Golden Ocean Group Limited has reported “encouraging” signs of market recovery with net income of $101 million and earnings per share of $0.22 for the second quarter of 2009, confirming its “robust” financial position after a considerably unstable start to the year.
With total operating revenues for the second quarter amounting to $85.2m, gains from the buy back of the convertible bond of $96.1m as well as a loss from the sale of the Company’s shares in Navios Maritime Holdings of $12.1 million resulted in net other income totalling $73.4m.
Cash and cash equivalents increased by $108m during the quarter, generated from operating activities of $27.6m and used $41.6m in investing activities including part payments on new buildings of $59.8m. The issuance of 180 million new shares in the company also accounted for $108m in new equity.
Asserting that the dry bulk sector “continued its relative strong performance during the second quarter of 2009 with earnings well above most analysts’ expectations,” Golden Ocean underlined the “extreme volatility for dry bulk owners” in terms of wide-ranging charter rates.
However, acknowledging that China was virtually “driving the market on its own with all time high iron ore imports,” and with asset prices having increased by an average of 10% during the second quarter, Golden Ocean remains optimistic about overall future growth as a result of the “positive development experienced in the demand for dry bulk transportation.”
While the official orderbook is still considered to be too high and lower freight rates have been indicative of this, analysts are expecting a wide spread economic recovery within the next 12 months. This, together with a strong balance sheet, “will enable Golden Ocean to have an opportunistic view on market opportunities if these should occur in the coming months,” and despite the deductions for the equity needed to fund its newbuilding program, the company’s cash position “is expected to increase in the coming quarters.”