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GOGL Golden Ocean Group Limited

Participants
Ulrik Andersen Chief Executive Officer
Peder Simonsen Chief Financial Officer
William Fraser -
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the third quarter 2021 Golden Ocean Group Limited earnings conference call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question and answer session, and to ask a question, you will need to press star, one on your telephone. Please be advised today’s conference is being recorded.

further press any zero. require you assistance, star, please If meeting to your I like the over Andersen. would now Ulrik hand to and speakers today ahead. go Please

Ulrik Andersen

solid name and next will doing Good is Ulrik Today, Peder financial has we’re near everyone. the The message Welcome been a future. timely give strong this release of XX and into Basically and CFO. release. afternoon you during how combined to insight Ocean we’re next to Simonsen, our Andersen, insight me to My expecting and in here I is next hedge performance for overall XX outlook, a show have what with year. this QX is minutes the to QX what you period strong we and have of while and the cover, out capitalized priced an million forward look to the highlights dividend, We we portion demand income into a $XXX sustained at net remain quarter. let’s significant place we per and attractively for $X.XX of the of the recorded that on take a that profit for a that markets. just million, securing which continue a pay in main shy of supply $XXX translated fundamentals profitable share. or net QX EBITDA note, On our that Golden

this older prices. and of Securing attractive new Kamsarmaxes. tonnage, the we vessels vessels seven entered us also construction agreement allowed to an We divest for into sold has at quarter two

our Our strategy tonnage. oldest divest is continue to to

rates Panamaxes. our cash for time. the facility Capes day favorable refinancing Sterna and on We of reducing completed the for per same the $XX,XXX the also We at $XX,XXX and very of report TCE the breakeven terms

words, and than QX, to at other per $XX,XXX so Panamax $XX,XXX has our we day days Cape per the day QX. Looking days; be secured XX% in for better for QX our potential XX% of of quarter, far this have

per Panamax $XX,XXX our secured approximately year, day our into days and next per have day $XX,XXX days. Cape of for of Looking approximately we XX% XX% for

dividend a take is announced XXXX million. quarterly This we $X.XX will $XXX dividends it payout to of share. the per third Finally, our and

into Peder, the you, Now to numbers and please. look financials. QX dive the have in at over closer a let’s details

Peder Simonsen

Thank revenues all recorded up the by which QX time uplift We you $XXX segments. strong previous million, in Ulrik. million of We charter $XX had was quarter. from

As $XX,XXX mentioned, for for and Panamaxes. were TCE rates Capes $XX,XXX the Ulrik

We ship QX. Panamaxes three XXX of Total are previous up X.X% in days drydock $X,XXX days compared one QX, of quarter. days in rate and to which for or XX this We the had in quarter TCE in off-hire versus resulted $XX,XXX respectively versus and the in versus $X,XXX Capes QX. $XX,XXX ships

opex, increase opex we This adjusted ships million by running recorded fewer this drydocked million in downwards $XX.X a in our at QX. versus Looking slight was $XX.X quarter. but

We where quarter, previous by maintain sharing expenses, around administrative our estimate impact we accrual, profit continue to day crew $XXX relating and day On impact. industry in see to COVID-XX $XXX,XXX $X.X level. in expenses, equals per to and which the in million cost we costs This recorded also general we day or in impacted the recorded $XXX best impacting what to mainly QX, our QX, hotels. we and G&A equal was the is $XXX which in changes per cost quarantine operating per

ships ships positions as chartered the also of have our by $XX This activity. addition $XX quarters. was this that previous stemming million in relates well ships recorded new levels been net trading which the QX, income, mainly entering charter during rate our reflects levels and financial result which positive expense was which Hemen and fleet. a to expenses million. rate impacted c many on higher On increased the we increased chartered offset higher mark-to-market and tonnage $X.X in by million Depreciation new versus from QX, fleet $X.X down mostly derivative QX. our Of increase where our of derivatives as financial took by $X.X delivery this, $XX.X portfolio was in higher million Our debt we average million million in, during of to by in of interest other quarter, $XX.X FFA hire from portfolio we saw the million

dry related Marine, results from from a Swiss to total $XX.X and associates positive of our for an in mainly associates $XX.X increase results Our of bulk million investment result--and operator, million.

