GOGL - Earnings call transcript Q4 2024 | Golden Ocean Group Limited

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Operator

Good day, and thank you for standing by. Welcome to the Golden Ocean Group Limited Q4 2024 Earnings Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded.

I would now like to turn the conference over to your speaker, Mr. and CEO Interim Simonsen, CFO. Peder Please go ahead.

Peder Carl Simonsen

Ocean. and Earnings Release. afternoon, am and Interim of forward welcome QX present Simonsen, to XXXX QX the Golden CFO and Ocean outlook. Golden CEO I My numbers I will our the and Good Today, name Peder is

XXXX, have following fourth highlights. main the In we quarter of the

a $XX in Our for million compared $XX.X and adjusted ended the quarter. share compared XXXX third at of EBITDA of of million quarter. in income to of the earnings net We per earnings a $X.XX delivered $XXX.X per third share million of fourth million income and quarter $X.XX the to $XX.X net

in XXXX $XXX.X profit was year an million, full annual net $XXX.X XXXX. from Our million up result of

were quarter. for TCE Our per and about about $XX,XXX Panamax day the for net a fleet-wide $XX,XXX for and per day $XX,XXX Capesizes our vessels about TCE of rates

QX XX $XX.X recorded X of vessels. dry costs to We QX to in compared have million vessels during relating docking to relating million $X.X

have our with X by part under Capesize approximately for by be Corp an acquisition day. $XX lease vessels X-year breakeven non-amortizing revolving The and a million facility will declared a reduce for million. SFL sum Capesize purchase aggregate financed agreement will credit cash of We $XXX option our $X,XXX per

day about per TCE $XX,XXX day per $X,XXX of XX% Panamax net days about secured of QX, a and have For we for XX% of Capesize days. for our

$XX,XXX for of of about per locked we days. day have of day for QX, XX% XX% about Capesize and in our $XX,XXX Panamax a TCE net our days For per

for of of pleased XXXX. are we share a dividend fourth quarter per to the Finally, $X.XX declare

numbers. little deeper into Let's look a the

in fleet-wide QX, total down QX. in from was $XX,XXX $XX,XXX rate Our TCE

XX docks. Newcastlemaxes. dry including We docked to XXXX, close have QX frequent and in a period our QX of Capesize we with will From dry are and

to contributing in and scheduled dry X of ships in compared are to X in XXXX. in dock to approximately QX to dock QX off-hire X dry days XXXX XX today in versus are QX, ships QX QX docked dry ships had of XXX further with XXX as in We ships days X expected completed vessels QX.

$XXX.X net recorded $XXX.X from of revenues QX. million, million down We in

Our system million, increase. OpEx related versus recorded expenses million up QX, million, expensed $XX mainly at $XX.X upgrades. due million $X.X $XX.X $XX.X to Running and a water dry from treatment bunkers ballast to dock ended million

dry $XX.X dry all an quarter-on-quarter relating we from docking to classified We $X.X from charter was million in hire million and expensed docking. saw QX. result down increase OpEx costs, million, OpEx of our the $X

per general expense, $XXX $X.X our for a number charter at and in $X.X trading up companies, expenses in recorded cost vessel days accounting versus $XXX difference. QX. of in expense QX. from recharge from portfolio hire day G&A $X.X of lower the profit On to administrative up sharing million, million million at and affiliated we QX, Daily per ended came the with net million day, $X.X Our for

mainly gain at of the income, ended loss derivatives and On million million as compared quarter. expense reduction $XX lower lower versus financial financial as to QX. recorded Our in $XX.X a $XX.X rates million debt $XX.X QX, well net we other average a to million a due in SOFR of in

On QX. in $XX a loss derivatives, $XX.X million million of recorded versus a of we gain

the net and $XX.X investments $X.XX QX relating a $X.XX per a results declared million to profit loss of and associates, For in recorded to million and from $X.X quarter. of TFG million we in for of $X.XX and dividend compared UFC, adjusted an $XX Marine, Swiss profit or in million share of a investments $X.X or net gain

flow cash mainly operations from recorded $XXX.X Looking lease from of financings financing comprising at $XX.X to debt fees results. $XX debt of in in vessels million and new to of repurchases $XX.X net Cash million flow, million, the newbuilding million in dividend $XX.X of in of $XX.X in used $X.X relating million scheduled and million, prepayments of million. sold, flow share from and in down increase of million, cash $XX.X $XX million relating repayments, proceeds QX. we paid our debt net Total payments QX and cash drawdowns

