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good day and Thank you for standing by
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Welcome to the Q3 2024 Golden Ocean
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group limited earnings conference Call
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At this time all participants are in a
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listen only mode after the speaker
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presentation There will be a question
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and answer session to ask a question dur
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in the session you will need to press
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star one one on your telephone you will
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then hear automated message advising
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thees r to with your question please
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press star one one Again
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interim CEO and cfo Please Go
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ahead Welcome to the golden oce Q3 2024
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release My name is Peder Simonsen and I
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the interim CEO and cfo Golden oce
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third quarter We The Following
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highlights adjusted in third quarter up
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at
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12.4 million compared to 12.3 million in
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the second quarter we deliver net income
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of 56. million and earnings Per share of
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28 C compared to net income of 62.5
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million ears Per 3 in
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second profit was 6.7 million and
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adjusted earnings Per share of 33 cents
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up from 63.4 million and earnings Per
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share of 32 cents in
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q2 rtc rates were about
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28300 per day for Cape sizes and about
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16400 per day for panamax vessels and
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Fleet wide net TC of around
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23700 per day for the quarter
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continu to execute on our Fleet renew
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strategy by selling one older panamax
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and an older Newcastle Max vessel at
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attractive
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prices further we continue to secure
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attractive financing Supporting our
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industry low Cash Break Even
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rate for q4 we have secured net tce of
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about 26300 per day for 82% of size
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Days per day
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per day for 27% of Cape Days and about
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17500 per day for 15% of
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panamax and strong result We are pleased
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to declare a dividend of 30 Per share
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Ford quarter
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of4 Let's look a Little Deeper into the
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numbers
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as mentioned we achieved the total Fleet
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White tce rate of
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23700 slightly up from
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q2 We had five Ships dry docked in Q3
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compared to four ships in q2
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contributing to about 253 Days of Fire
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in Q3 versus 193 days in
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q2 We are entering into a period with
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frequent dry doings we have 13 Ships
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scheduled to dry dock in q4 2024
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dryck as of to and s Ships are expected
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to dry in
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q125 we recorded net revenues of
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20.6 million 9.2 million higher than q2
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mainly due to increased vessel
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Days looking at our operating expenses
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we recorded 69.4 million in opex versus
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66 3 million
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q2 running expenses were largely
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unchanged quarter by quarter while We
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had one more ship dry dock in the
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quarter reflected in the
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results We had 2.4 million in
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decarbonization and digitalization
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investments our opex reclassified from
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charter higher was 2.4
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million Just Below 1 million up from q2
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on our General and administrative
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expenses we ended at 5.3 million
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slightly up from q2 Our Daily gna came
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in at
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572 per day net of cost recharge to
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affiliated companies unchanged from q2
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our charter higher expenses were 6.4
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million versus 4.8 million in
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q2 reflecting higher number of vessel
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Days for the Trading portfolio
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as as profit Sharing
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exp
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sfl net financial expenses came in at
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25.5 million largely unchanged quarter
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quarter are derivatives and other
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financial income we recorded a loss of
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12 million compared to a gain of 1.9
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million in
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q2 on derivatives rec loss of 11 million
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of Which million was relating to mark
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market loss on interest rate swap
