Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q1 2023 Earnings Presentation
36 slides from Genco Shipping & Trading's earnings presentation, May 4, 2023
Slide 1: Q1 2023 Earnings Presentation
GENCO SHIPPING & TRADING LIMITED Q1 2023 Earnings Presentation May 4th, 2023
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 • Q1 2023 + YTD Highlights • Financial Overview • Industry Overview 3
Slide 4: First Quarter 2023 and Year-to-Date Highlights
First Quarter 2023 and Year-to-Date Highlights 4
Slide 5: Q1 2023: continued strong financial performance
Q1 2023: continued strong financial performance Financial performance Value strategy Net income attributable to Genco, Q1 2023 $2.6m $2.6 million, basic and diluted earnings per share of $0.15 Q1 2023 dividend per share $0.06, adjusted EBITDA of $19.9m* Declared 15 consecutive quarterly dividends $1
Slide 6: Genco's comprehensive value strategy
Genco’s comprehensive value strategy Focused on 3 key elements… Significant dividends Deleveraging Growth Debt outstanding at Mar 31, 2023 $162 Use shares as a currency million (~40% of fleet’s current scrap value) Debt repayments to grow Cash flow generation Debt prepayments Utilize reserve + revol
Slide 7: Dividend history over the last ~4 years
Dividend history over the last ~4 years Sizeable dividend payouts since the implementation of the value strategy Dividend history Significant increase in dividends since Sustained dividends across (Q3 2019 to date) value strategy inception diverse market environments Quarter Dividend/sh 6 15 Q3 2019
Slide 8: Quarterly dividend calculation / framework
Quarterly dividend calculation / framework Straight-forward and transparent dividend formula Dividend calculation (numbers in m Q1 2023 actual Q2 2023 estimates except per share amounts) Fixtures to date + Q2 2023 to date estimate based on 68% of Net revenue $ 53.40 market $16,679 available days fix
Slide 9: 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 Major bulk Minor bulk These two sectors provide Capesize complementary characteristics for Ultra/Supra Genco’s value strategy… 17 27 vessels vesse
Slide 10: Portfolio approach to scrubber installation
Portfolio approach to scrubber installation Genco continues to capture wide fuel spreads thru scrubbers installed on 17 Capesize vessels ◼ Genco implemented a portfolio approach for IMO 2020 compliance ◼ Installed scrubbers on Capesize vessels + consuming VLSFO on our minor bulk vessels ◼ All-in cos
Slide 11: Financial Overview
Financial Overview 11
Slide 12: First quarter earnings
First quarter earnings Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 (Dollars in thousands, except share and per share data) (unaudited) INCOME STATEMENT DATA: Revenues: Voyage revenues $ 94,391 $ 136,227 Total revenues 94,391 136,227 Operating expenses: Voyage expenses 37,435
Slide 13: March 31, 2023 balance sheet
March 31, 2023 balance sheet March 31, 2023 December 31, 2022 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 50,397 $ 64,100 Current assets 107,244 125,430 Total assets 1,143,900 1,173,866 Current liabilities (excluding current portion of long-term debt) 34
Slide 14: First quarter highlights
First quarter highlights Three Months Ended March 31, 2023 March 31, 2022 (unaudited) FLEET DATA: Total number of vessels at end of period 44 44 Average number of vessels (1) 44.0 43.9 Total ownership days for fleet (2) 3,960 3,950 Total chartered-in days (3) 236 311 Total available days (4) 4,064 4
Slide 15: Continued strong TCE performance
Continued strong TCE performance… …with fleetwide rates well in excess of our cash flow breakeven rate Fleet-wide TCE rate Q2 2023 cash flow breakeven rate $35 Q2 2023 TCE estimate to date $16.7k based on fixtures for ~68% of the $30 $28.8 quarter’s available days $25 $24.1 $23.6 Q2 2023 cash flow $
Slide 16: Genco's industry low cash flow breakeven rate
Genco’s industry low cash flow breakeven rate Genco’s financial de-leveraging thru large scale debt paydowns has helped to create the strongest balance sheet among its peer group Meaningful reduction in debt outstanding thru large- …significantly reduced our cash flow breakeven scale debt paydowns s
Slide 17: Industry Overview
Industry Overview 17
Slide 18: Current drybulk market trends
Current drybulk market trends Orderbook Environmental China Geopolitical / macro 6.9% 2023 Reopening Ukraine Historically low Environmental China’s pivot from zero- Russia’s war in Ukraine newbuilding vessel regulations have led to Covid policies + stimulus has resulted in a re- orderbook as a lower
Slide 19: Freight rate development
Freight rate development Capes / Supras have risen off recent lows as part of the seasonal uptick – more normalized BCI / BSI spread in April to date $20,000 Baltic Capesize Index Baltic Supramax Index $18,000 $16,000 $14,000 $12,000 $10,000 Current BDI $8,000 BCI is based on a non- $6,000 scrubber
