with a presentation of the Q3 2026 report from NORDEN that was published this morning. In the first part of the presentation, you will be in a listen-only mode, which will be followed by a Q and A session. During the Q and A session, and if you have dialed in by phone, you will be able to ask questions verbally by pressing pound or hashtag, followed by five on your phone's keypad. If you are watching this webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but the operator will read them aloud. With that, I will hand over to CEO Jan Rindbo and CSO Martin Badsted from NORDEN. Please go ahead.
Thank you very much, and a warm welcome from my side also, and thank you for joining our Q3 webcast. I will start with just a quick reminder of who we are and how our model works before we turn to this quarter's results. NORDEN enables smarter global trade by combining customer-led shipping solutions with flexible fleet access and disciplined capital allocation. We transport all the essential raw materials for energy, food, manufacturing, construction. As one of the world's largest carriers, we operate just under 500 vessels and move around 130 million tons of cargo annually. Our scale gives us a deep market insight, strong customer access, and the flexibility to optimize our fleet across regions and vessel segments. This model helps us to manage shipping cycles while retaining upside.
It has assisted us in delivering an average return on invested capital of 25% over the last five years. On the following slide, let me explain how the business model behind these results work. NORDEN is more than just a vessel owner. We combine three connected capabilities: commercial operations, exposure management, and asset allocation. We connect customer cargo with vessel capacity and optimize voyages, trading patterns, and fleet utilization. We use a mix of owned, leased, and short-term capacity so that we can adjust the fleet, in accordance with markets and customer demands. We invest across vessels, leases, and purchase options, and ultimately, we seek attractive risk-adjusted returns while keeping the flexibility to recycle capital. This model becomes particularly valuable when trade flows are complex and customers place a premium on reliability.
That brings me to the next slide, a bit on the industry backdrop. The supply outlook is supportive, I would say especially for dry cargo, where the global fleet is aging and the order book remains modest. At the same time, geopolitical disruption, strained supply chains are making trade routes longer, less predictable, and more complex to operate. This supports vessel demand, and it makes flexibility, scale, and execution more important. With just under 500 vessels, a global commercial network, and a customer-centric approach, we help customers secure capacity and manage complex logistics across markets. This positions NORDEN to benefit not only through freight market exposure, but by helping our customers managing this increasing complexity that we see. With that, I will hand you over to Martin, who will take you through how this has translated into our quarterly results.
Thank you. In terms of operational and financial performance, Q3 was a good quarter for NORDEN. As you can see in the middle of the slide, we made a group net profit of $54 million. In the graph to the left-hand side, you will see that that is actually about double the net profit that we made in the same period of last year. Actually, also when comparing to the latest quarter, it was only a little bit down when you adjust the $101 million in the large bar there for $42 million of sales gains included last quarter. The net profit corresponds to a return on invested capital of 12%. Based on this performance, we have decided to continue distributing cash to our shareholders.
In this case, $24 million in the form of both DKK 2 per share dividend, and $15 million in a share buy-back running during the next quarter. You will also see that the NAV went up to DKK 523 per share, and I will get back to that in more detail a little bit later. In addition to strong operational performance, we also of course, had some tailwinds from the market. You will see here, especially on the left-hand side, that the Supramax spot rates were up 25%, capesize asset values were also up 28%, and in general, it was a firm picture across dry cargo. This was not actually driven by strong volumes. It was much more driven by inefficiencies in the form of longer distances, more ballast time, and slower speeds. This is the nature of the game in these periods.
On the right-hand side, we have similar indices for tankers, and here you can see that the market was actually even more extreme, especially visible in the almost vertical blue line in the top right graph. During the quarter, the MR rates actually rose 48%, and you had historical high volatility. Asset values tagged along, also increasing about 23% year-on-year. The earnings mix were a little bit more balanced in this quarter. You can see from this graph that over the last couple of quarters, it has been mainly a tanker story. What happened in Q3 here was actually the tankers continued to do quite well with $35 million of EBIT, but dry cargo improved quite a lot to $17 million. So now actually contributing one third of profits during the quarter.
