GOGL – Second Quarter 2024 Results

Rhea-AI Summary

Golden Ocean Group (NASDAQ/OSE: GOGL), the world's largest listed owner of large dry bulk vessels, reported its Q2 2024 results. Key highlights include:

- Net income of $62.5 million and EPS of $0.31
- Adjusted EBITDA of $120.3 million
- TCE rates: Capesize $28,005/day, Panamax $15,721/day, fleet average $23,535/day
- Agreement to sell one Panamax vessel for $20.8 million
- 13.3% improvement in Carbon Intensity Indicator vs 2019 baseline
- Q3 2024 estimated TCE rates: Capesize $26,200/day (83% coverage), Panamax $17,200/day (94% coverage)
- Announced $0.30 per share cash dividend for Q2 2024

The company remains optimistic about the dry bulk market, citing strong demand fundamentals and favorable supply-side conditions.

Positive

• Net income of $62.5 million and EPS of $0.31 for Q2 2024
• Adjusted EBITDA increased to $120.3 million from $114.3 million in Q1 2024
• Strong TCE rates: Capesize $28,005/day, Panamax $15,721/day, fleet average $23,535/day
• 13.3% improvement in Carbon Intensity Indicator compared to 2019 baseline
• High charter coverage for Q3 2024: 83% for Capesize and 94% for Panamax
• Announced $0.30 per share cash dividend for Q2 2024

Negative

• Slight decrease in net income from $65.4 million in Q1 2024 to $62.5 million in Q2 2024
• EPS decreased from $0.33 in Q1 2024 to $0.31 in Q2 2024

Financial Analyst

Golden Ocean Group's Q2 2024 results demonstrate resilience in a volatile market. Net income of $62.5 million and EPS of $0.31 show a slight decrease from Q1, but adjusted EBITDA increased to $120.3 million. The company's TCE rates remain strong, particularly for Capesize vessels at $28,005 per day.

The sale of a Panamax vessel for $20.8 million suggests strategic fleet management. The $0.30 per share dividend maintains an attractive yield for investors. Forward-looking TCE rates indicate continued strength in Q3 and Q4, especially in the Capesize segment.

The 13.3% improvement in Carbon Intensity Indicator aligns with ESG trends, potentially attracting environmentally conscious investors. Overall, Golden Ocean's performance remains solid in a challenging global environment.

Shipping Industry Expert

Golden Ocean's Q2 results reflect the resilience of the dry bulk market. The company's focus on large vessels, particularly Capesize, is paying off with strong TCE rates. The widening gap between Capesize ($28,005/day) and Panamax ($15,721/day) rates underscores the importance of fleet composition.

The outlook for Q3 and Q4 suggests continued strength, especially in the Capesize segment. This aligns with expectations of increased Chinese demand for bauxite and new iron ore projects in the Atlantic Basin. The company's strategic charter coverage balances stability with market exposure, positioning it well for potential market strengthening.

The moderating fleet growth and impact of environmental regulations on effective fleet capacity create a favorable supply-side scenario, potentially supporting freight rates in the medium term.

ESG Analyst

Golden Ocean's ESG report highlights a significant improvement in its Carbon Intensity Indicator, reducing by 13.3% compared to the 2019 baseline. This progress demonstrates the company's commitment to sustainability goals and aligns with increasing investor focus on environmental performance in the shipping industry.

The company's investment in a modern, fuel-efficient fleet contributes to both environmental performance and operational efficiency. This dual benefit positions Golden Ocean favorably in a market where environmental regulations are tightening.

While the ESG improvements are commendable, investors should monitor how Golden Ocean balances these initiatives with financial performance, especially given the capital-intensive nature of fleet upgrades in the shipping industry.

Hamilton, Bermuda, August 28, 2024 - 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 June 30, 2024.

Highlights

• Net income of $62.5 million and earnings per share of $0.31 (basic) for the second quarter of 2024, compared with net income of $65.4 million and earnings per share of $0.33 (basic) for the first quarter of 2024.
• Adjusted EBITDA of $120.3 million for the second quarter of 2024, compared with $114.3 million for the first quarter of 2024.
• Adjusted net income of $63.4 million for the second quarter of 2024, compared to $58.4 million for the first quarter of 2024.
• Reported TCE rates for Capesize and Panamax vessels of $28,005 per day and $15,721 per day, respectively, and $23,535 per day for the entire fleet in the second quarter of 2024.
• Entered into an agreement to sell one Panamax vessel for net consideration of $20.8 million.
• Published its ESG report for 2023, showing an improvement in its Carbon Intensity Indicator by 13.3% compared to its 2019 baseline.
• Estimated TCE rates, inclusive of charter coverage calculated on a load-to-discharge basis, are approximately:
  • $26,200 per day for 83% of Capesize available days and $17,200 per day for 94% of Panamax available days for the third quarter of 2024.
  • $25,800 per day for 29% of Capesize available days and $17,900 per day for 18% of Panamax available days for the fourth quarter of 2024.
• Announced a cash dividend of $0.30 per share for the second quarter of 2024, which is payable on or about September 20, 2024, to shareholders of record on September 11, 2024. Shareholders holding the Company’s shares through Euronext VPS may receive this cash dividend later, on or about September 23, 2024.

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

"Despite a volatile macro and geopolitical backdrop, the dry bulk shipping market remains healthy, and Golden Ocean continues to deliver above-market performance. This is attributable to the quality of our modern, fuel-efficient fleet as well as our strong commercial capabilities. While we continue to opportunistically secure charter coverage, we retain significant exposure to a market we believe will strengthen as the year progresses.

Demand fundamentals in large vessel segments are particularly constructive, with Chinese demand for bauxite and new iron ore export projects under development in the Atlantic Basin are expected to be long-term drivers. The supply side is also favorable as fleet growth is moderating and environmental regulations are expected to constrain effective fleet capacity. Golden Ocean is well positioned to continue to generate strong cash flows, based on our fleet premium and our industry-leading cash breakeven levels. Accordingly, the Company expects to continue to deliver strong returns for our shareholders."

The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
August 28, 2024

Questions should be directed to:

Peder Simonsen: Interim Chief Executive Officer and 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; the impact that any discontinuance, modification or other reform or the establishment of alternative reference rates have on the Company’s floating interest rate debt instruments; 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 Company potentially becoming subject to corporate income tax in Bermuda in the future; 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 2nd Quarter 2024 Results

FAQ

What was Golden Ocean Group's (GOGL) net income for Q2 2024?

Golden Ocean Group (GOGL) reported a net income of $62.5 million for Q2 2024.

What were the TCE rates for GOGL's Capesize and Panamax vessels in Q2 2024?

In Q2 2024, GOGL reported TCE rates of $28,005 per day for Capesize vessels and $15,721 per day for Panamax vessels.

What is the Q2 2024 dividend announced by Golden Ocean Group (GOGL)?

Golden Ocean Group (GOGL) announced a cash dividend of $0.30 per share for Q2 2024, payable on or about September 20, 2024.

What is GOGL's estimated TCE rate for Capesize vessels in Q3 2024?

GOGL estimates a TCE rate of $26,200 per day for 83% of Capesize available days in Q3 2024.

How much did Golden Ocean Group (GOGL) improve its Carbon Intensity Indicator in 2023?

GOGL improved its Carbon Intensity Indicator by 13.3% in 2023 compared to its 2019 baseline.