2017 May 25

Golden Ocean Group Limited: First Quarter 2017 Results

Golden Ocean Group Limited, a leading dry bulk shipping company, announced its results for the quarter ended March 31, 2017.


·      Net loss of $17.9 million and loss per share of $0.17 for the first quarter of 2017, compared with net income of $6.5 million and earnings per share of $0.06 for the fourth quarter of 2016 and a net loss of $68.2 million and a loss per share of $1.09 for the first quarter of 2016.
·      Adjusted EBITDA[1] of $17.5 million for the first quarter of 2017 compared with $24.2 million in the prior quarter and negative $14.2 million for the first quarter of 2016.
·      Entered into agreements to acquire 16 modern dry bulk vessels in a ship-for-share transaction in exchange for 17.8 million shares and the assumption of $285.2 million in debt.
·      Successfully completed a $60.0 million equity offering at NOK 60 per share (or $6.97 per share based on the prevailing exchange rate at the time) to provide financial support for the vessel acquisitions.
·      Took delivery of two Ultramax newbuildings, Golden Virgo and Golden Libra and two Capesize newbuildings, Golden Surabaya and Golden Savannah, and entered into agreements to postpone the delivery of six remaining newbuildings until 2018.

Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS commented:

"The freight rate environment held up in the first quarter of the year, a quarter that is typically characterized by seasonal weakness. Demand growth was sufficient to partially offset seasonal weakness as well as the 13 million dwt net growth of the global fleet during the quarter. Against this backdrop, we believe that our acquisition of a large fleet of modern, high quality vessels in a ship-for-share transaction was timely. The acquired vessels, averaging 4 years of age, which matches the age profile of our existing fleet, will further enhance our already significant commercial scale and increase our operational leverage. We believe these acquisitions will create significant value for our shareholders and position us well for further improvements in the dry bulk market."

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

"We will pay the full accumulated deferred repayments of $54 million of bank debt in the second quarter of 2017 by triggering the cash sweep mechanism put in place during our first quarter 2016 restructuring due to earnings levels in excess of those anticipated at that time. Also, following the delivery of the recently-acquired 16 vessels, we expect our cash breakeven levels to be further reduced. Given our significant leverage to an improving market and highly competitive cash breakeven levels, a sustained period of market strength will allow us to continue to deleverage the Company's balance sheet."

The full report is available here.


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