Exhibit 99.1
INTERIM FINANCIAL INFORMATION
GOLDEN OCEAN GROUP LIMITED
Second Quarter 2022
August 25, 2022
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Hamilton, Bermuda, August 25, 2022 - Golden Ocean Group Limited (NASDAQ/OSE: GOGL) (the “Company” or “Golden Ocean”), the world's leading owner of large size dry bulk
vessels, today announced its unaudited results for the three and six month period ended June 30, 2022.
Highlights
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Net income of $163.7 million and earnings per share of $0.82 for the second quarter of 2022 compared with net income of $125.3 million and earnings per share of $0.63 for the first
quarter of 2022.
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Adjusted EBITDA1 of $191.6 million for the second quarter of 2022, compared with $149.4 million for the first quarter of 2022.
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Reported TCE2 rates for Capesize and Panamax/Ultramax vessels of $30,661 per day and $27,581 per day, respectively, in the second quarter of 2022. Reported TCE rate for
the total fleet of $29,431 per day.
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Completed the $275 million refinancing of 14 Capesize vessels at attractive terms, further reducing the industry low cash break-even rate.
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Entered into agreements to sell two Ultramax vessels and construct three Kamsarmax vessels at attractive prices.
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Estimated TCE rates, inclusive of charter coverage, calculated on a load-to-discharge basis are approximately:
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$27,900 per day for 80% of Capesize available days and $27,100 per day for 96% of Panamax available days for the third quarter of 2022; and
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$29,500 per day for 25% of Capesize available days and $21,900 per day for 27% of Panamax available days for the fourth quarter of 2022.
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Published the Company’s fourth annual ESG report for 2021, which can be found on the Company’s website.
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Announced a cash dividend of $0.60 per share for the second quarter of 2022, payable on or about September 14, 2022 to shareholders of record on September 7, 2022. Shareholders
holding the Company’s shares through Euronext VPS may receive this cash dividend later, on or about September 16, 2022.
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1Adjusted earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure. A reconciliation of adjusted EBITDA to the
most directly comparable GAAP measure is included in the back part of this report.
2TCE rate, or time charter equivalent rate, is a non-GAAP measure. A reconciliation of TCE rate to the most directly comparable GAAP measure is included in the
back part of this report.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Ulrik Andersen, Chief Executive Officer, commented:
“Golden Ocean delivered another strong result in the second quarter of 2022 despite trade disruptions and economic headwinds. Our performance is attributable to the
strength of our commercial operations as well as the quality of our fleet, which allowed us to generate a solid premium to benchmark rates.
Despite recent weakness in freight rates caused by easing port congestion and the contraction in China’s economy due, in part, to its “zero COVID” policy, our market
outlook remains optimistic. Slowing fleet growth and new environmental regulations provide a strong offset to a potential short-term slowing of demand growth which combined with our charter coverage and superior fuel economics from our modern fleet
will support continued healthy returns.“
Fleet Development & Performance
As of the date of this report, the Company's fleet consists of 97 vessels, including 10 newbuildings, with an aggregate capacity of approximately 13.7 million dwt. The
Company's fleet consists of:
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78 vessels owned by the Company (48 Capesize, 28 Panamax and two Ultramax vessels);
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Eight Capesize vessels chartered in on long-term leases with profit-sharing arrangements;
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One Ultramax vessel chartered in; and
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Ten 85,000 dwt Kamsarmax vessels on order.
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In February 2022, the Company entered into an agreement to sell three older Panamax vessels, Golden Empress, Golden Enterprise and Golden Endeavour, to an unrelated
third party for an aggregate sales price of $52.0 million. In April and May 2022, the vessels were delivered to their new owner. The Company recorded a gain of $9.5 million from the vessel sales in the second quarter of 2022.
In June 2022, the Company entered into an agreement to sell two Ultramax vessels, Golden Cecilie and Golden Cathrine, to an unrelated third party for an aggregate sales
price of $63.0 million. The vessels are expected to be delivered to their new owner by the fourth quarter of 2022. The Company expects to record a gain of approximately $22.0 million from the sale upon delivery of vessels.
In June 2022, the Company entered into agreements to construct a total of three Kamsarmax vessels, with the same design and shipyard group as the seven previously
announced newbuilding contracts. The three incremental vessels are expected to be delivered to the Company by the first quarter of 2025 and to be financed through net sales proceeds from the sale of two Ultramax vessels described above, and with debt financing to be established closer to the delivery. As of the date of this report, the Company had 10 vessels under construction and outstanding contractual commitments of $271.7
million due by the first quarter of 2025.
The Company's estimated TCE rates for the third quarter of 2022 are $27,900 per day for 80% of available days
for Capesize vessels and $27,100 per day for 96% of available days for Panamax vessels. These estimates are forward looking statements and are based on time charter contracts entered by the Company as well as current spot fixtures on the
load-to-discharge method, whereby revenue is recognized on a straight-line basis over the voyage from the commencement of loading to the completion of discharge. The actual TCE rates to be earned will depend on the number of contracted days as well
as the number of ballast days at the end of the period when a vessel is sailing without cargo. According to the load-to-discharge accounting method, the Company will not be able to recognize revenue for any ballast days or uncontracted days at the
end of the third quarter of 2022. At the same time, expenses for uncontracted days cannot be deferred and will be recognized.
Adding attractive forward coverage, Golden Ocean has the fourth quarter of 2022, secured 25% of total days at an average rate of $29,500 per day for Capesize vessels and
27% of total days for Panamax vessels at an average rate of $21,900 per day.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Corporate Development
In May 2022, the Company signed a loan agreement for a $275.0 million credit facility with a group of leading shipping banks to refinance debt secured by 14 Capesize
vessels. The new financing has an interest rate of Secured Overnight Financing Rate (“SOFR”) plus 190 basis points, which, based on the historical spread between London Interbank Offered Rate (“LIBOR”) and SOFR reference rates, corresponds to a
LIBOR-based credit margin of around 165 basis points. As of June 30, 2022, the new facility was fully drawn, thereby fully refinancing the outstanding amount of $265.6 million.
The Company’s fourth annual ESG report, published in July 2022, describes environmental, social and governance factors the Company managed during 2021. In the Company’s
fourth annual ESG report, Golden Ocean expresses its support for the IMO’s 2030 and 2050 targets for reducing emissions in the shipping industry. The Company has set targets for scope 1 emission reduction and aims to reduce its Annual Efficiency
Ratio (AER) by 15% by 2026 and 30% by 2030, compared to 2019 levels. The Company will also target net-zero emissions by 2050.
The Company announced today a cash dividend of $0.60 per share in respect of the second quarter of 2022, which is payable on or about September 14, 2022, to shareholders
of record on September 7, 2022. Shareholders holding the Company’s shares through Euronext VPS may receive this cash dividend later, on or about September 16, 2022.
Second Quarter 2022 Results
Second quarter 2022 income statements
The Company reported net income of $163.7 million and earnings per share of $0.82 (basic) for the second quarter of 2022, compared with net income of $125.3 million and
earnings per share of $0.63 (basic) for the first quarter of 2022.
