Golden Ocean banks on growth

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Oslo-listed dry bulk company Golden Ocean Group has taken steps to secure cash flow as it remains bullish about the future markets, especially in the anticipation of increased growth coming from the Far East.

In order to reduce counterparty risk for its capesize newbuilding programme, Golden Ocean has restructured the long-term charter of one of its capesizes under construction at Jinhaiwan Shipyard, having agreed for its charterer to pay $6 million upfront to secure cash flow and reducing the time charter rate by 25% to $33,050 per day.

The John Fredriksen-owned company reported profits of $24.1m for the fourth quarter of 2009, comparing to profits of $6.7m for the same period in 2008. However, total annual revenue dropped by two-thirds from last year, falling from $947.5m to $349.6m during 2009.

Remaining confident of future growth in the dry bulk markets, Golden Ocean has meanwhile won approval to be listed on the Singapore Stock Exchange as it makes a bid to tap into the growing Asian investor market, banking on China providing a major stimulus to the markets.

Opportunities coming from increased economic development in China are setting a positive trend for the company, as it looks ahead with a conservative but positive stance on tackling the market situation. “Chinese growth, which is of vital importance for the dry bulk sector, came out even higher during the fourth quarter at 10.7 per cent and 8.7 per cent for the full year of 2009,” the company said.

Stating how “China’s relative share of dry bulk imports has grown considerably over the last 10 years,” the company anticipates that a number of the country’s stimulus packages are “expected to have a positive effect on the dry bulk market well into 2011.”

Despite the continued sour market situation for capesize and panamax tonnage, the company upholds the strength of a well positioned fleet and a robust financial balance sheet in the aim to benefit from long term demand growth in dry bulk commodities.

Golden Ocean has underlined how due to its strategies, it remains in a “unique position to act opportunistic if market opportunities should occur in the coming months,” and that given the high contract coverage, the Board anticipates that operating results will be stronger in 2010 compared to 2009.

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