Golden Ocean(US:GOGL)2023-08-29 16:11Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2023 was $80.4 million, up from $54.7 million in Q1 2023, with a net profit of $34.9 million compared to a net loss of $8.8 million in Q1 [2][3] - Total fleet-wide TCE increased to $17,700 from $14,900 in Q1, with TCE revenues rising to $153 million from $131.2 million [4][5] - Charter hire expense decreased from $16.8 million in Q1 to $10.2 million in Q2 due to fewer vessel days in the trading portfolio [6] Business Line Data and Key Metrics Changes - TCE rates for Capesize vessels were $19,100 per day and $15,600 for Panamax vessels, leading to a fleet-wide average net TCE of $17,660 per day [26] - Operating expenses increased to $62.4 million from $61.6 million in Q1, primarily due to higher drydocking costs [28] - General and administrative expenses rose to $5.2 million from $4.2 million in Q1, attributed to nonrecurring personnel expenses [29] Market Data and Key Metrics Changes - The Capesize market saw a significant increase in iron ore exports from Brazil, up by approximately 12 million tonnes year-to-date [36] - Chinese iron ore port inventories decreased by 25% since early 2022, indicating strong demand for iron ore [37] - The bauxite trade is expected to grow significantly, with analysts predicting a 30% to 40% increase in 2024 [38] Company Strategy and Development Direction - The company aims to maintain the lowest cash breakeven in the industry, currently around $13,000 per day, while continuing fleet renewal and enhancing energy efficiency [50] - A total of $181 million in TCE revenue has been contracted for the second half of the year, which is expected to support a healthy bottom line [51] - The company is optimistic about the bauxite trade's growth potential, which could drive Capesize rates higher [53] Management's Comments on Operating Environment and Future Outlook - The management noted unusual volatility in freight and trading markets due to macroeconomic factors [12] - The outlook for the second half of the year appears promising, with 79% of Capesize days locked in at $18,300 per day and 97% of Panamax days at $13,500 per day [17] - The company expects to capitalize on the increased iron ore activity and the potential for steady trade flows throughout the year [40] Other Important Information - The company declared a dividend of $0.10 per share for Q2 2023 [3] - Cash flow from operations was positive at $45.5 million, including dividends received from associated companies [31] - The company has $75 million undrawn and available under revolving credit facilities at quarter end [33] Q&A Session Summary Question: Iron ore activity and volumes outside of China - Management noted that iron ore activity has been strong going into China, with significant increases in output from Brazil, and they see potential for growth in other regions as well [21][44] Question: Impact of bauxite trade on traditional drybulk market dynamics - Management expressed optimism about the bauxite trade potentially offsetting the typical seasonal weakness in the drybulk market, indicating a shift in traditional patterns [42][53] Question: Effects of rising LNG prices on coal volumes - The management observed that the coal trade has remained active, particularly from Australia to China, and they expect continued imports from India as stockpiles are low [56]