was
RESULTS Q1 - 2018
May 30, 2018
was RESULTS Q1 - 2018 May 30, 2018 FORWARD-LOOKING STATEMENTS - - PowerPoint PPT Presentation
was RESULTS Q1 - 2018 May 30, 2018 FORWARD-LOOKING STATEMENTS Matters discussed in this presentation may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for
RESULTS Q1 - 2018
May 30, 2018
FORWARD-LOOKING STATEMENTS
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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. We desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are including this cautionary statement in connection with this safe harbor legislation. Words such as "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "will," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this presentation 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.
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
Securities and Exchange Commission.
several sources. You are hereby advised that such industry data, charts and statistics have not been prepared specifically for inclusion in these materials and Golden Ocean Group Limited has not undertaken any independent investigation to confirm the accuracy or completeness of such information
COMPANY UPDATE
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HIGHLIGHTS
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share of $0.12 for the first quarter of 2018, compared with net income of $27.1 million and earnings per share of $0.19 for the fourth quarter of 2017
with $65.3 million in the fourth quarter of 2017 and $17.5 million in the first quarter 2017
remaining five Capesize newbuildings.
in October 2017
favorable terms
million to an unrelated third party
(in thousands of $) Q1 2018 Q4 2017 Quarterly Variance
Operating revenues 147,888 150,712 (2,824) Voyage expenses (30,841) (28,949) (1,893 Net revenues 117,047 121,763 (4,717) Ship operating expenses (37,279) (36,383) (896) Administrative expenses (3,668) (3,279) (389) Charter hire expenses (27,642) (20,382) (7,260) Depreciation / impairment (22,113) (20,873) (1,239) Other gains (losses) 65 (505) 570 Net operating expenses (90,637) (81,423) (9,214) Net operating income (loss) 26,409 40,340 (13,931) Net financial expenses (15,903) (15,619) 284 Derivatives and other financial income (loss) 6,190 2,386 (3,804) Net income before taxation (loss) 16,696 27,107 (10,411) Income Tax expense 13 (16) 23 Net income (loss) 16,683 27,124 (17,878) Earnings (loss) per share: basic and diluted $0.12 $0.19 Adjusted EBITDA 53,273 65,325 (12,053) TCE per day 15,593 16,444 (851)
PROFIT & LOSS
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CASH FLOW DURING THE QUARTER
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Cash at beginning of period(1) Cash from
New debt Final installments for NBs Repayment
Dividends paid Vessel acquisition costs Other Cash at end
(1) INCLUDES RESTRICTED CASH
Q1 2018
372.0 28.5 150.0 (144.6) (24.8) (14.4) (7.5) (0.8) (358.4)
BALANCE SHEET
(in thousands of $) Q1 2018 Q4 2017 Quarterly Variance
ASSETS
