GNK - Earnings call transcript Q4 2024 | Genco Shipping & Trading Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Fourth Quarter 2024 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 being webcast at the company's website, www.gencoshipping.com.

question-and-answer the a remarks. conduct will session opening after We that Instructions at will follow time.

will via the be in webcast also Our replay available release well today's as the as website. on company's press provided link

this company. go the I over Please now the ahead. turn At conference time, to will

Unknown Executive

Good morning.

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

a For company's cause to in company's website, relating the including, Form differ, filings limitation, factors with with see SEC. materials on Exchange the Commission, the XX, the reports to and please that yesterday, the could discussion the of company's issued posted call this release results press on XX-Q year ended that without for filed and the December XXXX, report company's company's Form on Form X-K Securities subsequently XX-K and annual the the was

Wobensmith, introduce this Executive Officer Chief At Genco to of & I John would Limited. time, Shipping Trading like

John Wobensmith

year-to-date XXXX to Quarter reviewing begin Genco's Conference Welcome QX call everyone. Fourth our highlights. I morning, and Call. by Good today's XXXX will

opening quarter industry's strategy, for update for provide our will value as current the financial as questions. up the an we well Additionally, call the discuss fundamentals before our results on

our please website. also posted refer For presentation our earnings additional information, to on

value year and XXXX pillars: QX comprehensive the for another and for focused a X, company good very Genco, on capping growth. Slide advanced dividends, quarter we our as deleveraging off strategy earnings X what was grew on solid Starting marked

shareholders another our have provide the took take acquisition continue vessels increasing lower last time In risk, to we vessel. during Genco steps to Capesize a since financial we with XXXX. in our our acquired to additional and high-specification sizable year, the approximately modern of Intrepid, over pleased investment high-specification Specifically, Capesize third to $XXX when delivery million October, returns are we

towards high-quality our Notably, Importantly, acquisition our year, part cash Genco the strategy. the fleet we XXXX-built we in from vessels XXXX the earnings the redeployed have the CapEx enhance and by had completed the ton in exit XXXX additional reduced our fleet of and dry as the Intrepid these vessels. of acquisition smaller docking accretive of Capesize is and sale Earlier X XXX,XXX power proceeds broader deadweight and million. transactions premium X assets older $XX to renewal and

to Turning strong highlight Slide for Genco. We XXXX a what was X.

EBITDA exceeded $XX,XXX increasing prior I million, levels, nearly apologize, increase to led day the $XXX rates success levels XX% XXXX our year. charter Our equivalent a -- $XX,XXX time versus by from per XXXX

to day we or XX%, strong of adding current $X.XX on platform. per continued declaring the annualized per price. of in commercial In demonstrating strength continue addition also our our to we from approximately TCE share distributions our the during benchmarks, XX% market, yield share offer $X,XXX the by shareholders increased rates, year dividends to to the Furthermore, an

as shareholders highlighted to Page dividends sizable provide to on X. continue We

our financial dividend to increasing cash significant further price dividend our while XXnd through and strength at our dividend our current per to represents consecutive which strengthen shareholders of providing [indiscernible] cycles distributable pleased $X.XX shareholders recent the quarter aggregate share earnings fourth we aimed quarter. in market renew XX. This February dividends our are enhance $X.XXX power. The to our to XX% declared marks decision dividend advance which of our per and for We policy, as share follows as fleet to maintaining fourth share or grow is solid

Specifically, docking we from removed the dry going CapEx calculation line the item dividend forward.

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

given risk At to building by fleet capital, have remain origins. X%, the strong to and downward a balance longer-term provide shareholders. over rate beginning drybulk in new Despite led XXXX off moderate low of this built rate bulk low Coming of favorable fundamentals, same industry market, we seasonal rates, balance revolver both opportunistically part bulk of to strong and softening net in due has we cash returns significant Specifically, dry to volumes loan-to-value near-term time, freight factors. our sheet, breakeven diverse through environments which the long-haul to a constructive Genco and cycles dry an from capitalize the reward XXXX and on a order market grow sizable book cargo availability. undrawn on million flow growth continue to we of are in $XXX seen the access volatility

