Interim report - third quarter 2005 - NORDEN · dampskibsselskabet "norden" a/s, 49 amaliegade, dk-1256 copenhagen, denmark, 3/22 interim report - third quarter 2005

DAMPSKIBSSELSKABET "NORDEN" A/S, 49 AMALIEGADE, DK-1256 COPENHAGEN, DENMARK, WWW.DS-NORDEN.COM, CVR-NO. 67758919 1/22

Copenhagen Stock Exchange

Nikolaj Plads 6

1067 Copenhagen K

Announcement No. 29

25 November 2005

Interim report - third quarter 2005

The first three quarters - highlights

• The profit for the third quarter was USD 78 million, including profits from the sale of vessels of USD 39 million. An increase of

USD 31 million compared to the same period last year when no profits from the sale of vessels were included.

• The profit for the first three quarters was USD 245 million, including profits from the sale of vessels of USD 66 million against USD

199 million in the same period last year, including profits from the sale of vessels amounting to USD 33 million.

• In the first three quarters, the Company's operation generated a positive cash flow of USD 215 million. The total liquidity was in-

creased by USD 27 million after gross investments of USD 234 million in fleet expansions (including prepayments).

• In the third quarter, the Dry Cargo Department's profit was USD 56 million, including profits of USD 20 million from the sale of

vessels, while the Tanker Department's profit was USD 25 million, including profits of USD 18 million from the sale of vessels.

• As at 30 September, the Company's fleet is estimated to have an added value of USD 293 million, including the value of 7 new-

buildings, compared to the book value.

• The result for the whole year, which was previously expected to be in the range of USD 310 million, is now expected to be in the

range of USD 320 million, including profits from the sale of vessels of USD 125 million and fair value adjustment of certain hedg-

ing instruments of USD 15 million.

Mogens Hugo Jørgensen

Chairman of the Board

Carsten Mortensen

President

Today at 14.00 hours (CET), NORDEN will hold a telephone con-

ference where CEO Carsten Mortensen and CFO Jens Fehrn-

Christensen will comment on the third quarter and the expecta-

tions for the whole year. By 13.55 (CET) at the latest, Danish

participants should dial +45 70265040 while participants from

abroad should dial +44 20 7769 6432. The telephone confer-

ence can also be followed live at www.ds-norden.com where the

accompanying presentation also is available.

Further information: President Carsten Mortensen,

tel. +45 33 15 04 51.

DAMPSKIBSSELSKABET "NORDEN" A/S, 49 AMALIEGADE, DK-1256 COPENHAGEN, DENMARK, WWW.DS-NORDEN.COM 2/22

INTERIM REPORT - THIRD QUARTER 2005



Contents

Financial highlights and key ratios 4

Interim report

Comments on the development of the period for the Group 5

Activity and earnings 5

Expansion of the fleet 5

Subsequent fleet changes 6

Cash flows 7

Equity 7

Highlights by segments 8

Dry Cargo 9

Financial highlights 9

Market trends 9

Employment of the fleet 10

Tanker 11

Financial highlights 11

Market trends 11

Employment of the fleet 12

Expectations for the rest of 2005 13

Dry Cargo 13

Tanker 13

The Group 13

Interim report first to third quarter - the Group

Accounting policies 14

Statement 15

Income statement 17

Income statement per quarter 18

Balance sheet 19

Summarised cash flow statement - the Group 20

Statement of changes in equity - the Group 21



Financial highlights and key ratios The Company’s accounting policies have been changed as at 1 January 2005 in compliance with the new standards approved by the European Union, the International Financial Reporting Standards (IFRS), and other such financial reporting requirements that apply to listed companies. The comparative figures for 2004 have been adjusted accordingly.

USD 1,000

2005

1/1-30/9

2004

1/1-30/9

Change

1st-3rd

quarter

2004-2005

2004

1/1-31/12

INCOME STATEMENT

Freight income (net revenues) 993,103 828,034 20% 1,166,593

Costs -816,652 -645,220 27% -933,669

Profit before depreciation (EBITDA) 176,451 182,814 -3% 232,924

Profit from the sale of vessels etc. 58,027 32,756 77% 49,757

Depreciation -12,955 -9,666 34% -13,328

Income from joint ventures 8,111 183 4332% 195

Operating profit (EBIT) 229,634 206,087 11% 269,548

Fair value adjustment of certain hedging instruments 27,147 - - -

Net finance -8,096 -5,097 59% -2,425

Profit before tax 248,685 200,990 24% 267,123

Profit for the period 244,959 199,011 23% 264,159

Profit for the period (NORDEN's share) 244,663 198,787 23% 263,912

Profit for the period (Minorities' share) 296 224 32% 247

CASH FLOWS

From operating activities 215,272 164,035 31% 190,100

From investment activities, including vessels -69,730 3,160 -2307% 20,193

From financing activities -118,600 -58,996 101% -135,007

Change in cash equivalents for the period 26,942 108,199 -75% 75,286

KEY FIGURES FOR THE BALANCE SHEET

Long-term assets 301,352 268,381 12% 268,778

Total assets 661,186 536,061 23% 521,937

Equity (including minority interests) 519,158 356,508 46% 340,077

Long-term liabilities 61,989 108,730 -43% 91,751

Short-term liabilities 80,039 70,823 13% 90,109

FINANCIAL AND ACCOUNTING RATIOS

Number of shares (excl. own shares) 2,161,097 2,213,850 -2% 2,200,890

Earnings per share (EPS) 112.07 88.96 26% 118.17

Diluted earnings per share (diluted EPS) 111.23 87.19 28% 115.80

Intrinsic value per share (excl. own shares), USD (DKK1)) 239 (1,482) 160 (960) 49% 154 (840)

