GNK - Earnings call transcript Q1 2024 | Genco Shipping & Trading Limited

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Operator

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited First Quarter 2021 earnings conference call and presentation.

Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.gencoshipping.com.

We will conduct a question-and-answer session after the opening remarks. that at follow will time. Instructions the A during entering be anytime will next replay the two XXXXX. and of the XXX-XX-XX weeks accessible (XXX) conference by passcode dialing to will the time, now this I conference At over the company. turn go Please ahead.

Unknown Executive

morning. Good

Such that such other Private Before call, and of this Act Securities forward-looking pursuant Litigation we we believe harbor and as safe plan, circumstances intend, based project, expect, current XXXX. and connection certain conference performance. discussion estimate, to making similar Reform on of the in the or financial I expectations in are forward-looking be observations. potential words provisions begin meaning words presentation, forward-looking or budget, terms statements events, our statements anticipate, These statements management's future note use will with of of operating future the

annual company's report At XX-Q would on Officer of to XX-K Trading on Form & ended discussion the please Limited. and reports with differ, and the issued this subsequently including, For limitation, website introduce X-K the results that that see without Exchange filed the company's Form Wobensmith, the this factors XXXX, and time, the call materials Chief a Executive December SEC. year XX, Form company's I cause was John the press the the Securities relating like filings to with for release on yesterday, could to Commission, of Genco posted company's company's and Shipping

John Wobensmith

call. Good morning, Genco's everyone. XXXX Welcome Quarter to First conference

progress making years value well current to we the to reviewing as In fundamentals. comprehensive use QX highlights, are strategy this our opportunity three the an on on addition provide want our as industry's XXXX year-to-date and into update to we

up questions. We the call for will then open

of leading earnings all Board to our that For additional on of with advisory our to items recommendations be our of consistent a Shareholders presentation earnings website. our our firm, this for voted we those on with please the made issued press year. news Meeting from yesterday proxy ISS, at Separately also release release, posted Annual information, the refer

While we our results quarter for pleased our of value the call of implementation strategy. be result, first this focus of with are this XXXX ongoing over comprehensive will morning and the the the

more on If wish mentioned to Meeting, Slide our matters see refer to press I our on information to be X. regarding website you Annual voted the www.voteforgenco.com.Beginning at or please release at

end XXXX first leading long-term leverage creating the drew driven the further through QX and Genco. we of our $XX,XXX. marked which aimed cycles Building dry quarter, strategy, is on QX shareholder strong time for During XX first sustained generate and executed at time million, quarter by Notably, another increased QX operating driving to bulk XXXX, a solid commercial for fleet-wide value. $XX.X relative value on returns net charter our equivalent a platform over the years. income in TCE of to rate significant QX We to

earnings consistent shareholder we $X.XX dividend, transparent of to share the quarter-over-quarter dividend into as QX terms In our policy. our our QX strong with increased returns, flowed per

reward risk net improved paid X. as we X% debt balance approach debt leverage During the improved we net voluntarily of to goal our and quarter, as also our further down our we position

we over centered three our value X. XXXX, how approach implementing clear nearly down to our dividends form debt to $XXX with that flexibility provide $XXX a financial since snapshot opportunistically low ago. investing of while a the provide of growth $XXX years We our we to deleveraging shareholders through objectives related transfer dry laid in million Genco In significant allocation Slide shareholders to with into a leverage, and returns path company Turning developed the distributing and million out of and time, grow capital Since bulk paid dividends, and shipping a has dividend-yielding strategy high to cycles. around fleet. little have in million

execution and continued to market reduce the our vessel while dividends. the highlight strong XXXX, Since have voluntarily prioritized we creating paydowns debt we our to Page provided foundation turn in to the began in the dividends increasing XXXX, strategy. pay value we our we debt compelling strategy have of we a when cash X, As for On implemented on acquisitions down the flow focus cyclical shareholders. breakeven