As I said before, current markets have actually been quite erratic and extremely volatile. In environments like this, which makes the market super unpredictable and erratic, we feel that it is a good portfolio management to take some risk off the table and cash in on some of the already high rates. This we have done during the quarter and also in the year to date period. You will see that from the cover figures at the bottom left, where dry cargo has increased cover to 66%, and in tankers, we have increased it to 87%. This of course, protects downside, and it also actually adds visibility of earnings, going forward. You may say that it also eliminates upside.
And of course, there is some truth to that, but you have to bear in mind that we are actually still reinvesting into our dry cargo fleet, into the smaller vessel types like MPP and Handysize, where we are now up to an order book in our fleet of 26 units in both our own and TC capacity. In addition to that upside, we have, of course, all the options that are mentioned here on the right-hand side, where we have 89 purchase options still to come, and the equivalent of 221 one-year extension options on our portfolio. Some of them are already in the money, and we are actually just waiting for opportune times to cash in on some of them.
In terms of the upside or the sensitivity effect of what we are doing, you will see, first of all here, that the NAV in the quarter went up to DKK 523 per share. But also on the right-hand side, we show you the sensitivities to changes in the market environment. So for instance, if you have a 30% simultaneous decline in both rates and in asset values, the NAV would decline some 40% down to DKK 314. But interestingly also, if you have the 30% upside scenario, it increases actually by 50%, up to DKK 786 per share. So even though we have taken cover, there is still a lot of upside left in the book for future periods. With that, I will give you back to Jan.
Thank you, Martin. On this slide, we are showing how we put our capital to work this year, how we are shifting the exposure we have on the various segments away from the most volatile ship types and towards where we see strong opportunities for customer-driven, repeatable earnings. Or in other words, where we see the best risk reward. We think about our earnings in two layers. Base margin that you see on the right of the slide comes from customer contracts, cargo networks, operational optimization, and provides a more repeatable earnings foundation. The directional margins that is more represented by the larger vessels reflects the results of our freight and asset positioning, including market dislocations. It can add upside, but it also brings market-driven volatility. Here we can see on the slide that in the larger and medium segments, we have reduced our exposure.
We have in total 24 vessels in these segments where we have either sold or chartered out the vessels, securing some long-term profitable income and visibility on the earnings. On the other hand, on the right-hand side in the smaller segments, we have added quite significantly to our exposure. We have added 26 Handysize and multipurpose vessels this year, and these are the segments where we see the strongest fit with our customer contract and cargo network model. It is also in these segments where we see the oldest fleet age profile for the global fleet, and it is also where we have the lowest order book.
Overall, the core fleet, in terms of number of vessels, is broadly unchanged, but we have recycled capital away from the more volatile segments into the smaller ships where we have more upside through just the craftsmanship that we can generate that materializes through the base margins. It is important to say, also highlighted by the slide that Martin had, that we retain the flexibility to adjust our market exposure as opportunities occur, and we have a lot of optionality in the book where we can still capture upside on all the vessel segments, regardless of size. That brings us to the full year guidance for 2026, which, as you will have seen, we have now raised the full year net profit guidance to a range between $200 million and $250 million, up from $180 million to $230 million previously.
That is supported by our strong Q3 performance and also solid expectations for the fourth quarter. In dry cargo, we continue to perform well, supported by favorable market conditions, but also very strong commercial execution. We do expect a solid Q4 performance. I think here it is worth highlighting that the voyage timing at the end of the year could shift some earnings between Q4 2026 and Q1 2027. The timing of these voyages, of course, remain uncertain until we get to year-end. In tankers, geopolitical developments and trade flows remain our key uncertainties, but our high level of coverage limits our exposure to the spot market volatility, and we expect another solid contribution in the fourth quarter.
Overall, we enter the final part of the year in a strong position with limited open exposure for the remainder of the year, while maintaining the flexibility to capture market opportunities. With that, we can go to the final slide of the presentation, just summarizing the, you can say, the equity case for NORDEN where we offer exposure to what we see as a very supportive shipping fundamental story, including the constrained vessel supply and these increasingly complex trade flows where the scale and the reliability that NORDEN bring to our customers really matter. Our flexible and capital-efficient model combine short-term capacity, leased vessels, and owned assets, and then all the embedded purchase options. This allows us to adjust market position in accordance with market conditions and how they change.
