Genco Shipping & Trading Limited Announces Q4 2023 Financial Results
- None.
- None.
Insights
The declaration of a $0.41 per share dividend for Q4 2023 by Genco Shipping & Trading Limited signifies a robust return to shareholders, marking the 18th consecutive quarterly dividend. This consistency in payouts is a clear signal of the company's financial health and a commitment to shareholder returns. The cumulative dividend amounting to $5.155 per share, which equates to 29% of the share price, is particularly noteworthy as it suggests a substantial yield that is likely above the industry average. This could potentially attract dividend investors and support the stock price.
However, investors should consider the sustainability of these payouts in relation to the company's earnings and cash flow. A payout ratio that is too high could jeopardize future dividends or indicate that the company is not reinvesting enough in its own growth. It's also important to assess the company's debt levels and capital expenditures, as these factors could influence its ability to maintain or increase dividends.
Genco's focus on the global transportation of commodities positions it within a volatile market, where freight rates can fluctuate significantly due to economic cycles, trade policies and geopolitical events. The drybulk shipping industry is capital intensive and companies within this sector must carefully balance growth investments with shareholder returns. Genco's strategy of dividends, deleveraging and growth suggests a holistic approach to creating shareholder value.
Investors should monitor commodity market trends, as they can directly impact Genco's revenue streams. Additionally, the broader economic outlook, including indicators like the Baltic Dry Index, can provide insights into the potential performance of shipping stocks. Considering Genco's performance against these industry-specific benchmarks is crucial for stakeholders to evaluate the company's market position and future potential.
The dividend announcement by Genco can be seen as a microcosmic reflection of the broader economic environment. A steady dividend payout could indicate that the company is experiencing stable demand for drybulk shipping, which in turn may suggest resilience or growth in global trade and economic activity. Conversely, any future reduction in dividend payouts could be an early indicator of economic slowdown or challenges within the shipping industry.
Long-term stakeholders should also consider the impact of macroeconomic factors such as inflation, interest rates and currency exchange rates on Genco's operational costs and international competitiveness. The company's ability to navigate these economic challenges while maintaining its dividend strategy will be critical for its sustained success and appeal to investors.
Executes on All Three Pillars of Value Strategy Related to Dividends, Deleveraging and Growth
Declares Dividend of
NEW YORK, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”), the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today reported its financial results for the three months and twelve months ended December 31, 2023.
Fourth Quarter 2023 and Year-to-Date Highlights
- Dividend: Declared a
$0.41 per share dividend for Q4 2023- 18th consecutive quarterly payout
- Cumulative dividends of
$5.15 5 per share or29% of our share price1 - Q4 2023 dividend is payable on or about March 13, 2024 to all shareholders of record as of March 6, 2024.
- Global refinancing: Closed a
$500 million revolving credit facility providing additional capital allocation flexibility and improved terms compared to our previous facility100% revolver structure with increased borrowing capacity by$156 million , maturity is extended by over two years to the end of 2028 and margin is reduced to a grid of1.85% to2.15% from2.15% to2.75%
- Fleet renewal: Acquired two 2016-built scrubber-fitted Capesize vessels, the Genco Ranger and the Genco Reliance, for
$86.1 million , in Q4 2023- Agreed to sell three 2009-2010-built 169,000 dwt Capesize vessels
- Saved nearly
$10 million in 2024 drydocking capex for these vessels which had upcoming third special surveys due
- Saved nearly
- Agreed to sell three 2009-2010-built 169,000 dwt Capesize vessels
- Financial performance: Net income of
$4.9 million for Q4 2023, including a non-cash vessel impairment charge of$13.6 million , or basic and diluted earnings per share of$0.12 and$0.11 , respectively- Adjusted net income of
$18.6 million or basic and diluted earnings per share of$0.43 , excluding the non-cash vessel impairment charge of$13.6 million 2 - Adjusted EBITDA of
$37.1 million for Q4 2023 and$101.5 million for FY 20232
- Adjusted net income of
- Voyage revenues: Totaled
$115.5 million in Q4 2023- Net revenue2 was
$70.6 million during Q4 2023 - Average daily fleet-wide TCE2 was
$17,373 for Q4 2023
- Net revenue2 was
- Fleet-wide TCE for FY 2023:
$14,766 , which outperformed our scrubber-adjusted internal benchmark by approximately$1,300 per day3 - Estimated TCE to date for Q1 2024:
$18,724 for81% of our owned fleet available days, based on both period and current spot fixtures2
John C. Wobensmith, Chief Executive Officer, commented, “2023 marked another strong year for Genco, as we continued to take concrete steps to drive sustainable long-term shareholder value while remaining the #1 shipping company for the third consecutive year in the Webber Research ESG Scorecard. Notably, we further executed on all three pillars of our comprehensive value strategy focused on dividends, deleveraging and growth. We declared our 18th consecutive dividend, increasing cumulative dividends to shareholders to
Mr. Wobensmith continued, “Our performance in the fourth quarter was strong. Importantly, we capitalized on our industry leading commercial platform and our significant operating leverage to once again outperform benchmarks and increase TCE by
Mr. Wobensmith concluded, “Since implementing our value strategy in early 2021, we have taken important steps to position Genco to drive value through drybulk shipping market cycles. Going forward, we continue to focus on providing significant returns to shareholders, reducing our financial risk and maximizing our ability to pursue accretive growth opportunities. At the same time, we remain committed to maintaining high corporate governance standards for the benefit of shareholders.”