Adjusted EBITDA was $191.6 million for the second quarter of 2022, an increase of $42.2 million from $149.4 million for the first quarter of 2022.
Operating revenues were $316.7 million in the second quarter of 2022, an increase of $51.5 million from $265.2 million in the first quarter of 2022. One vessel was in
drydock during the second quarter of 2022 compared to six vessels in drydock during the first quarter of 2022, contributing to a decrease in off-hire days from 294 days in the first quarter
of 2022 to 187 days in the second quarter of 2022. Voyage expenses increased by $10.4 million to $66.6 million compared to the first quarter of 2022, primarily due to an increase in bunker
prices and commissions.
The Company achieved an average TCE rate for the fleet of $29,431 per day in the second quarter of 2022 compared to $24,330 per day in the first quarter of 2022.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Gain from sale of vessels of $9.5 million was recorded in the second quarter of 2022 related to sale of Panamax vessels Golden Empress, Golden Enterprise and Golden
Endeavour. No gain from sale of vessels was recorded in the first quarter of 2022.
Ship operating expenses amounted to $50.4 million in the second quarter of 2022 compared with $58.2 million in the first quarter of 2022. In the second quarter of 2022,
ship operating expenses mainly consisted of $45.3 million in running and other sundry expenses (compared to $48.6 million of running expenses in the first quarter of 2022) and $0.6 million in drydocking expenses ($4.9 million in the first quarter of
2022). Running expenses mainly consisted of crew costs, repair and maintenance, spares and insurance. COVID-19 continues to impact the operating cost and efficiency of the fleet, in particular with respect to crewing.
Charter hire expenses were $15.4 million in the second quarter of 2022 compared with $10.3 million in the first quarter of 2022. The increase in charter hire expenses
was mainly due to increased market rates during the quarter.
Administrative expenses increased to $5.5 million in the second quarter of 2022 compared with $5.1 million in the first quarter of 2022, primarily due to higher
non-recurring personnel expenses. Depreciation was $32.5 in the second quarter of 2022, largely unchanged compared to the first quarter of 2022.
Net interest expense increased to $11.9 million in the second quarter of 2022, compared with $10.0 million in the first quarter of 2022, primarily due to increase in
interest rates during the period.
In the second quarter of 2022, the Company recorded a $7.1 million net gain on derivatives, mainly relating to a $7.4 million gain on USD interest rate swaps.
The Company recorded a gain from associated companies of $12.7 million in the second quarter of 2022, mainly related to a gain of $6.6 million from its investments in
SwissMarine Pte. Ltd. (‘’SwissMarine’’) and an aggregate $6.1 million gain from its investments in United Freight Carriers LLC and TFG Marine Pte. Ltd. (“TFG Marine”).
Second quarter 2022 cash flow statements and Balance Sheet as of June 30, 2022
As of June 30, 2022, the Company had cash and cash equivalents of $168.3 million, including restricted cash balances of $4.3 million, representing an increase of $52.6 million compared with March 31, 2022. During the second quarter of 2022, cash provided by operating activities amounted to $155.5 million, which included a negative working capital change
of $13.3 and dividends received from associates of $0.9 million.
For the second quarter of 2022, total net cash provided by investing activities was $37.8 million and was primarily related to $51.5 million in proceeds net of
commissions from the sales of three older Panamax vessels, Golden Empress, Golden Enterprise and Golden Endeavour, partly offset by $13.7 million in installment payments for four newbuilding contracts entered in 2021.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Net cash used in financing activities was $140.7 million in the second quarter of 2022. This included the
full draw down on the new $275.0 million credit facility refinancing $265.6 million outstanding under the previous facility, $25.9 million in scheduled debt repayment, and $7.9 million of
scheduled finance leases repayments. In connection with the sale of Golden Empress, Golden Enterprise and Golden Endeavour, a
total of related debt of $14.0 million was repaid in the second quarter, while $6.8 million was repaid in the first quarter. Finally, the Company recorded dividend payments of $100.4 million in the second quarter.
As of June 30, 2022, the book value of long-term debt was $1,197.5 million, including the current portion of long-term debt of $96.1 million. The book value of finance
lease obligations was $115.3 million, including the current portion of finance lease obligations of $18.5 million. In addition, the Company had $100.0 million in undrawn available capacity under its revolving credit facilities.
The Dry Bulk Market
During the second quarter of 2022, dry bulk rates recovered from seasonal lows, despite negative economic sentiment and the continuation of China’s “zero COVID”
strategy. The impact of decreased demand for certain commodities was offset by increased demand for others, elevated port congestion and new trade routes that emerged after Russia’s incursion into Ukraine. Notably, high fuel prices also impacted the
dry bulk market, which is reflected in sailing speeds that have been trending down over the last twelve months as well as the difference in average time charter equivalent rates earned by modern, fuel-efficient vessels compared to older tonnage.
In the second quarter of 2022, global dry bulk fleet utilization (calculated as total tonne-mile demand divided by total available fleet capacity) was 92.5%, an increase
from 89.7% in the prior quarter, according to Maritime Analytics. Total seaborne transportation of dry bulk goods was 1,164 mt in the second quarter of 2022, representing a 4.7% increase from 1,112 mt in the first quarter of 2022 and a 2.1% increase
from 1,189 mt in the second quarter of 2021.
Chinese steel production increased by 3.8% in the second quarter of 2022, although production dropped sharply in June as steel inventories rose due in part to demand
destruction caused by new rounds of lockdowns. Additionally, the Chinese real estate sector has come under pressure, creating demand uncertainty, and some domestic steel mills have voluntarily curbed output in response to slowing demand. While the
Chinese government has signaled that it is not presently in favor of large-scale stimulus packages, many analysts expect China to prioritize increased public infrastructure spending to support its economy, which would have a positive impact on
domestic steel consumption. In the meantime, Indian steel production has remained steady as the Indian government targets to double steel production capacity by 2030.
Chinese iron ore imports declined by 0.9% in the second quarter of 2022 compared to the prior quarter and 3.6% compared to the second quarter of 2021 as inventories are
at elevated levels due to a slowdown in consumption related to China’s “zero COVID” policy as well as weaker real estate demand. Additionally, Brazilian iron ore exports were negatively impacted by adverse weather disruptions. Thus far in the third
quarter of 2022, Brazilian exports have increased and are projected to continue to increase through the remainder of 2022.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Seaborne transportation of coal offset the impact of reduced iron ore volumes, increasing by 10.9% in the second quarter of 2022 compared to the prior quarter and 0.1%
compared to the second quarter of 2021. The coal trade is expected to be significantly impacted by sanctions imposed in April 2022 by the European Union (EU) that prohibit the import of Russian coal by EU members. Combined with concerns about the
potential for Russian natural gas supplies to Europe being disrupted, the need for energy security has boosted the demand for coal globally. Although Europe remains committed to its energy transition plans, previously closed coal-fired power plants are being brought back online as a temporary measure to meet any potential gaps in energy demand. In addition to causing increased demand for coal, volumes are being sourced
from increasingly distant sources, thereby increasing tonne-mile demand.