consecutive XXth during of dividends continue declared $X.XX Over the dividend we time, consecutive fleet representing peer highlighted in or on as returns quarter group. approximately Complementing period longest share price. share first X. quarterly XX% current prioritize marks renewal dividend per QX, shareholder this our we in The payment, have the our of Page dividends to

our Capesize in the approximately Following $XX these and fleet's built docking vessels QX to high-specification increased power, million fleet, we improved acquisition XXXX the early in for reduced of our efficiency our saved XXXX three QX age to fuel divested vessels CapEx buyers Through XXXX. QX, transactions, have earnings in average and two and delivered dry we of XXXX. timely

increased we utilization market. current strong also Importantly, in the

renewal provide strategy. further on minor of of linked With believe Capesize diverse owning vessels X. Page value We more global stable iron coal advanced trade bulk Genco's our this as streams, barbell high in provide the composition focus sector's bauxite a to on these closely more on the approach growth. ore, of upside earnings GDP and the leverage support are with routes execution plan, trades ships have and while we fleet our operate potential vessels operating shown both fleet and phase to

renew purchase market Moving forward, further further opportunities evaluate we continue sale to fleet. the in our and to

XX. Slide to Turning

a continue fleet increased TCE In generate on ride our year-over-year TCE XX% by basis. We QX, to performance. strong

rate are day. QX, Pointing at available to is to a of firm breakeven as approximately $XX,XXX ahead flow cash above of day. $XX,XXX fixed this over XX% today Looking per days our another our quarter well

remains Turning to advantageous highly XX. in forward. believe position We Slide a moving Genco

the million bulk going shipping in and We forward. is revolver undrawn This the and financial low our executed dividend $XXX dry believe an Specifically, model payout provides we nearly leverage, optionality public cash net breakeven and low markets. in scale flow significant industry industry-leading have loan-to-value availability. high company for in rate flexibility

and volatility cyclicality through bulk to cycles. opportunistically our Allen, powers shareholders, Financial favorable shipping, to believe risk-reward the it we Officer. the grow returns enhance creates also to fleet provide the a will our now Given Peter earnings sizable I balance the over dry and of call turn Chief

Peter Allen

of or $XX.X or results. On basic and $X.XX recorded quarter John. highlight respectively. you, Genco diluted and and $XX.X Thank to income basic share and earnings diluted $X.XX. earnings $X.XX first Adjusted we per Slides million through income our XX XX, net million amounted of share, financial $X.XX net per

a than operating million, of vessels period totaled Excluding of same $X.X the of from loss the fuel on EBITDA million, $X.X more of unrealized Adjusted sale million of $X XXXX. $XX.X total double QX expenses million. for and other gains

the while leverage year-to-date, During of high our per basis which earned a to With TCE our our $XX,XXX an estimate basis, illustrating over vessel proceeds day year, per on of period our a quarter, On far the voluntary primarily utilizing for by returns. continued the we financial leverage, facility have vessels, XX, breakeven flat a we built-in such basis annualized nearly $XXX expense interest approximately debt need of day of reduce QX highlight million best go-forward first operating $XX less million the Capesize is approximately This the utilized flow our of by operating same and debt degree flexibility there sales. pay in million from achieve of strong revolving to the our cost year-over-year is displayed revenues leverage business. on outstanding per Slide these structure the inherent we debt $XX,XXX our than In credit in remained operating year. trajectory voluntarily net $X a per cash $XXX higher repayments. last day On XXXX, the or paydowns by XX% recurring will this of down increased so debt on period, leverage rate. vessel approximately

or XX% of paid a forma now have million, resulting ratio of down our in debt pro X%. net $XXX loan-to-value We nearly

to given actively nearly capacity the revolving our million to drawing continue we interest vessel opportunistically our debt end our while of manage balance undrawn credit Given expense at down for save QX. to of purchases XXX% plan on $XXX facility,

over XX, of nature shareholders of The Slide the distribution transparent flow, based our XXX% policy, dividend cash dividend future targets couple variable as excess to for rate highlight a of which we've and to from investment. quarterly leverage withholding our benefit last on our enables we excluding seen operating Moving quarters. freight policy increases maintenance and fleet's directly