1 Genco share price as of February 20, 2024.
2 We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. Please see Summary Consolidated Financial and Other Data below for further reconciliation. Regarding Q1 2024 TCE, actual results will vary from current estimates. Net revenue is defined as voyage revenues minus voyage expenses, charter hire expenses and realized gains or losses on fuel hedges.
3 Our benchmark is defined as the weighted average of the Baltic Supramax Index as published by the Baltic Exchange and the Platts Scrubber Fitted Capesize Index net of
Comprehensive Value Strategy
Genco’s comprehensive value strategy is centered on three pillars:
- Dividends: paying sizeable quarterly cash dividends to shareholders
- Deleveraging: through voluntary debt repayments to maintain low financial leverage, and
- Growth: opportunistically growing and renewing the Company’s asset base
This strategy is a key differentiator for Genco, which we believe creates a compelling risk-reward balance to drive shareholder value over the long-term. The Company intends to pay a sizeable quarterly dividend across the cyclicality of the drybulk market while maintaining significant flexibility to grow the fleet through accretive vessel acquisitions.
Key characteristics of our unique platform include:
- Industry low cash flow breakeven rate
- Net loan-to-value of
10% 4 - Strong liquidity position of
$341.7 million at December 31, 2023, which consists of:$46.9 million of cash on the balance sheet$294.8 million of revolver availability
- High operating leverage with our scalable fleet across the major and minor bulk sectors
4 Represents the principal amount of our credit facility debt outstanding less our cash and cash equivalents as of December 31, 2023 divided by estimates of the market value of our fleet as of February 20, 2024 from VesselsValue.com. These figures are pro forma for agreed upon vessel sales, the delivery of which occurred or is expected to occur in Q1 2024. The actual market value of our vessels may vary.
Financial deleveraging
Genco has reduced debt outstanding by ~
- Debt outstanding:
$200.0 million as of December 31, 2023- Drew down
$65.0 million under our revolver in Q4 2023 to partially fund the acquisition of the Genco Ranger and the Genco Reliance - Later in Q4, we paid down
$9.8 million of debt as we actively manage our debt outstanding under our$500 million revolver to reduce interest expense
- Drew down
- We plan to continue to voluntarily pay down debt with a medium-term goal of zero net debt in order to enhance our ability to pay meaningful dividends and take advantage of strategic opportunities throughout drybulk market cycles
Growth
Acquired two 2016-built 181,000 dwt scrubber-fitted Capesize vessels for
- Genco Reliance: November 21, 2023
- Genco Ranger: November 27, 2023
We took delivery of the two acquired Capesize vessels as the freight rate environment was strengthening. As such, EBITDA generated on the first fixtures for these ships are estimated to have paid off approximately
Furthermore, we agreed to sell three of our 169,000 dwt Capesize vessels for aggregate gross proceeds of
- Genco Commodus: February 7, 2024
- Genco Claudius: February 2024 expected delivery
- Genco Maximus: March 2024 expected delivery
We continue to further evaluate fleet renewal and growth opportunities in the sale and purchase market.
Dividend Policy
Genco declared a cash dividend of
Quarterly dividend policy:
Under the quarterly dividend policy adopted by our Board of Directors, the amount available for quarterly dividends is to be calculated based on the formula in the table below. The table includes the calculation of the actual Q4 2023 dividend and estimated amounts for the calculation of the dividend for Q1 2024:
| Dividend calculation | Q4 2023 actual | Q1 2024 estimates | |||||
| Net revenue | $ | 70.62 | Fixtures + market | ||||
| Operating expenses | (33.33 | ) | (35.05 | ) | |||
| Less: capex for dydocking/BWTS/ESDs | - | (4.76 | ) | ||||
| Operating cash flow less DD capex | $ | 37.29 | Sum of the above | ||||
| Less: voluntary quarterly reserve | (19.50 | ) | (19.50 | ) | |||
| Cash flow distributable as dividends | $ | 17.79 | Sum of the above | ||||
| Number of shares to be paid dividends | 43.2 | 43.2 | |||||
| Dividend per share | $ | 0.41 | |||||
| Numbers in millions except per share amounts | |||||||
Operating cash flow is defined as net revenue (consisting of voyage revenue less voyage expenses, charter hire expenses, and realized gains or losses on fuel hedges), less operating expenses (consisting of vessel operating expenses, general and administrative expenses other than non-cash restricted stock expenses, technical management fees, and interest expense other than non-cash deferred financing costs), for purposes of the foregoing calculation. Estimated expenses and capital expenditures for Q1 2024 are estimates and subject to change. For the first quarter, operating expenses are expected to exclude extraordinary annual meeting related expenses.
