Genco Shipping & Trading Limited Announces Second Quarter Financial Results
Genco Shipping & Trading Limited (GNK) announced a transformative second quarter of 2021, reporting net income of $32 million, with earnings per share at $0.76, the highest since 2010. The company has entered a new $450 million credit facility to refinance existing debt, enhancing financial flexibility and lowering cash flow breakeven rates. Genco also agreed to acquire three additional Ultramax vessels, totaling six since April 2021. The quarterly cash dividend increased to $0.10 per share, reflecting a cumulative dividend of $0.905 over the last eight quarters.
- Net income increased to $32 million in Q2 2021, up from a loss of $18.2 million in Q2 2020.
- Earnings per share rose to $0.76, the highest since 2010.
- New $450 million credit facility improves capital structure and lowers cash flow breakeven rate.
- Quarterly cash dividend increased to $0.10 per share, payable on or about August 25, 2021.
- Agreed to acquire six modern Ultramax vessels since April 2021.
- Operating expenses increased to $84.8 million in Q2 2021 from $87.3 million in Q2 2020, reflecting higher crew and spare part expenses.
New Credit Facility for Global Refinancing Marks a Key Milestone Towards Implementation of Genco’s Comprehensive Value Strategy
Genco Agrees to Acquire Three Modern, Fuel Efficient Ultramax Vessels
Reports Highest Quarterly Earnings Per Share Since 2010
NEW YORK, Aug. 04, 2021 (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 six months ended June 30, 2021.
The following financial review discusses the results for the three months and six months ended June 30, 2021 and June 30, 2020.
Second Quarter 2021 and Year-to-Date Highlights
- As part of Genco’s comprehensive value strategy announced in April 2021, we have taken the following steps in the year-to-date:
- Entered into an agreement for a new
$450 million credit facility (the “$450 Million Credit Facility”) to refinance our existing$495 Million Credit Facility and$133 Million Credit Facility, which provides additional flexibility for capital allocation, lowers our cash flow breakeven rate, and improves key terms - New facility consists of a
$150 million term loan and a revolving line of up to$300 million that can be used for acquisitions and general corporate purposes - Agreed to acquire an additional three modern, fuel efficient Ultramax vessels in July 2021, bringing our total to six Ultramaxes we have agreed to acquire since April 2021
- Repaid
$82.2 million of debt during the first half of 2021, or18% of the beginning year debt balance- Expect to close the refinancing of our credit facilities by the end of August and continue to pay down debt under the new facility's revolver through the end of the year, advancing towards our goal of
20% net LTV by year end
- Expect to close the refinancing of our credit facilities by the end of August and continue to pay down debt under the new facility's revolver through the end of the year, advancing towards our goal of
- Fixed three Ultramax vessels on period time charters for approximately two years each at rates between
$23,375 and$25,500 per day
- Entered into an agreement for a new
- Genco increased its regular quarterly cash dividend to
$0.10 per share for the second quarter of 2021- Payable on or about August 25, 2021 to all shareholders of record as of August 17, 2021
- We have now declared cumulative dividends totaling
$0.90 5 per share over the last eight quarters - Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022
- We recorded net income of
$32.0 million for the second quarter of 2021- Basic and diluted earnings per share of
$0.76 and$0.75 , respectively - Represents our highest quarterly earnings per share result since 2010
- Basic and diluted earnings per share of
- Voyage revenues totaled
$121.0 million and net revenue1 (voyage revenues minus voyage expenses and charter hire expenses) totaled$76.0 million during Q2 2021- Our average daily fleet-wide time charter equivalent, or TCE1, for Q2 2021 was
$21,137 , marking our highest quarterly TCE since Q4 2010 - We estimate our TCE to date for Q3 2021 to be
$27,599 for71% owned fleet available days, based on current fixtures
- Our average daily fleet-wide time charter equivalent, or TCE1, for Q2 2021 was
- Recorded adjusted EBITDA of
$50.2 million during Q2 20211- During the first half of 2021, adjusted EBITDA totaled
$70.9 million nearly identical to our full year 2020 adjusted EBITDA of$71.8 million
- During the first half of 2021, adjusted EBITDA totaled
- Maintained a strong financial position with
$161.2 million of cash, including$44.9 million of restricted cash, as of June 30, 2021 - During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., with The Synergy Group (“Synergy”) for the technical management of our fleet, which aims to unlock further value for shareholders through its differentiated approach to ship management
- Entered into an initial framework to jointly study the feasibility of ammonia as an alternative marine fuel alongside various participants across the maritime value chain
- Ranked #1 out of 52 other public shipping companies in the Webber Research 2021 ESG scorecard
- We have agreed to sell our oldest vessel, the Genco Provence (2004-built Supramax) which we expect to deliver to the buyer by October 2021
John C. Wobensmith, Chief Executive Officer, commented, “The second quarter of 2021 was a transformative period for Genco, highlighted by the execution of several key initiatives under our comprehensive value strategy, focused on dividends, deleveraging and growth. We are pleased with the significant progress we are making working towards paying the first dividend under this strategy, while continuing to pay dividends to shareholders under our current policy.”