Short term Cash and cash equivalents (incl. restricted cash) 306,192 317,139 (10,947) Other current assets 144,019 127,361 16,658 Long term Restricted cash 52,193 54,845 (2,652) Vessels (incl. newbuildings and held-for-sale) 2,489,836 2,320,730 169,106 Other long term assets 44,988 49,983 (4,995) Total assets 3,037,228 2,870,058 167,170
LIABILITIES AND EQUITY
Short term Current portion of long term debt and capital lease 306,636 114,910 191,726 Other current liabilities 71,284 66,817 4,467 Long term Long term debt and capital lease 1,143,060 1,186,223 (43,163) Other long term liabilities 7,944 8,059 (115) Equity 1,508,304 1,494,049 14,255 Total liabilities and equity 3,037,228 2,870,058 167,170
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MODERN, EFFICIENT FLEET
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$4 $9 $8 $6 $7 $7
10 15 20 25 30 35 40 45
10 15 20 25 30 35 40 45
Expected cost by year ($ millions) # of vessels
# of vessels Expected cost 5 100 5 200 5 200 205
2 000 3 000 4 000 5 000 6 000 Supramax Panamax Capesize OPEX Drydock & Surveys
BWTS INSTALLATION SCHEDULE OPERATING EXPENSES (Q1 2018)
FLEET DEPLOYMENT
NOTE: CHARTERING PROFILE AS OF FEBRUARY 2018; GROSS RATES SHOWN ARE FOR 2018; FOUR PANAMAX CHARTERS EXPIRE BETWEEN JANUARY 2020 AND DECEMBER 2021 * GOLDEN EMINENCE TO BE DELIVERED TO THE NEW OWNER LATER THIS YEAR
9 CHARTERING PROFILE
2018 2019 2020 2021
Capesize
12 vessels at $17,960 34 vessels trading spot
Panamax
6 vessels at $20,750 23* vessels trading spot
Supramax
3 vessels trading spot
12 fixed 6 fixed 4 fixed
Fleet heavily skewed towards spot exposure to capture market upside
191
200
311 1,165 311 974
CREDIT FACILITY SUMMARY(1)
CREDIT FACILITIES
(1) BASED ON MARCH 31, 2018 FIGURES, ADJUSTED FOR NEW LOAN FACILITY SIGNED IN MAY 2018 TO BE DRAWN BY END OF Q2-18
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Selected covenants
RECOURSE DEBT
Selected covenants through July 1, 2019
Selected covenants post July 1, 2019
NON-RECOURSE DEBT RECENT DEVELOPMENTS
under two loan facilities maturing in 2018 and seller credit loans of $65.5 million
interest of L + 2.25% 900 120 181 358 245
200 400 600 800 1 000 1 200 1 400 1 600
Recourse debt New loan Convertible loan Non-recourse debt Total Cash
USD (thousands)
Recourse Non-recourse
245 1,201
DRY BULK MARKET UPDATE
DRY BULK SUPPLY / DEMAND & UTILIZATION
12 SUPPLY, DEMAND AND UTILIZATION RATE - DRY BULK SHIPS 10,000 DWT +
Utilization decreased in the first quarter following increased capacity due to easing of port delays
SOURCE: MARITIME ANALYTICS 60% 65% 70% 75% 80% 85% 90% 95% 100% 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Fleet utilization Tonne miles (billions)
Demand Supply Utilization Rate
GROWTH IN SEABORNE TRADE CONTINUES
13 SEABORNE TRADE OF DRY BULK COMMODITIES (MAJOR IMPORTERS)
First quarter import increased due to discharge after port delayed and
SOURCE: MARITIME ANALYTICS 700 800 900 1 000 1 100 1 200 50 100 150 200 250 300 350 400 2010 2011 2012 2013 2014 2015 2016 2017 2018
Metric tonnes (billions) Metric tonnes (millions) Total Iron Ore Coal Other Bulks Agribulks
WORLD STEEL PRODUCTION TRENDS INTACT
ANNUAL CHANGE IN STEEL PRODUCTION
Synchronised growth both in Chinese and Rest of World production