The voluntary quarterly reserve for the first quarter of 2024 under the Company’s dividend formula is expected to be
Anticipated uses for the voluntary reserve include, but are not limited to:
- Vessel acquisitions
- Debt repayments, and
- General corporate purposes
The Board expects to reassess the payment of dividends as appropriate from time to time. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facility) and the Board of Directors’ determination that each declaration and payment is at the time in the best interests of the Company and its shareholders after its review of our financial performance.
Peter Allen, Chief Financial Officer, commented, “During the fourth quarter, we continued to enhance our financial strength and increase the fleet’s earnings power. We closed on a new
Genco’s Active Commercial Operating Platform and Fleet Deployment Strategy
We utilize a portfolio approach towards revenue generation through a combination of:
- Short-term, spot market employment, and
- Opportunistically booking longer term coverage
Our fleet deployment strategy currently remains weighted towards short-term fixtures, which provide us with optionality on our sizeable fleet.
Our barbell approach towards fleet composition enables Genco to gain exposure to both the major and minor bulk commodities with a fleet whose cargoes carried align with global commodity trade flows. This approach continues to serve us well given the upside potential in major bulk rates together with the relative stability of minor bulk rates.
Based on current fixtures to date, our estimated TCE to date for the first quarter of 2024 on a load-to-discharge basis is presented below. Actual rates for the first quarter will vary based upon future fixtures. These estimates are based on time charter contracts entered by the Company as well as current spot fixtures on the load-to-discharge method, whereby revenue is recognized ratably over the voyage from the commencement of loading to the completion of discharge. The actual TCE rates to be earned will depend on the number of contracted days and the number of ballast days at the end of the period. According to the load-to-discharge accounting method, the Company does not recognize revenue for any ballast days or uncontracted days at the end of the first quarter of 2024. At the same time, expenses for uncontracted days will be recognized.
| Estimated net TCE - Q1 2024 to Date | |||
| Vessel Type | Fleet-wide | % Fixed | |
| Capesize | $ | 23,504 | |
| Ultra/Supra | $ | 15,798 | |
| Total | $ | 18,724 | 81% |
Our index-linked and short-period time charters are listed below. The Genco Reliance and Genco Ranger index-linked charters are estimated to begin in March following the completion of current employment.
| Vessel | Type | DWT | Year Built | Rate | Duration | Min Expiration | ||
| Genco Endeavour | Capesize | 181,060 | 2015 | BCI + | 11-14 months | Apr-24 | ||
| Genco Resolute | Capesize | 181,060 | 2015 | BCI + | 11-14 months | Apr-24 | ||
| Genco Defender | Capesize | 180,021 | 2016 | BCI + | 11-14 months | Apr-24 | ||
| Genco Reliance | Capesize | 181,146 | 2016 | BCI + | 10-12 months | Jan-25 | ||
| Genco Ranger | Capesize | 180,882 | 2016 | BCI + | 11-14 months | Feb-25 | ||
| Genco Madeleine | Ultramax | 63,166 | 2014 | $ | 16,000 | 5-7 months | Mar-24 | |
| Genco Constellation | Ultramax | 63,310 | 2017 | $ | 16,000 | 5-7 months | Mar-24 | |
| Genco Languedoc | Supramax | 58,018 | 2010 | $ | 18,250 | 3-5 months | Mar-24 | |
| Genco Bourgogne | Supramax | 58,018 | 2010 | $ | 15,000 | 4-6 months | Mar-24 | |
| Baltic Wasp | Ultramax | 63,389 | 2015 | $ | 16,500 | 5-7 months | Apr-24 | |
Financial Review: 2023 Fourth Quarter
The Company recorded net income for the fourth quarter of 2023 of
Revenue / TCE
The Company’s revenues decreased to
Voyage expenses
Voyage expenses were
Vessel operating expenses
Vessel operating expenses increased to
We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical manager, our DVOE budget for Q1 2024 is
General and administrative expenses
General and administrative expenses decreased to
Depreciation and amortization expenses
Depreciation and amortization expenses increased to
Financial Review: Twelve Months 2023
The Company recorded net loss of
Revenue / TCE
The Company’s revenues decreased to
Voyage expenses
Voyage expenses decreased to
Vessel operating expenses
Vessel operating expenses decreased to
General and administrative expenses
General and administrative expenses for the twelve months ended December 31, 2023 increased to
EBITDA
EBITDA for the twelve months ended December 31, 2023 amounted to
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the years ended December 31, 2023 and 2022 was
Net cash used in investing activities during the years ended December 31, 2023 and 2022 was
Net cash used in financing activities during the years ended December 31, 2023 and 2022 was
Capital Expenditures
After the agreed upon vessel sales, Genco’s fleet will consist of 43 vessels:
- 16 Capesizes
- 15 Ultramaxes
- 12 Supramaxes
The fleet’s average age is 11.6 years and has an aggregate capacity of approximately 4,490,000 dwt.