Our yield approximately share price, current of QX above of treasury dividend annualized X.X% represents U.S. on rate well the X.X%. X-year XXXX an

below related excluding of the another calculation. dividend meeting now Dry Michael These XX% will our expenses related we anticipate our QX I XXXX, to flow to QX to annual to our from estimates per fundamentals. annual expenses day, Analyst, discuss call will Bulk TCE vessel pointing strong well to the $XX,XXX Orr, turn ahead $X,XXX over incremental be per meeting quarter. to breakeven Looking QX incremental for Market fixed, current date rate, cash industry's the be also excluded

Michael Orr

you, Thank Peter.

As dry quarter occurred historically These during strong rates. the the quarter. market during the depicted rates first at bulk on of year softest Slide the XX, remained freight for levels elevated

Capesize ore weather and per period, supply have respectively. increased tightness Capesize strong XX-year impact market. experiencing in a Atlantic $XX,XXX exports. Basin in the With effect in well-balanced push rates can a dry events vessel a continued reached have the an QX recent in as on Supramax recent rates by seen QX bulk enabling dry years, to approximately remain to supplier firm the of relatively and ships In for that freight day, However, levels, the iron date, high we days $XX,XXX driven and at Brazil, market

water in were low of through the ships the number vessels. on Initially, delays Slides and diverted transit, that highlighted heavy Panama vessels XX the As could of Canal. resulting Suez in impacted XX, in levels Canal rerouting

global many of on Sea in the transit efficiency further Red vessels commercial disrupting companies attacks region longer and no to led of dry the shipping fleet. bulk Southern area, Aden the Gulf the However,

complex have XXXX in year-over-year, on building October. been iron XX, Slides port by and XX while steel rose Chinese the imports China's since inventories Regarding ore X% iron ore QX

of Steel increase to In terms trade secondary the see of routes. forecasts countries the World expected China's led production, in India, is levels, at growth an pointing X%, output developed from while Association to world from X% and support growth steel the of remain by demand around rest from XXXX to

forecasting the of XX bulk the the rates. American exports season. soybeans currently In terms we grain additional and expected trade, midst is in both shipped this An and marketing tons are million year, grain Brazil The of minor corn of in support to be Argentina. are increase in USDA a substantial South helping from

low Historically order coming vessels net -- as well of years. fleet outlined the as the in side to in and a was regulations regarding percentage Regarding book XX, fleet near-term growth supply low expected net to as XX longer-term growth keep X%. the the environmental Slides are XXXX fleet on

While This the concludes presentation, we of supply happy now provides basis volatility freight a of we market, going the foundation your market dry forward. a in growth to for bulk questions. expect picture the our view would take be constructive solid our and low

Operator

Thank Omar gentlemen, from question question-and-answer Jefferies. now we the first [Operator you. conduct will Ladies session. Nokta and with Instructions] Our

Omar Nokta

So I second far into your cape market so obviously, mean, the a seeing solid to earnings quarter. point we're strong continuing averages and the

really married Maybe on on that as it's a and here hip. been ore are the of that's months of the How things the lot iron developing? and does at discussion Capes bit come how has a two several color those Because here been been always market. past new the on past, market bit your a really the few or kind Capes. talked in just so? perspective past and a how supportive give There's more that little trade you of quarters over or trade influence market could over in from or of quarters the kind bauxite bauxite in You

John Wobensmith

ton I miles. Well, now where for few in the getting wouldn't trade meaningful it's a call point it been it's I to terms think, necessarily but because it's around years, Omar, of a new

bauxite And to going as Africa. coming West that's, a amount significant It's out of there's you so, of said, Asia.

that relatively is a supplementing thing trade iron And nice it's So, year is route for Brazil. also it trade out creating ore about coming the still this growth the and ton of is next long clearly The projected miles. bauxite there's year.

