GOGL – First Quarter 2024 Results

Rhea-AI Summary

Golden Ocean Group (NASDAQ/OSE: GOGL), the world's largest listed owner of large size dry bulk vessels, reported unaudited results for Q1 2024. The company posted net income of $65.4 million and EPS of $0.33, up from $57.5 million and $0.29 in Q4 2023. Adjusted EBITDA was $114.3 million, a decrease from $123.2 million in the previous quarter. Adjusted net income also fell to $58.4 million from $64.6 million. Notably, TCE rates for Capesize and Panamax vessels were $27,222 and $14,978 per day, respectively. The company completed the sale of a Panamax vessel for $15.7 million and secured a $180 million credit facility at favorable terms post-quarter. A cash dividend of $0.30 per share will be distributed on June 17, 2024, with an optimistic outlook for future demand and fleet supply growth.

Positive

• Net income of $65.4 million in Q1 2024, up from $57.5 million in Q4 2023
• EPS increased to $0.33 from $0.29 in the previous quarter
• TCE rates for Capesize vessels at $27,222 per day
• TCE rates for Panamax vessels at $14,978 per day
• Completed sale of a Panamax vessel for $15.7 million
• Secured $180 million credit facility at record low credit margin
• Declared a cash dividend of $0.30 per share payable on June 17, 2024
• Optimistic demand outlook due to fleet supply growth

Negative

• Adjusted EBITDA decreased to $114.3 million from $123.2 million in Q4 2023
• Adjusted net income fell to $58.4 million from $64.6 million in the previous quarter
• TCE rates for the entire fleet were lower at $22,628 per day

Financial Analyst

Golden Ocean Group Limited reported a notable net income of $65.4 million for Q1 2024, displaying an improvement from the previous quarter’s $57.5 million. The corresponding EPS (Earnings Per Share) rose from $0.29 to $0.33. This increment suggests efficient cost management and revenue growth, even though Adjusted EBITDA decreased slightly to $114.3 million from $123.2 million in Q4 2023. Investors should look into the decline in Adjusted EBITDA as it could indicate increased operating costs or expenses.

The company's ability to maintain a high dividend payout ($0.30 per share) is promising for income-focused investors. However, the fleet’s Time Charter Equivalent (TCE) rates showed mixed results with Panamax vessels at $14,978 per day and Capesize at $27,222 per day. Investors should monitor these rates closely as they significantly impact revenue.

The recent sale of a Panamax vessel for $15.7 million and the new $180 million credit facility with favorable terms strengthen the company's balance sheet and liquidity. However, future performance will hinge on freight market conditions and fleet utilization rates.

Market Research Analyst

Golden Ocean Group's exposure to spot market rates has proven beneficial. The CEO highlighted a 'significant spot exposure,' which allowed the company to capitalize on counter-seasonal strength in freight rates. This proactive positioning could indicate strong market intuition and strategic foresight, valuable for maintaining competitive advantages.

He also pointed out a tightening market, supported by a limited supply growth, particularly in the Capesize segment. For retail investors, understanding that limited supply can lead to higher freight rates and, consequently, better margins is key. This market trend might lead to sustained or increasing profitability if demand growth continues to outpace supply growth.

The CEO's optimistic outlook on future demand, combined with the company's ability to return $1 billion to shareholders over the past three years, showcases a robust capital allocation strategy. Potential investors should consider this historical performance as an indicator of the company's commitment to shareholder value.

Golden Ocean Group Limited (NASDAQ/OSE: GOGL) (the “Company” or “Golden Ocean”), the world's largest listed owner of large size dry bulk vessels, today announced its unaudited results for the quarter ended March 31, 2024.