Thermal coal volumes increased by 13.4% in the second quarter of 2022 compared to the first quarter of 2022. Although volumes were not materially different from the
second quarter of 2021, the coal trade is expected to increase substantially as winter approaches. The main expected driver is the replenishment and building of inventories due to energy security concerns and to avoid the power shortages that
occurred in India and China last year. While coal is not favored by developed economies for power generation, it has been a critical part of the energy mix for emerging economies and is the source of greater than 70% of total Chinese electricity
output and greater than 75% during the winter months. According to Maritime Analytics, thermal coal demand is forecast to increase at a growth rate of 5.4% and 7.8% in 2022 and 2023, respectively.
Transportation of essential agribulks, which represented 12.6% of total seaborne volumes in the second quarter of 2022, increased by 3.6% compared to the first quarter
of 2022 but decreased by 4.5% compared to the second quarter of 2021 as exports from Ukraine were halted for the duration of the quarter. Ukraine accounts for 10% of total wheat exports and 14% of total corn exports. This is expected to have a
positive impact on tonne-mile demand in the short term as exports increase from the Americas. Other minor bulks increased by 5.8% compared to the first quarter of 2022 but decreased by 0.8%
compared to the second quarter of 2021 as exports of various minor bulks from Ukraine and Russia were impacted.
The global fleet of dry bulk vessels amounted to 959.8 million deadweight tonnes ("dwt") at the end of the second quarter of 2022, absorbing a net increase of 6.4
million dwt in the quarter, compared to 7.9 million dwt in the first quarter of 2022 and 9.5 million dwt in the second quarter of 2021. Supply growth was partly offset by decreased fleet efficiency although port congestion and average waiting times
in port decreased in the second quarter, a trend that has continued into the third quarter. In the second quarter of 2022, Capesize and Panamax vessels spent an average of 2.75 days waiting in port, compared to an average of 3.0 days in the second
quarter of 2021.Since the end of the quarter, waiting times have reverted to historical averages. Newbuilding ordering levels continued to decline in the second quarter of 2022, with only 3.5 million dwt of vessels ordered, the lowest quarterly
amount since the first quarter of 2017 and the fourth sequential quarterly decline in ordering. The orderbook as a percentage of the global fleet stood at 7.1% at quarter-end, a decrease from 7.8% in June 30, 2021 and an average of 27.8% over the
last 20 years. The orderbook is presently at the lowest level in 30 years.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Strategy and Outlook
Despite macroeconomic headwinds, the Company maintains a positive market outlook based on several factors, including changing trade patterns, particularly for agribulks and coal, a rebound in industrial activity and demand for iron ore, and equally importantly, supply-side dynamics that have not been present for decades.
The International Monetary Fund ("IMF") forecasts global GDP to grow by 3.2% and 2.9% in 2022 and 2023, respectively, after a series of downward revisions driven by
inflation, geopolitical tensions and tightening monetary policy. Growth forecasts for the emerging Asian economies have also been reduced to 4.6% and 5.0% for 2022 and 2023, respectively.
Nevertheless, the revised forecasts remain high by historical standards and should support healthy baseline dry bulk commodity demand. Notably, India's GDP is forecast to grow by 7.4% and 6.1% in 2022 and 2023, respectively. Even with lowered growth
forecasts, global tonne-mile demand is forecast to increase by 1.9% and 4.3% in 2022 and 2023, respectively, according to Maritime Analytics.
In contrast to a less certain short-term demand outlook, the outlook for fleet supply is positive. Setting aside the potential increase in fleet inefficiency due to
supply chain and logistical issues and protocols related to COVID-19, the introduction of the Energy Efficiency Existing Ship Index, or EEXI, by the International Maritime Organization is expected to have a significant effect on fleet efficiency.
Commencing in 2023, all vessels in the global fleet will be required to meet new energy efficiency standards Most vessels built before 2014 will have limited options to meet the EEXI standards aside from reducing their sailing speeds. This gives
further potential for early retirement of less efficient vessels that cannot meet the new standards. In the current market environment, modern, fuel-efficient vessels and vessels fitted with exhaust gas cleaning systems are earning a substantial
premium compared to older tonnage due to elevated fuel prices and fuel spreads.
An orderbook at a 30-year low as a percentage of the operating fleet is also highly supportive of expectations for positive supply dynamics. After growing by 3.4% in
2022 and by approximately 4.2% per year on average over the last decade, the global dry bulk fleet is forecast to grow by 3.1% in 2022 and just 2.5% in 2023, well below organic replacement levels. Depending on the impact of the EEXI standards, fleet
growth may slow even further as nearly 20% of the vessels in the global fleet will be 15 years of age or older, making them less commercially viable than their modern counterparts. This figure decreases to 16.5% of the global Capesize and Panamax segments, which is a significant portion of the fleet by any measure.
In the first half of 2022, just 2.7 million dwt of new Capesize and Panamax vessels have been ordered, representing less than 0.5% of the global fleet as of the start of
the year. An increase in steel prices and limited yard capacity have combined to drive newbuilding prices sharply higher. Indeed, newbuilding prices for Capesize and Panamax vessels continued to increase in the second quarter of 2022 and are at
levels not seen since 2009. The Company does not anticipate a dramatic surge in newbuilding orders given the recent sharp rise in newbuilding prices, scarcity of competitive financing, capacity limits on shipyards and question marks over truly
futureproof technology.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
The Company is closely monitoring macro-economic factors and potential impacts on the dry bulk trades and is well-positioned in the near term, with highly profitable
charter coverage for most of its available days in the third quarter of 2022, also stretching into the fourth quarter.
Over the last 18 months, the Company has actively grown and renewed its fleet, disposing of several older vessels and acquiring or placing orders for 28 modern vessels. The Company is the largest listed owner of large-size dry bulk vessels, with an average age of approximately 6.1 years including
newbuilding vessels. In addition to increasing the Company’s cash generation potential by virtue of a larger fleet, the recent vessel transactions will ensure that its fleet benefits from superior fuel economy and remains highly competitive for years
to come.
With a best-in-class fleet focused exclusively on the large vessel classes, Golden Ocean is well-positioned to generate significant cash flow and the Board of Directors
remains committed to returning value to its shareholders through dividends. While the amount and timing of any future dividend payments will be based on Company's results, investment opportunities and the prevailing market conditions, the Company
intent to distribute a significant portion of its earnings.
ESG Update
The Company's fourth comprehensive and stand-alone annual ESG report was published in July 2022 in respect of the calendar year 2021. The report describes environmental,
social, and governance factors the Company managed during 2021 and can be found on the Company's website. The information in the ESG report and on our website is not incorporated by
reference into this document. The Company's ESG report provides an opportunity to reflect on Golden Ocean's ESG journey and to demonstrate the Company's progress towards its goals.
