Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Investor Presentation (April 2021)
42 slides from Genco Shipping & Trading's investor presentation, Apr 21, 2021
Slide 1: Genco Shipping & Trading Limited Company Presentation
Genco Shipping & Trading Limited Company Presentation NYSE:GNK April 2021
Slide 2: Forward Looking Statements
Forward Looking Statements "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This release 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 word
Slide 3: Presenters
Presenters Peter Allen John C. Wobensmith Apostolos Zafolias Senior Vice President, Chief Executive Officer Chief Financial Officer Strategy & Finance Over 25 years of 15 years of experience in 13 years of experience in experience in the shipping the shipping industry the shipping industry ind
Slide 4: Executive Summary
Executive Summary
Slide 5: Genco Shipping & Trading: Who We Are
Genco Shipping & Trading: Who We Are… Genco is the largest U.S. based drybulk shipowner We are headquartered in New York with global offices in Singapore and Copenhagen Our fleet pro forma for vessel sales consists of 40 modern, high quality drybulk vessels* Our large and scalable fleet cons
Slide 6: Genco's differentiated approach
Genco’s differentiated approach Strong financial position Cash position: $164.0 million, including $40.5 million of restricted cash related to vessel sales, as of March 31, 2021 Strongest balance sheet among the peer group together with a simplified and flexible debt structure Paid a total of
Slide 7: Genco transported 30 mdwt of drybulk commodities in 2020
Genco transported 30 mdwt of drybulk commodities in 2020 We employ a diversified asset base consisting of the larger Capesize vessels and medium size Ultramax / Supramax vessels enabling us to carry a wide range of cargoes worldwide Commodities carried Iron ore: 48% 40 Genco’s owned fleet post agree
Slide 8: Genco's global footprint – active, real-time commercial management
Genco’s global footprint – active, real-time commercial management Genco has vessels trading all over the world – our global presence enables us to capture market trends to enhance revenue generation Americas Europe Asia Copenhagen U.S. Headquarters Commercial Corporate strategy Minor bulk foc
Slide 9: Fleet-wide operating leverage
Fleet-wide operating leverage $300 Every $1,000 increase in TCE is ~$14m of incremental $14m Illustrative net revenue ($ in m) $250 annualized EBITDA on our 40-vessel fleet $200 $150 $100 For our 17 Capesizes specifically, every $5,000 increase in $50 $31m TCE is ~$31m of incremental annualized EBIT
Slide 10: GNK stock performance
GNK stock performance GNK’s large shareholders’ % ownership* $14 Prior to 58% recent sales* 20% Current* $12 $10 $8 $6 GNK large $4 shareholders $2 began selling on Dec 11, 2020 $- Since Dec 11, 2020: GNK share price has lagged the peer group of listed drybulk shipping companies during a time in whi
Slide 11: Comprehensive capital allocation strategy
Comprehensive capital allocation strategy
Slide 12: Genco's new comprehensive value strategy
Genco’s new comprehensive value strategy We have formulated this new corporate strategy utilizing Genco’s strong balance sheet and our already low leverage position together with positive drybulk market fundamentals Transform Genco into a low leverage, attractive dividend yield company Objective
Slide 13: Our new corporate strategy
Our new corporate strategy… …is a holistic three-pronged approach including returning cash to shareholders, further de-levering of the balance sheet and continuing to renew and grow the fleet Dividends De-levering Growth Use shares as a Scheduled debt currency to grow Cash flow repayments generation
Slide 14: Our roadmap to year-end and implementation
Our roadmap to year-end and implementation… Where we currently stand – March 31, 2021 balances $164m Cash balance, including restricted cash $237m Net debt $401m Debt outstanding 28% Net LTV Year-end targets Target a net loan-to-value of ~20% by Differentiator for Genco: we 20% year-end believe achi
Slide 15: Genco's quarterly dividend framework / calculation
