company overview - globenewswire

COMPANY PRESENTATION

SEPTEMBER 2019

FORWARD LOOKING STATEMENTS

2

Matters discussed in this presentation may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Words such as "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statementsin 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.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the dry bulk market, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.

Certain shipping, steel, Chinese and global industry information, statistics and charts contained herein have been derived from 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 has not undertaken any independent investigation to confirm the accuracy or completeness of such information

COMPANY OVERVIEW

4SOURCE: CLARKSONS, PUBLIC FILINGS AND OTHER DISCLOSURES

NOTE: RATES DISPLAYED ARE WEEKLY AVERAGES FOR CAPESIZE AND PANAMAX VESSELS

Positioned to capture market strength and generate significant cash flow with modern,

fuel-efficient fleet, large commercial scale and highly competitive cash costs

KEY INVESTMENT HIGHLIGHTS

-100%

0%

100%

200%

300%

400%

500%

600%

700%

Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

Cum

ula

tive c

hange

Capesize Panamax Supramax Handysize

• FOCUS ON LARGER VESSELS TO

CAPTURE MARKET UPSIDE AND

VOLATILITY

Capesize and Panamax vessels significantly outperform in stronger markets

1

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

1

10

19

28

37

46

55

64

73

82

91

10

0

10

9

11

8

12

7

13

6Weekly Capesize Rates Weekly Panamax Rates

-

10 000

20 000

30 000

40 000

Capesize Panamax

OPEX G&A Interest Leases Repayment• COMPETITIVE CASH COSTS DRIVE

EARNINGS AND PROTECT DOWNSIDE

Fully-burdened daily costs of $13,800 and $9,600 for Capesize and Panamax, respectively

3

2017

9,4 9,3 8,98,58

7,8 7,7

3,2

5,8

-

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

Diana Shipping Genco Shipping Eagle Bulk Safe Bulkers Star Bulk Carriers Navios Maritime Scorpio Bulkers Golden Ocean

Years

• MODERN, FUEL-EFFICIENT FLEET

COMMANDS A PREMIUM

Fleet performance is increasingly important as new sulphur emissions regulations approach

2

FLEET DEPLOYMENT

NOTE: CHARTERING PROFILE AS OF AUGUST 2019; EIGHT PANAMAX CHARTERS EXPIRE BETWEEN END OF 2019 AND END OF 2021.

*IN ADDITION SIX CAPESIZE VESSELS HAVE FLOOR / CEILING CONTRACTS FOR 2019 AND TWO VESSELS FOR 2020 5

CONTRACTED EARNINGS

Opportunistic chartering strategy with significant operating leverage

Age 5.0 years

Age 7.4 years

Age 4.3 years

2019

8 fixed at $20,440/day*

38 trading spot

8 fixed at $18,960/day

20 trading spot

3 trading spot

1 fixed at $20,500/day*

2020

45 trading spot

8 fixed at $18,960/day

20 trading spot

3 trading spot

2021

46 trading spot

See note

28 trading spot*

3 trading spot

Capesize Panamax Ultramax

25,636

days

Capesize

Panamax

Ultramax

2020 OPERATING LEVERAGE

$63

$126

$190

$253

$316

$0,44

$0,88

$1,31

$1,75

$2,19

$-

$0,5

$1,0

$1,5

$2,0

$2,5

$-

$50

$100

$150

$200

$250

$300

$350

$2 500 $5 000 $7 500 $10 000 $12 500

Cash f

low

per

share

Cash f

low

($ m

illio

ns)

Incremental daily TCE above breakeven levels

Cash flow Cash flow per share

6

JOINT VENTURE WITH TRAFIGURA CREATES COMPETITIVE ADVANTAGE

NOTE: COMPLIANT FUEL PRICE ESTIMATED 1:2 FO:GASOIL BLEND; ASSUMES MODERN AND 10 YR OLD VESSELS CONSUME 9,500

AND 11,750 MT, RESPECTIVELY, OF FUEL ANNUALLY

MAXIMIZING FLEET EFFICIENCY IN A HIGH FUEL PRICE ENVIRONMENT

WELL POSITIONED AS IMO 2020 APPROACHES

Modern, fuel-efficient fleet with average age of less than 6

years comprised primary of “ECO” vessels

Thus far installing scrubbers on 50% of the Capesize fleet,

or the equivalent of 2/3 of the Capesize fleet with

economic exposure to fuel prices in the next years

Scrubber present attractive investment decision that we

believe will result in increased earnings

-

2 500

5 000

7 500

10 000

-100 -75 -50 -25 Fwd. curve +25 +50 +75 +100

Scru

bber

savin

gs (

$/d

ay)