Mr. Wobensmith continued, “The foundation of our value strategy, which was announced in April, is our strong balance sheet and capital structure. Our recently agreed upon global credit facility refinancing further enhances Genco’s capital structure, providing additional flexibility, reducing our cash flow breakeven rates to industry lows, and supporting sustainability of quarterly dividends through diverse market environments. Additionally, we continued to opportunistically expand our fleet at a unique point in the cycle, seeking to capture the disconnect between decade high freight rates and asset values that have yet to catch up, which has resulted in compelling return on capital opportunities. In terms of our operating performance, our second quarter results represent our highest EPS and TCE since 2010, while our current fixtures for the third quarter to date point to further improvements. Looking ahead, the near-term market dynamics are highly supportive, and we continue to believe that the constrained overall supply picture for the next several years will provide a low baseline for demand growth to have to exceed in order to move freight rates higher.”
1 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 a further reconciliation.
Credit Facility Refinancing
On August 3, 2021, as a key step of our comprehensive value strategy, we entered into the
Key terms of the
- Competitive pricing of LIBOR+
2.15% to LIBOR+2.75% basis a net debt to EBITDA measurement which may be further decreased or increased based on our performance regarding emissions targets - Quarterly revolver commitment reductions of
$11.7 million per quarter followed by a balloon of$215.6 million - Favorable covenant package including a minimum liquidity covenant requiring our unrestricted cash and cash equivalents to be the greater of
$500,000 per vessel or5% of total indebtedness, while unused revolver commitments can be used against this measurement - Other customary financial covenants, including a minimum collateral maintenance covenant at
140% , a minimum working capital covenant of not less than zero, and a debt to capitalization covenant of no more than70% - Vessel replacement feature whereby collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral within 360 days of such sale or disposition
- No restrictions on dividends other than customary event of default and pro forma financial covenant compliance provisions
Importantly, five of our vessels to be acquired will remain unencumbered and not pledged as collateral for this new facility. This will provide Genco with further flexibility and optionality on a go-forward basis.
As of June 30, 2021, Genco had
2 Target paydown is based on management’s estimate of expenses and capital expenditures through the end of the year and net revenues based on current fixtures to date, rates under the current forward freight agreement (FFA) curve less
Comprehensive Value Strategy Update
Genco’s comprehensive value strategy is centered on low financial leverage, paying quarterly cash dividends to shareholders based on cash flows after debt service less a reserve, and growth of the Company’s asset base. We believe this strategy will be a key differentiator for the Company and drive shareholder value over the long-term.
Drawing on one of the strongest balance sheets in the industry, Genco has utilized a phased in approach to further reduce its debt and refinance its current credit facilities in order to lower its cash flow breakeven levels and position the Company to pay a sizeable quarterly dividend across diverse market environments. We maintain significant flexibility to grow the fleet through accretive vessel acquisitions. Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022.
In implementing this strategy, the Company has taken the following measures to date:
- Deleveraging: paid down
$82.2 million of debt during the first six months of 2021, or approximately18% of our outstanding debt - Refinancing: entered into a new global credit facility to increase flexibility, improve key terms and lower cash flow breakeven rates
- Growth: agreed to acquire six modern, fuel efficient Ultramaxes since April 2021
- Securing revenue: opportunistically fixed various period time charterers to secure cash flows and de-risk recent acquisitions
| Vessel | Type | Rate | Duration | Min Expiration | |
| Genco Liberty | Capesize | $ | 31,000 | 10-13 months | Feb-22 |
| Baltic Bear | Capesize | $ | 32,000 | 10-14 months | Mar-22 |
| Genco Vigilant | Ultramax | $ | 17,750 | 11-13 months | Sep-22 |
| Genco Freedom | Ultramax | $ | 23,375 | 20-23 months | Mar-23 |
| Baltic Hornet | Ultramax | $ | 24,000 | 20-23 months | Apr-23 |
| Baltic Wasp | Ultramax | $ | 25,500 | 23-25 months | Jun-23 |
For the second quarter of 2021, Genco declared a cash dividend of
Technical Management Joint Venture
During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., owned
- Increase visibility and control over vessel operations
- Increase fleet-wide fuel efficiency to lower our carbon footprint through an advanced data platform
- Unlock potential vessel operating expense savings
- Provide a unique and differentiated service to the management of our vessels
Genco currently has eight vessels under the technical management of Synergy, all of which will be transferred to the joint venture in the near term. For the balance of the fleet, notice of withdrawal has been provided to our two other existing ship managers Anglo-Eastern and Wallem Shipmanagement, and we plan to transition technical management of all of our vessels to the joint venture during the next three to five months. Synergy, headquartered in Singapore, provides technical management services to over 375 vessels of all vessel types including drybulk vessels, tankers, LNG vessels, container ships and car carriers with offices in 12 countries and ship routes all over the globe. Synergy’s vast experience across different sectors of shipping, reputation for excellence in all areas of ship management, and focus on innovation as well as sustainability provide strong building blocks for a mutually beneficial partnership.
