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| Norden focused on risk management to achieve growth, optimize fuel efficiency |
| Shipper highlights commitment to managing exposure with new risk department, framework and board committee.
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| D/S Norden door plate. Image credit: D/S Norden |
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Updated on 26 Mar 2018 17:17 GMT
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D/S Norden says it will be paying particular attention to risk management issues in 2018.
As part of its effort to optimize fuel efficiency, grow its activities and "develop a more agile business model", the Danish shipper has strengthened its risk management capabilities with the launch of a new Risk Management department and risk framework with clear limits and procedures.
Additionally, Norden has established a Board Risk Committee with the purpose of assisting the board of directors in its oversight of the company's overall risk taking, tolerance and management of financial risks, including market, credit and liquidity risks.
With Norden operating around 300 vessels in highly volatile markets, the company believes comprehensive risk management is "essential" for managing exposure moving forwards.
The new risk department will be providing relevant input for decision making on a risk-adjusted basis; short-term market analysis; and fuel efficiency.
Using digitalisation to maximize fuel efficiency
Digitalisation is at the core of Norden's efforts as it aims to realize the full potential of the organisation. The company has developed a sophisticated modelling system that is used to provide recommendations to staff, and comprehensive data capturing and processing forms the basis of Norden's market research and positioning.
Norden's knowledge centre provides departments with advice regarding the efficiency of vessels in order to help reduce bunker consumption and maximize fuel efficiency, and the Fuel Efficiency team has developed a digital traffic light system that informs the operator of the optimal vessel speed considering both vessel consumption and weather conditions.
Also, real-time financial figures have recently been made available to the commercial teams in order to support a
transparent performance culture.
Dry Operator business in 2018
For Norden's operator division, Dry Operator, whilst 2017 was about reorganising the teams and developing new reporting and risk systems, in 2018 the emphasis will be on improving profitability further and ensuring that the platform is scalable to deliver growth and sustainable value.
In order to achieve this, Norden says it will be amplifying the model with risk management, quantitative and predictive modelling, research and fuel efficiency in order to further improve the decision-making process.
Reduced fuel consumption
One of the key highlights for Norden in 2017 was the announcement back in March that its ships were 10 percent more efficient than three years earlier. The long-term chartered vessels had increased their efficiency by 5.4 percent, while the short-term chartered vessels had improved theirs by 1.3 percent.
Between 2014 and 2016, Norden said that its fleet of owned and chartered dry cargo vessels and product tankers had reduced their fuel costs by $24.9 million - entirely by utilising fuel more efficiently.
Improved results
In its financial results for 2017, Norden managed to swing into profit after posting successive losses in recent years. Profit after tax last year was $24.6m, up from the 2016 loss of $45.6m, whilst earnings from operations were $23.3m (2016: $64.5m).
Revenue increased by $557.4m, or 44.5 percent, to $1,808.6m. |
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