Golden Ocean Group Limited (NASDAQ:GOGL) Q3 2022 Earnings Call Transcript

Ulrik Andersen: I mean there will €“ presumably, it’s hard to quantify, but there will presumably be a number of ship owners out there that are doing what we are doing, which is to install energy saving devices. It could be new stock, which is say propeller vortex, it could be low friction paint, it could be other things. And these can you say upgrades can prolong dry dock stays. So that could give some, can you say, inefficiency gain, if you like, or at least, can you say, reduce the efficiency of the fleet. But I think the big, can you say, kicker here is all the vessels that are being slowed down which is up to €“ I mean some say that up to 70% to 75% of the global fleet is non-compliant with IMO 2023. It means a lot of vessels will have to reduce their speed.

The big kicker comes only when the markets are strong, because in a weak market, the vessels are not full speeding anyways. So, you have a situation where at the moment that you reach to certain thresholds on the rates, depending on your ship, then you would want to speed it up and you can’t. So, you remove the flexibility in the fleet, which in my world means that you will have, can you say, higher highs because the normal situation is that there is an inherent flexibility in the fleet. So, when rates increase and demand increases, then the fleet will start speeding up, which will of course, can you say, will of course, soften the market. But that possibility would be gone for a lot of vessels. So, the real effect you will only see when the markets are becoming stronger.

And then I would also like to add that this is being, can you say gradually, IMO 2023 has been gradually implemented over the course of 2023. So, the full effect of this regulation will only really be present in €“ from 2024.

Unidentified Analyst: That’s really helpful color. Thank you.

Ulrik Andersen: Thank you.

Operator: Thank you for your question. There are no further questions at the moment.

Ulrik Andersen: Okay. In that case, we will say thank you very much for tuning into Golden Ocean’s third quarter release. You can always follow us on LinkedIn, if you are in the need of more information. And with that, I will say thank you very much for the attention, and have a good day.

Operator: That concludes the conference for today. Thank you for participating. You may all disconnect.