Good day. And welcome to the Q1 2016 Golden Ocean Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Birgitte Vartdal, CEO of Golden Ocean. Please go ahead.

Thank you, and welcome to those listening to our Q1 earnings call. Following the management changes in April, I would also like to welcome Per Heiberg as CFO in the company. We would like to thank Herman Billung for his 11 years with the company, building it from a four vessel venture at the time in 2005, and up to what the company is today. Today's agenda will be as earlier. Per will go through the highlights, financials, state of our fleet and newbuilding. And I will go through a macro update, before we open up for Q&A. Before Per starts, I would like to say that the refinancing the company went through in February has created a long runway for the company. We have supportive banks and shareholders, and we managed to create a solution that took down our cash break even and extended the runway. And at the same time, we managed to keep the upside to dry bulk markets. Discussion with the yards are still ongoing, and Per will come back to that.

Yes, can I take over? I go straight ahead to the highlights for Q1, which it's much related to the restructuring, of course. But before that, we reported today our net loss of $68.2 million for the quarter. It is worthwhile mentioning there, that although the loss $26.7 million is mark-to-market losses on impairments, and other one-offs, so the net loss is $41.5 million. Since I've have taken large impairments, both in this quarter and also in the previous quarter, is the limited downside on those assets going forward. So to the restructuring that we get - that we put in place in February or we started in February, by entering into amendments with - from all of our loan facilities, that included no repayments until the end of Q3, '18. This implies a deferred repayments of around $140 million on existing debts, and also up to, at the maximum of $50 million of Q2 drawings on newbuildings. This amount is likely to be lower, since we are postponing a few of the delivery of newbuildings, and I'll come back to that. It also includes - or we have to pay out a likely hike on the margin, on the loan agreement, but only on the deferred amounts. We have put in place a cash sweep, which is actually capped at the repaid or the postponed repayments, but it will give us the opportunity to repay if - or leverage the vessels, if the market improves. And other - our covenants were amended, where we waived the value of adjusted equity, and reduced the minimum value covenant on the facility basis to 100%. We also pre-agreed with the banks in one loan facility, that we will have a fixed amount of loan on the remaining newbuildings, that we'll - when we take delivery of them. In order to give this concession, the banks or we should raise equity, which we managed to do also in February and March. So we had a private placement, and a subsequent repair issue that generated a net proceeds of $205.4 million, issuing 357.1 million shares. These shares are currently, or for a six month period, restricted from trading in the US, but we expect that period to end at the end of September this year. And they will then become tradable or possible to move into the US, and trade under the regular ticker, current shareholders does not need to do any action in that respect. The restructuring gave us a lower cash break even, especially on the capes, where cash break even were reduced to around 3,500, and for the fleet in total, it was reduced down to 9,200. If you exclude the capes, then the average cash break even for kind of the remaining fleet is less than $7,000 today, for the period, up until end of Q3, '18. To the P&L. You see that, basically due to the lower markets, the net revenue is down by $14.7 million, if you compare it to Q4. We had a small gain on sale of asset, that was the vessel delivered and previously sold, and then delivered in February to the new owner. If you look at the ship operating expenses, they are more or less in line with Q4, and as expected. We docked one vessel in Q1, '16, which was the same as in Q4, '15. Going down to the financials, we took $10 million in impairment on financial assets. And as I said earlier, we now see limited upside on those assets. We also had to book a negative mark-to-market loss – sorry, yes, sorry about that. We had a negative mark-to-market loss on interest rate swaps, since the long-term forward interest rate in dollars has dropped quite significantly during Q1. The net result of 68.2, if you then adjust for all the non-recurring items, its 41.5, compared to a similar result in Q4 for $29.4 million. If you look at the balance sheets, the cash at the end of the quarter was, including restricted cash was $314.4 million, which is an increase of $151 million. And the reason is, of course, mainly the share issue, and then adjusted for investment activities, new debt, and the installment paid during the quarter. The vessel net increased since we took deliver of four Capesize newbuildings, the net increased $240 million during the quarter. And in addition, we had one, took delivery of one vessel that was immediately sold. In the balance sheet, currently due to the waiver period amendment, we have no part of the bank debt or is classified as short-term, that is all long-term debt. And the long-term debt increased with the debt on delivered newbuildings. That's ordinary repayment on debt. After March 31, we are in line with all repayment schedules, and we also paid $4.2 million in minimum value clauses or according to minimum value clauses in January, in order to be in line with all covenants. Equity increased during the quarter with $137.1 million, which is the share issued, net the loss for the quarter. And then more details on the fleet. In January, took then delivery of - first, we took delivery of two newbuildings from Daehan. We paid in total $52.2 million in delivery installments, and draw $56.7 million in debt on those vessels. Later in January, we took delivery of the two Newcastlemaxes from Bohai in China, and paid in total $60.4 million, and draw $60.5 million in debt on the vessels. And then, in early February, we took delivery of Front Caribbean, and immediately sold it to the new owner. That vessel had been taken in, on a one year contractor according to a previous agreed agreements for one year at $14,000 a day. Later in February, we also agreed with the lessor of Golden Hawk to reduce the charter rate with $2,000 a day for a period of two years. But the amount will be repaid to the lessor over the remaining part of the charter period, also linked to the index. If that increase above or to all-time prevailing rates paid. In January, we also entered into an extended agreement with Capesize Chartering Limited, in order to - for a revenue sharing agreement. So that vessel's trade, handled by Capsize Charter are now equally or share their income equally according to specifications of each vessel. So the current fleet as per now, is then as seen from the table, is some 71, vessels of which one of the Capesize newbuildings are sold, and with 58 vessels currently trading. Of these vessels, we are now in early May and we delivered the two last vessels under the RWE contact, two RWE. So all the10 vessels under that contract is traded by them. Then we have, as earlier, the four Kamsarmax's trading on long-term TC, and two Panamax's on long-term TC out. The remaining part of the fleet is trading in spot markets where the capes, are then into - the capes are chartering revenue sharing agreements. For newbuildings or the 13 of them, it's important to say that after the release on the share issue in February, we have not paid any CapEx on the vessels. We have managed to postpone delivery of two of the Capesizes from Q1 until Q4, '16. And if you look at the graph, there are - it's a little bit less than $100 million in recourse installments left, and those are related to Capesizes, of which half, approximately the half is related to the one that is sold, and the other is for a vessel that we will take delivery on later in Q2. The company is currently working hard in order to achieve further postponements on the remaining part of the newbuildings. All the remaining Capesizes are financed, but the three Supermax's are currently not financed. Just a small comment on the OpEx, it's pretty stable, actually at one tick down, maybe have an OpEx of around $5,000 a day on all the segments. We had one vessel docking in Q1, and we expect two more to be docked during through '16. And then, I will leave the floor to Birgitte for her macro presentation.

