Bulker owner Golden Ocean Group has recorded its first quarterly loss in three years but will continue to pay a dividend to shareholders.
The shipowner, which counts John Fredriksen as its biggest shareholder, saw its bottom line hit by weak freight markets during the first quarter of 2023 as operating revenues fell and expenses grew year on year.
It recorded a net loss of $8.8m for the first three months, equivalent to a loss of $0.04 per share.
This is down from a profit of $125.3m a year earlier, when basic earnings per share were $0.63.
The Oslo and Nasdaq-listed company will pay a dividend of $0.10 per share for the first quarter.
Chief executive Ulrik Andersen said better markets are on the way and highlighted the sale-and-purchase deals Golden Ocean completed during the period, making its fleet younger.
“Following a period of seasonal weakness in the first quarter, freight rates have rebounded, and the outlook for the rest of the year is positive, driven by the gradual recovery of the Chinese economy,” he said.
“We took advantage of a temporary softening in asset prices in the first quarter to acquire six modern and high-efficient vessels.
“Upon completion, Golden Ocean will have acquired 34 vessels in two years, bringing down the average age of the fleet to just 6.5 years and cementing our market-leading position in the large-sized segment bulkers.”
Golden Ocean bought six modern newcastlemaxes in February from H Line of South Korea, three of which have been delivered already. It signed a $233m two-year credit facility in March to partly finance the acquisition.
It also sold two older capesizes — the 169,232-dwt Golden Feng and 169,332-dwt Golden Shui (both built 2009) — for a total net price of $43.6m. The buyer has not yet been reported. Golden Ocean recognised an $11.8m impairment loss from the sale in its first-quarter results.
The Golden Ocean fleet continued to outperform the Baltic indices by roughly 50% or around $5,000 per day during the first three months.
Its capesizes earned an average time charter equivalent rate of $13,620 per day during the first quarter, while its panamax and ultramax bulkers earned $16,630 per day.
For the current quarter, the company has covered 74% of its available capesize days at $20,010 per day on average. For panamaxes, 76% of its days have been booked at $14,600 per day.
Golden Ocean has tweaked its commercial strategy towards panamaxes in the third quarter.
Some 38% of its available panamax days have been booked during the third quarter at $19,600 per day on average. Its forward capesize coverage for the quarter is 26% booked at $22,300 per day on average.
Golden Ocean believes capesizes have the most promise in the longer term relative to other bulker segments, owing to the low orderbook and strong correlation with growth in the Chinese economy.
“Over the next two years, demand is forecast to increase as fleet supply growth reaches historic lows. This dynamic will support high fleet utilisation, which has historically led to strong freight rates,” Andersen said.
“The company has a proven track record of generating healthy cash flows due to our industry-leading cash breakeven levels and the fuel efficiency of our fleet. This provides a unique level of downside protection in periods of market weakness.
“Equally important, it supports our mission to deliver value to our shareholders through consistent dividends in the strong markets we expect in the coming years.”
Golden Ocean’s fleet stands at 96 vessels, of which it owns 51 capesizes and 27 panamaxes. It has an ultramax on charter plus eight capesizes on long-term leases.
It also has nine 85,000-dwt kamsarmaxes on order and signed a seven-year $80m loan in April to part-finance four of the vessels.