Genco’s quarterly dividend framework / calculation Targeting a quarterly dividend based on cash flow after debt service less a reserve Genco's quarterly dividend to be paid based on the following formula: Operating cash flow Quarterly reserve is targeted to be based on quarterly debt Less: Debt repa
Slide 16: Illustrative cash flow sensitivity
Illustrative cash flow sensitivity ($ in m, except TCE and per share data) Plan to pay down debt to achieve a Cash, including restricted $164m cash, as of March 31, 2021 $75m cash balance of ~$75m to reduce our cash flow breakeven rate 2022 illustrative analysis based on cash flow sensitivity Fleet-
Slide 17: Genco's low net leverage position is a clear differentiator
Genco’s low net leverage position is a clear differentiator Our strong balance sheet uniquely positions Genco relative to the peer group to effectively deliver on the low leverage, attractive dividend yield strategy Genco has the lowest net loan-to-value position across its drybulk peer group 60% (n
Slide 18: Breakeven rate prior to debt service is covered
Breakeven rate prior to debt service is covered… …in nearly every rate environment over the last two decades, highlighting the importance of the quarter dividend reserve to be targeted off debt and interest payments – a prudent approach to protect the balance sheet during volatile market periods $50
Slide 19: Now is an opportune time to execute this strategy
Now is an opportune time to execute this strategy… …due to Genco’s strong financial position and platform + positive market fundamentals Genco’s differentiated position Drybulk market outlook Best in class company in the peer group to Record low orderbook as a percentage of the execute a low lev
Slide 20: Market update and industry overview
Market update and industry overview
Slide 21: Freight rates have started 2021 off strong
Freight rates have started 2021 off strong… …with the BSI at ~$20,000 for the first time since 2010 and the BCI recording its best Q1 since 2014 $60,000 Index rates as of Apr 20, 2021 Baltic Capesize Index $50,000 Baltic Supramax Index BCI: $28,652 Current BSI $40,000 BSI: $21,177 $30,000 $20,000 $1
Slide 22: Asset values have significantly increased in the YTD
Asset values have significantly increased in the YTD… …but remain low relative to the current earnings environment $50 10yr old asset value increases in the YTD 10yr old Capesize $45 $40 10yr old Supramax Capes: +40% Supras: +35% $35 $30 $25 $20 $15 $10 $5 $- Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-1
Slide 23: China's record IO imports led by all-time high steel output
China’s record IO imports led by all-time high steel output China’s IO imports rose by 8% YOY in Q1 2021… 120 2017 2018 2019 2020 2021 110 100 90 80 70 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec …as China’s steel output continues to set records and gain global market share 100 2017 2018 2019 20
Slide 24: Brazilian iron ore exports have recovered
Brazilian iron ore exports have recovered… …following poor weather conditions and operational challenges that disrupted production and shipments during most of 1H 2020 Brazilian iron ore exports have increased by 17% YOY through March Vale 2021 production guidance of 315-335MT Vale forecasts t
Slide 25: Inventory levels for key major bulk trades
Inventory levels for key major bulk trades China’s steel inventories China’s iron ore port inventories 30 170 25 160 150 20 140 15 130 10 120 5 110 - 100 India’s coal powerplant stockpiles China’s steel inventories experienced seasonal 60 restocking in Q1, but have now seen multiple weeks of drawn
Slide 26: Strong grain trade + improvement in other minor bulk trades
Strong grain trade + improvement in other minor bulk trades China’s soybean imports 110 100 90 80 Black Sea – US – Q4 peak season Aug peak season China Firm exports carried Ramping up into 2021 soybean imports following recovery in demand from the swine flu Brazil – Q2 to Q3 peak season Minor bulk
Slide 27: Drybulk newbuilding orderbook