In addition to acquisitions that we may undertake, we will incur additional capital expenditures due to special surveys and drydockings. Furthermore, we plan to upgrade a portion of our fleet with energy saving devices and apply high performance paint systems to our vessels in order to reduce fuel consumption and emissions.
We estimate our capital expenditures related to drydocking, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment system costs, fuel efficiency upgrades and scheduled off-hire days for our fleet for the balance of 2024 to be:
| Estimated costs ($ in millions) | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | |||||
| Drydock Costs(1) | $ | 3.55 | $ | 3.55 | $ | 5.10 | $ | 5.85 | |
| Estimated BWTS Costs(2) | $ | 0.53 | $ | 0.53 | $ | - | $ | - | |
| Fuel Efficiency Upgrade Costs(3) | $ | 0.68 | $ | 0.68 | $ | 0.82 | $ | 0.96 | |
| Total Costs | $ | 4.76 | $ | 4.76 | $ | 5.92 | $ | 6.81 | |
| Estimated Offhire Days(4) | 60 | 60 | 80 | 90 | |||||
(1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses.
(2) Estimated costs associated with the installation of ballast water treatment systems are expected to be funded with cash on hand.
(3) Estimated costs associated with the installation of fuel efficiency upgrades are expected to be funded with cash on hand.
(4) Actual length will vary based on the condition of the vessel, yard schedules and other factors. The estimated offhire days per sector scheduled for Q1 2024 consists of 30 days for one Ultramax and 30 days for one Supramax.
Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below.
| Three Months Ended December 31, 2023 | Three Months Ended December 31, 2022 | Twelve Months Ended December 31, 2023 | Twelve Months Ended December 31, 2022 | |||||||||||||||||
| (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 | $ | 115,516 | $ | 126,973 | $ | 383,825 | $ | 536,934 | ||||||||||||
| Total revenues | 115,516 | 126,973 | 383,825 | 536,934 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Voyage expenses | 42,450 | 43,470 | 142,971 | 153,889 | ||||||||||||||||
| Vessel operating expenses | 25,368 | 20,902 | 97,093 | 99,469 | ||||||||||||||||
| Charter hire expenses | 2,404 | 7,497 | 9,135 | 27,130 | ||||||||||||||||
| General and administrative expenses (inclusive of nonvested stock amortization | 7,001 | 7,372 | 28,268 | 25,708 | ||||||||||||||||
| expense of | ||||||||||||||||||||
| Technical management fees | 937 | 932 | 4,021 | 3,310 | ||||||||||||||||
| Depreciation and amortization | 16,703 | 16,028 | 66,465 | 60,190 | ||||||||||||||||
| Impairment of vessel assets | 13,617 | - | 41,719 | - | ||||||||||||||||
| Total operating expenses | 108,480 | 96,201 | 389,672 | 369,696 | ||||||||||||||||
| Operating income (loss) | 7,036 | 30,772 | (5,847 | ) | 167,238 | |||||||||||||||
| Other (expense) income: | ||||||||||||||||||||
| Other (expense) income | (98 | ) | (439 | ) | (396 | ) | 178 | |||||||||||||
| Interest income | 790 | 666 | 2,667 | 1,042 | ||||||||||||||||
| Interest expense | (2,622 | ) | (2,171 | ) | (8,780 | ) | (9,094 | ) | ||||||||||||
| Other expense, net | (1,930 | ) | (1,944 | ) | (6,509 | ) | (7,874 | ) | ||||||||||||
| Net income (loss) | $ | 5,106 | $ | 28,828 | $ | (12,356 | ) | $ | 159,364 | |||||||||||
| Less: Net income attributable to noncontrolling interest | 169 | 149 | 514 | $ | 788 | |||||||||||||||
| Net income (loss) attributable to Genco Shipping & Trading Limited | $ | 4,937 | $ | 28,679 | $ | (12,870 | ) | $ | 158,576 | |||||||||||
| Net earnings (loss) per share - basic | $ | 0.12 | $ | 0.67 | $ | (0.30 | ) | $ | 3.74 | |||||||||||
| Net earnings (loss) per share - diluted | $ | 0.11 | $ | 0.67 | $ | (0.30 | ) | $ | 3.70 | |||||||||||
| Weighted average common shares outstanding - basic | 42,827,334 | 42,563,836 | 42,766,262 | 42,412,722 | ||||||||||||||||
