Goodbulk Expects Dry Bulk Market Recovery to Continue

GoodBulk

GoodBulk, a leading owner and operator of dry bulk vessels, announced its financial results for the third quarter of 2018.

3rd Quarter Highlights
• Generated $14.5 million of net profit resulting in earnings per share (EPS) of $ 0.49. EBITDA for the period was $27.9 million.
• Earned an average gross Time Charter Equivalent rate (TCE) of $19,612 per day on our Capesize vessels, $13,577 per day on our Panamax vessel and $12,910 per day on our Supramax vessels.
• Averaged direct vessel operating expenses for the period of $5,373 per vessel per day.
• Hedged all floating interest rate exposure under its credit facilities to maturity, fixing LIBOR at an average of 2.6654%.
• Ended the period with a cash balance of $28.6 million.
• Completed a private placement of new common shares to an unaffiliated investor at an issue price of $17.46 per share for net consideration of $9.9 million.

Recent Developments
• For the fourth quarter thus far the Company has fixed approximately 75% of its Capesize days at $20,290 per vessel per day (equivalent to reported gross TCE).
• GoodBulk fixed 25% of its Capesize days through the fourth quarter of 2019 at an average of $21,352 per vessel per day (equivalent to reported gross TCE).
• On 12 October 2018, took delivery of two Capesize vessels, the M/V Aquaexplorer and M/V Aquanavigator. • Declared a regular quarterly cash dividend of $0.24 per common share payable to shareholders of record as of 14 November 2018. GoodBulk is a leading owner of dry bulk vessels executing a strategy based on low financial leverage and active portfolio management which optimizes operational leverage to the dry bulk freight market.

While GoodBulk is able to invest in dry bulk vessels ranging in size from 50,000 to 210,000 dwt, Management continues to believe that secondhand Capesize vessels currently represent the most attractive risk adjusted return opportunity. As such, the Company continues to focus its capital allocation to this segment. In this effort, the Company announced on 31 July 2018 an agreement to sell the M/V Aquapride, a Supramax vessel, and the exercise of options entered into in April 2018 to acquire three additional Capesize vessels, all of which have now been delivered into the fleet. Following the delivery of the M/V Aquapride to its new owners, the Company will control a fleet of twenty-seven dry bulk vessels consisting of twenty-five Capesize vessels, one Panamax vessel, and one Supramax vessel.

The third quarter of 2018 saw a continuation of the improvement in the Capesize market as measured by the benchmark Baltic 180,000 dwt 5TC index (“BCI”). Capesize rates in July and August were the strongest so far this year with July averaging $23,952 per day and August averaging $25,209 per day, 195% and 57% above the same months of last year, respectively. In September the trend changed and rates moved lower mainly due to softening coal imports into China as the nation had ample stocks to feed its power stations. Capesize rates in September averaged $17,177 per day, a sequential decline and 13% lower than the same month last year. The market started to improve slowly in October with rates averaging $18,602 per day. Management remains optimistic that supply and demand fundamentals in the Capesize market will remain strong supported by historically low fleet growth and growth in tonne miles.

Results of Operations
Third Quarter 2018
For the three months ended 30 September 2018, the Company reported revenues and net other operating income (expenses) of $56.2 million, and net income of $14.5 million, generating EPS of $0.49 based on 29,692,278 weighted average number of shares outstanding. This result compares with a gain of $0.7 million for the third quarter of 2017. Ship ownership days increased sequentially to 2,327 in the third quarter of 2018, from 2,131 in the second quarter of 2018 as the Company took delivery of one vessel. Ship ownership days are expected to further increase to an estimated 2,506 in the fourth quarter of 2018 but move down to 2,430 in the first quarter of 2019 as the M/V Aquapride delivers to its new owners. Ship ownership days in the full year of 2019 are expected to be 9,855.

The Company earned an average gross TCE of $19,612 per day on its Capesize vessels, $13,577 per day on its Panamax vessel, and $12,910 per day on its Supramax vessels for the three months ended 30 September 2018. Comparatively for the three months ended 30 September 2017, the Company earned an average gross TCE of $11,049 per day. During the third quarter of 2018, nineteen of the Company’s vessels were traded on the spot market employed in Capesize Chartering Ltd. (“CCL”) via the CTH Capesize Revenue Sharing Agreement (“Capesize RSA”), one Capesize vessel was employed on an index-linked charter and three Capesize vessels on period charters. The Panamax vessel was trading on the spot market and the Supramax vessels were employed in the CTM Supramax Revenue Sharing Agreement (“Supramax RSA”). Net income for the three months ended 30 September 2018 included non-cash depreciation expense of $9.5 million. Direct vessel operating expenses for the period totaled $12.5 million or $5,373 per vessel per day. General and administrative expenses (“G&A”) for the three months ended 30 September 2018 were $0.7 million, or $294 per vessel per day compared to $352 per vessel per day for the same period in 2017.

Nine months ended 30 September 2018
For the nine months ended 30 September 2018, the Company reported revenues and net other operating income (expenses) of $125.3 million, and net income of $27.2 million, generating EPS of $1.00 based on 27,043,951 weighted average number of issued and outstanding shares. This result compares with a gain of $1.2 million for the nine months ended 30 September 2017. Ship ownership days increased to 6,195 in the first nine months of 2018, from 1,569 in the same period of 2017, as the Company owned 14 more vessels during the first nine months of 2018. Ship ownership days are expected to further increase to an estimated 8,701 for the full year of 2018 and 9,855 for the full year of 2019. The Company earned an average gross TCE of $16,382 per day on its Capesize vessels, $13,468 per day on its Panamax vessel, and $12,271 per day on its Supramax vessels for the nine months ended 30 September 2018. Comparatively, for the nine months ended 30 September 2017 the Company earned an average gross TCE of $10,605 per day. During the nine months ended 30 September 2018, most of the Company’s vessels were traded on the spot market, with fifteen Capesize vessels employed in Capesize Chartering Ltd. (“CCL”) via the CTH Capesize Revenue Sharing Agreement (“Capesize RSA”), three Capesize vessels employed on index-linked charters and two Capesize vessels on period charter. The Panamax vessel was trading on the spot market and the Supramax vessels were employed in the CTM Supramax Revenue Sharing Agreement (“Supramax RSA”).

Net income for the nine months ended 30 September 2018 included non-cash depreciation expense of $25.2 million. Direct vessel operating expenses for the period totaled $33.3 million or $5,381 per vessel per day, or $5,278 per vessel per day excluding one-time expenses related to the acquisition of the vessels. General and administrative expenses (“G&A”) for the nine months ended 30 September 2018 were $2.4 million, or $384 per vessel per day compared to $372 per vessel per day for the same period in 2017.

GoodBulk Fleet
Following delivery of the two Capesize vessels 12 October 2018, GoodBulk controls a fleet of twenty-five Capesize, one Panamax, and two Supramax dry bulk vessels (of which one was sold in July and expected to be delivered to its new owner in November 2018) with an average age of 9.5 years.

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