GOGL – Third Quarter 2015 Results
· The Company reports negative EBITDA of $3.6 million for the third quarter of 2015
· The Company reports a net loss of $40.7 million and a loss per share of $0.24 for the third quarter of 2015.
· The Company reports a net loss of $151.6 million and a loss per share of $1.05 for the nine months ended September 30, 2015.
· In August 2015, the Company took delivery of, and sold, one Capesize newbuilding further to an agreement entered into in April 2015.
· In September 2015, the Company took delivery of one Capesize newbuilding.
· During the quarter; the Company completed the sale and lease back transaction with Ship Finance for eight Capesize vessels and repaid related bank debt of $188.9 million.
· During October, the Company and the yards have agreed to postpone the delivery of three newbuildings from 2015 to 2016, with a total delay of 14 months.
· In November, the Company has entered into an agreement to convert two Capesize newbuilding contracts to Suezmax newbuilding contracts, and on November 23, 2015, agreed to sell these newbuilding contracts to Frontline Ltd.
Third Quarter 2015 and Nine Months Results
The Company reports a net loss of $40.7 million and a loss per share of $0.24 for the third quarter compared with a loss of $35.5 million and a loss per share of $0.21 for the preceding quarter. The net loss in the third quarter includes (i) a loss of $2.3 million on sale of the Capesize newbuilding, Front Atlantic, and (ii) a vessel impairment loss of $7.1 million. If these two items are excluded, the adjusted loss in the third quarter is $31.3 million. The net loss in the second quarter includes a loss adjustment to the bargain purchase gain of $2.1 million. If this item is excluded, the adjusted loss in the second quarter is $33.5 million.
Vessel earnings improved in the third quarter compared to the preceding quarter and time charter equivalent (or TCE) revenues increased by $13.4 million due to an improvement in TCE rates partially offset by a decrease in trading days. This increase, however, was offset by (i) increased mark to market losses on interest rate hedges of $5.0 million, (ii) increased operating costs of $2.6 million (of which $1.8 million is attributable to an increase in dry docking costs – three vessels dry docked in the third quarter compared with one vessel in the preceding quarter) and, (iii) increased charter hire expense of $7.4 million (of which $4.6 million is attributable to the eight vessels sold to, and leased back from, Ship Finance International Limited, or Ship Finance, and $1.9 million is attributable to a loss provision for onerous time charter contracts). Administrative expenses and net interest expense decreased by $1.7 million and $1.9 million, respectively, compared to the preceding quarter.
The Company has recorded a vessel impairment loss of $7.1 million in the third quarter. This loss relates to three of the four Capesize newbuildings, which the Company agreed to sell to in April 2015. The Company completed the sale of one of these newbuildings, Front Atlantic, in August and recorded a loss on disposal of $2.3 million.
Cash and cash equivalents increased by $56.0 million in the third quarter. The main cash movements were the payment of $114.1 million in respect of the Company’s newbuilding program, $318.8 million received from the sale of vessels and the payment of $12.3 million for investments. The Company increased bank borrowings by $53.6 million (net of debt fees paid) and repaid debt of $199.7 million.
The full report is available in the link below.
November 24, 2015
The Board of Directors
Golden Ocean Group Limited
Questions should be directed to:
Herman Billung: CEO Golden Ocean Management AS
+47 22 01 73 41
Birgitte Ringstad Vartdal: CFO Golden Ocean Management AS
+47 22 01 73 53
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which 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. Words such as “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions. Although we believe 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 our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.
In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the dry bulk market, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.