In 2021, the Company strengthened its management and understanding of climate risk by conducting a high-level review using the Task Force on Climate-Related Financial
Disclosures (TCFD) framework. This review included assessing governance, strategy, risk management and targets linked to climate-related issues relevant to Golden Ocean and the shipping sector. This improved Golden Ocean’s ability to identify risks
and opportunities associated with climate change and how to tackle these challenges going forward.
With respect to emissions reductions, Golden Ocean supports the IMO’s 2030 and 2050 targets for reducing emissions in the shipping industry. The Company has set targets
for scope 1 emission reduction and aims to reduce its Annual Efficiency Ratio (AER) by 15% by 2026 and 30% by 2030, compared to 2019 levels. The Company will also target net-zero emissions by 2050. The Company has embraced decarbonization as a core
strategic pillar and is carefully considering all potential efforts to reduce its emissions. Technological advancements play a key role when it comes to energy efficiency and emission control, both in terms of engine technology and data handling, and
the Company optimizes vessel routing and speed in order to increase voyage efficiency and reduce fuel consumption, among other actions.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
August 25, 2022
Questions should be directed to:
Ulrik Andersen: Chief Executive Officer, Golden Ocean Management AS
+ 47 22 01 73 53
Peder Simonsen: Chief Financial Officer, Golden Ocean Management AS
+47 22 01 73 45
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
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.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
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: the Company’s future operating or financial results; the Company’s continued borrowing availability under its 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 Company’s ability to successfully employ its
existing and newbuilding dry bulk vessels and replace its operating leases on favorable terms, or at all; changes in the Company’s operating expenses and voyage costs, including bunker prices, fuel prices (including increases costs for low sulfur
fuel), dry docking, crewing and insurance costs; 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 thereof, the delivery and commencement of operations dates, expected downtime and lost revenue); planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including
drydocking, surveys, upgrades and insurance costs; risks associated with vessel construction; the Company’s expectations regarding the availability of vessel acquisitions and its ability to complete acquisition transactions planned; vessel breakdowns
and instances of off-hire; potential differences in interest by or among certain members of the Company’s board of directors, or the Board, executive officers, senior management and shareholders; potential liability from pending or future litigation;
potential exposure or loss from investment in derivative instruments; general dry bulk shipping market trends, including fluctuations in charter hire rates and vessel values; 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; the strength of world economies; stability of Europe and the Euro; the overall impact of inflation and the rise in interest rates and foreign exchange rates;
changes in seaborne and other transportation; changes in governmental rules and regulations or actions taken by regulatory authorities; general domestic and international political conditions; potential disruption of shipping routes due to accidents,
climate-related (acute and chronic), political instability, terrorist attacks, piracy or international hostilities, including the ongoing aggression between Russia and Ukraine; the length and severity of epidemics and pandemics, including COVID-19
and its impact on the demand for seaborne transportation in the dry bulk sector; the impact of increasing scrutiny and changing expectations from investors, lenders, charterers and other market participants with respect to our Environmental, Social
and Governance practices; new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime Organization, and/or regional/national imposed by regional authorities such as the European Union or
individual countries; 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, 2021.
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.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
INTERIM FINANCIAL INFORMATION
SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
Index
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Unaudited Interim Condensed Consolidated Statements of Operations
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Unaudited Interim Condensed Consolidated Balance Sheets
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Unaudited Interim Condensed Consolidated Cash Flow Statements
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Unaudited Interim Condensed Consolidated Statements of Changes in Equity
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Selected Notes to the Unaudited Interim Condensed Consolidated Financial Statements
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GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
Unaudited Interim Condensed Consolidated Statements of Operations
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(in thousands of $, except per share data)
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Three months
ended
June 30,
2022
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Three months
ended
March 31,
2022
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Three months ended
June 30,
2021
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Six months ended
June 30,
2022
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Six months ended
June 30,
2021
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Operating revenues
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Time charter revenues
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183,393
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161,848
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127,198
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345,241
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205,518
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Voyage charter revenues
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132,985
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103,173
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148,047
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236,158
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227,223
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|||||||||||||||
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Other revenues
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287
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163
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457
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450
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1,014
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Total operating revenues
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316,665
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265,184