| Weighted average common shares outstanding - diluted | 43,290,851 | 42,916,252 | 42,766,262 | 42,915,496 | ||||||||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||
| BALANCE SHEET DATA (Dollars in thousands): | (unaudited) | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 46,542 | $ | 58,142 | ||||||||||||||||
| Restricted cash | - | 5,643 | ||||||||||||||||||
| Due from charterers, net | 17,815 | 25,333 | ||||||||||||||||||
| Prepaid expenses and other current assets | 10,154 | 8,399 | ||||||||||||||||||
| Inventories | 26,749 | 21,601 | ||||||||||||||||||
| Fair value of derivative instruments | 572 | 6,312 | ||||||||||||||||||
| Vessels held for sale | 55,440 | - | ||||||||||||||||||
| Total current assets | 157,272 | 125,430 | ||||||||||||||||||
| Noncurrent assets: | ||||||||||||||||||||
| Vessels, net of accumulated depreciation of | 945,114 | 1,002,810 | ||||||||||||||||||
| Deferred drydock, net | 29,502 | 32,254 | ||||||||||||||||||
| Fixed assets, net | 7,071 | 8,556 | ||||||||||||||||||
| Operating lease right-of-use assets | 2,628 | 4,078 | ||||||||||||||||||
| Restricted cash | 315 | 315 | ||||||||||||||||||
| Fair value of derivative instruments | - | 423 | ||||||||||||||||||
| Total noncurrent assets | 984,630 | 1,048,436 | ||||||||||||||||||
| Total assets | $ | 1,141,902 | $ | 1,173,866 | ||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 24,245 | $ | 29,475 | ||||||||||||||||
| Deferred revenue | 8,746 | 4,958 | ||||||||||||||||||
| Current operating lease liabilities | 2,295 | 2,107 | ||||||||||||||||||
| Total current liabilities | 35,286 | 36,540 | ||||||||||||||||||
| Noncurrent liabilities | ||||||||||||||||||||
| Long-term operating lease liabilities | 1,801 | 4,096 | ||||||||||||||||||
| Long-term debt, net of deferred financing costs of | 190,169 | 164,921 | ||||||||||||||||||
| Total noncurrent liabilities | 191,970 | 169,017 | ||||||||||||||||||
| Total liabilities | 227,256 | 205,557 | ||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Equity: | ||||||||||||||||||||
| Common stock | 425 | 423 | ||||||||||||||||||
| Additional paid-in capital | 1,553,421 | 1,588,777 | ||||||||||||||||||
| Accumulated other comprehensive income | 527 | 6,480 | ||||||||||||||||||
| Accumulated deficit | (641,117 | ) | (628,247 | ) | ||||||||||||||||
| Total Genco Shipping & Trading Limited shareholders' equity | 913,256 | 967,433 | ||||||||||||||||||
| Noncontrolling interest | 1,390 | 876 | ||||||||||||||||||
| Total equity | 914,646 | 968,309 | ||||||||||||||||||
| Total liabilities and equity | $ | 1,141,902 | $ | 1,173,866 | ||||||||||||||||
| Twelve Months Ended December 31, 2023 | Twelve Months Ended December 31, 2022 | |||||||||||||||||||
| STATEMENT OF CASH FLOWS (Dollars in thousands): | (unaudited) | |||||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Net (loss) income | $ | (12,356 | ) | $ | 159,364 | |||||||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 66,465 | 60,190 | ||||||||||||||||||
| Amortization of deferred financing costs | 1,779 | 1,694 | ||||||||||||||||||
| Right-of-use asset amortization | 1,450 | 1,417 | ||||||||||||||||||
| Amortization of nonvested stock compensation expense | 5,530 | 3,242 | ||||||||||||||||||
| Impairment of vessel assets | 41,719 | - | ||||||||||||||||||
| Amortization of premium on derivatives | 210 | 86 | ||||||||||||||||||
| Insurance proceeds for protection and indemnity claims | 269 | 829 | ||||||||||||||||||
| Insurance proceeds for loss of hire claims | 506 | - | ||||||||||||||||||
| Change in assets and liabilities: | ||||||||||||||||||||
| Decrease (increase) in due from charterers | 7,518 | (5,217 | ) | |||||||||||||||||
| Increase in prepaid expenses and other current assets | (4,767 | ) | (317 | ) | ||||||||||||||||