I think importantly, when we look at the proven returns that we have, we have seen that with our business model, we are delivering a very high return on invested capital. Last five years, an average of 25%. We also see good underlying value. We have a NAV that is DKK 523 . It is actually up 38% since the beginning of the year, and it is significantly above the current share price. Finally, we are broadening our earnings base through our customer solutions and commercial capabilities, and we are aiming to build more of these repeatable earnings that we especially see on some of the smaller vessels. In summary, in NORDEN, we combine a flexible shipping platform, a demonstrated return record, and a strategy to build more repeatable earnings while we still retain market upside.
I think with that, thank you, and we are now ready to go into the Q and A.
Thank you, Jan and Martin. Yes, we are now ready for the Q and A session. To repeat, you can get in line to ask questions by pushing the pound key or hashtag followed by five on your phone's touchpad if you have dialed in by phone. Should you wish to withdraw from the line, you can push the pound key or hashtag followed by six. If you are watching the webcast online through a browser, you can ask your written questions in the chat below. Those questions will not be published, but the operator will read them aloud. Then we have the first question here. How many vessel options does NORDEN have left that can be exercised over the next five quarters, and how many options are there for each vessel type?
Yes. I can start then you can elaborate, Martin. As we showed on one of the previous slides, we have in total 23 purchase options that can be declared within the next two years. The average strike price is 22% below the current market prices. There is significant value embedded in these options. Then on top of the purchase options, we of course have all the extension options as well. Just generally, we like to take advantage of all the extension options first because there is a lot of value also in that part of the business before we then move in and declare the purchase options as well.
Thank you. The next question here is: You have scaled up your Handy MPP fleet a lot compared to larger segments. This market is quite opaque for investors. Can you elaborate on what you see in this segment and what catalysts for greater earnings you see in the horizon apart from the modest OB?
Yeah. This is a segment that is relatively new to NORDEN. We have made now three acquisitions in the last few years, and we have now built strong competencies in this part of the business. The next phase of that is now taking delivery of the new buildings. We are actually this week taking delivery of the first multipurpose vessel that will go straight into our program and contribute positively to our earnings. What we see in this segment is a number of things. First of all, it is a strong customer demand because here we are transporting cargoes for renewable energy, for oil and gas, for infrastructure, and all these are high demand and high growing areas of the business. We also see a very old global fleet in this segment, so ships that are not in great conditions, not reliable.
Connecting state-of-the-art ships with the higher demand is something where we really have high expectations to this part of the business. It is also important to say that it links in with the rest of the NORDEN business. There is a strong overlap into, for example, our Handysize, the smallest dry cargo vessels, where we increasingly are also carrying these type of project cargoes across. Actually not just limiting it to Handysize, but across all our vessel sizes in dry bulk. We now have the capability of moving some of these more demanding cargoes on that vessel size. In that sense, it actually contributes across the entire dry cargo business.
You can, I think, add also to this that we are seeing actually good volumes from China into Europe, which of course in our normal dry cargo business is a backhaul. But where we can combine it with the MPPs and the Handysize, we are seeing more and more opportunities to actually triangulate quite well and bring that additional premium to our time charter earnings.
Thank you. The next question here is: With both basins on absolute historical levels, I am surprised to see that not all 2026 in-the-money extension and purchase options on MRs has been exercised. What is your strategy to lock in these exceptional MR rates?
Yeah, so that's a good question. It ties a little bit in with, I think, the answer we gave earlier that we like to, first of all, utilize clearly the firm periods that we already have on these leasing contracts. Then we move into using the extension periods. Then finally, the purchase option. So it's a question of timing. It's a question of getting to that point where we will declare those options. We have declared some, but we have thankfully, a lot of them are still in front of us with a lot of value embedded. So what we do to also secure values on the tanker side is to secure long-term contracts.
So we have, in this quarter, entered into several new contracts for three years, some of them with forward delivery well into next year, where we are securing high-level earnings, not just for one quarter or two, but for the next several years. That, of course, on some of the deals will overlap into the extension period. So we already now know on some ships that we have already secured the earnings. That means that it will make sense for us to also declare the extension options because we already have profitable earnings secured against those extension options.