Drybulk newbuilding orderbook Current drybulk newbuilding orderbook as a % of the fleet per Clarksons (does not take into account slippage or scrapping) 2.0% 1.5% 2.8% 2.2% 1.1% % of fleet 1.0% 0.9% 0.9% 0.8% 0.5% 0.5% 0.4% 0.4% 0.4% 0.0% Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 2023+ Orderbook a
Slide 28: Active shipyards per country
Active shipyards per country # of active shipyards across the three largest shipbuilding countries 500 China 435 Active shipyards in China have 450 been reduced by 310 or 71% Japan 400 since the 2009 peak # of active shipyards 350 S. Korea 300 250 200 125 150 100 50 0 Japan’s # of shipyards has de
Slide 29: Global ordering trends focusing on containerships
Global ordering trends focusing on containerships Drybulk Tanker Container 70% Drybulk Current 6% 9% 15% Oct-20 7% 8% 8% 60% Tanker % Variance -20% 9% 86% 50% Container Average 23% 16% 19% Min 6% 8% 8% 40% Max 66% 34% 38% 30% 20% 10% 0% Global newbuild ordering has been focused on the containershi
Slide 30: Freight rate catalysts for 2021
Freight rate catalysts for 2021 1 Record low orderbook as a percentage of the fleet to limit net fleet growth 2 Unprecedented levels of global stimulus – global GDP forecast to rise by 6% in 2021* 3 China’s economy to continue to lead while ROW continues economic improvement 4 Recovery and growth of
Slide 31: Conclusion
Conclusion
Slide 32: Genco is attractively positioned to capture market upside
Genco is attractively positioned to capture market upside Leadership Experienced US-based management team Drybulk Market Demand and supply dynamics forecast to improve in 2021 Capital Structure Strong balance sheet + meaningful cash position + new value strategy Fleet Opportunistically dives
Slide 33: Appendix
Appendix
Slide 34: Assumptions to illustrative cash flow sensitivity
Assumptions to illustrative cash flow sensitivity Fleet size: Based on a fleet of 39 vessels pro forma for the agreed upon sale of two 53,000 dwt Supramaxes. Illustrative rates used to calculate net revenue: Net revenue is defined as voyage revenues less voyage expenses less charter hire expense
Slide 35: Fourth Quarter Earnings
Fourth Quarter Earnings Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (u
Slide 36: December 31, 2020 Balance Sheet
December 31, 2020 Balance Sheet December 31, 2020 December 31, 2019 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 179,679 $ 162,249 Current assets 247,202 223,195 Total assets 1,232,809 1,528,892 Current liabilities (excluding current portion of long-term
Slide 37: Fourth Quarter Highlights
Fourth Quarter Highlights Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 47 55 47 55 Average number of vessels (1) 48.5 56.1 51.8 57.6 Total ownership days for
Slide 38: Time Charter Equivalent Reconciliation
Time Charter Equivalent Reconciliation(1) Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 95,495 $ 108,705 $ 355,560 $ 389,496 Voyage expenses (in thousands) 33,435 45,
Slide 39: Genco pro forma fleet list
Genco pro forma fleet list Major Bulk Minor Bulk Vessel Name Year Built Dwt Vessel Name Year Built Dwt Vessel Name Year Built Dwt Capesize Ultramax Genco Pyrenees 2010 58,018 Genco Resolute 2015 181,060 Genco Enterprise 2016 64,000 Genco Rhone 2011 58,018 Genco Endeavour 2015 181,060 Baltic Hornet 2
Slide 40: Fleet renewal program: divestiture portion complete
Fleet renewal program: divestiture portion complete Genco’s pro forma fleet composition (based on sale and purchase activity from 2018 to date) 25 Base Fleet Bought Sold 20 6 # of Vessels 15 4 10 17 16 13 5 8 6 - Cape Pana Ultra/Supra 53s Hmax/Hsize Fleet composition strategy: “barbell” approach t
Slide 41: 3-year track record of Ultra/Supra benchmark outperformance
3-year track record of Ultra/Supra benchmark outperformance Ultra / Supra TCE outperformance - incremental TCE per day $1,750 Incremental TCE benchmark outperformance ($/day) $7.5m $5.4m $11.2m earnings ($ in m) $1,500 $1,250 $1,000 $750 $1,249 $500 $774 $250 $599 $0 2018 2019 2020 Genco’s minor b
Slide 42: Thank you
Thank you <<
Genco Shipping & Trading — Investor Presentation (April 2021) on 6ix