Highlights

• Net income of $65.4 million and earnings per share of $0.33 (basic) for the first quarter of 2024, compared with net income of $57.5 million and earnings per share of $0.29 (basic) for the fourth quarter of 2023.
• Adjusted EBITDA of $114.3 million for the first quarter of 2024, compared with $123.2 million for the fourth quarter of 2023.
• Adjusted net income of $58.4 million for the first quarter of 2024, compared to $64.6 million for the fourth quarter of 2023.
• Reported TCE rates for Capesize and Panamax vessels of $27,222 per day and $14,978 per day, respectively, and $22,628 per day for the entire fleet in the first quarter of 2024.
• Completed a sale of one Panamax vessel for net consideration of $15.7 million.
• Subsequent to quarter end, signed and closed the $180 million credit facility, at record low credit margin and attractive terms.
• Estimated TCE rates, inclusive of charter coverage calculated on a load-to-discharge basis, are approximately:
  • $27,200 per day for 75% of Capesize available days and $14,500 per day for 82% of Panamax available days for the second quarter of 2024.
  • $25,200 per day for 24% of Capesize available days and $20,500 per day for 41% of Panamax available days for the third quarter of 2024.
• Announced a cash dividend of $0.30 per share for the first quarter of 2024, which is payable on or about June 17, 2024, to shareholders of record on June 7, 2024. Shareholders holding the Company’s shares through Euronext VPS may receive this cash dividend later, on or about June 19, 2024.

Lars-Christian Svensen, Chief Executive Officer, commented:

“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 Company has over the last three years returned over $1 billion, or $5.1 per share in dividends to its shareholders, largely due to the modern fleet and industry low cash break even rates. Given its fleet profile and significant exposure to the trades offering the greatest upside, the Company has the potential to generate significant returns to its shareholders in the coming years.”

The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
May 22, 2024

Questions should be directed to:

Lars-Christian Svensen: Chief Executive Officer, Golden Ocean Management AS
+47 22 01 73 40

Peder Simonsen: Chief Financial Officer, Golden Ocean Management AS
+47 22 01 73 40

The full report is available in the link below.

Forward-Looking Statements

Matters discussed in this earnings report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company is taking advantage of the safe harbor provisions of the PSLRA and is including this cautionary statement in connection therewith. This document and any other written or oral statements made by the Company or on its behalf may include forward-looking statements, which reflect the Company's current views with respect to future events and financial performance. This earnings report includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." The Company cautions that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. When used in this document, the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “will,” “would,” “could” and similar expressions or phrases may identify forward-looking statements.

