Golden Ocean Group Limited (NASDAQ:GOGL) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed several negative factors, including a significant decline in adjusted EBITDA, net revenues, and a reported net loss. The Q&A section highlighted management's vague responses regarding the merger and market conditions, raising concerns about transparency and strategic direction. Additionally, the decline in TCE rates and increased operational downtime indicate potential operational challenges. Despite a positive market outlook for the second half of 2025, these short-term issues and uncertainties outweigh the positive aspects, leading to a negative sentiment rating.
Key Financial Performance
Adjusted EBITDA $12.7 million, down from $69.9 million in Q4, due to lower revenues and increased drydocking costs.
Net Loss $44.1 million, compared to a net income of $39 million in Q4, primarily due to decreased revenues and increased operational costs.
Loss per Share $0.22, compared to earnings per share of $0.20 in Q4, reflecting the overall net loss.
Total Fleet TCE $14,400 per day, down from $20,800 in Q4, attributed to reduced shipping rates and increased drydocking.
Net Revenues $114.7 million, down from $174.9 million in Q4, mainly due to lower fleet utilization and increased off-hire days.
Operating Expenses $95.3 million, slightly down from $95.6 million in Q4, with a decrease in running expenses.
Running Expenses $53.8 million, down by $5.9 million from Q4, due to fewer Capesize days and lower ballast water treatment costs.
G&A Expenses $5.4 million, down from $6.5 million in Q4, due to lower legal fees.
Charter Hire Expense $1.5 million, down from $4.2 million in Q4, resulting from lower vessel days.
Depreciation $31.9 million, down by $3.6 million from Q4, due to the extension of useful life for leased vessels.
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Operating Highlights
Share-for-share merger with CMB.TECH: Following the share purchase by CMB.TECH of close to 50% of the shares in Golden Ocean, a contemplated share-for-share merger between Golden Ocean and CMB.TECH was announced after quarter end.
Drydocking program: We continue our intensive drydocking program, recording drydocking costs of $38.3 million for 380 drydocking days in Q1, compared to $34.3 million in Q4 relating to 320 dry docking days.
Fleet TCE rates: For Q2, we have fixed a net TCE of about $19,000 per day for 69% of Capesize days and about $11,100 per day for 81% of our Panamax stays. For Q3, we have fixed a net TCE of about $20,900 per day for 16% of Capesize days and about $12,900 per day for 38% of Panamax days.
Operational expenses: We recorded $95.3 million in operating expenses versus $95.6 million in Q4. Our running expenses ended at $53.8 million, $5.9 million down from Q4.
Fleet renewal strategy: In line with our fleet renewal strategy, we have entered into agreements for the sale of two older Kamsarmax vessels at attractive prices.
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Risk or Challenges
Earnings Miss: Golden Ocean Group reported a net loss of $44.1 million in Q1 2025, missing earnings expectations, which raises concerns about financial stability.
Drydocking Costs: The company incurred significant drydocking costs of $38.3 million for 380 drydocking days, indicating potential operational inefficiencies and financial strain.
Fleet Renewal Strategy: The ongoing fleet renewal strategy involves selling older vessels, which may pose risks if market conditions change or if the sales do not yield expected returns.
TCE Rate Decline: The decline in TCE rates from $20,800 in Q4 to $14,400 in Q1 raises concerns about revenue generation and market competitiveness.
Operational Downtime: The company recorded 445 days of total off-hire in Q1, an increase from 364 days in Q4, indicating potential operational challenges and revenue loss.
Economic Factors: The overall economic environment and market conditions could impact future earnings and operational performance, particularly in the shipping industry.
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Guidance & Outlook
Fleet Renewal Strategy: Entered into agreements for the sale of two older Kamsarmax vessels at attractive prices.
Drydocking Program: Continued intensive drydocking program with costs of $38.3 million for 380 drydocking days in Q1.
Share-for-Share Merger: Announced a contemplated share-for-share merger between Golden Ocean and CMB.TECH after quarter end.
TCE Rates Q2 2025: Fixed a net TCE of about $19,000 per day for 69% of Capesize days and about $11,100 per day for 81% of Panamax days.
TCE Rates Q3 2025: Fixed a net TCE of about $20,900 per day for 16% of Capesize days and about $12,900 per day for 38% of Panamax days.