Thank you. The next question here. Most of your capesize tonnages fixed at moderate levels through year-end 2027. Is that a reflection of you not seeing a strong capesize segment going forward? Market tightness in capes was evident in Q3, but it's not reflected in your P&L. Aren't you risking to miss out on a lot of upside going forward?
Yeah, you could, of course, argue that. That's always the case when you take some decisions about cover. But I think you should look at it also in a relative space. So we are maybe giving up a little bit of the cape upside, but we are gaining something else, as Jan also said before, with our investments into now 26 MPPs and Handysize vessels. To us, it's a constant relative evaluation. Where is the risk-reward most attractive? After a long period where cape has sort of been driving the dry cargo market with low order book and strong demand, the parameters may change a little bit now in our view. The order book is actually quite large on cape now, smaller on the smaller segments. We think that the potential and also sort of the risk-reward profile is more attractive on the smaller vessels.
But we have to sort of give up something and then gain the other thing.
I think it's also important that when you look at our capesize cover, of course, in isolation, the levels for 2027 may not look very attractive compared to current market levels. But don't forget that the contracts that we have secured in capesize are typically not just a one-year contract, but three years. So again, a little bit like the MR ships, we are securing profitable cover well into the future, several years. And that, as Martin says, allows us to be a little bit more adventurous on some of the other vessel types where we see a better risk-reward.
Thank you. Then a question here. What are the key priorities for the coming quarters?
Well, we have a long list of things that we are working on. Of course, we want to finish the year well. So strong focus on the execution of our business. We have good momentum in both our dry cargo and in our tanker business. So we want to obviously maintain that good momentum into 2027. So that's one focus area. The other focus area is maritime logistics, which doesn't have a big position today in terms of our P&L. But it is a part of our business that we have high expectations for in the future. And here we have a very exciting pipeline of new projects. And this will not only support maritime logistics in isolation, but actually contribute a lot to our freight business. We talked about capesize earlier.
A lot of the projects we have in maritime logistics will enable more capesize freight opportunities and help us to grow that segment in a risk-adjusted, sensible way.
Thank you. The next question here is: The dry bulk market is developing well. How do you see the market if you take the long-term view? Are there any segments that stand out compared to others? How dependent are you on China's growth in this area?
Yeah. We are quite optimistic on the dry cargo market outlook. We see continued growth for a lot of the commodities that we carry. I think what is interesting is that a lot of the big themes in the world today, which is on AI, on the green transition, a lot of that is very raw material intensive, and that supports the underlying demand for the raw materials that we carry. We see this, for example, on bauxite, which supports aluminum, which goes into the production of electric cars. We see it on the batteries that we then carry out to support the green transition around the world. There are a lot of supportive factors for the dry cargo demand.
Of course, we need to watch the world economy, for so far it has been very resilient, even in the wake of higher energy prices and financials that are a little bit more constrained in countries around the world. Within the dry cargo market, what we are seeing is a little bit higher fleet growth now on capesize. That's why we're rebalancing a bit towards the smaller vessels, where we just see a better risk/reward based on where we are today. But of course, this remains dynamic and something that we are evaluating all the time to get obviously the most out of our business.
Thank you. Another question here. Will we see continued expansion and development in project cargo? Could it eventually become a third pillar of NORDEN alongside tankers and dry bulk?
Well, today we do see project cargo as embedded into our dry cargo business. That is because there is quite a lot of overlap between what we do on the project cargo vessels and what we do on the, you can say, the traditional dry bulk vessels. But the ambition here is clearly to grow the project cargo segment into a significant contributor to the NORDEN earnings. But we do see it embedded inside the dry cargo business. You will perhaps notice that today we are actually reporting on what we call the dry operator small vessels, so you are actually able to follow the development. So we already have independent reporting within the dry cargo numbers on this specific segment that we in NORDEN combine with Handysize.
Thank you. Then a question here. What drove the $ 10 million tax credit?
Well, for a period of time, we have been in discussions with the tax authorities about the treatment of purchase options when we declare them and sell them on. Under the tonnage tax system, this has been tax-free. Under the new global minimum tax regulation, this was taxed at the rate of 15%, which we actually felt was wrong, because we have had ownership of that asset or economic ups and downs over several years before declaring them. So we have, until now, reserved taxes in our P&L when we have made money on flipping a purchase option. But now we have come to an agreement where we shall no longer, or we shall not pay that tax, and that means that the previous provisions have now been taken back, you can say. Going forward, it will again be without tax implications when we declare purchase options.
