Genco Shipping & Trading Limited
Noble Capital Markets'
17th Annual Investor Conference
NYSE:GNK
January 20, 2021
Forward Looking Statements
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as "anticipate," "budget," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward- looking statements are based on our management's current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company's acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters;
- charterers' compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel or any additional scrubbers we may seek to install; (xix) our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xx) worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020; (xxi) our financial results for the year ended December 31, 2020 and other factors relating to determination of the tax treatment of dividends we have declared; (xxii) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions; our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; and (xxiii) other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent reports on Form 8-K and Form 10-Q. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
2
Executive Summary
Genco Shipping & Trading: Who We Are…
- Genco is the largest U.S. based drybulk shipowner
- We are headquartered in New York with global offices in Singapore and Copenhagen
- Our fleet pro forma for vessel sales / swaps consists of 40 modern, high quality drybulk vessels*
- Our large and scalable fleet consists of both major and minor bulk vessels
- We transport raw materials such as iron ore, grain, bauxite, cement, nickel ore, among other commodities
- NYSE listed under ticker symbol GNK
*Pro forma fleet is based upon agreed upon vessel sales (Baltic Cougar and Baltic Leopard) and vessel swap transaction (Genco to acquire Genco Freedom, Genco Vigilant and Genco Magic and | 4 |
divest Genco Ocean, Genco Spirit, Genco Mare, Baltic Cove, Genco Avra and Baltic Fox). | |
Genco's differentiated approach
Strong capital structure
- Cash position: $160.8 million, including $24.2 million of restricted
cash related to vessel sales, as of Sep 30, 2020
- Simplified and flexible debt structure
- Paid a total of $0.735 per share in dividends over the past 5Q's(1)
Margin expansion led by benchmark outperformance
- Fleet-widebenchmark outperformance driven by global presence
- Active commercial platform booked over 400 fixtures in 2020
- Efficient cost structure
Focus on long-term, sustainable operations
- Purchase modern, fuel efficient assets while divesting older, less fuel efficient tonnage to reduce our carbon footprint
- Employ a diverse global team with a strong culture of safety
- Transparent US filer with no related party transactions
- As previously announced, our dividend policy is reviewed by our Board of Directors on a quarterly basis.
5
Genco's global footprint - active, real-time commercial management
Genco has vessels trading all over the world - our global presence enables us to capture market trends to enhance revenue generation
Americas
U.S. Headquarters
Corporate strategy Finance/accounting Commercial Technical Operations
Europe | Asia |
Copenhagen
Commercial
Minor bulk focus
Capture arbitrage opportunities
Closer to cargo customers
Singapore
Commercial
Operations
Capesize focus and minor bulk backhauls/Pacific trading Closer to cargo customers
Time difference to US: | +6 hours | +12/13 hours |
Source: VesselsValue.com
6
Genco transported 30 mdwt of drybulk commodities in 2020
We employ a diversified asset base consisting of the larger Capesize vessels and medium size Ultramax / Supramax vessels enabling us to carry a wide range of cargoes worldwide
Commodities carried | ||
40 | Genco's owned fleet post agreed | Iron ore: 48% |
vessels | vessel sales / swap | |
Grains: 15% | ||
4.4 | Of cargo carrying capacity | Coal: 14% |
mdwt | ||
Potash/Fertilizer: 4% |
~400
~20
Fixtures booked by our in-house commercial team across 3 global offices
New customers that we conducted business with in 2020
Steel/Pig Iron: 3%
Alumina/Bauxite: 2%
Limestone: 2%
Miscellaneous: 9%
7
Fleet renewal program: sales nearly completed
