GOGL Q4 2021 results

Golden Ocean (GOGL) was one of the ideas suggested as a Ho Ho Hohum idea for 2022.

The short write-up I did for GOGL–
3. Golden Ocean (GOGL)
When I was considering this pick, shares were trading under $8/sh. Based on what GOGL had booked Q4-to-date, GOGL should provide a decent Q4 2021 payout. After that, one quarter at a time. The dry bulk vessel deliveries are light in 2022, so little pressure on the supply side. GOGL sold two modern (< 15 yo) vessels during Q4 2021, and management suggested that with the right conditions, GOGL could prune its fleet further. Among 81 owned vessels, only 6 vessels were delivered in 2010-or-earlier. Trimming the fleet would thus likely be due to GOGL management being wary of an individual vessel’s future earning potential. In that sense, pruning the fleet is a way to extract value on individual assets.
For 2022, the company has a strategy to deal with Q1 (typically, the weakest quarter of an annual cycle)


Well, Q4 2021 results were announced last week (2/16/22).
Both impressive and scary.

  1. Best quarterly result in the company’s history
  2. Best year in the company’s history
  3. Time charter equivalent (TCE) across the entire fleet $35 256 daily for Q4 2021.
  4. #3 translates to net margins > 53%
    and that leads to the scary part
  5. GOGL mgmt know that (historically) Q1 is typically the weakest Q in a cycle. So, why have they opted to pay most of the Q4 free cash ($181M of $203M) out as a dividend?
    That’s part of what I referred to as “Fredriksen risk” in another thread.

I can understand the enthusiasm. The supply of new dry bulk vessels does not seem out-of-whack with replacement, plus some growth. In addition, there’s an emissions standard taking effect in 2023 that likely bodes well for dry bulk shipping


GOGL shares bounced and briefly touched $13/sh today (2/22/22).
The last 13 months, I have mostly accumulated GOGL shares. My purchases have a range of price points (under $5 to $11.30/sh).
The overall stock market has not been happy YTD.

Decisions, decisions?
Today’s behavior seems to suggest there’s a momentum crowd hopping on. Or, maybe its a yield chasing crowd. So perhaps it might be smart for me to lock in some GOGL gains soon.
FWIW, @ $13/sh, the P/rev ratio is 2.17