* Q1 operating profit $15.5 mln vs $17 mln seen in poll
* Says expects Q2 profit more or less in line with Q1
* Says to pay no Q1 dividend, start share repurchase programme (Adds detail)
OSLO, May 30 (Reuters) - Norway's Golden Ocean, controlled by shipping magnate John Fredriksen, said on Wednesday the pace of new ships coming on to the market was slowing down although overcapacity would weigh on the dry-bulk business in the medium term.
The shipping industry in Europe has struggled during the economic downturn which has depressed demand for vessels just as new ships from an ordering binge a few years earlier have begun to flood on to the market. Some big firms have come under pressure, including Denmark's Torm.
"The size of the order book will still have a negative effect medium term," said Oslo-listed Golden Ocean, which has not paid a quarterly dividend since the second quarter last year.
Golden Ocean reported first quarter operating profit of $15.5 million, compared to a $16 million loss a year ago. Analysts in a Reuters poll had an average forecast of $17 million in operating profit.
The company said it would not pay a dividend for the first quarter while it is carries out a new share repurchase programme of a maximum of 45 million shares.
It took an impairment of $2.2 million in the quarter related to the sale of a construction contract for the vessel Golden Emerald.
Golden Ocean expects a similar profit in the second quarter. But the company also said the restructuring of Japan's ailing shipping firm Sanko could lead to a loss from a vessel - Golden Feng - which Sanko had chartered. This could impact second quarter operating profit through a potential impairment.
Its quarterly net profit of $13 million was in line with analysts expectations.
Fredriksen also owns major or controlling stakes in tanker operator Frontline, deep sea driller Seadrill and LNG shipping firm Golar LNG. (Reporting by Victoria Klesty. Editing by Jane Merriman)