was RESULTS Q May 30, 2018

Transcription

1 was RESULTS Q May 30, 2018

2 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 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. 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 Golden Ocean Group Limited with the U.S. Securities and Exchange Commission. Certain third-party shipping, steel 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 Group Limited has not undertaken any independent investigation to confirm the accuracy or completeness of such information 2

3 COMPANY UPDATE

4 HIGHLIGHTS The Company reports net income of $16.7 million and earnings per 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 Adjusted EBITDA in the first quarter was $53.3 million, compared with $65.3 million in the fourth quarter of 2017 and $17.5 million in the first quarter 2017 Completed the newbuilding program by taking delivery of the remaining five Capesize newbuildings. Took delivery of the Golden Monterrey, a Capesize vessel acquired in October 2017 Agreed a $120 million loan facility to refinance 10 vessels at favorable terms Agreed to sell the Golden Eminence, a Panamax vessel, for $14.7 million to an unrelated third party Announces a cash dividend of $0.10 per share for the first quarter 4

5 PROFIT & LOSS (in thousands of $) Q Q Quarterly Variance Operating revenues 147, ,712 (2,824) Voyage expenses (30,841) (28,949) (1,893 Net revenues 117, ,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) 5

6 CASH FLOW DURING THE QUARTER Q (144.6) (24.8) (14.4) (7.5) (0.8) (358.4) Cash at beginning of period (1) Cash from operations New debt Final installments for NBs Repayment of debt Dividends paid Vessel acquisition costs Other Cash at end of period (1) (1) INCLUDES RESTRICTED CASH 6

7 BALANCE SHEET (in thousands of $) Q Q Quarterly Variance ASSETS Short term Cash and cash equivalents (incl. restricted cash) 306, ,139 (10,947) Other current assets 144, ,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, ,106 Other long term assets 44,988 49,983 (4,995) Total assets 3,037,228 2,870, ,170 LIABILITIES AND EQUITY Short term Current portion of long term debt and capital lease 306, , ,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, ,170 7

8 # of vessels Expected cost by year ($ millions) MODERN, EFFICIENT FLEET Fully-burdened Opex includes dry docking and management fees One vessel dry docked in the first quarter of 2018, and five more to be docked later this year Average fleet age of ~5 years and majority of the fleet designed with fuel-efficient engines and ballast water treatment systems OPERATING EXPENSES (Q1 2018) BWTS INSTALLATION SCHEDULE $4 $9 $8 $6 $7 $ Supramax Panamax Capesize - - OPEX Drydock & Surveys # of vessels Expected cost 8

9 Supramax Panamax Capesize FLEET DEPLOYMENT Fleet heavily skewed towards spot exposure to capture market upside CHARTERING PROFILE vessels at $17, fixed 34 vessels trading spot 6 vessels at $20,750 6 fixed 4 fixed 23* vessels trading spot 3 vessels trading spot 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

10 USD (thousands) CREDIT FACILITIES CREDIT FACILITY SUMMARY (1) RECOURSE DEBT , ,201 Selected covenants Resumed ordinary amortization of 16.5 million per quarter No further cash sweep or outstanding deferred debt % MVC Convertible Bond matures in January 2019 NON-RECOURSE DEBT Selected covenants through July 1, 2019 No amortization payments Cash sweep mechanism 105% MVC Selected covenants post July 1, 2019 Amortization payments resume % MVC Recourse debt New loan Convertible loan Non-recourse debt Recourse Non-recourse Total 358 Cash RECENT DEVELOPMENTS New $120 million loan facility to refinance $58.3 million due under two loan facilities maturing in 2018 and seller credit loans of $65.5 million 20-year amortization profile with seven year tenor and interest of L % (1) BASED ON MARCH 31, 2018 FIGURES, ADJUSTED FOR NEW LOAN FACILITY SIGNED IN MAY 2018 TO BE DRAWN BY END OF Q