Dividend Declaration: Declared a dividend of $0.05 per share for Q1 2025.
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Shareholder Return Plan
Dividend per share: $0.05 per share for the first quarter of 2025.
Share Purchase: CMB.TECH purchased close to 50% of the shares in Golden Ocean.
Share-for-Share Merger: A contemplated share-for-share merger between Golden Ocean and CMB.TECH was announced after quarter end.
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Key Q&A
Q:I was wondering if you could shed some light on the timing for the contemplated merger in terms of — well, yes, I suppose, more if you can be specific on bases to look forward to in this context?
A:No. I think as of it, it’s really hard to say. We are working in accordance with the plan that was announced in the press release. And there are, obviously, in such processes, a lot of different work streams. So it’s hard to be more specific than what has been announced.
Q:It seems to be a detachment between market prices and the agreed 0.95 exchange ratio. Should we interpret that as if the market is not expecting the merger to go through with such exchange ratio, or are there any other elements to this that — well, I don’t understand?
A:I have to say, that’s something that you should probably interpret on my behalf, at least. I mean, it’s priced in a way it’s priced and for whatever reason. I guess some of it has to do with liquidity in the stock, but I leave that to you to interpret.
Q:In terms of near-term expectations here, should we think that we need to see Simandou volumes coming and trying to get covered with ships, or are there significant or sort of meaningful catalysts in the marketplace to be expected prior to that?
A:I think what has happened in the recent couple of weeks is that, we’ve seen some disruptions on the Guinea export side. There’s been some turmoil on force mature being embarked on some of the mines and export facilities there. And also, we saw for a breakdown of some technical equipment in Peru, also disrupting some of the market. And these things do not necessarily give a lot of less volumes into the market, but they impact the sentiment.
Q:Is it to be expected that we’ll continue to see, according to Clarkson $79 million to $80 million for resale Newcastlemax if rates continue for the standard Capes and sort of mid-teen level? Doesn’t something have to give here, either rates come up or asset prices would see some pressure?
A:Yes. You’ve asked this question now for quite a long time and there’s been a disconnect between asset prices and sort of the rates. I think that, new building prices are high as a function of both sort of supportive long-term fundamentals for the market, but also lack of the yard capacity.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer regarding the timing of the merger and the detachment between market prices and the agreed exchange ratio, providing vague responses that lacked specific details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
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Group Conference
Limited NASDAQ
Limited miss
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expectation day
miss expectation
speaker today
today CEO
GOGL Transcript
Golden Ocean Group Limited (NASDAQ:GOGL) Q1 2025 Earnings Call Transcript
Unknown5-22
The earnings call revealed several negative factors, including a significant decline in adjusted EBITDA, net revenues, and a reported net loss. The Q&A section highlighted management's vague responses regarding the merger and market conditions, raising concerns about transparency and strategic direction. Additionally, the decline in TCE rates and increased operational downtime indicate potential operational challenges. Despite a positive market outlook for the second half of 2025, these short-term issues and uncertainties outweigh the positive aspects, leading to a negative sentiment rating.
Golden Ocean Group Limited (GOGL) Q1 2025 Earnings Call Transcript
Unknown5-21
The earnings call reveals financial instability with a net loss and decreased revenues, despite optimistic long-term market outlook. The Q&A section highlights management's evasiveness on key issues, adding uncertainty. Despite a stable leverage position and increased bauxite export volumes, the negative financial performance and operational risks, including increased drydocking costs, outweigh potential positives. Given the market cap, these factors suggest a negative stock price movement in the short term.
Golden Ocean Group Limited (GOGL) Q4 2024 Earnings Call Transcript
Neutral2-26
Golden Ocean Group Limited (GOGL) Q3 2024 Earnings Call Transcript
Unknown11-27
The earnings call summary shows mixed signals. Financial performance is stable with slight growth in revenue and EBITDA, but net income and EPS are down. The dividend remains consistent, but management's vague responses in the Q&A raise concerns about future payouts. Geopolitical and supply chain risks, along with regulatory and economic challenges, present uncertainties. The positive outlook for Capesize demand and cash flow improvements are offset by interest rate exposures and market volatility. Given the company's small-cap status, the stock price is likely to remain neutral, fluctuating between -2% and 2%.
GOGL Report
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