Golden Ocean Group reports dramatic profit drop
Golden Ocean Group reported a second quarter net income of $34.9 million, down from $163.8 million in the same quarter a year earlier.
The Bermudian-registered, Norwegian-based, Nasdaq-listed company, which bills itself as the “world's largest listed owner of large-size dry bulk vessels”, also reported a significant drop in revenue in the same period, to $213.4 million in the three months to June 30, from $316.7 million.
Half-year results were similar. Net income plummeted to $26 million in the first six months of 2023 from $289 million in the year-earlier period.
“Golden Ocean has continued to deliver solid performance against a very volatile macroeconomic backdrop,” the company said.
“Despite headline risks related to inflation and interest rates, dry bulk demand remains fundamentally strong, driven by shifting trade routes, the need to secure the energy supply chain and the increased significance of emerging trades, including the West African Bauxite trade.”
In the first quarter of the year, the company reported a net loss of $8.8 million.
It added: “Golden Ocean has one of the world’s youngest and most fuel-efficient fleets and very low cash break-even levels.
“This allows the company to remain profitable when markets are weaker and produce outsize cash flows when markets are strong.
“It is also a key enabler of our capital allocation policy, which has allowed the company to consistently distribute dividends to its shareholders and also repurchase shares under its repurchase programme.”
Golden Ocean has a 97-vessel fleet, 84 of the ships are company owned. An additional eight are on long-term lease with a profit-sharing agreement.
The Baltic Exchange Dry Index, the benchmark for cargo pricing, is down from a recent high of above 5,500 in September 2021 to around 500 earlier this year.