Genco Shipping & Trading Limited Announces Third Quarter Financial Results
Genco Shipping & Trading Limited (NYSE:GNK) reported its highest quarterly earnings per share since 2008, achieving a net income of $57.1 million for Q3 2021, translating to earnings per share of $1.36 and $1.34 for basic and diluted shares, respectively. Voyage revenues surged to $155.3 million, while the TCE rate reached $29,287, the highest since 2010. The company increased its quarterly dividend to $0.15 per share and aims to reduce debt to $246 million by year's end. Genco's comprehensive value strategy emphasizes low financial leverage and significant shareholder returns.
- Record net income of $57.1 million in Q3 2021.
- Increased quarterly dividend from $0.10 to $0.15 per share.
- Highest quarterly earnings per share since Q3 2008.
- Secured a $450 million credit facility to improve capital flexibility.
- TCE rates reached $29,287, indicating strong market positioning.
- Loss on debt extinguishment of $4.4 million.
- Higher voyage expenses due to increased bunker costs.
Increases Quarterly Dividend and Approaches Full Execution of Genco’s Comprehensive Value Strategy
Reports Highest Quarterly Earnings Per Share Since 2008
NEW YORK, Nov. 03, 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 nine months ended September 30, 2021.
The following financial review discusses the results for the three months and nine months ended September 30, 2021 and September 30, 2020.
Third 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:
- Closed our
$450 Million Credit Facility in August 2021, which provides additional flexibility for capital allocation, lowers our cash flow breakeven rate, and improves key terms - Took delivery of four modern, fuel efficient Ultramax vessels in Q3 2021
- Repaid
$144.2 million of debt during the first nine months of 2021, or32% of the beginning year debt balance- We plan to pay down debt to
$246 million by year-end 2021
- We plan to pay down debt to
- Fixed seven vessels on period TCs for ~1 to ~2 years at rates between
$23,375 and$32,000 per day to secure cash flows and de-risk acquisitions
- Closed our
- Genco increased its regular quarterly cash dividend to
$0.15 per share for the third quarter of 2021- Payable on or about November 22, 2021 to all shareholders of record as of November 15, 2021
- We have now declared cumulative dividends totaling
$1.05 5 per share over the last nine quarters - The first dividend under Genco’s value strategy, is to be based on Q4 2021 results and be payable in Q1 2022
- We recorded net income of
$57.1 million for the third quarter of 2021- Basic and diluted earnings per share of
$1.36 and$1.34 , respectively - Adjusted net income1 of
$61.7 million or basic and diluted earnings per share of$1.47 and$1.44 , respectively, excluding$4.4 million in loss on debt extinguishment and a$0.2 million loss on sale of vessels - Represents our highest quarterly earnings per share result since Q3 2008
- Basic and diluted earnings per share of
- Voyage revenues totaled
$155.3 million and net revenue1 (voyage revenues minus voyage expenses and charter hire expenses) totaled$108.8 million during Q3 2021- Our average daily fleet-wide time charter equivalent, or TCE1, for Q3 2021 was
$29,287 , marking our highest quarterly TCE since 2010 - We estimate our TCE to date for Q4 2021 to be
$36,879 for71% of our owned fleet available days, based on both period and current spot fixtures
- Our average daily fleet-wide time charter equivalent, or TCE1, for Q3 2021 was
- Recorded adjusted EBITDA of
$79.8 million during Q3 2021, which is greater than the comparable figure for all of 20201 - Maintained a strong liquidity position with
$80.5 million of cash as of September 30, 2021, after$144.2 million of debt repayments as well as$108.7 million paid for vessels acquired in the year to date - Established 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
- Became a signatory to the Call to Action for Shipping Decarbonization
John C. Wobensmith, Chief Executive Officer, commented, “During the third quarter, Genco maintained its upward earnings trajectory posting its best quarter since 2008. We continue to capitalize on both our leading platform and the favorable drybulk market, which has moved from strength-to-strength in recent quarters. While we anticipate normal seasonality in the coming months, the overall fundamentals, including a historically low orderbook, remain supportive of Genco further taking advantage of its strong earnings power for the benefit of shareholders. Against this favorable backdrop, we are progressing towards the full execution of our comprehensive value strategy. Importantly, we have laid the groundwork over the course of the year, have once again increased our quarterly dividend and are on schedule to declare our first dividend under our new policy.”
