D/S Norden runs an asset-light-ish dual model — a modest owned dry-bulk + product-tanker fleet plus a large chartered-in/spot book that flexes to the freight cycle — so earnings are almost purely rate-driven (5-year ROIC range 8.9%–53.4%). Chartered-in (time-charter) vessels are core operating capacity, so we include the lease liability in invested capital.
FY2025 is a soft, normalising year: EBIT% of TCE 8.3% versus 18–22% at the 2022–23 peak. Critically, ~USD 86M of one-off vessel-trading gains carry the headline — strip them and underlying adjusted ROIC falls to ~2.9%, below the 9% WACC, with EP −USD 110M. Tonnage tax keeps the cash rate ~9.7%. Q1 2026 stayed soft (EBIT −41% YoY).
At ~1.0x P/BV and EV/IC ~0.97x the market prices Norden near its invested capital — the negative economic profit reflects cycle position, not structural impairment, so the reverse-DCF (depressed by trough ROIC) is uninformative; book/IC anchors fair value.
Base USD 46 (~flat, near IC) on a normalising freight market; bull USD 62 on a dry-bulk/tanker rate recovery flowing through the charter-book operating leverage; bear USD 32 on a deeper freight trough.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 3% ≈ WACC 9%) it cannot reach the current EV. No-growth value is DKK -44/share (-14% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 402 | ≥-50% | +24% | 30% | Dry-bulk/tanker freight-rate recovery |
| Base | DKK 298 | ≥-50% | -8% | 45% | Normalising market; priced near invested capital |
| Bear | DKK 207 | ≥-50% | -36% | 25% | Deeper freight trough |
| Prob-weighted | DKK 306 | — | -6% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 7.50% | -37 | -83 | -119 | -182 | -229 | -370 |
| 8.25% | -41 | -87 | -123 | -184 | -231 | -370 |
| 9.00% (base) | -44 | -90 | -125 | -186 | -232 | -369 |
| 9.75% | -47 | -92 | -127 | -187 | -232 | -367 |
| 10.50% | -49 | -94 | -128 | -187 | -231 | -364 |
Green = fair value above the current price of DKK 325.20. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
The chartered-in/spot book amplifies a rate recovery — the primary upside lever.
65% payout + buybacks (39.2m→31.0m shares); conservative balance sheet (equity ratio 54%).
~9.7% cash tax keeps cash conversion healthy through the cycle.
Owned + chartered mix lets Norden flex capacity to the cycle.
D/S Norden is a shareholder-friendly, conservatively financed shipping operator whose headline returns are flattered by vessel-trading gains; on an underlying basis it earns below its cost of capital at this point in the freight cycle and is priced near invested capital. HOLD, medium conviction; base USD 46.
This is a dry-bulk/tanker rate-recovery call — turn constructive on a sustained freight upcycle, not on the current trough economics.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue (FY2025) | 3,126 | Income statement / Note 2.1 📄 p.110 | Consolidated income statement, Revenue line, USD million. LTM revenue 3,140.2 = FY 3,125.7 - Q1 2025 799.0 + Q1 2026 813.5. |
| EBIT / Profit from operations (FY2025) | 158 | Income statement 📄 p.110 | EBIT line on the consolidated income statement. LTM EBIT 142.5 via the FY/Q1 bridge. Still includes vessel-sale gains above it. |
| Depreciation, amortisation & impairment, net (FY2025) | -296 | Income statement / Notes 3.2-3.5 📄 p.110 | Single 'Depreciation, amortisation and impairment losses, net' line. Real vessel operating cost — NOT added back. LTM 289.8. |
| Profit/loss from sale of vessels (FY2025) | 70.3 | Note 3.9 Assets held for sale 📄 p.139 | 24 vessels sold in FY2025 for a USD 70.3m net gain; separate line above EBIT. One-off — normalized out. LTM gain 85.9 (FY 70.3 - Q1'25 3.3 + Q1'26 18.9). |
| Impairment (FY2025) | 0 | Note 3.2 📄 p.129 | All three CGUs value-in-use tested, no impairment in 2025 (Projects & Parcelling headroom USD 13.4m at 7.9% WACC). Owned-vessel note also shows zero impairment. |
| Derivative MTM in EBIT | 0 | Statement of comprehensive income / Note 4.6 📄 p.110 | Bunker/FFA/FX derivatives are cash-flow hedges routed through OCI (Reserve for hedges -66.4 FY), not EBIT. No operating MTM to normalize. |
| Right-of-use (chartered-in) vessels | 367 | Q1 BS / AR Note 3.5 📄 p.13 | ROU assets at 31/3/2026 (FY2025: 382.9). 'Majority of lease contracts are time charter contracts on vessels' — core chartered-in operating capacity. ~34% of on-BS vessel value vs owned 718.1. |
| Lease liabilities (IFRS 16) | 471 | Q1 BS / AR Note 4.2 📄 p.13 | Non-current 254.1 + current 217.0 at 31/3/2026 (FY2025: 458.5). INCLUDED in IC (lease_in_IC=true) — charter-heavy model; NORDEN's own IC also includes ROU. |
| Interest-bearing borrowings (ex-lease) | 303 | Q1 BS / AR Note 4.2 📄 p.13 | Borrowings non-current 234.9 + current 68.4 at 31/3/2026 (bank loans + sale-and-leaseback financing-lease debt). FY2025: 305.3. |
| Cash & cash equivalents | 319 | Q1 BS / AR Note 3.8 📄 p.13 | 31/3/2026. Excludes an additional USD 216.5m of >3-month term deposits (separate BS line), also treated as excess liquidity. Operational cash 2% x revenue = 62.8. |
| Total equity | 1,304 | Q1 BS / changes in equity p.15 📄 p.13 | 31/3/2026; all attributable to owners of NORDEN A/S (no NCI). Reserve for hedges +32.7 stripped as OCI -> equity_ex_oci 1,271.6. |
| Operational tax on EBIT (FY2025) | 15.4 | Note 3.1 / Note 5.2 📄 p.129 | Tax attributable to EBIT = 15.4 -> operational tax rate 9.72%. Danish+Singaporean tonnage-tax regimes; reconciles to NORDEN's own NOPAT 143.0 (158.4 - 15.4). |
| NORDEN invested capital (own def.) | 1,659 | Note 3.1 📄 p.129 | Company's own IC (FY) including ROU assets, goodwill, vessels and working capital; LTM 1,543.4 (Q1 p.3). Confirms lease-in-IC treatment. Our equity+net-debt build = 1,790.0. |
| NORDEN ROIC (own, FY2025) | 0.089 | Key figures / Note 3.1 📄 p.12 | Company's own ROIC 8.9% FY (LTM 7.8%, Q1 p.3) — incl. vessel-sale gains. Our adjusted ROIC strips the gains -> 2.85%. |
| Adjusted results APM definition | 0 | Alternative performance measures 📄 p.172 | 'Adjusted results' = profit adjusted for profit/loss from sale of vessels — identical to our single normalization, giving a 0% APM bridge. |
How the mttssn view has evolved — each prior dated note is preserved.