I call will over Officer. Allen, Chief Peter now our Financial to the turn

Peter Allen

you, $X.XX increase Thank net earnings results. XX% XX, and year-over-year. highlight $XXX.X income John. basic recorded quarter our financial fourth diluted yearly total of to of [ share. ] Adjusted million, million, per through the totaled Slides for On $XX.X we QX bringing EBITDA Genco XX an $XX.X million or

day leverage same $X,XXX turned year-over-year vessels, [indiscernible] the which During the TCEs $XX,XXX of highlighting basis, than quarter operating significant on day the by the period sector. per Capesize QX, per of last led over a greater year, or our during of our Capesize rate increased approximately

continued voluntary Slide we of the our On XX, repayments. and trajectory showed outstanding debt debt our

down net nearly credit paid of down which or only us and debt years, annualized highlights XXXX, capture down by the has approximately interest manage will million facility debt paid paying in losing without per X expense revolving of last accretive million Voluntarily per In loan-to-value on cash our credit estimate the growth opportunities. we specifically, can vessel an $X pay that that basis reduce flexibility offers we $XXX to $XXX X%. we voluntarily under significant actively we to resulted rate. million, ratio facility, on $XXX flow XX% have this and importance of debt structure our our borrowing Over or down expense that capacity debt and our XXX% interest day breakeven revolving

a of will Slide Turning position XX, Genco's we to current as financial present snapshot XX, of December XXXX.

of We industry have and an cash of $XX balance $XX net net respectively, on approximately fleet. a debt in million loan-to-value million X% a $XX and debt our of resulting XX and position vessel low ratio million,

undrawn opportunities have we of growth revolver Additionally, availability other million uses. we among utilize for $XXX can that

targets cash yield flows plus our on voluntary XXX% per treasury quarterly We XX. our Slide policy, dividend a reserve. the to nearly of based Moving in highlight quarterly distribution X%, fourth double rate or resulted quarter, annualized approximately of a X-year $X.XX The of X%. share an a which dividend formula

at per our vessel Looking much the tends half during year, XX% front-load high seek days we that seasonally maximize rate of drydockings ahead and of to docking the stronger related plan industry be $X,XXX to to to these day. note a perspective. dry the year utilization in fixed which the to second We as currently freight a QX dry of rate flow year from in $XX,XXX of available first fleet-wide docking the per our XXXX, of a half has excluding per CapEx of have compared anticipated like cash day XXXX, while we breakeven rate, Genco,

the I Orr, fundamentals. to will market Michael now turn to analyst, call discuss drybulk over our industry

Michael Orr

year the day. you, dry averaged Last Peter. an Capesize strong Baltic the on from a $XX,XXX perspective, the led which per with improved Beginning strong was Thank year-end. XX, market XXXX, experienced a that Slide the seasonality in from was of year sense Index, into market start bulk the the ease QX by atypical

new trends in in the QX, both Pacific New such minor timing So traditional bulk vessels, seen availability, building deliveries, for as Atlantic as particularly the basins seasonal front-loaded far of impacting in the the as disruptions return has of well XXXX nature cargo Chinese Year. the and date, market weather the

and congestion the to freight demand than of supply exports XXXX. trade Page iron reduced QX, highlighted in back with lower impacting ore approximately volumes, XX, downside. second the long-haul rates temporarily [indiscernible] since to the due for exports off the and an have port January iron poor but have on the weather of XX% conditions scheduled as half highs easing Specifically, These balance sector, ore together thrown pulled

year to marked active another and Turning iron Iron ore for year Chinese replenished year-over-year, both imports. inventory. XX, by grew some of X% Slide coal ore XXXX imports which

remained of XX% proportion inducing Asian below other While exports absolute current as higher recent of than terms, levels access Chinese highs in XX% growing with production China years. mostly last demand. point while export well steel China approximately globally. steel declined continues are its time output steel exports domestic this reduced measures East, to highlighting producers, increased to year. the the stockpiles are of by XXXX, these of a to over contention, XXXX XX% China's has nations over Middle as steel going protection in

