Goodbulk Ltd. Announces Higher Second Quarter Profits Despite Dry Bulk Market Decline

GoodBulk Ltd., a leading owner and operator of dry bulk carriers, today announces its financial results for the second quarter of 2022.
GoodBulk is a leading dry bulk carrier owner executing a strategy combining low financial leverage with active portfolio management to maximize operational leverage in the dry bulk cargo market. The company’s strict financial discipline has resulted in industry-leading pure cash general and administrative expenses of $246 per vessel per day.

Market Commentary
For the quarter ending June 30, 2022, BCI averaged $21,599 per day, 30.6% lower than $31,120 per day for the same period of 2021 and 46.5% higher than $14,746 per day for the quarter ending March 31, 2022. The second quarter of the year started off on a strong note that saw earnings more than double between early April and May 23, 2022, with BCI reaching a year-to-date high. year at $38,169 per day. After that, the market was mostly on a downtrend, losing close to $18,000 and ending the quarter at $20,190 per
day, down 38% compared to the end of June 2021.

Since then, the market has remained very flat, averaging $20,173 a day in July and $9,339 a day in August, down 33.6% and 78.0% year-on-year. the other respectively. On August 31, 2022, the BCI fell to $2,505 per day, levels not seen since 2020 at the height of the pandemic shutdowns and during the first two weeks of September, the BCI averaged $6,762 per day.

Sluggish Chinese demand, combined with a large number of ships in ballast to Brazil, and a drop in congestion may partly explain the current weakness. In addition to this, very negative sentiment, fueled by fears of a global recession, high inflation for several decades and the real estate crisis in China, also dragged freight rates down.

From January to August, volumes carried on Capesize vessels were healthy and higher than the same period last year thanks to higher volumes of coal and bauxite. On the contrary, trade in iron ore was weaker than during the same period last year, which is largely attributable to weak demand for steel in China. Ton-miles in the Capesize market were particularly affected by lower iron ore exports from Brazil, which fell by 13 million tonnes in the first eight months of the year.
On the supply side, the Capesize fleet recorded a net addition of 5.7 million deadweight in the first eight months of the year, down 43% from the 10.0 million deadweight in heavy added during the same period last year. The order book for this segment is still hovering around historical lows, representing around 6% of the current fleet at sea, which means that the growth of the Capesize fleet is expected to remain limited in the next two years.

Operating results
Second quarter 2022
For the quarter ended June 30, 2022, the Company reported revenue and other income (expense) of $66.4 million and net income of $25.9 million, resulting in EPS of $0.86 on based on a weighted average number of shares outstanding of 30,029,572. This compares to a profit of $20.6 million for the second quarter of 2021. Vessel ownership days were 1,928 at second quarter of 2022, compared to 2,093 in the second quarter of 2021. Vessel ownership days are expected to be 1,769 for the third quarter. of 2022, and 1,408 for the fourth quarter of 2022, giving an estimate of 7,175 and 5,475 vessel ownership days for the full years ending December 31, 2022 and 2023, respectively, taking into account vessel sales aforementioned.

The Company earned an average gross TCE of $23,304 per day on its Capesize vessels and $20,001 per day on its Panamax vessel for the three months ended June 30, 2022. Compared, for the three months ended June 30, 2021 , the Company earned an average gross TCE of $23,503 per day on its Capesize vessels and $21,521 per day on its Panamax vessel. The remaining three vessels on periodic charter were re-delivered in April and May 2022 and therefore, effective May 20, 2022, all of the Company’s Capesize vessels have
traded on the spot market employed by Capesize Chartering Ltd. (“CCL”) through the CTH Capesize Revenue Sharing Agreement (“Capesize RSA”). Net income for the three months ended June 30, 2022 included a non-cash amortization charge of $9.0 million.
Direct vessel operating expenses for the period totaled $12.6 million or $6,534 per vessel per day.
General and administrative (“G&A”) expenses for the three months ended June 30, 2022 were $0.9 million, or $477 per vessel per day, compared to $421 per vessel per day for the same period in 2021, the increase being mainly due to the decrease in vessel ownership days. Pure cash G&A was $246 per vessel per day, compared to $214 per vessel per day for the same period in 2021.