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derivatives offset by a 4 million
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realized Cash gain on the same
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derivatives as well as a 400000 loss on
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FFA FX and Bunker
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derivatives for results in investment in
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associate we recorded a 700000 loss
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compared to a 400000 loss in q2 relating
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to our investments in Swiss Marine TFG
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UFC a net profit of 56. 3 million or 28
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cents an adjusted net profit of 66. 7 or
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33 cents and a dividend of 30 cents Per
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share declared for the
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quarter on our Cash flow we recorded
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Cash flow from Operations of 100.8
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million up from 76.99 in
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q2 og Cash flow used in investments was
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4.4 million
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mainly due to installments and cost
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relating to cams Max new buildings of
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24.8 million offset by 20.8 million in
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sales proceeds from one older panamax
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vessel Cash low us in financing came in
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at 8.8 million mainly comprising of 35
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million in scheduled debt and lease
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repayments an 8.1 million in prepayment
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relating to the sale of one panamax
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Vessel
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60 million in dividend payment relating
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to the q2 results was offset by 21.6
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million in drawdown in connection with
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delivery of One csx new
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building total net increase in cash of
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14.6 million on our balance sheet we
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recorded cash and Cash equivalence of
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17.6 million including 1.4 million in
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restricted
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cash in addition we have 150 million in
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undrawn available Credit facilities at
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quarter
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end Deb and Finance lead liabilities
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total 1.4 billion and Q3 Down by
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approximately 20 million quarter on
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quarter average Fleet wide loan to value
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under the company de facilities Per
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quarter end was
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34.1 book equity of 1.9 billion
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5% looking at Golden o Fleet
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comp Golden oce continues to renew its
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Fleet as evidenced with the vessel sales
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announced in the
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quarter although We are optimistic we
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focus on our position in the Cape size
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Newcastle Max
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segments Which represents over 80% of
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Golden Oceans deadweight tons and
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thereby earnings capacity
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We are the largest listed Owner in the
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Cape segment as I will discuss further
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in this presentation we believe that
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both supply and demand Dynamics favors
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the cape segment in the for
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Future as Illustrated in the graphs if
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you are to invest in the drb space We
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are the only listed company offering
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meaningful Cape Exposure and at the same
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time significant market cap and Trading
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liquidity in Q3 we cargo volumes heth
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levels Seas half despite geal tur and
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challenging Trading
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sentiment Brazilian Iron volumes were up
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133% quarter on quarter as driven by
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strong production and guidance from the
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largest Brazilian miner Vale Australia
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continued strong exports Al slightly
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Down quarter on
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quarter w Box volumes have grown to
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healthy baseline of 10 to 12 million
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tons Per month and are now in the upper
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end of the range as they are Approaching
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Peak season exports in
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q1 whole volumes are up 3% quarter on
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quarter mainly from Indonesia and
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Australia to Southeast
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Asia Colombian volumes Which were strong
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Ton Mile contributor for the first half
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of 2024 have decreased 11% from prev
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quarter as have struggled with onshore
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infrastructure
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issues as for the first half China
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continued to import a large portion of
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the volumes representing 75% of the
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Brazilian Iron or and 83% of the Guinea
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Box site
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exports in line with healthy growth in
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volumes both Vala and Australian Miners