XX Brazil Africa Turning from and coming growth and the West long-haul Pages iron bauxite XX, highlight trade expected ore we and to years. the in

more year be book. Capesize key for newbuilding absorb which long-haul trading [indiscernible] significant sector. catalysts newbuilding and are over constraints XXXX, added current than combined can are to expected volumes XXX which Capesize businesses this is growth growth is While there vessels, expected activity order 'XX with marginal, May the and Capesize X the

wide XX, January. range Slide Canadian the in on trade XX% initiated been and Trump has on [indiscernible] of a of Mexican depicted blanket partners since tariffs, tariffs imports have Many delayed. inauguration across threatened these As such as the administration and

tariff on XX% equipment. on ] XX% beauties and oil has However, agricultural imposed implemented well [indiscernible] [ and China as a crude the imports, U.S. on to [indiscernible] U.S. XX% coal all as LNG

and that of on a regardless aluminum XX% Additionally, plans all steel President institute has Trump announced tariff imports to origin. he

dry So regimes impact have a limited global on generally far, trade. bulk had tariff the new

manner the multiple tariffs been in what implemented are as administration the first being than However, aggressive partners simultaneously. in a broad-based Trump witnessed have trade on we they more

grain war, the was trade In by grain Page impacted we trade on China entering U.S. South as American first terms currently of are XX, the season. detailed which

year a of Brazillian for bulk minor be and trade. Following strong should supportive shipments another Argentine harvest are U.S. bumper both expectations which for

During increase far, approximately February XX% by so due dynamics. rates Supramax spot seen we've part to these in

XXX% Panama in in average February in to over gone Slide Red directions. XX. XXXX transits levels. the to Sea our have and year have [indiscernible] Panama different back bulk This Moving increased low, drive Canal Since

On normal and Suez still are levels lower the remain tenuiscaso hand, the seafire, to agreement. as in term near further the ] are seafire at Canal taken transits in likely well are the other despite [ levels below steps

amount least ssupply X%, order delivery smallest the X the book are January year. the on was The Slide outlined only expected There fleet side of in year. the to cape growth currently among this capes for January, XXXX previous line only with XX have continues with Capesize delivered in XX, XXXX. Regarding the cape since net deliveries more segment sectors

low the we While expect going a provides the of base in view of market, solid foundation volatility market the picture a bulk supply growth our dry freight constructive forward. of

presentation, questions. This be happy and concludes now we your to our take would

Operator

now Instructions]. gentlemen, question-and-answer comes and Jefferies. Ladies from line with first Nokta you. your session. Thank we Omar Okay. question And will conduct of [Operator the the

Omar Nokta

John, morning Michael. Good Peter

softer think on in strong on [ as Genco, market looking right think you're just you but late? you've I LTV be here now? be ] strongest to Just coming is overall, the shape, opportunities that just been, has close may is, obviously, highlight, do how pushing think ever of terms the you -- How terms liquidity about How the up, and do the what Genco positioned you the market And in is just at market especially where is developed X%, here release update dry to maybe going -- million. in recently? it morning, you're of the bulk of clearly, given $XXX just

John Wobensmith

Thanks, Omar. Yes.

happen up we us company it from the were lower acquire prices, Ultramaxes. the standpoint, company offense. is large by where going always in to how we fleet to we always And that, a in clearly, So with seen years focusing as on ago that that is to allow you've capes almost play rate position put XXXX. X what that and X.X this value in into payout right flows, XXXX, XXXX I -- the able we a dividend mean we've renewal look be to the And believe that look, plays strategy. with at do set XXXX, can wanted this than particularly cash And at while softer vessels additional eco-type may favorable due to still it we

And company for situation a will up think sacrificing to first this So what in freight back I'd X% side. part for dividend debt, grow. while this little in on again, of softer can we environments. go all anything company with just the that they that net maybe is to breed extremely without a do And we the we to thrive said the easy opportunity year, this have

Omar Nokta

here Okay. That's pretty and market offense guess like nice on play is last to on your simple. just a maybe your obviously dividend, in this. be nicely policy able And to point payout I the

You with reserve. that How setup the How think about $XX -- dividend flow that just the the maybe first year you in do dynamic? in what million think pay be cash red for do slipping out earnings, operating the rates. given the you quarter low spot that about would

John Wobensmith

Yes. comes And this certainly, question up.

