Fourth Quarter 2022 Results The company details its Q4 2022 performance, fleet development, corporate actions, and market outlook Highlights The company reported Q4 net income of $68.2 million, announced a $0.20 dividend, and acquired six vessels Q4 2022 Financial & Operational Highlights | Metric | Value | Quarter Comparison | | :--- | :--- | :--- | | Net Income | $68.2 million | Down from $104.6 million in Q3 2022 | | Earnings Per Share (EPS) | $0.34 | Down from $0.52 in Q3 2022 | | Adjusted EBITDA | $112.4 million | Down from $118.2 million in Q3 2022 | | Cash Dividend per Share | $0.20 | - | | Fleet TCE Rate | $20,421 per day | - | | Capesize TCE Rate | $21,399 per day | - | | Panamax/Ultramax TCE Rate | $18,992 per day | - | - Acquired six modern Newcastlemax vessels for $291 million, which will be chartered back to the seller for 36 months at a net TCE rate of approximately $21,000 per day5 - Completed the sale of two older Panamax vessels, Golden Ice and Golden Strength, as part of its fleet renewal strategy5 - Announced a cash dividend of $0.20 per share for Q4 20225 Q1 & Q2 2023 TCE Rate Estimates (Load-to-Discharge Basis) | Quarter | Vessel Type | TCE Rate per Day | % of Available Days Covered | | :--- | :--- | :--- | :--- | | Q1 2023 | Capesize | ~$13,150 | 63% | | Q1 2023 | Panamax | ~$14,900 | 73% | | Q2 2023 | Capesize | ~$21,100 | 19% | | Q2 2023 | Panamax | ~$17,900 | 14% | Fleet Development & Performance The company's fleet stands at 93 vessels after acquiring six modern ships and selling two older ones - The company's fleet consists of 93 vessels with an aggregate capacity of ~13.4 million dwt, including 74 owned vessels, 8 chartered-in Capesize vessels, 1 chartered-in Ultramax, and 10 Kamsarmax vessels on order915 - Sold two Panamax vessels (built 2008 and 2009) for an aggregate price of $30.3 million, recording a gain of ~$2.8 million for Golden Ice in Q4 2022 and expecting a ~$2.7 million gain for Golden Strength in Q1 20239 - Acquired six modern Newcastlemax vessels (average age ~2.5 years) for $291 million, which are chartered back to the seller for 36 months at a net TCE of just above $21,000 per day10 - Outstanding contractual commitments for ten newbuildings amount to $241.7 million, due by Q1 202511 Corporate Development The company executed share buy-backs, purchased scrubbers, and secured new credit facilities for refinancing - Repurchased 400,000 shares for $3.3 million in Q4 2022 under its share buy-back program16 - Entered into agreements to purchase three scrubbers for installation on Capesize vessels during their 2023 drydocks17 - Signed a $250.0 million credit facility in January 2023 to refinance debt on 20 vessels with an attractive interest rate of SOFR plus 185 basis points18 - Received credit approvals for a new two-year $233 million credit facility to be secured by the six newly-acquired vessels and two unencumbered vessels19 Financial Performance The company's Q4 net income was $68.2 million, with full-year 2022 net income reaching $461.8 million Fourth Quarter 2022 Results Q4 net income fell to $68.2 million from $104.6 million in Q3 due to lower TCE rates and revenues Q4 2022 vs Q3 2022 Performance | Metric | Q4 2022 | Q3 2022 | | :--- | :--- | :--- | | Net Income | $68.2M | $104.6M | | Basic EPS | $0.34 | $0.52 | | Adjusted EBITDA | $112.4M | $118.2M | | Operating Revenues | $249.6M | $282.0M | | Average Fleet TCE Rate | $20,421/day | $23,017/day | | Net Interest Expense | $17.6M | $14.4M | - Voyage expenses decreased by $17.3 million to $69.2 million, primarily due to lower bunker prices and commissions24 - Recorded a $2.8 million gain from the sale of the vessel Golden Ice25 Full Year 2022 Results Full-year 2022 net income was $461.8 million, down from 2021 due to lower average TCE rates Full Year 2022 vs 2021 Performance | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Net Income | $461.8M | $527.2M | | Net Operating Income | $435.1M | $513.6M | | Average Fleet TCE Rate | $24,262/day | $27,582/day | Cash Flow and Balance Sheet The company ended Q4 with $138.1 million in cash, supported by strong operating cash flow of $125.6 million - Cash and cash equivalents increased by $5.8 million during Q4 to $138.1 million as of December 31, 202231 - Cash provided by operating activities was $125.6 million in Q4 202232 - Net cash used in financing activities was $114.3 million, including $70.3 million in dividend payments and $23.2 million in scheduled debt repayments34 - As of December 31, 