Norden has posted its third-consecutive year in profit in 2019 and its best quarter since 2015.
The Danish shipowner and operator unveiled the result as it announced organisational changes that will help it become more "trading oriented" and return more capital to its shareholders.
The firm, which owns and operates bulkers and tankers, said that in 2020 it will roll out its strategy to become more "agile" and better able to manage risk.
Norden's board has proposed a dividend of DKK 2.50 ($0.37) per share for the full year, which is DKK 0.50 more than was paid to shareholders in 2018.
Before that, Norden had not paid out a dividend for five years.
The company said it aims to further increase its returns to shareholders and will implement a new dividend policy from this year.
Copenhagen-listed Norden will aim to distribute annual dividends based on a minimum 50% ratio of the annual adjusted result.
The dividend for 2019 represents a pay-out ratio of 77%.
"With the $10m share buy-back programme initiated in November 2019, Norden will thus return $24m in total to the shareholders, which is a yield of close to 4%," the company said in its year-end report.
Fourth quarter
Norden said the fourth quarter of 2019 was its best since 2015 and booked a net result of $31.2m for the period, up from $19.3m a year earlier.
Including $1m in gains made on vessel sales during the quarter, profit for the final quarter totalled $32m.
Despite weak bulker markets during the period, Norden's dry operator unit had its best quarter of the year with an adjusted result of $14m.
Its dry owner segment also posted a positive result of $2m for the three months, benefiting from high contract coverage.
But it was Norden's tanker segment that was the real star during the fourth quarter due to a high market.
The tanker segment booked an adjusted result of $15m, driven by significant improvements to handysize earnings.
Rates for MR tankers saw more muted growth and only improved from December, Norden said.
Full-year results
Norden's adjusted profit for the full year 2019 was $22.8m, up from $20m in 2018.
"This is thereby the third-consecutive year with black figures, but with a low return on equity of 2.3%, there is still room for improvement," Norden said in its report.
The result falls squarely in the middle of Norden's estimate of between $10m and $45m, although this estimate was lowered last October from between $25m and $60m.
The revision was made after Norden discovered an error in its accounting-related adjustments to its tanker segment's expected contribution margin last year, which caused a $15m impact to its full-year estimates.
Norden's dry operator business saw a 73% year-on-year reduction in net profit, which was $8m for 2019.
Likewise, profit for the dry owner unit fell by 88% from the 2018 level, to $2m.
However, the tanker segment booked a $13m profit last year, up from a net loss of $28m in 2018.
Total revenue for the year was $2.6bn, up by 4% compared with 2018.
The group's $40.8m profit from operations during 2019 was almost four times the level seen the previous year.
But, this result followed a $157m charge from depreciation, amortisation and impairment losses, which is over three times the level seen in 2018, plus a $3.6m net loss from the sale of vessels last year.
Although the owned fleet incurred impairment losses during the year, Norden said it had determined that none of its assets were impaired as of 31 December.
Organisational changes
The Danish company has reorganised its business units into asset management, dry operator and tanker operator segments.
Norden said it had made the change in "recognition that traditional shipping business models are not optimised for the modern shipping market".
The asset management segment represents the traditional market value of the owned and leased fleet, the firm said.
The company's technical, commercial and research teams have been merged and will support the unit.
Norden said its two operator units will generate "additional margins" through voyage optimisation and short-term market positions on both cargoes and chartered vessels.
"Not only does this approach allow us to better cope with the volatility of the marketplace, it allows us to take advantage of it by selecting the best vessels, at the right price, to service our customers," the company explained.
"Using advanced risk management, market analytics and a trading-oriented mindset, Norden is therefore set to deliver better returns."
Outlook
Chief executive Jan Rindbo expects the company to post even stronger results this year than for 2019.
"Despite challenging markets and an uncertain outlook for the global economy, Norden expects to deliver improved earnings with an expected adjusted result for 2020 in the range of $30m to $70m,” he said in the firm's year-end report.
If Norden meets this target, it would achieve its best annual result since 2011.
"In 2020, we will continue our work towards creating a more resilient, agile and ambitious Norden based on our core values," the company said.
