Golden Ocean Group has comfortably beaten analysts' estimates for the second quarter of 2021.
The success comes as the world's largest listed bulker owner has refinanced a credit facility with help from its largest shareholder, John Fredriksen, and has appointed a new director to its board.
The Oslo and Nasdaq-listed firm recorded net profit of $104.5m and earnings per share of $0.52 for the second quarter, up from a loss of $41.3m in the same period last year.
Analysts had expected the shipowner to post net profit of $89m for the period, according to consensus estimates.
Golden Ocean also declared a cash dividend of $0.50 per share for the period, double the analyst consensus estimate of $0.25.
Chief executive Ulrik Andersen said Golden Ocean's result "reflects the dry bulk market's strong underlying fundamentals, but also our strategy of maintaining a significant portion of our fleet exposed to the spot market".
But the firm is "more excited about what lies ahead", Andersen added.
"Our longer-term market outlook is positive based on the pace of the growth in the demand, coupled with slowing fleet growth through at least 2023.
"While in the short term, port and supply chain inefficiencies will continue to result in rate volatility and periods of exceptionally strong rates."
Andersen said the $0.50 dividend demonstrates that Golden Ocean intends to pay out a "significant portion" of its earnings.
"With no material capital expenses, no debt maturities or vessels on order, Golden Ocean, as the largest listed owner in the world, is well-positioned to continue to generate significant cash flows to the benefit of the shareholders," he said.
Refinanced loan
Golden Ocean has agreed to refinance an existing credit facility with Sterna Finance, which is controlled by John Fredriksen and his family via Hemen Holding.
The refinancing will secure up to $435m of new long-term financing, Golden Ocean said.
"The highly attractive terms of the refinancing will lower the average cash break-even rate for the acquired vessels with an estimated $415 per day," the company said in its second-quarter report.
In February, the shipowner acquired 18 modern bulk carriers — including three newbuildings — in a $752m deal with Hemen Holding, which is Golden Ocean's largest shareholder.
At the time, Hemen provided Golden Ocean with a $414m loan to give what the company called "time and flexibility" to arrange long-term financing for the vessels.
All 18 of the vessels have now been delivered.
Meanwhile, Ben Mills was appointed to Golden Ocean's board of directors.
Mills is currently head of dry cargo at Seatankers Management, Fredriksen's private company.
Golden Ocean said Mills has "extensive experience" in the dry bulk market, particularly the capesize segment, through tenures in Trafigura and the Baltic Exchange.
Fleet earnings
Golden Ocean recorded $275.7m in operating revenue during the second quarter, of which $148m was generated from voyage charters and $127.2m came from time-charter employment.
Its capesize fleet earned an average time-charter equivalent (TCE) rate of $29,372 per day during the three months, while its panamax and ultramax vessels earned $18,987 per day.
This gave an average TCE rate of $24,920 per day for Golden Ocean's fleet overall during the quarter.
During the quarter, the shipowner converted time charters from floating rates to average gross fixed rates of $33,250 per day until the second quarter of 2022 for three of its capesize vessels.
Golden Ocean left the Capesize Chartering Ltd pool in August, allowing it to take full control of its capesize fleet's commercial activities.
Third quarter so far
Golden Ocean has covered 71% of available days for its capesize vessels at an average TCE rate of about $33,500 per day during the third quarter.
Its panamax fleet is contracted for 92% of the available days at about $22,900 per day.
"We expect the spot TCEs for the full third quarter of 2021 to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the third quarter of 2021 as well as fluctuations in freight rates," Golden Ocean said in its second-quarter report.
