Genco Shipping & Trading Limited Announces Third Quarter Financial Results
Genco Shipping & Trading Limited (NYSE:GNK) declared a quarterly cash dividend of $0.02 per share, payable on November 25, 2020. For Q3 2020, the company reported voyage revenues of $87.5 million but recorded a net loss of $21.1 million due to non-cash vessel impairment charges of $21.9 million. Despite a challenging market, the company reported an adjusted net income of $1.2 million. Cash on hand reached $160.8 million. The TCE for Q4 2020 is estimated at $13,004, showing a promising market recovery, particularly in the Capesize sector.
- Declared a quarterly cash dividend of $0.02 per share.
- Cumulative dividends total $0.735 per share over the last five quarters.
- Estimated TCE for Q4 2020 is $13,004, indicating a favorable market outlook.
- Improved cash position of $160.8 million.
- Reported a net loss of $21.1 million for Q3 2020, a decline from $14.6 million in Q3 2019.
- Voyage revenues decreased from $103.8 million in Q3 2019 to $87.5 million in Q3 2020.
- Recorded significant non-cash impairment charges of $21.9 million.
Declares a Regular Quarterly Cash Dividend of
NEW YORK, Nov. 04, 2020 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”), the largest U.S. headquartered drybulk shipowner focused on the transportation of major and minor bulk commodities globally, today reported its financial results for the three months and nine months ended September 30, 2020.
The following financial review discusses the results for the three and nine months ended September 30, 2020 and September 30, 2019.
Third Quarter 2020 and Year-to-Date Highlights
- Genco announced a regular quarterly cash dividend of
$0.02 per share for the third quarter of 2020- Payable on or about November 25, 2020 to all shareholders of record as of November 17, 2020
- We have now declared cumulative dividends totaling
$0.73 5 per share over the last five quarters
- Genco maintains a strong financial position with
$160.8 million of cash, including$24.5 million of restricted cash, as of September 30, 2020 - Voyage revenues totaled
$87.5 million and net revenue1 (voyage revenues minus voyage expenses and charter hire expenses) totaled$53.0 million during Q3 2020- Our average daily fleet-wide time charter equivalent, or TCE1, for Q3 2020 was
$11,456 - We estimate our TCE to date for Q4 2020 to be
$13,004 for57% of our owned fleet available days, based on current fixtures
- Our average daily fleet-wide time charter equivalent, or TCE1, for Q3 2020 was
- We recorded a net loss of
$21.1 million for the third quarter of 2020- Basic and diluted loss per share of
$0.50 - Adjusted net income of
$1.2 million or basic and diluted earnings per share of$0.03 , excluding$21.9 million in non-cash vessel impairment charges and a$0.4 million loss on sale of vessels
- Basic and diluted loss per share of
- Recorded adjusted EBITDA of
$22.3 million during Q3 20201 - In the second half of 2020 to date, we have completed the sale of four vessels
- The Baltic Wind, a 2009-built Handysize, delivered to buyers on July 7, 2020
- The Baltic Breeze, a 2010-built Handysize, delivered to buyers on July 31, 2020
- The Genco Bay, a 2010-built Handysize, delivered to buyers on October 1, 2020
- The Baltic Jaguar, a 2009-built Supramax, delivered to buyers on October 16, 2020
- We have also agreed to sell the Genco Normandy, a 2007-built Supramax, the Genco Loire, a 2009-built Supramax, and the Baltic Panther, a 2009-built Supramax, which are part of our fleet renewal program and we expect to deliver to the respective buyers during Q4 2020 and Q1 2021
- Genco’s focus remains on the health and safety of our crew members and our team onshore during this uncertain time
- We have completed crew rotations on the majority of our fleet in the year-to-date, involving over 1,600 crew members, despite various travel and port restrictions and during a time in which seafarers globally have been onboard vessels well in excess of their original contract duration
- We have completed crew rotations on the majority of our fleet in the year-to-date, involving over 1,600 crew members, despite various travel and port restrictions and during a time in which seafarers globally have been onboard vessels well in excess of their original contract duration
John C. Wobensmith, Chief Executive Officer, commented, “During the third quarter, we generated a
Mr. Wobensmith continued, “We are pleased to have declared our fifth consecutive quarterly dividend and now have declared dividends totaling
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.