SOURCE: MARITIME ANALYTICS
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0% 5% 10% 15% 20%
jan.12 mar.12 mai.12 jul.12 sep.12 nov.12 jan.13 mar.13 mai.13 jul.13 sep.13 nov.13 jan.14 mar.14 mai.14 jul.14 sep.14 nov.14 jan.15 mar.15 mai.15 jul.15 sep.15 nov.15 jan.16 mar.16 mai.16 jul.16 sep.16 nov.16 jan.17 mar.17 mai.17 jul.17 sep.17 nov.17 jan.18 mar.18
China Rest of World
20 40 60 80 100 120 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18
TSI 62% FE content Qingdao TSI 58%
15 IRON ORE PRICE DIFFERENTIALS
SOURCE: SSY, STORMGEO, NENA ANALYTICS
GROSS PROFIT (STEEL PRICE MINUS COST OF COKING COAL AND IRON ORE; ALL PRICES SPOT)
STEEL MARGINS AND IRON ORE PRICE DIFFERENTIALS SUPPORTIVE
50 100 150 200 250 300 350 2016 2017 2018
$/t Gross profit using Au coking coal, Au iron ore price and Tangshan steel billett price Gross profit using Cn coking coal price, Au iron ore price and Tangshan steel billett price
AUSTRALIA AND BRAZIL REMAIN MAJOR IRON ORE EXPORTERS
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SOURCE: MARITIME ANALYTICS, STORMGEO, NENA ANALYTICS; DISPLAYS VOLUMES BY QUARTER
QUARTERLY EXPORTED IRON ORE VOLUMES PER COUNTRY
20 40 60 80 100 120 140 160 180
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Australia Brazil South Africa India Other
81,1 81,6 94,5 73,6 65,5 65,0 62,7 11,0 16,2 13,8 30,6 21,0 13,2 15,9
20 40 60 80 100 120 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 End April China India
COAL IMPORTS REMAINS HEALTHY, AND INVENTORIES REMAIN AT LOW LEVELS AHEAD OF COOLING SEASON
17 CHINA AND INDIA COAL INVENTORIES COAL IMPORTS BY MAJOR IMPORTERS
SOURCE: MARITIME ANALYTICS, COMMODORE RESEARCH
10 20 30 40 50 60 70 80 90 2010 2011 2012 2013 2014 2015 2016 2017 2018 Metric tonnes (millions) China Japan
India Europe
300 350 400 450 500 550 600 650
jan.10 apr.10 jul.10
jan.11 apr.11 jul.11
jan.12 apr.12 jul.12
jan.13 apr.13 jul.13
jan.14 apr.14 jul.14
jan.15 apr.15 jul.15
jan.16 apr.16 jul.16
jan.17 apr.17 jul.17
jan.18 apr.18
Kilowatt hours (billions)
SEASONALLY STRONG ELECTRICITY CONSUMPTION SUPPORTS COAL DEMAND
18 CHINESE ELECTRICITY OUTPUT BY SOURCE
SOURCE: COMMODORE RESEARCH / NARIONAL BUREAU OF STATISTICS OF CHINA
CHINESE ELECTRICITY OUTPUT
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % jan.10 mar.10 mai.10 jul.10 sep.10 nov.10 jan.11 mar.11 mai.11 jul.11 sep.11 nov.11 jan.12 mar.12 mai.12 jul.12 sep.12 nov.12 jan.13 mar.13 mai.13 jul.13 sep.13 nov.13 jan.14 mar.14 mai.14 jul.14 sep.14 nov.14 jan.15 mar.15 mai.15 jul.15 sep.15 nov.15 jan.16 mar.16 mai.16 jul.16 sep.16 nov.16 jan.17 mar.17 mai.17 jul.17 sep.17 nov.17 jan.18 mar.18
Coal-derived electricity output Hydropower output Other output sources
U.S. GRAIN EXPORTS SURGED AHEAD OF THREATENED TARIFFS
19 SOYBEAN AND SOYBEAN MEAL EXPORTS BY SOURCE
SOURCE: FEARNRESEARCH
GRAIN EXPORTS BY SOURCE
2 4 6 8 10 12 14 16 18 20
Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18
USA Brazil Argentina 2 4 6 8 10 12
Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18
USA
Argentina EU to 3rd c. Canada
0,0 1,0 2,0 3,0 4,0 5,0 6,0
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Mill dwt
