Dry bulk shipper Golden Ocean, controlled by billionaire tycoon John Fredriksen, plans further acquisitions as it banks on a rebound of the depressed market and takes advantage of stress among its peers.
Golden Ocean said it may buy new or second-hand vessels and will also look at “distressed corporate deals”, as its healthy balance sheet and backing by a wealthy shareholder puts it in a unique position among shipping firms.
The company also said it expects its first quarter 2013 operating profit to fall slightly from the previous three months, noting that spot freight rates so far this year have been below levels recorded in the fourth quarter of 2012.
The global shipping industry, particularly the dry bulk and tanker segments, have been in distress for the past several years as new vessels ordered before the global financial crisis are hitting the waters while global demand remains weak.
The oversupply of vessels sent freight rates to extreme lows in 2012, below breakeven levels during some periods, forcing some firms out of business and others to scrap older, less efficient vessels.
“Utilization of the dry bulk fleet will remain low for most of 2013 due to overhang of newbuildings delivered over the last two years,” Golden Ocean said.
“But the order book is shrinking rapidly over the coming months and with low utilization and corresponding freight rates it is expected that scrapping will remain high.”
Golden Ocean’s net profit rose to $9.3 million in the fourth quarter from $6.2 million a year ago, in line with analysts’ expectations for $10 million. (Reuters)