Mr. Wobensmith, continued, “With our expected debt balance of
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.
Comprehensive Value Strategy Update
Genco’s comprehensive value strategy is centered on three key pillars:
- Low financial leverage
- Paying sizeable quarterly cash dividends to shareholders, and
- Growth of the Company’s asset base
We believe this strategy is a key differentiator for the Company and will drive shareholder value over the long-term creating a compelling risk-reward balance.
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 positioning the Company to pay a sizeable quarterly dividend across diverse market environments. At the same time, we also maintain significant flexibility to grow the fleet through accretive vessel acquisitions. The first dividend under the Company’s new corporate strategy will be based on Q4 2021 results and be payable in Q1 2022.
In implementing this strategy, the Company has taken the following measures to date:
- Deleveraging: paid down
$144.2 million of debt during the first nine months of 2021, or approximately32% of our outstanding debt - Refinancing: closed on a new global credit facility to increase flexibility, improve key terms and lower cash flow breakeven rates
- Revolver: our new
$450 million credit facility has a substantial revolver in place with$137.5 million of availability as of September 2021 - 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 | |||
| Baltic Wolf | Capesize | $ | 30,250 | 22-28 months | Jun-23 | |||
| Genco Maximus | Capesize | $ | 27,500 | 24-30 months | Sep-23 | |||
| 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 | |||
We plan to have
Dividend policy
For the third quarter of 2021, Genco declared a cash dividend of
As part of Genco’s value strategy, the Board of Directors adopted a new quarterly dividend policy for dividends payable commencing in the first quarter of 2022 in respect to the Company’s financial results for the fourth quarter of 2021. Under the new quarterly dividend policy, the amount available for quarterly dividends is to be calculated based on the following formula:
Operating cash flow
Less: Debt repayments
Less: Capital expenditures for drydocking
Less: Reserve
Cash flow distributable as dividends
For purposes of the foregoing calculation, operating cash flow is defined as voyage revenue less voyage expenses, charter hire expenses, 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. Anticipated uses for the reserve include, but are not limited to, vessel acquisitions, debt repayments, and general corporate purposes. In order to set aside funds for these purposes, the reserve will be set on a quarterly basis in advance of the subsequent quarter and is anticipated to be based on future quarterly debt repayments and interest expense. The quarterly reserve for the fourth quarter of 2021, which is set in and remains subject to our Board of Directors’ discretion, is expected to be
The Board expects to reassess the payment of dividends as appropriate from time to time. The quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with law and contractual obligations 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.
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, our estimated TCE to date for the fourth quarter of 2021 on a load-to-discharge basis is presented below. Our estimated Q4 TCE based on current fixtures is
| Estimated net TCE - Q4 2021 to Date | ||||||||
| Vessel Type | Period | Spot | Fleet-wide | % Fixed | ||||
| Capesize | $ | 28,197 | $ | 51,288 | $ | 43,708 | 72 | % |
| Ultramax/Supramax | $ | 23,109 | $ | 37,620 | $ | 32,143 | 71 | % |
| Fleet-wide | $ | 25,024 | $ | 43,471 | $ | 36,879 | 71 | % |
As we have fixed eight vessels on one to two year period time charters, we have provided a TCE breakout of the period time charters as well as the spot trading fixtures in the fourth quarter to date. Actual rates for the fourth quarter will vary based upon future fixtures. We have approximately eight Capesize vessels coming open in the coming weeks, of which we plan to ballast select vessels to the Atlantic basin. As the market has declined from the highs seen during the third quarter and early October, we anticipate the unfixed portion of our available days to be contracted at lower rates than those reflected above in our fixtures to date.
