Highlights
· The Company reports a net loss of $68.2 million and a loss per share of $0.22 for the first quarter of 2016. Excluding impairment, mark to market loss on interest rate derivatives and other one-off effects, the net loss is $41.5 million.
· In January 2016, the Company took delivery of Golden Barnet, Golden Bexley, Golden Scape and Golden Swift, two Capesize and two Newcastlemax dry bulk newbuildings.
· In January 2016, the Company entered into a Capesize revenue sharing agreement with three other owners of Capesize vessels.
· In February 2016, the Company took delivery of, and simultaneously sold, the Front Caribbean, and chartered the vessel in for a period of twelve months.
· In February 2016, the Company agreed amendments to its bank facilities, whereby there are no repayments for the next two and a half years and various covenants are amended or waived
· In February 2016, the Company completed a private placement and in March 2016 a subsequent repair issue, which generated net proceeds of $205.4 million.
· In March 2016, the Company entered an agreement to postpone delivery of two Capesize newbuildings.
Preliminary First Quarter 2016 Results
The Company reports a net loss of $68.2 million and a loss per share of $0.22 for the first quarter compared with a net loss of $69.3 million and a loss per share of $0.40 for the preceding quarter. The net loss in the first quarter includes (i) a gain on sale of newbuildings and amortization of deferred gain of $0.1 million, (ii) an impairment loss on securities of $10.0 million, (iii) a loss on derivatives of $12.9 million, mainly related to unrealized losses on interest rate hedges, (iv) a loss provision of $1.8 million against uncollectible receivables, and (v) an impairment loss of $2.1 million relating to the Company's investment in a joint venture. The net loss in the preceding quarter includes (i) a loss on sale of newbuildings and amortization of deferred gain of $8.5 million (which includes a loss of $8.9 million on the sale of two converted Capesize newbuilding contracts to Frontline Ltd.), (ii) an impairment loss on securities of $23.3 million, (iii) a loss provision of $4.7 million against uncollectible receivables, (iv) an impairment loss of $4.5 million relating to the Golden Lyderhorn, a vessel held under capital lease, (v) an impairment loss of $4.6 million relating to the Company's investment in a joint venture, and (vi) a mark-to-market gain on derivatives of $1.2 million. If these items are excluded, the adjusted losses in the first and preceding quarters are $41.5 million and $29.4 million, respectively. This deterioration in results is primarily due to the decrease in vessel earnings (or time charter equivalent revenues) of $13.1 million.
Cash and cash equivalents increased by $151.0 million in the first quarter. The main cash movements were the payment of $161.7 million in respect of the Company's newbuilding program, $48.1 million received from the sale the Front Caribbean and the two newbuilding contracts sold in the prior quarter, the net draw down of debt of $95.0 million and the net proceeds from the private placement of $205.4 million. In addition, $21.6 million was used in operations.
The full report is available in the link below.
The Board of Directors
Golden Ocean Group Limited
Hamilton, Bermuda
May 24, 2016
Questions should be directed to:
Birgitte Ringstad Vartdal: CEO, Golden Ocean Management AS
+47 22 01 73 53
Per Heiberg: CFO, Golden Ocean Management AS
+47 22 01 73 45
Forward Looking Statements
Matters discussed in this 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. 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 statements in this report 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.