# of Vessels
25
20
15
10
5
-
Genco's pro forma fleet composition
(based on sale and purchase activity from 2018 to date)
Base Fleet | Bought | Sold | |||||||||||||||||||||||
5 | |||||||||||||||||||||||||
4 | 17 | 16 | |||||||||||||||||||||||
13 | |||||||||||||||||||||||||
7 | |||||||||||||||||||||||||
6 | |||||||||||||||||||||||||
1 | |||||||||||||||||||||||||
Cape | Pana | Ultra/Supra | 53s | Hmax/Hsize | |||||||||||||||||||||
- Fleet composition strategy: "barbell" approach to fleet composition concentrated on the ownership of Capesize and Ultramax/Supramax vessels
- Vessel swap transaction: agreed to acquire 3 modern, eco Ultramaxes in exchange for 6 older, non-core Handysize vessels
- In 2020, we made significant progress in divesting our non-core 53,000 dwt Supramaxes and Handysizes through individual ship sales and a vessel swap transaction
- Only 1 x 53,000 dwt Supramax remaining to complete the divestiture side of our fleet renewal program
- Have expanded in the Ultramax sector in 2020 - looking to further expand in the Ultramax sector utilizing proceeds from recent minor bulk vessel sales
Note: Pro forma fleet is based upon agreed upon vessel sales (Baltic Cougar and Baltic Leopard) and vessel swap transaction (Genco to acquire Genco Freedom, Genco Vigilant and Genco Magic | 8 |
and divest Genco Ocean, Genco Spirit, Genco Mare, Baltic Cove, Genco Avra and Baltic Fox). | |
Genco's industry leading balance sheet
Key balance sheet items as of September 30, 2020
Cash1 | Debt2 | Net Debt3 | ||
$160.8 million | $475.4 million | $314.7 million |
- Strong financial position: Genco continues to maintain one of the highest liquidity positions and lowest leverage profiles among our drybulk peer group
1) | Cash balance as of September 30, 2020 includes $24.5 million of restricted cash. | |
2) | The debt balance presented is gross of $10.7 million of unamortized debt issuance costs. | 9 |
3) | Net debt is equal to debt minus cash |
Freight rate catalysts for 2021
We believe 2021 will be an improved year for the drybulk market relative to 2020 due to the following factors…
- Record low orderbook as a percentage of the fleet to limit net fleet growth
-
Unprecedented levels of global stimulus - global GDP forecast to rise by 5% in 2021*
3 China's economy to continue to lead while ROW continues economic improvement
- Recovery and growth of Brazilian iron ore exports
- India's coal imports and steel production to continue their rebound
Primary risk factor remains trajectory of COVID-19, further lockdown measures and timing of large-scale vaccine distribution
*IMF forecast | 10 |
GNK stock performance
GNK's large shareholders' % ownership* | |||
$12 | Prior to | ||
58% | 33% | Current* | |
recent sales* | |||
$10 | |||
$8 | |||
$6 | |||
GNK large | |||
$4 | shareholders | ||
began selling on | |||
$2 | Dec 11, 2020 | ||
$- |
Dec 11, 2020 to Jan 15, 2021: GNK share price has lagged the peer group of listed drybulk shipping companies during a time in which significant large shareholder sales have been occurring
- Large stock sales have contributed to GNK trading at a discount to net asset value
- Total value of GNK shares traded: $187 million (based on closing share price x daily volume)
- Total value of GNK shares traded by 3 large shareholders: $71 million or 38% of total volume over this period*
*Represents ownership of large shareholders with representation on Genco's board of directors. Prior to December 2020, Genco had three such shareholders. On December 15, 2020, the sole director affiliated with Strategic Value Partners, LLC ("SVP") resigned from our board, and investment funds affiliated with SVP reported sales reducing their ownership to approximately 1.3 million Genco shares, or approximately 3%. Additionally, based on
filings with the SEC through January 15, 2021, investment funds affiliated with Centerbridge Partners, L.P. and investment funds managed by affiliates of Apollo Global Management, LLC reported sales that reduced their | |
ownership of our stock to approximately 9.6 million and 4.4 million shares, respectively. As a result, we have two remaining large shareholders with board representation who own an aggregate of approximately 14.0 million | 11 |