$XXX.X cash recorded and including cash. at balance of our Looking of million $X.X million, cash sheet. We equivalents restricted

billion loan-to-value of fleet-wide $X.X In finance end and to billion lease approximately company's of $XXX equity and million and credit QX, at facilities have Debt $X.X end. quarter down a book under million addition, available the equity end we liabilities by undrawn Average at totaled facilities total per XX%. XX.X% of of of debt assets quarter approximately the ratio quarter-on-quarter. was $XX

Capesize dry started will a QX continue period in special its has of in the an completing of and the of fleet, that docks months. and fleet second the onwards. half to timing surveys half We is of Ocean favorable, close XXXX ahead stronger docking the Golden of seasonal for first X intensive dry over of period half XXXX, believe a

Capes only earnings the Newcastlemaxes XX% the of company tonnes we offering Ocean capitalization deadweight bulk capacity. maintains Cape dry and Ocean's market exposure largest time, significant at Golden listed thereby And the and are liquidity. in listed Capesize the represent the as same and trading segment. Golden and owner and position Newcastlemax over

XX% guidance volumes volumes saw range, annual slightly upper Vale the while in QX, quarter-on-quarter. ahead off of end were continued season. up but cargo the but strong the winter were in quarter-on-quarter, exports export by of end Australian start we record In while exports reported iron X%. seasonally weaker November healthy, volumes, of volumes down volumes fell down Brazilian ore

have during run over reaching and million XX% up Australia. rate per bad their volumes seen averaged in mining operations, grown bauxite per season, targets. XX.X annual and impacting We high month from the in Guinea tonnes million saw have Vale In exports, both average further, Brazil production XX.X And reduce weather month after port QX. year-on-year we've and its QX

tonne QX, half we representing for of economies. whereas of China and volumes coal most cargo supplemented Colombian Australia mile Indonesia. demand in of types, Southeast bauxite iron continued for is other saw QX, increased first by export but volumes volumes in steady Asian volumes further providing XX% being in XXXX, XXXX, XX% replaced the healthy Coal and in ore levels by

exports to As other replaced an are sources. being and the adverse by announced, and limited scenario, will a comment volumes, largely which be U.S. coal tariffs grain to we expect various taxes in

China from the U.S. of only ore XX.X came XXX imported U.S.-related As tonnes an and million million year, the coal example, last are not Iron bauxite of that cargoes.

demand. trade However, an will negative the impact war ongoing time, for over be dry and bulk sentiment

dry to average have This to volumes of dry historical commodities had is bulk Looking XX due GDP perspective, rate. from bulk have grow the we mainly a higher last X.X over years, seen growth economies growth. at demand a a multiple higher at than being volumes for who emerging in

in to down the we Although continue. emerging by driven and economies trend come growth China India the highs, from expect historical has

dry demand. growth most commodities. the away emerging another are because to This addition, shipping add of located In from major will tonne-mile is bulk exporting regions, this case the boost effect economies for

projects globally, Latest X.X% Brazilian delivered expected million expansion and upper year production and to of the Vale also XXXX XXXX year Both an new Australian while of for have for with India China emerging to export XXXX in guide full which a on miners grow and is both projections from forecast X.X%, respectively. IMF of annual XXX growth miners are X.X% full tonnes, the targets GDP guiding. in basins. end continue and growth positively

but Australia to continue Australia, tonne-mile distance the ore. iron demand to is exporters QX XXXX. Asia to Capesize is up compared has flat X% compared remained Chinese to with and be around steel the of most Brazil Xx to contributor the largest the production market. sailing Brazil, important quarter-on-quarter,