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guide positively on production
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reiterating their strong full year produ
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TS Iron prices have been volatile but
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sted at historically healthy levels
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despite the negative macro
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backdrop current prices of Above 100 per
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Ton Compares very favorably to the
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Breakeven rate of the major Miners of
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approximately 4 per Ton delivered in
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Asia indicating continued profitable
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exports healthy Iron
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Price IR
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f inv min infrastructure gu SIM High
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Iron mine expected to ramp up its
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production and exports from q4
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2025 which will over 2 and half years
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have expected 120 million Tons of export
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capacity
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Ann if assuming volumes rep Australian
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volumes tri distance to Asia boosting
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Ton Mile demand for Cape sizes
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significantly in addition to simu Brazil
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have several new expansion projects on
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way the additional annual export
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capacity of around 50 million tons will
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come onstream during 2025 and 2026
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further adding Cape size Ton
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Mile Iron or inventories increased to
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2022 levels during the first half of
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2024
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whereas we throughout the Year seen
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significant negative new flow relating
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to chines growths in October we Chinese
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government announcing s packages
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including stabil the we Property Sector
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but more importantly
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clear lest economic outl published by im
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is expected that China will grow 48% and
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4.5% in4 and 2025 respectively
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Supporting healthy longterm demand for
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commodities despite elevated inventories
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China has continued to import High grade
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Brazilian Iron Which supports the
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indication that the parts of inventories
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are a lower
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gr further thean Metal Exchange China
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has required traders to hold higher
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deposit of IR in order to trade its
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furthering inventory
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levels China has stated that Aiming to
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reduce emissions in the steel
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industry to use High grade iron and co
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will reduce emissions Per Ton Steel
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produced China is in the process of
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including the steel industry into its
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emissions Trading scheme make increased
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Highs even more Ben
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new High r m inim gu Partially funded by
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Chinese
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interest Add to the sourcing of high
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grade
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commodities the official statistics on
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reported Steel production in China has
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Remain muted in Q3 but has during
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October improved as Steel margins have
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started to strengthen and pmi indicators
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improve also more optimistic Tone from
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the large steels
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change in narrative from what was
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presented during
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q2 outside China crude Steel production
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has started recovering but is muted by
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weak demand and high interest
00:14:11
rates however as this constitutes 50% of
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global steal demand it presents a
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significant upside Once the remand comes
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underway analyst Expect growth of 5 to
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7% in next couple of years as the world
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is recovering from inflation and Higher
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interest rate
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weak Steel margins chines steels to
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protect market share the steel exp from
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China has continued in Q3 and into q4
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with a 30% increase year on year in the
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first n months of
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2024 the stimulus targeting the real
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estate Sector is highly positive to
00:14:51
stabil the property market and for
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economy General
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Construction 25%
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inv
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Manu
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agen appr 6% of Chinese Steel
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production gu West Africa has become a
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Major exporter of high
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commodities as the case for the new Iron
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projects coming on stream the guinean
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boite is large degree contr by chines
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indica