Fleet Update
Since April 2021, the Company has entered agreements to purchase six modern, fuel efficient Ultramax vessels. To date, we have taken delivery of the following Ultramax vessels:
- Genco Enterprise (2016-built) on August 23, 2021
- Genco Madeleine (2014-built) on August 23, 2021
- Genco Mayflower (2017-built) on August 24, 2021
- Genco Constellation (2017-built) on September 3, 2021
We anticipate taking delivery of the final two Ultramaxes in January 2022 at which point we expect to pay the remaining
Regarding vessel divestitures, we completed the sale of the Genco Provence on November 2, 2021, for gross proceeds of
Financial Review: 2021 Third Quarter
The Company recorded net income for the third 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, “During the quarter, we took important steps to strengthen our capital structure and further reduce our financial leverage. We closed our new
Financial Review: Nine Months 2021
The Company recorded net income of
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the nine months ended September 30, 2021 was
Net cash used in investing activities for the nine months ended September 30, 2021 was
Net cash used in financing activities during the nine months ended September 30, 2021 and 2020 was
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. As of November 3, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, 13 Ultramax and 12 Supramax vessels with an aggregate capacity of approximately 4,514,000 dwt and an average age of 10.1 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:
| Q4 2021 | 2022 | |
| Estimated Drydock Costs (1) | ||
| Estimated BWTS Costs (2) | ||
| Estimated Fuel Efficiency Upgrade Costs (3) | ||
| Total Estimated Costs | ||
| Estimated Offhire Days (4) | 60 | 300 |
(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 Q4 2021 consists of 40 days for two Ultramaxes and 20 days for one Supramax. Estimated offhire days for 2022 relate to 12 vessels drydocking during the year and 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 September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 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 | $ | 155,252 | $ | 87,524 | $ | 363,851 | $ | 260,066 | |||||||||||
| Total revenues | 155,252 | 87,524 | 363,851 | 260,066 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Voyage expenses | 37,797 | 33,487 | 109,572 | 123,550 | |||||||||||||||
| Vessel operating expenses | 21,788 | 23,460 | 59,622 | 66,332 | |||||||||||||||
| Charter hire expenses | 8,644 | 1,020 | 22,405 | 5,527 | |||||||||||||||
| General and administrative expenses (inclusive of nonvested stock amortization | 5,659 | 5,115 | 17,616 | 16,353 | |||||||||||||||
| expense of | |||||||||||||||||||
| Technical management fees | 1,631 | 1,739 | 4,400 | 5,316 | |||||||||||||||
| Depreciation and amortization | 14,200 | 16,115 | 41,409 | 49,619 | |||||||||||||||
| Impairment of vessel assets | - | 21,896 | - | 134,710 | |||||||||||||||
| Loss on sale of vessels | 159 | 358 | 894 | 844 | |||||||||||||||
| Total operating expenses | 89,878 | 103,190 | 255,918 | 402,251 | |||||||||||||||
| Operating income (loss) | 65,374 | (15,666 | ) | 107,933 | (142,185 | ) | |||||||||||||
| Other income (expense): | |||||||||||||||||||
| Other income (expense) | 84 | (436 | ) | 440 | (900 | ) | |||||||||||||
| Interest income | 25 | 101 | 144 | 948 | |||||||||||||||
