Investor Presentation • Nov 16, 2022
Investor Presentation
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Matters discussed in this presentation 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 presentation 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 presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.
In addition to these important factors and matters discussed elsewhere herein, important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements, include among other things: 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 sulphur 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 rising 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), damage to storage or receiving facilities, 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 presentation 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 presentation or to reflect the occurrence of unanticipated events. These forwardlooking 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.
Third quarter 2022
| Quarterly | |||||
|---|---|---|---|---|---|
| (in thousands of \$) | Q3 2022 | SS0S SQ | Variance | ||
| Operating revenues and other operating income/expenses | 282049 | 316 665 | (34616) | ||
| Voyage expenses | (86460) | (6668) | (19832) | ||
| Net revenues | 195 589 | 250 037 | (54448) | Q3 2022 | Q2 2022 |
| Gain from disposal of vessels | 21856 | 9516 | 12340 | ||
| Ship operating expenses | (59336) | (50369) | (8967) | ||
| Administrative expenses | (4787) | (5497) | 710 | $TCE$ rate 1 | TCE rate 1 |
| Charter hire expenses | (19179) | (15380) | (3799) | ||
| Depreciation | (32477) | (32534) | 57 | \$23 017 | \$29431 |
| Net operating expenses | (115779) | (103780) | (11999) | ||
| Net operating income | 101666 | 155773 | (54107) | Earnings per | |
| Earnings per | |||||
| Net financial expenses | $(14\,406)$ | (11873) | (2533) | share | share |
| Derivatives and other income | 17340 | 19879 | (2539) | ||
| Net income before taxation | 104 600 | 163779 | (59179) | \$0.52 | \$0.82 |
| Income tax expense | (35) | (30) | (5) | ||
| Net income | 104 565 | 163749 | (59184) | ||
| Earnings per share: basic and diluted | \$0.52 | $$0.82/\$0.81$ | $($0.30/\$0.29)$ | ||
| Adjusted EBITDA | 118 188 | 191643 | (73455) | ||
| TCE per day | 23 017 | 29431 | (6414) |
61.7
98.7
$(120.5)$
Other
Cash at Q3
$end1$
Q3 2022
GOLDEN OCEAN
380
350
320
290
260
$\frac{1}{2}$ and $\frac{230}{170}$
170
140
110
80
50
20
168.3
| Quarterly | |||||
|---|---|---|---|---|---|
| (in thousands of \$) | Q3 2022 | Q2 2022 | Variance | ||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents (incl. restricted cash) | 132 255 | 168 321 | (36066) | ||
| Other current assets | 192090 | 186784 | 5306 | Q3 2022 | Q2 2022 |
| Non-current assets | |||||
| Vessels and equipment, net (incl. held for sale) | 2718422 | 2784845 | (66423) | ||
| Newbuildings | 73583 | 49830 | 23753 | Loan-to-value 1 | Loan-to-value 1 |
| Leases, right of use assets | 114 686 | 116 775 | (2089) | ||
| Other long-term assets | 93 4 75 | 81150 | 12 3 25 | ||
| Total assets | 3 3 2 4 5 1 1 | 3387705 | (63194) | $41.7\%$ | 37.5% |
| LIABILITIES AND EQUITY | |||||
| Current liabilities | |||||
| Current portion of long-term debt | 94 4 6 0 | 96 070 | (1610) | Liquidity 2 | Liquidity 2 |
| Current portion of finance lease obligations | 18 10 6 | 18 517 | (411) | ||
| Current portion of operating lease obligations | 14754 | 11695 | 3059 | \$229 million | \$264 million |
| Other current liabilities | 103 191 | 103943 | (752) | ||
| Non-current liabilities | |||||
| Long-term debt | 1060001 | 1101399 | (41398) | ||
| Non-current portion of finance lease obligations | 92 241 | 96823 | (4582) | ||
| Non-current portion of operating lease obligations | 19481 | 21150 | (1669) | ||
| Equity | 1922 277 | 1938108 | (15831) | ||
| Total liabilities and equity | 3324511 | 3387705 | (63194) |
Continued easing of port congestion partially offset by longer sailing distances for coal cargoes
| 90 000 | Q4 2021 | Q1 2022 | SS0SSQ | SS0S EQ |
|---|---|---|---|---|
| 80 000 | Near peak utilization as inefficiencies and port congestion |
Typical seasonality impacts coal trade and iron ore exports |
New trade routes emerge as a result of the war in Ukraine |
Continued easing of port congestion led to decreased fleet utilization |
| 70 000 | continue China curbs industrial production to ration energy |
Winter Olympics through late February decrease Chinese demand Omicron variant rapidly spreads |
Sailing speeds trend down as a result of higher fuel prices China "COVID zero" policy and weakness |
Decreased global trade in certain commodities, including agribulks and construction-related materials |
| 60000 | Strong coal volumes imported to replenish inventories |
globally Russian incursion into Ukraine roils global markets and dampens sentiment |
of real estate sector impacts iron ore demand Port congestion easing |
Coal volumes traveling longer distance as a result of EU ban on Russian imports and global focus on energy security |
| 50 000 | ||||
| 40 000 | ||||
| 30 000 | ||||
| 20 000 | ||||
| 10 000 | ||||
| Weekly Capesize Rates Weekly Panamax Rates | ||||
| $Oct-21$ $Nov-21$ $Dec-21$ |
Jan-22 Feb-22 Mar-22 |
Apr-22 $Jun-22$ May-22 |
$Jul-22$ Sep-22 Aug-22 |
Despite downwards revisions, growth forecasts remain above pre-pandemic levels and will likely be supportive of continued demand for dry bulk commodities
GOLDEN OCEAN
The orderbook for the next several years is highly visible and is set to continue to decline further as we move through 2022
Orderbook as % of global fleet
2017
Supply
2016
Demand
2015
2018
—Utilisation
2019
2020
2021
2022e
2023e
2024e
2010
2011
2012
2013
2014
Significant cash flow secured for the coming quarters
\$143 in contracted TCE revenue for Q4 2022 and Q1 2023 million
Annualized free cash flow and yield
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