Equity ratio 78.2% 66.1% 18% 64.8%

Share price at year-end, DKK 3,146 2,587 22% 2,726

Share price/intrinsic value 2) 2.12 2.69 -21% 3.24

Net Asset Value per share excl. purchase options for vessels, USD (DKK1)) 375 (2,322) 253 (1,516) 48% 260 (1,424)

Net interest-bearing debt, USD -91,364 -47,480 92% -17,670

Invested capital, USD 427,794 309,028 38% 322,407

USD rate at year-end 619.67 599.69 3% 546.76 1) Translated to the USD/DKK rate at end-period. 2) Intrinsic value is calculated as equity (excl. minority interests) in USD translated to the USD/DKK rate at end-period.

The key figures and ratios are calculated in accordance with guidelines issued by the Danish Association of Financial Analysts 2005 (Anbefalinger og Nøgletal 2005).



Comments on the development of the period for the Group

Activity and earnings In the first three quarters of 2005, the Company's freight in-

come increased by 20% to USD 993 million. The high level of

activity is the result of the continued expansion of the fleet in

both the Tanker and the Dry Cargo Departments, and the earn-

ings have increased in spite of the decreasing dry cargo market.

In the third quarter, the number of ship days increased by 11%

to 11,641 compared to the same period last year. The capacity

was increased by 27% in the Tanker Department and 9% in the

Dry Cargo Department, primarily obtained by chartering ves-

sels. In the first three quarters, the number of ship days is

33,401 against 28,184 in the same period last year.

In the third quarter, the profit before depreciation and profit

from sales (EBITDA) amounted to USD 42 million (USD 51 mil-

lion) and, in the first three quarters, USD 176 million (USD 183

million). Even though the earnings year-to-date are 4% lower,

they are still at a high level in spite of the lower dry cargo mar-

ket, primarily due to a stronger tanker market and increased

activity in both segments.

The operating profit (EBIT) amounted to USD 76 million in the

third quarter (USD 48 million), including total profits of USD 39

million (USD 0 million) from the sale of 4 Handymax bulkcarri-

ers, 1 of which was partly-owned, and 3 product tankers, 2 of

which were partly-owned.

In the first three quarters, the operating profit (EBIT) was USD

230 million (USD 206 million), including profits from the sale of

vessels amounting to USD 66 million (USD 33 million).

In connection with the Company's transition to the IFRS, it is no

longer an option to postpone the effect of value adjustments on

the bunker hedging contracts and the Forward Freight Agree-

ments (FFAs) to the point in time when the covered transaction

takes place. The profit effect of this is recognised in a special

item called "Fair value adjustment of certain hedging instru-

ments" and amounts to USD 27 million in the first three quar-

ters, of which USD 25 million relate to bunker hedging contracts

regarding bunker purchases during 2005 -2009 and USD 2 mil-

lion to FFAs for open ship days during 2005-2006.

Net financial items amounted to USD -8 million (USD -5 mil-

lion). This is mainly due to negative value adjustments on the

foreign exchange rate forward contracts due to the rising

USD/DKK exchange rate.

The Company's interest rate risk on its long-term debt is cov-

ered for a period of 2.9 years at an interest rate of 5.1%, in-

cluding lenders margin.

Profit for the first three quarters was USD 245 million (USD 199

million). The result yields a rate of return on equity of 76%

(p.a.).

Expansion of the fleet The Company continues its planned expansion of the fleet and

has this year declared purchase options on another 8 dry cargo

vessels. The declared options and the times of delivery to

NORDEN can be specified as follows:

Delivery Vessel type

1st quarter 2005 1 Handymax (option declared in 2004)

2nd quarter 2005 2 Handymax

3rd quarter 2005 2 Handymax, 1 Panamax, 1 Capesize

4th quarter 2005 2 Handymax

Furthermore, in 2005, the Company has entered into agree-

ments regarding the following long-term charters with purchase

options:

Contracting Vessel type Delivery

Dry Cargo:

1st quarter 1 Handymax 2006

1st quarter 1 Panamax 2006

2nd quarter 2 Handymax 2006 and 2008

2nd quarter 1 Panamax 2008

3rd quarter 1 Panamax 2008

3rd quarter 2 Handymax 2007 and 2008

Tanker:

1st quarter 1 Product tanker 2008

The Company thus has a total of 50 long-term chartered ves-

sels with purchase options, 19 of which are delivered. All pur-

chase options are in-the-money.

In parallel with the expansion of the fleet, NORDEN continu-

ously considers the optimal time for making profit through the

sale of vessels.