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275,702
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581,849
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433,755
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Gain from disposal of vessels
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9,516
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—
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—
|
9,516
|
—
|
|||||||||||||||
|
Other operating income (expenses)
|
—
|
(413
|
)
|
2,910
|
(413
|
)
|
3,559
|
|||||||||||||
|
Operating expenses
|
||||||||||||||||||||
|
Voyage expenses and commissions
|
66,628
|
56,273
|
62,955
|
122,901
|
102,188
|
|||||||||||||||
|
Ship operating expenses
|
50,369
|
58,165
|
50,283
|
108,534
|
98,900
|
|||||||||||||||
|
Charter hire expenses
|
15,380
|
10,303
|
33,152
|
25,683
|
47,072
|
|||||||||||||||
|
Administrative expenses
|
5,497
|
5,127
|
4,605
|
10,624
|
8,720
|
|||||||||||||||
|
Impairment loss on vessels
|
—
|
—
|
—
|
—
|
4,187
|
|||||||||||||||
|
Depreciation
|
32,534
|
32,434
|
30,248
|
64,968
|
57,046
|
|||||||||||||||
|
Total operating expenses
|
170,408
|
162,302
|
181,243
|
332,710
|
318,113
|
|||||||||||||||
|
Net operating income
|
155,773
|
102,469
|
97,369
|
258,242
|
119,201
|
|||||||||||||||
|
Other income (expenses)
|
||||||||||||||||||||
|
Interest income
|
240
|
54
|
79
|
294
|
254
|
|||||||||||||||
|
Interest expense
|
(12,113
|
)
|
(10,041
|
)
|
(9,665
|
)
|
(22,154
|
)
|
(18,554
|
)
|
||||||||||
|
Gain on derivatives
|
7,127
|
18,750
|
14,631
|
25,877
|
23,655
|
|||||||||||||||
|
Equity results of associated companies
|
12,666
|
14,454
|
2,866
|
27,120
|
3,533
|
|||||||||||||||
|
Other financial items
|
86
|
(328
|
)
|
(755
|
)
|
(242
|
)
|
35
|
||||||||||||
|
Net other income (expenses)
|
8,006
|
22,889
|
7,156
|
30,895
|
8,923
|
|||||||||||||||
|
Net income before income taxes
|
163,779
|
125,358
|
104,525
|
289,137
|
128,124
|
|||||||||||||||
|
Income tax expense
|
30
|
35
|
30
|
65
|
50
|
|||||||||||||||
|
Net income
|
163,749
|
125,323
|
104,495
|
289,072
|
128,074
|
|||||||||||||||
|
Per share information:
|
||||||||||||||||||||
|
Earnings per share: basic
|
$
|
0.82
|
$
|
0.63
|
$
|
0.52
|
$
|
1.44
|
$
|
0.70
|
||||||||||
|
Earnings per share: diluted
|
$
|
0.81
|
$
|
0.62
|
$
|
0.52
|
$
|
1.43
|
$
|
0.69
|
||||||||||
The accompanying selected notes are an integral part of these unaudited interim condensed consolidated financial statements.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
Unaudited Interim Condensed Consolidated Balance Sheets
|
(in thousands of $)
|
As of
June 30, 2022
|
As of
March 31, 2022 |
As of
December 31, 2021 |
|||||||||
|
ASSETS
|
||||||||||||
|
Current assets
|
||||||||||||
|
Cash and cash equivalents
|
163,981
|
107,356
|
197,032
|
|||||||||
|
Restricted cash
|
4,340
|
8,365
|
12,985
|
|||||||||
|
Other current assets
|
186,784
|
182,846
|
159,373
|
|||||||||
|
Total current assets
|
355,105
|
298,567
|
369,390
|
|||||||||
|
Vessels and equipment, net
|
2,744,961
|
2,813,459
|
2,880,321
|
|||||||||
|
Vessels held for sale
|
39,884
|
41,916
|
—
|
|||||||||
|
Newbuildings
|
49,830
|
35,890
|
35,678
|
|||||||||
|
Finance leases, right of use assets, net
|
91,123
|
94,849
|
98,535
|
|||||||||
|
Operating leases, right of use assets, net
|
25,652
|
26,804
|
19,965
|
|||||||||
|
Other long-term assets
|
81,150
|
49,956
|
50,288
|
|||||||||
|
Total assets
|
3,387,705
|
3,361,441
|
3,454,177
|
|||||||||
|
LIABILITIES AND EQUITY
|
||||||||||||
|
Current liabilities
|
||||||||||||
|
Current portion of long-term debt
|
96,070
|
104,355
|
105,864
|
|||||||||
|
Current portion of finance lease obligations
|
18,517
|
20,147
|
21,755
|
|||||||||
|
Current portion of operating lease obligations
|
11,695
|
19,240
|
13,860
|
|||||||||
|
Other current liabilities
|
103,943
|
102,635
|
106,594
|
|||||||||
|
Total current liabilities
|
230,225
|
246,377
|
248,073
|
|||||||||
|
Long-term debt
|
1,101,399
|
1,125,567
|
1,156,481
|
|||||||||
|
Non-current portion of finance lease obligations
|
96,823
|
101,400
|
105,975
|
|||||||||
|
Non-current portion of operating lease obligations
|
21,150
|
14,277
|
14,907
|
|||||||||
|
Total liabilities
|
1,449,597
|
1,487,621
|
1,525,436
|
|||||||||
|
Equity
|
1,938,108
|
1,873,820
|
1,928,741
|
|||||||||
|
Total liabilities and equity
|
3,387,705
|
3,361,441
|
3,454,177
|
|||||||||
The accompanying selected notes are an integral part of these unaudited interim condensed consolidated financial statements.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
Unaudited Interim Condensed Consolidated Cash Flow Statements
|
(in thousands of $)
|
Three months ended
June 30,
2022
|
Three months
ended
March 31,
2022
|
Three months
ended
June 30,
2021
|
Six months ended
June 30,
2022
|
Six months
ended
June 30,
2021
|
|||||||||||||||
|
Net income
|
163,749
|
125,323
|
104,495
|
289,072
|
128,074
|
|||||||||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities;
|
||||||||||||||||||||
|
Gain from disposal of vessels
|
(9,516
|
)
|
—
|
—
|
(9,516
|
)
|
—
|
|||||||||||||
|
Depreciation
|
32,534
|
32,434
|
30,248
|
64,968
|
57,046
|
|||||||||||||||
|
Impairment loss on vessels
|
—
|
—
|
—
|
—
|
4,187
|
|||||||||||||||
|
Dividends from associated companies
|
945
|
6,552
|
—
|
7,497
|
—
|
|||||||||||||||
|
Equity results from associated companies
|
(12,666
|
)
|
(14,454
|
)
|
(2,866
|
)
|
(27,120
|
)
|
(3,533
|
)
|
||||||||||
|
Amortization of time charter party out contracts
|
—
|
—
|
(68
|
)
|
—
|
1,010
|
||||||||||||||
|
Mark to market value on derivatives
|
(7,541
|
)
|
(18,930
|
)
|
139
|
(26,471
|
)
|
(10,407
|
)
|
|||||||||||
|
Other, net
|
1,271
|
(1,032
|
)
|
(893
|
)
|
239
|
(3,426
|
)
|
||||||||||||
|
Change in operating assets and liabilities
|
(13,300
|
)
|
(6,269
|
)
|
3,124
|
(19,569
|
)
|
(32,194
|
)
|
|||||||||||
|
Net cash provided by operating activities
|
155,476
|
123,624
|
134,179
|
279,100
|
140,757
|
|||||||||||||||
|
Investing activities
|
||||||||||||||||||||
|
Additions to vessels and right of use assets
|
(848
|
)
|
(1,394
|
)
|
(223,642
|
)
|
(2,242
|
)
|
(288,942
|
)
|
||||||||||
|
Additions to newbuildings
|
(13,727
|
)
|
—
|
(72,843
|
)
|
(13,727
|
)
|
(116,445
|
)
|
|||||||||||
|
Repayments of loans receivable from related parties
|
—
|
5,350
|
—
|
5,350
|
—
|
|||||||||||||||
|
Proceeds from sale of vessels
|
51,479
|
—
|
8,148
|
51,479
|
17,652
|
|||||||||||||||
|
Other investing activities, net
|
939
|
2
|
11
|
941
|
22
|
|||||||||||||||
|
Net cash provided by (used in) investing activities
|
37,843
|
3,958
|
(288,326
|
)
|
41,801
|
(387,713
|
)
|
|||||||||||||
|
Financing activities
|
||||||||||||||||||||
|
Repayment of long-term debt
|
(305,418
|
)
|
(33,230
|
)
|
(21,266
|
)
|
(338,648
|
)
|
(103,307
|
)
|
||||||||||
|
Proceeds from long-term debt
|
275,000
|
—
|
62,975
|
275,000
|
62,975
|
|||||||||||||||
|
Net proceeds from share distributions
|
828
|
—
|
—
|
828
|
574
|
|||||||||||||||
|
Debt fees paid
|
(2,750
|
)
|
—
|
—
|
(2,750
|
)
|
—
|
|||||||||||||
|
Net proceeds from share issuance
|
—
|
—
|
16,885
|
—
|
352,225
|
|||||||||||||||
|
Dividends paid
|
(100,443
|
)
|
(180,392
|
)
|
(50,104
|
)
|
(280,835
|
)
|
(50,104
|
)
|
||||||||||
|
Repayment of finance leases
|
(7,936
|
)
|
(8,256
|
)
|
(8,071
|
)
|
(16,192
|
)
|
(15,692
|
)
|
||||||||||
|
Net cash provided by (used in) financing activities
|
(140,719