Thank you. Looking back, the first quarter of 2016 was the worst in the Baltic dry index history. And all segments that we are operating in, had earnings below operating expenses for the quarter as a whole. This is related again too much supply delivered in an already supplied – the over-supplied market, and with demand dropping at the same time. Looking at the GDP growth, the growth in 2015 was around 3% globally, and the projections for 2016 is more or less the same, with still a positive outlook for 2017 and onwards. World GDP growth is relevant for us, as for instance, the steel consumption is highly correlated with the global GDP growth. In 2015, there was a flat steel consumption on around 3% GDP growth, but as can been seen from the left graph, around 3% growth can be from slightly negative up to 4% to 5% positive steel consumption. As can be seen from the right hand graph, steel consumption or steel production was flat towards the end of 2015 and into 2016, and in this period, the cut in steel projection was worse since the financial crisis. This can also be seen on the transportation of iron ore, which had a sharp drop towards the end of the year. The bad rate environment at the start of the year can be explained by these factors, in addition to a lot of deliveries which normally occurs in the beginning of the year. As can be seen from the graph, the trade has picked up again in the last months, due to a spike in iron ore prices, and an increase in steel prices as well. Cape rights, cape rates were hit in Q1, and there was also an oversupply of mid-sized vessels that completed with the capes. For instance, in Richards Bay, normally a cape loading port, the number of geared vessels was higher than the number of capes, and this was the coal trade, which where smaller sizes could offer optionality. With backwardation in commodity curves, there is no incentive to push imports now, if you believe that you can buy the commodity cheaper tomorrow as well. Looking ahead, most analysts expect steel production to be flat or slightly down in the coming years. However, due to lower iron ore prices in the global market, Chinese quality on their domestic iron ore, and environmental issues, there is still a good possibility that imports will substitute local production, as have been seen over the last years. This slide is from Lorentzen & Stemoco, that has an assumed local production of around 300 million tons this year, some other analysts have seen somewhat slightly lower numbers, but the trend for the values analysts is typically that you see still a drop in the domestic production going forward. In the presentation, in addition to graphs from Lorentzen & Stemoco, I used data from Clarkson Platou and Grieg Shipbroking. Although China wants to move to a consumer-driven economy, Chinese authorities stated in their latest five year plan in March that no goals should jeopardize social stability or economical prosperity. For the latest months, the statistics have seen an increase, both on the infrastructure investment and fixed asset investment. But many analysts view that there is an uncertainty on the long-term fundamentals, and it will be exciting to see the next months how this is developing. China clearly produces more steel than what is consumed internally, and the surplus has been exported with a significant increase in export over the last few years. As can be seen, most of the export is to other Asian countries, China is also investing abroad, and transporting steel to build up on these investments. Although as have been pointed out lately, US has imported a new import duty of more than 500%. The volumes exported to US is small, relatively here. Europe has also become a net importer of steel, but there is limited volumes from China on this trade. Another indicator on the Chinese economy is electricity consumption, and you can see the same pattern here, as you saw on steel and iron ore, with the drop towards the end of '15, and into the start of '16. This can also tie in with the Chinese New Year, but you see that the trend that has earlier been upward, has now flattened out for the last years, and with larger volatility. The growth in terms of percentage on various renewable energy sources are significant, but thermal is still the major source for electricity, and coal has around 63% of that. At the moment, there are some restrictions on new development on hydropower plants, as they are worried about the effects in terms of water flows and earthquakes that large dams may have. Again with coal, its worth to remind that imported coal is around 5% to 6% of the total production in China. Although previously there have been more - or earlier there had been support for domestic production, but lately mines have been closing down. Although the long-term outlook for coal is negative, after a very low transportation in January and February, there was an increase in March, and it looks at the moment that it has been stabilizing around 200 million ton of yearly imports. Coal is obviously very sensitive in terms of the hydropower output, as well as temperature and the need for cooling in the summer. India, where a lot of analyst was very positive earlier, here the projections for growth has been reduced somewhat. At the moment, there are very high stockpiles, and there has been less imports. India also has a strategy and ambition to be self-sufficient, but production is located in one part of the country, and the consumption, and many of the coal-fired power plant are located in another part of the country. But various - many analysts still view an expected increase in volumes into India, but lower than earlier. It’s also worth mentioning that as the rates pick up, there has also been more coal transported from Columbia to India, as there has been a coal arbitrage in terms of pricing, and that has taken some mild [ph] in the market. The more positive commodity, in terms of the demand side is the grain and the agribox. There has been strong growth from Brazil and Argentina, and also a lot of