GOGL said that it has declared the first four out of nine options to install exhaust gas scrubbers on Capesize vessels in addition to contracts to install scrubbers on 16 Capesize vessels announced in August.
“The company is still evaluating whether and when to declare the last five options. The scrubbers will be installed during routine dry dockings, the majority of which are scheduled for 2019 or early 2020,” GOGL said.
Adopters of scrubbers, especially on large Capesizes, believe they will reap the fruits from higher charter rates and asset values once the 2020 sulphur cap enters into force, as low sulphur fuel prices are expected to rise considerably.
“We have further strengthened our fleet’s competitive advantage by declaring options for additional scrubbers. A large part of our Capesize fleet that have exposure to fuel cost will be retrofitted with scrubbers, and is expected to significantly increase the company’s cash generation from 2020 and onwards,” Birgitte Ringstad Vartdal, Chief Executive Officer of Golden Ocean Management AS, said.
The dry bulk shipping company benefited from stronger rates during summer, enabling it to report bolstered earnings on a like-for-like basis. GOGL’s net income in Q3 came at USD 35.3 million, compared USD 0.4 million for the third quarter of 2017, and USD 9 million in Q2, 2018.
“Our focus on operational efficiency resulted in stable costs and low offhire during the quarter, which also contributed positively to our results. The company’s operating cash flow during the quarter further strengthened our balance sheet, and we took advantage of market volatility to secure incremental time charter coverage prior to the recent drop in rates,” Vartdal added.
According to GOGL, results for the third quarter improved on higher rates across the company’s vessel classes as a result of the earnings sensitivity of Capesize and Panamax vessels to periods of market strength.
“The company has taken advantage of market strength to opportunistically increase time charter coverage for its Panamax fleet at profitable levels. Capesize rates have declined in recent weeks, and we expect this segment of the market to continue to be particularly volatile,” the company said.(marine crane manufacturer;offshore crane manufacturer)
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