GOGL Reports Better Earnings in 4Q 2017

Norway-based shipping company Golden Ocean Group (GOGL) ended the fourth quarter of 2017 with a net income of USD 27.1 million, compared to net income of USD 6.5 million seen in the corresponding period a year earlier.

The company’s adjusted EBITDA stood at USD 65.3 million in the fourth quarter of 2017, against USD 24.2 million in 4Q 2016.

Operating revenues amounted to USD 151.4 million in the fourth quarter of 2017, an increase of USD 24.4 million from USD 127 million during the third quarter of 2017. As explained, the improvement in operating revenues was primarily related to increased freight rates during the quarter, particularly for the company’s Capesize vessels.

“After returning to profitability during the third quarter of 2017, (…) we were able to capitalize on improving market conditions due to the size, composition and modernity of our fleet. We remain focused on maintaining competitive cash breakeven levels and a healthy balance sheet to provide us the flexibility to return value to our shareholders through our cash flows and continue to evaluate accretive growth opportunities,” Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS, commented.

GOGL also managed to narrow its net loss for 2017 to USD 2.3 million from loss of USD 127.7 million reported a year earlier.

During the quarter, GOGL raised USD 100 million in capital through a USD 66 million equity offering and a USD 34 million equity in-kind contribution as partial consideration for two Capesize vessels, delivered in November 2017 and January 2018.

In December 2017, the company completed the sale of six Ultramax vessels for USD 142.5 million.

Following the sale of six Ultramaxes and the acquisition of two Capesize ships, GOGL has increased its focus on larger vessel classes which are believed to “provide the greatest amount of leverage in a strong rate environment.”

In addition, during January and February 2018, GOGL took delivery of the five new vessels, completing its newbuilding program.

Currently, the company’s operating fleet is comprised 78 vessels, with an aggregate capacity of 10.7 million dwt.

“With a solid cash Golden Ocean Group Limited, fourth quarter 2017 position and competitive cash breakeven rates, the company expects to be well-positioned to generate strong cash flow if the market continues to develop positively,” the company said in its outlook.

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