In 2005, the Company has entered into agreements regarding

the sale of the following vessels and the profits will be recog-

nised concurrently as the vessels are delivered to the buyers:

Vessel type Time of delivery

Tanker:

2 Product tankers (from yard)1 2nd quarter 2005

1 Product tanker 3rd quarter 2005

1 Aframax 4th quarter 2005

Dry Cargo:

1 Handymax (from yard) 1st quarter 2005

1 Handymax1 (from yard) 1st quarter 2005

2 Handymax (1 from yard) 3rd quarter 2005

4 Handymax (1 from yard) 4th quarter 2005 1 Partly-owned

For the first three quarters, profits from the sale of vessels

amount to USD 66 million before tax, 8 million of which have

been recognised in the item "Income from joint ventures".

At the end of the third quarter, the Company had 12 owned

vessels and 7 newbuildings as follows:

Owned vessels as at 30 September 2005

Aframax

3

Handysize 1

Tanker Department total

4

Capesize 1

Panamax 1

Handymax 6

Dry Cargo Department total 8

Total 12

Newbuilding programme:

Newbuilding programme as at 30 September 2005

Tanker Department

Delivery

Ownership

share (%)

Product tanker - SR 1st quarter 2006 100

Product tanker - SR 2nd quarter 2006 100

Product tanker - SR 4th quarter 2006 100

Product tanker - SR 2nd quarter 2007 100

Dry Cargo Department

Handymax (sold) 4th quarter 2005 100

Handymax 1st quarter 2008 100

Handymax 2nd quarter 2008 100

Subsequent fleet changes In the fourth quarter, the Company will take delivery of the

Handymax bulkcarrier NORDFLEX, acquired through the decla-

ration of a purchase option. The Company has sold the Handy-

max vessel NORDHOLM to Greek interests for delivery in the

fourth quarter of 2005. The profit amounts to USD 10 million.

The Handymax vessels NORDSUND and NORDBRIGHT have

been sold to American interests and chartered back for a period

of 2 years. The vessels are expected to be delivered to the new

owners in the fourth quarter and the gross profit from the sale

of the 2 vessels will be approximately USD 33 million before

tax, USD 23 million of which will be recognised this year and

USD 10 million of which will be set off against the charter hire

over the next 2 years.

The product tanker NORDSEA - held by the Company on long-

term charter with purchase option until the middle of 2008, has

been sold as the Company will declare the purchase option at

this point of time. The profit will amount to approximately 12

million before tax.

Equity development, 1 January - 30 September

USD 1,000 2005 2004

Equity 1 January (old policies) - 184,908

IFRS adjustment - 9,755

Equity 1 January (new policies) 340,077 194,663

Adjustment of hedging instruments 5,398 3,668

Profit for the period 244,959 199,011

Purchase of minority 0 -6,669

Dividend paid -38,073 -35,667

Purchase/sale of own shares -33,296 1,409

Share-based incentive programme 93 93

Equity at year-end 519,158 356,508



Cash flows The Company's available funds increased during the third quar-

ter by USD 23 million and amounted to USD 160 million as at

30 September 2005. During the quarter, the Company's opera-

tions generated a positive cash flow of USD 59 million whereas

investments and financing activities contributed by USD -9 mil-

lion and USD -27 million, respectively.

During the first three quarters, the Company's available funds

increased by USD 27 million, USD 215 million of which were

generated by operations and USD -70 million as well as USD

-119 million by the investment and financing activities, respec-

tively.

The investments of the year mainly relate to the purchase and

sale of vessels whereas the financing primarily relates to the

purchase of own shares for USD -35 million, dividend paid of

USD -38 million, and repayment/instalment on long-term debt

of USD -47 million.

In the first three quarters, the Company invested USD 234 mil-

lion gross (USD 114 million in the third quarter) in expansion of

the fleet (including prepayments) while the net proceeds from

the sale of vessels amounted to USD 166 million (107 million in

the third quarter).

Equity The Company's equity amounted to USD 519 million as at 30

September 2005 and has, this year, thus been increased by

USD 179 million or 53%.

The equity development comprises profit for the period of USD

245 million, write-down in connection with the purchase of own

shares for USD -33 million, dividend paid of USD -38 million as

well as other adjustments of USD 5 million, which mainly relate

to the value adjustment of hedging instruments.

As at 30 September, the Company's fleet and the orders for 7

newbuildings are estimated to represent an added value of USD

293 million compared to book value. This corresponds to USD

131 (DKK 811) per share, excluding the Company's stock of

own shares. Net asset value per share is hereafter USD 375

(DKK 2,322) per share. Furthermore, the Company's purchase

options on long-term chartered vessels have a non-entered,

positive value.



Highlights by segments

3rd quarter 2005 3rd quarter 2004

USD 1,000

Dry

Cargo Tanker

Not

allocated Total

Dry

Cargo Tanker

Not

allocated Total

Freight income 275,390 25,379 0 300,769 269,598 24,397 0 293,995

Costs -242,096 -15,163 -1,262 -258,521 -227,446 -14,900 -367 -242,713

Profit before depreciation

(EBITDA) 33,294 10,216 -1,262 42,248 42,152 9,497 -367 51,282

Profit from sale of vessels etc. 20,094 18,468 18 38,580 -18 0 0 -18

Depreciation -2,029 -2,487 -362 -4,878 -514 -2,544 -234 -3,292

Income from joint

ventures

0

258

0

258

0

4

0

4

Operating profit

(EBIT)