Genco’s active commercial operating platform and fleet deployment strategy
Overall, our fleet deployment strategy 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 relative stability of minor bulk rates in the year-to-date.
Regarding our Q4 2020 fixtures to date, the firm drybulk market during the third quarter has carried into October and November to date, led by the Capesize sector. With our active commercial trading strategy currently geared towards spot market employment together with the absence of any scheduled drydockings for the balance of 2020 for our Capesize vessels, we have positioned our fleet to capture this strong market. During the second half of this past quarter, we repositioned certain Capesize vessels to the Atlantic basin as the market eased to better position these assets for the market improvement which materialized at the end of September and into the beginning of October. We further plan to ballast select Capesize vessels to the Atlantic basin to take advantage of improving cargo flows from the region.
For our minor bulk vessels, market conditions have also improved led by a strong grain trade coupled with augmented trade flows of commodities closely tied to global economic activity. Based on current fixtures to date, we estimate the following to be our TCE to date for the fourth quarter of 2020:
- Capesize:
$19,363 for52% of the owned available Q4 2020 days - Ultramax and Supramax:
$10,113 for62% of the owned available Q4 2020 days - Handysize:
$8,731 for47% of the owned available Q4 2020 days - Fleet average:
$13,004 for57% of the owned available Q4 2020 days
Actual rates for the fourth quarter will vary based upon future fixtures. The above fourth quarter to date estimate compares to our third quarter of 2020 TCE results by class which are listed below.
- Capesize:
$16,287 - Ultramax and Supramax:
$9,857 - Handysize:
$6,445 - Fleet average:
$11,456
Regular Quarterly Cash Dividend Policy
For the third quarter of 2020, Genco declared a regular quarterly cash dividend of
Dividends going forward remain subject to the determination of our Board of Directors each quarter after its review of our financial performance and will depend upon various factors, including limitations under our credit agreements and applicable provisions of Marshall Islands law. Heightened economic uncertainty as a result of the COVID-19 pandemic and related economic conditions may result in our suspension, reduction, or termination of future quarterly dividends.
Financial Review: 2020 Third Quarter
The Company recorded a net loss for the third quarter of 2020 of
The Company’s revenues decreased to
Voyage expenses were
Daily vessel operating expenses, or DVOE, amounted to
Apostolos Zafolias, Chief Financial Officer, commented, “The improved market conditions since June have enabled Genco to continue to build upon our industry leading balance sheet, as we increased our cash position to
Financial Review: Nine Months 2020
The Company recorded a net loss of
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the nine months ended September 30, 2020 and 2019 was
Net cash provided by investing activities during the nine months ended September 30, 2020 was
Net cash used in financing activities during the nine months ended September 30, 2020 and 2019 was
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. As of November 4, 2020, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, six Ultramax, 19 Supramax and seven Handysize vessels with an aggregate capacity of approximately 4,680,000 dwt and an average age of 10.3 years.
In addition to acquisitions that we may undertake, we will incur additional capital expenditures due to special surveys and drydockings. 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 and scheduled off-hire days for our fleet for the remainder of 2020 and 2021 to be:
| Q4 2020 | 2021 | |
| Estimated Drydock Costs (1) | ||
| Estimated BWTS Costs (2) | ||
| Estimated Offhire Days (3) | 94 | 230 |
(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 costs presented include approximately
(2) Estimated costs associated with the installation of ballast water treatment systems is expected to be funded with cash on hand. Estimated costs presented include approximately
(3) Actual length will vary based on the condition of the vessel, yard schedules and other factors. Estimated offhire presented includes approximately 80 days associated with four vessels that could potentially be sold based on our fleet renewal program. The estimated offhire days per sector scheduled for Q4 2020 consists of 20 days for Ultramaxes, 17 days for Supramaxes and 57 days for Handysizes.
