Monday, January 17

Golden Ocean earned $ 1.7 billion in the third quarter – paying most in dividends

The John Fredriksen shipping company’s earnings for the third quarter were significantly boosted by the strong dry cargo market during the period. Meglerhuset Sparebank 1 Markets sees “a significant dividend potential going forward”.

Billionaire John Fredriksen is heavily involved in shipping. Among other things, he is a dominant shareholder in the shipping companies Golden Ocean and Frontline.


The case is being updated.

On Wednesday morning, Golden Ocean will present the figures for the third quarter of the year, which show that the dry cargo shipping company raised large sums for the transport of goods such as iron ore, coal and grain at sea.

  • Profit after tax landed at $ 195 million, up from $ 39 million in the same period last year. This year’s earnings correspond to NOK 1.7 billion.
  • Operating revenues for this year’s three-month period were $ 388 million, up from $ 186 million last year. This year’s figures correspond to NOK 3.5 billion.

A profit before tax of 164 million dollars was expected in advance, according to estimates Infront has collected for TDN Direkt.

The company pays a dividend of 0.85 dollars per share for the third quarter, it is stated. This corresponds to a dividend of NOK 1.5 billion.

Golden Ocean, which in the first quarter delivered the company’s best start of the year ever, also did strongly in the second quarter, where profit after tax ended at $ 104.5 million.

Course jump this year

The Golden Ocean share has risen over 90 percent at a price of NOK 71.95 this year.

The rise was admittedly much larger in mid-September, with a fall of around 30 percent since then.

In the third quarter and into October, the dry cargo market plunged to the highest level since 2008.

Earlier this autumn, however, the ships’ earnings in the spot market began to fall sharply.

Earnings for capesize vessels in the spot market are now around 32,000 dollars, down from 87,000 dollars at the end of October.

Capesize, which makes up about 65 percent of the Golden Ocean fleet, is the largest type of dry cargo ship. These have a “cash break-even”, the level needed to cover operating costs and debt obligations and go to zero on shipping, at around 14,000 dollars a day.

In the spring of last year, capesize earnings were below $ 2,000 due to the corona outbreak, which meant that the money ran out for the shipping companies.

For the entire fleet, Golden Ocean reports hourly charter earnings (longer contracts) of $ 32,262 per day in the third quarter. For the fourth quarter, 83 percent of the capesize fleet is contracted at around $ 41,900 per day.

Eyes large upside

Meglerhuset Sparebank 1 Markets last week set a price target of NOK 115 on the Golden Ocean share, with a buy recommendation to customers – partly due to expectations of a strong dry cargo market going forward.

A price target is often based on a calculation of what one expects the share price to be in between six to twelve months.

Sparebank 1 Markets also sees “a significant dividend potential going forward” based on its own estimates, and expects that Golden Ocean will pay out 60 per cent of the current share price as dividends to shareholders by the end of 2023.

The brokerage ABG Sundal Collier recently upgraded their recommendation on Golden Ocean to “buy”, from previous “hold”, and raised the price target to NOK 167, from the previous NOK 90 per share, according to Infront TDN Direkt.

ABG writes that their model estimates that the utilization of the dry bulk fleet will increase to 92 per cent in 2022 and further to 93 per cent in 2023, and points out that no such high utilization has been seen since 2008.

ABG expects the average capesize rate to be $ 43,000 per day by 2023, according to Infront TDN Direct.

also read

“The Big Short” investor closed Fredriksen bet

Investor profile closed bets

The American investor, Michael Burry, who became famous through the film adaptation of the book “The Big Short”, is now investing through the hedge fund Scion Asset Management.

This spring, it became known that the fund had taken a position in a number of shipping companies, among these Golden Ocean. However, stock overviews for the third quarter at the US Financial Supervisory Authority, SEC, show that the Fredriksen bet was closed during the period.

The SEC overviews do not show the prices at which the shares were bought and sold. At the end of the second quarter, Burry was listed with 700,000 Golden Ocean shares worth around NOK 60 million.

Golden Ocean is listed on both the Oslo Stock Exchange and Wall Street. The market value of the company is NOK 14.5 billion.

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