The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements, include among other things: general market trends in the dry bulk industry, which is cyclical and volatile, including fluctuations in charter hire rates and vessel values; a decrease in the market value of the Company’s vessels; changes in supply and demand in the dry bulk shipping industry, including the market for the Company’s vessels and the number of newbuildings under construction; delays or defaults in the construction of the Company’s newbuildings could increase the Company’s expenses and diminish the Company’s net income and cash flows; an oversupply of dry bulk vessels, which may depress charter rates and profitability; the Company’s future operating or financial results; the Company’s continued borrowing availability under the Company’s debt agreements and compliance with the covenants contained therein; the Company’s ability to procure or have access to financing, the Company’s liquidity and the adequacy of cash flows for the Company’s operations; the failure of the Company’s contract counterparties to meet their obligations, including changes in credit risk with respect to the Company’s counterparties on contracts; the loss of a large customer or significant business relationship; the strength of world economies; the volatility of prevailing spot market and charter-hire charter rates, which may negatively affect the Company’s earnings; the Company’s ability to successfully employ the Company’s dry bulk vessels and replace the Company’s operating leases on favorable terms, or at all; changes in the Company’s operating expenses and voyage costs, including bunker prices, fuel prices (including increased costs for low sulfur fuel), drydocking, crewing and insurance costs; the adequacy of the Company’s insurance to cover the Company’s losses, including in the case of a vessel collision; vessel breakdowns and instances of offhire; the Company’s ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of the Company’s vessels (including the amount and nature thereof and the timing of completion of vessels under construction, the delivery and commencement of operation dates, expected downtime and lost revenue); risks associated with any future vessel construction or the purchase of second-hand vessels; effects of new products and new technology in the Company’s industry, including the potential for technological innovation to reduce the value of the Company’s vessels and charter income derived therefrom; the impact of an interruption or failure of the Company’s information technology and communications systems, including the impact of cyber-attacks, upon the Company’s ability to operate; potential liability from safety, environmental, governmental and other requirements and potential significant additional expenditures (by the Company and the Company’s customers) related to complying with such regulations; changes in governmental rules and regulations or actions taken by regulatory authorities and the impact of government inquiries and investigations; the arrest of the Company’s vessels by maritime claimants; government requisition of the Company’s vessels during a period of war or emergency; the Company’s compliance with complex laws, regulations, including environmental laws and regulations and the U.S. Foreign Corrupt Practices Act of 1977; potential difference in interests between or among certain members of the Board of Directors, executive officers, senior management and shareholders; the Company’s ability to attract, retain and motivate key employees; work stoppages or other labor disruptions by the Company’s employees or the employees of other companies in related industries; potential exposure or loss from investment in derivative instruments; stability of Europe and the Euro or the inability of countries to refinance their debts; inflationary pressures and the central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates; fluctuations in currencies; acts of piracy on ocean-going vessels, public health threats, terrorist attacks and international hostilities and political instability; potential physical disruption of shipping routes due to accidents, climate-related (acute and chronic), political instability, terrorist attacks, piracy, international sanctions or international hostilities, including the developments in the Ukraine region and in the Middle East, including the conflicts in Israel and Gaza, and the Houthi attacks in the Red Sea; general domestic and international political and geopolitical conditions or events, including any further changes in U.S. trade policy that could trigger retaliatory actions by affected countries; the impact of adverse weather and natural disasters; the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to the Company’s Environmental, Social and Governance policies; changes in seaborne and other transportation; the length and severity of epidemics and pandemics and governmental responses thereto and the impact on the demand for seaborne transportation in the dry bulk sector; impacts of supply chain disruptions and market volatility surrounding impacts of the Russian-Ukrainian conflict and the developments in the Middle East; fluctuations in the contributions of the Company’s joint ventures to the Company’s profits and losses; the potential for shareholders to not be able to bring a suit against us or enforce a judgement obtained against us in the United States; the Company’s treatment as a “passive foreign investment company” by U.S. tax authorities; being required to pay taxes on U.S. source income; the Company’s operations being subject to economic substance requirements; the volatility of the stock price for the Company’s common shares, from which investors could incur substantial losses, and the future sale of the Company’s common shares, which could cause the market price of the Company’s common shares to decline; and other important factors described from time to time in the reports filed by the Company with the U.S. Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 20-F for the year ended December 31, 2023.

The Company cautions readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. These forward-looking statements are not guarantees of the Company’s future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

 

Attachment

• GOGL - 1st Quarter 2024 Results

FAQ

What were Golden Ocean's Q1 2024 earnings?

Golden Ocean reported net income of $65.4 million and EPS of $0.33 for Q1 2024.

How did Golden Ocean's Q1 2024 EPS compare to Q4 2023?

Golden Ocean's EPS increased to $0.33 in Q1 2024 from $0.29 in Q4 2023.

What were the adjusted EBITDA figures for Golden Ocean in Q1 2024?

Golden Ocean reported an adjusted EBITDA of $114.3 million for Q1 2024.

What are the TCE rates for Golden Ocean's Capesize and Panamax vessels?

TCE rates were $27,222 per day for Capesize vessels and $14,978 per day for Panamax vessels.

Did Golden Ocean sell any vessels in Q1 2024?

Yes, Golden Ocean completed the sale of one Panamax vessel for $15.7 million.

What new credit facility did Golden Ocean secure post-Q1 2024?

Golden Ocean secured a $180 million credit facility at a record low credit margin post-Q1 2024.

When will Golden Ocean pay the cash dividend announced for Q1 2024?

Golden Ocean will pay a cash dividend of $0.30 per share on June 17, 2024.