Golden Ocean Group Limited (NASDAQ:GOGL) Q4 2019 Earnings Conference Call - Final Transcript

Feb 18, 2020 • 09:00 am ET

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Golden Ocean Group Limited (NASDAQ:GOGL) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Per Heiberg

a decrease in LIBOR rates that had a positive impact on our floating rate loan portfolio. Unlike last quarter, we booked a profit on derivatives amounting to $6.4 million in this quarter. Most of it relates to profit on US interest rate hedges with $3.9 million due to the increase in the forward rates as we book the hedges mark to markets. Further, we booked gains on both FFAs and bunker hedges but took some losses on FX hedges. We also booked an unrealized profit of $0.6 million related to our shareholding in Scorpio Bulkers and we sold the shares in Scorpio Tankers received as dividend for the net proceeds of $1.1 million. Adjusted EBITDA was $73.9 million for the quarter and achieved TCE per day was 21,668 compared to 19,727 for the previous quarter.

Moving on to cash flow. The Company entered the quarter with $139.3 million in cash, and generated positive cash flow from operation of $84.1 million. Increased working capital in third quarter was some -- to some extent reversed during this quarter on top of an underlying strong cash generation. As we refinance one of our loan facility and drew down additional debt on one facility related to scrubber investments, net repayment was on the $12.2 million during the fourth quarter compared to ordinary quarterly repayments of approximately $21 million.

The Company paid $21.5 million or $0.15 per share in dividends for the third quarter payable in fourth quarter. And we repurchased 380,000 shares for a total cost of $2.1 million. We also invested $25.4 million during the quarter, mostly this relates to installation of scrubbers and ballast water treatment systems on certain of our vessels. Following other minor cash outflow at the end of the quarter. The cash at the end of the quarter amounted to $163.2 million, an increase of $23.9 million from the start of the quarter.

Looking at the balance sheet. The most notable change this quarter is the reclassification of seven of ours SFL leases from operational leases to finance leases. The reclassification relates to charter amendments made to finance scrubbers for seven vessels, resulting in a fully updated classification test on the leases. We determined that these leases need to be reclassified from operational to financial leases over the remaining life time. At the end of the quarter, the Company's book equity was 51%.

Under our credit facility, we see that in December, we completed the new $155.3 million loan facility with six banks, refinancing 15 vessels that were financed throughout [Phonetic] prior to $84 million facility. The new facility has a five-year tenure bears an interest of LIBOR plus 210 basis points, and has the same 20 years age-adjusted profile as the previous facility. During the year of 2019, we have extended and refinanced five of our loan facilities. We have postponed maturity significantly and repaid our corporate's debt. The result is that now our earliest loan matures in March 31, 2021 and the remaining facilities mature from 2023