51,359

26,455

-1,606

76,208

41,620

6,957

-601

47,976

Fair value adjustment of

certain hedging instruments

4,626

-1,056

0

3,570

-

-

-

-

Net finance 0 0 -568 -568 0 0 -202 -202

Profit before tax 55,985 25,399 -2,174 79,210 41,620 6,957 -803 47,774

Profit for the year 55,966 25,399 -3,349 78,016 41,620 6,957 -1,146 47,431

1/1-30/9 2005

1/1-30/9 2004

USD 1,000

Dry

Cargo Tanker

Not

allocated Total

Dry

Cargo Tanker

Not

allocated Total

Freight income 903,228 89,875 0 993,103 762,439 65,595 0 828,034

Costs -764,150 -48,489 -4,013 -816,652 -605,890 -37,425 -1,905 -645,220

Profit before depreciation

(EBITDA) 139,078 41,386 -4,013 176,451 156,549 28,170 -1,905 182,814

Profit from sale of vessels etc. 39,538 18,468 21 58,027 20,305 12,451 0 32,756

Depreciation -4,035 -7,878 -1,042 -12,955 -842 -8,195 -629 -9,666

Income from joint

ventures

0

8,111

0

8,111

0

183

0

183

Operating profit

(EBIT)

174,581

60,087

-5,034

229,634

176,012

32,609

-2,534

206,087

Fair value adjustment of

certain hedging instruments

28,203

-1,056

0

27,147

-

-

-

-

Net finance 0 0 -8,096 -8,096 0 0 -5,097 -5,097

Profit before tax 202,784 59,031 -13,130 248,685 176,012 32,609 -7,631 200,990

Profit for the year 202,488 59,031 -16,856 244,663 175,788 32,609 -9,610 198,787



Dry Cargo Financial highlights

In the third quarter, the Dry Cargo Department achieved a pro-

fit of USD 56 million (USD 41 million), including the profit from

the sale of a Handymax bulkcarrier of USD 20 million (USD 0

million). For the first three quarters, the profit was USD 202

million (USD 176 million), including profits from the sale of ves-

sels of USD 40 million (USD 20 million).

In the third quarter and for all 3 segments of the Dry Cargo De-

partment, the freight market in general was considerably lower

than it was in the first half-year. The rates of the Panamax and

Capesize segments decreased by 50% and 44%, respectively,

while there was a decrease of 39% in the largest segment of

the Dry Cargo Department - Handymax.

In the third quarter, the Company achieved higher earnings

than the average spot market in all 3 segments, which can be

attributed to the Company's strategy of securing long-term em-

ployment of the tonnage. At the same time, NORDEN continued

the planned expansion of the capacity. Thus, more than 10,000

ship days were operated in a single quarter (including single

voyages) for the first time. The total activity for the first three

quarters reached 29,134 ship days (including single voyages),

corresponding to an increase of 14% compared to 2004.

In the Capesize segment, all 4 active units were chartered out

on long-term charter at T/C equivalents 15% above the spot

market. For the Company's 2 main segments, Panamax and

Handymax, the Company's earnings were 38% and 35% higher

than the spot market, respectively.

Market trends

At present, the dry cargo rates are considerably below the peak

level from February this year (approximately 40% lower), how-

ever, since the middle of August to this date the level has in-

creased by approximately 70% measured by the Baltic Dry In-

dex.

The general market increase can largely be attributed to the in-

creased Chinese import of raw materials. The Chinese import of

certain raw materials is controlled centrally and the market has

therefore had some experiences where the import volume is ad-

justed up- or downward with very short notice. This has caused

an unprecedented increased volatility in demand for transport

and thus also in the freight levels.

For the remainder of 2005, NORDEN expects that the market

will show a slowly decreasing trend and continued high volatility

as an effect of the fact that the fleet growth (5.3% increase

year-to-date) has been higher than the increase in demand

(3.7% increase year-to-date) and that this trend will continue

in the fourth quarter. (Source: Platou).

Today, the prices of secondhand vessels for immediate delivery

are at the same level as the prices at the end of the first half-

year, i.e. approximately 15-20% below the historically high le-

vel in the spring of 2005. Starting in September, the prices for

newbuildings with delivery 2007-2009 have been indicating a

decreasing trend due to the declining steel prices. The new-

building prices are today 10-15% below the historical record-

level in the first quarter of 2005.

Employment and rates - third quarter 2005

( excluding single voyages )

USD per day Number of

ship days NORDEN

T/C equivalent NORDEN

Spot T/C avg.

market*

Capesize 384 39,354 34,169

Panamax 2,515 22,132 16,073

Handymax 5,321 21,612 15,971

*Source: The Baltic Exchange

Employment and rates - first three quarters

( excluding single voyages )


ship days NORDEN


Spot T/C avg.

market*

Capesize 958 37,661 51,937

Panamax 7,110 29,336 26,395

Handymax 16,949 25,104 22,535

*Source: The Baltic Exchange



Employment of the fleet

Fleet as at 30 September 2005

Dry Cargo Department

Active fleet

Owned vessels 8

Chartered vessels without purchase options 88

Chartered vessels with purchase options 16

Active total 112

Vessels for delivery

Newbuildings (of which 1 is sold) 3


For delivery total 31

Gross fleet total incl. newbuildings

143

Of which vessels with purchase options total

44

In the third quarter, the Company has been focusing on obtain-

ing higher capacity coverage for the rest of 2005 and in 2006.

