Golden Ocean Group Ltd (NASDAQ: GOGL) stock rose over 0.90% on May 30th, 2018 (As of 2:04 PM GMT-4; Source: Google finance).
In the first quarter 2018, the company has completed newbuilding program by taking delivery of five Capesize newbuildings. The company also took delivery of the Golden Monterrey, a Capesize vessel acquired in October 2017. GOGL has agreed to sell the Golden Eminence, a Panamax vessel, for $14.7 million to an unrelated third party
Meanwhile, GOGL has entered into a $120 million loan facility to refinance 10 vessels at favorable terms. Further, this facility will refinance $58.3 million due under two loan facilities maturing in 2018 and seller credit loans of $65.5 million. The company has 20-year amortization profile with seven year tenor and interest of L + 2.25%. The company has announced a cash dividend of $0.10 per share for the first quarter of 2018.
Additionally, GOGL’s one vessel dry docked in the first quarter of 2018, and five more is expected to be docked later this year. The average fleet age of ~5 years and majority of the fleet designed with fuel-efficient engines and ballast water treatment systems. The projected fleet growth is still moderate, despite new ordering observed and any additional capacity from now are expected to be placed in 2020 or later.
The company in the first quarter of FY 18 has reported the 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 and net loss of $17.9 million and loss per share of $0.17 for the first quarter of 2017. The company has posted the adjusted EBITDA of $53.3 million for the first quarter of 2018, compared with $65.3 million for the fourth quarter of 2017 and $17.5 million for the first quarter of 2017
In addition, the first quarter import increased due to discharge after port delayed and overall increases in year-over-year imports. Meanwhile, the continued slippage is expected as ~22% of vessels scheduled for delivery in 2018 have not even commenced construction
On the other hand, there is an upside potential for increased tonne-miles if additional iron ore capacity comes from Brazil. More tonne-miles due to longer sailing distances on continued demand increase in Asia replacing European demand. There is supply constraints, including port congestion and slow steaming on higher bunker prices. The removal of older vessels ahead of BWTS and sulphur emissions regulations