shares, or approximately 33% of our stock. |
Market update and industry overview
Global drybulk trade and key routes
Commodity and percentage of global drybulk trade
Iron Ore | 29% | Coal | 23% | Grain | 10% | Minor Bulks 38% |
Primary | ||||||
use | ||||||
Steel production | Steel production | Human consumption | Various uses - | |||
Power generation | Feed livestock | linked to global GDP growth | ||||
Cooking oils |
Select key trade routes
13
Drybulk trade has shown consistent YOY growth
Since 1980, there have only been 6 years in which drybulk trade has contracted on a YOY basis, 4 of which occurred between 1980 to 1990
Total drybulk trade | CAGR per commodity | ||||||||
6,000 | Time period | Iron ore | Coal | Grain | Minor bulk | Total | 3% | ||
Iron ore | 1980s | 1% | 6% | 1% | 2% | 2% | |||
cagr | |||||||||
coal | 1990s | 2% | 4% | 2% | 4% | 3% | |||
2000s | 8% | 6% | 3% | 3% | 5% | ||||
5,000 | |||||||||
grain | 2010s | 4% | 2% | 5% | 2% | 3% | |||
minor bulk | COVID-19 | ||||||||
5% | |||||||||
(MT) | 4,000 | ||||||||
cagr | |||||||||
trade | Two demand shocks | ||||||||
- drybulk demand | |||||||||
seaborne | |||||||||
3% | quickly returned to | ||||||||
3,000 | Financial | growth in the | |||||||
cagr | subsequent years | ||||||||
crisis | |||||||||
2% | |||||||||
World | |||||||||
2,000 | cagr | ||||||||
1,000 | |||||||||
0 |
Source: Clarksons Research Services Limited 2021 | 14 |
Supply side fundamentals
mdwt
25
20
15
10
5
-
Current Drybulk Vessel Orderbook by Type | Drybulk Vessel Deliveries vs. Scrapping | ||||||||||||||
Capesize | Panamax | Handymax | Handysize | Deliveries | Scrapping | Net Additions | |||||||||
10 | Jan 2017 | ||||||
Newbuilding orderbook as a percentage of | |||||||
the fleet is currently 6% | 8 | Jan 2020 | |||||
1.5% | mdwt | 6 | Jan 2018 | ||||
1.1% | 4 | Jan 2019 | |||||
0.8% | 0.8% | 0.8% | 2 | ||||
0.4% | 0.3% | 0.3% | 0.1% | 0 | |||
-2 |
- Lowest orderbook on record at 6% of the fleet
- On the water tonnage greater than or equal to 20 years old totals 6% of the fleet on a dwt basis
- Scrapping levels were strong in 2020, with 48 reported Capesize demolitions (including 27 VLOCs), eclipsing the 29 reported in all of 2019
- 2020 VLOC newbuilding deliveries were nearly fully offset by VLOC scrapping
- Plenty of Capesize scrap potential remains on the water with approximately 75 Capesizes >=18 years old
Source: Clarksons Research Services Limited 2021 | 15 |
Supply side shock experienced from peak N/B ordering
Record newbuild ordering in boom years + a resurgence of orders in 2013 and 2014…
175 | Record N/B ordering | 161 | Newbuilding orderbook has eased in | |||||||||||||||||||
Supply shock | ||||||||||||||||||||||
resulted in 11% to 17% | recent years, while vessel supply | |||||||||||||||||||||
150 | from record | |||||||||||||||||||||
net fleet growth per | growth has rationalized post peak | |||||||||||||||||||||
N/B orders | ||||||||||||||||||||||
year from 2009 to 2012 | ordering periods - low vessel supply | |||||||||||||||||||||
125 | ||||||||||||||||||||||
growth is projected in 2021 against a | ||||||||||||||||||||||
102 | 103 | 104 | ||||||||||||||||||||
backdrop of a demand recovery | ||||||||||||||||||||||
mdwt | 100 | |||||||||||||||||||||
78 | ||||||||||||||||||||||
75 | 63 | Declining | ||||||||||||||||||||
50 | 37 | 37 | 42 | 43 | 44 | orders… | ||||||||||||||||
33 | 32 | |||||||||||||||||||||
30 | 30 | |||||||||||||||||||||
24 | ||||||||||||||||||||||
22 | ||||||||||||||||||||||
25 | 15 | 14 | ||||||||||||||||||||
9 | 11 | |||||||||||||||||||||
0 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
mdwt
50
45 …pressured rates leading to increased scrapping as a lever to balance the market
40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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35 | 31 | 29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
23 | 23 | …met by | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
