Golden Ocean said it would hold its own in a potentially "rotten and tough market" this year and sharply raised its dividend after net earnings positively surprised in the fourth quarter.

Net profit came in at $24 million, 17 percent above the mean forecast in a Reuters poll and reversing a $14.3 million net loss in the same period last year.

"It seems like fairly good underlying results," said Pareto Securities analyst Martin Korsvold, adding that the dividend proposal of $0.05 per share exceeded analyst expectations by 20 percent.

With new ships crowding on to global sea lanes to compete for cargo, the company offset below-forecast Q4 revenue and operating profit with a $16.6 million expense cut from the previous quarter.

"You could well get a rotten and tough market the next 12 to 18 months before it swings up again," CEO Herman Billung told Reuters. "There are too many ships coming, but it could happen that fewer are delivered than expected while some (older ships) will be scrapped."

Pareto Securities projected 15 percent growth in Capesize tonnage and 11 percent in Panamax in 2011 -- a global fleet expansion it said would outstrip demand growth tied to China's hunger for bulk freight such as iron ore.

With its strong financial position, Billung said, Golden Ocean could grow market share in a low-rate environment, and the company said it would pursue acquisition opportunities.

Golden Ocean, which runs a core fleet of 14 vessels as well as charters, said it saw "fairly stable" earnings before interest, depreciation and amortisation (EBITDA) in upcoming quarters.

It has partly sheltered itself from weak spot prices by putting a higher percentage of its vessels under long-term contract in 2011 than peers such as Diana Shipping and DryShips , analysts said.

Billung said Ocean was struggling with counterparty risk in the charter market and cited Korea Line . Analysts have said a default by Korea Line could force two Golden Ocean ships off charter into the spot market. (Reuters)