Golden Ocean Group Limited Q4 2006 results March 1, 2007
PROFIT & LOSS 2005 2006 (in thousands of $) 2006 2005 Oct-Dec Oct-Dec Jan - Dec Jan - Dec Operating Revenues 37 292 91 253 Time charter revenues 267 099 94 971 260 (1 370) Other Income 3 228 840 37 552 89 883 Total operating revenues 270 327 95 811 (9) Gain (loss) from sale of assets 4 108 Operating expenses 339 14 252 Voyage expenses and commission 47 575 762 1 212 6 291 Ship operating expenses 11 374 3 509 21 436 54 107 Charterhire expenses 144 152 50 510 1 646 2 226 Administrative expenses 7 259 3 536 1 546 3 862 Depreciation 10 145 5 021 26 179 80 738 Total operating expenses 220 505 63 338 11 373 9 136 Net operating income 53 930 32 473 Other income (expenses) 165 403 Interest income 1 100 596 (3 926) (4 887) Interest expense (17 098) (9 455) 1 158 Gain on sale of marketable securities 3 261 10 733 (7 030) (121) Gain on freight future contracts 4 369 8 780 (104) (162) Other financial items 419 (380) - Loss on Lease (1 983) (1 802) - Impairment loss (8 000) (1 802) (12 697) (3 609) Net other income (expenses) (17 932) 8 472 (51) Taxation (51) (295) Minority Interests (295) (1 324) 5 181 Net income 35 652 40 945 $(0.01) $0.02 Basic earnings per share $0.14 $0.17
BALANCE SHEET '2006 '2005 (in thousands of $) Dec 31 Dec 31 ASS ETS Current Cash and cash equivalents 40 771 16 484 Other current assets 58 022 11 237 Total current assets 98 793 27 721 Long-term Vessels and equipment, net 155 047 130 082 Vessels under finance lease 223 382 124 022 Vessel purchase options 28 832 28 832 Newbuildings 14 355 35 670 Investment in future net income 30 795 45 011 Deferred charges and other long-term assets 1 011 1 623 Total assets 552 215 392 961 LIABILITIES AND STOCKHOLDERS' EQUITY Short term Short term and current portion of long-term debt 50 473 60 154 Current portion of finance lease obligation 13 976 5 783 Other current liabilities 60 423 10 160 Total current liabilities 124 872 76 097 Long-term Long-term debt 159 462 175 985 Finance lease obligation 130 460 61 145 Minority Interests 295 Stockholders' equity 137 126 79 734 Total liabilities and stockholders' equity 552 215 392 961
Main events Q4 2006 / Q1 2007 In December 2006, the company acquired four Capesize newbuilding contracts at Daehan Shipbuilding Co. Ltd. The vessels will be delivered between May 2008 and January 2009. Two of the vessels have been fixed out for a period of 5 years at a net rate of USD 36,800 per day. The two fixed out vessels have been sold to Ship Finance International with a 15 years bare boat agreement back to Golden Ocean. Golden Ocean has been granted purchase options after 5, 10 and 15 years. In December 2006, the company drydocked the vessels Channel Navigator and Channel Alliance. Total drydocking costs amounted to approximately USD 4 million. Pluss cost of offhire amounting to about 5 millon. In February 2007, Golden Ocean sold the Panamax M/V Golden Gunn for gross sale proceeds of $50.2 million. The vessel will be delivered in March 2007. The sale will give a positive result of approximately $9.6 million and will generate approximately $20.6 million in additional liquidity. Change of dividend policy
Newbuildings Type Hull Yard Delivery Panamax Ice class 1008 Rongsheng Q4 / 2007 Panamax Ice class 1009 Rongsheng Q1 / 2008 Panamax Ice class 1046 Rongsheng Q1 / 2008 Panamax Ice class 1010 Rongsheng Q2 / 2008 Panamax Ice class 1021 Rongsheng Q2 / 2008 Panamax Ice class 1047 Rongsheng Q2 / 2008 Capesize 1001 Daehan Q2 / 2008 Capesize 1002 Daehan Q3 / 2008 Capesize 1003 Daehan Q4 / 2008 Capesize 1004 Daehan Q1 / 2009
Baltic index average timecharter rates 110,000 100,000 90,000 Handymax Panamax 74kdwt Cape 172kdwt 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 $/day
Major dry bulk export cargoes 920 +11.3% 880 840 +5% 800 Mt 760 720 680 640 600 1h03 2h03 1h04 2h04 1h05 2h05 1h06 2h06
SSY Australian coal port congestion index 18 16 Delay: weighted by port output 14 12 10 8 6 4 2 0 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07
Steel production the key driver Iron ore 27% Other 33% Coking coal 7% Steam coal 19% Steel products 8% Pig iron 1% Coke 1% Scrap 4% Source: Clarksons
Annual percentage change in steel production 15.0% 12.5% Total Without China 10.0% 7.5% 5.0% 2.5% 0.0% -2.5% -5.0% Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07
Chinese apparent steel consumption 45.0 40.0 35.0 30.0 % growth 25.0 20.0 15.0 10.0 5.0 0.0 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07
Chinese iron ore imports 36,000 31,000 26,000 000 tonnes 21,000 16,000 11,000 6,000 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07
Chinese iron ore imports 550 500 450 400 +208 Capes +137 Capes 350 300 Mt 250 200 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2010 Base 2010 High
Chinese coal trade balances 30 27 24 25.3 Imports Exports Net Exports Million tonnes 21 18 15 12 9 6 3 0-3 -6 20.3 16.1 19.8 17.5 14.6 14.6 10.0 11.4 9.5 7.8 5.9 8.2 3.1-4.2-9 -12-15 3q03 4q03 1q04 2q04 3q04 4q04 1q05 2q05 3q05 4q05 1q06 2q06 3q06 4q06 1q07est
Indian steam & coking coal imports Million tonnes 60.0 56.0 52.0 48.0 44.0 40.0 36.0 32.0 28.0 24.0 20.0 16.0 12.0 8.0 4.0 0.0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E 2007F
Bulk carriers on order vs 20+ year fleet Million Dwt 48 44 40 36 32 28 24 20 16 12 8 4 0 45.9 Orderbook 20+ years 25+ years 37.9 23.5 19.2 20.7 21.7 20.4 16.3 8.1 7.1 4.1 4.5 Handysize Handymax Panamax Capesize
Capesize net fleet changes Million Dwt 12 10 8 6 4 2 Additions Deletions Net Change 7.3 3.7 4.1 4.5 2.2 2.1 8.5 9.7 8.3 8.6 0-2 -1.2-4 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Panamax net fleet changes 9 7.5 6 Additions Deletions Net Change 6.1 6.1 7.2 8.0 6.4 5.6 Million Dwt 4.5 3 1.5 2.3 2.3 4.0 2.6 1.2 0-1.5-3 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Scrap potential the longer scrappings are postponed the higher the next freight bubble 1200 1000 800 No of ships 600 400 200 0 > 30 years Delivery > 29 years Delivery > 28 years Delivery > 26 years Delivery Handysize Handymax Panamax Capesize 2006 2007 2008 Source: Clarksons
Simplified comparison 80 70 60 50 mt 40 30 20 10 0 2006 2007 2008 2009 2010 2011 Iron ore imports Cape deliveries adjusted Cape order book Source: Clarksons