Sentiment mills stimulus its analysts ongoing to claim to if new attempt Chinese is steel and positive the including tariff economy been postponed to needed, discussions. stimulate their heavy that has among the its have news continue but China authorities production. commitment decarbonize steel reiterated more industry, due

using coal being iron Increased for emissions the high-grade By to with of tonne-mile able they're demand per tonne Brazil and quality and deposits found supportive high-grade reduce in ore iron highly higher to new commodities, ore is largest steel produced. Guinea.

has but by Outside recovering, as crude only and production steel construction started growth. interest conservative X.X% quarter-on-quarter China weak rates is high and India, a demand from limiting

demand. However, closer, recovery the significant to presents coming steel potential a as upside it is

X the XXX QX export mine ore iron expected commence production this million see Guinea, to up its capacity an exports. of Simandou year, years, Africa, annually. ramp West we adding Simandou mine will In high-grade is expected tonnes over in

additional capacity an in addition, and on tonnes expansion projects underway approximately new are during Brazil stream million with XXXX In XX XXXX. of coming

prices tonne actually increased have at escalating of around currently for volatile, miners and the historically but in $XX amidst healthy which been at is the backdrop levels compares delivered major tonne, Iron $XXX an stayed very trading trade ore negative uncertainty. per to favorably breakeven ore rate Iron macro despite Asia. approximately per

domestic curve pressure prices, ore lower prices. iron cost it's ore producers, and highly and Australian among but at The prices expected the production. producers that current more volumes will new outcompete Brazilian Chinese key At that producers shows is expensive on put including most are resilient profitable,

distance demand high-grade coming into will significantly. Australian will the new assume analysts the the Chinese the ore is expecting boosting volumes, significantly it domestic, for of triple quality Capesizes the replace that of sailing If will the tonne-mile poorer ore market, Given volumes which that Simandou iron Asia, conservatively we quality. replace to are

Chinese major bauxite government ore. Africa Guinea industrial mining large has of West mine in development. and The deposits the majors high-grade with conglomerates, in and and infrastructure together exporter has made iron Guinea vast become holds investments and significant a

tonne-mile being China. growth has the in industry majority the aluminum, booming the EV growth production over demand in last years feeding is provides of in largest X Asia, with sectors the as an Guinean rate With which compounded exports of is average other used as of for bauxite steady grown located this Bauxite, well Southeast XX%. vessels. in

replaces volumes tonnes bauxite in volumes million, significant Guinean The to XXXX volumes QX represents switch in smaller Indonesia, vessel segments. traded exports to monthly XX million exceeded a which, tonne-mile addition XX.X Capesizes date average have were month. growth season, per The export and high to in while in from from

analysts million growth. XX% are improvements, infrastructure XXX X% a expecting tonnes annual export representing an in Following XXXX, to year-on-year of

vessels, exports scheduled XX% Capesize of demand contributing XX% if most, to the not the to tonne-mile currently of XXXX. of deliveries bauxite As Capesizes in for this will all, represent about covering growth

by unfavored container Newcastlemaxes the build and shipyards to shipyards The most they Capesize of the lower dry margins year's order Despite bulk to vessels able largest has ships remain newbuilding profit other on filling compared up with last vessels. shipping the followed prices, development pattern book elevated as for provide capacity segments.

XXXX The X% addition, capacity a reduction any additional fleet long-dated for delivery earliest dry X.X% limited capacity analysts period compared leads during and entering Capesize to shipyard In and global Newcastlemax both an XXXX currently to fleet as to XXXX. into dockings, frequent dates, quoting is and of meaningful the estimate capacity volume. delivery in XXXX

are modern a and is are where fleet We years large-sized increasing bulk above safety, in capacity, of fuel be will half efficiency over also regulations aging welfare Capesize to emissions. age period the for in crew of in a vessels, both terms but fleet in environmental XXXX with carrying XX and increasing period and requirements of tightening. The competitive dry advantages

record continues not fleet we reduced although disruptions, fleet some the at meaningfully. has And capacity seasonal it operate operating seen have The to efficiency.

some For but will in Suez also dry transits normalization marginal transatlantic the reduction will negative trades. a have of bulk, which through effect open tonne-miles, further for provide will Canal full