Fuel spread ($/t)

Modern 10 yr old

80.5mmt

Total fuel oil and gasoil traded by Trafigura in

2018

Joint venture with Trafigura Group and Frontline

ensures availability of competitively priced fuel from a

trusted supplier with a global network

Golden Ocean to own 10% and Frontline 15%,

respectively and Trafigura to contribute its existing

bunkering operations into the JV

JV expected to launch in the third quarter of 2019

MODERN, EFFICIENT FLEET

7

$3

$6 $6

$4 $4

-

5

10

15

20

25

-

5

10

15

20

25

30

35

40

45

50

Expecte

d c

ost by y

ear

($ m

illio

ns)

# o

f vessels

# of vessels Expected cost

BWTS INSTALLATION SCHEDULEOPERATING EXPENSES (YTD 2019)

Fully-burdened Opex includes dry docking and management fees

Eight vessels completed dry-dock in first half of 2019, which included installation of BWTS

Additional 11 Capesize vessels are scheduled for drydock in 2019

Average fleet age of less than six years and majority of the fleet designed with fuel-efficient engines and ballast water treatment systems

Additional advantage to be gained through scrubber installations

SCRUBBER INSTALLATION SCHEDULE

0

3 3

9

8

-

1

2

3

4

5

6

7

8

9

10

Q1-19 Q2-19 Q3-19 Q4-19 Q1-20

5 2505 600

450

700

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

Supramax &Panamax

Capesize

OPEX Drydock & Surveys

STRONG BALANCE SHEET WITH LIMITED CAPEX

8

DEBT MATURITIES

RECENT DEVELOPMENTS

Three non-recourse facilities, financing 14 vessels, have been

replaced by two new facilities with more favourable terms

All loans are asset-backed with well-known shipping banks

and fully guaranteed by GOGL

An undrawn separate loan tranche of up to $33 million,

financing up to 11 scrubber installations, is in place

Total amortization of $21.2 million per quarter

Average margin above LIBOR on bank financing is

competitive at 2.25%

(in thousands of $) 06/30/2019

ASSETS

Short term

Cash and cash equivalents (incl. restricted cash) 117,549

Other current assets 148,061

Long term

Restricted cash 45,708

Vessels (incl. newbuildings and held-for-sale) 2,365,773

Other long term assets 226,496

Total assets 2,903,587

LIABILITIES AND EQUITY

Short term

Current portion of long term debt and capital lease 238,355

Other current liabilities 112,919

Long term

Long term debt and capital lease 914,012

Other long term liabilities 165,084

Equity 1,473,217

Total liabilities and equity 2,903,587

-

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025

DRY BULK MARKET UPDATE

10SOURCE: CLARKSONS

NOTE: RATES DISPLAYED ARE WEEKLY AVERAGES FOR CAPESIZE AND PANAMAX VESSELS

Rates have rebounded sharply as iron ore volumes begin to return to the

market and other trades remain supportive

FREIGHT MARKET UPDATE

WEEKLY PANAMAX RATESWEEKLY CAPESIZE RATES

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018 2019 5Yr. Average

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018 2019 5Yr. Average

11SOURCE: BALTIC EXCHANGE

Expectations recovering following steep declines driven by trade tensions

and disruptions in iron ore production

FORWARD FREIGHT AGREEMENTS

PANAMAX FFAsCAPESIZE FFAs

10 000

12 500

15 000

17 500

20 000

22 500

J-1

8

F-1

8

M-1

8

A-1

8

M-1

8

J-1

8

J-1

8

A-1

8

S-1

8

O-1

8

N-1

8

D-1

8

J-1

9

F-1

9

M-1

9

A-1

9

M-1

9

J-1

9

J-1

9

A-1

9

CS5TC, Cal-20, NOS Closing CS5TC, Cal-21, NOS Closing

7 500

10 000

12 500

J-1

8

F-1

8

M-1

8

A-1

8

M-1

8

J-1

8

J-1

8

A-1

8

S-1

8

O-1

8

N-1

8

D-1

8

J-1

9

F-1

9

M-1

9

A-1

9

M-1

9

J-1

9

J-1

9

A-1

9

PM4TC, Cal-20, NOS Closing PM4TC, Cal-21, NOS Closing

60%

65%

70%

75%

80%

85%

90%

95%

100%

0

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 2019

Fle

et

utiliz

atio

n

Tonne m

iles (

bill

ions)

