Golden Ocean Group is investing in exhaust gas scrubbers as the International Maritime Organisation's low-sulphur mandate draws ever closer.
The Birgitte Vartdal-led company announced today that it has signed contracts for the devices to be installed on 16 capesize bulkers with the option to place them on nine more vessels.
The bulker owner with a fleet of 78 vessels, including 46 capesizes, said the scrubbers will be installed during 2019 and 2020 dry dockings.
The company said the scrubbers would come from a "few different providers" and no decisions have been made at this time regarding further installations.
"We have a fleet of modern, fuel efficient vessels, and the steps we are taking to optimise the fleet by installing scrubbers will further position the company ahead of the implementation of new caps on sulphur emissions," chief executive Vartdal said.
The company says it will continue to evaluate options for further installations, most likely be timed with future dry dockings.
By 2020, all ships will be required to have exhaust sulphur emissions lowered to 0.5% from 3.5%.
Herman Hildan of Clarksons Platou Securities says the plan will see scrubbers on two thirds of Golden Ocean's capesize fleet and could add $6,500 per day to earnings from the ships based on current fuel price spreads.
"The company does not give details on the economics but we expect around 1-2 years payback on the current HFO/MGO spread," Hildan said.
Golden Ocean is majority owned by John Fredriksen, who also controls tanker player Frontline, which took a stake in a scrubber manufacturer as part of its own major retrofitting plan.
Fredriksen's Ship Finance International is also a shareholder in ADS Crude, which is retrofitting scrubbers on three veteran VLCCs.
The Norwegian-born tycoon was revealed in May to be installing scrubbers on a series of dry cargo newbuildings ordered privately and set to end up in the Golden Ocean fleet in the future.
Back to black
Golden Ocean posted $9m in net income on $140.9m in revenue versus a $12m loss on $99.7m in revenue during the same period last year.
Herman Hildan of Clarksons Platou Securities says it marks the company's fourth consecutive profitable quarter while the numbers beat consensus expectations.
The New York-listed company beat analysts' estimates by $0.01 with earnings per share (EPS) of $0.05, up from a $0.10 loss per share a year ago.
"The market continues to strengthen over the summer, in particular for capesize vessels," Vartdal said.
"The company is currently benefiting from the strategic decision to focus our fleet on larger vessel classes as this maximises the company's leverage to improving markets."
