John Fredriksen’s Golden Ocean Group’s first-quarter results have bucked the trend in what is typically a weak period for bulker owners.
A high level of exposure to the spot market during the period helped the Oslo and Nasdaq-listed shipowner make the most of unexpectedly strong rates.
This helped Golden Ocean file profitable results that were a little above what it booked last quarter, which is usually the seasonally strongest time of the year.
Net profit for the quarter was $65.4m, equivalent to $0.33 in earnings per share.
This is up from a loss of $8.8m a year or a loss per share of $0.04.
The shipowner, which owns a fleet of capesize and panamax bulk carriers, will pay out $0.30 per share in dividends, the same as last quarter.
Chief executive Lars-Christian Svensen said: “Golden Ocean was well positioned as the new year got underway with significant spot exposure to capture counter-seasonal strength in freight rates during the first quarter of 2024.
“The freight market and strong year-over-year demand growth offer clear indications that the market is beginning to tighten.
“Looking forward, the demand outlook is broadly optimistic, firmly supported by limited fleet supply growth, particularly in the capesize segment.”
The shipowner, which counts Fredriksen as its biggest shareholder, sold a panamax during the quarter for a net price of $15.7m, generating a $1.1m gain that was recognised during the period.
The ship was not identified but would appear to be the 75,000-dwt Golden Bull (built 2012), which was sold in October to Nova Gemi Acenteligi of Turkey. It has been renamed Ice Bull.
Ship earnings
Vessels earnings were very strong for what was supposed to be a seasonally weak quarter.
Golden Ocean’s capesize vessels earned an average net time charter equivalent rate of $27,200 per day, while its panamaxes earned $15,000 per day.
Since the quarter ended, the company has signed and closed a $180m credit facility to refinance six newcastlemaxes at what it described as a “record low” credit margin and “attractive” terms.
The five-year loan bears interest of secured overnight financing rate plus a margin of 160 basis points per annum and has an age adjusted amortisation profile of 20 years. It is secured by the six vessels.
Golden Ocean has covered about 77% of its available capesize days at $27,200 per day for the second quarter on average.
Panamaxes have a slightly higher level of forward cover this quarter with 81% covered at an average daily rate of $14,500.
It is much more spot exposed during the third quarter, a time when the capesize market begins to see real seasonal strength.
Some 24% of capesize days have been covered at an average daily rate of $25,200 per day and 40% of panamax days have been booked at $20,500 per day.
During the first quarter, Golden Ocean repaid $50m of its revolving credit facilities, leaving an undrawn revolving credit facility balance of $125m at the end of the period.