| Interest expense | (3,943 | ) | (5,097 | ) | (12,955 | ) | (17,515 | ) | |||||||||||
| Loss on debt extinguishment | (4,408 | ) | - | (4,408 | ) | - | |||||||||||||
| Other expense, net | (8,242 | ) | (5,432 | ) | (16,779 | ) | (17,467 | ) | |||||||||||
| Net income (loss) | $ | 57,132 | $ | (21,098 | ) | $ | 91,154 | $ | (159,652 | ) | |||||||||
| Net earnings (loss) per share - basic | $ | 1.36 | $ | (0.50 | ) | $ | 2.17 | $ | (3.81 | ) | |||||||||
| Net earnings (loss) per share - diluted | $ | 1.34 | $ | (0.50 | ) | $ | 2.14 | $ | (3.81 | ) | |||||||||
| Weighted average common shares outstanding - basic | 42,095,211 | 41,928,682 | 42,047,115 | 41,898,756 | |||||||||||||||
| Weighted average common shares outstanding - diluted | 42,750,836 | 41,928,682 | 42,548,187 | 41,898,756 | |||||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||||||||||
| BALANCE SHEET DATA (Dollars in thousands): | (unaudited) | ||||||||||||||||||
| Assets | |||||||||||||||||||
| Current assets: | |||||||||||||||||||
| Cash and cash equivalents | $ | 80,172 | $ | 143,872 | |||||||||||||||
| Restricted cash | - | 35,492 | |||||||||||||||||
| Due from charterers, net | 22,069 | 12,991 | |||||||||||||||||
| Prepaid expenses and other current assets | 9,544 | 10,856 | |||||||||||||||||
| Inventories | 23,722 | 21,583 | |||||||||||||||||
| Vessels held for sale | 6,964 | 22,408 | |||||||||||||||||
| Total current assets | 142,471 | 247,202 | |||||||||||||||||
| Noncurrent assets: | |||||||||||||||||||
| Vessels, net of accumulated depreciation of | 991,471 | 919,114 | |||||||||||||||||
| Deposits on vessels | 17,702 | - | |||||||||||||||||
| Vessels held for exchange | - | 38,214 | |||||||||||||||||
| Deferred drydock, net | 12,465 | 14,689 | |||||||||||||||||
| Fixed assets, net | 6,072 | 6,393 | |||||||||||||||||
| Operating lease right-of-use assets | 5,845 | 6,882 | |||||||||||||||||
| Restricted cash | 315 | 315 | |||||||||||||||||
| Fair value of derivative instruments | 424 | - | |||||||||||||||||
| Total noncurrent assets | 1,034,294 | 985,607 | |||||||||||||||||
| Total assets | $ | 1,176,765 | $ | 1,232,809 | |||||||||||||||
| Liabilities and Equity | |||||||||||||||||||
| Current liabilities: | |||||||||||||||||||
| Accounts payable and accrued expenses | $ | 24,138 | $ | 22,793 | |||||||||||||||
| Current portion of long-term debt | - | 80,642 | |||||||||||||||||
| Deferred revenue | 14,441 | 8,421 | |||||||||||||||||
| Fair market value of time charters acquired | 2,220 | - | |||||||||||||||||
| Current operating lease liabilities | 1,835 | 1,765 | |||||||||||||||||
| Total current liabilities | 42,634 | 113,621 | |||||||||||||||||
| Noncurrent liabilities | |||||||||||||||||||
| Long-term operating lease liabilities | 6,677 | 8,061 | |||||||||||||||||
| Contract liability | - | 7,200 | |||||||||||||||||
| Long-term debt, net of deferred financing costs of | 296,771 | 358,933 | |||||||||||||||||
| Total noncurrent liabilities | 303,448 | 374,194 | |||||||||||||||||
| Total liabilities | 346,082 | 487,815 | |||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||
| Equity: | |||||||||||||||||||
| Common stock | 419 | 418 | |||||||||||||||||
| Additional paid-in capital | 1,707,900 | 1,713,406 | |||||||||||||||||
| Accumulated other comprehensive income | 40 | - | |||||||||||||||||
| Accumulated deficit | (877,676 | ) | (968,830 | ) | |||||||||||||||
