Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q2 2024 Earnings Presentation
36 slides from Genco Shipping & Trading's earnings presentation, Aug 8, 2024
Slide 1: Q2 2024 Earnings Presentation
GENCO SHIPPING & TRADING LIMITED Q2 2024 Earnings Presentation August 8th, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This presentation 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
Slide 3: Agenda
Agenda Q2 2024 + YTD Highlights Financial Overview Industry Overview 3
Slide 4: Second Quarter 2024 and Year-to-Date Highlights
Second Quarter 2024 and Year-to-Date Highlights 4
Slide 5: Q2 2024 highlights + financial performance
Q2 2024 highlights + financial performance Value Strategy Financial Performance $23.5m Q2 2024 dividend: $0.34/sh, Q2 2024 net income or $0.54/sh (diluted) 20th consecutive quarterly Adjusted net income of $19.9m or $0.46/sh Dividends dividend totaling 33% of the current share price (as of Aug 6, 20
Slide 6: Compelling quarterly dividends over the last 5 years
Compelling quarterly dividends over the last 5 years Significant increase in dividends since value strategy inception Sustained dividends across diverse market environments 11 20 20 Consecutive quarterly quarters dividends since Q3 2019 # of $4.860 quarters $5.915 $5.915/ Dividends in aggregate sinc
Slide 7: Genco's "barbell" approach to fleet composition
Genco’s “barbell” approach to fleet composition …combines upside potential of Capesize vessels with the more stable earnings stream of minor bulk vessels These two sectors provide Major bulk complementary characteristics Minor bulk Capesize Ultra/Supra for Genco’s value strategy… 15 Direct exposure
Slide 8: Continued strong TCE performance…
Continued strong TCE performance… …with fleetwide rates well in excess of our cash flow breakeven rate Fleet-wide TCE rate +60% $20 YoY Q3 2024 TCE estimate to date $19.3k based on fixtures for ~67% of the quarter’s available days $15 67% ~67% of Q3 TCE ($ in 000s) available days fixed $10 $19.2 $19
Slide 9: Genco is in an advantageous position…
Genco is in an advantageous position… Industry low financial leverage + Low cash flow breakeven rate + $328m of undrawn revolver availability Genco’s low CF b/e rate provides the ability to pay dividends across Genco has the cyclicality of the GNK’s greater an industry drybulk freight market RCF ava
Slide 10: Financial Overview
Financial Overview 10
Slide 11: Second quarter earnings
Second quarter earnings Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (unaudited) INCOME STATE
Slide 12: June 30, 2024 balance sheet
June 30, 2024 balance sheet June 30, 2024 December 31, 2023 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 42,348 $ 46,857 Current assets 135,920 157,272 Total assets 1,057,974 1,141,902 Current liabilities (excluding current portion of long-term debt) 37,8
Slide 13: Second quarter highlights
Second quarter highlights Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 43 44 43 44 Average number of vessels (1) 43.2 44.0 44.3 44.0 Total ownership days for fleet (2) 3,936 4,
Slide 14: Debt outstanding per quarter ($ in m)
Debt repayments accelerated to date w/ RCF $500 Revolving credit facility increases flexibility to: Debt outstanding ▪ Opportunistically draw down capital Draw down ▪ Continue to voluntarily repay debt without losing borrowing capacity $400 Debt outstanding per quarter ($ in m) $300 Draw for 2 x Cap
Slide 15: Transparent dividend policy
Transparent dividend policy Dividend calculation (numbers in millions Q2 2024 actual Q3 2024 estimates except per share amounts) Net revenue $ 74.41 Fixtures to date + market Q3 2024 to date estimate based on 67% Operating cash flow $19,291 of owned available days fixed Operating expenses $ (35.34)
Slide 16: Industry Overview
Industry Overview 16
Slide 17: Drybulk freight market
Drybulk freight market $60,000 Baltic Capesize Index Baltic Supramax Index $50,000 Current spot rates BCI is based on a $40,000 non-scrubber BCI: $20,509 fitted Capesize BSI: $14,397 $30,000 $20,000 $10,000 $- Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24
Slide 18: China's iron ore and steel complex
China’s iron ore and steel complex China’s iron ore inventory restocking, but remains below 2022 levels 170 160 89% China steel mill utilization 150 China steel production has fallen by -1% 140 1% YoY through June 130 120 China’s iron ore imports increased 110 +7% by 7% YoY through July 100 Jan-21 A
Slide 19: Global iron ore growth projects
Global iron ore growth projects Key iron ore and bauxite expansion projects… …add long-haul ton mile demand to absorb Cape supply 60 Brazil - Vale Iron ore Simandou - Guinea, W Africa expansion 50 Bauxite 40 MTPA Assumes a 30- month ramp-up eventually hitting 24 Iron Ore 30 an annualized production
Slide 20: Global bauxite trade has grown significantly