Genco’s active commercial operating platform and fleet deployment strategy
Overall, we utilize a portfolio approach towards revenue generation through a combination of short-term, spot market employment as well as 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 experienced in major bulk rates together with the continued improvement and relative stability of minor bulk rates.
Based on current fixtures to date, we estimate the following to be our TCE to date for the third quarter of 2021 on a load-to-discharge basis. Actual rates for the third quarter will vary based upon future fixtures. We have approximately ten Capesize vessels coming open in the coming weeks during this strong market, of which we plan to ballast select vessels to the Atlantic basin.
- Capesize:
$31,304 for66% of the owned available Q3 2021 days - Ultramax and Supramax:
$25,273 for75% of the owned available Q3 2021 days - Fleet average:
$27,599 for71% of the owned available Q3 2021 days
Our second quarter of 2021 TCE results by class are listed below.
- Capesize:
$23,760 - Ultramax and Supramax:
$19,215 - Fleet average:
$21,137
Our second quarter TCE represents a
Fleet Update
Since April 2021, the Company has entered agreements to purchase six modern, fuel efficient Ultramax vessels including our most recent acquisition of three vessels agreed upon in July 2021. We expect to take delivery of these vessels between August 2021 and January 2022. Since December 2020, we have grown our core Ultramax fleet by nine vessels to a total of 15 vessels as we continue to modernize and expand our fleet at an attractive point in the drybulk cycle. A summary of our Ultramax acquisitions since Q2 2021 is below:
| Vessel | DWT | Yard Built | Year Built | Expected delivery | T/C Rate | Min Expiration | Max Expiration | ||
| Genco Enterprise | 63,997 | Yangfan | 2016 | Aug-21 | |||||
| Genco Madeleine | 63,166 | Dayang | 2014 | Aug-21 | $ | 11,200 | Aug-21 | Oct-21 | |
| Genco Constellation | 63,310 | Chengxi | 2017 | Aug-21 | $ | 12,500 | Aug-21 | Oct-21 | |
| Genco Mayflower | 63,371 | Chengxi | 2017 | Aug-21 | $ | 11,500 | Sep-21 | Nov-21 | |
| Genco Mary | 61,000 | DACKS | 2022 | Jan-22 | |||||
| Genco Laddey | 61,000 | DACKS | 2022 | Jan-22 | |||||
During the second quarter of 2021, we paid
Regarding vessel divestitures, in July 2021 we delivered the Genco Lorraine, a 2009-built 53,000 dwt Supramax, to the new owner. We have also agreed to sell the Genco Provence, the oldest vessel in our fleet, for gross proceeds of
Financial Review: 2021 Second Quarter
The Company recorded net income for the second quarter of 2021 of
The Company’s revenues increased to
Voyage expenses were
Daily vessel operating expenses, or DVOE, amounted to
Apostolos Zafolias, Chief Financial Officer, commented, “We are pleased to have entered into a new credit agreement for the global refinancing of our previous credit facilities on favorable terms and appreciate the strong support of our leading bank group. By further strengthening our capital structure, we expect to significantly increase our flexibility for both paying sizeable dividends to shareholders and opportunistically growing our fleet through accretive vessel acquisitions, consistent with our track record. Moreover, we expect our new credit facility to markedly reduce our cash flow breakeven rate, which will further strengthen our industry leading balance sheet. Going forward, we will remain focused on ensuring the strength of our balance sheet through continuing to pay down debt with a medium-term objective of reducing our net debt to zero.”
