Hamilton, Bermuda - May 30, 2018
Golden Ocean Group Limited (NASDAQ: GOGL / OSE: GOGL) (the “Company” or “Golden Ocean”), a leading dry bulk shipping company, today announced its results for the quarter ended March 31, 2018.
• Net income of $16.7 million and earnings per share of $0.12 for the first quarter of 2018, compared with net income of $27.1 million and earnings per share of $0.19 f or the fourth quarter of 2017 and net loss of $17.9 million and loss per share of $0.17 for the first quarter of 2017.
• Adjusted EBITDA (1) of $53.3 million for the first quarter of 2018, compared with $65.3 million for the fourth quarter of 2017 and $17.5 million for the first quarter of 2017.
• Completed newbuilding program by taking delivery of five Capesize newbuildings.
• Took delivery of the Golden Monterrey, a Capesize vessel, acquired in October 2017.
• Entered into a $120 million loan facility to refinance 10 vessels at favorable terms.
• Agreed to sell the Golden Eminence, a Panamax vessel, for $14.7 million to an unrelated third party.
• Announces a cash dividend of $0.10 per share for the first quarter of 2018.
Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS, commented: "Golden Ocean continued to generate positive results in the first quarter of 2018 despite some seasonal weakness late in the quarter, reflecting primarily a strong entry into the year and period charters at decent rates. We are pleased to have taken delivery of the final five Capesize vessels in our newbuilding program as we continue to grow and modernize our operating fleet. As market conditions improve, we are well positioned to generate substantial cash flow with a large, modern fleet and competitive cash break-even levels.”
Per Heiberg, Chief Financial Officer of Golden Ocean Management AS, commented: “Our new $120 million loan facility that refinanced 10 vessels was completed on attractive terms. It reduces our interest expense and pushes out the average tenor of our debt. We remain focused on maintaining a moderate amount of leverage on our balance sheet, and have repeatedly been successful at accessing attractively priced capital.”
(1) Adjusted earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure. A reconciliation of adjusted EBITDA to the most directly comparable GAAP measure is included in the back part of this report.
In the first quarter of 2018, the Company took delivery of the five remaining Capesize vessels in its newbuilding program. The Company paid an aggregate of $144.6 million in final installments and drew down $150.0 million in debt in connection with these deliveries. In the first quarter of 2018, the Company also took delivery of the Golden Monterrey, a previously announced acquisition. In relation to the delivery, the Company issued two million shares, paid $4.5 million in cash and assumed a seller’s credit debt of $21.5 million.
As of March 31, 2018, the Company’s fleet consisted of 78 vessels, with an aggregate capacity of approximately 10.7 million dwt. The Company’s fleet consisted of:
(i) 68 vessels owned by the Company (38 Capesize, 28 Panamax and two Ultramax vessels);
(ii) eight Capesize vessels under operating leases with profit split mechanism;
(iii) one Panamax vessel under a capital lease; and
(iv) one Supramax vessel under an operating lease.
In April 2018, the Company entered into an agreement to sell the Golden Eminence, a Panamax vessel, to an unrelated third party for $14.7 million. The vessel is expected to be delivered to its new owners in the third quarter of 2018, and the estimated net cash flow from the transaction is expected to be approximately $5.4 million in the third quarter of 2018. The Company expects to record a loss of approximately $0.7 million from the sale in the second quarter of 2018.
As of the date of this report, the Company has entered into the following fixed rate time charter contracts:
(i) Fixed rate coverage, including forward freight agreements, for 12 Capesize vessels for 2018 at an average gross rate of approximately $17,960 per day.
(ii) Six Panamax vessels on fixed rate time charter contracts, two of which expire in the first half of 2019 and four of which expire between January 2020 and December 2021, at an average gross rate of approximately $20,750 per day for the remainder of 2018.
The remaining fleet is trading in the spot market, in spot pools or on short term charters, some with floor and ceiling structure, expiring within the next six to eleven months.
In the first quarter of 2018, the Company acquired $9.4 million notional of its 3.07% Golden Ocean Group Limited Convertible Bond for $9.2 million, and in April 2018, the Company acquired an additional $0.4 million notional. After these purchases, the Company holds $19.2 million notional of the $200 million 3.07% Golden Ocean Group Limited Convertible Bond, convertible into 220,209 shares in the Company at the conversion price of $87.19 per share.
As of March 31, 2018, the Company had 144,247,697 issued common shares, each with a par value of $0.05. For the three months ended March 31, 2018, the weighted average number of shares outstanding was 143,814,364.
In May 2018, the Company entered into a $120 million loan facility to refinance $58.3 million due under two loan facilities maturing in 2018 and seller credit loans of $65.5 million. The facility has a seven year tenor, will be repaid in quarterly installments based on a 20-year age profile, and bears interest of LIBOR plus a margin of 2.25%.
The Company announces today a cash dividend for the first quarter of 2018 of $0.10 per share. The record date for the dividend will be June 14, 2018. The ex-dividend date is expected to be June 13, 2018 and the dividend will be paid on or about June 28, 2018.
Golden Ocean Group Limited press release