Slide 20: Drybulk trade tilted towards developing Asia
Drybulk trade tilted towards developing Asia… +0.8% / +1.4% 9% +5.2% / +4.5% 0.17 +1.6% / +1.1% 46% (75% of IO, 19% of coal, 26% of grain) 0.4% 0.65 0.07 Easing monetary policy + Tightening monetary stimulus , CPI at 1% policy, CPI at 6% +5.9% / +6.3% 6% (17% of coal trade) 0.29 2023 / 24 GDP growth
Slide 21: Historical seaborne iron ore imports and China steel production
Historical seaborne iron ore imports and China steel production Brazil IO exports peak in 2H… …together with Aust IO exports China’s IO inventories are at lowest levels since Jul 2022 100 +19% or +31MT 200 +7% or +26MT 170 31MT draw down from in 2H vs 1H in 2H vs 1H 2022 high 160 75 175 IO stock bui
Slide 22: Grain trade impacted by macro environment
Grain trade impacted by macro environment USDA grain export forecasts – Feb 2023 1 2021/22 2022/23 +14MT 70 59 55 4 49 22 21 3 -9MT Coarse grain (incl corn) Wheat Soybean 1 -26MT 2 2021/22 2022/23 79 93 48 50 2 +15MT Coarse grain (incl corn) Wheat Soybean 3 2021/22 2022/23 33 ◼ South American grain
Slide 23: Historically low newbuilding orderbook
Historically low newbuilding orderbook 25% 24% 23% Development of the drybulk newbuilding 20% orderbook as a % of the total drybulk fleet Orderbook as a % of the total 20% 18% 6.9% drybulk fleet 15% 12% 11% 11% % of fleet 10% 10% 8% 7% 7% 5% 3% 2% 2% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2
Slide 24: Freight rate catalysts and drybulk outlook
Freight rate catalysts and drybulk outlook Marsoft 2023 to 2024 S&D growth estimates Drybulk market catalysts Vessel* 2023 2024 Record low orderbook as a percentage of the fleet Iron Ore 1 to limit net fleet growth Capesize +4.8% +2.5% Coal Capesize 2 China’s reopening + stimulus +3.7% +0.7% Panamax
Slide 25: Q&A
Q&A 25
Slide 26: Appendix
Appendix 26
Slide 27: Genco's fleet list
Genco’s fleet list Major Bulk Minor Bulk 17 Vessel Name Year Built Dwt Vessel Name Year Built Dwt Vessel Name Year Built Dwt Capesize Capesize Ultramax Supramax Genco Resolute 2015 181,060 Genco Freedom 2015 63,671 Genco Hunter 2007 58,729 Genco Endeavour 2015 181,060 Baltic Hornet 2014 63,574 Genco
Slide 28: Longer term time charter activity
Longer term time charter activity Vessel Type Rate Duration Min Expiration ◼ We continue to utilize a fleet-wide portfolio approach to fixture Baltic Wolf Capesize $ 30,250 22-28 months Jun-23 activity Genco Maximus Capesize $ 27,500 24-30 months Sep-23 Baltic Hornet Ultramax $ 24,000 20-23 months M
Slide 29: Breakeven rate prior to debt service
Breakeven rate prior to debt service… …is covered in nearly every rate environment over the last 2 decades $50,000 Illustrative fleet-wide time charter rate $45,000 Illustrative breakeven rate prior to debt service $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- Q1-2000 Q3-2001 Q1-
Slide 30: Significant fleet-wide operating leverage
Significant fleet-wide operating leverage Highlights the improved risk / reward profile of our new value strategy $350 Every $1,000 increase in TCE is ~$16m of $16m incremental annualized EBITDA on our 44- $300 vessel fleet $250 For our 17 Capesizes specifically, every $5,000 Illustrative net revenu
Slide 31: EBITDA reconciliation
EBITDA reconciliation(1) Adjusted EBITDA Q1 2021-Q1 2023 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Net income $ 1,985 $ 32,037 $ 57,132 $ 90,852 $ 41,689 $ 47,382 $ 40,828 $ 28,679 $ 2,634 Net interest expense 4,470 4,422 3,918 2,392 2,225 2,337 1,984 1,505 1,259 Income
Slide 32: Time charter equivalent reconciliation
Time charter equivalent reconciliation(1) Three Months Ended March 31, 2023 March 31, 2022 (unaudited) Total Fleet Voyage revenues (in thousands) $ 94,391 $ 136,227 Voyage expenses (in thousands) 37,435 38,464 Charter hire expenses (in thousands) 3,664 7,638 Realized gain on fuel hedges (in thousand
Slide 33: Net Income reconciliation
Net Income reconciliation Three Months Ended March 31, 2023 Net Income Reconciliation (unaudited) Net income attributable to Genco Shipping & Trading Limited $ 2,634 + Unrealized loss on fuel hedges 42 Net income $ 2,676 Adjusted earnings per share - basic $ 0.06 Adjusted earnings per share - dilute
Slide 34: Q2 2023 estimated fleet-wide expenses
Q2 2023 estimated fleet-wide expenses(1) Est Ownership / Owned Available Days - Q2 2023 Daily Expenses by Category Free Cash Flow(2) Net Income Owned Avail Vessel Type Own. Days DD Days Direct Vessel Operating(3) $6,250 $6,250 Days Capesize 1,547 - 1,547 G&A Expenses(4) 1,473 1,659 Ultramax 1,365 -
Slide 35: Footnotes to Q2 2023 estimated fleet-wide expenses & operating expense reconciliation
Footnotes to Q2 2023 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: Thank You
Thank You
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