Financial Review: Six Months 2021
The Company recorded net income of
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the six months ended June 30, 2021 was
Net cash provided by investing activities for the six months ended June 30, 2021 was
Net cash used in financing activities during the six months ended June 30, 2021 and 2020 was
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.
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 2021 and 2022 to be:
| Q3 2021 | Q4 2021 | 2022 | |
| Estimated Drydock Costs (1) | |||
| Estimated BWTS Costs (2) | |||
| Estimated Fuel Efficiency Upgrade Costs (3) | |||
| Estimated Offhire Days (4) | 40 | 110 | 210 |
(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. Estimated drydocking costs for 2022 exclude the
(2) Estimated costs associated with the installation of ballast water treatment systems is 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 Q3 2021 consists of 20 days for Ultramaxes and 20 days for Supramaxes. Estimated offhire days for 2022 exclude days related to the Genco Provence due to the vessel’s agreed upon sale.
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 June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||||||||
| (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 | $ | 121,008 | $ | 74,206 | $ | 208,599 | $ | 172,542 | |||||||||||
| Total revenues | 121,008 | 74,206 | 208,599 | 172,542 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Voyage expenses | 36,702 | 41,695 | 71,775 | 90,063 | |||||||||||||||
| Vessel operating expenses | 18,789 | 21,058 | 37,834 | 42,871 | |||||||||||||||
| Charter hire expenses | 8,325 | 1,432 | 13,761 | 4,507 | |||||||||||||||
| General and administrative expenses (inclusive of nonvested stock amortization | 5,854 | 5,471 | 11,957 | 11,238 | |||||||||||||||
| expense of | |||||||||||||||||||
| Technical management fees | 1,305 | 1,724 | 2,769 | 3,578 | |||||||||||||||
| Depreciation and amortization | 13,769 | 15,930 | 27,209 | 33,504 | |||||||||||||||
| Impairment of vessel assets | - | - | - | 112,814 | |||||||||||||||
| Loss on sale of vessels | 15 | - | 735 | 486 | |||||||||||||||
| Total operating expenses | 84,759 | 87,310 | 166,040 | 299,061 | |||||||||||||||
| Operating income (loss) | 36,249 | (13,104 | ) | 42,559 | (126,519 | ) | |||||||||||||
| Other income (expense): | |||||||||||||||||||
| Other income (expense) | 210 | 120 | 356 | (464 | ) | ||||||||||||||
| Interest income | 48 | 253 | 119 | 847 | |||||||||||||||
| Interest expense | (4,470 | ) | (5,473 | ) | (9,012 | ) | (12,418 | ) | |||||||||||
| Other expense, net | (4,212 | ) | (5,100 | ) | (8,537 | ) | (12,035 | ) | |||||||||||
| Net income (loss) | $ | 32,037 | $ | (18,204 | ) | $ | 34,022 | $ | (138,554 | ) | |||||||||
| Net earnings (loss) per share - basic | $ | 0.76 | $ | (0.43 | ) | $ | 0.81 | $ | (3.31 | ) | |||||||||
| Net earnings (loss) per share - diluted | $ | 0.75 | $ | (0.43 | ) | $ | 0.80 | $ | (3.31 | ) | |||||||||
| Weighted average common shares outstanding - basic | 42,071,019 | 41,900,901 | 42,022,669 | 41,883,629 | |||||||||||||||
| Weighted average common shares outstanding - diluted | 42,612,132 | 41,900,901 | 42,445,184 | 41,883,629 | |||||||||||||||
| June 30, 2021 | December 31, 2020 | ||||||||||||||||||
| BALANCE SHEET DATA (Dollars in thousands): | (unaudited) | ||||||||||||||||||
| Assets | |||||||||||||||||||
| Current assets: | |||||||||||||||||||
| Cash and cash equivalents | $ | 116,280 | $ | 143,872 | |||||||||||||||
| Restricted cash | 44,606 | 35,492 | |||||||||||||||||
| Due from charterers, net | 13,912 | 12,991 | |||||||||||||||||
| Prepaid expenses and other current assets | 11,057 | 10,856 | |||||||||||||||||
| Inventories | 26,441 | 21,583 | |||||||||||||||||
| Vessels held for sale | 7,798 | 22,408 | |||||||||||||||||
| Total current assets | 220,094 | 247,202 | |||||||||||||||||
