Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q3 2019 Earnings Presentation
31 slides from Genco Shipping & Trading's earnings presentation, Nov 7, 2019
Slide 1: Q3 2019 Earnings Call
Genco Shipping & Trading Limited Q3 2019 Earnings Call November 7th, 2019
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 Third Quarter 2019 and Year-to-Date Highlights Financial Overview Industry Overview 3
Slide 4: Third Quarter 2019 and Year-to-Date Highlights
Third Quarter 2019 and Year-to-Date Highlights
Slide 5: Third Quarter 2019 and YTD Update
Third Quarter 2019 and YTD Update Capital allocation strategy Initiated a regular quarterly dividend policy with a dividend of $0.175 per share for Q3 2019 Declared a special dividend of $0.325 per share, utilizing net cash proceeds from four recently agreed upon vessel sales after paying down a
Slide 6: Genco's dividend initiation and capital allocation strategy
Genco’s dividend initiation and capital allocation strategy Management and our Board of Directors have declared an aggregate dividend of $0.50 per share for Q3 2019, which includes… $0.175 Regular quarterly cash dividend policy per share $0.325 Special dividend, utilizing net cash proceeds from four
Slide 7: Rationale behind our capital allocation strategy
Rationale behind our capital allocation strategy Genco’s unique platform enables it to return value to shareholders $166 million of cash as of Sep 30, 2019 Our balance sheet Favorable credit facility structure Recent amendment provides capital allocation flexibility World-class fleet of 54 v
Slide 8: Genco's fleet composition strategy and development
Genco’s fleet composition strategy and development Fleet composition prior to Genco’s Genco has created a focused fleet, Previous sale and purchase activity… Current with scale in targeted sectors 30 25 20 Acquisitions Opportunistic # of Vessels concentrated exit from the on Capesizes / Panamax
Slide 9: 2019 is the busiest drydocking year in Company history
2019 is the busiest drydocking year in Company history… …with more than half of the fleet entering a shipyard at some point during the year 23 Special surveys currently scheduled 19 completed to date Vessels consist of 7 x Capes, 1 x Ultra, 9 x Supras, 2 x Handies 4 additional special surveys
Slide 10: 58% TCE rise in Q3 vs Q2, with further increases anticipated in Q4
58% TCE rise in Q3 vs Q2, with further increases anticipated in Q4 TCE increases highlight strong operating leverage Aim to maximize Capesize utilization in 2020 2019 2020 Major Bulk +58% +20% $25 Minor Bulk Q3 vs Q2 Q4 to date vs Q3 Genco’s Capesize fleet 17 17 Fleet-Wide $19.8 (# of vessels) $20 T
Slide 11: Financial Overview
Financial Overview
Slide 12: Third Quarter Earnings
Third Quarter Earnings Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (Dollars in thousands, except s hare and per share data) (Dollars in thousands, except share and per s hare data) (unaudited) (
Slide 13: September 30, 2019 Balance Sheet
September 30, 2019 Balance Sheet September 30, 2019 December 31, 2018 (Dollars in thous ands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 166,191 $ 202,761 Current assets 241,064 270,451 Total assets 1,561,964 1,627,470 Current liabilities (excluding current portion of long-te
Slide 14: Third Quarter Highlights
Third Quarter Highlights Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 58 64 58 64 Average number of vessels (1) 58.0 61.7 58.1 60.6 Total ownership days fo
Slide 15: Genco's simplified credit facility structure
Genco’s simplified credit facility structure… …provides flexibility and highlights our access to high quality commercial bank financing Key balance sheet items – Sep 30, 2019 Easing restrictions on dividends Cash $166.2 We have amended the dividend covenants in our credit facilities such that Genco
Slide 16: Estimated Q4 2019 Cash Breakeven Rates
Estimated Q4 2019 Cash Breakeven Rates(1) Fleet Breakeven Rates – Estimated Q4 2019 (Detailed Q4 2019 Estimated B/E Rates in Appendix) $15,000 $12,500 $ per vessel per day $10,000 $3,122 In Q4 2019, we plan $1,301 to incur one-time $7,500 $1,154 costs for BWTS $353 $11,667 installation of $5,000 $1,
