Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — B. Riley Investor Presentation (May 2023)
32 slides from Genco Shipping & Trading's conference presentation, May 9, 2023
Slide 1: Genco Shipping & Trading Limited B. Riley Investor Presentation
GENCO SHIPPING & TRADING LIMITED B. Riley Investor Presentation May 9, 2023 NYSE: GNK
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: Presenters
Presenters John C. Wobensmith Apostolos Zafolias Peter Allen Chief Executive Officer Chief Financial Officer SVP, Strategy & Finance ▪ Over 25 years of ▪ 18 years of experience ▪ 15 years of experience experience in the in the shipping industry in the shipping industry shipping industry ▪ Significan
Slide 4: Executive summary
Executive summary 4
Slide 5: Genco Shipping & Trading overview
Genco Shipping & Trading overview ◼ The largest U.S. based drybulk shipowner, with 44 modern, high quality vessels transporting both major (iron ore & coal) and minor (grains, cement, fertilizers, etc.) bulk across all key world-wide shipping routes ◼ Optimized risk return profile: low leverage (11%
Slide 6: 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 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 Major bulk Minor bulk These two sectors provide Capesize complementary characteristics for Ultra/Supra Genco’s value strategy… 17 27 vessels vesse
Slide 8: 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 9: Genco's ESG overview / recent initiatives
Genco’s ESG overview / recent initiatives #1 rated public shipping company on ESG matters (1) ◼ Replaced older, less fuel-efficient vessels with modern Ultramax ships that will lower overall fuel consumption in order to reduce our fleet’s greenhouse gas emissions ◼ Implemented an IMO 2023 compliance
Slide 10: Global drybulk trade and key routes
Global drybulk trade and key routes ~90% of global trade is carried by the international shipping industry – Genco’s global footprint maximizes revenue generation by capturing market trends in real-time Copenhagen Commercial Operations Minor Bulk focus U.S. Headquarters Corporate strategy Finance/ac
Slide 11: Current drybulk market trends
Current drybulk market trends Orderbook Environmental China Geopolitical / macro 6.8% 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 12: The drybulk supply and demand equation
The drybulk supply and demand equation 80% 18% orderbook 9,000 16% 8,000 14% 7,000 Fleet Growth 12% 6,000 Drybulk Trade Growth 10% 5,000 BDI 7% % growth 8% 4,000 orderbook BDI 6% 3,000 4% 2,000 2% 1,000 0% 0 -2% -1,000 COVID-19 -4% -2,000 Financial War in crisis Ukraine Source: Clarksons Research Se
Slide 13: Comprehensive value strategy
Comprehensive value strategy 13
Slide 14: 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 15: 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 16: 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 17: 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 18: Conclusion
Conclusion 18
Slide 19: Genco provides an attractive risk-reward balance
Genco provides an attractive risk-reward balance… …while being well-positioned to capture market upside Leadership ◼ Experienced US-based management team + US-filer with high corporate governance standards Value strategy ◼ Meaningful dividends to shareholders + low leverage + strong cash position Be
Slide 20: Appendix
Appendix 20
Slide 21: 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 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: Thank You
Thank You
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