vessels tied up, first in Brazil and now in Argentina, in terms of congestion. They also had good crops and low exchange rates, and they have sold a lot of volumes in order to get US dollars. Brazil, it's likely to ease off, but Argentina there is still congestion, and we expect there to be a long season. Grain is the commodity where there is positive - high positive fundamentals in the more long-term. A smaller commodity, in terms of volume, but where there has been increase in transportation is bauxite. After Indonesia closed down their export, Malaysia has replaced a lot of the volumes, and there is expected only to be two years left of resources for Malaysia to export. A new market that is opening up is Guinea, where the export has started and there's also a port expanding into a cape trade. So although small in volume, there can be small new trade for the cape. US is closing down their aluminum production, and therefore some of the tons that have been transported from Jamaica to the US could go to the Far East in the future. There are also new projects in Australia, starting in 2017 to replace the volumes from Malaysia. Looking at the demand side as whole, there is expectations for a slight increase in the various commodities. Coal will be more or less flat, and most analysts predict around 2%, give and take growth on the seaborne trade. Although it’s positive, it's obviously a lot less than what we have seen in the history of the last 10 years. What is more exciting from a ship owner's perspective at the moment is that fleet growth, or the lack of such. As always, there is a lot of deliveries in January. As of 1st of May, the net fleet growth for the year was 2.9 million deadweight ton, and April alone, saw negative fleet growth. Scrapping has slowed down slightly, when rates picked up above OpEx towards the end of April, but if the rates continue to hover around where they are today, we should still see significant scrapping, and negative fleet growth for the year as a whole is very much possible. If you look at the actual deliveries so far this year relative to what was scheduled, there is 47% slippage so far this year. In the current market environment, all owners are doing their best to delay deliveries. And it is very likely that the final delivery for this year will be well below the gross order book of $83 million, and we believe that it will be less than 50 million deadweight ton delivered for the year. On the ordering side, the Valemax's were ordered in February and March added volume, but except for that, there have been very limited new orders, and that is exactly what the market need at the moment. Looking at the slippage, if you break down the order book by the status of the various vessels, as can be seen in this graph from IHS Fairplay, more than 40% of vessels are going to be delivered this year, have a status that is under construction, or on order and not commenced. The situation for the yards are even worse than for the owners. A few examples, in 2015, 100 yards have delivered dry bulk vessels, relative to 200 yards in 2012, and 40 yards received new building orders in 2015, relative to more than 200 yards in 2008. So the new activity is limited, and while the construction progress is lagging behind, this will also delay later projects due to their construction schedule. The most interesting areas, of course, is the part that are not commenced. If you look at Chinese orders for delivery this year, the numbers show that the progress is between zero and 10%. Gross order book at the moment is around 15% of the fleet. IHS has a bit lower numbers. But various analysts believe that the correct data are more in line of 10%. And if that is so, that is in par with the number of vessels above 20 years. Looking ahead, assuming slippage, with partly that are later delivered, and partly never delivered, we could see in this low rate environment see negative fleet growth, both this year's and in the next years to come. Another interesting observation, looking at monthly data and comparing 12 months back, we are now in a territory whereby the year-over-year fleet growth is lower than the year-over-year trade growth. We should therefore, see a bottom in the market as the incremental growth, due to demand seems to exceed the incremental growth in supply. However, should we see any healthy return of the market, it is likely better that the markets are continuing at low levels, so we keep the scrapping up, and keeping the delay and the cancellations. Q1, '16 may well have been the bottom of the market, and based on zero to slightly negative fleet growth, and the slightly positive demand in growth, utilization should slowly the increase in the years to come. If you look at asset values, also in a historic perspective, they are almost at the low level since - in the light of 30 years. From the bottom that was observed in Q1, values have picked up slightly, maybe 10% to 15%. There are several vessels for sale at the moment, but there is also decent - in terms of inspections and buying. But at the moment there seems to be good support on the downside, but with the right environment and the number of available vessels, we do not expect to see any sharp increase in pricing either. With this in mind, the refinancing we did put us in a strong position, and we should be able to wait for the market to recover. In terms of strategy, we have some limitations on investments at the moment, but we are always looking at opportunities, ideally with optionality, and we believe we do have some time, as the market looks on. It's also important, in today's market with counterpart day rates, charters see the risk of rest of vessels with their cargos. And lately, there has actually been questionnaires circulating, where the charter asks for the debt outstanding on the vessels. So being a strong counterpart in this market should hopefully be positive, and contribute to our earnings going forward. With this, I would like to conclude the presentation. And if there are any questions, please go ahead.

