Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q3 2024 Earnings Presentation
37 slides from Genco Shipping & Trading's earnings presentation, Nov 7, 2024
Slide 1: Q3 2024 Earnings Presentation
GENCO SHIPPING & TRADING LIMITED Q3 2024 Earnings Presentation November 7th, 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 Q3 2024 + YTD Highlights Financial Overview Industry Overview 3
Slide 4: Third Quarter 2024 and Year-to-Date Highlights
Third Quarter 2024 and Year-to-Date Highlights 4
Slide 5: Q3 2024 highlights + financial performance
Q3 2024 highlights + financial performance Value Strategy Financial Performance $21.5m Q3 2024 dividend: $0.40/sh, Q3 2024 net income or $0.49/sh (diluted) 21st consecutive quarterly dividend Adjusted net income of $18.1m or $0.41/sh Dividends Cumulative dividends totaling 39% of our current share p
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 12 21 21 Consecutive quarterly quarters dividends since Q3 2019 $5.260 # of quarters $6.315 $6.315/ Dividends in aggregate sinc
Slide 7: Continued strong TCE performance
Continued strong TCE performance… …with fleetwide rates well in excess of our cash flow breakeven rate Fleet-wide TCE rate +59% $20 YoY Q4 2024 TCE estimate based $18.8k on fixtures to date for ~65% of the quarter’s available days $15 65% ~65% of Q4 TCE ($ in 000s) available days fixed $10 $19.2 $19
Slide 8: Genco is in an advantageous position
Genco is in an advantageous position… Industry low financial leverage + Low cash flow breakeven rate + $333m of undrawn revolver availability Genco’s low cash flow breakeven rate provides the ability to pay GNK’s greater dividends across the revolving credit Genco has cyclicality of the drybulk faci
Slide 9: Financial Overview
Financial Overview 9
Slide 10: Third quarter earnings
Third quarter earnings Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (un
Slide 11: September 30, 2024 balance sheet
September 30, 2024 balance sheet September 30, 2024 December 31, 2023 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 46,980 $ 46,857 Current assets 127,471 157,272 Total assets 1,044,498 1,141,902 Current liabilities (excluding current portion of long-term
Slide 12: Third quarter highlights
Third quarter highlights Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 42 44 42 44 Average number of vessels (1) 42.0 44.0 43.6 44.0 Total ownership days fo
Slide 13: Substantial debt repayments made since 2021
Substantial debt repayments made since 2021 $500 Debt outstanding Trajectory of Genco’s debt outstanding since value strategy inception Draw down $400 Debt outstanding per quarter ($ in m) $300 Draw for 2 x Cape acquisitions $449 $200 $401 $367 $65 Draw for 1 x $305 Cape acquisition $246 $100 $197 $
Slide 14: Transparent dividend policy
Transparent dividend policy Dividend calculation (numbers in millions Q3 2024 actual Q4 2024 estimates except per share amounts) Q4 2024 to date estimate based on 65% Net revenue $ 69.82 Fixtures to date + market $18,786 of owned available days fixed Operating cash flow Operating expenses $ (32.89)
Slide 15: Industry Overview
Industry Overview 15
Slide 16: Drybulk freight market
Drybulk freight market $60,000 Baltic Capesize Index Baltic Supramax 58 Index $50,000 Current spot rates BCI is based on a $40,000 non-scrubber BCI: $17,086 fitted Capesize BSI: $12,095 $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
Slide 17: China's coordinated stimulus measures
China’s coordinated stimulus measures 1 2 3 Monetary policy Property policy Stock market People’s Bank of China (PBOC) lowered Lowered the outstanding mortgage rate PBOC will set up a ~$70 bn swap facility its 1yr and 5yr loan prime rates by 25bps by 50bps – asked to lower by Oct 31 for brokers and
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 88% China steel mill utilization 150 China steel production has fallen by -4% 140 4% YoY through September 130 120 China’s iron ore imports increased 110 +5% by 5% YoY through September 100
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 70 Brazil - Vale Iron ore expansion Simandou - Guinea, W Africa 60 Bauxite 50 7 MTPA 40 Assumes a 30- month ramp- up Iron Ore eventually hitting 24 an annualized 30 produ
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) 250 Rest of World Guinea Guinea accounts for ~70% of the global seaborne Major global Capesize trade routes bauxite trade –
Slide 21: Grain trade impacted by macro environment
Grain trade impacted by macro environment Currently North American grain season Wheat 2024/25p 2023/24e Variance % Variance World 215.82 221.32 (5.50) -2% US 22.45 19.24 3.21 17% Russia 48.00 55.50 (7.50) -14% Ukraine 16.00 18.58 (2.58) -14% -13MT Aust 25.00 20.00 5.00 25% Canada 26.00 25.44 0.56 2%
Slide 22: Intense period of global fleet replacement is scheduled to occur
Intense period of global fleet replacement is scheduled 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 ~4,200 ships 350 300 9% Fleet size (mdwt) 250 9% of the fleet is currently 20 years
Slide 23: Supply side remains favorable, with increasing inefficiencies
Supply side remains favorable, with increasing inefficiencies Global port congestion has pulled back in recent weeks… ◼ Global port congestion has decreased in Capesize Panamax 125 recent weeks, particularly in the Capesize 115 segment 105 Mdwt 95 85 ◼ This follows below average congestion for 75 mu
Slide 24: Q&A
Q&A 24
Slide 25: Thank You
Thank You
Slide 26: Appendix
Appendix 26
Slide 27: 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… 16 Direct exposure
Slide 28: 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 Capesize Ultramax Supramax Genco Reliance Genco Resolute 2016 2015 181,146 181,060 Genco Freedom Baltic Hornet 2015 2014 63,671 63,574 Genco Hunter Genco Auvergne 2007 2009 58,72
Slide 29: 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 30: 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 42-vessel fleet $29m For our 16 Capesizes specifically, every $5,000 $250 increase in TCE is
Slide 31: EBITDA reconciliation
EBITDA reconciliation(1) Adjusted EBITDA Q1 2021-Q3 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 Q3 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,
Slide 32: Time charter equivalent reconciliation
Time charter equivalent reconciliation(1) Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 99,332 $ 83,361 $ 323,814 $ 268,309 Voyage expenses (in thousands) 28,232 34
Slide 33: Net income reconciliation
Net income reconciliation Three Months Ended September 30, 2024 Net Income Reconciliation (unaudited) Net income attributable to Genco Shipping & Trading Limited $ 21,459 + Impairment of vessel assets 961 + Gain on sale of vessels (4,465) + Unrealized loss on fuel hedges 123 Adjusted net income $ 18
Slide 34: Portfolio approach to scrubber installation
Portfolio approach to scrubber installation Genco continues to capture wide fuel spreads through scrubbers installed on 15 Capesize vessels ◼ Portfolio approach: installed on Capesize vessels + Singapore Fuel Spread Developments consuming very low sulfur fuel oil (VLSFO) on our minor bulk vessels $1
Slide 35: Q4 2024 estimated fleet-wide expenses
Q4 2024 estimated fleet-wide expenses(1) Daily Expenses by Category Net Income Free Cash Flow(2) Est Ownership / Owned Available Days – Q4 2024 Vessel Operating Expenses(3) $6,200 $6,200 Vessel Type Own. Days Drydock Days Owned Avail Days G&A Expenses(4) 1,822 1,482 Technical Management Capsize 1,45
Slide 36: Footnotes to Q4 2024 estimated fleet-wide expenses & operating expense reconciliation
Footnotes to Q4 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 37: Volatility and cyclicality of drybulk shipping highlights importance of low leverage
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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