Golden Ocean CEO: Company is in a "Very Serious Situation"

Golden Ocean has reported a net loss of $69.3 million for 2015's Q4.

Herman Billung, CEO for Golden Ocean Group Ltd. (Golden Ocean) [NASDAQ:GOGL] says the company is in a "very serious situation."

The comments came during a presentation on the company's fourth quarter results, in which it reported a net loss of $69.3 million for 2015's Q4 compared to a profit of $5.2 million for the period in 2014, and a full year loss of $220.8 million for the 12 months to December 31, 2015, compared to profit of $16.2 million in the previous year.

As a result in a fall in time charter equivalent (TCE) rates, Golden Ocean's TCE revenues were said to have decreased by $7.9 million in Q4, although this is noted to have been partially offset by an increase in trading days.

Pointing out that scrapping is at an all time high, charter rates are depressed, and tonnage is in a state of oversupply, Billung said "these market conditions are not sustainable for anybody but we believe the market will repair faster than any analysts expect."

In terms of the outlook for the 2016 year, Billung says that the company expects the "market will remain soft, and with earnings below opex you could see negative fleet growth in 2016."

For its part in fleet reduction, as Ship & Bunker also reported Friday, Golden Ocean is said to have scrapped 25 vessels for the year and is seriously considering idling its 3 to 5 year old vessels.

In terms of financing, the company is looking to raise $200 million in fresh equity, with leading shareholders including John Fredriksen's Hemen Holding set to invest an amount equal to their respective stakes in return for banks deferring loan repayments of $165 million until September 2018.

In November, upon reporting worse than expected third quarter results, Golden Ocean remarked that this year's rate slide has been "dramatic for the owners of dry bulk tonnage."