|
)
|
(221,878
|
)
|
419
|
(362,597
|
)
|
246,671
|
||||||||||||
|
Net change
|
52,600
|
(94,296
|
)
|
(153,728
|
)
|
(41,696
|
)
|
(285
|
)
|
|||||||||||
|
Cash, cash equivalents and restricted cash at start of period
|
115,721
|
210,017
|
328,545
|
210,017
|
175,102
|
|||||||||||||||
|
Cash, cash equivalents and restricted cash at end of period
|
168,321
|
115,721
|
174,817
|
168,321
|
174,817
|
|||||||||||||||
The accompanying selected notes are an integral part of these unaudited interim condensed consolidated financial statements.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
Unaudited Interim Condensed Consolidated Statements of Changes in Equity
|
(in thousands of $, except for the share data)
|
Six months
ended June 30, 2022 |
Six months
ended
June 30,
2021
|
||||||
|
Number of shares outstanding
|
||||||||
|
Balance at beginning of period
|
200,435,621
|
143,327,697
|
||||||
|
Shares issued
|
—
|
56,917,924
|
||||||
|
Distribution of treasury shares
|
450,000
|
170,000
|
||||||
|
Balance at end of period
|
200,885,621
|
200,415,621
|
||||||
|
Share capital
|
||||||||
|
Balance at beginning of period
|
10,061
|
7,215
|
||||||
|
Shares issued
|
—
|
2,846
|
||||||
|
Balance at end of period
|
10,061
|
10,061
|
||||||
|
Treasury shares
|
||||||||
|
Balance at beginning of period
|
(4,309
|
)
|
(5,386
|
)
|
||||
|
Share distribution
|
2,568
|
964
|
||||||
|
Balance at end of period
|
(1,741
|
)
|
(4,422
|
)
|
||||
|
Additional paid in capital
|
||||||||
|
Balance at beginning of period
|
285
|
979
|
||||||
|
Shares issued
|
—
|
349,379
|
||||||
|
Stock option expense
|
302
|
313
|
||||||
|
Transfer to contributed surplus
|
—
|
(350,671
|
)
|
|||||
|
Balance at end of period
|
587
|
—
|
||||||
|
Contributed capital surplus
|
||||||||
|
Balance at beginning of period
|
1,762,649
|
1,732,670
|
||||||
|
Distributions to shareholders
|
(180,392
|
)
|
(50,104
|
)
|
||||
|
Transfer to contributed surplus
|
—
|
350,671
|
||||||
|
Balance at end of period
|
1,582,257
|
2,033,237
|
||||||
|
Accumulated earnings (deficit)
|
||||||||
|
Balance at beginning of period
|
160,055
|
(366,722
|
)
|
|||||
|
Distributions to shareholders
|
(100,443
|
)
|
—
|
|||||
|
Distribution treasury shares
|
(1,740
|
)
|
(390
|
)
|
||||
|
Net income
|
289,072
|
128,074
|
||||||
|
Balance at end of period
|
346,944
|
(239,038
|
)
|
|||||
|
Total equity
|
1,938,108
|
1,799,838
|
||||||
The accompanying selected notes are an integral part of these unaudited interim condensed consolidated financial statements.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
SELECTED NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. General
Golden Ocean Group Limited (the "Company" or "Golden Ocean") is a Bermuda incorporated shipping company specializing in the transportation of dry bulk cargoes. The
Company's ordinary shares are listed on the Nasdaq Global Select Market with a secondary listing on the Euronext Oslo Stock Exchange.
2. Accounting policies
Basis of accounting
The unaudited condensed consolidated financial statements are stated in accordance with accounting principles generally accepted in the United States. The unaudited
condensed consolidated financial statements do not include all the disclosures required in the annual and interim consolidated financial statements and should be read in conjunction with the Company’s annual financial statements included in the
Company’s annual report on Form 20-F for the year ended December 31, 2021, which was filed with the U.S. Securities and Exchange Commission on March 24, 2022.
Significant accounting policies
The accounting policies adopted in the preparation of the unaudited condensed consolidated financial statements are consistent with those followed in the preparation of
the Company’s annual financial statements for the year ended December 31, 2021.
3. Earnings per share
Basic earnings per share amounts for the three and six months ended June 30, 2022, are based on the weighted average number of shares outstanding of 200,643,313 and
200,540,041, respectively. The Company's treasury shares have been weighted for the portion of the period they were outstanding.
In May 2022, 450,000 share options held by the management were exercised. The Company settled the options by distributing the same amount of treasury shares.
As of June 30, 2022, total outstanding share options were 650,000, which for the three and six months ended June 30, 2022, were dilutive under the treasury stock method by 624,733 and 541,826 shares, respectively.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
4. Vessels and equipment, net and vessels held for sale
In February 2022, the Company entered into an agreement to sell three older Panamax vessels, Golden Empress, Golden Enterprise and Golden Endeavour, to an unrelated
third party for an aggregate sales price of $52.0 million. In April and May 2022, the three Panamax vessels were delivered to their new owner. The Company recorded a gain of $9.5 million from the sale in the second quarter of 2022.
In June 2022, the Company entered into an agreement to sell two Ultramax vessels, Golden Cecilie and Golden Cathrine, to an unrelated third party for an aggregate sales
price of $63.0 million. The vessels are expected to be delivered their new owner by the fourth quarter of 2022. The Company expects to record a gain of approximately $22.0 million from the sale upon delivery of vessels. As of June 30, 2022, these
vessels are recorded as Vessels held for sale.
5. Newbuildings
As of June 30, 2022, the Company had capitalized costs of $49.8 million relating to construction contracts for seven Kamsarmax newbuildings entered in 2021.
In June 2022, the Company entered into agreements to construct a total of three Kamsarmax vessels, with the same design and shipyard group as the seven previously
announced newbuilding contracts. The three incremental vessels are expected to be delivered to the Company by the first quarter of 2025 and will be financed through net sales proceeds from the sale of two Ultramax vessels, with debt financing to be
established closer to their delivery.
6. Leases
As of June 30, 2022, the Company had 11 vessels chartered-in long-term where the Company is the lessee. Seven of eight vessels chartered in from SFL Corporation Ltd.
(NYSE: SFL) (“SFL”), a related party, were classified as finance leases. For the six months ended June 30, 2022, the Company made a total repayment of $16.2 million to SFL in connection with these leases.
In the second quarter of 2022, the Company signed a memorandum of agreement with owners of Admiral Schmidt and Vitus Bering, whereby it redelivered the vessels to their
owner for a period of up to six months. The charterparty agreements remain unchanged and stay in force.
As of June 30, 2022, the Company’s book value of finance lease obligations was $115.3 million, including current portion of $18.5 million.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
7. Equity securities
The Company has an investment in Eneti Inc., a company engaged in marine based renewable energy and listed on the New York Stock Exchange (NYSE: NETI) (“Eneti”). In the
first half of 2022, the Company recognized a loss of $0.3 million based on the decrease of Eneti’s share price. The mark to market loss is reported under other financial items in the Company’s interim condensed consolidated statements of operations.