| Total equity | 830,683 | 744,994 | |||||||||||||||||
| Total liabilities and equity | $ | 1,176,765 | $ | 1,232,809 | |||||||||||||||
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||
| STATEMENT OF CASH FLOWS (Dollars in thousands): | (unaudited) | ||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||
| Net income (loss) | $ | 91,154 | $ | (159,652 | ) | ||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||||||
| Depreciation and amortization | 41,409 | 49,619 | |||||||||||||||||
| Amortization of deferred financing costs | 3,110 | 2,906 | |||||||||||||||||
| Amortization of fair market value of time charters acquired | (2,043 | ) | - | ||||||||||||||||
| Right-of-use asset amortization | 1,037 | 1,016 | |||||||||||||||||
| Amortization of nonvested stock compensation expense | 1,670 | 1,491 | |||||||||||||||||
| Impairment of vessel assets | - | 134,710 | |||||||||||||||||
| Loss on sale of vessels | 894 | 844 | |||||||||||||||||
| Loss on debt extinguishment | 4,408 | - | |||||||||||||||||
| Amortization of premium on derivative | 153 | - | |||||||||||||||||
| Interest rate cap premium payment | (240 | ) | - | ||||||||||||||||
| Insurance proceeds for protection and indemnity claims | 913 | 330 | |||||||||||||||||
| Insurance proceeds for loss of hire claims | - | 78 | |||||||||||||||||
| Change in assets and liabilities: | |||||||||||||||||||
| (Increase) decrease in due from charterers | (9,078 | ) | 2,795 | ||||||||||||||||
| (Increase) decrease in prepaid expenses and other current assets | (193 | ) | 143 | ||||||||||||||||
| (Increase) decrease in inventories | (2,139 | ) | 6,049 | ||||||||||||||||
| Increase (decrease) in accounts payable and accrued expenses | 1,111 | (17,956 | ) | ||||||||||||||||
| Increase in deferred revenue | 6,020 | 1,691 | |||||||||||||||||
| Decrease in operating lease liabilities | (1,314 | ) | (1,250 | ) | |||||||||||||||
| Deferred drydock costs incurred | (1,885 | ) | (6,799 | ) | |||||||||||||||
| Net cash provided by operating activities | 134,987 | 16,015 | |||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||
| Purchase of vessels and ballast water treatment systems, including deposits | (113,199 | ) | (3,379 | ) | |||||||||||||||
| Purchase of scrubbers (capitalized in Vessels) | (193 | ) | (10,948 | ) | |||||||||||||||
| Purchase of other fixed assets | (901 | ) | (3,684 | ) | |||||||||||||||
| Net proceeds from sale of vessels | 36,696 | 29,854 | |||||||||||||||||
| Insurance proceeds for hull and machinery claims | 295 | 484 | |||||||||||||||||
| Net cash (used in) provided by investing activities | (77,302 | ) | 12,327 | ||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||
| Proceeds from the | 350,000 | - | |||||||||||||||||
| Repayments on the | (45,000 | ) | - | ||||||||||||||||
| Proceeds from the | - | 24,000 | |||||||||||||||||
| Repayments on the | (114,940 | ) | (5,660 | ) | |||||||||||||||
| Proceeds from the | - | 11,250 | |||||||||||||||||
| Repayments on the | (334,288 | ) | (49,981 | ) | |||||||||||||||
| Cash dividends paid | (7,175 | ) | (8,963 | ) | |||||||||||||||
| Payment of deferred financing costs | (5,474 | ) | (462 | ) | |||||||||||||||
| Net cash used in financing activities | (156,877 | ) | (29,816 | ) | |||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | (99,192 | ) | (1,474 | ) | |||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 179,679 | 162,249 | |||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 80,487 | $ | 160,775 | |||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||