Demand Supply Utilization Rate

DRY BULK SUPPLY / DEMAND & UTILIZATION

12

SUPPLY, DEMAND AND UTILIZATION RATE - DRY BULK SHIPS 10,000 DWT +

SOURCE: MARITIME ANALYTICS

Utilization increased to ~83.5% in the second quarter, rebounding from the

pullback in the first quarter caused by iron ore export disruptions in Brazil

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 2019

Metr

ic t

onnes (

bill

ions)

Metr

ic t

onnes (

mill

ions)

Total Iron Ore Coal Other Bulks Agribulks

GROWTH IN VOLUMES DESPITE IRON ORE DISRUPTIONS

13

SEABORNE TRADE OF DRY BULK COMMODITIES (MAJOR IMPORTERS)

Volumes grew slightly year-over-year despite ~20mn metric tonne

decrease in iron ore volumes

SOURCE: MARITIME ANALYTICS

0

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 2019

Australia Brazil South Africa India Other

DECLINE IN BRAZIL IRON ORE PRODUCTION ARE REFLECTED IN Q2 2019 EXPORT FIGURES

14SOURCE: MARITIME ANALYTICS; DISPLAYS VOLUMES BY QUARTER

QUARTERLY EXPORTED IRON ORE VOLUMES PER COUNTRY

-10%

-5%

0%

5%

10%

15%

20%

jan

.12

ma

r.1

2

ma

i.12

jul.1

2

sep

.12

nov.1

2

jan

.13

ma

r.1

3

ma

i.13

jul.1

3

sep

.13

nov.1

3

jan

.14

ma

r.1

4

ma

i.14

jul.1

4

sep

.14

nov.1

4

jan

.15

ma

r.1

5

ma

i.15

jul.1

5

sep

.15

nov.1

5

jan

.16

ma

r.1

6

ma

i.16

jul.1

6

sep

.16

nov.1

6

jan

.17

ma

r.1

7

ma

i.17

jul.1

7

sep

.17

nov.1

7

jan

.18

ma

r.1

8

ma

i.18

jul.1

8

sep

.18

nov.1

8

jan

.19

ma

r.1

9

ma

i.19

China Rest of World

WORLD STEEL PRODUCTION TRENDS

ANNUAL CHANGE IN STEEL PRODUCTION

Chinese steel production growth remained strong, while the rest of the

world was unchanged year over year

SOURCE: SSY 15

-

10

20

30

40

50

60

70

80

90

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Metr

ic t

onnes

(mill

ions)

China Japan S. Korea India Other Asia Europe

INDIAN AND CHINA COAL IMPORTS UP SIGNIFCANTLY YEAR-OVER-YEAR

16

CHINA AND INDIA COAL INVENTORIESCOAL IMPORTS BY MAJOR IMPORTERS

SOURCE: MARITIME ANALYTICS, COMMODORE RESEARCH

81 82

95

74

66 65

83

88

11

1614

31

21

1317

25

-

10

20

30

40

50

60

70

80

90

100

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Jul-19

China India

300

350

400

450

500

550

600

650

700

ma

r.1

0

jun

.10

sep

.10

des.1

0

ma

r.1

1

jun

.11

sep

.11

des.1

1

ma

r.1

2

jun

.12

sep

.12

des.1

2

ma

r.1

3

jun

.13

sep

.13

des.1

3

ma

r.1

4

jun

.14

sep

.14

des.1

4

ma

r.1

5

jun

.15

sep

.15

des.1

5

ma

r.1

6

jun

.16

sep

.16

des.1

6

ma

r.1

7

jun

.17

sep

.17

des.1

7

ma

r.1

8

jun

.18

sep

.18

des.1

8

ma

r.1

9

jun

.19

Kilo

watt h

ours

(bill

ions)