The Company has an equity investment of 16.4% of the shares in SwissMarine, a dry bulk freight operator. The Company’s ownership in SwissMarine was diluted in the first
quarter of 2022 from 17.5% to 16.4%. The Company accounts for this investment under the equity method, and the book value of the investment amounted to $52.3 million as of June 30, 2022.
For the three and six months ended June 30, 2022, the Company recorded equity in earnings of SwissMarine of $6.6 million and $20.0 million respectively. In the first
half of 2022, the Company received dividends from SwissMarine of $6.6 million, which was recorded as a reduction of investments. In addition, a subordinated shareholder loan of $5.4 million was fully repaid by SwissMarine to the Company in the first
quarter of 2022.
The Company has an equity investment of 10% of the shares in TFG Marine Ltd, a bunkering procurement joint venture company between Golden Ocean, Frontline Ltd. and
Trafigura Pte Ltd. The Company has also provided a shareholder loan of $0.9 million to TFG Marine with a five-year term, maturing in 2024.
The Company has an equity investment of 50% of the shares in United Freight Carriers LLC, a dry cargo vessel operator and logistics service provider. The Company
accounts for this investment under the equity method, and the book value of the investment amounted to $4.0 million as of June 30, 2022.
8. Long-term debt
As of June 30, 2022, the Company’s book value and outstanding principal of long-term debt was $1,197.5 million and $1,210.1 million, respectively. The current portion of
long-term debt was $96.1 million.
In May 2022, the Company signed a loan agreement for a $275.0 million credit facility with a group of leading shipping banks to refinance debt secured by 14 Capesize
vessels. The new financing has an interest rate of Secured Overnight Financing Rate (“SOFR”) plus 190 basis points, which, based on the historical spread between London Interbank Offered Rate (“LIBOR”) and SOFR reference rates, corresponds to a LIBOR
based credit margin of around 165 basis points. As of the date of this report, the new facility has been fully drawn, thereby fully refinancing the outstanding amount of $265.6 million.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
9. Share capital
As of June 30, 2022, the Company had 201,190,621 issued and 200,885,621 outstanding common shares, each with a par value of $0.05. Additionally, the Company held 305,000
shares in treasury.
In the second quarter ended June 30, 2022, the Company paid an aggregate of $100.4 million, or $0.50 per share in dividends to its shareholders related to its first quarter 2022 results.
10. Related party transactions
The Company’s most significant related party transactions are with SFL, a company under the significant influence of the Company’s largest shareholder. With reference to
Note 6, "Leases", the Company leased eight vessels from SFL during the second quarter of 2022.
In addition to charter hire for the eight vessels leased from SFL, other amounts charged by related parties primarily include general management fees and charter hire
for short-term charters. Amounts earned from other related parties primarily include commercial management fees.
With reference to Note 7, "Equity securities", in January 2022 SwissMarine fully repaid the outstanding shareholder loan of $5.4 million to the Company. The outstanding
balance of the shareholder loan to TFG as of June 30, 2022, amounts to $0.9 million.
Pursuant to its agreement with TFG Marine, the Company paid $88.1 million for bunker procurement in the six months ended June 30, 2022. As of June 30, 2022, amounts
payable to TFG Marine totaled $17.9 million.
11. Commitment and contingencies
As of June 30, 2022, the Company had 10 vessels under construction and outstanding contractual commitments of $295.0 million due by the first quarter of 2025.
With reference to Note 7, "Equity securities", the Company has a $30.0 million guarantee in respect of the performance of its subsidiaries under a bunker supply
arrangement with TFG Marine. As of June 30, 2022, there is no exposure under this guarantee.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
12. Subsequent events
In July 2022, the Company paid installments totaling $23.2 million for Kamsarmax newbuilding contracts entered in 2021 and 2022.
On August 25, 2022, the Company announced a cash dividend of $0.60 per share in respect of the second quarter of 2022, which is payable on or about September 14 , 2022,
to shareholders of record on September 7, 2022. Shareholders holding the Company’s shares through Euronext VPS may receive this cash dividend later on or about September 16, 2022.
(A) Reconciliation of Net Income (loss) to EBITDA and Adjusted EBITDA (Earnings before Interest Taxes Depreciation and
Amortization)
EBITDA represents net income (loss) plus net interest expense, income tax expense and depreciation and amortization. Adjusted EBITDA represents EBITDA adjusted to
exclude the items set forth in the table below, which represent certain non-cash other items that the Company believes are not indicative of the ongoing performance of its core operations. EBITDA and Adjusted EBITDA are used by analysts in the
shipping industry as common performance measures to compare results across peers. EBITDA and Adjusted EBITDA are not items recognized by accounting principles generally accepted in the United States of America ("GAAP") and should not be considered in
isolation or used as alternatives to net income, operating income, cash flow from operating activity or any other indicator of the Company’s operating performance or liquidity required by GAAP.
The Company’s presentation of EBITDA and Adjusted EBITDA is intended to supplement investors’ understanding of the Company’s operating performance by providing
information regarding the Company’s ongoing performance that exclude items the Company believes do not directly affect the Company’s core operations and enhancing the comparability of the Company’s ongoing performance across periods. The Company’s
management considers EBITDA and Adjusted EBITDA to be useful to investors because such performance measures provide information regarding the profitability of the Company’s core operations and facilitate comparison of the Company’s operating
performance to the operating performance of its peers. Additionally, the Company’s management uses EBITDA and Adjusted EBITDA as measures when reviewing the Company’s operating performance. While the Company believes these measures are useful to
investors, the definitions of EBITDA and Adjusted EBITDA used by the Company may not be comparable to similar measures used by other companies.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
The Company presents Adjusted EBITDA in addition to EBITDA because Adjusted EBITDA eliminates the impact of additional non-cash and other items not associated with the
ongoing performance of the Company’s core operations. To derive adjusted EBITDA, the Company has excluded certain gains/losses such as those related to sale of vessels, sale of investments in associates, bargain purchase gain arising on
consolidation, impairments on vessels, right of use assets and marketable securities, mark to market of derivatives and other financial items that it believes further reduce the comparability of the ongoing performance of the Company’s core
operations across periods.