The outperformed the close over full day the indexes per has, year, last to $X,XXX by fleet. company on

and rate retaining with push SFL leverage fleet per conservative recently industry rate. for breakeven cash Corp The low an day. Cape will continue for vessels announced the cost, refinancing We X cash the to lower for leases meaningful breakeven with $X,XXX of reduce but

sales provide upgrade of the the weakness As second are fleet These This the cash are hand. ahead half market seasonally with proceeds a will using significantly us of vessels. funded investments on competitive and with mentioned, the strong a and highly onwards. combination in to we

as strategy share our as announced We well continue dividends shareholders our to buybacks. reward through previously

continue Although have we in term, fundamentally on ongoing ourselves the market remain to thereafter. we outlook positive volatility the uncertainty, expect near and geopolitical with positioned

illustrate we we side, flow potential left-hand move as cash of the the On the Ocean into market stronger significant sentiment. Golden

you. now any pass and I the to will the word back operator questions. welcome Thank

Operator

of line [Operator the from Nokta Instructions] Our from Jefferies. comes first Omar question

Omar Nokta

given of big a usual as how overview update good of look and kind things Good and the market picture.

to it's in I market of what but -- Maybe little follow-up and a been you what do short seeing know questions of Just the term, we've a make here too Cape week couple a that. this as specifically?

know like it's and run really but I days early looks to momentum. it's haven't be away, Sentiment rates amount good a there improving. still seems of

You this whatnot. to can seeing freight and rates? latest futures I see been behind that just obviously do in sense in of get the your is you we've think what move want

Peder Carl Simonsen

Omar, for thanks question. the

we're I weather now for a ramp bit conditions started the think which while has rebound to based on improvement seeing which which up a what when there, volumes in of some is cyclones little disappeared sentiment, in active. in a Australia, were is

a into created the now lot Brazil. boost bit fairly sort the still a moving. at Panamax as of We're It's rates, to that some volume squeeze you've increases the in we've which the move in coal of well of seen a not in muted due has volumes Pacific Capes seeing rates seen with still levels. seen we've of addition, In

I But downturn. it very firmly market And that's end long sort we it it the of before show But to of sentiment of sort is moves need and the are now. upwards. be what's that remains maybe does responsive, how to think will seasonal we the seen driving in wait the

Omar Nokta

Yes.

Okay. And mentioned, some at dockings, Good then on you've docks are the maybe least of perhaps accelerated the dry kind as color. you going upgrades. or through just dry

thinking? the And first you the are have ships. are half in for million dry budgeting 'XX? for the what XX docks $XX What you quarter spent you those on You earmarked of fourth

Peder Carl Simonsen

dry very it -- of it much XX-year depends dock. -- the sort we think I which on XX-year is X-year, or

best are with general, is hull. the efforts putting doing the newest in the of of sand best vessels we paint, and the blasting think a into I we're what lot upgrading

some the on are ships. [indiscernible] We also investing of in

addition sort them of So ships fully we are, in to up to and maintained. moving making class standard

into money additional investing also are We them.

going that I quarter maybe think we dockings dry average normally than the higher because this have this we a forward of sort XX-year-old what was saw in you of in quite few see slightly had the quarter. would

think to the space up seen sort -- a that costs into due commercially. have requirements expenses that come have and to vessels have high-performing we of up in seen regulations the dry quality I as bulk having moving value the moved have and the in of we the But to the the of vessel well, moved addition

Operator

of Our comes next question Lewis from the line Greg from BTIG.

