John Fredriksen’s Golden Ocean Group has cut its breakeven costs through a new loan at a time when profit is rolling in.
The world’s biggest listed owner of large bulkers said net earnings in the first quarter were $125.3m, against $23.5m in the same period of 2021.
The Oslo-listed company’s revenue from 94 ships jumped to $265m from $158m in healthy dry cargo markets.
Time charter equivalent (TCE) earnings came in at $24,778 per day for capesizes and $23,693 for panamaxes and ultramaxes.
In the second quarter, coverage stands at 78% of capesize days at $28,300, and $27,500 for panamaxes at 77%.
This rises to $38,200 and $34,900 for 15% and 33% of capesize and panamax days in the third quarter, respectively.
Golden Ocean also revealed it had signed a new loan agreement worth $275m to refinance 14 capesizes.
This will improve cash breakeven rates for these ships by about $1,500 per day.
The owner is paying a dividend of $0.50 per share.
Ebitda of $135m was 10% higher than analyst consensus, as was the dividend, equating to about 100% of adjusted earnings per share.
Chief executive Ulrik Andersen said the company had delivered another strong quarter on the back of a firm panamax market and a high degree of contract coverage for the capesize fleet secured at attractive levels last year.
Second half looking better
“With the anticipated strengthening of the freight market in the second half of the year, we expect to generate significant cash flows,” he added.
Andersen said the global recovery from the Covid-19 pandemic faces numerous new challenges.
Golden Ocean is maintaining an optimistic outlook due to healthy forecasted demand growth and an extremely favourable fleet supply dynamic, he added.
“Fleet growth is slowing significantly, and new environmental regulations will both reduce effective fleet supply and create a further competitive advantage for Golden Ocean due to our fleet’s scale, modernity and fuel efficiency,” the CEO said.
Gains from investments
The company recorded a gain from associated companies of $14.5m, comprising $12.5m from its investment in SwissMarine and $2m from United Freight Carriers and bunker joint venture TFG Marine.
In the first quarter, global dry bulk fleet utilisation was 89.5%, a decrease from 93% in the prior quarter, according to Maritime Analytics.
Despite this, usage remained firm in a historical and seasonal context, Golden Ocean said.
Total seaborne transport of dry bulk goods stood at 1.12bn tonnes, down 7.1% from the fourth quarter of 2021.
Throughout 2021, Golden Ocean grew and renewed its fleet, disposing of several older vessels and acquiring or placing orders for 25 modern bulkers.