Golden Ocean Group — Earnings Release 2020

Nov 19, 2020

RESULTS Q3 - 2020

November 19, 2020

FORWARD LOOKING STATEMENTS

Matters discussed in this earnings report 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. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. Words such as "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "projects," "likely," "will," "would," "could," "seeks," "potential," "continue," "contemplate," "possible," "might," "forecasts," "may," "should" 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. The information set forth herein speaks only as of the date hereof, and the Company disclaims 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 the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include, among other things, 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, the length and severity of the COVID-19 outbreak, the impact of public health threats and outbreaks of other highly communicable diseases, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company's vessels, availability of financing and refinancing, the impact of the expected discontinuance of LIBOR after 2021 on interest rates of the Company's debt that reference LIBOR, 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 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, 2019.

COMPANY UPDATE

HIGHLIGHTS

• Adjusted EBITDA in the third quarter of 2020 was \$76.7 million, compared with \$4.2 million in the second quarter of 2020
• The Company reports net income of \$39.1 million and earnings per share of \$0.27 for the third quarter of 2020, compared with net loss of \$41.3 million and loss per share of \$0.29 for the second quarter of 2020
• Signed loan agreement in November 2020 to refinance the \$425.0 million credit facility which is secured by 14 Capesize vessels at attractive terms, lowering the daily cash break even rate by more than \$1,000 per day for the financed vessels and removing any nearterm debt maturities
• Estimated TCE rates for the fourth quarter of 2020 calculated on a load-to-discharge basis and inclusive of charter coverage are:
• approximately \$21,750 per day contracted for 73% of the available days for Capesize vessels
• approximately \$12,750 per day contracted for 82% of the available days for Panamax vessels
• Divested ownership interest in our in-house ship management company (SeaTeam) and exited management agreement for seven Handysize vessels to further focus on the Company's core activities

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PROFIT & LOSS

(in thousands of \$)	Q3 2020	Q2 2020	Quarterly Variance
Operating revenues	186,892	114,623	72,269
Voyage expenses	(43,935)	(47,453)	3,518
Net revenues	142,957	67,170	75,787
Ship operating expenses	(43,444)	(44,702)	1,258
Administrative expenses	(3,103)	(3,350)	247
Charter hire expenses	(20,443)	(12,252)	(8,191)
Depreciation	(27,631)	(27,018)	(613)
Impairment	-	-	-
Net operating expenses	(94,621)	(87,322)	(7,299)
Net operating income (loss)	48,336	(20,153)	68,489
Net financial expenses	(9,805)	(12,702)	2,897
Derivatives and other financial income (loss)	570	(8,386)	8,956
Net income before taxation (loss)	39,101	(41,241)	80,342
Income Tax expense	40	40	-
Net income (loss)	39,061	(41,281)	80,342
Earnings (loss) per share: basic and diluted	\$0.27	(\$0.29)	\$0.56
Adjusted EBITDA	76,742	4,198	72,544
TCE per day	17,912	8,782	9,130

CASH FLOW - Q3 2020

BALANCE SHEET

(in thousands of \$)	Q3 2020	Q2 2020	Quarterly Variance
ASSETS
Short term
Cash and cash equivalents (incl. restricted cash)	130,826	104,081	26,744
Other current assets	120,696	113,603	7,093
Long term
Vessels and equipment, net	2,300,566	2,324,419	(23,853)
Leases, right of use of assets	141,609	146,996	(5,387)
Other long term assets	23,796	26,878	(3,082)
Total assets	2,717,493	2,715,978	1,515
LIABILITIES AND EQUITY
Short term
Current portion of long term debt	83,158	379,312	(296,154)
Current portion of finance lease obligations	23,117	22,735	382
Current portion of operating leases obligations	14,852	14,698	154
Other current liabilities	107,149	112,866	(5,717)
Long term
Long term debt	981,762	708,423	273,339
Non -current portion of finance lease obligations	133,679	139,566	(5,887)
Non -current portion of operating lease obligations	30,691	34,433	(3,742)
Equity	1,343,085	1,303,945	39,140
Total liabilities and equity	2,717,493	2,715,978	1,515

CREDIT FACILITES

Recently-completed refinancing done at attractive terms pushes out nearest maturity to 2023

LOAN MATURITIES

RECENT DEVELOPMENTS

• In November 2020, the Company entered into a new \$304.0 million term loan and revolving credit facility which fully refinanced the outstanding amount of the 14 vessels in the \$425.0 million credit facility scheduled to mature in March 2021
• Interest rate of LIBOR + 235 bps
• Tenor of five years
• Improved repayment profile (20 years age adjusted), reducing the cash break-even rate for the vessels in the facility by more than \$1,000 per day
• Otherwise materially unchanged from previous financings
• Strong banking group consisting of the largest global shipping banks

MARKET REVIEW & OUTLOOK

Q3 MARKET DEVELOPMENTS

The strong rebound in rates at the end of the second quarter led by resumption in demand from China continued into the third quarter

WEEKLY DRY BULK SHIPPING RATES – LAST 12 MONTHS

SUPPLY GROWTH TO SLOW SIGNIFICANTLY

Orderbook is at historically low levels and ordering likely to stay muted

FORECAST FLEET DEVELOPMENT

DEMAND EXPECTED TO REBOUND STRONGLY IN 2021

5,2%

Rebound in global GDP growth for 2021 led by strong growth in China and India

-4,4%

SUMMARY OUTLOOK

Market recovery to continue despite volatility and uncertainty due to COVID-19

Unprecedented global stimulus packages to drive a recovery into 2021 led by strong GDP growth in China and India

Infrastructure investments and industrial activity will lead to demand growth for iron ore and coal

Continued recovery of lost iron ore production in Brazil will benefit tonne-miles

Growth of the global fleet is set to slow significantly due to lack of new ordering and the potential for scrapping

Downside risk and uncertainty will linger until the pandemic runs its course

POSITIONED FOR CASH FLOW GENERATION

Cash flow visibility from time charters and limited capital expenditures lay the foundation for strong cash flow generation

CASH BREAK EVEN RATES

VISIBLE CASH FLOW FOR Q4 2020

NOTE: HISTORICAL CAPEX AND DRYDOCK EXPENSES ARE BASED ON CASHFLOW WHILE FUTURE EXPENSES ARE ESTIMATES AND SUBJECT TO CHANGES BASED ON TIMING OF DRYDOCKINGS 14

QUESTIONS & ANSWERS

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