we're all, much committed of value which to dividends. includes strategy, the very first quarterly so -- think I

dividends time, Definitely out a again, volatility still have and elected I look a back of at formula of all X X but think pay straightforward by very formula at during that. produced is straightforward share. is the quarters, at but in softness, the formula to quarter, record go even a first that those to periods QX the when do and on out, pointed XXXX you downward our track spit previous you $X.XX there's strategy As QX the very, we XXXX, would dividend have

-- what management defined terms the to in very their there's track the now a So we've record Board of the strategy. company, value team and I commitment and think

$X.XX it You out reserve, pointed a works quarterly out to the actually share. about

what doesn't is reserve tap mean needed. to right going a reserve, short-term happening of us basis but it out in to a as the bit now. is short-term freight markets, pay to It lot exactly counteract a whole quite we we're certainly gives the of there's So flexibility believe volatility on which

So much where even and so We've It's growth is to go just dividends, Omar. it's in us. for to again, have about playing periods continue thing. decent-sized the factor offense this it's same very softness company up -- back paying we rates set in I a

Omar Nokta

Great very it. it John, thanks Got I'll helpful. over. turn

Operator

Robertson question your comes Chris of with next And Deutsche line from the Bank.

Christopher Robertson

I'm are to not load environment. to that's regards well. trying deploying only to so this year rate with as just And Just assuming the docking the you're public front other due players forward, doing the there dry private

surveys Additionally, there's year. and of built portion in dry that that docking this large do the undergo XXXX was fleet a to have special

is effective see So to guess, do rush potential in yard? is reduced trying I capacity everyone any because you the to for, as upside the fleet

John Wobensmith

year Maybe made larger it a overall. it's fleet at I if that's bit. actually think look I the little year made is. dry actually being actually being than even an next a little docking believe is you bigger

quarter how normal And to this things I seasonal drydockings, of not can in factor when next even certainly a terms is is when set Genco But we too as we forward a not low regulatory what this But obviously particularly sure I'm schedule drydockings. of pulling part our much we're terms need in make as having is in again, we year necessarily much In it doing, of XXXX. possible do as things pull the to softness. we're of have try opportunity we earlier year. as But costs the to year -- as heavier. the forward

So maybe next into see we it we to year. as get start

Christopher Robertson

that talk you ] as the Suez Okay. the that what [ the for Got in do is the impacted demand means overall just bulk think transit, Canal in normalize? second dry John, if you. And about were My right. relates All of segment could decrease Suez you it to Tamal normalization question most? to which sector

John Wobensmith

one we has you can go again maybe everything no I Red turn We day, point volatile the Africa Red it's I the looks is Genco as transit of can't X%. it's at a in blows thing and at and near bulk, middle to plans it. crew, the world to we to around good you, tax. you a don't and the continue this dry what as of think Sea have and And the least you there. still Sea much tell up a will very a the situation it's very sudden, last think area, company all a in for around ship want see and you're have term

So away. staying for the being, time we're

shipowners but lot a other not not we think it's to that a clearly want of take shipping are with I crew. everyone, risk our

Christopher Robertson

Yes, it's it the guys. for time. All for smart crew, Thank right, safety essentially. the turn you over. I'll

Operator

BTIG. the with of [Operator line next Instructions] from question And Elmaghrabi your comes Sherif

Sherif Elmaghrabi

When showing we the below liberty of but are fixed aren't on a So far Capes bit classes. smaller where the endeavor are market. vessels recent are a and bifurcation by owners at time a bit too fixtures other between China some look a couple the vessel market, lower.

strength seasonal wondering Capes the So sort even through slump. market behind what's I'm of as spark the weather impacted goes and in relative the

John Wobensmith

a I'm this at point. confused TC are X-year Capes because XX little on rates definitely below

So every they the have down as pushed other ships. been market larger on the ships as well like smaller just

of So pressure gets those being FFAs of lot like And where more off FFA because that than they've seen the market, of because rates in times, are. spot think daily used definitely curve midsized I -- the downward X-year priced are vessels. somewhat in TC that that so Cape a

Sherif Elmaghrabi

the to year for XX. on that's bauxite Okay. were ore more a expansions my some The I figures iron But It so be Slide could highlighted than that shifting saw second a maybe you and of question. driver.

