Golden Ocean : GOGL – 2nd Quarter 2021 Results

INTERIM FINANCIAL INFORMATION

GOLDEN OCEAN GROUP LIMITED

Second Quarter 2021

August 26, 2021

GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2021

Hamilton, Bermuda, August 26, 2021 - Golden Ocean Group Limited (NASDAQ: GOGL / OSE: GOGL) (the "Company" or "Golden Ocean"), the world's largest listed owner of Capesize vessels, today announced its results for the quarter ended June 30, 2021.

Highlights

• Net income of $104.5 million and earnings per share of $0.52 for the second quarter of 2021 compared with net income of $23.6 million and earnings per share of $0.14 for the first quarter of 2021
• Adjusted EBITDA1 of $130.5 million for the second quarter of 2021, compared with $54.6 million for the first quarter of 2021
• Reported TCE2 rates for Capesize and Panamax/Ultramax vessels of $29,372 per day and $18,987 per day, respectively, in the second quarter of 2021. Reported TCE rate for the whole fleet of $24,920 per day
• Completed the previously announced acquisitions of 15 modern dry bulk vessels and three newbuildings, all of which have been delivered as of the date of this report
• Signed agreements to refinance existing credit facility with Sterna Finance, securing up to $435 million of new long-term financing. The highly attractive terms of the refinancing will lower the average cash break even rate for the acquired vessels with an estimated $415 per day
• Converted time charters from floating rates to average fixed rates of $33,250 gross until the second quarter of 2022 for three Capesize vessels (180k dwt)
• In August 2021 terminated relationship with Capesize Chartering Ltd, taking full control of the Company's commercial activities on the Capesize vessels
• Estimated TCE rates for the third quarter of 2021, based on contracted time charters and current spot fixtures on a load-to-discharge basis, are:
• • approximately $33,500 per day contracted for 71% of the available days for Capesize vessels;
  • approximately $22,900 per day contracted for 92% of the available days for Panamax vessels

We expect the spot TCEs for the full third quarter of 2021 to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the third quarter of 2021 as well as fluctuations in freight rates

• Announces the appointment of Mr Ben Mills as Director of the Company to fill a vacancy. Mr Mills has extensive experience from the dry bulk market through tenures in Trafigura and the Baltic Exchange, particularly focusing on the Capesize segment. Mr Mills is currently Head of Dry Cargo in Seatankers Management Ltd, an affiliate of Hemen Holding Ltd, the Companys largest shareholder.
• Announces a cash dividend of $0.50 per share for the second quarter of 2021

1Adjusted earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure. A reconciliation of adjusted EBITDA to the most directly comparable GAAP measure is included in the back part of this report.

2TCE rate, or time charter equivalent rate, is a non-GAAP measure. A reconciliation of TCE rate to the most directly comparable GAAP measure is included in the back part of this report.

GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2021

Ulrik Andersen, Chief Executive Officer, commented:

"Golden Ocean's result for the second quarter of 2021 reflects the dry bulk market's strong underlying fundamentals, but also our strategy of maintaining a significant portion of our fleet exposed to the spot market. As pleased as we are with the net profit for the second quarter of 2021, we are more excited about what lies ahead. Our longer-term market outlook is positive based on the pace of the growth in the demand, coupled with slowing fleet growth through at least 2023. While in the short term, port and supply chain inefficiencies will continue to result in rate volatility and periods of exceptionally strong rates.

As evidenced this quarter with a $0.50 per share dividend, Golden Ocean intends to pay out a significant portion of the earnings. With no material capital expenses, no debt maturities or vessels on order, Golden Ocean, as the largest listed owner in the world, is well-positioned to continue to generate significant cash flows to the benefit of the shareholders."

GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2021

Fleet Development & Performance

As of the date of this report, the Company's fleet consists of 94 vessels, with an aggregate capacity of approximately 13.4 million dwt. The Company's fleet consists of:

1. 83 vessels owned by the Company (48 Capesize, 33 Panamax and two Ultramax vessels);
2. Eight Capesize vessels chartered in on long-term leases with profit-sharing arrangements;
3. Two ice-class Babycape vessels chartered in; and
4. One Ultramax vessel chartered in.

