GOGL - Preliminary Fourth Quarter 2015 and Full Year Results

HAMILTON, Bermuda, Feb. 18, 2016 --

Highlights

• The Company reports a net loss of $69.3 million and a loss per share of $0.40 for the fourth quarter of 2015.
• The Company reports a net loss of $220.8 million and a loss per share of $1.46 for the year ended December 31, 2015.
• Excluding one-off items, the adjusted losses in the fourth and third quarters are $27.6 million and $25.5, respectively.
• The Company completed the sale of two converted Capesize newbuilding contracts to Frontline Ltd on December 31, 2015.
• In November 2015, the Company took delivery of, and simultaneously sold, the KSL Baltic, and chartered the vessel in for a period of twelve months.
• In December 2015, the lenders of the $425.0 million term loan facility agreed to certain amendments to the loan, as increasing the loan to value test, reducing the profile and adjusting the margin on the loan.
• In January 2016, the Company took delivery of Golden Barnet, Golden Bexley, Golden Scape and Golden Swift, two Capesize and two Newcastlemax dry bulk newbuildings.
• In January 2016, the Company entered into a Capesize revenue sharing agreement with three other owners of Capesize vessels.
• In February 2016, the Company took delivery of, and simultaneously sold, the KSL Caribbean, and chartered the vessel in for a period of twelve months.
• In February 2016, the Company agreed amendments to its bank facilities, whereby there are no repayments for the next two and a half year and various covenants are amended or waived, subject to the Company raising $200 million in equity.

Preliminary Fourth Quarter 2015 and Full Year Results

The Company reports a net loss of $69.3 million and a loss per share of $0.40 for the fourth quarter compared with a loss of $40.7 million and a loss per share of $0.24 for the preceding quarter. The net loss in the fourth quarter includes (i) a loss on sale of newbuildings and amortization of deferred gain of $8.5 million (which includes a loss of $8.9 million on the sale of two converted Capesize newbuilding contracts to Frontline Ltd.), (ii) an impairment loss on securities of $23.3 million, (iii) a loss provision of $4.7 million against uncollectible receivables, (iv) an impairment loss of $4.5 million relating to the Golden Lyderhorn, a vessel held under capital lease, (v) an impairment loss of $4.6 million relating to the Company's investment in Golden Opus Inc., and (vi) a mark-to-market gain on derivatives of $3.9 million. The net loss in the third quarter includes (i) a loss of $2.3 million on the sale of the Capesize newbuilding, KSL Atlantic, (ii) a vessel impairment loss of $7.1 million, and (iii) a mark-to-market loss on derivatives of $5.8 million. If these items are excluded, the adjusted losses in the fourth and third quarters are $27.6 million and $25.5, respectively.

Vessel earnings fell in the fourth quarter compared to the preceding quarter and time charter equivalent (or TCE) revenues decreased by $7.9 million due to a fall in TCE rates partially offset by an increase in trading days. This decrease was offset by a fall in operating costs of $1.1 million, which was primarily attributable to a decrease in dry docking costs - three vessels dry docked in the third quarter compared with one vessel in the fourth quarter.

Cash and cash equivalents decreased by $36.6 million in the fourth quarter. The main cash movements were the payment of $65.3 million in respect of the Company's newbuilding program, $46.2 million received from the sale the KSL Baltic and the repayment of debt of $11.4 million. In addition, $6.2 million was used in operations.

Agreement on amended financing terms

Over the last 12 months, Golden Ocean has taken several measures to preserve its liquidity position, including postponement of newbuilding deliveries, sale of vessels, sale of newbuildings and sale and leaseback agreements. In light of the continued weak freight markets, the Company has been exploring additional measures to further preserve and improve its liquidity position to better position the Company through the current market cycle.

The Company is, therefore announcing further proactive measures to strengthen its balance sheet, including amendment of all debt facilities, positive discussions with yards about further postponements of newbuilding deliveries, and a new equity issue. The refinancing would create a comfortable liquidity position while preserving an attractive and leveraged exposure to the dry bulk market. The agreement with the banks is conditional upon the company raising USD 200 million in new equity.

The agreement with the Company's lenders clearly demonstrates the strong support the Company has from its bank relationships. This, together with the support from the main shareholder, who have indicated support for subscribing at least to its pro rata share in the private placement, puts the Company in a strong position to manage the current down turn in the dry bulk market.

The full report is available in the link below.

February 18, 2016

The Board of Directors Golden Ocean Group Limited
Hamilton, Bermuda

Questions should be directed to: 
Herman Billung: CEO Golden Ocean Management AS
+47 22 01 73 41

Birgitte Ringstad Vartdal: CFO Golden Ocean Management AS
+47 22 01 73 53

Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements.  The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements, which include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. Words such as "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions.  Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the dry bulk market, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our  vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists, and other important factors described from time to time in the reports filed by the Company with the Securities and Exchange Commission.

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

4th Quarter and FY 2015 results http://hugin.info/132879/R/1987158/729282.pdf

HUG#1987158