| (Increase) decrease in inventories | (5,148 | ) | 2,962 | |||||||||||||||||
| Decrease in accounts payable and accrued expenses | (2,205 | ) | (2,134 | ) | ||||||||||||||||
| Increase (decrease) in deferred revenue | 3,788 | (5,123 | ) | |||||||||||||||||
| Decrease in operating lease liabilities | (2,107 | ) | (1,858 | ) | ||||||||||||||||
| Deferred drydock costs incurred | (10,867 | ) | (25,812 | ) | ||||||||||||||||
| Net cash provided by operating activities | 91,784 | 189,323 | ||||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Purchase of vessels and ballast water treatment systems, including deposits | (91,305 | ) | (52,473 | ) | ||||||||||||||||
| Purchase of other fixed assets | (2,707 | ) | (3,566 | ) | ||||||||||||||||
| Insurance proceeds for hull and machinery claims | 2,388 | 1,024 | ||||||||||||||||||
| Net cash used in investing activities | (91,624 | ) | (55,015 | ) | ||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from the | 209,750 | - | ||||||||||||||||||
| Repayments from the | (9,750 | ) | - | |||||||||||||||||
| Proceeds from the | 65,000 | - | ||||||||||||||||||
| Repayments on the | (236,000 | ) | (75,000 | ) | ||||||||||||||||
| Cash dividends paid | (40,910 | ) | (115,728 | ) | ||||||||||||||||
| Payment of deferred financing costs | (5,493 | ) | (11 | ) | ||||||||||||||||
| Net cash used in financing activities | (17,403 | ) | (190,739 | ) | ||||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | (17,243 | ) | (56,431 | ) | ||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 64,100 | 120,531 | ||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 46,857 | $ | 64,100 | ||||||||||||||||
| Three Months Ended December 31, 2023 | ||||||||||||||||||||
| Net Income Reconciliation | (unaudited) | |||||||||||||||||||
| Net income attributable to Genco Shipping & Trading Limited | $ | 4,937 | ||||||||||||||||||
| + | Impairment of vessel assets | 13,617 | ||||||||||||||||||
| + | Unrealized loss on fuel hedges | 1 | ||||||||||||||||||
| Adjusted net income | $ | 18,555 | ||||||||||||||||||
| Adjusted income per share - basic | $ | 0.43 | ||||||||||||||||||
| Adjusted income per share - diluted | $ | 0.43 | ||||||||||||||||||
| Weighted average common shares outstanding - basic | 42,827,334 | |||||||||||||||||||
| Weighted average common shares outstanding - diluted | 43,290,851 | |||||||||||||||||||
| Weighted average common shares outstanding - basic as per financial statements | 42,827,334 | |||||||||||||||||||
| Dilutive effect of stock options | 166,289 | |||||||||||||||||||
| Dilutive effect of performance based restricted stock units | 55,353 | |||||||||||||||||||
| Dilutive effect of restricted stock units | 241,876 | |||||||||||||||||||
| Weighted average common shares outstanding - diluted as adjusted | 43,290,851 | |||||||||||||||||||
| Three Months Ended December 31, 2023 | Three Months Ended December 31, 2022 | Twelve Months Ended December 31, 2023 | Twelve Months Ended December 31, 2022 | |||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
| EBITDA Reconciliation: | (unaudited) | (unaudited) | ||||||||||||||||||
| Net income (loss) attributable to Genco Shipping & Trading Limited | $ | 4,937 | $ | 28,679 | $ | (12,870 | ) | $ | 158,576 | |||||||||||
| + | Net interest expense | 1,832 | 1,505 | 6,113 | 8,052 | |||||||||||||||
| + | Depreciation and amortization | 16,703 | 16,028 | 66,465 | 60,190 | |||||||||||||||
| EBITDA(1) | $ | 23,472 | $ | 46,212 | $ | 59,708 | $ | 226,818 | ||||||||||||
| + | Impairment of vessel assets | 13,617 | - | 41,719 | - | |||||||||||||||
| + | Unrealized loss (gain) on fuel hedges | 1 | (115 | ) | 96 | (4 | ) | |||||||||||||
| Adjusted EBITDA | $ | 37,090 | $ | 46,097 | $ | 101,523 | $ | 226,814 | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | ||||||||||||||||||