[indiscernible]. per which share million per in This Our million, million relates versus resulted to was net marketable our $X.X of share a and QX. $XXX.X in down in shareholding profit $XXX.X securities by $X.XX or $X.XX

a the was mentioned, share of As dividend $X.XX for per quarter. declared Ulrik

higher Moving quarter. to where slide, in $XXX.X ship our recorded flow million at next we in a can look we the QX. cash can the rate is see flow, levels and from we cash of operations result more a of days recorded This

to $XXX relating financing which investments in scheduled net used largely repayment $XX.X the million the of flow the amounting refinancing quarter, cash quarter results. relates flow second million, we net million Sterna debt and release fees. and finally financing million cash in $XX positive $XX a a facility to in Our of was and paid to dividends was from out recorded Further,

million, which FFA the million which balance and balance cash we $XXX.X of restricted portfolio. interest our includes position had cash our sheet, at $XX secures rate a derivatives Looking

liabilities of $X.X have equity total the and approximately assets total billion equity billion on billion, of to of of $X.X gives lease XX%. $X.X a ratio of book assets and debt based total which We

and at the maturities we slide, coming debt next the overview the to years. for capex of our look can Moving

recent on we maturities XX% terms. and averaging expect fleet, value at banking a to maturities financings refinanced very very new distributed years. evenly banks will to strong and we no the low that see, and very added attractive the loan debt a and you over thereafter our leverage until coming With these be sheet have group can mid-XXXX As balance with liquidity strong

sold seven the have deliver for will our ships orders we program, off four we predominantly part our older modern in in year, of put renewal that ships fleet mid Kamsarmax segment. during at also our from Panamax This is XXXX. where Looking capex,

to report capex estimated back We to opportunistically of have to older equity Ulrik. this With continue that, to of third the the seek will tonnage. for give and word divest paid date we ships the I one

Ulrik Andersen

you Peder. Thank

This Now quarter than QX a let’s highest seen and reaching in the turn in the and the the a quarter utilization steadily decade. iron we QX have XX. is rising rate the Naturally with in this ore market quote development Slide strong was attention the to more on XX%. firmed for shipments. segments. main continued The congestion, positive level No. throughout Brazilian growth rate, inefficiencies the which increased three market, both drivers up were: a

very better. to bullish the was ahead. remain but be we QX ahead, guidance good for lies quarter, potential a as even our what Looking QX has indicated, rate

slightly to the XX% firstly years, prolonged has the average for if coincides the side? order for dry supply for a a strong our the other It of growth are growing what that Even and growth past rates dry bulk In fact, bulk Well, the a has dry XX than set growth exceptionally is ordering still no stage demand an is GDP what a strong secondly less now view, In support for growth book key historic shipping well average. been good looks and growth. commodities is growth to In environment. will on per is high the compared equation, and tempering a demand the demand compared demand period GDP the GDP next the side strong bulk We world to growth. to solid off like than that recent the is year ELO. more demand. about a proxy XXXX beyond. but for anticipated it into year, with remember of muted sits freight favorable XXXX face continue at period side, it of been currently XX years,

from that dry of only has average control are and the for new When anticipated earnings. about by demand the Slide X.X% demand. XX which bulk not months No. the on did high supply growth the is governments decelerating least in and combine story on time, change. many In the to XX growth of to shipping of and XXXX. to growing do This sustainable a even coming That than unlikely demand naturally any supply pressure, the and at years, to at much comfortably growth supply XXXX in has stimulus a prices level is minimum - us is owners past in massive over The bulk but normally the around story words, anticipated by likely we XXXX, hard, year, demand The next changing is no with we Since because too dry XX, still faster of has two very period Going to a under see fleet years been XXXX. while That levels the story XXXX, building COVID been will demand slots demand up. financial the we runway it of case driven building points for stimulus to of about causes growth temper will but crisis technology grow in during come an the truly at for with propulsive retract the under is is positive. extended to the that very The the will return a future-proof. there’s two it six in months growth. that period to an normalized the off XX the employed are world, a been fleet we supply. the get normalized before two other end gives forward, during well ordering XXXX modest lack longer. see per level is It not the historical but picking vessels years markets side what clarity by

three months. the attention been past Turning to six Ocean to in term has active the future, near Golden

build have to the rest portion QX and capacity, usually paying TCE fixed the a risk, weaker of bridge high We the between large mitigate dividend year. of secure deals secured and a

As these our that figures. around and TCE of around our and the revenue have XX% $XX,XXX for year per just at all for Panamax XX% fixed day, QX of means Cape fleet. of currently today, we we It on of fleet million contracted of $XX you fixed next per net are XX% QX, mind $XX,XXX have fleet day

flow the achieved of for focus we fleet. last generation. to access will have slides cash acquisitions, economies cash our we finance, industry-low today, well-timed on breakeven competitive Through On and on two scale,