| Adjusted Net Income Reconciliation | (unaudited) | ||||||||||||||||||
| Net income | $ | 57,132 | |||||||||||||||||
| + | Loss on sale of vessels | 159 | |||||||||||||||||
| + | Loss on debt extinguishment | 4,408 | |||||||||||||||||
| Adjusted net income | $ | 61,699 | |||||||||||||||||
| Adjusted net earnings per share - basic | $ | 1.47 | |||||||||||||||||
| Adjusted net earnings per share - diluted | $ | 1.44 | |||||||||||||||||
| Weighted average common shares outstanding - basic | 42,095,211 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted | 42,750,836 | ||||||||||||||||||
| Weighted average common shares outstanding - basic as per financial statements | 42,095,211 | ||||||||||||||||||
| Dilutive effect of stock options | 442,617 | ||||||||||||||||||
| Dilutive effect of restricted stock units | 213,008 | ||||||||||||||||||
| Weighted average common shares outstanding - diluted as adjusted | 42,750,836 | ||||||||||||||||||
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||
| EBITDA Reconciliation: | (unaudited) | (unaudited) | |||||||||||||||||
| Net income (loss) | $ | 57,132 | $ | (21,098 | ) | $ | 91,154 | $ | (159,652 | ) | |||||||||
| + | Net interest expense | 3,918 | 4,996 | 12,811 | 16,567 | ||||||||||||||
| + | Depreciation and amortization | 14,200 | 16,115 | 41,409 | 49,619 | ||||||||||||||
| EBITDA(1) | $ | 75,250 | $ | 13 | $ | 145,374 | $ | (93,466 | ) | ||||||||||
| + | Impairment of vessel assets | - | 21,896 | - | 134,710 | ||||||||||||||
| + | Loss on sale of vessels | 159 | 358 | 894 | 844 | ||||||||||||||
| + | Loss on debt extinguishment | 4,408 | - | 4,408 | - | ||||||||||||||
| Adjusted EBITDA | $ | 79,817 | $ | 22,267 | $ | 150,676 | $ | 42,088 | |||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | |||||||||||||||||
| Total number of vessels at end of period | 43 | 51 | 43 | 51 | |||||||||||||||
| Average number of vessels (2) | 40.6 | 51.4 | 41.3 | 52.9 | |||||||||||||||
| Total ownership days for fleet (3) | 3,735 | 4,729 | 11,280 | 14,495 | |||||||||||||||
| Total chartered-in days (4) | 333 | 145 | 1,120 | 816 | |||||||||||||||
| Total available days for fleet (5) | 4,048 | 4,773 | 12,289 | 14,891 | |||||||||||||||
| Total available days for owned fleet (6) | 3,715 | 4,628 | 11,169 | 14,075 | |||||||||||||||
| Total operating days for fleet (7) | 3,990 | 4,626 | 12,108 | 14,576 | |||||||||||||||
| Fleet utilization (8) | 98.1 | % | 96.2 | % | 98.1 | % | 97.3 | % | |||||||||||
| AVERAGE DAILY RESULTS: | |||||||||||||||||||
| Time charter equivalent (9) | $ | 29,287 | $ | 11,456 | $ | 20,761 | $ | 9,307 | |||||||||||
| Daily vessel operating expenses per vessel (10) | 5,833 | 4,961 | 5,286 | 4,576 | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||||||||||||||||
| FLEET DATA: | (unaudited) | (unaudited) | |||||||||||||||||
| Ownership days | |||||||||||||||||||
| Capesize | 1,564.0 | 1,564.0 | 4,641.0 | 4,658.0 | |||||||||||||||
| Panamax | - | - | - | 64.8 | |||||||||||||||
| Ultramax | 970.0 | 552.0 | 2,520.8 | 1,644.0 | |||||||||||||||
| Supramax | 1,201.3 | 1,840.0 | 3,890.5 | 5,480.0 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 773.3 | 227.5 | 2,648.0 | |||||||||||||||
| Total | 3,735.3 | 4,729.3 | 11,279.8 | 14,494.8 | |||||||||||||||