production year tanker seen some the the last refineries couple trade of more. context, but ramp we've online, years, has a full or the important For come of taken

impact in projects, X, start you and a the the tonnes those how of dry of bauxite an these ore cadence for trade? have iron bulk sense So making do should XXX

John Wobensmith

Sure.

it's They it end the of ramp think up then said, we are as by ramp-up 'XX you going have this tons. guess have large of indicated early call more get half run might I you, the into by of symbolic shipments should that a anything I 'XX. full I second would into be educated XXX see up those more and to would and rate than tell that 'XX, should I we And else. year. I XXXX get time don't into believe begin they'll and as as I and certainly an shipments. real then going 'XX full the -- be you get So million you'll

Sherif Elmaghrabi

you color. Thank so for the helpful. that's Great, much

John Wobensmith

lose don't that And as welcome. come long-haul you're of and well east. And going little Vale still as and bauxite Yes, growth of from probably 'XX a well West That's into trade. that's to as a Africa got on well growth side, fact you've sight have the we out sooner. through the at coming 'XX least still going obviously

Operator

next of Poe comes Alliance Partners. the Global Your line from question with Fratt

Charles Fratt

as you not between talk the in -- buying a you presentation, to growth, discount growth the huge tonnage. get talking always. assets, would about compare Comprehensive you're emphasizing you're clearly your play market, to to going able your stock, be own Can to buying about you're that NAV. [indiscernible] And just probably

prices the you to to Can conversely, But that pay open you market NAV. about opportunities? purposes. those talk they're assess if to going going pretty your You're for and [indiscernible], how different discount all intents market and own good just buy

John Wobensmith

Sure.

we ROIC and return and operating debt, generate ships First shipping them money is we're by using dividends company, buying most flows to shareholders. importantly, and pay to those down to cash continue and a make

or buybacks? it done tremendous share have share comes amount think I work it is We on to a a of of, down dividends buybacks. So question

done to when better them in returning We have to shareholders is in as dividends than of a of is share this -- a share that company, with formed TSR work have sector programs companies And year, our shipping at seen that I form look exception one better not the go. any been do the money way whole. believe We the are actually been that buybacks. buyback in have

way is best the shareholder returns dividends. believe fundamentally we So through generate to

to shipping ROIC. our fleet and shipping need company. grow to We continue though a to cash The again, flows side, we're generate

Charles Fratt

good. Sounds

in first previous to first this where in sense X% in change about a covered quarter talk on your opinion in significant you your -- Can just historic make you're already you're to -- does the point So the at according XX,XXX. buybacks. or reserve, it said still not quarter, it reserve that Clearly, have time, the made the you call at in, presentation, generate going my least full for stock on it, calculation. no dividend

flexed down waiting next right of not until reserve the why you quarter instead So report? when now

John Wobensmith

as being Look, Again, a consistent, that soft And agree. well. formula not we to I can't committed the in think will I and the quarterly I will and the it's again, to do value that to we dividend. definitely actual sure smooth think strategy, we first even the spit working what the it dividends can quarter ability out, but enough. a pay dividends I I'm -- I'm out think say give past. quarterly We're We had use that just not I reserve extremely about and and we've it's But it's quarter a have Poe. the done sure and companies have in forward, the the quarter first most if across industry. guidance flex

Charles Fratt

quarter. should that? into you sort you expectations? dividend Or the Understood. And at we heard something minimum of -- of mean $X.XX the a did level applied least built that not is should at on Is John, your history I that based

John Wobensmith

we the balance out this formula as and market. addressed we why obviously, CapEx to which have fundamentals Board forward call, put took dry it year, the the but in as to still sheet, had address to that's forward of of want that docking said we it's what certainly what want positive of I I out is, the very management because terms flows dividend. earlier pointed Well, well, strong team as the no, have quarter. past decision the $X.XX very, and We've on optionality first per yet, heavy cash we a get minus a didn't through on we history the all. in as been reserve going We see are. such the I've have the is share I a made terms of

Charles Fratt

Thanks John. good. my taking questions Sounds for

John Wobensmith

Thank you, Poe.

Operator

no your questions Thank call this for at ask disconnect your please time. today. and conference there further As for you participating you to are lines. This concludes

Genco Shipping & Trading Limited (GNK) 20 Feb 252024 Q4 Earnings call transcript