GOGL – Renewal of share buy-back program

Rhea-AI Summary

Golden Ocean Group (OSE/NASDAQ: GOGL) has announced the renewal of its share buy-back program for an additional 12 months, from 5 October 2024 to 4 October 2025. The program allows for the repurchase of up to 10,000,000 common shares, with a maximum expenditure of USD 100 million. As of the announcement date, 1,507,328 shares have been repurchased for USD 11,629,758.

The company will conduct repurchases on both the Oslo Stock Exchange and Nasdaq, reporting buy-backs in accordance with Oslo Stock Exchange disclosure requirements. The timing and amount of repurchases will depend on various factors, including market conditions and stock price.

Peder Simonsen, Interim CEO and CFO, stated that the program extension is in shareholders' interest, citing volatile market conditions and periods where GOGL shares traded at a discount to underlying substance values. The buy-back program will be used opportunistically alongside the company's focus on dividends.

Positive

• Authorization to repurchase up to 10,000,000 common shares
• Maximum expenditure of USD 100 million for share buy-backs
• Flexibility to repurchase shares on both Oslo Stock Exchange and Nasdaq
• Program extension aims to benefit shareholders during periods of stock undervaluation

Negative

• Volatile sentiment in capital markets and dry bulk freight
• Uncertainty regarding global economic outlook affecting stock performance
• GOGL shares trading at a discount to underlying substance values in some periods

Insights

Financial Analyst

The renewal of Golden Ocean Group 's (GOGL) share buy-back program is a strategic move that signals management's confidence in the company's value. The extended program, with a maximum of $100 million to purchase up to 10 million shares over the next 12 months, provides flexibility in capital allocation.

Key points to consider:

• The company has already repurchased 1.5 million shares for $11.6 million, demonstrating commitment to the program.
• The average repurchase price of $7.84 per share on Nasdaq and NOK 81.2 on Oslo Stock Exchange suggests management believes the stock is undervalued.
• The program's extension indicates that GOGL sees continued value in reducing share count, potentially boosting earnings per share and supporting stock price.
• The discretionary nature of the program allows GOGL to balance share repurchases with other capital needs and market conditions.

While the program is positive for shareholder value, investors should note that it's not an obligation and actual repurchases will depend on various factors. The initiative complements GOGL's dividend focus, potentially enhancing total shareholder returns in a volatile dry bulk market.

Market Research Analyst

GOGL's share buy-back extension reflects a nuanced response to market dynamics in the dry bulk shipping sector. Key observations:

• The program's renewal amid "volatile" sentiment in capital markets and dry bulk freight suggests management is positioning defensively against market uncertainties.
• The mention of shares trading at a discount to "underlying substance values" indicates a perceived misalignment between stock price and company fundamentals, despite "healthy freight markets."
• The $100 million cap and 10 million share limit provide substantial room for repurchases, representing about 38% of the current $2.61 billion market cap.
• The opportunistic approach allows GOGL to capitalize on potential market inefficiencies without committing to a rigid repurchase schedule.

Investors should view this as a tool for management to support share price during market dips, potentially reducing volatility. However, the effectiveness will depend on execution timing and the evolving balance between share repurchases and dividend payments in GOGL's capital allocation strategy.

Reference is made to the announcement by the Board of Directors in Golden Ocean Group Limited (OSE/NASDAQ: GOGL) dated 4 October 2022 and 3 October 2023 regarding the establishment and renewal of a share buy-back program. The Company has repurchased a total of 1,507,328 shares under the program for a total consideration of $11,629,758. A total of 741,900 shares have been repurchased at average price of $7.84 per share at Nasdaq and 765,428 shares have been repurchased at an average price of NOK 81.2 at Oslo Stock Exchange.

The Board of Directors of Golden Ocean Group Limited has on 2 October 2024, resolved to extend the existing share buy-back program with a further 12 months and the following main terms:

• Maximum USD 100 million to purchase up to an aggregate of 10,000,000 of the Company's common shares, with 1,507,328 shares repurchased for USD 11,629,758 as of the date hereof.  
• A period from and including 5 October 2024 to and including 4 October 2025.
• The share buy-backs will be carried out by way of repurchases in the market, both on the Oslo Stock Exchange and on Nasdaq.
  
  

The Company will report buy-backs carried out continuously and in accordance with the disclosure requirements of the Oslo Stock Exchange.

The Company is not obligated under the terms of the program to repurchase any of its common shares. The timing and amount of any repurchase will depend on alternative uses of capital, legal requirements, market conditions, stock price, and other factors, in the discretion of the Board of Directors.

Peder Simonsen, Interim Chief Executive Officer and Chief Financial Officer, comments:

"The sentiment in the capital markets and dry bulk freight is volatile and has over the last year been impacted by uncertainty regarding global economic outlook. As a result, GOGL share has in periods been trading at a discount to underlying substance values, despite healthy freight markets. We continue to believe that it is in the shareholders’ interest to extend the authorization to repurchase our common stock as part of its capital allocation strategy. We will opportunistically utilize the extended program as a supplement to our long-term focus on dividend."

2 October 2024
Hamilton, Bermuda


For more info please contact:
Peder Simonsen, Interim Chief Executive Officer and Chief Financial Officer of Golden Ocean Management AS.
Telephone +47 22 01 73 40

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

Forward-looking statements: This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company's current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

 

FAQ

What is the duration of GOGL's renewed share buy-back program?

Golden Ocean Group (GOGL) has renewed its share buy-back program for a period from 5 October 2024 to 4 October 2025, extending it for 12 months.

How many shares can GOGL repurchase under the renewed program?

GOGL can repurchase up to 10,000,000 of the company's common shares under the renewed share buy-back program.

What is the maximum amount GOGL can spend on share repurchases?

The maximum amount GOGL can spend on share repurchases under the renewed program is USD 100 million.

How many shares has GOGL repurchased so far under the program?

As of the announcement date, GOGL has repurchased 1,507,328 shares for a total consideration of USD 11,629,758 under the program.