Dividends and decarbonization — that is what Golden Ocean plans to focus on this year, according to its chief executive. Ulrik Andersen told TradeWinds that the bulker company, which is backed by shipowner John Fredriksen, wants to stick to its strategy of making payouts to shareholders and has put contract cover in place to protect its dividend capacity. The Oslo- and Nasdaq-listed firm paid out half a billion dollars in dividends during 2021.

Golden Ocean naturally wants to expand its investor base, both institutional and retail investors, and the uptick in investor interest has helped with the liquidity of Golden Ocean’s stock, he told TradeWinds. High commodity markets have helped with investor sentiment and already some funds have invested in the space as a proxy for investing in commodities, Andersen said. Unlike its rival Star Bulk, which is aiming for a $3.8bn market cap, Golden Ocean doesn’t have a specific target in mind. “We want to make it as big as possible,” Andersen said. The pandemic has hampered the firm’s ability to travel and market itself to investors, so now is the time to get back out on the road, he added.

Golden Ocean has expanded its fleet by around 33% over the past year through a deal with John Fredriksen’s Hemen Holding. This has raised the firm’s market capitalization to over $1bn — Andersen points out it is currently trading at around $2bn. But part of the reason that bulker demand has held so firm over the past year has been down to coal. China and India imported large volumes to replenish inventories and prevent widespread power shortages during the final six months of 2021. Andersen said coal is “not going away”, with transportation demand for the commodity expected to grow over the next two to three years. On the other hand, there is mounting pressure for industries not just to quit coal as an energy source, but to dissociate themselves from the fuel entirely. Bulker owner Eastern Pacific Shipping has taken matters into its own hands and has officially banned the carriage of coal on its commercially managed bulk carriers. Would Golden Ocean consider following suit? Maybe one day, but not right now, Andersen said.

“Decarbonization is obviously high on Golden Ocean’s agenda,” he told TradeWinds. “But for now, we’re focused on efforts that will have a direct impact on our reducing our emissions.” Golden Ocean is not really coming under any external pressure to quit coal, its CEO said. “There are funds that choose not to invest in shipping but that’s because they see the industry as polluting, it’s nothing to do with coal as such,” Andersen said. For these reasons, he said it is better that Golden Ocean tackles its own greenhouse gas emissions. The best way to do this is by upgrading ships to run more efficiently and use less fuel, which lowers costs and adds value to vessels, Andersen said. Golden Ocean has also sold off four of its highest emitting vessels over the past 12 months. “You can expect to see us doing more of that going forward,” Andersen said. The shipowner has seven kamsarmaxes on order in China that will replace these older units from 2023 onwards.

Following the release of Golden Ocean’s annual results, analysts praised the firm’s commitment to paying dividends. Golden Ocean has no debt maturities due before 2023 and a relatively low level of committed capital expenditure for its newbuilding program. The company has already raised $22m for the newbuildings through the sale of older vessels, with $66m outstanding. It had around $300m in cash and available liquidity at the end of 2021. This, in combination with the company’s access to “attractively priced financing”, will give Golden Ocean the “flexibility to allocate capital freely and to focus on dividends,” CFO Peder Simonsen said during the company’s webcast with investors on Wednesday. Norway’s DNB Bank expects Golden Ocean to finance its upcoming maturities ahead of time, a note from the bank said on Wednesday. DNB estimates that Golden Ocean’s shares at trading at net asset value (NAV). Three months ago, it estimated that the stock was at 0.7 times NAV. Magnus Fyhr, equities analyst at HC Wainwright & Co, calculates that stock is trading at a 31% premium to his firm’s current NAV estimate of $9.10 per share, ahead of other public bulker companies.