Global bauxite trade has grown significantly 2025e global bauxite shipments are expected to be more than double the levels seen a decade ago Global seaborne bauxite trade (mt) Rest of World Guinea 200 180 Global bauxite trade growth 8% CAGR per year since 2014 160 140 120 61 73 73 85 109 124 132 100
Slide 21: Grain trade impacted by macro environment
Grain trade impacted by macro environment Wheat 2024/25p 2023/24e Variance % Variance World 212.89 220.61 (7.72) -3% US 22.45 19.24 3.21 17% -11MT Russia 48.00 55.50 (7.50) -14% Ukraine 13.00 18.10 (5.10) -28% -9MT Aust 22.00 20.00 2.00 10% Canada 25.00 25.00 - 0% +7MT EU 34.50 37.00 (2.50) -7% Arg
Slide 22: Intense period of global fleet replacement is anticipated to occur…
Intense period of global fleet replacement is anticipated to occur… Age profile of the global drybulk fleet vs newbuilding orderbook 450 ~30% In 2030, ~30% of the current 400 drybulk fleet will be 20 years or older or ~4,300 ships 350 300 9% Fleet size (mdwt) 250 9% of the fleet is currently 20 year
Slide 23: Supply side remains favorable, with increasing inefficiencies
Supply side remains favorable, with increasing inefficiencies Global port congestion has picked up since December… ◼ Global port congestion has pulled back from Capesize Panamax 125 YTD highs in April 115 105 Mdwt 95 ◼ This follows below average congestion for 85 much of last year 75 65 …while the g
Slide 24: Q&A
Q&A 24
Slide 25: Thank You
Thank You
Slide 26: Appendix
Appendix 26
Slide 27: Genco's fleet list
Genco’s fleet list Major Bulk Minor Bulk Vessel Name Year Built Dwt Vessel Name Year Built Dwt Vessel Name Year Built Dwt 15 Capesize Ultramax Supramax Genco Reliance 2016 181,146 Genco Freedom 2015 63,671 Genco Hunter 2007 58,729 Genco Resolute 2015 181,060 Baltic Hornet 2014 63,574 Genco Auvergne
Slide 28: Longer term time charter activity
Longer term time charter activity Vessel Type Rate Duration Min Expiry Genco Reliance Capesize BCI + 28% + scrubber 10-12 months Jan-25 Genco Ranger Capesize BCI + 28% + scrubber 11-14 months Feb-25 ◼ We continue to utilize a fleet-wide portfolio approach to fixture activity Genco Liberty Capesize $
Slide 29: Significant fleet-wide operating leverage
Significant fleet-wide operating leverage Highlights the improved risk / reward profile of our new value strategy $350 $300 $15m Every $1,000 increase in TCE is ~$15m of incremental annualized EBITDA on our pro forma 41-vessel fleet $27m For our 15 Capesizes specifically, every $5,000 $250 increase
Slide 30: EBITDA reconciliation
EBITDA reconciliation(1) Adjusted EBITDA Q1 2021-Q2 2024 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net income $ 1,985 $ 32,037 $ 57,132 $ 90,852 $ 41,689 $ 47,382 $ 40,828 $ 28,679 $ 2,634 $ 11,562 $ (32,004) $ 4,937 $ 18,798 $ 23
Slide 31: Time charter equivalent reconciliation
Time charter equivalent reconciliation(1) Three Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 107,047 $ 90,556 $ 224,482 $ 184,947 Voyage expenses (in thousands) 30,273 28,830 67,473 66,265 C
Slide 32: Net income reconciliation
Net income reconciliation Three Months Ended June 30, 2024 Net Income Reconciliation (unaudited) Net income attributable to Genco Shipping & Trading Limited $ 23,467 + Impairment of vessel assets 5,634 + Gain on sale of vessels (13,206) + Other operating expense 3,924 + Unrealized loss on fuel hedge
Slide 33: Portfolio approach to scrubber installation
Portfolio approach to scrubber installation Genco continues to capture wide fuel spreads through scrubbers installed on 16 Capesize vessels ◼ Portfolio approach: installed scrubbers on Capesize Singapore Fuel Spread Developments vessels + consuming VLSFO on our minor bulk vessels $1,200 IFO 0.5% S S
Slide 34: Q3 2024 estimated fleet-wide expenses
Q3 2024 estimated fleet-wide expenses(1) Daily Expenses by Category Net Income Free Cash Flow(2) Est Ownership / Owned Available Days – Q3 2024 Vessel Operating Expenses(3) $6,150 $6,150 Vessel Type Own. Days Drydock Days Owned Avail Days G&A Expenses(4) 1,811 1,473 Technical Management Capsize 1,47
Slide 35: Footnotes to Q3 2024 estimated fleet-wide expenses & operating expense reconciliation
Footnotes to Q3 2024 estimated fleet-wide expenses & operating expense reconciliation (1) Estimated expenses are presented for illustrative purposes. The amounts shown will vary based on actual results. (2) Free Cash Flow is defined as net income plus depreciation less capital expenditures, primaril
Slide 36: Volatility and cyclicality of drybulk shipping highlights the importance of low financial leverage + low breakeven rate
Volatility and cyclicality of drybulk shipping highlights the importance of low financial leverage + low breakeven rate Significant operating leverage inherent in $100,000 the business Illustrative fleet-wide time charter rate $15m Every $1,000 increase in TCE is ~$15m of incremental annualized EBIT
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