Norway-based dry bulk shipping company Golden Ocean Group Limited (GOGL) has narrowed its net loss to USD 26.7 million for the third quarter of 2016, from a net loss of USD 39.2 million seen in the second quarter of the year.
The operating results in the third quarter improved by USD 6.4 million compared with the prior quarter. The company said that the positive development is attributable to the increase in its average daily vessel earnings following slightly improved market conditions in the third quarter.
“Following significant steps the company took to strengthen its balance sheet and delay vessel deliveries earlier this year, we are pleased to see that the dry bulk market has strengthened lately,” Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS, said.
“Revenues in the third quarter improved due to better market conditions and utilization of our ice class vessels in specialized trade during the quarter. We expect increased rates for our Capesize vessels will positively impact our fourth quarter results,” Vartdal added.
While the dry bulk market has not yet stabilized and may experience weakness over the next several quarters, Vartdal said that GOGL believes it is well positioned for an eventual market recovery.
During the third quarter the company took delivery of one Ultramax newbuilding, the Golden Leo, and paid a final installment of USD 15.7 million on delivery.
Additionally, GOGL acquired the Golden Lyderhorn following the vessel owner’s exercise of its option to sell the vessel to the company, and subsequently sold the vessel to an unrelated third party.
Furthermore, the shipping firm took delivery of the Capesize newbuilding Front Mediterranean subsequent to the end of the third quarter and immediately sold and delivered the vessel to its new owner, resulting in net cash flow of USD 12.7 million in the fourth quarter.
As of September 30, 2016 the company had 11 vessels under construction, and outstanding contractual commitments of USD 349.9 million, with payments of USD 150.6 million due in 2016 and USD 199.3 million due in 2017 for delivery of five vessels in 2016 and six vessels in 2017.
Depending on the outcome of the ongoing discussions with the yards, the company said that it expects more payments to be pushed into 2017.