Golden Ocean's Strong Q3 Performance: A Bright Spot Amid Industry Challenges
The Golden Ocean Group Limited has reported a solid set of results for the third quarter of 2024, with adjusted EBITDA reaching $124.4 million compared to $120.3 million in the second quarter.
In a conference call on November 27th, Peder Carl Simonsen, Interim CEO and CFO, highlighted the company's achievements during Q3, including a net income of $6.3 million and earnings per share of $0.28. Adjusted net profit was $66.7 million, with adjusted earnings per share coming in at $0.33.
The company's TCE rates were also impressive, with Capesize vessels earning an average of around $28,300 per day, Panamax vessels averaging $16,400 per day, and the fleet-wide net TCE rate standing at approximately $23,700 per day for the quarter.
Golden Ocean has continued to execute its fleet renewal strategy by selling one older Panamax and an older newbuild vessel at attractive prices. The company has also secured favorable financings, supporting industry-low cash breakeven rates.
Looking ahead to Q4 2024, Golden Ocean has locked in a net TCE of around $26,300 per day for 82% of Capesize days and approximately $14,600 per day for 83% of Panamax stays. For Q1 2025, the company has secured a net TCE of about $21,100 per day for 27% of Capesize dates and around $17,500 per day for 15% of Panamax days.
The company's strong performance has enabled it to declare a dividend of $0.30 per share for the third quarter of 2024. On its operating expenses, Golden Ocean recorded net revenues of $206.6 million in Q3, up from $197.4 million in Q2 due mainly to increased vessel days.
The company's operating expenses were largely unchanged quarter-by-quarter, with running expenses remaining steady while the additional dry-docking of one ship in Q3 contributed to higher costs. Golden Ocean invested $2.4 million in decarbonization and digitalization efforts during the quarter.
Charter hire expenses rose to $6.4 million from $4.8 million in Q2, reflecting increased vessel days as well as profit-sharing expenses related to its lease with SFL Corp. Net financial expenses came in at $25.5 million, unchanged from Q2.
The company's cash flow from operations was up at $100.8 million compared to $76.9 million in Q2, while cash flow used in investments stood at $4.4 million, mainly due to the costs of newbuilding Kamsarmax vessels offset by sales proceeds from an older Panamax vessel.
Total net increase in cash was a modest $14.6 million as of quarter-end. The company's balance sheet showed cash and cash equivalents of $117.6 million, including restricted cash worth $1.4 million, along with undrawn credit facilities of $150 million.