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which is used in production of aluminum
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is feeding the booming EV industry as
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well as other sectors in
00:15:36
China the guinean boite replaces volumes
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from Indonesia Which in addition to
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significant growth in demand and Sailing
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distance represen the Switch to Cape
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sizes from smaller vessel
00:15:49
segments the boite trade has on average
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grown by 22% Ann since 2017 and is
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expected to grow by approximately 5 to
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10%
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20
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further
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demand aside exps currently contributing
00:16:07
to 13 to 14% of Ton Mile for Cape sizes
00:16:11
this will represent a demand growth
00:16:13
covering most if not all of the schedule
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deliveries in Cape size for
00:16:20
2025 the ord Remains favorable with Cape
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supported by shipyard capacity
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constraints si Newcastle Max compete
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with containers Ships LNG vessels and
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tankers for capacity due to the dock
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size
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required with capes representing the
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lowest profit margins for the shipyards
00:16:41
They are generally out competed by other
00:16:44
more profitable segments on the
00:16:46
available capacity leading to higher
00:16:48
quarter prices and long dated delivery
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schedules we only seen marginal
00:16:54
additions to the orderbook the P quarter
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and We Remain at historic
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long fundamental
00:17:10
support Fleet is aging and Over half of
00:17:13
the Cape Fleet will be years
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in8 environmental regulations
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ti also asen
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investments to me technical
00:17:39
requirements Rising the bar for smaller
00:17:45
operators There has unus little weathers
00:17:49
in the Port Operations during the fall
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normally leads ti
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Mar highly efficiently with low
00:18:00
congestion only marginal Panama and sues
00:18:03
Canal
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Exposure The Return of physical volume
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setting the price of freight has seen a
00:18:11
healthy Rebound in rates in q4 Following
00:18:13
a weaker period very much as seen in
00:18:19
2023 it illustrates the underlying
00:18:22
supply and demand balance in the freight
00:18:25
market We will round off with remer of
00:18:29
business model low cost B and modern
00:18:32
Fleet Which continues to support the
00:18:33
free cash flow and dividend Potential in
00:18:36
Golden
00:18:37
Ocean the accumulated dividends paid has
00:18:39
surpassed 1.1 billion by good margin
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representing Above 90% of net profit for
00:18:46
the
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period although we expect volatility
00:18:50
with ongoing geopolitical uncertainty We
00:18:52
continue to Remain fundamentally
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positive the market
00:18:56
Outlook I now pass the word back
00:19:05
Thank you as a reminder to ask a
00:19:08
question please press Star one one on
00:19:12
your telephone and wait for your name to
00:19:14
be announced to withdraw your question
00:19:16
please press star one on one
00:19:20
Again once again That's star one and one
00:19:25
if you wish to ask a question
00:19:30
We will now take the first
00:19:33
question from the Line of Omar noct from
00:19:36
Jeff Please Go
00:19:39
ahead Thank you Simon Thanks for the for
00:19:43
the update pretty good detail on the
00:19:46
market Outlook and I gu just wanted to
00:19:48
you get maybe a sense in terms of Golden
00:19:50
Ocean Where you sit in terms of capital
00:19:53
deployment from here You sold older
00:19:56
Newcastle Max and px prices look Fairly
00:19:59
Solid and You've got some big gains on
00:20:01
those I guess How would you characterize
00:20:04
Where you sit today company wise or do
00:20:07
you View Golden Ocean being kind of more
00:20:09
of a seller in this market take
00:20:10
advantage of Perhaps lofty pricing or
00:20:13
you buyer in terms of Perhaps asset
00:20:16
values are coming Under Pressure or are
00:20:18
you neither any kind of color you can
00:20:19
give I guess in terms of what you're
00:20:21
seeing in s& market and what that means
00:20:23
for for
00:20:26
you Thanks for the questions eh I think
00:20:29
eh First of all we We have sort of done
00:20:33
our heavy lifting when it comes to Fleet
00:20:35
growth eh earlier In The Cycle so we We
00:20:39
grew by 30% over the last three years
00:20:42
and then know in in line with the
00:20:46
increased asset prices I think at
00:20:48
current point in Time We don't see the
00:20:50
real value in in acquiring Modern Cage
00:20:55
at the current prevailing prices I think
00:20:57
we more eh
00:21:10
balance
00:21:12
[Musikk]
00:21:19
outage ites capy i
00:21:23
[Musikk]
00:21:28
eh at the current point in
00:21:31
time eh even though look at current
00:21:35
share prices PL know might beting to to
00:21:39
Deploy some of this into the buyback
00:21:41
program we announced renewal of but I
00:21:45
think as for the rest of the
00:21:48
group the same main shareholder we do
00:21:52
preference dividend over over buybacks
00:21:56
General terms
00:21:59
OK thank you that's clear and I guess
00:22:01
Maybe just in terms of div just
00:22:03
highlighting you pa de and you that I
00:22:07
believe the Quarters earnings Per share
00:22:11
has been in that range Plus or minus
00:22:13
couple
00:22:14
of How would you think about next
00:22:18
quarter you know following quarter eps
00:22:21
Falls say 20 25
00:22:24
saying hold you to
00:22:27
it threshold is that something you
00:22:29
Expect to maintain if earnings Don't
00:22:31
deviate too far away from what you have
00:22:34
achieved or do you Shift back Towards
00:22:37
that percentage payout of earnings I
00:22:41
think we always been a percentage payout
00:22:43
of earnings but we have also tried to
00:22:46
balance out the sort of the Peaks and
00:22:49
troughs and obviously we have a space
00:22:52
where Which enables us to pay out
00:22:54
dividends if the market weakens
00:22:57
temporarily
00:22:58
eh I think we are very
00:23:02
much you know repeating what we said we
00:23:06
positive to the market fundamentals of
00:23:08
the market Which means in to P dividend
00:23:13
any we period But The nal amount I
00:23:17
think have to see and
00:23:20
and you know we are also as we but I
00:23:26
think in general eh
00:23:32
[Musikk]
00:23:38
eh Very good thank you turn it over
00:23:42
thank
00:23:43
you thank you as a reminder if you wish
00:23:47
to ask a question please press Star one
00:23:51
on one on your
00:23:53
telefone star one and one if you wish to
00:23:57
ask a question
00:24:11
There are no more questions At this
00:24:19
time
00:24:23
Okay I will Thank you all for listening
00:24:26
in and Wish you all
00:24:29
peaceful Hol season time Thank
00:24:33
you this concludes today's conference
00:24:36
call Thank you for participating you may
00:24:38
now Disconnect