| Noncurrent assets: | |||||||||||||||||||
| Vessels, net of accumulated depreciation of | 913,829 | 919,114 | |||||||||||||||||
| Deposits on vessels | 21,638 | - | |||||||||||||||||
| Vessels held for exchange | - | 38,214 | |||||||||||||||||
| Deferred drydock, net | 13,956 | 14,689 | |||||||||||||||||
| Fixed assets, net | 5,877 | 6,393 | |||||||||||||||||
| Operating lease right-of-use assets | 6,192 | 6,882 | |||||||||||||||||
| Restricted cash | 315 | 315 | |||||||||||||||||
| Fair value of derivative instruments | 564 | - | |||||||||||||||||
| Total noncurrent assets | 962,371 | 985,607 | |||||||||||||||||
| Total assets | $ | 1,182,465 | $ | 1,232,809 | |||||||||||||||
| Liabilities and Equity | |||||||||||||||||||
| Current liabilities: | |||||||||||||||||||
| Accounts payable and accrued expenses | $ | 27,256 | $ | 22,793 | |||||||||||||||
| Current portion of long-term debt | 55,920 | 80,642 | |||||||||||||||||
| Deferred revenue | 9,375 | 8,421 | |||||||||||||||||
| Current operating lease liabilities | 1,811 | 1,765 | |||||||||||||||||
| Total current liabilities | 94,362 | 113,621 | |||||||||||||||||
| Noncurrent liabilities | |||||||||||||||||||
| Long-term operating lease liabilities | 7,144 | 8,061 | |||||||||||||||||
| Contract liability | - | 7,200 | |||||||||||||||||
| Long-term debt, net of deferred financing costs of | 303,687 | 358,933 | |||||||||||||||||
| Total noncurrent liabilities | 310,831 | 374,194 | |||||||||||||||||
| Total liabilities | 405,193 | 487,815 | |||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Equity: | |||||||||||||||||||
| Common stock | 419 | 418 | |||||||||||||||||
| Additional paid-in capital | 1,711,523 | 1,713,406 | |||||||||||||||||
| Accumulated other comprehensive income | 138 | - | |||||||||||||||||
| Accumulated deficit | (934,808 | ) | (968,830 | ) | |||||||||||||||
| Total equity | 777,272 | 744,994 | |||||||||||||||||
| Total liabilities and equity | $ | 1,182,465 | $ | 1,232,809 | |||||||||||||||
| Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||||||||||
| STATEMENT OF CASH FLOWS (Dollars in thousands): | (unaudited) | ||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||
| Net income (loss) | $ | 34,022 | $ | (138,554 | ) | ||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||
| Depreciation and amortization | 27,209 | 33,504 | |||||||||||||||||
| Amortization of deferred financing costs | 2,235 | 1,909 | |||||||||||||||||
| Right-of-use asset amortization | 690 | 676 | |||||||||||||||||
| Amortization of nonvested stock compensation expense | 1,073 | 957 | |||||||||||||||||
| Impairment of vessel assets | - | 112,814 | |||||||||||||||||
| Loss on sale of vessels | 735 | 486 | |||||||||||||||||
| Amortization of premium on derivative | 111 | - | |||||||||||||||||
| Interest rate cap premium payment | (240 | ) | - | ||||||||||||||||
| Insurance proceeds for protection and indemnity claims | 101 | 278 | |||||||||||||||||
| Insurance proceeds for loss of hire claims | - | 78 | |||||||||||||||||
| Change in assets and liabilities: | |||||||||||||||||||
| (Increase) decrease in due from charterers | (921 | ) | 331 | ||||||||||||||||
| (Increase) decrease in prepaid expenses and other current assets | (894 | ) | 504 | ||||||||||||||||
| (Increase) decrease in inventories | (4,858 | ) | 4,174 | ||||||||||||||||
| Increase (decrease) in accounts payable and accrued expenses | 5,028 | (17,454 | ) | ||||||||||||||||
| Increase (decrease) in deferred revenue | 954 | (2,259 | ) | ||||||||||||||||
| Decrease in operating lease liabilities | (871 | ) | (828 | ) | |||||||||||||||
| Deferred drydock costs incurred | (1,822 | ) | (5,593 | ) | |||||||||||||||
| Net cash provided by (used in) operating activities | 62,552 | (8,977 | ) | ||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||
| Purchase of vessels and ballast water treatment systems, including deposits | (24,678 | ) | (2,275 | ) | |||||||||||||||
