OSLO, May 28 (Reuters) - Dry bulk shipping firm Golden Ocean reported first-quarter earnings below forecasts on Thursday and said its market had gone from “bad to worse” with market conditions not seen in three decades.
Golden Ocean, controlled by shipping tycoon John Fredriksen, said its made a net loss of $75.3 million in the first quarter, below expectations for a loss of $27 million, the result was weighed down by a $141 million impairment charge on its vessels.
Excluding the impairments, the firm made an EBITDA loss of $3.6 million, not far from forecasts for a $1 million loss.
Its shares were trading 3.13 percent lower at 32.84 Norwegian crowns at 0821 GMT.
The dry bulk shipping market has suffered a deep downturn in recent months as China cut its first-quarter coal imports by 42 percent and markets expect its coal imports to stabilise at the reduced level.
“The dry bulk market has remained weak so far in the second quarter; consequently the revenues of Golden Ocean are expected to remain low in the second quarter,” the company said in a statement.
The majority of Golden Ocean’s fleet is exposed to the spot market or on time charter contracts linked to the spot market which means results will continue to correlate with spot rates.
“The utilisation of the dry bulk fleet was hovering around 80 percent during the quarter and earnings were at levels not experienced since the mid 1980s,” the company said.
It said the sector normally benefits from global GDP growth but its heavy reliance on transporting coal and iron ore to China increases its vulnerability, especially as visibility regarding China “at best must be considered as limited”, Golden Ocean said.
It added that the scrapping of old vessels outpaced new deliveries in the first quarter, beginning what could be much needed structural changes to the market.
$1 = 7.7492 Norwegian crowns Reporting by Balazs Koranyi, editing by Terje Solsvik