And I year, a balanced numbers, the getting in the on what's versus ore in mean Australia projecting of this growth trade. terms a you're more back happening we're Atlantic to X% of basis. So, going year-on-year basin tonnage in iron just XXXX growth

Omar Nokta

year, to tends ore kind the seen of tends bulk of but does a mentioned usually, more lens volatility exhibit a or trade, market. we Or normally? And of especially Brazil you From in eyes that, volatility, being a you the sort Iron especially I of guess of the more of swing year. haven't of chunk total Atlantic cargo? be -- a it growth on although big kind bit to maybe obviously, beginning perhaps, of balance have is just just the of that dry it on terms your similar your mentioned, this bauxite, in as consistent, type gradual it so

Michael Orr

exports strong tight year-over-year the ore just within more yes, an Atlantic and you're There Capes it There's so tends volatility yes, the But That -- with It option QX. Basin. rainy seasonality. Atlantic of there So QX, picks XX% iron there year exports. it's to season and additional certain gives with Brazilian seasonality This that is on is particularly in the up to trade. the also that important be saw definitely that have within a we up in Basin. bauxite rainy QX, gives the QX, bauxite there right. is sequentially amount extra already saw QX in in bauxite optionality on season, in -- then

John Wobensmith

And traditionally. and iron QX obviously, for ore strong are periods QX Brazilian

Omar Nokta

the than FFA at assessment? here the And for see assessment various averages the from or And guess? that broker clearly just of It's on rates above market then charter index in of maybe the one Genco perhaps happened, rates you fixed visibly XX,XXX? for give which kind me, It's least just day-to-day Any I would market at above guys. repeatable above seen stronger what I can Is what's say we seemingly houses. you year X-year one headline of I the final this the what or we've time is Baltic? Is kind versus Liberty one recently. also forward XX,XXX, this curve. noticed color

John Wobensmith

while we ago. that did little a perspective, look, Well,

And so recovery we've a over than recreate That FFA higher difficult the would be -- last a though what weeks. today, rate was today. bit -- market little to seen at it is a least the the certainly two

shows said when market, -- take approach. this, did good the take However, Liberty. Capes, time, risk terms we've opportunity in time you think how with look, table we'll from there's that's of in see particularly the and we from exactly to off rates some we we And the liquidity it portfolio and to what the in the a

And on So the talk to supply all the forward. the is we're and case going But market keep an and going about order the strong. the much it's time, eye situation the and with still book. think we make those low market supply decisions I Cape very low

you in upside, -- markets. is the change of the the you the biggest -- sure to in a few amounts supply because see an supply, you immediately iron the low situation, that I'm had massive of and that just that the rates think new demand It's and seen back XXXX move. years have remember wouldn't oversupply ore we've could when very do you demand have not and I XXXX freight and over And come in had balance. can today. demand case last we it There's freight movements incremental good when

you So, market. up when freight movements it in see in the have demand, incremental you

Operator

Riley. B. We'll Liam next take Burke with from question our

Liam Burke

barbell John, balanced you the fleet. the on strategy -- your

your high. You're what it to assets to vessels? manage like for with your so always look does more -- add looking the asset ability value

John Wobensmith

redeploy buckets. From more power to into potential for at older risk of close we're our will you continue elevated then assets continue going an continue standpoint, fuel-efficient that. increase So of start earnings renewal the capital make ships in in this look to hopeful, and and dividend which vessels I to dispose obviously, terms newer, it the at you look market. NAV. going which a We're of do equity values potential we're assets, if do so maybe that just our to kind at buying fleet -- three close I great. obviously XXth think I level When days, you our for But in payouts. these using levels. are that that cash those think mean percentile, proper can optimistic there's on the at gap And is pretty sense your of will I as can buying deal, am really use now buying I currency. to equity that you're

at the sort look are I'd of So it. those three ways

Liam Burke

where there some you've is time to non your Capesize? charters, Capesize the with you're do Capesize see Do on index, opportunities vessels? the more the really charters on assets. thought any Or time charter And you on over -- you earning longer-term those can