Thus, at the end of the third quarter, 89% of the known capa-

city measured in ship days for the fourth quarter of 2005 and

63% of the total capacity in 2006 had been covered. The future

employment was in the third quarter secured by a combination

of Contracts of Affreightments (COAs), period charter parties,

and Forward Freight Agreements (FFAs).

The Company's owned dry cargo fleet was expanded from 5 to

8 units through the delivery of 5 units (4 units by exercising

purchase options and 1 unit from yard) and by selling off 2

units. The Dry Cargo Department has, furthermore, declared

purchase options on another 2 Handymax bulkcarriers for ex-

pected delivery in the fourth quarter of 2005.

In the third quarter, the Company realised the sale of 2 units

with a total profit of USD 20 million.

In the third quarter, the Dry Cargo Department has entered in-

to an agreement regarding the chartering of 3 dry cargo vessels

on long-term charter with purchase option.

After the end of the third quarter, the Dry Cargo Department

has furthermore chartered another 2 dry cargo vessels with

purchase option.

As previously announced, the Dry Cargo Department has sold 3

Handymax bulkcarriers for delivery during the fourth quarter

with a total profit of USD 33 million.

The Dry Cargo Department's newbuilding programme at 30 September

Delivery Ownership %

Handymax (sold) 4th quarter 2005 100

Handymax 1st quarter 2008 100

Handymax 2nd quarter 2008 100



Tanker

Financial highlights

In the third quarter of 2005, the Company's Tanker Department

achieved a profit before tax of USD 25 million (USD 7 million),

including profit from the sale of vessels of USD 18 million (USD

0 million).

Excluding profits from the sale of vessels, earnings are at the

same level as last year in spite of a lower market and can be

attributed to increased activity manifesting itself as 19% more

ship days. However, the demand - primarily for refined oil pro-

ducts and thereby product tonnage - has increased significantly

after the two very fierce hurricanes in the Mexican Gulf towards

the end of August and in the beginning of September but the

effects of these will not be seen until the fourth quarter.

In the third quarter of 2005, the freight earnings were USD 25

million (USD 24 million), corresponding to a minor increase of

4%. In the first three quarters, the freight earnings amounted

to USD 90 million (USD 66 million).

The mentioned T/C equivalents for the MR and Handysize ves-

sels are based on a preliminary pool distribution, which will be

readjusted at the end of the year. This will result in higher

earnings, in particular on the MR vessels.

Thus, the Company still expects the product tanker segment,

where the Company operates on the spot market, to do consid-

erably better than raw oil tank, where the Company's vessels

are employed on long-term charter.

Market trends

In the third quarter, global oil demand was 82.4 mbd against

81.7 mbd in the same period last year.

According to the International Energy Agency's (IEA) latest re-

port from October, oil demand for 2005 is expected to reach

83.4 mbd, an increase of 1.5% (82.1 mbd) compared to 2004.

The increase for 2006 is expected to be 2.1%, corresponding to

1.7 mbd.

IEA's figures include the effect of the strong hurricanes, hitting

the Mexican Gulf at the end of August and in the beginning of

September. Due to this, the American demand for refined oil

products decreased by 2.3%.

The hurricanes caused massive damage to the oil refineries in

the area and, in September, refining capacity corresponding to

2.1 mbd was out of operation. This lack of capacity caused bot-

tleneck problems with lack of refining capacity and, almost im-

mediately, caused increase in demand for product tonnage and

thus considerably increasing freight rates for this type of ton-

nage while the rate levels for raw oil tonnage remained unaf-

fected.

Employment and rates - third quarter 2005


ship days NORDEN


Spot T/C avg.

market*

Aframax (95,000 – 115,000 dwt)

368

19,694

31,577

MR product tanker (45,000 dwt)

368

22,920

23,423

Handysize product tanker (35,000 – 37,000 dwt)

618

20,018

22,500

*Source: ACM Shipbroker Ltd.

Employment and rates - first three quarters


ship days NORDEN


Spot T/C avg.

market*

Aframax (95,000 – 115,000 dwt)

1,092

19,673

31,154

MR product tanker (45,000 dwt)

1,092

26,011

24,164

Handysize product tanker (35,000 – 37,000 dwt)

2,080

22,213

23,474

* Source: ACM Shipbroker Ltd.



Employment of the fleet

Fleet as at 30 September 2005

Tanker Department

Active fleet

Owned vessels 4



Active total 14

Vessels for delivery

Newbuildings 4



For delivery total 10

Gross fleet total incl. newbuildings

24

Of which vessels with purchase options total

7

Since 1 January 2005, the majority of the product tanker ton-

nage has been employed through Norient Product Pool, estab-

lished by NORDEN and Interorient. The pool's objective is to

achieve the best possible combination of employment in the

spot market and some coverage of earnings through long-term

charter agreements. The pool holds a fine reputation with our

customers in both market segments and supplies the reliable as

well as effective transport in demand by the big oil companies

and traders.

At the end of the third quarter, the pool operated 17 units and

the 2 pool partners have a total order book of 20 units for de-

livery up to 2008.

The Company's Aframax tonnage is still employed on long-term

charter agreements. The Company is thereby maintaining the

objective of securing stable and good earnings by combining

the employment of the tonnage in the spot and period market.

In October, the Company has chartered another new-built MR

unit from Korean interests with delivery from yard in March

2006.

