Golden Ocean Group, the commodity-shipping company led by billionaire John Fredriksen, said analysts believe use of dry-bulk carriers may stay below 90 per cent for 11/2 years as the fleet expands.
Supply of commodity transporters will likely swell 14 per cent this year, counteracting 'healthy' growth in demand for shipments, Hamilton, Bermuda-based Golden Ocean said in a statement yesterday.
'It is difficult for analysts to argue that the utilisation of the dry-bulk fleet could be any higher than 85 to 90 per cent for the next 12 to 18 months, before the next fundamental trend shift is likely to take place,' Golden Ocean said in the statement.
The Norwegian shipper reported a surprise first- quarter loss, hurt by low day rates for vessels and a negative market impact from weather disruptions and the earthquake in Japan.
Golden Ocean swung to an operating loss of US$15.5 million from a US$25.2 million profit in the same period a year ago, while analysts in a Reuters poll had on average expected a US$23 million profit.
Impairments related to five vessels of US$38.7 million was the main reason for the decline in the operating result, it said.
'First quarter of 2011 has been a rough experience for owners of dry bulk vessels,' the firm said in a statement. 'In particular the capesize segment has suffered, with average earnings during the first quarter barely covering operating expenses.'
Golden Ocean is struggling with counterparty risk in the charter market, especially after the January bankruptcy of Korea Line, South Korea's second-biggest dry bulk shipping line, which forced two Golden Ocean ships off charter and into the depressed spot market. The board said it would pay a dividend of US$0.04 per share for the quarter, in line with forecasts.
'The impairment loss was a surprise,' said Nordea analyst Anders Karlsen. 'The dividend was good, but (it reported) somewhat lower figures than we expected.'
The company said demand growth overall, measured in tonne miles, 'has been, and is expected to be, healthy . . . supported by the general temperature of the global economy'.
It also said the difficult market situation 'should lead to interesting investment opportunities'.