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Results Q4 - 201219 Februar 2013
Agenda
HighlightsFinancialsOperationsMacro UpdateQ&A
Highlights
GOGL results Q4 2012
EBITDA: $23.3 million
Profit: $9.3 million
Earnings per share: $0.02
GOGL results 2012:
Profit: $11.6 million
Cancelled four newbuildingcontracts in Q4 2012 and one inQ1 2013
Golden Brilliant delivered inJanuary 2013
Received $25 million up-frontpayment from one charterer
FinancialsBirgitte Vartdal, CFO Golden Ocean Management AS
Profit & Loss
Revenues stable: Higher spotearnings, Bull and Feng higherearnings, lower earnings onDreyfus vessels (TC expiry)
No impairment in Q4
(in thousands of $) 2012 2012Oct-Dec Jul-Sep
Operating revenue 55 891 56 473Vessel voyage expenses -10 017 -9 516Impairment of trade receivables 0 -2 575Vessel operating expenses -10 496 -10 591Charter hire expenses -8 170 -6 658Administrative expenses -3 446 -3 580Depreciation and amortisation -9 149 -8 622Impairment 0 -25 200Other gain/ (losses net) -448 583Operating profit 14 165 -9 685Interest income 340 437Interest expense -4 940 -5 239Interest swap -281 -1 713Other financial items 115 -916Taxation -67 0Profit for the period 9 332 -17 116
Profit attributable to:Owners of the parent 9 381 -17 145Non-controll ing interest -49 29Profit for the period 9 332 -17 116
(in thousands of $) 2012 2011Dec 31 Dec 31
ASSETSVessels and equipment, net 611 517 637 441Vessels held under finance leases, net 140 217 147 991Vessels under construction 116 082 216 965Other assets 9 274 10 681Total non-current assets 877 090 1 013 079Cash and cash equivalents 112 537 138 284Trade and other receivables 14 677 22 789Refundable instal lements for cancelled newbuildings 100 325 -Other current assets 5 750 37 920Total current assets 233 289 198 993
Total assets 1 110 379 1 212 071
EQUITY AND LIABILITIESEquity attributable to equity holders of the parent
Share capital 44 726 45 699Additional paid in capital 99 156 104 801Other reserves 16 635 14 110Retained earnings 377 288 364 779Non-controll ing interest 491 496
Total Equity 538 296 529 885Long term debt 324 432 455 385Obligations under finance leases 118 055 124 859Other long term l iabil ities 2 205 2 508Deferred income
- -Total non-current liabilities 444 693 582 752Current Liabilities
Long-term debt - current portion 68 733 62 962Obligations under finance leases – current portion 6 837 6 426Other current l iabilities 51 820 30 046
Total current liabilities 127 390 99 434Total liabilities and shareholders’ equity 1 110 379 1 212 071
Balance Sheet
Equity ratio ~ 48,5 %
•Ordinary downpayments•MVC payments in January•Debt related to refundsreclassified as short term
•Long term debt down fromextraordinary downpayments andreclassification
•Two installments paid,reclassified demand asreceivable
•Cash up on cash fromoperations and prepayment, lessMVC and installments to yard
•Prepaid hire
•Cancellation of treasury shares
OperationsBirgitte Vartdal, CFO Golden Ocean Management AS
Vessels: Deliveries, charters and newbuildings I
November 2012: Golden Bullstarted on the five year charter at$16,788 /day
December 2012: The Companyreceived $25 million inprepayment of hire from onecharterer relating to five vessels
January 2013:The Company accepteddelivery of Golden Brilliantfrom PipavavThe two options have beenassigned to third parties andthe Company has concludedits construction program atPipavav
Vessels: Deliveries, charters and newbuildings II
Cancellation of newbuilding contracts at Jinhaiwan
