GoodBulk Reports 1Q2022 Financial Results

GoodBulk

GoodBulk Ltd., a leading owner and operator of dry bulk vessels, announces its financial results for the first quarter of 2022.

Highlights

• On 18 March 2022 the Board of Directors authorized the payment to Shareholders of $30.0 million ($1.00 per share) as capital repatriation; furthermore, on 13 June 2022 authorized the payment to Shareholders of $45.0 million ($1.50 per share) as capital repatriation (a total of $75.0 million paid in the first half of 2022). Cumulative distributions will be at $9.34 per share, or 84.91% of the price of the Company’s March 2017 Norwegian OTC initial offering, for a total of $280.3 million.

• An index-type vessel traded spot in the CTH RSA earned $18,090 per day net, exceeding the Baltic Capesize Index by 30%; our Panamax vessel earned $18,335 per day.

• Ended the first quarter with a cash balance of $46.3 million.

• Generated $4.0 million of net profit in the first quarter of the year, resulting in earnings per share (EPS) of $0.13. EBITDA for the period was $15.7 million.

• The entire GoodBulk fleet is open on the spot market as from the second quarter of the year; at the same time the Company has taken advantage of the strong SandP market by monetizing some of the investments concluding the following disposals:

• On 19 April 2022, the Company sold and delivered to the new owner the M/V Aquamaka, a 2009 built Capesize vessel of 179,362 DWT built in Hyundai (Korea).

• On 16 May 2022, the Company sold and delivered to the new owner the M/V Aquaknight, a 2007 built Panamax vessel of 75,395 DWT built in Universal (Japan) .

• On 16 May 2022, the Company sold and delivered to the new owner the M/V Aquascope, a 2006 built Capesize vessel of 174,008 DWT built in SWS (China).

The three transactions generated $43.8 million of free cash and an annualized IRR of 18.30%.

GoodBulk is a leading owner of dry bulk vessels executing a strategy combining low financial leverage with active portfolio management to optimize operational leverage to the dry bulk freight market. The Company’s strict financial discipline resulted in industry leading pure cash general and administrative expenses of $259 per vessel per day.

Market Commentary

For the quarter ending 31 March 2022, the Baltic Capesize Index averaged $14,746 per day, 13.9% lower than $17,126 per day for the same period in 2021 and 65.4% lower than $42,645 per day for the quarter ending 31 December 2021. The weakness of Capesize earnings during the first quarter of the year is strongly correlated to low iron ore exports from Brazil where heavier-than-normal rainfall disrupted mining activities and operations at ports resulting into a 7.4 million tonne drop in exports compared to Q1 2021. The market was also negatively impacted by a resurgence in Covid-19 infections in China that triggered stringent restrictions in some major cities including Shanghai and Tangshan, the largest steelmaking hub in the country, and hurt industrial activity. This partly explains the sluggishness of China’s iron ore and coal imports during the first quarter of the year, down 15.3 million tonnes and 17.1 million tonnes yearon-year respectively.

The outbreak of the war in Ukraine also had a major impact on the dry bulk industry, triggering a reshuffling of many trades (mostly the coal trade) and making some areas almost untradable (particularly the Black Sea). Russia and Ukraine are major dry bulk exporters and the war has significantly disrupted shipments from both countries. The war also triggered a jump in European coal imports that increased by 1.0 – 1.5 million tonnes per week post-war and benefitted mostly the Capesize segment. The Panamax and Supramax segments fared better than the Capesize segment in the January – March period with the Baltic Panamax Index and the Baltic Supramax Index averaging $23,218 and $25,156 per day respectively, up 25.5% and 51.2% year-on-year respectively, supported by strong minor bulk activity. Capesize earnings rebounded towards the end of April, driven by higher volumes of cargoes, including iron ore from Brazil and the outlook for the remainder of the year is solid as the fleet growth will remain limited and as demand is expected to strengthen further with higher coal volumes and a rebound in iron ore demand into China fuelled by government’s stimulus

First Quarter 2022

For the three months ended 31 March 2022, the Company reported revenues and net other operating income (expenses) of $57.1 million, and a net profit of $4.0 million generating earnings per share of $0.13 based on 30,028,169 weighted average number of shares outstanding. This result compares with a net profit of $3.1 million for the first quarter of 2021. Ship ownership days were 2,070 in the first quarter of 2022, same as in the first quarter of 2021. In 2022 ownership days are expected to decrease to an estimated 7,543, from 8,030 in 2021. The Company earned an average gross TCE of $16,887 per day on its Capesize vessels and $18,335 per day on its Panamax vessel for the three months ended 31 March 2022. Comparatively for the three months ended 31 March 2021, the Company earned an average gross TCE of $14,592 per day on its Capesize vessels and $12,594 per day on its Panamax vessel. During the first quarter of 2022, seventeen of the Company’s Capesize vessels were traded on the spot market employed in Capesize Chartering Ltd. via the CTH Capesize Revenue Sharing Agreement; the Panamax vessel was also traded on the spot market whilst six Capesize vessels were employed on period charters. Net result for the three months ended 31 March 2022 included non-cash depreciation expense of $10.0 million. Direct vessel operating expenses for the period totaled $13.2 million or $6,366 per vessel per day. General and administrative expenses for the three months ended 31 March 2022 were $0.9 million, or $417 per vessel per day, compared to $594 per vessel per day for the same period in 2021. Pure cash G&A were $259 per vessel per day.

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