Furthermore, after the end of the third quarter, an agreement

on 3 years time charter employment of an MR unit to Swiss in-

terests - with the obligation to purchase the vessel from the

Company after the expiration of the charter period - has been

entered into in cooperation with the pool.

Thus, the Company continues the controlled expansion of the

tanker activities.

For the rest of the year, 74% of the known capacity, measured

in ship days, has been covered. The corresponding figure for

2006 is 56%.



Expectations for the rest of 2005

Dry Cargo For 2005, despite a declining market, the Company expects the

total earnings of the Dry Cargo Department to be the best in

the Company's history and this can be attributed to the Dry

Cargo Department's long-term strategy of obtaining high cover-

age as well as profits from the sale of vessels.

Tanker At the beginning of the fourth quarter, the tanker market was

characterised by a very strong rate level for the product ton-

nage, primarily due to an after-effect of the hurricanes in the

USA and the expectation of a coming strong winter market.

The Company expects a solid and balanced market for the who-

le year. Reflecting the increased number of ship days at dis-

posal in the favourable market and profits from the sale of ves-

sels, a considerably higher profit than the profit of 2004 is an-

ticipated for 2005 - the best ever in the history of the Com-

pany.

The Group The result for the whole year, which was previously expected to

be in the range of USD 310 million, is now expected to be in the

range of USD 320 million, including profits from the sale of ves-

sels of USD 125 million and fair value adjustment of certain

hedging instruments of USD 15 million. This upward adjustment

is due to an increased profit from operations of USD 5 million

and a positive value adjustment of hedging instruments of USD

5 million.

Forward-looking statement The report includes forward-looking statements reflecting

the board of management’s current perception of future

trends and financial performance. The statements for 2005

and the years to come naturally carry some uncertainty and

NORDEN's actual results may therefore differ from the ex-

pectations. Factors that may cause the results achieved to

differ from the expectations are, among other things, but

not exclusively so, changes in the macro-economic and po-

litical conditions – especially in the Company’s key markets,

changes in NORDEN's assumptions of rate development and

operating costs, volatility in rates and ship prices, changes

in legislation, possible interruptions in traffic and operations

as a result of external events, etc. The interim report is not

intended to be a solicitation to purchase or trade in shares

in Dampskibsselskabet "NORDEN" A/S.

The report is published in the Danish and the English languages. In the event of any discrepancies, the Danish version shall be governing.



Interim report first to third quarter - the Group

Accounting policies The Company’s accounting policies have been changed as at 1

January 2005 in compliance with the new standards approved

by the European Union, the International Financial Reporting

Standards (IFRS), and such other financial reporting require-

ments as apply to listed companies.

Furthermore, the Company will present its interim reports for

2005 in accordance with requirements in the IFRS and the

Danish financial reporting requirements for interim reports as

apply to listed companies.

The interim report has been presented in accordance with the

IAS 34.

The effect, on a quarterly basis, of the transition to the IFRS as

well as the presentation of applied accounting policies have

been announced to the Copenhagen Stock Exchange on 25 May

2005. The most important changes for the Group are as fol-

lows:

• Scrap values of vessels • Recognition of share-based incentive payment • Minority interests

• Fair value adjustment of certain hedging instruments

In accordance with the IFRS 1, the provisions of the IAS 39 re-

garding the recognition and measurement of financial instru-

ments are only introduced from 1 January 2005 without re-

statement of comparative figures.

The effects on profit, balance and equity of the policy changes

made as well as the changes in presentation of the interim re-

port for the third quarter of 2004 concerning the Group, are as

follows:

USD 1,000

Profit for the period 356

Equity 3,537

Balance sum 1,597

The changes applied in the accounting policies have no effect on

tax on the profit for the period or on the tax liabilities recog-

nised in the balance sheet as at 30 September 2004.

The comparative figures for 2004 have been adjusted to the

new accounting policies and to the presentation of accounts.

A detailed specification of the quarterly effect on the compara-

tive figures in 2004 can be seen in the stock exchange an-

nouncement of 25 May 2005.



Statement

The Board of Directors and Management today reviewed and approved the interim report for the third quarter of 2005 of Dampskibs-

selskabet "NORDEN" A/S.

The interim report is prepared in accordance with the International Financial Reporting Standards (IFRS) and the general Danish fi-

nancial requirements. In line with previous policies, the interim report is not audited.

We consider the accounting policies applied to be appropriate and the accounting estimates made to be adequate. Furthermore, we

find the overall presentation of the interim report to present a true and fair view.

In our opinion, the interim report therefore gives a true and fair view of the assets and liabilities of the Group, the financial position as

well as the result of the Group's activities and cash flows for the interim period.

