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UPDATE 1-Golden Ocean Q3 beats forecasts, rates hold up

Published 11/23/2010, 04:04 AM
Updated 11/23/2010, 04:08 AM
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* Q3 operating profit $47 million vs $43 million forecast

* Operating profit down 39 percent on lower demand

* Sees Q4 results in line with Q3

* Says overcapacity worries not hurting rates

* Shares up 0.3 percent vs lower blue-chip index

OSLO, Nov 23 (Reuters) - Dry bulk shipping company Golden Ocean Group Ltd. beat forecasts for third-quarter core profit on Tuesday and said rates had held up surprisingly well despite new ships entering the global market.

Operating profit fell 37 percent to $47 million, reflecting weaker global trade. The fall was smaller than expected, with eleven analysts in a Reuters poll forecasting an average operating profit of $43 million.

Golden Ocean said fourth-quarter results should be broadly the same as the third quarter.

The company said a large influx of new vessels globally was "a major concern" but has not undermined rates. The industry expects the global bulk carrier fleet to grow by some 14 percent in 2010.

It may shift its fleet from long-term contracts to higher-price shorter-profile ones if the market remains good in 2011 and 2012, Golden Ocean said.

"The board has to a certain extent been surprised to see how well the new tonnage has been absorbed by the market without negatively influencing rates," the company said.

"This is a development which has been actively supported by strong demand and increasing transportation distances for dry bulk commodities."

Golden Ocean announced a dividend of $0.05 per share, which was a penny higher than analysts had forecast.

"It is the intention . . . that a major part of the free cash-flow after debt service shall be paid out to shareholders in form of dividend," the company said.

Golden ocean shares were up 0.3 percent at 0852 GMT compared with a 0.7 percent lower Oslo blue-chip index

(Reporting by Oslo newsroom; Editing by Erica Billingham)

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