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

ma

r.1

0

jun

.10

sep

.10

des.1

0

ma

r.1

1

jun

.11

sep

.11

des.1

1

ma

r.1

2

jun

.12

sep

.12

des.1

2

ma

r.1

3

jun

.13

sep

.13

des.1

3

ma

r.1

4

jun

.14

sep

.14

des.1

4

ma

r.1

5

jun

.15

sep

.15

des.1

5

ma

r.1

6

jun

.16

sep

.16

des.1

6

ma

r.1

7

jun

.17

sep

.17

des.1

7

ma

r.1

8

jun

.18

sep

.18

des.1

8

ma

r.1

9

jun

.19

Coal-derived electricity output Hydropower output Other output sources

CONTINUED YEAR OVER YEAR GROWTH IN ELECTRICITY CONSUMPTION SUPPORTS COAL DEMAND IN CHINA

17

CHINESE ELECTRICITY OUTPUT BY SOURCE

SOURCE: COMMODORE RESEARCH / NARIONAL BUREAU OF STATISTICS OF CHINA

CHINESE ELECTRICITY OUTPUT

-

2

4

6

8

10

12

De

c-1

0

Ma

r-1

1

Jun

-11

Se

p-1

1

Dec-1

1

Ma

r-1

2

Jun

-12

Se

p-1

2

Dec-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-1

5

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-1

6

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-1

7

Jun

-17

Se

p-1

7

Dec-1

7

Ma

r-1

8

Jun

-18

Se

p-1

8

Dec-1

8

Ma

r-1

9

Jun

-19

USA Aust. Wheat Only Argentina EU to 3rd c. Canada

- 2 4 6 8

10 12 14 16 18 20

Dec-1

0

Ma

r-1

1

Jun

-11

Se

p-1

1

Dec-1

1

Ma

r-1

2

Jun

-12

Se

p-1

2

Dec-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-1

5

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-1

6

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-1

7

Jun

-17

Se

p-1

7

Dec-1

7

Ma

r-1

8

Jun

-18

Se

p-1

8

Dec-1

8

Ma

r-1

9

Jun

-19

USA Brazil Argentina

U.S. GRAIN EXPORTS CONTINUE TO BE DISRUPTED BY TRADE TENSIONS

18

SOYBEAN AND SOYBEAN MEAL EXPORTS BY SOURCE

SOURCE: FEARNRESEARCH

GRAIN EXPORTS BY SOURCE

0,0

1,0

2,0

3,0

4,0

5,0

6,0

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

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Mill

dw

t

-4,0

-2,0

0,0

2,0

4,0

6,0

8,0

10,0

12,0

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

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Mill

dw

t

-2,0

-1,0

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

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

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Mill

dw

t

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

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

Q2

2018

Q3

2018

Q4

2018

Q1

2019

Q2

2019

Mill

dw

t

CAPESIZE FLEET GROWTH SLOWING ON HIGHER SCRAPPING

19

PANAMAX / POST-PANAMAXCAPESIZE

LTM Delivered: 13.6m dwt

LTM Scrapped: 5.4m dwt







HANDYSIZEHANDYMAX / SUPRAMAX

SOURCE: CLARKSONS PLATOU

5,9% 5,6%

1,5%

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

35,0%

0

100

200

300

400

500

600

700

800

900

1 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019f 2020f 2121f+

Annual fleet gro

wth

Fle

et

(MdW

T)

Fleet size Deliveries Scheduled deliveries Fleet growth

PROJECTED FLEET GROWTH IS MODERATE VERSUS HISTORICAL LEVELS

FLEET GROWTH (ASSUMES NO SCRAPPING OR NEW ORDERING)

High likelihood that some 2019 deliveries are cancelled or pushed out to 2020;

limited ordering and scrapping ahead of regulations is expected

SOURCE: SSY 20

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

0

5

10

15

20

25

30

jan

-201

1

apr-

20

11

jul-

201

1

okt-

201

1

jan

-201

2

apr-

20

12

jul-

201

2

okt-

201

2

jan

-201

3

apr-

20

13

jul-

201

3

okt-

201

3

jan

-201

4

apr-

20

14

jul-

201

4

okt-

201

4

jan

-201

5

apr-

20

15

jul-

201

5

okt-

201

5

jan

-201

6

apr-

20

16

jul-

201

6

okt-

201

6

jan

-201

7

apr-

20

17

jul-

201

7

okt-

201

7

jan

-201

8

apr-

20

18

jul-

201

8

okt-

201

8

jan

-201

9

apr-

20

19

jul-

201

9

Dem

olit

ion (

mill

ion D

WT

)

Vessel valu

es (

mm

US

D)

Capesize Bulkcarrier Demolition Capesize 176k dwt 15 Year Old Secondhand Prices Capesize Scrap Value

DEMOLITION ACTIVITY HAS INCREASED

CAPESIZE DEMOLITION AND VESSEL VALUES

21

(7.3m dwt)(0.8m dwt)