Golden Excellence and Golden Explorer cancelled in NovemberGolden Excalibur and Golden Express cancelled in DecemberGolden Nantong cancelled in January
The yard has referred the first four cancellations to arbitrationThe claim is securred by refund guarantees
Overview of newbuilding program Jinhaiwan
Cancelled Remaining
Capesize 1 0
Kamsarmax 4 0
Iceclass panamax 0 4
MUSDInstallments paid 130.3 44.9
Remaining Capex 0 89.1
Loan drawn 41.5 1.6
As per 19 February 2013
Vessel under construction at Pipavav
Corporate transactions and covenants
Asset values continued to drop during the quarter$14.3 million in extraordinary downpayments in October 2012$7.5 million in extraordinary downpayments in January 2013Prepaid installments for one facility for 2013
Share repurchaseCancelled the 6 238 204 shares in December 2012
Convertible bond expiredRepaid remaining $1.8 million of CB back in December
The Company granted new stock options to its employees and Directors inOctober 2012
The Company has in Q1 2013 bought 1 Cal-14 and 1 Cal-15 Cape FFA
Open positions on sailing vessels
Capesize exposure - Sailing vessels Core Fleet
2013 2014 2015
Total vessel days 1 865 2 108 2 108
Open vessel days 609 1 641 2 065
Open position (%) 33 % 78 % 98 %
Average net rate on fixed days 29 954 23 510 na
No of vessels 6 6 6
Panamax exposure - Sailing vessels Core Fleet
2013 2014 2015Total vessel days 5 653 6 265 5 521
Open vessel days 1 801 3 665 3 164
Open position (%) 32 % 59 % 57 %
Average net rate on fixed days 16 078 19 413 20 819
No of vessels 18 18 18
Based on 13 Panamax/Kamsarmax and 6 Capesize vessels
Vessel operating expenses
5 3005 400
5 050
5 550
5 3005 200
5 4005 350 5 3505 550
5 2505 375
5 650
6 000
3 000
3 500
4 000
4 500
5 000
5 500
6 000
6 500
Q4-12 Q3-12 Q2-12 Q1-12 2012 2011 2010
Panamax Cape
Macro UpdateHerman Billung, CEO Golden Ocean Management AS
Overcapacity not structural
Source: Platou Economic Research
-10
-5
0
5
10
15
20
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 9920
0020
0120
0220
0320
0420
0520
0620
0720
0820
0920
1020
1120
12
Percent
Order book vs actual deliveries - bulk carriers
Source: Platou Economic Research
0
20
40
60
80
100
120
140
2011 Mar Jun Sept
Mill dwt
Order book per RSP 4Q2010 Actual delivered 11
Order book del 2011 142.2 mill dwtActual deliveries 2011 95.3 mill dwtIn 2011 67 % oforder book trend delivered
0
20
40
60
80
100
120
140
2012 Mar Jun Sept
Mill dwt
Order book per RSP 4Q2011 Actual delivered 12
Order book del 2012 138.8 mill dwtActual deliveries 2012 98.2 mill dwtPer end December 71 % oforder book trend delivered
Bulk carriers: existing fleet and order book by year of delivery
Source: Platou Economic Research
Existing fleet and order book, per 1 January 2013 (mill dwt)
Existing On Del. On order in %Bulk carriers fleet * order 2012 2013 2014 2015 2016+ of exist. fleetHandysize
10-14,999 dwt 2.9 0.1 0.0 0.1 0.0 0.0 0.0 2.815-19,999 dwt 5.1 0.0 0.3 0.0 0.0 0.0 0.0 -0.320-29,999 dwt 31.6 1.2 1.2 0.9 0.3 0.0 0.0 3.830-39,999 dwt 45.9 9.7 7.7 6.2 2.2 1.3 0.0 21.1Total 85.6 10.9 9.2 7.1 2.5 1.3 0.0 12.8
Handymax / Supramax40-52,999 dwt 53.9 4.1 2.0 3.4 0.6 0.1 0.0 7.653-64,999 dwt (blt > 1999) 82.7 14.8 17.0 11.7 2.8 0.3 0.0 17.9Total 136.7 19.0 19.0 15.1 3.4 0.5 0.0 13.9
Total 222.3 29.9 28.2 22.2 5.9 1.8 0.0 13.4
Panamax / Kamsarmax65-84,999 dwt** 140.0 30.7 20.1 23.7 6.1 0.9 0.0 21.9
Post Panamax85-119,999 dwt 44.1 6.4 10.4 4.9 1.0 0.5 0.0 14.5
Capesize120,000 dwt + 267.1 38.4 38.0 31.1 7.1 0.2 0.0 14.4
Grand total 673.5 105.5 96.7 82.0 20.1 3.4 0.0 15.7
* Scrapped vessels removed from the fleet when sold for scrap. ** Incl 60,000 - 64,999 built year 2000 and before
