En strategisk regnskabsanalyse og værdiansættelse af Dampskibsselskabet Norden A/S

Kathrine Madsen

Student thesis: Master thesis


D/S Norden is one of the oldest and most experienced dry bulk shipping companies in the world. Headquartered in Copenhagen Denmark, with offices around the world, Norden operates and manage a highly flexible fleet of both owned and chartered dry bulkers and product tankers. Each day Norden´ s vessels transport raw materials such as iron ore, coal, steel and oil products from continent to continent. Norden have done so, since 1871. Norden is listed on NASDAQ OMX Copenhagen A/S and had a price per share of DKK 204, 80 on July the 1st 2010. The purpose of this thesis is to determine a market price per share as of July the 1st 2010. Using both the DCF and the EVA approach, an estimate of the value of Norden´ share has been determined to DKK 414, 00. This value estimate deviates from the current price with more than 200 % at the time of valuation. However, results from comparing the price at which peers of Norden currently trades at using multiples, indicate that the market are currently undervaluing Norden. This comparison thus supports the value estimate generated from the DCF and EVA approach. Trough both a strategic and financial analysis, Norden´ s nonfinancial and financial value drivers have been found. The combination of these drivers show, that despite the fact that Norden is a company which operates in a volatile industry; highly correlated with the world economy, Norden has the capacity of keeping its position as one of the leaders within the dry bulk market. This is a consequence of part having a highly flexible fleet and part having a strong financial position. The conditions for the dry bulk market have been extremely well the past decade. As a result, dry bulk shipping companies have seen higher and higher excess returns. The never ending increase in Chinese demand for raw commodities, have been the primary driver behind the success in the dry bulk segment. How long can this go on? This is one of the most important assumptions following the valuation of Norden in this thesis. Chinas demand for raw materials is expected to decline, however at a slow and moderate rate in the years to come. In effect, EBIT margin will fade and in return so will the return on invested capital. Economic value added will decline and reach zero when steady state for Norden is reached. Nonetheless, the value estimate of the stock indicates that it can be characterized as a profitable long term investment.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2010
Number of pages113