Thank you. [Operator Instructions] Our first question today comes from Herman Hildan of Clarksons Platou Securities.

Good afternoon, Per, Birgitte. My first question relates to the non-recourse part of your CapEx in Q1, you had $78 million that you didn’t pay. Could you give some color on – I guess, you won't pay the $100 million in Q2 either, could you some color on what stage you'll start paying the CapEx and how the dialogue with the yards are on the non-recourse CapEx?

As I said in the presentation, the larger part of the non – of the recourse is related to the two Capesize vessels we delivered, one that we have sold and one that we would take delivery of. The remaining part of the CapEx, most if it’s actually delivery installment, so it's a very limited amount that will be paid on many of the vessels until delivery. So the timing of the CapEx very much depends on what we achieved with yards. And given the current state of the markets it’s quite obvious for everybody that we are not very happy to take delivery at this stage. So we do whatever we can in order to postpone deliveries.

So is there any dialogue in terms of, call it, at what stage you need to make some sort of capital commitments to keep those orders or will you walk away from them at one stage or how is that kind of looking going forward?

I don't think we can say more at this point in time, but we have good and constructive dialogues with our yards and that we will need to report to the market whenever we have more information that we can share.

Okay. Thank you. And also Birgitte you mentioned that you have some limitations on further investments. Is that – is it possible to give some color on that? Would you be able to - for example, do additional sale leasebacks and then pursue new investments or could you give some color on what kind of limitations you have on that side?

It’s fully disclosed in our 20-F. We need approval from banks if we are going to do significant investments and obviously when you have debt deferral, it needs to make sense from a commercial perspective to do something...

You also must remember that, entering into sale leasebacks, the payable trades contain at least a certain element of repayments. So – and you actually end up with a quite significant cash breakeven. So its not – it’s not given in this market that is favorable with the sale leasebacks, even if we could.

Okay. Thank you, very much.

We will now take a question from Eirik Haavaldsen of Pareto Securities.

Yes, hi. Thank you. Just a follow-up on that, do those CapEx restrictions stretch through the whole amortization over there you'll be giving from the banks, so does this mean that you can't really invest in anything until Q3 of 2018?

As long as we have the waivers in place.

Okay. Secondly, can you give an update on the funding situation for three Supramax's, are you pushing back those as well now and what kind of funding do you expect there?

The main priority is to agree with the Oregon [ph] on deliveries, financing its second on the agenda. And as we said in the restructuring, current plans and current forecast it doesn't assume financing on those, but it’s of course possible to finance them.