First semester 2022
For the six months ended June 30, 2022, the Company reported revenue and other income (expense) of $123.4 million and net income of $29.8 million, resulting in EPS of $0.99 on the basis of 30,028,869 weighted average number of shares issued and outstanding. That result compares with a profit of $23.7 million for the first half of 2021. Vessel ownership days decreased to 3,998 for the first half of 2022, from 4,163 for the first half of 2021.

For the six months ended June 30, 2022, the Company earned an average gross TCE of $19,860 per day on its Capesize vessels and $18,891 per day on its Panamax vessel. That compares to $19,072 per day on its Capesize vessels and $17,261 per day on its Panamax vessel, for the six months ended June 30, 2021. At the start of the year, five vessels were still employed on charters of time. The last charter period ended on May 20, 2022 and the Capesize fleet has been trading on the spot market ever since. The Panamax vessel was also trading on the spot market until it was sold and delivered to its new owners. Net income for the six months ended June 30, 2022 included a non-cash amortization charge of $19.0 million. Direct vessel operating expenses for the period totaled $25.8 million or $6,447 per vessel per day. General and administrative (“G&A”) expenses for the six months ended June 30, 2022 were $1.8 million, or $446 per vessel per day, compared to $507 per vessel per day for the same period. period in 2021. Pure cash G&A was $253 per vessel per day compared to $237 per vessel per day for the same period of 2021.

At the start of the second quarter of 2022, three ships were still stopped over the period. The last vessel on charter was returned on May 20, 2022 and since then the entire fleet has been cash traded.

Investments
GoodBulk’s regular dry-docking and maintenance program is an area of ​​ongoing investment. These capital expenditures are necessary to keep our vessels running smoothly, safely and efficiently and to comply with international maritime standards and environmental laws and regulations. On the advice of our Technical Manager, GoodBulk completed the installation of Ballast Water Treatment Systems (“BWTS”) on seven Capesize vessels in 2022 and another is underway. Two other Capesize vessels
expected to be equipped with BWTS for the remainder of 2022; after that, GoodBulk’s fleet will be fully equipped with BWTS.

The following table includes our estimated drydock expenses and non-hire days for 2022 and 2023. These estimates are based on the experience of our Technical Manager and may vary depending on yard schedules, vessel condition time of dry docking, dry dock location, and other factors and include the cost of installing BWTS.
Cash and capital resources
Net cash used during the three months ended June 30, 2022 was $24.1 million, compared to $13.9 million generated during the same period of 2021. operating in the second quarter of 2022 was $16.6 million, compared to $31.3 million generated in 2021. the same period in 2021. Net cash generated by investing activities in the second quarter of 2022 was $56.6 million, compared to $0.5 million used during the same period in 2021. Net cash used in financing activities for the second quarter of 2022 was
$97.3 million, compared to $16.9 million in cash used for the same period of 2021. GoodBulk ended the quarter with cash of $22.2 million. Capital repatriation On September 15, 2022, the Board of Directors declared a return of the shareholder contribution of $1.50
per common share to shareholders of record on September 20, 2022 and payable on September 30, 2022.

Summary Financial Statements
Unaudited Condensed Consolidated Statement of Financial Position As at December 31, 2021 and June 30, 2022 (All amounts are in thousands of US dollars unless otherwise indicated, except per share)

Unaudited condensed consolidated income statement
For the three and six months ended June 30, 2021 and 2022 (All amounts are expressed in thousands of US dollars, unless otherwise indicated, except per share)

Condensed unaudited consolidated statement of changes in equity For the six months ended June 30, 2021 and 2022
(All amounts are expressed in thousands of US dollars, unless otherwise indicated, except per share)

Condensed Consolidated Statement of Unaudited Cash Flows
For the six months ended June 30, 2021 and 2022 (All amounts are expressed in thousands of US dollars unless otherwise indicated, except per share)

Full report

Source: GoodBulk Ltd.


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