| Purchase of scrubbers (capitalized in Vessels) | (126 | ) | (10,839 | ) | |||||||||||||||
| Purchase of other fixed assets | (431 | ) | (2,716 | ) | |||||||||||||||
| Net proceeds from sale of vessels | 29,096 | 14,726 | |||||||||||||||||
| Insurance proceeds for hull and machinery claims | 295 | 484 | |||||||||||||||||
| Net cash provided by (used in) investing activities | 4,156 | (620 | ) | ||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||
| Proceeds from the | - | 24,000 | |||||||||||||||||
| Repayments on the | (24,320 | ) | (3,280 | ) | |||||||||||||||
| Proceeds from the | - | 11,250 | |||||||||||||||||
| Repayments on the | (57,883 | ) | (33,321 | ) | |||||||||||||||
| Cash dividends paid | (2,983 | ) | (8,126 | ) | |||||||||||||||
| Payment of deferred financing costs | - | (283 | ) | ||||||||||||||||
| Net cash used in financing activities | (85,186 | ) | (9,760 | ) | |||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | (18,478 | ) | (19,357 | ) | |||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 179,679 | 162,249 | |||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 161,201 | $ | 142,892 | |||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||
| Adjusted Net Income Reconciliation | (unaudited) | ||||||||||||||||||
| Net income | $ | 32,037 | |||||||||||||||||
| + | Loss on sale of vessels | 15 | |||||||||||||||||
| Adjusted net income | $ | 32,052 | |||||||||||||||||
| Adjusted net earnings per share - basic | $ | 0.76 | |||||||||||||||||
| Adjusted net earnings per share - diluted | $ | 0.75 | |||||||||||||||||
| Weighted average common shares outstanding - basic | 42,071,019 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted | 42,612,132 | ||||||||||||||||||
| Weighted average common shares outstanding - basic as per financial statements | 42,071,019 | ||||||||||||||||||
| Dilutive effect of stock options | 340,072 | ||||||||||||||||||
| Dilutive effect of restricted stock units | 201,041 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted as adjusted | 42,612,132 | ||||||||||||||||||
| Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||
| EBITDA Reconciliation: | (unaudited) | (unaudited) | |||||||||||||||||
| Net income (loss) | $ | 32,037 | $ | (18,204 | ) | $ | 34,022 | $ | (138,554 | ) | |||||||||
| + | Net interest expense | 4,422 | 5,220 | 8,893 | 11,571 | ||||||||||||||
| + | Depreciation and amortization | 13,769 | 15,930 | 27,209 | 33,504 | ||||||||||||||
| EBITDA(1) | $ | 50,228 | $ | 2,946 | $ | 70,124 | $ | (93,479 | ) | ||||||||||
| + | Impairment of vessel assets | - | - | - | 112,814 | ||||||||||||||
| + | Loss on sale of vessels | 15 | - | 735 | 486 | ||||||||||||||
| Adjusted EBITDA | $ | 50,243 | $ | 2,946 | $ | 70,859 | $ | 19,821 | |||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | |||||||||||||||||
| Total number of vessels at end of period | 40 | 53 | 40 | 53 | |||||||||||||||
| Average number of vessels (2) | 40.1 | 53.0 | 41.7 | 53.7 | |||||||||||||||
| Total ownership days for fleet (3) | 3,647 | 4,823 | 7,544 | 9,765 | |||||||||||||||
| Total chartered-in days (4) | 446 | 248 | 787 | 671 | |||||||||||||||
| Total available days for fleet (5) | 4,041 | 4,892 | 8,242 | 10,121 | |||||||||||||||
| Total available days for owned fleet (6) | 3,595 | 4,643 | 7,455 | 9,450 | |||||||||||||||
| Total operating days for fleet (7) | 3,998 | 4,827 | 8,120 | 9,951 | |||||||||||||||
| Fleet utilization (8) | 98.3 | % | 97.8 | % | 98.1 | % | 97.8 | % | |||||||||||
| AVERAGE DAILY RESULTS: | |||||||||||||||||||
| Time charter equivalent (9) | $ | 21,137 | $ | 6,693 | $ | 16,508 | $ | 8,251 | |||||||||||
| Daily vessel operating expenses per vessel (10) | 5,151 | 4,366 | 5,015 | 4,390 | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | |||||||||||||||||
| Ownership days | |||||||||||||||||||