Fleet Update
We continue to divest our older, less fuel-efficient tonnage as part of our efforts to modernize our fleet and create a more focused asset base while reducing our carbon footprint. Specifically, we delivered the Baltic Wind and Baltic Breeze to their new owners during the third quarter of 2020 and the Genco Bay and Baltic Jaguar in October. The Baltic Jaguar was sold for gross proceeds of
We have also agreed to sell the Genco Normandy, a 2007-built Supramax, for
As of September 30, 2020,
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 September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | |||||||||||||||||
| (Dollars in thousands, except share and per share data) | (Dollars in thousands, except share and per share data) | |||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| INCOME STATEMENT DATA: | ||||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Voyage revenues | $ | 87,524 | $ | 103,776 | $ | 260,066 | $ | 280,790 | ||||||||||||
| Total revenues | 87,524 | 103,776 | 260,066 | 280,790 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Voyage expenses | 33,487 | 42,967 | 123,550 | 127,789 | ||||||||||||||||
| Vessel operating expenses | 23,460 | 24,711 | 66,332 | 72,260 | ||||||||||||||||
| Charter hire expenses | 1,020 | 5,475 | 5,527 | 12,743 | ||||||||||||||||
| General and administrative expenses (inclusive of nonvested stock amortization | 5,115 | 6,144 | 16,353 | 18,253 | ||||||||||||||||
| expense of | ||||||||||||||||||||
| Technical management fees | 1,739 | 1,885 | 5,316 | 5,710 | ||||||||||||||||
| Depreciation and amortization | 16,115 | 18,184 | 49,619 | 54,532 | ||||||||||||||||
| Impairment of vessel assets | 21,896 | 12,182 | 134,710 | 26,078 | ||||||||||||||||
| Loss (gain) on sale of vessels | 358 | - | 844 | (611 | ) | |||||||||||||||
| Total operating expenses | 103,190 | 111,548 | 402,251 | 316,754 | ||||||||||||||||
| Operating loss | (15,666 | ) | (7,772 | ) | (142,185 | ) | (35,964 | ) | ||||||||||||
| Other (expense) income: | ||||||||||||||||||||
| Other (expense) income | (436 | ) | 86 | (900 | ) | 523 | ||||||||||||||
| Interest income | 101 | 892 | 948 | 3,292 | ||||||||||||||||
| Interest expense | (5,097 | ) | (7,797 | ) | (17,515 | ) | (24,496 | ) | ||||||||||||
| Impairment of right-of-use asset | - | - | - | (223 | ) | |||||||||||||||
| Other expense | (5,432 | ) | (6,819 | ) | (17,467 | ) | (20,904 | ) | ||||||||||||
| Net loss | $ | (21,098 | ) | $ | (14,591 | ) | $ | (159,652 | ) | $ | (56,868 | ) | ||||||||
| Net loss per share - basic | $ | (0.50 | ) | $ | (0.35 | ) | $ | (3.81 | ) | $ | (1.36 | ) | ||||||||
| Net loss per share - diluted | $ | (0.50 | ) | $ | (0.35 | ) | $ | (3.81 | ) | $ | (1.36 | ) | ||||||||
| Weighted average common shares outstanding - basic | 41,928,682 | 41,749,200 | 41,898,756 | 41,739,287 | ||||||||||||||||
| Weighted average common shares outstanding - diluted | 41,928,682 | 41,749,200 | 41,898,756 | 41,739,287 | ||||||||||||||||
| September 30, 2020 | December 31, 2019 | |||||||||||||||||||
| BALANCE SHEET DATA (Dollars in thousands): | (unaudited) | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 136,233 | $ | 155,889 | ||||||||||||||||
| Restricted cash | 24,227 | 6,045 | ||||||||||||||||||
| Due from charterers, net | 10,906 | 13,701 | ||||||||||||||||||
| Prepaid expenses and other current assets | 9,014 | 10,049 | ||||||||||||||||||
| Inventories | 21,159 | 27,208 | ||||||||||||||||||
| Vessels held for sale | 20,889 | 10,303 | ||||||||||||||||||
| Total current assets | 222,428 | 223,195 | ||||||||||||||||||
| Noncurrent assets: | ||||||||||||||||||||
| Vessels, net of accumulated depreciation of | 1,062,888 | 1,273,861 | ||||||||||||||||||
| Deferred drydock, net | 17,157 | 17,304 | ||||||||||||||||||