| Chartered-in days | |||||||||||||||||||
| Capesize | - | - | - | - | |||||||||||||||
| Panamax | - | - | - | - | |||||||||||||||
| Ultramax | 43.3 | 82.2 | 387.5 | 374.7 | |||||||||||||||
| Supramax | 289.8 | 60.6 | 732.3 | 363.5 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 2.5 | - | 63.2 | |||||||||||||||
| Total | 333.1 | 145.3 | 1,119.8 | 815.9 | |||||||||||||||
| Available days (owned & chartered-in fleet) | |||||||||||||||||||
| Capesize | 1,564.0 | 1,551.2 | 4,583.4 | 4,609.5 | |||||||||||||||
| Panamax | - | - | - | 64.4 | |||||||||||||||
| Ultramax | 997.1 | 633.8 | 2,883.5 | 1,939.4 | |||||||||||||||
| Supramax | 1,487.3 | 1,829.2 | 4,594.1 | 5,581.8 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 758.9 | 227.5 | 2,681.1 | |||||||||||||||
| Total | 4,048.4 | 4,773.1 | 12,288.5 | 14,890.7 | |||||||||||||||
| Available days (owned fleet) | |||||||||||||||||||
| Capesize | 1,564.0 | 1,551.2 | 4,583.4 | 4,609.5 | |||||||||||||||
| Panamax | - | - | - | 64.4 | |||||||||||||||
| Ultramax | 953.8 | 551.6 | 2,496.0 | 1,564.7 | |||||||||||||||
| Supramax | 1,197.5 | 1,768.6 | 3,861.8 | 5,218.3 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 756.4 | 227.5 | 2,617.9 | |||||||||||||||
| Total | 3,715.3 | 4,627.8 | 11,168.7 | 14,074.8 | |||||||||||||||
| Operating days | |||||||||||||||||||
| Capesize | 1,545.3 | 1,513.5 | 4,549.2 | 4,570.4 | |||||||||||||||
| Panamax | - | - | - | 60.1 | |||||||||||||||
| Ultramax | 981.6 | 625.4 | 2,854.5 | 1,929.6 | |||||||||||||||
| Supramax | 1,463.5 | 1,814.0 | 4,513.3 | 5,521.3 | |||||||||||||||
| Handymax | - | - | - | 14.5 | |||||||||||||||
| Handysize | - | 673.4 | 191.3 | 2,479.8 | |||||||||||||||
| Total | 3,990.4 | 4,626.3 | 12,108.3 | 14,575.7 | |||||||||||||||
| Fleet utilization | |||||||||||||||||||
| Capesize | 98.8 | % | 96.8 | % | 99.1 | % | 98.5 | % | |||||||||||
| Panamax | - | - | - | 92.7 | % | ||||||||||||||
| Ultramax | 96.9 | % | 98.6 | % | 98.2 | % | 99.5 | % | |||||||||||
| Supramax | 98.1 | % | 97.9 | % | 97.6 | % | 98.0 | % | |||||||||||
| Handymax | - | - | - | 100.0 | % | ||||||||||||||
| Handysize | - | 88.7 | % | 84.1 | % | 92.0 | % | ||||||||||||
| Fleet average | 98.1 | % | 96.2 | % | 98.1 | % | 97.3 | % | |||||||||||
| Average Daily Results: | |||||||||||||||||||
| Time Charter Equivalent | |||||||||||||||||||
| Capesize | $ | 30,809 | $ | 16,287 | $ | 22,829 | $ | 14,147 | |||||||||||
| Panamax | - | - | - | 5,365 | |||||||||||||||
| Ultramax | 23,271 | 10,965 | 18,365 | 9,028 | |||||||||||||||
| Supramax | 31,996 | 9,523 | 20,605 | 7,136 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 6,445 | 8,503 | 5,328 | |||||||||||||||
| Fleet average | 29,287 | 11,456 | 20,761 | 9,307 | |||||||||||||||
| Daily vessel operating expenses | |||||||||||||||||||
| Capesize | $ | 6,092 | $ | 5,255 | $ | 5,590 | $ | 5,064 | |||||||||||
| Panamax | - | - | - | 3,149 | |||||||||||||||
| Ultramax | 5,792 | 5,709 | 5,194 | 4,728 | |||||||||||||||
| Supramax | 5,515 | 4,786 | 4,961 | 4,396 | |||||||||||||||
| Handymax | - | - | - | - | |||||||||||||||
| Handysize | - | 4,191 | 5,617 | 3,967 | |||||||||||||||
| Fleet average | 5,833 | 4,961 | 5,286 | 4,576 | |||||||||||||||
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 fourth 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 fourth quarter to the most comparable financial measures presented in accordance with GAAP.
