Golden Ocean posts losses in 1Q on lower charter rates

: Freight
25/05/21

Norway-based dry bulk shipping company Golden Ocean posted losses in the first quarter, because of a seasonal dip in demand and subdued charter rates during the first quarter.

The Nasdaq-listed dry bulk shipowner made a net loss of $44.1mn in the first quarter, plunging from a net income of $58.4mn in the first quarter of 2024, it said today. The time charter equivalent rate for Golden Ocean's fleet fell to $14,409/d over January-March, down by 36pc from $22,628/d in the first quarter of 2024.

The losses were because of a weaker market environment, which pressured charter rates and curbed trading activity, said the firm's chief executive officer and chief financial officer, Peder Simonsen. An intensive drydocking schedule for the fleet's vessels also caused the company's financials to take a hit. Drydocking is the process of moving a vessel onto a dry shipyard for maintenance, repair or inspections, mandated by safety and operational requirements. The company incurred $38.4mn in drydocking expenses in the first quarter, compared to $34.3mn in the previous quarter.

But he also noted that these headwinds were expected, because of a seasonal slowdown and higher macroeconomic uncertainty, including disruptions caused by recently announced trade tariffs.

Golden Ocean reiterated that the fundamentals underpinning the overall dry bulk shipping market remains intact, especially for the Capesize segment. "Limited fleet growth, shifting trade patterns, and infrastructure-led demand in key regions continue to support a constructive medium-term outlook," Peder added.

Merger with CMB.TECH

Golden Ocean and shipping group CMB.TECH in April signed a term sheet for a stock-for-stock merger. The merger would result in a new shipowning entity with a combined fleet exceeding 250 vessels.

Golden Ocean is the world's largest listed owner of large dry bulk vessels. Its fleet consists of 91 vessels with an aggregate capacity of around 13.7mn deadweight tonnes. Of these, 83 vessels are owned by the company, consisting of 18 Newcastlemaxes, 33 Capesizes, 28 Kamsarmaxes and 4 Panamaxes.

By Sean Lui, Sureka Elangovan and Lisa Cheng

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