Gregory Lewis

bit purchase purchase I you're and was hoping you seeing sales could money. talk a were the Obviously, the opportunities exercised options about the side. little you on in

So kind that mean, guess, given the just a I that would I -- I was that. was of no-brainer I of think guess pricing

X to some next guess, I X this the acquisition, vessel thinking think even the as following selling to about are now? how years, But like positioning you opportunities fleet thinking you about maybe about vessels over tonnage X maybe or add

Peder Carl Simonsen

that our that Newcastlemax the of outliers we smaller favorable the where fleet we valuations the sellers of the want is means We which for as long-term we more capacity moment, do vessel will an as than space, renewal where are maybe time, reason, segment. selling. we coming maintain in same consider we, buyers from have the I think strategic in. Greg, and sort we from can much strategy, are have to ongoing Cape in sort at are Yes. which At cycle that

I declare They a that of the them had the options. think transaction. than had which were I transaction very, S&P way ships, we a mean a structured we've the sort SFL highly we more very sort likely options. made of will the in refinancing is

of And of that be we so -- seeing won't those sort more for -- those. so

moment. I the in So I sellers generally the than buyers in think general, side, more we are S&P think at

are But opportunistic. We continue sort growing in nimble end and the up to light-footed than space the we the Capesize ships long opportunity over And than we're say be not vessels. the of in keen that of time. -- since more as will sort very here sold been other it's it's comes space up, well. Panamax if we building. that, some may always And on we I'd buying

Gregory Lewis

potential bulk -- past, Yes. in different. cycles out. bit the little dry the about guess And a it's is how the more have little kind bit I a you M&A. just of for funny other people then that, been active in Everyone as in play guess space. companies the ask think about M&A I always and

are I guess, your over XX the on you months, on out is, M&A? as and the just mean, of think it's think we public could Or I you I guess given would do vessels, be can fleets? private as kind do the large where business look usual I in in cycle, larger pickup focus that what think -- next the see we scale a and you

Peder Carl Simonsen

M&A think I term. No, Yes. a is wide

we think there's much the a on on right. use I and in the M&A which transactions collateral on shareholder the add constellations not sort is of space And transaction. players add an to side obviously, value if is different share possible where may pricing different the the fleet as or very

shipping and to in that as is the space -- everybody the sort assets has in be they M&A it after, pretty But are challenging is proven of general, the generic.

in a that's trade of little combination So if right terms very and and age possible. sort type, much of sort of around we the is bit composition values underlying start of more the and ownership to there asset fleet

Operator

Our Molins Edge. next of Value the Instructions] [Operator from Investor's line question comes Climent from

Climent Molins

remains It do on so, what to you whether force. ask to patterns? port overall will market? be expect impact to potential Chinese-built you do into flow come those foresee the what extent on But trading impact fees To imposition U.S. of the I docking ultimately recent around wanted those in if about the vessels news seen

Peder Carl Simonsen

new very details I on and impact. much analysts policies enough to -- sort much it the think and very on the what view we not make it meaningful read still course drawing are very and assessment what and is the is suggestion the then from the of in the any the it, that analysts about board of the suggested much coming proposal seems

are from player. from dry volumes the These these lift general, the volumes possible economically a freight. due cost is I it also on to major becomes to has on and volumes replace the soybean some for U.S. not coal. bulk think if the U.S. that on in It challenging side other increased sources are to

in more possible So I suggestion a be think space of to seems that one do place And happening patterns play. elements will then we consumer very But also it -- where here in comes the that if trading looks dry much that the falls as the this another. intention. which it lot with the things that line there in bulk it China, are will than hurt which see to into it U.S. one seems region, other that's I from reroutes think in

with think fix included EU end calculations be at the sort we I of ships. other on the day our or user tariffs of in taxes they the and passed like freight of types Fuel will when or will the also And be to fees, or end

for So change shipping do -- dry to it not as not will be outlook this the a see we bulk. massive

Climent Molins

to ships but Japanese whether was let's just guess. will more you I on expected towards effect an taking in wondering or a routes have makes prominent U.S., tell, of role the say, Korean I time that sense. Yes, the,

over. it turn I'll So

Sorry, go ahead.

Peder Carl Simonsen

it Atlantic effect come comes it presented, Korean it of but more Japanese the guess ships, saying No, Basin very will into I a in if through ships was be the just exercise. is is I no. will and as still it theoretical much then and that

Operator

back questions hand [Operator Instructions] time. We no further at I to for closing have you this any will now remarks.

Peder Carl Simonsen

listening Thank week. have you you great for you the in, continued questions, very for thank much. a Thank and and

Golden Ocean Group Limited (GOGL) 26 Feb 252024 Q4 Earnings call transcript