Copenhagen, 25 November 2005

Management

Carsten Mortensen Jens Fehrn-Christensen

President Executive Vice President

Board of Directors

Mogens Hugo Jørgensen Alison J. F. Riegels

Chairman Vice Chairman

Erik G. Hansen Einar Fredvik

Kirsten Hansen Ole Clausen

Erling Højsgaard Egon Christensen





Income statement

USD 1,000 2005 2004 2005 2004

1/1-30/9 1/1-30/9 1/7 -30/9 1/7-30/9

Freight income (net revenues) 993,103 828,034 300,769 293,995

Costs -816,652 -645,220 -258,521 -242,713

Profit before depreciation (EBITDA) 176,451 182,814 42,248 51,282

Profit from the sale of vessels etc. 58,027 32,756 38,580 -18

Depreciation -12,955 -9,666 -4,878 -3,292

Profit from joint ventures 8,111 183 258 4

Operating profit (EBIT) 229,634 206,087 76,208 47,976

Fair value adjustment of certain hedging instruments 1) 27,147 - 3,570 -

Net finance -8,096 -5,097 -568 -202

Profit before tax 248,685 200,990 79,210 47,774

Tax on the profit for the period -3,726 -1,979 -1,175 -343

Profit for the period 244,959 199,011 78,035 47,431

Distributed as follows:

Shareholders in D/S "NORDEN" A/S 244,663 198,787 78,016 47,311

Minority share 296 224 19 0

Total 244,959 199,011 78,035 47,431

Earnings per share 112.07 88.96 36.08 21.22

Diluted earnings per share 111.23 87.19 35.81 20.80

1) Specification of "Fair value adjustment of certain hedging instruments"

Bunker hedging:

2005 6,129

2006 10,556

2007 6,972

2008 665

2009 738

Total 25,060

FFA:

2005 1,398

2006 689

Total 2,087

Total 27,147

The specification shows unrealised fair value adjustments of financial instruments covering future periods used for hedging according

to the Company's risk management policy, but as a number of restrictive conditions under IAS 39 are not met, cannot be regarded as

hedging under IFRS regulations. As the fair value adjustments are realised, the profit/loss is reclassified to the same item as the

hedged transaction.



Income statement per quarter

USD 1,000 2005 2005 2005 2004 2004

3rd quarter 2nd quarter 1st quarter 4th quarter 3rd quarter

Freight income (net revenues) 300,769 348,833 343,501 338,559

293,995

Costs -258,521 -273,886 -284,245 -288,449 -242,713

Profit before depreciation (EBITDA) 42,248 74,947 59,256 50,110 51,282

Profit from the sale of vessels etc. 38,580 -18 19,465 17,001 -18

Depreciation -4,878 -4,120 -3,957 -3,662 -3,292

Profit from joint ventures 258 7,883 -30 12 4

Operating profit (EBIT) 76,208 78,692 74,734 63,461 47,976

Fair value adjustment of certain hedging instruments 1) 3,570 12,471 11,106 - -

Net finance -568 -3,590 -3,938 2,672 -202

Profit before tax 79,210 87,573 81,902 66,133 47,774

Tax on the profit for the period -1,175 -1,010 -1,541 -987 -343

Profit for the period 78,035 86,563 80,361 65,146 47,431

Distributed as follows:

Shareholders in D/S "NORDEN" A/S 78,016 86,549 80,098 65,123 47,431

Minority share 19 14 263 23 0

Total 78,035 86,563 80,361 65,146 47,431

Earnings per share 36.08 39.95 36.06 29.21

21.22

Diluted earnings per share 35.81 39.65 35.79 28.62

20.80



Balance sheet

USD 1,000 2005 2004 2004

30/9 30/9 31/12

ASSETS

Leasehold improvements 381 - 522

Land and buildings 4,085 4,352 4,154

Vessels 187,013 183,888 179,343

Vessels acquired under finance leases 26,808 28,168 27,793

Prepayments for newbuildings 60,396 37,665 42,477

Fixtures, fittings and equipment 4,506 4,405 4,530

Income from joint ventures 18,163 9,903 9,959

Non-current assets 301,352 268,381 268,778

Inventories 14,051 9,404 14,888

Receivables 87,944 85,397 93,831

Current account from joint ventures 0 0 1,715

Prepayments for newbuildings sold 5,777 4,461 7,083

Securities 2,347 594 660

Cash and bank balances 159,758 167,824 134,982

269,877 267,680 253,159

Non-current assets held for sale 89,957 - -

Current assets 359,834 267,680 253,159

Total assets 661,186 536,061 521,937

LIABILITIES

Share capital 7,321 7,321 7,321

Retained earnings 509,580 347,248 288,679

Proposed dividend 0 0 42,116

Equity (NORDEN's shareholders) 516,901 354,569 338,116

Minority interests 2,257 1,939 1,961

Equity 519,158 356,508 340,077

Provisions for docking costs (Bareboat) 338 285 104

Bank debt 14,225 54,500 39,378

Danish Ship Finance 24,220 28,624 27,523

Lease obligations 23,206 25,321 24,746

Non-current liabilities 61,989 108,730 91,751

Short-term portion of long-term debt 9,090 12,493 26,325

Trade payables 16,987 43,283 24,952

Current account from joint ventures 14,438 0 0

Prepayments received on vessels for resale 19,800 3,700 5,409

Other payables and accruals 19,724 11,347 33,423

Current liabilities 80,039 70,823 90,109

Total liabilities 142,028 179,553 181,860

Total equity and liabilities 661,186 536,061 521,937



Summarised cash flow statement - the Group

USD 1,000 2005 2004 2005 2004 2004

1/7-30/9 1/7-30/9 1/1-30/9 1/1-30/9 1/1-31/12

Net profit 78,035 47,431 244,959 199,011 264,159

Reversal of items with no effect on available funds -31,621 3,008 -70,560 -23,340 -33,825

Cash flows before change in operating capital 46,414 50,439 174,399 175,671 230,334