25 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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20 | 16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15 | scrapping | 15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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10 | 6 | 6 | 6 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | 1 | 1 | 2 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||||||||||||||
Source: Clarksons Research Services Limited 2021 | 16 |
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2020 2H in seen highs the exceeding earnings Supramax and…
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Brazilian IO exports have recovered since June…
…following poor weather conditions and operational challenges that disrupted production and shipments during most of 1H 2020
- Brazilian iron ore exports have exceeded 30MT in 6 out of the last 7 months
- December 2020 exports rose over 30% YOY
- Vale has issued 2021 production guidance of 315-335MT
- Vale forecasts to reach a runrate of 350mtpa by the end of 2021 and 400mtpa by the end of 2022
Brazil IO exports from Jun to Dec averaged 32MT vs 23MT in Jan to May
40 | +9MT | Incremental IO shipments | ||||||||||||||||||||||||||
35 | ||||||||||||||||||||||||||||
per month from Brazil since | ||||||||||||||||||||||||||||
30 | June | |||||||||||||||||||||||||||
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20 | 34 | 38 | 33 | |||||||||||||||||||||||||
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Source: Clarksons Research Services Limited 2021, Vale | 18 |
China's record IO imports led by all-time high steel output
China's IO imports rose by 9%YOY in 2020…
120 | |||||||||||
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100 | 2017 | 2018 | |||||||||
90 | 2019 | 2020 | |||||||||
80 | |||||||||||
70 | |||||||||||
60 | +6% | China steel output | -9% | ROW steel output | |||||||
growth YOY | contraction YOY | ||||||||||
50 | |||||||||||
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Source: Clarksons Research Services Limited 2021, World Steel | 19 | ||||||||||
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Dec-18 | Dec-18 | |||||||||||||||
Jan-19 | Jan-19 | |||||||||||||||
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Aug-20 | ||||||||||||||||
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Sep-20 | ||||||||||||||||
Sep-20 | ||||||||||||||||
Oct-20 | ||||||||||||||||
Oct-20 | ||||||||||||||||
Nov-20 | ||||||||||||||||
Nov-20 | ||||||||||||||||
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Jan-21 | ||||||||||||||||
Jan-21 | ||||||||||||||||
trades bulk major key for levels Inventory
Strong grain trade + improvement in other minor bulk trades
US - Q4 peak season Firm exports have carried into Q1 to date
Brazil - Q2 to
Q3 peak season Record soybean exports this year with increased market share to China
China's soybean imports | ||||||||||||
105 | ||||||||||||
100 | ||||||||||||
95 | ||||||||||||
90 | ||||||||||||
85 | ||||||||||||
Black Sea - | 80 | |||||||||||
2017 2018 2019 2020e 2021f | ||||||||||||
Aug peak | China | |||||||||||
season | ||||||||||||
Ramping up | ||||||||||||
soybean imports | ||||||||||||
following recovery | ||||||||||||
in demand from | ||||||||||||
the swine flu |
- Minor bulk trades are expected to further improved in 2021 given IMF's forecast of over 5% global GDP growth
- Grain trade has been resilient as China recovers from the swine fever outbreak in 2019 + strong Brazil crop
- Large scale purchases of US agricultural products have been made by China in recent months which has resulted in a firm US export season
Source: Clarksons Research Services Limited 2021 | 21 |
Freight rate catalysts for 2021
We believe 2021 will be an improved year for the drybulk market relative to 2020 due to the following factors…
- Record low orderbook as a percentage of the fleet to limit net fleet growth
-
Unprecedented levels of global stimulus - global GDP forecast to rise by 5% in 2021*
3 China's economy to continue to lead while ROW continues economic improvement
- Recovery and growth of Brazilian iron ore exports
- India's coal imports and steel production to continue their rebound