Source: ViaMar
Source: Swedbank First Securities
We expect dry bulk volumes to expand 4.5% in 2013
Higher growth (6.7%) expected for 2014 global economic growth picks up speed
1.5 %
-2.5 %
-0.3 %
2.5 %
8.0 %
0.1 %
5.5 %
-3.2 %
0.9 %
3.8 %3.1 %
2.7 %
5.5 %
8.3 %
5.8 %6.3 %
7.2 %
2.9 %
-1.7 %
12.1 %
6.7 %
4.7 %4.5 %
6.7 %5.7 %
5.3 %
-6 %
-4 %
-2 %
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Bnto
n
Minor bulks Grains
Coaking Coal Steam Coal
Iron Ore y/y change (r.a)
• Key dry bulk commodities and2012 volumes:
• Iron ore (1,114 mt)• Steam coal (783 mt)•Coking coal (229 mt)•Grains (254 mt)•Minor bulks (1,371 mt)
• Minor bulks include:•Steel products•Forest products• Scrap• Cement• Fertilizer•Sugar• Petcoke• Nickel ore• ++
China the driving force …
Source: Platou Economic Research
0
20
40
60
80
100
120
05.1 06.1 07.1 08.1 09.1 10.1 11.1 12.1
Mill tons / month
Iron ore Coal Soybean Baux/aluminaFertilizers Metals Nickel ore Mang.oreWoodpulp Grains
% change from year before
2006: + 26.4 %2007: + 12.6 %2008: + 9.5 %2009: + 44 .2%2010: + 6.0 %2011: + 12.7 %
2012- 11 months: + 14.1%
Investments in Chinese iron ore mining rose 22% in 2012 to USD 23bn– but China cannot sustain production.
• China has invested roughly USD 85bn in iron ore mining since 2007. In the same period, Investments per effective ton of iron ore producedhas increased from USD 15 in 2007, to USD 60 in 2012; obviously deposits are getting increasingly challenging and expensive to recover;the quality is simultaneously falling.
• It seems much of the same dynamics can be said about the coal mining industry, where the scope for a substantial increase in imports iseven more possible, due to the current low import share in overall coal consumption.
Average FE content on domestically produced iron ore fell to 19% last year
Effective domestic iron ore production has for all practical purposes beenflat since 2007
•Official statistics claimthat China’s iron oreproduction increased1.5% to 1084million tonsduring 11M2012. Itfurther claims thatChina’s domestic ironore production has closeto doubled since 2007(up 91%).
•However, adjusting forfalling FE content,effective iron oreproduction in 2012 isbroadly the same as in2007.
•This explains howChinese iron ore importsand domestic productionhas increased 95% and91% since 2007respectively; with steelproduction increasing“only” 43%.
Virtually flat io. Production since 2007
Energy consumption in China
Source: ViaMar
Coal is and will be the dominating energy source in China throughout our forecasting period.
China’s coal demand – only 6 % covered by imports…
Source: Platou Economic Research
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Mill tons/yr
Production Consumption
0
50
100
150
200
250
300
350
400
05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
Mill tons/yr
Exports Imports
Source: IEA/CNEB
Although parts of the substantial import increase in Q4/12 likely can be attributed to stock-building, governmentefforts to close smaller mines (new policy announced in Nov/12), combined with diminishing production,represent a substantial opportunity for additional import demand (mostly steam coal, sourced from Indonesia)
Optimum speed at $650 for bunker oil 380 cst
Source: Platou Economic Research
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
10,00 kn 11,00 kn 12,00 kn 13,00 kn 14,00 kn 15,00 kn
Net tc-result $/day
19$/ton 22$/ton 35$/ton 45$/ton
Actual rate January 22 = $19/ton
optimum speed
Q & A
Thank you for your attention !