| Fixed assets, net | 7,534 | 5,976 | ||||||||||||||||||
| Operating lease right-of-use assets | 7,225 | 8,241 | ||||||||||||||||||
| Restricted cash | 315 | 315 | ||||||||||||||||||
| Total noncurrent assets | 1,095,119 | 1,305,697 | ||||||||||||||||||
| Total assets | $ | 1,317,547 | $ | 1,528,892 | ||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 22,973 | $ | 49,604 | ||||||||||||||||
| Current portion of long-term debt | 80,642 | 69,747 | ||||||||||||||||||
| Deferred revenue | 8,318 | 6,627 | ||||||||||||||||||
| Current operating lease liabilities | 1,742 | 1,677 | ||||||||||||||||||
| Total current liabilities | 113,675 | 127,655 | ||||||||||||||||||
| Noncurrent liabilities | ||||||||||||||||||||
| Long-term operating lease liabilities | 8,511 | 9,826 | ||||||||||||||||||
| Long-term debt, net of deferred financing costs of | 384,141 | 412,983 | ||||||||||||||||||
| Total noncurrent liabilities | 392,652 | 422,809 | ||||||||||||||||||
| Total liabilities | 506,327 | 550,464 | ||||||||||||||||||
| Commitments and contingencies | ||||||||||||||||||||
| Equity: | ||||||||||||||||||||
| Common stock | 418 | 417 | ||||||||||||||||||
| Additional paid-in capital | 1,713,711 | 1,721,268 | ||||||||||||||||||
| Accumulated deficit | (902,909 | ) | (743,257 | ) | ||||||||||||||||
| Total equity | 811,220 | 978,428 | ||||||||||||||||||
| Total liabilities and equity | $ | 1,317,547 | $ | 1,528,892 | ||||||||||||||||
| Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | |||||||||||||||||||
| STATEMENT OF CASH FLOWS (Dollars in thousands): | (unaudited) | |||||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Net loss | $ | (159,652 | ) | $ | (56,868 | ) | ||||||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 49,619 | 54,532 | ||||||||||||||||||
| Amortization of deferred financing costs | 2,906 | 2,828 | ||||||||||||||||||
| Noncash operating lease expense | 1,016 | 911 | ||||||||||||||||||
| Amortization of nonvested stock compensation expense | 1,491 | 1,596 | ||||||||||||||||||
| Impairment of right-of-use asset | - | 223 | ||||||||||||||||||
| Impairment of vessel assets | 134,710 | 26,078 | ||||||||||||||||||
| Loss (gain) on sale of vessels | 844 | (611 | ) | |||||||||||||||||
| Insurance proceeds for protection and indemnity claims | 330 | 413 | ||||||||||||||||||
| Insurance proceeds for loss of hire claims | 78 | - | ||||||||||||||||||
| Change in assets and liabilities: | ||||||||||||||||||||
| Decrease in due from charterers | 2,795 | 1,915 | ||||||||||||||||||
| Decrease (increase) in prepaid expenses and other current assets | 143 | (655 | ) | |||||||||||||||||
| Decrease in inventories | 6,049 | 6,566 | ||||||||||||||||||
| (Decrease) increase in accounts payable and accrued expenses | (17,956 | ) | 5,061 | |||||||||||||||||
| Increase (decrease) increase in deferred revenue | 1,691 | (79 | ) | |||||||||||||||||
| Decrease in operating lease liabilities | (1,250 | ) | (1,187 | ) | ||||||||||||||||
| Deferred drydock costs incurred | (6,799 | ) | (11,965 | ) | ||||||||||||||||
| Net cash provided by operating activities | 16,015 | 28,758 | ||||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Purchase of vessels and ballast water treatment systems, including deposits | (3,379 | ) | (10,392 | ) | ||||||||||||||||
| Purchase of scrubbers (capitalized in Vessels) | (10,948 | ) | (24,736 | ) | ||||||||||||||||
| Purchase of other fixed assets | (3,684 | ) | (3,590 | ) | ||||||||||||||||
| Net proceeds from sale of vessels | 29,854 | 6,309 | ||||||||||||||||||
| Insurance proceeds for hull and machinery claims | 484 | 612 | ||||||||||||||||||
| Net cash provided by (used in) investing activities | 12,327 | (31,797 | ) | |||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from the | 24,000 | - | ||||||||||||||||||
