Golden Ocean returns to black in Q4; delays 10 newbuilds

Golden-Ocean

Golden Ocean reported a full year net loss of $127.7m for 2016 compared to a loss of $220.8m in the previous year. In the fourth quarter of 2016 the company returned to the black with a net profit of $6.5m compared to a $26.7m in the corresponding quarter a year earlier.

“Our results improved in the fourth quarter, and better rates will also have a positive impact on our results for the first quarter of 2017,” said Birgitte Ringstad Vartda, CEO of Golden Ocean Management.

“Against this market backdrop, we continued to execute on our strategic plan by achieving further deferrals of vessel deliveries and securing price reductions related to the deferred newbuildings.”

Highlights

  • Reports net income of $6.5 million and earnings per share of $0.06 for the fourth quarter of 2016, an improvement of $33.2 million compared with a net loss of $26.7 million and a loss per share of $0.25 for the third quarter of 2016.
  • Adjusted EBITDA in the fourth quarter was $24.2 million compared with $8.6 million in the third quarter of 2016.
  • Reports net loss of $127.7 million and a loss per share of $1.34 for the full year 2016 compared with a net loss of $220.8 million and a loss per share of $7.3 in 2015.
  • Took delivery of the Capesize newbuilding Front Mediterranean and immediately sold and delivered the vessel to its new owner, resulting in net positive cash flow of $12.7 million in the fourth quarter.
  • Reached agreement with shipyards to defer delivery of ten newbuildings and achieved aggregate price reductions of $15.3 million.
  • Took delivery of two Ultramax newbuildings, Golden Virgo and Golden Libra and two Capesize newbuildings, Golden Surabaya and Golden Savanna subsequent to the end of the fourth quarter.

In its full year financial results Golden Ocean said that all newbuilds due to be delivered in Q4 2016 were delayed until Q1 this year, while all its other newbuildings due to be delivered this year had been postponed till the first quarter of 2018.

“In aggregate the company has achieved price reductions of $15.3m for its remaining ten newbuildings through negotiations with the yards,” Golden Ocean said.

Per Heiberg, Chief Financial Officer of Golden Ocean Management AS, stated:

“As earnings have strengthened and are now above the levels anticipated in our first quarter 2016 restructuring, we expect that a cash sweep will be triggered in the second quarter of 2017. Given our significant leverage to an improving market, any sustained period of market strength will allow us to begin to deleverage the Company’s balance sheet.”

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