Golden Ocean(GOGL) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Adjusted EBITDA for Q3 2024 was $124.4 million, up from$ 120.3 million in Q2 [4] - Net income for Q3 was $56.3 million, with earnings per share (EPS) of$ 0.28, compared to $62.5 million and EPS of$ 0.31 in Q2 [4] - Adjusted net profit was $66.7 million, with adjusted EPS of$ 0.33, up from $63.4 million and EPS of$ 0.32 in Q2 [4] - TCE rates were $28,300 per day for Capesizes and$ 16,400 per day for Panamax vessels, with a fleet-wide net TCE of $23,700 per day [5] - Net revenues increased to$ 206.6 million, up $9.2 million from Q2, driven by increased vessel days [8] - Cash flow from operations was$ 100.8 million, up from $76.9 million in Q2 [12] Business Line Data and Key Metrics - The company sold one older Panamax and one older Newcastlemax vessel at attractive prices as part of its fleet renewal strategy [5] - For Q4, the company secured a net TCE of$ 26,300 per day for 82% of Capesize days and $14,600 per day for 83% of Panamax days [6] - For Q1 2025, the company locked in a net TCE of$ 21,100 per day for 27% of Capesize days and $17,500 per day for 15% of Panamax days [6] - The company declared a dividend of$ 0.30 per share for Q3 2024 [6] Market Data and Key Metrics - Brazilian iron ore volumes increased by 13% quarter-on-quarter, driven by strong production from Vale [17] - West African bauxite volumes grew to 10-12 million tonnes per month, approaching peak season exports in Q1 [18] - Coal volumes increased by 3% quarter-on-quarter, mainly from Indonesia and Australia to Southeast Asia [18] - Colombian volumes decreased by 11% due to onshore infrastructure issues [18] - China imported 75% of Brazilian iron ore and 83% of Guinea bauxite exports [19] Company Strategy and Industry Competition - The company focuses on its position in the Capesize and Newcastlemax segments, which represent over 80% of its deadweight tonnes and earnings capacity [15] - The company is the largest listed owner in the Capesize segment, benefiting from favorable supply and demand dynamics [16] - The company expects the Simandou iron ore mine in Guinea to significantly boost Capesize demand starting from Q4 2025 [21][22] - The company anticipates that environmental regulations and aging fleets will reduce capacity and increase costs for smaller operators [31] Management Commentary on Operating Environment and Future Outlook - The company remains fundamentally positive on the market outlook despite ongoing geopolitical uncertainty [35] - Iron ore prices remain healthy, supporting continued profitable exports [20] - Chinese government stimulus packages and commitment to growth targets are expected to support long-term demand for commodities [23][24] - The company expects the bauxite trade to grow by 5-10% in 2025, further supporting Capesize demand [29] Other Important Information - The company recorded $2.4 million in decarbonization and digitalization investments [8] - The company has$ 150 million in undrawn available credit facilities at quarter-end [14] - The company's debt and finance lease liabilities totaled $1.4 billion in Q3, down by approximately$ 20 million quarter-on-quarter [14] - The company's accumulated dividends paid have surpassed $1.1 billion, representing over 90% of net profit for the period [35] Q&A Session Summary Question: Capital Deployment Strategy - The company has completed its heavy lifting in fleet growth and does not see value in acquiring modern tonnage at current prices [38] - The company prefers dividends over buybacks and may consider deploying capital into its buyback program if share prices plummet [39] Question: Dividend Policy - The company intends to maintain its dividend policy, balancing peaks and troughs, and remains optimistic about the market fundamentals [41][42] - The company has paid a$ 0.30 dividend per share for the past four quarters and aims to continue this trend, even during weaker periods [40][41]