Change in operating capital 12,970 863

40,873

-11,636 -40,234

Cash flows from operating activities 59,384 51,302 215,272 164,035 190,100

Investments in newbuildings -13,043 -2,363

-78,033

994 -6,442

Investments in vessels etc. -101,082 -19,148 -156,302 -60,188 -61,087

Investments in subsidiaries - -8,471 - -8,471 -

Investments in joint venture -93 - -93 - -

Purchase of securities -1,687 - -1,687 - -

Net proceeds from the sale of vessels etc. 106,829 -18 166,385 70,825 87,722

Cash flows from investing activities -9,076 -30,000 -69,730 3,160 20,193

Loan financing -26,590 -3,352

-47,231

-24,738 -24,100

Dividend paid to shareholders 0 0 -38,073 -35,667 -100,049

Takeover of minority holdings in Nordholm Pte. Ltd. and

Nordafrika Pte. Ltd. - -

-

- -6,670

Purchase of own shares -875 1,409 -34,541 1,409 -5,598

Sale of own shares 0 -1,248 1,245 0 1,410

Cash flows from financing activities -27,465 -3,191 -118,600 -58,996 -135,007

Change in cash and cash equivalents for the period 22,843 18,111

26,942

108,199 75,286

Cash and cash equivalents at begin-period 136,042 149,900

134,982

59,845 59,845

Currency rate adjustments 873 -187 -2,166 -220 -149

Change in cash and cash equivalents for the period 22,843 18,111 26,942 108,199 75,286

Cash and cash equivalents at end-period 159,758 167,824

159,758

167,824 134,982



Statement of changes in equity - the Group

USD 1,000 Share

capital

Retained

earnings

Dividend Equity

(NORDEN's

shareholders)

Minority

interests

The Group's

equity

Equity at 1 January 2004

(old policies)

7,321

138,918

38,669

184,908

0

184,908

IFRS adjustment (depreciation) - 1,371 - 1,371 - 1,371

IFRS adjustment (minorities) - - - - 8,384 8,384

Equity 1 January 2004 (new policies)

7,321 140,289 38,669 186,279 8,384 194,663

Share-based incentive programme - 93 - 93 - 93

Value adjustment of hedging instruments - 3,668 - 3,668 - 3,668

Net income recognised directly in

equity

0

3,761

0

3,761

0

3,761

Profit for the period

-

198,787

-

198,787

224

199,011

Purchase of minority - - - - -6,669 -6,669

Total income for the period 0 202,548 0 202,548 -6,445 196,103

Purchase/sale of own shares

-

1,409

-

1,409

-

1,409

Distributed dividend - - -35,667 -35,667 - -35,667

Dividend own shares - 1,322 -1,322 0 - 0

Exchange rate adjustments on proposed

dividend - 1,680 -1,680 0 - 0

Total equity changes 0 206,959 -38,669 168,290 -6,445 161,845

Equity at 30 September 2004

7,321

347,248

0

354,569

1,939

356,508


(old policies)

7,321

286,959

42,116

336,396

-

336,396


IFRS adjustment (minorities) - - - 0 1,961 1,961

Equity at 1 January 2005 (new policies) 7,321 288,679 42,116 338,116 1,961 340,077

Share-based incentive programme

-

93

-

93

-

93

Value adjustment of hedging instruments - 5,398 - 5,398 - 5,398


equity

0

5,491

0

5,491

0

5,491


-

244,663

-

244,663

296

244,959

Total income for the period 0 250,154 0 250,154 296 250,450


-

-33,296

-

-33,296

-

-33,296

Dividend - - -38,073 -38,073 - -38,073



dividend - 2,079 -2,079 0 - 0

Total equity changes 0 220,901 -42,116 178,785 296 179,081

Equity at 30 September 2005

7,321

509,580

0

516,901

2,257

519,158



Statement of changes in equity - the Group (continued)

USD 1,000 Share

capital

Retained

earnings

Dividend Equity

(NORDEN's

shareholders)

Minority

interests

The Group's

equity


(old policies)

7,321

138,918

38,669

184,908

0

184,908


IFRS adjustment (minorities) - - - 0 8,384 8,384

Equity 1 January 2004 (new policies)

7,321 140,289 38,669 186,279 8,384 194,663

Share-based incentive programme

-

124

-

124

-

124

Value adjustment of hedging instruments - -6,987 - -6,987 - -6,987


equity

0

-6,863

0

-6,863

0

-6,863


-

263,912

-

263,912

247

264,159

Purchase of minority - - - 0 -6,670 -6,670

Total income for the period 0 257,049 0 257,049 -6,423 250,626


-

-4,188

-

-4,188

-

-4,188

Tax on equity changes - -975 - -975 - -975

Extraordinary dividend - -66,589 66,589 0 - 0



dividend - 1,680 -1,680 0 - 0

Distributed dividend - - -100,049 -100,049 - -100,049

Proposed dividend - -42,116 42,116 0 - 0

Total equity changes 0 148,390 3,447 151,837 -6,423 145,414

Equity at 31 December 2004

7,321

288,679

42,116

338,116

1,961

340,077

Documents

Interim report - third quarter 2005 - NORDEN · dampskibsselskabet "norden" a/s, 49 amaliegade, dk-1256 copenhagen, denmark, 3/22 interim report - third quarter 2005