Slide 17: Industry Overview
Industry Overview
Slide 18: Capesize sector has led the upward market move
Capesize sector has led the upward market move Two key factors driving Capesize freight rates… …have also filtered down to the smaller sectors $40,000 Capesize Increased Brazilian iron ore volumes, $35,000 Panamax 1 at a time when… $30,000 Supramax $25,000 Handysize $20,000 …vessel capacity is tight
Slide 19: Major Bulks – China's Steel Production Growth Remains Strong
Major Bulks – China’s Steel Production Growth Remains Strong Coal Power Plant Stockpiles(2) 120 45 (1) China Global Steel Production (million tons) 40 9 Mos 2019 9 Mos 2018 % Variance 100 India 35 China 747.8 690.2 8.4% China Stockpiles (MT) India Stockpiles (MT) European Union 122.5 126.0 -2.8% 80
Slide 20: Minor Bulks – Steady Grain Trade with Seasonal Impact
Minor Bulks – Steady Grain Trade with Seasonal Impact Seaborne Wheat / Course Grain Trade (MT) Clarksons Global Grain Trade Estimates Exporter 2018 2019 (f) % Variance +1% Argentina 37 43 16% 350 2018 2019F Australia 19 18 -5% Canada 24 25 4% 300 EU 33 36 9% US 83 72 -13% 250 Others 130 135 4% Total
Slide 21: Supply Side Fundamentals
Supply Side Fundamentals Current Drybulk Vessel Orderbook by Type Drybulk Vessel Deliveries vs. Scrapping Capesize Panamax Handymax Handysize Deliveries Scrapping Net Additions 25 10 Jan 2017 Newbuilding orderbook as a percentage of the fleet is currently 10% 8 20 Jan 2018 mdwt 6 1.7% mdwt 15 1.6% 1
Slide 22: 2H 2019 & 2020 Drybulk Outlook
2H 2019 & 2020 Drybulk Outlook 2H 2019 fundamentals have improved vs. 1H – a further improvement is expected in 2020 Drybulk Market Catalysts 2H 2019 & 2020 Supply & Demand Estimates Vessel* 2H 2019 2020 1 2 Iron Ore Coal Trade Linked Iron Ore Trade Capesize to Developing +8.4% +4.1% Growth Economie
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: Shipping plays an essential role in global development
Shipping plays an essential role in global development ~90% of global trade is carried by the international shipping industry Shipping is a fundamental pillar of the global economy Transportation by sea is the most cost-effective and fuel-efficient way to move goods and raw materials in large sc
Slide 26: As one of the largest drybulk shipping companies in the world
As one of the largest drybulk shipping companies in the world… …Genco recognizes the need to run a safe, responsible and sustainable business built for the long-term Environmental Social Governance Invest in our fleet to reduce GHG Employ a gender and culturally diverse U.S. filer committed to
Slide 27: Genco Fleet List
Genco Fleet List Major Bulk Minor Bulk Capesize Vessel Name Year Built Dwt Vessel Name Year Built Dwt Vessel Name Year Built Dwt Capesize Ultramax Baltic Cougar 2009 53,432 17 Genco Resolute 2015 181,060 Baltic Hornet 2014 63,574 Genco Loire 2009 53,430 Genco Endeavour 2015 181,060 Baltic Mantis 201
Slide 28: Time Charter Equivalent Reconciliation
Time Charter Equivalent Reconciliation(1) Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 103,776 $ 92,263 $ 280,790 $ 255,336 Voyage expenses (in thousands) 42,967 3
Slide 29: Adjusted Net Loss Reconciliation
Adjusted Net Loss Reconciliation Three Months Ended September 30, 2019 Adjusted Net Loss Reconciliation (unaudited) Net loss $ (14,591) + Impairment of vessel assets 12,182 Adjusted net loss $ (2,409) Adjusted net loss per share - basic $ (0.06) Adjusted net loss per share - diluted $ (0.06) Weighte
Slide 30: Q4 2019 Genco Estimated Breakeven Rates
Q4 2019 Genco Estimated Breakeven Rates(1) Daily Expenses by Category Free Cash Flow(2) Net Income Direct Vessel Operating(3) $4,615 $4,615 General and Administrative 1,122 1,211 Expenses(4) Technical Management Fees(5) 353 353 Drydocking(6) 1,154 - Interest Expense(7) 1,301 1,487 Fixed Debt Repayme
Slide 31: Thank you
Thank you <<
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