| Capesize | 1,547.0 | 1,547.0 | 3,077.0 | 3,094.0 | |||||||||||||||
| Panamax | - | - | - | 64.8 | |||||||||||||||
| Ultramax | 819.0 | 546.0 | 1,550.8 | 1,092.0 | |||||||||||||||
| Supramax | 1,281.5 | 1,820.0 | 2,689.2 | 3,640.0 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 910.0 | 227.5 | 1,874.7 | |||||||||||||||
| Total | 3,647.5 | 4,823.0 | 7,544.5 | 9,765.5 | |||||||||||||||
| Chartered-in days | |||||||||||||||||||
| Capesize | - | - | - | - | |||||||||||||||
| Panamax | - | - | - | - | |||||||||||||||
| Ultramax | 111.7 | 114.2 | 344.2 | 292.5 | |||||||||||||||
| Supramax | 334.2 | 98.7 | 442.5 | 302.8 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 35.6 | - | 60.7 | |||||||||||||||
| Total | 445.9 | 248.5 | 786.7 | 670.6 | |||||||||||||||
| Available days (owned & chartered-in fleet) | |||||||||||||||||||
| Capesize | 1,514.4 | 1,530.1 | 3,020.0 | 3,058.4 | |||||||||||||||
| Panamax | - | - | - | 64.4 | |||||||||||||||
| Ultramax | 930.7 | 637.2 | 1,886.4 | 1,305.6 | |||||||||||||||
| Supramax | 1,595.6 | 1,782.0 | 3,107.7 | 3,753.0 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 942.5 | 227.5 | 1,924.6 | |||||||||||||||
| Total | 4,040.7 | 4,891.8 | 8,241.6 | 10,120.5 | |||||||||||||||
| Available days (owned fleet) | |||||||||||||||||||
| Capesize | 1,514.4 | 1,530.1 | 3,020.0 | 3,058.4 | |||||||||||||||
| Panamax | - | - | - | 64.4 | |||||||||||||||
| Ultramax | 819.0 | 523.0 | 1,542.2 | 1,013.1 | |||||||||||||||
| Supramax | 1,261.4 | 1,683.3 | 2,665.2 | 3,450.2 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 906.9 | 227.5 | 1,863.9 | |||||||||||||||
| Total | 3,594.8 | 4,643.3 | 7,454.9 | 9,450.0 | |||||||||||||||
| Operating days | |||||||||||||||||||
| Capesize | 1,505.6 | 1,529.6 | 3,004.8 | 3,057.8 | |||||||||||||||
| Panamax | - | - | - | 60.1 | |||||||||||||||
| Ultramax | 923.3 | 635.6 | 1,874.0 | 1,303.3 | |||||||||||||||
| Supramax | 1,568.6 | 1,765.2 | 3,050.3 | 3,707.8 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 896.7 | 191.3 | 1,807.1 | |||||||||||||||
| Total | 3,997.5 | 4,827.1 | 8,120.4 | 9,950.6 | |||||||||||||||
| Fleet utilization | |||||||||||||||||||
| Capesize | 99.1 | % | 98.9 | % | 99.3 | % | 99.4 | % | |||||||||||
| Panamax | - | - | - | 92.7 | % | ||||||||||||||
| Ultramax | 99.2 | % | 99.7 | % | 98.9 | % | 99.8 | % | |||||||||||
| Supramax | 97.1 | % | 97.7 | % | 97.4 | % | 98.1 | % | |||||||||||
| Handymax | - | - | - | 100.0 | % | ||||||||||||||
| Handysize | - | 94.8 | % | 84.1 | % | 93.4 | % | ||||||||||||
| Fleet average | 98.3 | % | 97.8 | % | 98.1 | % | 97.8 | % | |||||||||||
| Average Daily Results: | |||||||||||||||||||
| Time Charter Equivalent | |||||||||||||||||||
| Capesize | $ | 23,760 | $ | 9,466 | $ | 18,692 | $ | 13,062 | |||||||||||
| Panamax | - | - | - | 5,256 | |||||||||||||||
| Ultramax | 19,524 | 7,848 | 15,331 | 7,973 | |||||||||||||||
| Supramax | 19,027 | 5,301 | 15,480 | 5,911 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 3,952 | 8,008 | 4,867 | |||||||||||||||
| Fleet average | 21,137 | 6,693 | 16,508 | 8,251 | |||||||||||||||
| Daily vessel operating expenses | |||||||||||||||||||
| Capesize | $ | 5,461 | $ | 5,049 | $ | 5,335 | $ | 4,968 | |||||||||||
| Panamax | - | - | - | 3,338 | |||||||||||||||
| Ultramax | 4,684 | 3,829 | 4,820 | 4,233 | |||||||||||||||
| Supramax | 4,966 | 4,190 | 4,714 | 4,200 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 3,864 | 5,541 | 3,874 | |||||||||||||||
| Fleet average | 5,151 | 4,366 | 5,015 | 4,390 | |||||||||||||||
1) EBITDA represents net income (loss) 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 and charter hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. Our estimated TCE for the third quarter of 2021 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 third quarter to the most comparable financial measures presented in accordance with GAAP.
| Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||||||||||||||||
| Total Fleet | (unaudited) | (unaudited) | |||||||||||||||||
| Voyage revenues (in thousands) | $ | 121,008 | $ | 74,206 | $ | 208,599 | $ | 172,542 | |||||||||||
| Voyage expenses (in thousands) | 36,702 | 41,695 | 71,775 | 90,063 | |||||||||||||||
| Charter hire expenses (in thousands) | 8,325 | 1,432 | 13,761 | 4,507 | |||||||||||||||
| 75,981 | 31,079 | 123,063 | 77,972 | ||||||||||||||||
| Total available days for owned fleet | 3,595 | 4,643 | 7,455 | 9,450 | |||||||||||||||
| Total TCE rate | $ | 21,137 | $ | 6,693 | $ | 16,508 | $ | 8,251 | |||||||||||
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. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.
The following table reflects Genco’s fleet list as of August 4, 2021:
| Vessel | DWT | Year Built | |||
| Capesize | |||||
| 1 | Genco Resolute | 181,060 | 2015 | ||
| 2 | Genco Endeavour | 181,060 | 2015 | ||
| 3 | Genco Constantine | 180,183 | 2008 | ||
| 4 | Genco Augustus | 180,151 | 2007 | ||
| 5 | Genco Liberty | 180,032 | 2016 | ||
| 6 | Genco Defender | 180,021 | 2016 | ||
| 7 | Baltic Lion | 179,185 | 2012 | ||
| 8 | Genco Tiger | 179,185 | 2011 | ||
| 9 | Genco London | 177,833 | 2007 | ||
| 10 | Baltic Wolf | 177,752 | 2010 | ||
| 11 | Genco Titus | 177,729 | 2007 | ||
| 12 | Baltic Bear | 177,717 | 2010 | ||
| 13 | Genco Tiberius | 175,874 | 2007 | ||
| 14 | Genco Commodus | 169,098 | 2009 | ||
| 15 | Genco Hadrian | 169,025 | 2008 | ||
| 16 | Genco Maximus | 169,025 | 2009 | ||
| 17 | Genco Claudius | 169,001 | 2010 | ||
| Ultramax | |||||
| 1 | Baltic Hornet | 63,574 | 2014 | ||
| 2 | Genco Freedom | 63,498 | 2015 | ||
| 3 | Genco Vigilant | 63,498 | 2015 | ||
| 4 | Baltic Mantis | 63,470 | 2015 | ||
| 5 | Baltic Scorpion | 63,462 | 2015 | ||
| 6 | Genco Magic | 63,446 | 2014 | ||
| 7 | Baltic Wasp | 63,389 | 2015 | ||
| 8 | Genco Weatherly | 61,556 | 2014 | ||
| 9 | Genco Columbia | 60,294 | 2016 | ||
| Supramax | |||||
| 1 | Genco Hunter | 58,729 | 2007 | ||
| 2 | Genco Auvergne | 58,020 | 2009 | ||
| 3 | Genco Rhone | 58,018 | 2011 | ||
| 4 | Genco Ardennes | 58,018 | 2009 | ||
| 5 | Genco Brittany | 58,018 | 2010 | ||
| 6 | Genco Languedoc | 58,018 | 2010 | ||
| 7 | Genco Pyrenees | 58,018 | 2010 | ||
| 8 | Genco Bourgogne | 58,018 | 2010 | ||
| 9 | Genco Aquitaine | 57,981 | 2009 | ||
| 10 | Genco Warrior | 55,435 | 2005 | ||
| 11 | Genco Predator | 55,407 | 2005 | ||
| 12 | Genco Provence | 55,317 | 2004 | ||
| 13 | Genco Picardy | 55,257 | 2005 | ||
Conference Call Announcement
Genco Shipping & Trading Limited will hold a conference call on Thursday,
August 5, 2021 at 8:30 a.m. Eastern Time to discuss its 2021 second 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 (323) 289-6581 or (800) 430-8332 and enter passcode 8885406. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 8885406. 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 report are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, 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, 2021 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) our ability to fulfill conditions for borrowings under the
CONTACT:
Apostolos Zafolias
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550
FAQ
What were Genco's earnings per share for Q2 2021?
How much net income did Genco report for Q2 2021?
What is the significance of Genco's new $450 million credit facility?
When is Genco's next dividend payment?
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