Earnings Transcript for GOGL.OL - Q3 Fiscal Year 2024

Operator: Good day, and thank you for standing by. Welcome to the Q3 2024 Golden Ocean Group Limited Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Peder Simonsen, Interim CEO and CFO. Please go ahead.

Peder Simonsen: Good afternoon, and welcome to the Golden Ocean Q3 2024 release. My name is Peder Simonsen, and I am the Interim CEO and CFO of Golden Ocean. Today, I will present our Q3 numbers and forward outlook. In the third quarter of 2024, we have the following main highlights

Operator: Thank you. [Operator Instructions] We will now take the first question from the line of Omar Nokta from Jefferies. Please go ahead.

Omar Nokta: Thank you. Hi, Simon, thanks for the update. It's pretty good detail on the market outlook. And I guess just wanted to get maybe a sense of - in terms of Golden Ocean and where you sit in terms of capital deployment. From here, you sold an older Newcastlemax and a Panamax. Prices look fairly solid and you've got some big gains on those. I guess how would you characterize where you sit today company-wise or do you view Golden Ocean being kind of more of a stellar in this market, take advantage of perhaps lofty pricing, are you a buyer in terms of asset values are coming under pressure, or are you neither? Any kind of color you can give, I guess, in terms of what you're seeing in the S&P market and then what that then means for you.

Peder Simonsen: Yeah, Hi, Omar. Thanks for the question. I think, first of all, we have sort of done our heavy lifting when it comes to fleet growth earlier in the cycle. So we grew by 30% over the last three years. And then in line with the increased asset prices, I think at current point in time, we don't see the real value in acquiring modern tonnage at the current prevailing prices. So I think we are more sort of selling off older tonnage in line with our strategy to replace the sort of -- to sort of balance out the fleet that we have and average out the fleet age. And I think when it comes to capital deployment, I think that we have been pretty clear that we favor dividends at the current point in time. And I think even though look at current share prices plummeting, we might be attempting to deploy some of this into the buyback program we announced the renewal of. But I think as for the rest of the group, with the same main shareholder, we do preference dividends over buybacks in general terms.

Omar Nokta: Okay, thank you. That's clear. And I guess maybe just in terms of the dividend, as you were just highlighting, you paid $0.30, or you declared $0.30, and you paid that, I believe, the past four quarters. Earnings per share has generally been in that range, plus or minus a couple of cents. How would you think about, let's say, next quarter or a following quarter, EPS falls into, say, the $0.20 or $0.25, not saying, don't want to hold you to it, but when you think of that $0.30 dividend threshold, is that something you expect to maintain if earnings don't deviate too far away from what you have achieved, or do you shift back towards that percentage payout of earnings?

Peder Simonsen: I think we've always been the percentage payout of earnings, but we have also tried to balance out the peaks and troughs and obviously we have a cap cost base which enables us to pay out dividends if the market weakens temporarily. And I think we are very much repeating what we've said that we're positive to the market and the fundamentals of the market, which means that we intend to pay dividends throughout any weaker periods. But the nominal amount I think, we'll have to see. And we are also optimistic, as we have shown, but I think in general, sort of the intent to continue where we are -- what we have been doing since 2021.

Omar Nokta: Okay, very good. All right, thank you. I'll turn it over.

Peder Simonsen: Thank you.

Operator: Thank you. [Operator Instructions] There are no more questions at this time.

Peder Simonsen: Okay. Then I will thank you all for listening in and I wish you all a peaceful holiday season when the time comes. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.