Demolition has increased in first half of 2019 driven by weaker of freight

rates and reduced differential between resale prices and scrap value

SOURCE: CLARKSONS

-

10

20

30

40

50

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Jun

-09

Se

p-0

9

Dec-0

9

Ma

r-1

0

Jun

-10

Se

p-1

0

Dec-1

0

Ma

r-1

1

Jun

-11

Se

p-1

1

Dec-1

1

Ma

r-1

2

Jun

-12

Se

p-1

2

Dec-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-1

5

Jun

-15

Se

p-1

5

Dec-1

5

Ma

r-1

6

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-1

7

Jun

-17

Se

p-1

7

Dec-1

7

Ma

r-1

8

Jun

-18

Se

p-1

8

Dec-1

8

Ma

r-1

9

Jun

-19

Asset

valu

es (

mm

US

D)

1 y

r-T

C (

US

D/d

ay)

1 yr-TC 5 yr SH Panamax 10 yr SH Panamax

-

10

20

30

40

50

60

70

-

10 000

20 000

30 000

40 000

50 000

Jun

-09

Se

p-0

9

Dec-0

9

Ma

r-1

0

Jun

-10

Se

p-1

0

Dec-1

0

Ma

r-1

1

Jun

-11

Se

p-1

1

Dec-1

1

Ma

r-1

2

Jun

-12

Se

p-1

2

Dec-1

2

Ma

r-1

3

Jun

-13

Se

p-1

3

Dec-1

3

Ma

r-1

4

Jun

-14

Se

p-1

4

Dec-1

4

Ma

r-1

5

Jun

-15

Se

p-1

5

De

c-1

5

Ma

r-1

6

Jun

-16

Se

p-1

6

Dec-1

6

Ma

r-1

7

Jun

-17

Se

p-1

7

Dec-1

7

Ma

r-1

8

Jun

-18

Se

p-1

8

Dec-1

8

Ma

r-1

9

Jun

-19

Asset

valu

es (

mm

US

D)

1 y

r-T

C (

US

D/d

ay)

1 yr-TC 5 yr SH Capesize 10 yr SH Capesize

22

PANAMAX VALUES AND EARNINGS

SOURCE: CLARKSONS

CAPESIZE VALUES AND EARNINGS

S&P PRICES STABLE; ACTIVITY PICKING UP FOCUSED ON OLDER, SMALLER TONNAGE

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

28,00

30,00

32,00

34,00

36,00

38,00

40,00

42,00

44,00

"EC

O"

pre

miu

m (

mm

US

D)

Vessel price (

mm

US

D)

5 Year Old "ECO" Capesize Secondhand Price 5 Year Old Capesize Secondhand Price "ECO" Price Premium"

CONSISTENT PREMIUM FOR MODERN VESSELS

CAPESIZE DEMOLITION AND VESSEL VALUES

SOURCE: CLARKSONS 23

(0.8m dwt)

“ECO” vessel premium has remained consistent as fuel price is set to

become an even more important factor in 2020

OUTLOOK AND STRATEGY

25

POTENTIAL RISKSPOSITIVE FACTORS

HIGH FLEET UTILIZATION ON SUPPLY CONTSRAINTS; POSITIVE OUTLOOK BUT VOLATILITY EXPECTED

• China implements additional stimulus

measures to support growth and/or offset

potential impact of tariffs

• Effective capacity is constrained ahead of

IMO 2020 due to cleaning of fuel tanks,

availability of fuel and offhire for scrubber

installations

• Older vessels are scrapped ahead of

investments required to meet BWTS or

remain economical following sulphur

emissions regulations

• Unresolved trade tensions and global

recession cause global trade to slow

• Reduced amount of coal in the energy mix

in China and other countries

• Slippage removed from the orderbook and

fleet size grows materially as well as

Valemax share of order book increases

market volatility

1 6

11

16

21

26

31

36

41

46

51

56

61

66

71

76

81

86

91

96

10

1

10

6

11

1

11

6

12

1

12

6

13

1

13

6

Weekly Capesize Rates Weekly Panamax Rates

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Capesize Panamax

OPEX G&A Interest Leases Repayment

COMPETITIVE CASH COST DRIVE EARNINGS AND PROTECTS DOWNSIDE

26

CASH BREAKEVEN LEVELS VS. INDEXES(1)

$13,800

$9,600

(1) ESTIMATED CASH BREAKEVEN LEVELS AT TODAYS INTEREST LEVEL, EXCLUDING PROFITABLE CHARTERS WHICH WILL

REDUCE THE CASH BREAKEVEN FROM THESE LEVELS

SOURCE: CLARKSONS; RATES DISPLAYED ARE WEEKLY AVERAGES FOR CAPESIZE AND PANAMAX VESSELS

Fully-burdened Opex includes dry docking and management fees

G&A net of management fees are estimated to be approximately $450 per day on a fleet of 77 vessels