Primary risk factor remains trajectory of COVID-19, further lockdown measures and timing of large-scale vaccine distribution
*IMF forecast | 22 |
Conclusion
Genco is attractively positioned to capture market upside
Leadership
Drybulk Market
Capital Structure
Fleet
Modernization
Commercial
Platform
Genco's Fleet
- Experienced US-based management team
- Demand and supply dynamics forecast to improve in 2021
- Strong balance sheet + meaningful cash position + regular quarterly dividend
- Opportunistically divest of older, less fuel-efficient assets and expand in Ultramax sector
- Active management through global commercial platform and full-service logistics solution
- Barbell approach to fleet composition
24
Appendix
Third Quarter Earnings
Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | ||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||
(Dollars in thousands, except share and per share data) | (Dollars in thousands, except share and per share data) | ||||||||||
(unaudited) | (unaudited) | ||||||||||
INCOME STATEMENT DATA: | |||||||||||
Revenues: | |||||||||||
Voyage revenues | $ | 87,524 | $ | 103,776 | $ | 260,066 | $ | 280,790 | |||
Total revenues | 87,524 | 103,776 | 260,066 | 280,790 | |||||||
Operating expenses: | |||||||||||
Voyage expenses | 33,487 | 42,967 | 123,550 | 127,789 | |||||||
Vessel operating expenses | 23,460 | 24,711 | 66,332 | 72,260 | |||||||
Charter hire expenses | 1,020 | 5,475 | 5,527 | 12,743 | |||||||
General and administrative expenses (inclusive of nonvested stock amortization | 5,115 | 6,144 | 16,353 | 18,253 | |||||||
expense of $0.5 million, $0.6 million, $1.5 million and $1.6 million, respectively) | |||||||||||
Technical management fees | 1,739 | 1,885 | 5,316 | 5,710 | |||||||
Depreciation and amortization | 16,115 | 18,184 | 49,619 | 54,532 | |||||||
Impairment of vessel assets | 21,896 | 12,182 | 134,710 | 26,078 | |||||||
Loss (gain) on sale of vessels | 358 | - | 844 | (611) | |||||||
Total operating expenses | 103,190 | 111,548 | 402,251 | 316,754 | |||||||
Operating loss | (15,666) | (7,772) | (142,185) | (35,964) | |||||||
Other (expense) income: | |||||||||||
Other (expense) income | (436) | 86 | (900) | 523 | |||||||
Interest income | 101 | 892 | 948 | 3,292 | |||||||
Interest expense | (5,097) | (7,797) | (17,515) | (24,496) | |||||||
Impairment of right-of-use asset | - | - | - | (223) | |||||||
Other expense | (5,432) | (6,819) | (17,467) | (20,904) | |||||||
Net loss | $ | (21,098) | $ | (14,591) | $ | (159,652) | $ | (56,868) | |||
Net loss per share - basic | $ | (0.50) | $ | (0.35) | $ | (3.81) | $ | (1.36) | |||
Net loss per share - diluted | $ | (0.50) | $ | (0.35) | $ | (3.81) | $ | (1.36) | |||
Weighted average common shares outstanding - basic | 41,928,682 | 41,749,200 | 41,898,756 | 41,739,287 | |||||||
Weighted average common shares outstanding - diluted | 41,928,682 | 41,749,200 | 41,898,756 | 41,739,287 |
26
September 30, 2020 Balance Sheet
September 30, 2020 | December 31, 2019 | ||||
(Dollars in thousands) | |||||
(unaudited) | |||||
BALANCE SHEET DATA: | |||||
Cash (including restricted cash) | $ | 160,775 | $ | 162,249 | |
Current assets | 222,428 | 223,195 | |||
Total assets | 1,317,547 | 1,528,892 | |||
Current liabilities (excluding current portion of long-term debt) | 33,033 | 57,908 | |||
Current portion of long-term debt | 80,642 | 69,747 | |||
Long-term debt (net of $10.7 million and $13.1 million of unamortized debt issuance | 384,141 | 412,983 | |||
costs at September 30, 2020 and December 31, 2019, respectively) | |||||
Shareholders' equity | 811,220 | 978,428 | |||
Three Months Ended | Nine Months Ended | ||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||
(Dollars in thousands) | (Dollars in thousands) | ||||
(unaudited) | (unaudited) |
OTHER FINANCIAL DATA:
Net cash provided by operating activities
Net cash provided by (used in) investing activities Net cash used in financing activities
N/A | $ | 16,015 | $ | 28,758 |
12,327 | (31,797) | |||
(29,816) | (33,531) | |||
(unaudited) | (unaudited) |
EBITDA Reconciliation: | ||||||||||||