2022, the book value of long-term debt was $1,120.9 million and finance lease obligations were $106.0 million35 Market and Strategy The company maintains a positive outlook on the dry bulk market, citing China's reopening and low fleet growth The Dry Bulk Market The Q4 dry bulk market was supported by coal volumes, with a positive outlook from low fleet orderbooks - Dry bulk rates rebounded slightly in Q4 2022, supported by increased coal volumes and longer sailing distances due to the EU ban on Russian imports36 - Chinese steel production decreased by 8.0% in Q4 2022 vs Q3, but the government eased its 'Zero-COVID' policy and released plans to support the real estate market39 - The orderbook as a percentage of the global fleet stood at a 30-year low of 7.5% at the end of Q4 2022, a decrease from 8.4% at the start of the year42 Strategy and Outlook The company anticipates a market recovery in H2 2023, leveraging its modern fleet and favorable supply dynamics - The IMF forecasts global GDP growth of 2.9% in 2023 and 3.1% in 2024, with China and India expected to account for half of global growth in 202345 - Global dry bulk fleet growth is forecasted to be 3.0% in 2023 and just 1.9% in 2024, well below historical averages and organic replacement levels47 - New environmental regulations (EEXI and CII) are expected to reduce effective fleet supply by up to 2.5% in both 2023 and 2024 by forcing older vessels to reduce speed49 - The company's strategy focuses on divesting older tonnage and leveraging its modern fleet, of which 48% (by dwt) will be scrubber-equipped, to capitalize on elevated fuel spreads and maintain its market-leading position50 Interim Financial Information This section presents the unaudited consolidated financial statements and reconciliations of non-GAAP measures Unaudited Interim Condensed Consolidated Financial Statements The statements show full-year 2022 net income of $461.8 million and total assets of $3.26 billion Consolidated Statement of Operations (Full Year) | Metric (in thousands of $) | 2022 | 2021 | | :--- | :--- | :--- | | Total operating revenues | 1,113,456 | 1,203,181 | | Net operating income | 435,087 | 513,608 | | Net income | 461,847 | 527,218 | Consolidated Balance Sheet (As of Dec 31, 2022) | Metric (in thousands of $) | Value | | :--- | :--- | | Total current assets | 299,147 | | Vessels and equipment, net | 2,665,785 | | Total assets | 3,257,291 | | Total current liabilities | 211,628 | | Long-term debt | 1,027,991 | | Total liabilities | 1,340,258 | | Total equity | 1,917,033 | Consolidated Cash Flow Statement (Full Year 2022) | Metric (in thousands of $) | Value | | :--- | :--- | | Net cash provided by operating activities | 503,387 | | Net cash provided by investing activities | 72,816 | | Net cash used in financing activities | (648,147) | | Net change in cash | (71,944) | Selected Notes to the Financial Statements Notes detail vessel sales, newbuilding commitments, debt levels, and significant subsequent events - In 2022, the company sold five vessels (Golden Empress, Enterprise, Endeavour, Cecilie, Cathrine) for total proceeds of $115.0 million, recording gains of $31.4 million7779 - As of Dec 31, 2022, capitalized costs for ten Kamsarmax newbuildings were $91.9 million, with total outstanding contractual commitments of $255.6 million due by Q1 202582100 - Book value of long-term debt was $1,120.9 million as of Dec 31, 202292 - Subsequent Event (Feb 2023): Acquired six scrubber-fitted Newcastlemax vessels for $291 million, to be financed by a new $233 million two-year credit facility and cash on hand106 - Subsequent Event (Jan 2023): Signed a $250.0 million credit facility to refinance debt on 20 vessels at a rate of SOFR + 185 bps104 Reconciliation of Non-GAAP Measures This section reconciles net income to Adjusted EBITDA and operating revenues to TCE income for Q4 2022 Reconciliation to Adjusted EBITDA (Q4 2022) | Metric (in thousands of $) | Value | | :--- | :--- | | Net income | 68,208 | | Adjustments (Interest, Tax, D&A) | +50,310 | | EBITDA | 118,518 | | Further Adjustments (Gains on disposals, derivatives, etc.) | (6,071) | | Adjusted EBITDA | 112,447 | Reconciliation to TCE Rate (Q4 2022) | Metric | Value | | :--- | :--- | | Total operating revenues (in thousands of $) | 249,558 | | Less: Voyage expenses & commission | (69,189) | | TCE Income (in thousands of $) | 180,216 | | Total Fleet onhire days | 8,825 | | TCE Rate ($ per day) | 20,421 |
Golden Ocean(GOGL) - 2022 Q4 - Annual Report