Golden Ocean Group posts big profit in strong dry bulk market

Golden-Ocean

Golden Ocean Group Limited, a leading dry bulk shipping company, announced its results for the quarter ended June 30, 2021.

Highlights

• Net income of $104.5 million and earnings per share of $0.52 for the second quarter of 2021 compared with net income of $23.6 million and earnings per share of $0.14 for the first quarter of 2021
• Adjusted EBITDA of $130.5 million for the second quarter of 2021, compared with $54.6 million for the first quarter of 2021
• Reported TCE rates for Capesize and Panamax/Ultramax vessels of $29,372 per day and $18,987 per day, respectively, in the second quarter of 2021. Reported TCE rate for the whole fleet of $24,920 per day
• Completed the previously announced acquisitions of 15 modern dry bulk vessels and three newbuildings, all of which have been delivered as of the date of this report
• Signed agreements to refinance existing credit facility with Sterna Finance, securing up to $435 million of new long-term financing. The highly attractive terms of the refinancing will lower the average cash break even rate for the acquired vessels with an estimated $415 per day
• Converted time charters from floating rates to average fixed rates of $33,250 gross until the second quarter of 2022 for three Capesize vessels (180k dwt)
• In August 2021 terminated relationship with Capesize Chartering Ltd, taking full control of the Company’s commercial activities on the Capesize vessels
• Estimated TCE rates for the third quarter of 2021, based on contracted time charters and current spot fixtures on a load-to-discharge basis, are:

o approximately $33,500 per day contracted for 71% of the available days for Capesize vessels;
o approximately $22,900 per day contracted for 92% of the available days for Panamax vessels

We expect the spot TCEs for the full third quarter of 2021 to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the third quarter of 2021 as well as fluctuations in freight rates

• Announces the appointment of Mr Ben Mills as Director of the Company to fill a vacancy. Mr Mills has extensive experience from the dry bulk market through tenures in Trafigura and the Baltic Exchange, particularly focusing on the Capesize segment. Mr Mills is currently Head of Dry Cargo in Seatankers Management Ltd, an affiliate of Hemen Holding Ltd, the Companys largest shareholder.
• Announces a cash dividend of $0.50 per share for the second quarter of 2021

Ulrik Andersen, Chief Executive Officer, commented:

“Golden Ocean’s result for the second quarter of 2021 reflects the dry bulk market’s strong underlying fundamentals, but also our strategy of maintaining a significant portion of our fleet exposed to the spot market. As pleased as we are with the net profit for the second quarter of 2021, we are more excited about what lies ahead. Our longer-term market outlook is positive based on the pace of the growth in the demand, coupled with slowing fleet growth through at least 2023. While in the short term, port and supply chain inefficiencies will continue to result in rate volatility and periods of exceptionally strong rates.

As evidenced this quarter with a $0.50 per share dividend, Golden Ocean intends to pay out a significant portion of the earnings. With no material capital expenses, no debt maturities or vessels on order, Golden Ocean, as the largest listed owner in the world, is well-positioned to continue to generate significant cash flows to the benefit of the shareholders.”

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