In February 2021, the Company entered into a agreements to acquire 15 modern dry bulk vessels and three newbuildings for a total consideration of $752 million (the "Vessel Acquisitions") from affiliates of Hemen Holding Ltd., the Company's largest shareholder ("Hemen"). All vessels were delivered during the second quarter of 2021.

The acquired vessels are on average approximately one year old, and all are equipped with exhaust gas cleaning systems. The transaction significantly increases the Company's commercial scale and further improves the Company's average fuel consumption and emission profile.

In January 2021, the Company entered into an agreement to sell the Golden Saguenay, a Panamax vessel, to an unrelated third party for $8.4 million. The Company recorded an impairment loss of $4.2 million related to the sale of the vessel in the first quarter of 2021. Debt relating to the vessel of $5.2 million was repaid in the first quarter of 2021. The vessel was delivered to her new owners and final payment received in April 2021.

The Company's estimated TCE rates for the third quarter of 2021 are $33,500 per day for 71% of available days for Capesize vessels and $22,900 per day for 92% of available days for Panamax vessels. These estimates are forward looking statements and are based on time charter contracts entered by the Company as well as current spot fixtures on the load-to-discharge method, whereby revenue is recognized on a straight-line basis over the voyage from the commencement of loading to the completion of discharge. The actual TCE rates to be earned will depend on the number of contracted days and the number of ballast days at the end of the period when a vessel is sailing without cargo. According to the load-to-discharge accounting method, the Company will not be able to recognize revenue for any ballast days or uncontracted days at the end of the third quarter of 2021. At the same time, expenses for uncontracted days cannot be deferred and will be recognized.

In August 2021, the Company announced that it had terminated its relationship with Capesize Chartering Ltd. ("CCL"), a joint venture to coordinate the Capesize spot chartering services of Golden Ocean, Star Bulk, CTM and Bocimar. Exiting CCL will give the Company full control over its commercial activities and bring the Company closer to its customers in the Capesize segment.

GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2021

Corporate Development

On March 24, 2021, the Company entered into a $413.6 million loan agreement with Sterna Finance, an affiliate of Hemen, to partially finance the Vessel Acquisitions. The loan was fully drawn as of June 30, 2021, whereof $63.0 million was drawn in cash and $350.6 million is non-cash draw down.

In May 2021, the Company completed a subsequent share offering following a private placement in February 2021 to part finance the Vessel Acquisitions. A total of 2,710,377 new shares were issued in the subsequent share offering at NOK 53.00 per share, for gross proceeds of NOK 143.6 million (or approximately $16.9 million).

The Company announces today a cash dividend for the second quarter of 2021 of $0.50 per share. The record date for the dividend will be September 10, 2021. The ex-dividend date is expected to be September 9, 2021 and the dividend is payable on or about September 20, 2021.

Second Quarter 2021 Results

Second quarter 2021 income statements

The Company reported net income of $104.5 million and earnings per share of $0.52 for the second quarter of 2021, compared with net income of $23.6 million and earnings per share of $0.14 for the first quarter of 2021.

Adjusted EBITDA was $130.5 million for the second quarter of 2021, an increase of $75.9 million from $54.6 million for the first quarter of 2021.

Operating revenues were $275.7 million in the second quarter of 2021, an increase of $117.6 million from $158.1 million in the first quarter of 2021. Operating revenues were positively impacted by a decrease in the number of drydockings compared to the first quarter of 2021; three vessels were in drydock during the second quarter of 2021 compared to six vessels in drydock during the first quarter of 2021. In the second quarter of 2021, total off-hire days were 150 compared to 280 total off-hire days in the first quarter of 2021. Voyage expenses increased by $23.8 million to $63.0 million compared with $39.2 million in the first quarter of 2021 as a result of increased voyages, bunker consumption and prices, port expenses and commissions.

Other operating income under the Company's revenue sharing agreements was $2.9 million in the second quarter of 2021, an increase of $2.3 million from $0.6 million in the first quarter of 2021. The increase was due to a net gain under the Company's revenue sharing agreements with Capesize Chartering Ltd, a related party.

The Company achieved an average TCE rate for the fleet of $24,920 per day in the second quarter of 2021 compared with $15,886 per day in the first quarter of 2021.

GOLDEN OCEAN GROUP LIMITED, SECOND QUARTER 2021