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||
| Total Fleet | (unaudited) | (unaudited) | |||||||||||||||||
| Voyage revenues (in thousands) | $ | 155,252 | $ | 87,524 | $ | 363,851 | $ | 260,066 | |||||||||||
| Voyage expenses (in thousands) | 37,797 | 33,487 | 109,572 | 123,550 | |||||||||||||||
| Charter hire expenses (in thousands) | 8,644 | 1,020 | 22,405 | 5,527 | |||||||||||||||
| 108,811 | 53,017 | 231,874 | 130,989 | ||||||||||||||||
| Total available days for owned fleet | 3,715 | 4,628 | 11,169 | 14,075 | |||||||||||||||
| Total TCE rate | $ | 29,287 | $ | 11,456 | $ | 20,761 | $ | 9,307 | |||||||||||
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. As of November 3, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, 13 Ultramax and 12 Supramax vessels with an aggregate capacity of approximately 4,514,000 dwt and an average age of 10.1 years.
The following table reflects Genco’s fleet list as of November 3, 2021:
| Vessel | DWT | Year Built | ||
| Capesize | ||||
| 1 | Genco Resolute | 181,060 | 2015 | |
| 2 | Genco Endeavour | 181,060 | 2015 | |
| 3 | Genco Liberty | 180,387 | 2016 | |
| 4 | Genco Defender | 180,377 | 2016 | |
| 5 | Genco Constantine | 180,183 | 2008 | |
| 6 | Genco Augustus | 180,151 | 2007 | |
| 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 | Genco Freedom | 63,671 | 2015 | |
| 2 | Genco Vigilant | 63,671 | 2015 | |
| 3 | Baltic Hornet | 63,574 | 2014 | |
| 4 | Genco Enterprise | 63,473 | 2016 | |
| 5 | Baltic Mantis | 63,470 | 2015 | |
| 6 | Baltic Scorpion | 63,462 | 2015 | |
| 7 | Genco Magic | 63,446 | 2014 | |
| 8 | Baltic Wasp | 63,389 | 2015 | |
| 9 | Genco Constellation | 63,310 | 2017 | |
| 10 | Genco Mayflower | 63,304 | 2017 | |
| 11 | Genco Madeleine | 63,166 | 2014 | |
| 12 | Genco Weatherly | 61,556 | 2014 | |
| 13 | 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 Picardy | 55,257 | 2005 | |
Conference Call Announcement
Genco Shipping & Trading Limited will hold a conference call on Thursday,
November 4, 2021 at 8:30 a.m. Eastern Time to discuss its 2021 third 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 (334) 777-6978 or (800) 367-2403 and enter passcode 8667167. 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 8667167. 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) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions; our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; and (xxiv) 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, 2020 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. 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:
Apostolos Zafolias
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550
FAQ
What are Genco Shipping's earnings for Q3 2021?
What is the new quarterly dividend declared by Genco Shipping?
How did Genco's TCE rates perform in Q3 2021?
What is Genco Shipping's plan for debt reduction by year-end 2021?
How does Genco Shipping plan to return value to shareholders?