11 DRY BULK MARKET UPDATE

12 Tonne miles (billions) Fleet utilization DRY BULK SUPPLY / DEMAND & UTILIZATION Utilization decreased in the first quarter following increased capacity due to easing of port delays SUPPLY, DEMAND AND UTILIZATION RATE - DRY BULK SHIPS 10,000 DWT % % % 85% 80% 75% 70% % 0 60% Demand Supply Utilization Rate SOURCE: MARITIME ANALYTICS 12

13 Metric tonnes (millions) Metric tonnes (billions) GROWTH IN SEABORNE TRADE CONTINUES First quarter import increased due to discharge after port delayed and overall increases in year-over-year imports SEABORNE TRADE OF DRY BULK COMMODITIES (MAJOR IMPORTERS) Total Iron Ore Coal Other Bulks Agribulks 700 SOURCE: MARITIME ANALYTICS 13

14 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 WORLD STEEL PRODUCTION TRENDS INTACT Synchronised growth both in Chinese and Rest of World production ANNUAL CHANGE IN STEEL PRODUCTION 20% 15% 10% 5% 0% -5% -10% China Rest of World SOURCE: MARITIME ANALYTICS 14

15 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 $/t STEEL MARGINS AND IRON ORE PRICE DIFFERENTIALS SUPPORTIVE GROSS PROFIT (STEEL PRICE MINUS COST OF COKING COAL AND IRON ORE; ALL PRICES SPOT) 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 IRON ORE PRICE DIFFERENTIALS TSI 62% FE content Qingdao TSI 58% SOURCE: SSY, STORMGEO, NENA ANALYTICS 15

16 AUSTRALIA AND BRAZIL REMAIN MAJOR IRON ORE EXPORTERS QUARTERLY EXPORTED IRON ORE VOLUMES PER COUNTRY Australia Brazil South Africa India Other SOURCE: MARITIME ANALYTICS, STORMGEO, NENA ANALYTICS; DISPLAYS VOLUMES BY QUARTER 16

17 Metric tonnes (millions) COAL IMPORTS REMAINS HEALTHY, AND INVENTORIES REMAIN AT LOW LEVELS AHEAD OF COOLING SEASON COAL IMPORTS BY MAJOR IMPORTERS 90 CHINA AND INDIA COAL INVENTORIES ,0 16,2 13,8 30,6 21,0 13,2 15, ,1 81,6 94,5 73,6 65,5 65,0 62, China Japan S. Korea India Europe 0 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 End April China India SOURCE: MARITIME ANALYTICS, COMMODORE RESEARCH 17

18 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 jan.10 apr.10 jul.10 okt.10 jan.11 apr.11 jul.11 okt.11 jan.12 apr.12 jul.12 okt.12 jan.13 apr.13 jul.13 okt.13 jan.14 apr.14 jul.14 okt.14 jan.15 apr.15 jul.15 okt.15 jan.16 apr.16 jul.16 okt.16 jan.17 apr.17 jul.17 okt.17 jan.18 apr.18 Kilowatt hours (billions) SEASONALLY STRONG ELECTRICITY CONSUMPTION SUPPORTS COAL DEMAND CHINESE ELECTRICITY OUTPUT CHINESE ELECTRICITY OUTPUT BY SOURCE 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Coal-derived electricity output Hydropower output Other output sources SOURCE: COMMODORE RESEARCH / NARIONAL BUREAU OF STATISTICS OF CHINA 18

19 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 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 U.S. GRAIN EXPORTS SURGED AHEAD OF THREATENED TARIFFS GRAIN EXPORTS BY SOURCE SOYBEAN AND SOYBEAN MEAL EXPORTS BY SOURCE USA Aust. Wheat Only Argentina EU to 3rd c. Canada USA Brazil Argentina SOURCE: FEARNRESEARCH 19