Average margin on bank financing is competitive at LIBOR + 2.25% and the majority of bank debt has 19 years profile (adjusted for year of age)

Jan 2017

APPENDIX

(in thousands of $) Q2 2019 Q1 2019Quarterly

Variance

Operating revenues 117,653 126,956 (9,303)

Voyage expenses (32,905) (34,199) 1,294

Net revenues 84,748 92,757 (8,009)

Ship operating expenses (48,707) (42,111) (6,596)

Administrative expenses (3,276) (3,530) 254

Charter hire expenses (15,828) (15,788) (40)

Depreciation / impairment (23,978) (22,875) (1,103)

Net operating expenses (91,789) (84,304) (7,485)

Net operating income (loss) (7,041) 8,453 (15,494)

Net financial expenses (14,214) (15,320) 1,106

Derivatives and other financial income (loss) (11,793) (560) (11,233)

Net income before taxation (loss) (33,048) (7,427) (25,621)

Income Tax expense 38 38 -

Net income (loss) (33,086) (7,465) (25,621)

Earnings (loss) per share: basic and diluted ($0.23) ($0.05) ($0.18)

Adjusted EBITDA 21,507 36,021 (14,514)

TCE per day 11,629 13,131 (1,502)

PROFIT & LOSS

28

BALANCE SHEET

(in thousands of $) Q2 2019 Q1 2019Quarterly

Variance

ASSETS

Short term

Cash and cash equivalents (incl. restricted cash) 117,549 153,036 (35,487)

Other current assets 148,061 132,252 15,809

Long term

Restricted cash 45,708 46,115 (407)

Vessels (incl. newbuildings and held-for-sale) 2,365,773 2,384,506 (18,733)

Operating leases, right of use assets, net 196,827 201,124 (4,297)

Other long term assets 29,669 19,992 9,677

Total assets 2,903,587 2,937,025 (33,438)

LIABILITIES AND EQUITY

Short term

Current portion of long term debt and capital lease 238,355 311,379 (73,024)

Current portion of operating leases 22,585 22,072 513

Other current liabilities 90,334 64,616 25,718

Long term

Long term debt and capital lease 914,012 857,287 56,725

Non-current portion of operating lease obligations 165,084 170,976 (5,892)

Equity 1,473,217 1,510,695 (37,478)

Total liabilities and equity 2,903,587 2,937,025 (33,438)

29

30

ADJUSTED EBITDAAVERAGE DAILY TCE

DIVIDENDS PER SHAREOPERATING REVENUE

SUMMARY FINANCIAL RESULTS

12 237 12 958

16 444 15 593 15 215

17 730 17 524

13 131 11 629

-

2 500

5 000

7 500

10 000

12 500

15 000

17 500

20 000

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

30

40

65

53 54

7970

36

22

0

10

20

30

40

50

60

70

80

90

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

100

127

151 150141

189176

126116

0

25

50

75

100

125

150

175

200

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

- -

0,10 0,10 0,10

0,15

0,05

0,025

0,10

-

0,05

0,10

0,15

0,20

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

LOWER FUEL CONSUMPTION LEADS TO REDUCED COST

31

SPEED VS. CONSUMPTION (BALLAST)SPEED VS. CONSUMPTION (LADEN)

-

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

9,0 9,5 10,0 10,5 11,0 11,5 12,0 12,5 13,0 13,5 14,0

-

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

50,00

9,0 9,5 10,0 10,5 11,0 11,5 12,0 12,5 13,0

Modern vessel Vessel 10+ years

NOTE: THESE ARE EXAMPLE NUMBERS BASED ON ACTUAL CONSUMPTION FOR A SPECIFIC VESSEL: EACH VESSELS CONSUMPTION VARY, AND IN ADDITION WEATHER CONDITIONS, TIME IN PORT, TRADE PATTERNS ETC WILL IMPACT THE TOTAL CONSUMPTION OVER A YEAR:

Modern vessels have significant competitive advantages

6 438 5 205

16 096 13 014

25 753

20 822

10 yr old Modern

Daily cost at 200 $/t Daily cost at 500 $/t Daily cost at 800 $/t

DAILY AVERAGE FUEL COSTS (USD/DAY)

THANK YOU FOR YOUR ATTENTION!

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