Thank you. What separates the low and high end of your implied Q4 guidance range?
I think we mentioned earlier that the voyage timing is certainly one aspect of this. So whether earnings fall in Q4 or in Q1 next year. That can move quite a lot of money between those two quarters and that obviously has an impact on the guidance for the full year for 2026. That is one aspect. Of course, it is the ongoing developments in the market. Even though we have high coverage on tankers, for example, we are seeing huge swings in the spot market. Rates can easily move by 10 or even $20,000 a day very, very quickly within a matter of few days. That of course, also brings some volatility into the final part of this year.
Thank you. You only have three tankers owned and no new ones on order. Are you moving towards owning no tankers at all?
No, I would say we don't necessarily look at our tanker business or any of our businesses where we look specifically in isolation of the owned vessels. So we look at the core fleet. This is where we combine owned ships with ships we lease with purchase options. So when you add all the ships that we lease with purchase options, you can say we have direct or indirect ownership of just under 30 vessels on the tanker side. So we have a bigger position in terms of the asset upside because of all the purchase options on the lease vessels than if you just look at the three ships in isolation. So we are actually and have declared some purchase options, so where we convert ships from lease to owned, and that may also happen on tankers.
There's no sort of specific target in terms of how many ships we want to own on any vessel type.
Thank you. Then a question here: who do you see as your main competitors now that you're operating in many different segments, i.e., you're not just a pure play tanker carrier, but selling full service solutions to your customers?
That's a good question. So who should you benchmark NORDEN against? Our business is different from most of the, you could say, traditional listed companies that are pure plays in either tankers or in dry cargo. The companies that we typically compare ourselves with are not listed companies, but are other larger operators that we see in dry cargo and in tankers.
Thank you. Then there's a question related to your fact sheet that you also published. I think it gets a little bit too technical, so I'll pass that one on to your investor relations afterwards. Then there's a couple of wishes and proposals also for reporting in the future, and I'll also-
Yes
pass them on to your investor relations. I think we'll move on to the last questions here that, it goes here: in an episode of the Danish radio broadcast Millionærklubben last week, you mentioned that you have a new CFO, and you also hinted that you might be facing some potentially larger investments in the future. Could you tell us a bit about those potential plans and also if you're open to further acquisitions?
Yeah. First of all, Martin is here together with me today in his new capacity as Chief Strategy Officer, and I think that is also a signal that we are becoming a larger company. We are seeing a range of very interesting opportunities as we have broadened, you can say, the spectrum of business that we look at in NORDEN. I think the investments, when we refer to that, first of all, we have quite significant investments already in ships and leases that we do. I think today we have the largest new building program in NORDEN that we've had in the last 20 years, with just under 40 new buildings coming into the fleet. So that on its own is quite significant. But I would also like to refer back to the maritime logistics and the pipeline of projects.
These are transshipment projects where we work with our customers to do a bespoke supply chain solution, typically in connection with loading our vessels. And that may require investments into transshipment vessels like we actually already have in one project in Africa today. Today, it's a very small part of NORDEN's overall investments and business. But when we look into the pipeline and we look into the strategy period that we're in now towards 2030, we expect to see more investment opportunities in this part of the business. I'm also delighted now that we have welcomed Anne-Sophie as our new CFO, so that in that sense, we have strengthened, you can say, our bandwidth as a leadership team to look at all these new exciting opportunities.
But also be selective on choosing the right projects for NORDEN so that we can continue this good track record we have on our return on invested capital, and also on our shareholder returns.
Thank you. There seems to be no further questions, so I'll just leave the word to management for any final remarks.
Well, first of all, thank you very much for lots of great questions. If you have input to the presentation or the way that we show our numbers, we welcome that input. Just please come forward with that. Let me just finalize by saying thank you for joining us today. Hopefully, you can see how NORDEN has a strong, flexible platform. We have a proven track record, and we're building a business where we have more of these repeatable earnings, a little bit more solid ground under the business that we are developing. We are also keeping the market upside through all the options at the same time. We look forward now to updating you on this progress. We look forward to see you at the next presentation. Thank you very much.
Thank you.