GoodBulk Ltd., a leading owner and operator of dry bulk vessels, today announces its financial results for the second quarter 2022.
GoodBulk is a leading owner of dry bulk vessels executing a strategy combining low financial leverage with active portfolio management to optimize operational leverage to the dry bulk freight market. The Company’s strict financial discipline resulted in industry-leading pure cash general and administrative expenses of $246 per vessel per day.
Market Commentary
For the quarter ending 30 June 2022, the BCI averaged $21,599 per day, 30.6% lower than $31,120 per day for the same period 2021 and 46.5% higher than $14,746 per day for the quarter ending 31 March 2022. The second quarter of the year started on a firm tone that saw earnings more than double between the beginning of April and 23 May 2022 with the BCI hitting a year-to-date high 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, 38% lower compared to end-June 2021.
Since then, the market has remained very sluggish, averaging $20,173 per day in July and $9,339 per day in August, down 33.6% and 78.0% year-on-year respectively. On 31 August 2022, the BCI fell to $2,505 per day, levels unseen since 2020 during the height of pandemic lockdowns and in the first two weeks of September the BCI has averaged $6,762 per day.
Sluggish demand from China, combined with a large number of vessels in ballast to Brazil, and a drop in congestion can partly explain the current weakness. In addition to this, very negative sentiment, driven by fears of a global recession, multi-decade high inflation and the real estate crisis in China, has also been dragging freight rates down.
In the January to August period, volumes transported on Capesize vessels have been healthy, and higher than during the same period last year on the back of stronger coal and bauxite volumes. On the contrary, the iron ore trade has been weaker than during the same period last year, which is largely attributable to tepid steel demand in China. Tonne miles in the Capesize market have been particularly dented by lower iron ore exports from Brazil which are down by 13 million tonnes in the first eight months of the year.
On the supply side, the Capesize fleet saw a net addition of 5.7 million deadweight in the first eight months of the year, down 43% compared to the 10.0 million deadweight added during the same period last year. The orderbook for this segment is still around historical lows, representing about 6% of the current fleet at sea, which means that Capesize fleet growth should remain limited in the next couple of years.
Results of Operations
Second Quarter 2022
For the three months ended 30 June 2022, the Company reported revenues and other income (expenses) of $66.4 million and net profit of $25.9 million, resulting in EPS of $0.86 based on 30,029,572 weighted average number of shares outstanding. This result compares with a profit of $20.6 million for the second quarter of 2021. Ship ownership days were 1,928 in the second quarter of 2022, compared to 2,093 in the second quarter of 2021. Ship ownership days are expected to be 1,769 for the third quarter of 2022, and 1,408 for the fourth quarter of 2022 resulting in an estimated 7,175 and 5,475 ship ownership days for the full years ending 31 December 2022 and 2023, respectively, taking into account the aforementioned vessel sales.
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 30 June 2022. Comparatively, for the three months ended 30 June 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 three remaining vessels on period charters were redelivered in April and May 2022 and therefore, as from 20 May 2022, all of the Company’s Capesize vessels have
been trading on the spot market employed in Capesize Chartering Ltd. (“CCL”) via the CTH Capesize Revenue Sharing Agreement (“Capesize RSA”). Net profit for the three months ended 30 June 2022 included non-cash depreciation expense 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 expenses (“G&A”) for the three months ended 30 June 2022 were $0.9 million, or $477 per vessel per day compared to $421 per vessel per day for the same period in 2021, with the increase mainly due to the decline in ship ownership days. Pure cash G&A were $246 per vessel per day compared to $214 per vessel per day for the same period in 2021.
First Half 2022
For the six months ended 30 June 2022, the Company reported revenues and other income (expenses) of $123.4 million, and net profit of $29.8 million, resulting in EPS of $0.99 based on 30,028,869 weighted average number of issued and outstanding shares. This result compares with a profit of $23.7 million for the first half of 2021. Ship ownership days decreased to 3,998 for the first half 2022, from 4,163 for the first half 2021.
For the six months ended 30 June 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. This compares with $19,072 per day on its Capesize vessels and $17,261 per day on its Panamax vessel, for the six months ended 30 June 2021. At the beginning of the year, there were five vessels still employed on period charters. The last period charter ended on 20 May 2022 and the Capesize fleet has been trading on the spot market since then. The Panamax vessel was also trading on the spot market until she was sold and delivered to her new owners. Net profit for the six months ended 30 June 2022 included non-cash depreciation expense 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 expenses (“G&A”) for the six months ended 30 June 2022 were $1.8 million, or $446 per vessel per day compared to $507 per vessel per day for the same period 2021. Pure cash G&A were $253 per vessel per day compared to $237 per vessel per day for the same period 2021.
At the beginning of Q2 2022, three vessels were still fixed out on period. The last vessel on period charter was redelivered on 20 May 2022 and since then all the fleet has been trading spot.
Investments
GoodBulk’s regularly scheduled drydocking and maintenance program is a continuing area of investment. This capital expenditure is necessary to ensure the proper, safe and efficient operation of our vessels and to comply with international shipping standards and environmental laws and regulations. Upon the advice of our technical manager GoodBulk has completed the installation of Ballast Water Treatment Systems (“BWTS”) on seven Capesize vessels in 2022 and another one is in progress. Two more Capesize vessels
are scheduled to be fitted with BWTS during the remainder of 2022; after that, GoodBulk’s fleet will be fully equipped with BWTS.
The following table includes our estimated drydock expense and off-hire days for 2022 and 2023. These estimates are based upon our technical manager’s experience and can vary based upon yard schedules, condition of the vessel at the time of drydocking, location of the drydocking, and other factors and include the cost of installing BWTS.
Liquidity and Capital Resources
Net cash used in the quarter ended 30 June 2022 was $24.1 million, which compares to $13.9 million cash produced in the same period of 2021. Net cash provided by operating activities in the second quarter of 2022 was $16.6 million, compared to $31.3 million produced in the same period in 2021. Net cash produced in investing activities in the second quarter of 2022 was $56.6 million, which compares to $0.5 million used in 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 cash used for the same period of 2021. GoodBulk ended the quarter with cash of $22.2 million. Capital repatriation On 15 September 2022 the Board of Directors declared a shareholders contribution repayment of $1.50
per common share to shareholders of record as of 20 September 2022 and payable on 30 September 2022.
Summary Financial Statements
Unaudited condensed consolidated statement of financial position As of December 31, 2021 and June 30, 2022 (All amounts expressed in thousands of U.S. Dollars unless otherwise stated, except per share)
Unaudited condensed consolidated statement of profit or loss
For the three and six months ended June 30, 2021 and 2022 (All amounts expressed in thousands of U.S. Dollars unless otherwise stated, except per share)
Unaudited condensed consolidated statement of changes in shareholders’ equity For the six months ended June 30, 2021 and 2022
(All amounts expressed in thousands of U.S. Dollars unless otherwise stated, except per share)
Unaudited condensed consolidated statement of cash flows
For the six months ended June 30, 2021 and 2022 (All amounts expressed in thousands of U.S. Dollars unless otherwise stated, except per share)
Source: Hellenic Shipping News