20 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Mill dwt Mill dwt Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Mill dwt Mill dwt DELIVERIES WERE DOWN COMPARED TO THE FIRST QUARTER OF 2017 DESPITE LOW SCRAPPING YTD CAPESIZE 12,0 10,0 8,0 6,0 4,0 2,0 0,0-2,0-4,0 LTM Delivered: 11.5m dwt LTM Scrapped: 4.3m dwt PANAMAX / POST-PANAMAX 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0-1,0-2,0 LTM Delivered: 5.8m dwt LTM Scrapped: 2.5m dwt HANDYMAX / SUPRAMAX HANDYSIZE 6,0 LTM Delivered: 8.1m dwt LTM Scrapped: 2.2m dwt 2,5 LTM Delivered: 2.6m dwt LTM Scrapped: 1.0m dwt 5,0 2,0 4,0 3,0 2,0 1,5 1,0 1,0 0,5 0,0 0,0-0,5 SOURCE: CLARKSONS PLATOU 20

21 % of Orderbook DOWNSIDE CASE FOR SUPPLY GROWTH Continued slippage is expected as ~22% of vessels scheduled for delivery in 2018 have not even commenced construction STATUS OF ORDERBOOK 100% 90% 80% 70% 60% 50% 35% (3.6m dwt) 8% (0.8m dwt) 7% (1.1m dwt) 24% (5.6m dwt) (5.2m dwt) 40% (14.3m dwt) 41% (33.7m dwt) 67% (9.6m dwt) 40% 30% 20% 10% 0% 46% 76% (4.7m dwt) (16.0m dwt) 58% 52% (20.1m dwt) (42.0m dwt) 24% 18% (3.5m dwt) (1.9m dwt) Q H > Total Not commenced (%) Under construction (%) Launched (%) SOURCE: VIAMAR, IHS SEAWEB 21

22 Fleet (MdWT) Annual fleet growth PROJECTED FLEET GROWTH STILL MODERATE Forecasted fleet growth is still moderate, despite new ordering observed; any additional capacity from now expected to be placed in 2020 or later FLEET GROWTH (ASSUMES NO SCRAPPING OR NEW ORDERING) % % % % % % 5% 2% 5% 0 1% 0% Fleet size Deliveries Scheduled deliveries Fleet growth SOURCE: SSY 22

23 1 yr-tc (USD/day) Asset values (mm USD) 1 yr-tc (USD/day) Asset values (mm USD) S&P PRICES STABLE, YET STILL LOW CAPESIZE VALUES AND EARNINGS PANAMAX VALUES AND EARNINGS 1 yr-tc 5 yr SH Capesize 10 yr SH Capesize SOURCE: CLARKSONS PLATOU 1 yr-tc 5 yr SH Panamax 10 yr SH Panamax 23

24 OUTLOOK AND STRATEGY

25 EXPECTATION FOR CONTINUED IMPROVEMENT WITH INHERENT SEASONALITY AND VOLATILITY UPSIDE POTENTIAL DOWNSIDE RISKS Increased tonne-miles if additional iron ore capacity comes from Brazil Coal demand grows due to increased consumption, restocking and arbitrage opportunities More tonne-miles due to longer sailing distances on continued demand increase in Asia replacing European demand Supply constraints, including port congestion and slow steaming on higher bunker prices Lower steel margins impact import / export volumes Draw down of iron ore inventories in China Economic activity decreases in China, leading to lower consumption of steel and energy Trade tensions reduce global trade New ordering increases fleet growth expectations for Removal of older vessels ahead of BWTS and sulphur emissions regulations 25

26 COMPETITIVE CASH COSTS DRIVE EARNINGS Fully-burdened Opex includes dry docking and management fees G&A net of management fees are estimated to be approximately $400 per day in 2018 on a fully delivered fleet Average margin above LIBOR on bank financing is competitive at ~2.3% Majority of bank debt has 20 year profile (adjusted for year of age) CASH BREAKEVEN LEVELS VS. INDEXES (1) $14,200 $9, Capesize Panamax Jan OPEX G&A Interest Leases Repayment Weekly Capesize Rates Weekly Panamax Rates (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 26

27 QUESTIONS & ANSWERS

28 THANK YOU FOR YOUR ATTENTION!