Okay. Just a final one, your group I guess recently made an order for VLCCs at quite low level, can you give an update on what kind of levels they are so marketing Capesize newbuilds at this stage if they market anything at all?

I don't think there is too much interest, but you do see levels on very low 40s, on Chinese yards.

Okay, thank you.

We will now take a question from Jonathan Staubo of Fearnley Securities.

Thank you. Just a quick one on your strategy going forward with regards to this chartering mix, are you looking to fix up more vessels on either time charters or index linked charters that you have for the RWE [ph] vessels?

For the Capesizes they are now either on index linked or they are trading via the Capesize chartering. For the smaller sizes we are continuing to trade them in the spot markets or Fort [ph] time charters, it can be. At the current levels we would keep the exposure of the majority of the fleet to the spot market.

Fair enough. Thanks a lot.

We will now move to a question from Erik Stavseth of Arctic Security.

Hi, guys. Two quick ones for me. First of all, you mentioned that you have firstly been almost TC back at 14,000, is that the same level for the three other vessels that you have done the sale TC back on?

Two others.

Its the same level at all vessels, but remember one of them are already re-delivered early in January, so its on the two of charter right now and the last vessel will not be taken back, that go directly to the owner or the buyer.

Okay, thanks. And then just sort of you mentioned there are shares they will be listed in the US by September. Could you just sort of quickly walk us through the points that needs to be completed to make sure that happens?

Its actually not steps to do, it is a six-month holding period after the last shares in the subsequent offering was listed. So it ends at the end of September and then its no need for anybody to do anything, actually they will just – the GOGL R shares will just be swapped into regular GOGL shares. They will not be transferred to the US later, but they can be by their shareholder and then they are free to do whatever they want, that’s actually the regular GOGL shares.

All right, so there is no restrictions from the SEC or anything? There is no risk of that happening?

No…

No, we will change the IC number and…

There is no risk, and it will not happen, no, its just a holding period, a six-month holding period.

Okay, thanks.

[Operator Instructions] We will now take a question from Fotis Giannakoulis of Morgan Stanley.

Yes, hello and thank you for taking my question. Birgitte, I wanted to understand about the non-recourse vessel that you mentioned, at what stage these vessels add right now? Have they started being built, and if they have not started being built, what is the reason that you did not decide to cancel completely these vessels?

Many of these vessels have already been delayed once, so they are either close to final or completed at the yard, most of them.

Okay. And do you have other vessels with the same yard that prevent us from taking another election and cancel these vessels?

No, but looking at the final installment relative to the where the market is we see beneficial to delay delivery.

Okay, that's very clear. And I saw that you have reduced the charter rate for one of the chartering vessels, are there any thoughts of doing the same with the capital lease vessels or with the vessels with strict refinance and finding a different arrangement?

Not any thoughts on that. We did the refinancing at Wango [ph] and at the moment we have a good runway and that place is growth for now.

Thank you. And regarding the market, I see that from your market outlook presentation that the group seems to be quite conservative right now. I am trying to craft what is the bull or the positive case for the dry bulk market looking at two, three years forward. You talked about the fact the steel demand is stagnant if not declining and at the same time especially for Capes you made a reference on the Valemax's that they were ordered in the mid of worse dry bulk market. How do you put all this together and try to do – have a more optimistic picture for the future?

First, when it comes to the Valemax's, of course there are other old VLCCs that will be taken out of the market. All these numbers are part of order book, of course, both on the new side and the old side, but that will be taken out of the order book around more or less the same time. And in the longer perspective, order ratios still have growth. They are building new coal fired power plants in that timeframe as you are talking and new coal fired power plants in that area, so you can see some increase there. Grain I think has a good positive in the longer term, but this has to be – this has to be solved also by reducing the supply side.

And you mentioned that you see very possibly this year to have a negative fleet growth. If I remember well you said that deliveries should be around 50 million deadweight. Can you give us also your estimate for scrapping? And there is some people over here talking about the limitations of the scrapping industry, what is the maximum amount that it can be scraped in mid year and what do you expect that it will be the scrapping this year?

That was many questions at once. If the market keeps on being at the levels, deliveries could be less than 50 and estimates to scrapping could be around the same levels or slightly higher. Steel prices have picked up a bit lately and it seems like there is demand for scrapping. Of course now we get into the monsoon season, so there will be some lower volumes. But it all depends on the rates and what level those are.

Okay. Thank you, very much Birgitte.

We currently have no further questions. [Operator Instructions]

Okay, many thanks for listening in to our call today and have a nice day.