golden ocean q2 2013 results presentation
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TRANSCRIPT
Results Q2 - 201323 August 2013
Agenda
HighlightsFinancialsOperationsMacro UpdateQ&A
Highlights
GOGL results Q2 2013
EBITDA: $49.5 million
Profit: $43.5 million
Earnings per share: $0.10
GOGL declares a dividend of$0.01 for Q2 2013
Three firm + three optionalsupramax newbuilding contractsconcluded with Chengxi
Received $30 million as asettlement for a dispute inrelation to a ten year charter
FinancialsBirgitte Vartdal, CFO Golden Ocean Management AS
Profit & Loss
• Revenues up on higher activityshort term and $30 millionsettlement
• Costs up on higher activity shortterm trading
• Positive MtM on interest rateswaps
Key figures:
(in thousands of $)2013 2013
Apr-Jun Jan-Mar
Operating revenue 104 707 54 432Vessel voyage expenses -21 758 -12 817Vessel operating expenses -10 734 -11 136Charter hire expenses -17 755 -8 599Administrative expenses -3 561 -3 055Depreciation and amortisation -9 643 -9 176Other gain/ (losses net) -1 442 1 809Operating profit 39 813 11 458Interest income 231 284Interest expense -4 691 -4 662Interest swap 8 193 -238Other financial items -52 -75Taxation 0 0Profit for the period 43 494 6 767
Other comprehensive incomeAvai lable for sale financial assets 1 191 0Total comprehensive income 44 685 6 767
(in thousands of $) 2013 2012Jun 30 Dec 31
ASSETSVessels and equipment, net 654 448 611 517Vessels held under finance leases, net 135 544 140 217Vessels under construction 21 933 116 082Investment in Joint Venture 20 081 1 248Other assets 10 237 8 026Total non-current assets 842 244 877 090Cash and cash equivalents 89 619 112 537Trade receivables and other current assets 44 772 20 427Refundable installements for cancelled newbuildings 178 187 100 325Total current assets 312 578 233 289
Total assets 1 154 822 1 110 379
EQUITY AND LIABILITIESEquity attributable to equity holders of the parent
Share capital 44 726 44 726Additional paid in capital 99 156 99 156Other reserves 17 826 16 635Retained earnings 428 455 377 288Non-controlling interest 270 491
Total Equity 590 432 538 296Long term debt 240 431 324 432Obl igations under finance leases 114 612 118 055Other long term liabi lities 2 055 2 205Deferred income
- -Total non-current liabilities 357 098 444 693Current Liabilities
Long-term debt - current portion 150 259 68 733Obl igations under finance leases – current portion 7 077 6 837Other current liabilities 49 955 51 820
Total current liabilities 207 292 127 390Total liabilities and shareholders’ equity 1 154 822 1 110 379
Balance Sheet
Equity ratio ~ 51,1 %
4. Debt on cancelled vesselsclassified as short term.Refinancing on the loan facilitycurrently classified as short term($82.5 million) in progress.
1. Delivery of Golden Pearl in Q2
2. Reclassification of two iceclassPanamaxes
3. Joint Venture investment inGolden Magnum – loan to bedrawn within next months
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OperationsBirgitte Vartdal, CFO Golden Ocean Management AS
Vessels: Deliveries and charters
The Company bought in May 2013 a 2009 built Cape in JVtogether with a cargo owner
Delivery took place in second half of JuneObtained commited financing (70%) which will be drawn within thenext months
The Company agreed in May 2013 to buy two ice class panamaxvessels built at Pipavav
Delivery of first vessel took place in JuneDelivery of second vessel will take place in the second half of 2013The seller has provided a 30% sellers credit and the Company has bankfinancing of 65% of the purchase price. Financing in relation toGolden Pearl is drawn.
Open positions on sailing vessels
* Capesize: MV Golden Magnum included with 50% as from Q3-13** Panamax: Golden Diamond included from Q4-13
Capesize exposure - Sailing vessels Core Fleet *
Rest of 2013 2014 2015Total vessel days 857 2 284 2 284
Open vessel days 289 1 820 2 290
Open position (%) 34 % 80 % 100 %
Average net rate on fixed days 27 445 23 510 na
No of vessels 7 7 7
Panamax exposure - Sailing vessels Core Fleet **
Rest of 2013 2014 2015Total vessel days 2 617 6 938 5 994Open vessel days 751 4 111 3 717Open position (%) 29 % 59 % 62 %Average net rate on fixed days 14 970 19 109 20 819No of vessels 20 20 20
Overview of newbuilding program Jinhaiwan
Cancelled Remaining
Capesize 1 0
Kamsarmax 4 0
Iceclass Panamax 3 1
MUSD
Installments paid 168.6 6.7
Remaining Capex 0 26.8
Loan drawn 43.2 0
As per 23 August 2013
Vessel under construction at Pipavav
Yard Vessels Contracted out Open Delivery
JMU (Japan) 2 0 2 Q1-15
Chengxi (China) 3 0 3 Q1-Q2/15
Chengxi, options (China)* 3 - - 2015
Newbuildings: Delivery schedule supramax vessels
* Not declared yet. Deadline to declare options is October 2013.
Corporate transactions and covenants
In May 2013 the Company entered into an agreement to settle a disputein relation to non-performance of a ten year charter contract
Cash settlement of $30 million was received at the same time
The Company has obtained commitment from the current lenders torefinance the facility which falls due in January 2014
The full amount to be refinancedRefinancing will take place within the next months
Korea Line Corporation has been through a second restructuring.The Company has record a profit as other comprehensive income in relationto the freely tradeable shares (20k shares) end Q2.Shares from the second restructuring will be released in November 2013
Based on 15 Panamax/Kamsarmax and 6 Capesize vessels
Vessel operating expenses
4 950
5 650
5 3005 200
5 500 5 4505 375
5 650
3 000
3 500
4 000
4 500
5 000
5 500
6 000
Q2-13 Q1-13 2012 2011
Panamax Cape
Macro UpdateHerman Billung, CEO Golden Ocean Management AS
Bulk Carrier fleet trend...
Source: RS Platou Economic Research
Still strong underlying fleet growth, but slowing
Source: RS Platou Economic Research
China the driving force …
Source: RS Platou Economic Research
Housing starts vs housing sales
Source: NCA
Chinese domestic steel prices
Source: NCA
China – the major growth market in dry bulk …
Source: RS Platou Economic Research
Existing fleet and order book by year of delivery
Source: RS Platou Economic Research
India – an increasing growth factor in dry bulk...
Source: RS Platou Economic Research
Brazilan iron ore exports…
Source: RS Platou Economic Research
The world grain market – trade set to increase from q4-13
Source: RS Platou Economic Research
Bulk carriers: existing fleet and order book by year of delivery
Source: RS Platou Economic Research
Demand catching up with supply
Source: Pareto Shipping
Vessel capacity utilization expected to firm up
Source: Pareto Shipping
Q & A
Thank you for your attention !