Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Morgan Stanley Commodities and Shipping Conference (April 2008)
35 slides from Genco Shipping & Trading's conference presentation, Apr 18, 2008
Slide 1: Genco Shipping & Trading Limited
Genco Shipping & Trading Limited Morgan Stanley Commodities and Shipping Conference April 18, 2008
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. These forward looking statements ar
Slide 3: Agenda
Agenda Company Overview Financial Overview Industry Overview Growth Strategy Conclusions 04/18/08 3
Slide 4: Company Overview
Company Overview
Slide 5: Genco Overview
Genco Overview Founded in December 2004, completed IPO in July 2005 High quality, modern fleet of 28 vessels ― Expected delivery of 4 additional vessels through the third quarter of 2009 Ideally positioned to take advantage of a strong market to renew time charters ― Consistent 75% coverage ti
Slide 6: Management
Management Peter Georgiopoulos Gerry Buchanan John C. Wobensmith Chairman President Chief Financial Officer Over 20 years of Over 40 years of 14 years of experience in experience in the shipping experience in the shipping the shipping industry industry industry Formerly Senior Vice Chairma
Slide 7: Execution of Growth Strategy
Execution of Growth Strategy Genco Muse acquisition in Metrostar 9 vessel acquisition in August 2005 - $34.5 million July 2007 - $1.1 billion Franco 3 vessel acquisition in Evalend 6 vessel acquisition in July 2006 - $81.3 million August 2007 - $336.0 million 35 32 31 28 28 29 30 Total Numbe
Slide 8: High Quality Operations
High Quality Operations Extensive relationships with Selected Customer Relationships established drybulk charterers These relationships help us to: ― Stabilize revenue through favorable contract terms ― Minimize counterparty risk ― Maximize fleet utilization We utilize four leading technical T
Slide 9: Fleet – A Portfolio Approach to Maximize ROC
Fleet * – A Portfolio Approach to Maximize ROC Daily Cash Adjusted Daily Vessel Type Vessel Name Year Built Charterer Charter Expiration (3) Rate (1) Revenue Rate (2) Genco Augustus 2007 Cargill International S.A. 45,263 62,750 December, 2009 Genco Tiberius 2007 Cargill International S.A. 45,263 62,
Slide 10: Footnotes to Fleet Table
Footnotes to Fleet Table (previous page) (1) Time charter rates presented are the gross daily charterhire rates before the payments of brokerage commissions ranging from 1.25% to 6.25% to third parties, except as indicated for the Genco Leader in note 6 below. In a time charter, the charterer is res
Slide 11: Acquisition Vessels to be Delivered
Acquisition Vessels to be Delivered Year Duration/ Daily Cash Vessel Type Vessel Name DWT Yard Delivery(1) Charterer Built(1) Expiration Rate Capesize Genco Hadrian 170,500 Sungdong Q4 2008 2008 Genco Commodus 170,500 Sungdong Q2 2009 2009 4 Genco Maximus 170,500 Sungdong Q2 2009 2009 Genco Claudius
Slide 12: Financial Overview
Financial Overview
Slide 13: Fourth Quarter 2007 and Year to Date Highlights
Fourth Quarter 2007 and Year to Date Highlights Net Income of $33.5 million for the fourth quarter of ’07, excluding the gain on the sale of the Genco Commander ― Basic earnings per share of $1.17 and diluted of $1.16 Net Income of $56.9 million for the fourth quarter of ‘07 ― Basic earnings per
Slide 14: Balance Sheet
Balance Sheet Selected Financial Information Updated Pro Forma 12/31/07 (Dollars in thousands) Balance Sheet Liquidity Position Cash(1) $46,779 Revolving Credit Facility $1,377,000 Debt(2) $1,044,500 Drawn Portion(2) (1,044,500) Shareholders’ Equity(3) 623,468 Undrawn Portion $332,500 Capitalization
Slide 15: Acquisition Vessel Payment Schedule
Acquisition Vessel Payment Schedule (Dollars in thousands) Deposit as % Expected Deposit Payment on Total Vessel Name of Purchase Delivery (1) Payment (2) Delivery Price Price Genco Hadrian Q4 2008 20% 24,200 96,800 121,000 Genco Commodus Q2 2009 20% 24,200 96,800 121,000 Genco Maximus Q2 2009 20% 2
Slide 16: Growing Dividend
Growing Dividend Disciplined DisciplinedAsset AssetGrowth Growth Paid a Q4 2007 dividend of $0.85 and andT/C T/CStrategy Strategy per share on March 7th, 2008 to all shareholders of record as of Period Declared Dividend February 29th, 2008 Q3 2005 $0.60 Cash reserves are determined by Q4 2005 $0
Slide 17: Capital Structure Developments
Capital Structure Developments Credit Facility Up to $1.377 billion Have entered into nine forward interest rate swaps Term 10 Years ― Total amount swapped Non-Amortization for 2008 of $681.2 mm 5 Years ― Average swapped rate Period of approximately 4.8% Interest Rate LIBOR + 0.85%(1) for 2008 DnB