0,0 0,5 1,0 1,5 2,0 2,5
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Mill dwt
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Mill dwt
0,0 2,0 4,0 6,0 8,0 10,0 12,0
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Mill dwt
DELIVERIES WERE DOWN COMPARED TO THE FIRST QUARTER OF 2017 DESPITE LOW SCRAPPING YTD
20 PANAMAX / POST-PANAMAX CAPESIZE
LTM Delivered: 11.5m dwt LTM Scrapped: 4.3m dwt LTM Delivered: 8.1m dwt LTM Scrapped: 2.2m dwt LTM Delivered: 5.8m dwt LTM Scrapped: 2.5m dwt LTM Delivered: 2.6m dwt LTM Scrapped: 1.0m dwt
HANDYSIZE HANDYMAX / SUPRAMAX
SOURCE: CLARKSONS PLATOU
18% 24% 58% 76% 52% 46% 67% 40% 24% 41% 35% 8% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2018 H2 2018 2019 2020-> Total % of Orderbook Not commenced (%) Under construction (%) Launched (%)
DOWNSIDE CASE FOR SUPPLY GROWTH
STATUS OF ORDERBOOK
Continued slippage is expected as ~22% of vessels scheduled for delivery in 2018 have not even commenced construction
SOURCE: VIAMAR, IHS SEAWEB
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(3.6m dwt) (4.7m dwt) (1.9m dwt) (1.1m dwt) (9.6m dwt) (3.5m dwt) (0.8m dwt) (14.3m dwt) (20.1m dwt) (5.2m dwt) (16.0m dwt) (5.6m dwt) (33.7m dwt) (42.0m dwt)
4% 5% 2% 1% 0% 5% 10% 15% 20% 25% 30% 100 200 300 400 500 600 700 800 900 1 000
Annual fleet growth Fleet (MdWT) Fleet size Deliveries Scheduled deliveries Fleet growth
PROJECTED FLEET GROWTH STILL MODERATE
FLEET GROWTH (ASSUMES NO SCRAPPING OR NEW ORDERING)
Forecasted fleet growth is still moderate, despite new ordering observed; any additional capacity from now expected to be placed in 2020 or later
SOURCE: SSY
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20 30 40 50 60 70
20 000 30 000 40 000 50 000
Asset values (mm USD) 1 yr-TC (USD/day) 1 yr-TC 5 yr SH Capesize 10 yr SH Capesize
10 15 20 25 30 35 40 45
10 000 15 000 20 000 25 000 30 000 35 000
Asset values (mm USD) 1 yr-TC (USD/day) 1 yr-TC 5 yr SH Panamax 10 yr SH Panamax
S&P PRICES STABLE, YET STILL LOW
23 PANAMAX VALUES AND EARNINGS
SOURCE: CLARKSONS PLATOU
CAPESIZE VALUES AND EARNINGS
OUTLOOK AND STRATEGY
EXPECTATION FOR CONTINUED IMPROVEMENT WITH INHERENT SEASONALITY AND VOLATILITY
25 DOWNSIDE RISKS UPSIDE POTENTIAL
iron ore capacity comes from Brazil
consumption, restocking and arbitrage
distances on continued demand increase in Asia replacing European demand
congestion and slow steaming on higher bunker prices
BWTS and sulphur emissions regulations
export volumes
China
leading to lower consumption of steel and energy
expectations for 2020+
1 3 5 7 9 11131517192123252729313335373941434547495153555759616365676971 Weekly Capesize Rates Weekly Panamax Rates
10 000 15 000 20 000 25 000 30 000 35 000 Capesize Panamax OPEX G&A Interest Leases Repayment
COMPETITIVE CASH COSTS DRIVE EARNINGS
26 CASH BREAKEVEN LEVELS VS. INDEXES(1)
$14,200 $9,900
(1) ESTIMATED CASH BREAKEVEN LEVELS AT TODAYS INTEREST LEVEL, INCLUDING FULL CASH-SWEEP FOR NON-RECOURSE DEBT AND EXCLUDING PROFITABLE CHARTERS WHICH WILL REDUCE THE CASH BREAKEVEN FROM THESE LEVELS SOURCE: CLARKSONS
Jan 2017
QUESTIONS & ANSWERS
THANK YOU FOR YOUR ATTENTION!