John Wobensmith

index pretty it. deals. good And scrubber spots the as obviously when great. deals trigger pull said, index they're on a of the We've economics you earning to are Look, the the on quite plus timing top on picked to some premium BCI

In about of fixed I on call. terms the the Liberty earlier rate, talked

to a volatility, is commercial ship market in exposure from the not trading where on the Capesize.I exhibit table we'll a focus say time and That platform robust will, bulks. it's to time, of minor this take wouldn't as putting -- opportunities the continues as taking the of a a of much on it's because off the We advantage think away But just of we that our rate side outperforming mean won't really the focus creating that to X-year Liam. good volatility. benchmarks say doesn't of I we're it. That Capes we platform. really arbitrage more on Thanks do and that see because a if

Operator

with comes question Elmaghrabi BTIG. Sherif next from Our

Sherif Elmaghrabi

year where scheduled million First, been have repayments the almost but debt. have $X doesn't this Genco paying regularly amortization, up. stepped you on until have down

that going is per are how about thinking is, so vessel voluntary question the forward, debt my now repayments you especially So, low?

Peter Allen

ship, remarkable as of per pretty is $X million vessel also you -- vessel that under the per in It's Yes. value is when and debt are is where which scrap where Sherif. Thanks, well. value think sense

very low it's you leverage alluded as situation to. So, a

our we terms In until debt of don't facility amortization debt voluntary in XXXX. repayments maturity -- because debt have any or scheduled

structure full that dividend managing reduce expense the debt With balance our essentially have our breakeven really capacity. increase our RCF save we're currently, and interest to we and

debt paying ships But worth date. have. really we on we whatever $XX did So, of we're million down sell to this year focused do

cash it, redraw. took and that well that we do going need we down So, RCF can the full we paid if

it's basis, million go-forward a RCF borrowing on with knowing we'll lose target, So, that but our manage we capacity. it the actively structure, the $XX year, million for still $X.XX that won't

John Wobensmith

that make appropriate based make avenues it's capital allocation. would I look, And to add monies reserve, But our the paying at fleet continue includes and from obviously down look $X.XX held time, the back also capital to renewal we depreciating obviously our assets. are decision all but reserve, that you the look on target a -- overall X. But part within debt sure right for net of allocation closer as obviously, it's of is shipping, have getting keeping level. we'll Board in at time the at which We'll debt, to

So, at a quite we're looking days. few things these

Sherif Elmaghrabi

in but And you market? for three acquire? values then climbed I'm And ships, and older specs are might purchase a also those two sort curious QX, especially You on added the have sold sale know, look vessel you that management, in fleet numerous opportunities how of what given to. where in do you

John Wobensmith

in as what the easy. the of say would easier for December more do the But -- -- vessels, to So as There's saw good, able to in a also we're and sector. you assets more for hands up deal. not available That's day, did solely The Ultramax in were often. newer as I was fuel-efficient us. not deal but two patience what timing we fantastic the for Capesize it's Capesize just really just XXXX Those in do designs. is to paramount which the December. bit that sale. ships. off that the modern market, refer those a more are carry come end on as get The would It's much I liquidity, our sale ability we was engine focused ships pays on eco quite in

confident So the continue to be I'm that renewal we'll able fleet strategy.