| Repayments on the | (5,660 | ) | (4,740 | ) | ||||||||||||||||
| Proceeds from the | 11,250 | 21,500 | ||||||||||||||||||
| Repayments on the | (49,981 | ) | (49,575 | ) | ||||||||||||||||
| Payment of common stock issuance costs | - | (105 | ) | |||||||||||||||||
| Cash dividends paid | (8,963 | ) | - | |||||||||||||||||
| Payment of deferred financing costs | (462 | ) | (611 | ) | ||||||||||||||||
| Net cash used in financing activities | (29,816 | ) | (33,531 | ) | ||||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | (1,474 | ) | (36,570 | ) | ||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 162,249 | 202,761 | ||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 160,775 | $ | 166,191 | ||||||||||||||||
| Three Months Ended September 30, 2020 | ||||||||||||||||||||
| Adjusted Net Income Reconciliation | (unaudited) | |||||||||||||||||||
| Net loss | $ | (21,098 | ) | |||||||||||||||||
| + | Impairment of vessel assets | 21,896 | ||||||||||||||||||
| + | Loss on sale of vessels | 358 | ||||||||||||||||||
| Adjusted net income | $ | 1,156 | ||||||||||||||||||
| Adjusted net earnings per share - basic | $ | 0.03 | ||||||||||||||||||
| Adjusted net earnings per share - diluted | $ | 0.03 | ||||||||||||||||||
| Weighted average common shares outstanding - basic | 41,928,682 | |||||||||||||||||||
| Weighted average common shares outstanding - diluted | 41,928,682 | |||||||||||||||||||
| Weighted average common shares outstanding - basic as per financial statements | 41,928,682 | |||||||||||||||||||
| Dilutive effect of stock options | - | |||||||||||||||||||
| Dilutive effect of restricted stock awards | - | |||||||||||||||||||
| Weighted average common shares outstanding - diluted as adjusted | 41,928,682 | |||||||||||||||||||
| Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | |||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||
| EBITDA Reconciliation: | (unaudited) | (unaudited) | ||||||||||||||||||
| Net loss | $ | (21,098 | ) | $ | (14,591 | ) | $ | (159,652 | ) | $ | (56,868 | ) | ||||||||
| + | Net interest expense | 4,996 | 6,905 | 16,567 | 21,204 | |||||||||||||||
| + | Depreciation and amortization | 16,115 | 18,184 | 49,619 | 54,532 | |||||||||||||||
| EBITDA(1) | $ | 13 | $ | 10,498 | $ | (93,466 | ) | $ | 18,868 | |||||||||||
| + | Impairment of vessel assets | 21,896 | 12,182 | 134,710 | 26,078 | |||||||||||||||
| + | Impairment of right-of-use asset | - | - | - | - | 223 | ||||||||||||||
| + | Loss (gain) on sale of vessels | 358 | - | 844 | (611 | ) | ||||||||||||||
| Adjusted EBITDA | $ | 22,267 | $ | 22,680 | $ | 42,088 | $ | 44,558 | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2020 | September 30, 2019 | September 30, 2020 | September 30, 2019 | |||||||||||||||||
| FLEET DATA: |
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FAQ
What was Genco Shipping's quarterly dividend for Q3 2020?
Genco Shipping declared a quarterly dividend of $0.02 per share for Q3 2020.
What were Genco Shipping's revenue figures for Q3 2020?
Genco Shipping reported voyage revenues of $87.5 million for Q3 2020.
How much cash did Genco Shipping have as of September 30, 2020?
Genco Shipping had a cash position of $160.8 million as of September 30, 2020.
What was Genco Shipping's net loss for Q3 2020?
Genco Shipping reported a net loss of $21.1 million for Q3 2020.
What is Genco Shipping's estimated TCE for Q4 2020?
Genco Shipping's estimated TCE for Q4 2020 is $13,004.
GENCO SHIPPING & TRADING LTD
NYSE:GNKGNK RankingsGNK Latest NewsGNK Stock Data
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Marine Shipping
Deep Sea Foreign Transportation of Freight
United States of America
NEW YORK
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