Net loss | $ | (21,098) | $ | (14,591) | $ | (159,652) | $ | (56,868) | ||||
+ | Net interest expense | 4,996 | 6,905 | 16,567 | 21,204 | |||||||
+ | Depreciation and amortization | 16,115 | 18,184 | 49,619 | 54,532 | |||||||
EBITDA(1) | $ | 13 | $ | 10,498 | $ | (93,466) | $ | 18,868 | ||||
+ Impairment of vessel assets | 21,896 | 12,182 | 134,710 | 26,078 | ||||||||
+ | Impairment of right-of-use asset | - | - | - | 223 | |||||||
+ | Loss (gain) on sale of vessels | 358 | - | 844 | (611) | |||||||
Adjusted EBITDA | $ | 22,267 | $ | 22,680 | $ | 42,088 | $ | 44,558 |
- EBITDA represents net (loss) income plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing. EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not
be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a measure | 27 |
of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. |
Third Quarter Highlights
Three Months Ended | Nine Months Ended | |||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||
(unaudited) | (unaudited) | |||||||
FLEET DATA: | ||||||||
Total number of vessels at end of period | 51 | 58 | 51 | 58 | ||||
Average number of vessels (1) | 51.4 | 58.0 | 52.9 | 58.1 | ||||
Total ownership days for fleet (2) | 4,729 | 5,336 | 14,495 | 15,861 | ||||
Total chartered-in days (3) | 145 | 430 | 816 | 1,071 | ||||
Total available days (4) | 4,773 | 5,165 | 14,891 | 15,984 | ||||
Total available days for owned fleet (5) | 4,628 | 4,735 | 14,075 | 14,914 | ||||
Total operating days for fleet (6) | 4,626 | 5,130 | 14,576 | 15,737 | ||||
Fleet utilization (7) | 96.2% | 98.9% | 97.3% | 97.9% | ||||
AVERAGE DAILY RESULTS: | ||||||||
Time charter equivalent (8) | $ | 11,456 | $ | 11,687 | $ | 9,307 | $ | 9,405 |
Daily vessel operating expenses per vessel (9) | 4,961 | 4,631 | 4,576 | 4,556 |
- Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as a measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period.
- We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
- We define chartered-in days as the aggregate number of days in a period during which we chartered-inthird-party vessels.
- We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to familiarization upon acquisition, repairs or repairs under guarantee, vessel upgrades or special surveys. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
- We define available days for the owned fleet as available days less chartered-in days.
- We define operating days as the number of our total available days in a period less the aggregate number of days that the vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
- We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus time charter-in days less days our vessels spend in drydocking.
- We define TCE rates as our voyage revenues less voyage expenses and charter-hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts.
- We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.
28
Time Charter Equivalent Reconciliation(1)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | ||||||||
(unaudited) | (unaudited) | ||||||||||
Total Fleet | |||||||||||
Voyage revenues (in thousands) | $ | 87,524 | $ | 103,776 | $ | 260,066 | $ | 280,790 | |||
Voyage expenses (in thousands) | 33,487 | 42,967 | 123,550 | 127,789 | |||||||
Charter hire expenses (in thousands) | 1,020 | 5,475 | 5,527 | 12,743 | |||||||
53,017 | 55,334 | 130,989 | 140,258 | ||||||||
Total available days for owned fleet | 4,628 | 4,735 | 14,075 | 14,914 | |||||||
Total TCE rate | $ | 11,456 | $ | 11,687 | $ | 9,307 | $ | 9,405 |
Three Months Ended | ||||||
March 31, 2020 | June 30, 2020 | |||||
(unaudited) | ||||||
Total Fleet | ||||||
Voyage revenues (in thousands) | $ | 98,336 | $ | 74,206 | ||
Voyage expenses (in thousands) | 48,368 | 41,695 | ||||
Charter hire expenses (in thousands) | 3,075 | 1,432 | ||||
46,893 | 31,079 | |||||
Total available days for owned fleet | 4,807 | 4,643 | ||||
Total TCE rate | $ | 9,755 | $ | 6,693 |
- We define TCE rates as our voyage revenues less voyage expenses and charter-hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts, while charterhire rates for vessels on time charters generally are expressed in such amounts.