$X,XXX interest, amortization, and in includes Our The G&A. cash breakeven the average and is for all the Panamaxes. and for $XX,XXX breakeven Capes cash is

same levels time on downside strong As also earnings the it instance, today’s appears for acts but breakeven the as it market, our strong our breakeven for been not flow Cape low the below cash has potential allows right-hand at With The in Golden Ocean’s and market, past breakeven protection. market substantial. side, outlook, long in the is cash cash five for our years. very

our the first do average or reflecting of Monday vessels, and back this It’s million. of on On of profits, our of XX% three have and portion per ratio week, of our price. something to $XXX we paying decision we of annualized paying As around delivered over Monday’s will more rates, significant we means no of the net breakeven, have with of Panamax a $XX,XXX almost day. board a secret Cape quarters Cape generating but an cash future basis, a the yield out made blended shareholders than $XXX was million our on share what earnings, that our year, Panamax in policy

the of QX of the next bridging usually three million up net Golden main for Golden Ocean weakest the on quarter Golden most the million release. of the Ocean this timely profitable the year. questions, expects $XX secured to in well revenue to market, shortly for in XXXX the points company. like Ocean I’d profit. TCE strong Before thereby is track almost wrap history $XXX QX capitalized opening on has be making from up and ever year,

the the start the I you. session. we therefore word Thank Operator. back Q&A hand Now to

Operator

a the William We from have question of instructions] Please [Operator Fraser. go line ahead.

William Fraser

morning. Yes, quarter. Congratulations. Fantastic good

Ulrik Andersen

Thank you.

William Fraser

I couple have a questions.

in XX% QX? period the of to that extend Does into cover, you XX% any On I see about have QX.

Ulrik Andersen

half. roughly Yes, there as portion QX of is extends that into about a well, that

William Fraser

to couple you some intend you and a Okay, older sales the in of vessels? sell Do these quarter. last continue to had

Ulrik Andersen

Yes, much that very is the--sorry?

William Fraser

to continuing on the So you of to--you vessels? continue older plan sell some

Ulrik Andersen

is The poor, as question, divest yes. line the I your heard we were vessels is going to asked that but you a little answer going if forward, bit and more to

in have the oldest are We primarily divest tonnage fleet, to our the vessels. looking we Panamax

William Fraser

at, Okay, of One period cover XXXX XX%, about the period forward year? the the level I that know, throughout you keeping thank do other XX% you feel how on you. into on to or a do going question don’t cover, plan

Ulrik Andersen

I we think next it’s will too soon to year. for say do what

plan the the good to first I made get here this markets on maximum has the through capitalization have preparing year think we for quarter. been with while

As when QX dipping are there today, to these as going is have we yes, feel we are cover risk. revisit it QX numbers we now, when little, is then the we I I into we not confident that into the expect achieve so that, But achieved will much how value our sit any now good speak with we and position can’t the that market that possible QX, hopefully, versus are and and and right as then from--hopefully in we end QX to not during for so we how we have happy continue about, price or QX a will, during take here and then picks of see today. say and will up it longer, the

William Fraser

Okay, appreciate that.

treatment the any there XXX% treatment that? is in more investments fleet planned or system, have scrubbers the for in the are the waste Regarding scrubbers systems, waste

Ulrik Andersen

No, we here. have--let’s see

earning in. don’t invest of XX future, per good going upgrades we our - or at look deem they an give and technology also for a usually it’s with are We the of to are If for different vessels, not of scrubbers to in investing, when have now day. the Capes to something we bringing the going will more extra so scrubbers, are that fitted solutions time. we we us But thousand couple down as a are invest that’s emissions we same have

William Fraser

Okay, performance. quarter fantastic I appreciate that, and and again,

for good thank into my as have us again call, well you taking year, holiday. so You’ve up and much for fourth set a a quarter nice and next very

Ulrik Andersen

Thank you. Thank you in. for calling

Operator

it any this questions. again, further Once is star have Please for time, and one you. no Thank we continue. questions. At

Ulrik Andersen

Okay, in. thanks for everyone dialing

the well. hope to in in will Thank next We quarter hear dialing you you. as

Peder Simonsen

Thank you.

Operator

That Thank for concludes presentation participating. today. the you

You may disconnect.