|
(in thousands of $)
|
Three months ended
June 30,
2022
|
Three months
ended
March 31,
2022
|
Three months
ended
June 30,
2021
|
Six months ended
June 30,
2022
|
Six months ended
June 30,
2021
|
|||||||||||||||
|
Net income
|
163,749
|
125,323
|
104,495
|
289,072
|
128,074
|
|||||||||||||||
|
Interest income
|
(240
|
)
|
(54
|
)
|
(79
|
)
|
(294
|
)
|
(254
|
)
|
||||||||||
|
Interest expense
|
12,113
|
10,041
|
9,665
|
22,154
|
18,554
|
|||||||||||||||
|
Income tax expense
|
30
|
35
|
30
|
65
|
50
|
|||||||||||||||
|
Depreciation
|
32,534
|
32,434
|
30,248
|
64,968
|
57,046
|
|||||||||||||||
|
Amortization of time charter party out contracts
|
—
|
—
|
(68
|
)
|
—
|
1,010
|
||||||||||||||
|
Earnings before Interest Taxes Depreciation and Amortization
|
208,186
|
167,779
|
144,290
|
375,965
|
204,480
|
|||||||||||||||
|
Impairment loss on vessels
|
—
|
—
|
—
|
—
|
4,187
|
|||||||||||||||
|
Gain from disposal of vessels
|
(9,516
|
)
|
—
|
—
|
(9,516
|
)
|
—
|
|||||||||||||
|
Gain on derivatives
|
(7,127
|
)
|
(18,750
|
)
|
(14,631
|
)
|
(25,877
|
)
|
(23,655
|
)
|
||||||||||
|
Other financial items
|
100
|
330
|
799
|
430
|
37
|
|||||||||||||||
|
Adjusted Earnings before Interest Taxes Depreciation and Amortization
|
191,643
|
149,359
|
130,459
|
341,002
|
185,049
|
|||||||||||||||
(B) Reconciliation of Total Operating Revenues to Time Charter Equivalent Income and Time Charter Equivalent Rate
(i) Time Charter Equivalent Revenue:
Consistent with general practice in the shipping industry, the Company uses TCE income as a measure to compare revenue generated from a voyage charter to revenue
generated from a time charter. The Company defines TCE income as operating revenues less voyage expenses and commission plus amortization of favorable charter party contracts (being the fair value above market of acquired time charter agreements upon
the completion of the merger with Knightsbridge Shipping Limited). Under time charter agreements, voyage costs, such as bunker fuel, canal and port charges and commissions are borne and paid by the charterer whereas under voyage charter agreements,
voyage costs are borne and paid by the owner. TCE income is a common shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot
charters and time charters) under which the vessels may be employed between the periods. Time charter equivalent income, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with operating revenues, the most directly
comparable U.S. GAAP measure, because it assists management in making decisions regarding the deployment and use of the Company's vessels and in evaluating their financial performance, regardless of whether a vessel has been employed on a time
charter or a voyage charter.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
|
(in thousands of $)
|
Three months ended
June 30,
2022
|
Three months
ended
March 31,
2022
|
Three months ended
June 30,
2021
|
Six months ended
June 30,
2022
|
Six months ended
June 30,
2021
|
|||||||||||||||
|
Total operating revenues
|
316,665
|
265,184
|
275,702
|
581,849
|
433,755
|
|||||||||||||||
|
Add: Amortization of time charter party out contracts
|
—
|
—
|
(68
|
)
|
1,010
|
|||||||||||||||
|
Add: Other operating income (expenses)
|
—
|
(413
|
)
|
2,910
|
(413
|
)
|
3,559
|
|||||||||||||
|
Less: Other revenues*
|
287
|
163
|
457
|
450
|
1,014
|
|||||||||||||||
|
Net time and voyage charter revenues
|
316,378
|
264,608
|
278,087
|
580,986
|
437,310
|
|||||||||||||||
|
Less: Voyage expenses & commission
|
66,628
|
56,273
|
62,955
|
122,901
|
102,188
|
|||||||||||||||
|
Time charter equivalent income
|
249,750
|
208,335
|
215,132
|
458,085
|
335,122
|
|||||||||||||||
*adjustment includes management fee revenue and other non-voyage related revenues recognized under other revenues.
(ii) Time Charter Equivalent Rate:
Time charter equivalent rate ("TCE rate") represents the weighted average daily TCE income of the Company's entire operating fleet.
TCE rate is a measure of the average daily income performance. The Company's method of calculating TCE rate for each vessel type is determined by dividing TCE income by
onhire days during a reporting period. Onhire days are calculated on a vessel by vessel basis and represent the net of available days and offhire days for each vessel (owned or chartered in) in the Company's possession during a reporting period.
Available days for a vessel during a reporting period is the number of days the vessel (owned or chartered in) is in the Company's possession during the period. By definition, available days for an owned vessel equal the calendar days during a
reporting period, unless the vessel is delivered by the yard during the relevant period whereas available days for a chartered-in vessel equal the tenure in days of the underlying time charter agreement, pro-rated to the relevant reporting period if
such tenure overlaps more than one reporting period. Offhire days for a vessel during a reporting period is the number of days the vessel is in the Company's possession during the period but is not operational as a result of unscheduled repairs,
scheduled dry docking or special or intermediate surveys and lay-ups, if any.
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
|
in thousands of $, except for TCE rate and days
|
Three months ended
June 30,
2022
|
Three months
ended
March 31,
2022
|
Three months ended
June 30,
2021
|
Six months ended
June 30,
2022
|
Six months ended
June 30,
2021
|
|||||||||||||||
|
TCE Income Capesize vessels
|
156,277
|
124,509
|
144,862
|
280,786
|
220,757
|
|||||||||||||||
|
TCE Income Panamax vessels and Ultramax vessels
|
93,473
|
83,826
|
70,270
|
177,299
|
114,365
|
|||||||||||||||
|
Total Time charter equivalent income
|
249,750
|
208,335
|
215,132
|
458,085
|
335,122
|
|||||||||||||||
|
in days
|
||||||||||||||||||||
|
Fleet onhire days Capesize vessels
|
5,097
|
5,025
|
4,932
|
10,122
|
9,501
|
|||||||||||||||
|
Fleet onhire days Panamax and Ultramax vessels
|
3,389
|
3,538
|
3,701
|
6,927
|
6,685
|
|||||||||||||||
|
Total Fleet onhire days
|
8,486
|
8,563
|
8,633
|
17,049
|
16,186
|
|||||||||||||||
|
in $ per day
|
||||||||||||||||||||
|
TCE per day Capesize vessels
|
30,661
|
24,778
|
29,372
|
27,740
|
23,235
|
|||||||||||||||
|
TCE per day Panamax and Ultramax vessels
|
27,581
|
23,693
|
18,987
|
25,595
|
17,108
|
|||||||||||||||
|
Time charter equivalent rate
|
29,431
|
24,330
|
24,920
|
26,869
|
20,704
|
|||||||||||||||
GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2022
GOLDEN OCEAN GROUP LIMITED
INTERIM REPORT JANUARY - JUNE 2022
Responsibility statement
We confirm, to the best of our knowledge, that the interim condensed consolidated financial statements for the period January 1 to June 30, 2022 have been stated in
accordance with U.S. generally accepted accounting principles, and give a true and fair view of the Company’s assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim
management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the interim condensed consolidated financial statements, a description of the principal risks and
uncertainties for the remaining six months of the financial year, and major related party transactions.
The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
August 25, 2022
|
John Fredriksen
|
Director
|
|
Ola Lorentzon
|
Director and Chairman of the Board
|
|
James O'Shaughnessy
|
Director
|
|
Bjørn Tore Larsen
|
Director
|
|
Ben Mills
|
Director
|
|
Jens Martin Jensen
|
Director
|