Operator

Alliance [Operator will Instructions] next Partners. Global with move Fratt Poe with We

Charles Fratt

it the Have past on the in John, up you mentioned, where close any your NAV, because value turned you has the that the the for market S&P in stock quiver, You moves equity seller potentially been down becomes to looking speak. narrow of deals as so a potentially your equity? to

John Wobensmith

I issuing to very continues. getting turned above yes, before, the wouldn't cautiously dilutive, you Clearly, price. that equity say terms we're that, I'm -- go as and It's something below said I to as with -- and of have we'll do. do close hopefully, we've to down. option not is things I of your have more that opted things in said, NAV the And to you probably NAV that there optimistic purchase value as as to looking equity. But far don't then quiver so that's not arrow we're get and you in strategy an we've

Charles Fratt

bit. booking first is little directionally, to Is you booking flavor And Ultras March now? when your on is Supras. on and little market of booking look how -- you're April right you really and me give Capes quarter forward cover, sort the you a rest Capes, of Ultras where I muted Can currently mean and have Cape of that of can sense the relative is give would the -- that up the how versus and a strong when a sort idea the are an a been you you're Supras? at correct? bit little the down you Or Supras me looks? in where the more just and Ultras of then My

John Wobensmith

$XX,XXX I earning are deals, BCI those have right? right, we that significant rates keeping day today, above in spot Capes And premiums are for that index a number Well, quoted. mind, just around that

ballasting to do at fixed have the up little break We a higher. I are think of when a bit. Atlantic look basin, you we ships that we bit you tend do couple the numbers them. Atlantic when look are now, And a -- though to haven't right little at the fleet the

think I a up and -- is few So definitely think weeks a market I because we are have softened pretty strengthening weeks, two last lot again, we've what the So to of just you're few ships but in ago, open, we ago weeks position a whereas seen didn't a the right? that a then now we good opening a were I a still market. again of in have It's pretty up are particular. very -- saw in are Capes relative, ships little mean all we numbers good, right? bit that these numbers all stronger though. ago, softness weeks we Even high on few the referring

Charles Fratt

of reason the you sort Ultras where talk and about Supras, there and Can the where are? of the the you quarter rates No to rest current complain. see

John Wobensmith

quarter, be. mid-XXs for out TCE which that for the But the do the we a into basis once of XX% good said, basis fleet quarter, or people spot are fuel rate any mean, of efficiency what a sort as or It's know, in very on to I get hard Well, to spot today. or somewhere going the of to forgetting the for spot scrubbers XX.X%, rates is next XX% rates that of years] you the of as rates, we'll I fixing we continue guidance vessels, Ultras-Supras average that. give XX adjustments for we're low on percentage around to put -- XX% also [fixed predict on the to Capes

Charles Fratt

side? a we just say two the about clarification, but costs, cost the I heard this like excluded And you dividend quarter million then, think One's the questions calculation. be on on that $X.X will clarify around from Peter, annual meeting looks I it can

your impact dividend won't that So payout?

Peter Allen

correct. that's Yes,

and the dividend QX. calculation. was will excluded from that correct, it $X.X QX, be be for estimated it million, So, That's in about like just would

John Wobensmith

Meaning it the will from not potential. dividend take away payout

Charles Fratt

Understood.

you cadence me about see Sorry, cost down come the bit on two should half Or first then you're running G&A the like potentially I flavor on Page those X.X%. over about in the the and a second a just and OpEx we half give little G&A appendix. just that guidance components? those can written talk you higher And Are XX OpEx looks It of and side the side. year? your cost down just can had

Peter Allen

Yes, sure.

So, timing on side, more related. OpEx the it's

QX a three number quarter, more like XX-month to what over far else. First period, quarter-to-quarter. off typically months at than related is anything too this this just were. our timing actuals look it not from than actually is But stuff We

the a is front-loaded really a front-loaded much, not On there but to would and is G&A stuff side, of that well, G&A as lot as that moving the we well. side anticipate nature

Operator

And are call conference this questions your This time. at concludes no there today. as further for

Genco Shipping & Trading Limited (GNK) 9 May 242024 Q1 Earnings call transcript