| Total number of vessels at end of period | 46 | 44 | 46 | 44 | ||||||||||||||||
| Average number of vessels(2) | 44.8 | 44.0 | 44.2 | 44.0 | ||||||||||||||||
| Total ownership days for fleet(3) | 4,123 | 4,048 | 16,135 | 16,050 | ||||||||||||||||
| Total chartered-in days(4) | 105 | 303 | 556 | 1,062 | ||||||||||||||||
| Total available days for fleet(5) | 4,169 | 4,235 | 16,263 | 16,070 | ||||||||||||||||
| Total available days for owned fleet(6) | 4,065 | 3,932 | 15,706 | 15,008 | ||||||||||||||||
| Total operating days for fleet(7) | 4,108 | 4,139 | 16,001 | 15,741 | ||||||||||||||||
| Fleet utilization(8) | 97.2 | % | 97.3 | % | 97.3 | % | 96.5 | % | ||||||||||||
| AVERAGE DAILY RESULTS: | ||||||||||||||||||||
| Time charter equivalent(9) | $ | 17,373 | $ | 19,330 | $ | 14,766 | $ | 23,824 | ||||||||||||
| Daily vessel operating expenses per vessel(10) | 6,153 | 5,164 | 6,017 | 6,197 | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | ||||||||||||||||||
| Ownership days | ||||||||||||||||||||
| Capesize | 1,639.2 | 1,564.0 | 6,280.2 | 6,205.0 | ||||||||||||||||
| Ultramax | 1,380.0 | 1,380.0 | 5,475.0 | 5,464.9 | ||||||||||||||||
| Supramax | 1,104.0 | 1,104.0 | 4,380.0 | 4,380.0 | ||||||||||||||||
| Total | 4,123.2 | 4,048.0 | 16,135.2 | 16,049.9 | ||||||||||||||||
| Chartered-in days | ||||||||||||||||||||
| Capesize | - | - | - | - | ||||||||||||||||
| Ultramax | 104.5 | 172.3 | 435.4 | 476.8 | ||||||||||||||||
| Supramax | - | 130.7 | 120.9 | 584.9 | ||||||||||||||||
| Total | 104.5 | 303.0 | 556.3 | 1,061.8 | ||||||||||||||||
| Available days (owned & chartered-in fleet) | ||||||||||||||||||||
| Capesize | 1,596.3 | 1,493.3 | 6,138.2 | 5,458.2 | ||||||||||||||||
| Ultramax | 1,480.0 | 1,518.2 | 5,880.0 | 5,793.5 | ||||||||||||||||
| Supramax | 1,093.1 | 1,223.8 | 4,244.5 | 4,817.8 | ||||||||||||||||
| Total | 4,169.4 | 4,235.4 | 16,262.7 | 16,069.5 | ||||||||||||||||
| Available days (owned fleet) | ||||||||||||||||||||
| Capesize | 1,596.3 | 1,493.3 | 6,138.2 | 5,458.2 | ||||||||||||||||
| Ultramax | 1,375.5 | 1,346.0 | 5,444.6 | 5,316.7 | ||||||||||||||||
| Supramax | 1,093.1 | 1,093.1 | 4,123.6 | 4,232.9 | ||||||||||||||||
| Total | 4,064.8 | 3,932.4 | 15,706.4 | 15,007.8 | ||||||||||||||||
| Operating days | ||||||||||||||||||||
| Capesize | 1,578.0 | 1,454.2 | 6,088.6 | 5,329.2 | ||||||||||||||||
| Ultramax | 1,465.5 | 1,498.3 | 5,745.4 | 5,730.0 | ||||||||||||||||
| Supramax | 1,064.3 | 1,186.0 | 4,167.4 | 4,681.6 | ||||||||||||||||
| Total | 4,107.8 | 4,138.5 | 16,001.4 | 15,740.8 | ||||||||||||||||
| Fleet utilization | ||||||||||||||||||||
| Capesize | 96.3 | % | 97.0 | % | 98.1 | % | 96.8 | % | ||||||||||||
| Ultramax | 98.7 | % | 98.5 | % | 97.2 | % | 97.7 | % | ||||||||||||
| Supramax | 96.4 | % | 96.1 | % | 96.1 | % | 94.7 | % | ||||||||||||
| Fleet average | 97.2 | % | 97.3 | % | 97.3 | % | 96.5 | % | ||||||||||||
| Average Daily Results: | ||||||||||||||||||||
| Time Charter Equivalent | ||||||||||||||||||||
| Capesize | $ | 22,052 | $ | 19,928 | $ | 18,280 | $ | 22,492 | ||||||||||||
| Ultramax | 16,193 | 21,980 | 13,780 | 25,945 | ||||||||||||||||
| Supramax | 12,026 | 15,245 | 10,840 | 22,873 | ||||||||||||||||
| Fleet average | 17,373 | 19,330 | 14,766 | 23,824 | ||||||||||||||||
| Daily vessel operating expenses | ||||||||||||||||||||
| Capesize | $ | 6,344 | $ | 5,354 | $ | 6,270 | $ | 6,023 | ||||||||||||
| Ultramax | 5,484 | 4,682 | 5,449 | 5,450 | ||||||||||||||||
| Supramax | 6,703 | 5,495 | 6,405 | 7,382 | ||||||||||||||||
| Fleet average | 6,153 | 5,164 | 6,017 | 6,197 | ||||||||||||||||
1) EBITDA represents net income (loss) attributable to Genco Shipping & Trading Limited 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 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.