Slide 18: Industry Overview
Industry Overview
Slide 19: Major Drybulk Trade Routes
Major Drybulk Trade Routes Iron Ore Coal Source: Drewry Grains 04/18/08 19
Slide 20: Global Seaborne Trade – 2007F
Global Seaborne Trade – 2007F Total Seaborne Trade Dry Seaborne Trade General Other Steam Coal Drybulk Minor Bulk 10% 20% Container 16% Coking 36% 37% 7% Coal 38% 8% 28% Liquid Iron Ore (Oil / Gases / Grain Chemical) Total = 7.65 billion tons Total = 2.8 billion tons Source: Clarkson’s Research Serv
Slide 21: Drybulk Indices
W ee 04/18/08 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 k W 1 ee k W 3 ee k W 5 ee k W 7 ee W k9 ee (BCI Points) k W 11 ee k W 13 ee k W 15 ee k W 17 ee k W 19 ee k W 21 ee k W 23 ee k W W 25 ee k 0 2,000 4,000 6,000 8,000 10,000 12,000 ee k W 1 W 27 ee ee k k W 3 W 29 Drybulk Ind
Slide 22: Strong Drybulk Vessel Demand Fundamentals
Strong Drybulk Vessel Demand Fundamentals Chinese GDP grew 10.6% YOY Major Drybulk Importers(5) for the first quarter of 2008, and (million tons per year) is forecasted to grow 10% for 600 2008(1) 500 Chinese fixed asset investment grew 24.6% YOY for the first 400 quarter of 2008(1) 300 Indian
Slide 23: Demand side fundamentals
Demand side fundamentals Australian miners attempting to negotiate a freight premium before settling on the 2008 iron ore contract price Price of steel remains firm through Q1 2008 Itaguai terminal fully operational as of February 26th Coal shipments from Australian mines beginning to normal
Slide 24: Supply side fundamentals
Supply side fundamentals 23% of Capesize orders for delivery 2009 and 33% of orders for 2010 are at greenfield yards(1) Credit crunch poses threat to new yards Newbuilding delivery delays possible due to engine, crane and other part shortages VLOC Conversions impact not certain Over 30% of
Slide 25: Commodity Volume Expansion
Commodity Volume Expansion Strong Chinese fixed asset investment through the first quarter of 2008 Ongoing Asian investments in Brazilian and Australian mining companies Potential iron ore production from approximately 600 Mt in 2007 to 1,110 Mt in 2012 Estimated Iron Ore Production Expansion
Slide 26: Growth Strategy
Growth Strategy
Slide 27: Significant Opportunities in Fragmented Industry
Significant Opportunities in Fragmented Industry No single owner owns more than 7% of the vessels within each class Market capitalization for all U.S.-listed pure drybulk owners is about $11 billion (1) Drybulk industry has similarities to the tanker industry in 1999 Ownership 100.0% 80.0% % o
Slide 28: Growth Strategy: Timing Is Everything
Growth Strategy: Timing Is Everything Opportunistic and prudent acquisition strategy ― Accretive earnings and cash flows while maintaining a disciplined approach to return on capital Pursue Accretive Revolver is primary driver of growth strategy Acquisitions ― Accretive to shareholders and reduc
Slide 29: Conclusions
Conclusions
Slide 30: Key Investment Highlights
Key Investment Highlights Modern high-quality fleet U.S. based management team with strong track record Dividend policy supported by time charters Strong growth with dividends to Cost efficient operations shareholders Attractive revolving credit facility Favorable industry fundamentals 04/18/08 30
Slide 31: Appendix
Appendix
Slide 32: Pro Forma Reconciliation 12/31/07
Pro Forma Reconciliation 12/31/07 (Dollars in thousands) 12/31/07 Actual Adjustment 12/31/07 Pro Forma Cash(1) $71,496 ($24,717) $46,779 Debt(2) $936,000 108,500 $1,044,500 Shareholders’ Equity(3) 622,185 1,283 623,468 Capitalization $1,558,185 - $1,667,968 (1) December 31, 2007 pro forma cash takes
Slide 33: Year to Date Earnings
Year to Date Earnings Three Months Ended Twelve Months Ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 (Dollars in thousands, except share and per share (Dollars in thousands, except share and per share data) data) (unaudited) (unaudited) INCOME STATEMENT DATA: Revenues
Slide 34: December 31, 2007 Balance Sheet
December 31, 2007 Balance Sheet December 31, 2007 December 31, 2006 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash $ 71,496 $ 73,554 Current assets, including cash 267,594 Dwt 88,118 Total assets 1,653,272 578,262 Current liabilities, including current portion of long-term debt 70,364 1
Slide 35: 4th Quarter Highlights
4th Quarter Highlights Three Months Ended Twelve Months Ended December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 27 20 27 20 Average number of vessels (1) 23.0 18.7 20.4 17.4 Total ownership days for fl
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