Norwegian dry-bulk shipper Golden Ocean reported a 46 percent fall in third-quarter operating profit and shelved its dividend, citing worries that ship values could drop further, Reuters reports. "The company has decided not to pay a dividend in order to protect the current strong cash position and to be well prepared for a potential further drop in asset values," Golden Ocean said
on Friday, a day after it reported trouble collecting charter payments from a Chinese freight firm.
Analysts polled by Reuters had forecast on average that Golden Ocean would pay a dividend of $0.02 per share.
Golden Ocean shares dropped as much 6.8 percent and at 0843 were trading down 6.4 percent, underperforming a 0.9 percent fall in the broader market.
The drop comes after a 6.4 percent fall on Thursday, after it said freight firm Grand China Logistics was months in arrears on charter payments.
The company posted $24.5 million operating profit for the July-September quarter, ahead of forecasts for $21 million, and expected a broadly similar result for the fourth quarter.
"The result itself was OK, but the cut in dividend was really bad," said Danske Bank analyst Debasish Sahabanik.
He said further declines in vessel sale values could oblige the company to make extraordinary loan repayments.
Chief Executive Herman Billung said the halt in dividend was a temporary measure.
The company added it "has taken great care in paying down on the loan facilities when required in relation to minimum value", a practice that will let it act quickly when purchase opportunities arise.
"We think it's important to keep our powder dry," Billung said. "I think 2012 will be the year when the timing is right to make acquisitions."
Until Friday Golden Ocean had paid a dividend in six consecutive quarters.
The problems collecting bills from Grand China Logistics has reignited industry concerns over the stability of contracts with Chinese shippers after COSCO Holdings earlier this year halted payments to vessel owners to renegotiate better terms.
Shipping companies have been showing the strains of global economic gloom, with oil tanker company General Maritime Corp filing for bankruptcy protection on Thursday and Danish dry shipper and oil tanker company Torm talking to lenders to reschedule its debt.
on Friday, a day after it reported trouble collecting charter payments from a Chinese freight firm.
Analysts polled by Reuters had forecast on average that Golden Ocean would pay a dividend of $0.02 per share.
Golden Ocean shares dropped as much 6.8 percent and at 0843 were trading down 6.4 percent, underperforming a 0.9 percent fall in the broader market.
The drop comes after a 6.4 percent fall on Thursday, after it said freight firm Grand China Logistics was months in arrears on charter payments.
The company posted $24.5 million operating profit for the July-September quarter, ahead of forecasts for $21 million, and expected a broadly similar result for the fourth quarter.
"The result itself was OK, but the cut in dividend was really bad," said Danske Bank analyst Debasish Sahabanik.
He said further declines in vessel sale values could oblige the company to make extraordinary loan repayments.
Chief Executive Herman Billung said the halt in dividend was a temporary measure.
The company added it "has taken great care in paying down on the loan facilities when required in relation to minimum value", a practice that will let it act quickly when purchase opportunities arise.
"We think it's important to keep our powder dry," Billung said. "I think 2012 will be the year when the timing is right to make acquisitions."
Until Friday Golden Ocean had paid a dividend in six consecutive quarters.
The problems collecting bills from Grand China Logistics has reignited industry concerns over the stability of contracts with Chinese shippers after COSCO Holdings earlier this year halted payments to vessel owners to renegotiate better terms.
Shipping companies have been showing the strains of global economic gloom, with oil tanker company General Maritime Corp filing for bankruptcy protection on Thursday and Danish dry shipper and oil tanker company Torm talking to lenders to reschedule its debt.