2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as 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.
3) 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.
4) We define chartered-in days as the aggregate number of days in a period during which we chartered-in third-party vessels.
5) 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.
6) We define available days for the owned fleet as available days less chartered-in days.
7) 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.
8) We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus chartered-in days less drydocking days.
9) We define TCE rates as our voyage revenues less voyage expenses, charter hire expenses, and realized gain or losses on fuel hedges, 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. Our estimated TCE for the first quarter of 2024 is based on fixtures booked to date. Actual results may vary based on the actual duration of voyages and other factors. Accordingly, we are unable to provide, without unreasonable efforts, a reconciliation of estimated TCE for the first quarter to the most comparable financial measures presented in accordance with GAAP. When we compare our TCE to the Baltic Supramax Index (BSI) in this release, we adjust the BSI for customary commissions.
| Three Months Ended December 31, 2023 | Three Months Ended December 31, 2022 | Twelve Months Ended December 31, 2023 | Twelve Months Ended December 31, 2022 | ||||||||||||||
| Total Fleet | (unaudited) | (unaudited) | |||||||||||||||
| Voyage revenues (in thousands) | $ | 115,516 | $ | 126,973 | $ | 383,825 | $ | 536,934 | |||||||||
| Voyage expenses (in thousands) | 42,450 | 43,470 | 142,971 | 153,889 | |||||||||||||
| Charter hire expenses (in thousands) | 2,404 | 7,497 | 9,135 | 27,130 | |||||||||||||
| Realized (loss) gain on fuel hedges (in thousands) | (43 | ) | 9 | 202 | 1,631 | ||||||||||||
| 70,619 | 76,015 | 231,921 | 357,546 | ||||||||||||||
| Total available days for owned fleet | 4,065 | 3,932 | 15,706 | 15,008 | |||||||||||||
| Total TCE rate | $ | 17,373 | $ | 19,330 | $ | 14,766 | $ | 23,824 | |||||||||
10) 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.
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited is a U.S. based drybulk ship owning company focused on the seaborne transportation of commodities globally. We provide a full-service logistics solution to our customers utilizing our in-house commercial operating platform, as we transport key cargoes such as iron ore, grain, steel products, bauxite, cement, nickel ore among other commodities along worldwide shipping routes. Our wholly owned high quality, modern fleet of dry cargo vessels consists of the larger Capesize (major bulk) and the medium-sized Ultramax and Supramax vessels (minor bulk) enabling us to carry a wide range of cargoes. We make capital expenditures from time to time in connection with vessel acquisitions. Genco’s fleet will consist of 43 vessels, including 16 Capesize, 15 Ultramax and 12 Supramax vessels with an aggregate capacity of approximately 4,490,000 dwt and an average age of 11.6 years, after agreed upon vessel sales.
Conference Call Announcement
Genco Shipping & Trading Limited will hold a conference call on Thursday, February 22, 2024 at 8:30 a.m. Eastern Time to discuss its 2023 fourth quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (416) 764-8624 or (888) 259-6580 and enter passcode 373966. A replay of the conference call can also be accessed for two weeks by dialing (416) 764-8692 or (877) 674-7070 and entering the passcode 373966. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call.
Website Information
We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
This release 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 release are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) 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, including without limitation the ongoing war in Ukraine, the Israel-Hamas war, and attacks on vessels in the Red Sea; (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; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results are 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, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xix) our financial results for the year ending December 31, 2023 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the financial results we achieve for each quarter that apply to the formula under our new dividend policy, including without limitation the actual amounts earned by our vessels and the amounts of various expenses we incur, as a significant decrease in such earnings or a significant increase in such expenses may affect our ability to carry out our new value strategy; (xxi) the exercise of the discretion of our Board regarding the declaration of dividends, including without limitation the amount that our Board determines to set aside for reserves under our dividend policy; (xxii) outbreaks of disease such as the COVID-19 pandemic; 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, 2022 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, market developments, and the best interests of the Company and its shareholders. 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.
CONTACT:
Peter Allen
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550
FAQ
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