29
As one of the largest drybulk shipping companies in the world…
…Genco recognizes the need to run a safe and responsible business built for the long-term
Over the last several years, we have invested in our fleet by…
Purchasing modern, fuel-efficient vessels Divesting older, less fuel-efficient tonnage Installing energy saving devices including Mewis Ducts Real-time fuel consumption analysis to optimize voyages Installing Ballast Water Treatment Systems
…while striving to exceed high safety standards and environmental regulations 100% Compliance with the 2020 Global Sulfur Cap targeted
100% of our fleet has an A through E GHG rating 85% of our fleet is rated 4 or better by
30
Working towards reducing emissions and protecting the environment
By purchasing modern, fuel-efficient vessels and selling older, less fuel-efficient tonnage, our Average Efficiency Ratio and Energy Efficiency Operational Indicator have improved leading to a reduction in our carbon emissions
2019 data
841k | CO2 emissions (metric tons CO2) | Data presented verified by |
DNV GL Maritime Advisory | ||
3.37 Average Efficiency Ratio - (g CO2 / dwt x NM)
6.23 Energy Efficiency Operational Indicator (g CO2 / t x NM)
Energy Efficiency Operational | Average Efficiency | CO2 emissions*** | |||
Indicator (EEOI)* | Ratio (AER)** | ||||
(measured in metric tons CO2) | |||||
(measured in g CO2 / t x NM) | (measured in g CO2 / dwt x NM) | ||||
-2% | -6% | -10% | |||
6.37 | 6.23 | 3.59 | 3.37 | 930,892 | 840,541 |
20182019
*Calculated as CO2 emissions of Genco's owned fleet divided by distance traveled laden multiplied by cargo carried.
20182019
**Calculated as CO2 emissions of Genco's owned fleet divided by distance traveled multiplied by design deadweight.
20182019
***Calculations are based on IMO emission factors and fuel consumption for Genco's owned fleet.
31
Genco pro forma fleet list
Major Bulk | Minor Bulk | |||||||
Vessel Name | Year Built | Dwt | Vessel Name | Year Built | Dwt | Vessel Name | Year Built | Dwt |
Capesize | Ultramax | Genco Rhone | 2011 | 58,018 | ||||
Genco Resolute | 2015 | 181,060 | Genco Freedom | 2015 | 63,671 | Genco Aquitaine | 2009 | 57,981 |
Genco Endeavour | 2015 | 181,060 | Genco Vigilant | 2015 | 63,671 | Genco Warrior | 2005 | 55,435 |
Genco Constantine | 2008 | 180,183 | Baltic Hornet | 2014 | 63,574 | Genco Predator | 2005 | 55,407 |
Genco Augustus | 2007 | 180,151 | Baltic Mantis | 2015 | 63,470 | Genco Provence | 2004 | 55,317 |
Genco Liberty | 2016 | 180,032 | Baltic Scorpion | 2015 | 63,462 | Genco Picardy | 2005 | 55,257 |
Genco Defender | 2016 | 180,021 | Genco Magic | 2014 | 63,446 | Genco Lorraine | 2009 | 53,417 |
Genco Tiger | 2011 | 179,185 | Baltic Wasp | 2015 | 63,389 | |||
Baltic Lion | 2012 | 179,185 | Genco Weatherly | 2014 | 61,556 | |||
Genco London | 2007 | 177,833 | Genco Columbia | 2016 | 60,294 | |||
Baltic Wolf | 2010 | 177,752 | Supramax | |||||
Genco Titus | 2007 | 177,729 | Genco Hunter | 2007 | 58,729 | Vessels to be | ||
Baltic Bear | 2010 | 177,717 | Genco Auvergne | 2009 | 58,020 | |||
acquired | ||||||||
Genco Tiberius | 2007 | 175,874 | Genco Ardennes | 2009 | 58,018 | |||
Genco Commodus | 2009 | 169,098 | Genco Bourgogne | 2010 | 58,018 | |||
Genco Hadrian | 2008 | 169,025 | Genco Brittany | 2010 | 58,018 | |||
Genco Maximus | 2009 | 169,025 | Genco Languedoc | 2010 | 58,018 | |||
Genco Claudius | 2010 | 169,001 | Genco Pyrenees | 2010 | 58,018 |
17
Capesize
23
Ultra/Supra
Note: Pro forma fleet is based upon agreed upon vessel sales (Baltic Cougar and Baltic Leopard) and vessel swap transaction (Genco to acquire Genco Freedom, Genco Vigilant and Genco Magic | 32 |
and divest Genco Ocean, Genco Spirit, Genco Mare, Baltic Cove, Genco Avra and Baltic Fox). | |
Thank you
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Genco Shipping & Trading Limited published this content on 20 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 January 2021 17:33:05 UTC