Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q2 2018 Earnings Presentation
28 slides from Genco Shipping & Trading's earnings presentation, Aug 9, 2018
Slide 1: Genco Shipping & Trading Limited Q2 2018 Earnings Call
Genco Shipping & Trading Limited Q2 2018 Earnings Call August 9th, 2018
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 Second Quarter 2018 and Year to Date Highlights Financial Overview Industry Overview 3
Slide 4: Second Quarter 2018 and Year to Date Highlights
Second Quarter 2018 and Year to Date Highlights
Slide 5: Second Quarter 2018 and Year to Date Highlights
Second Quarter 2018 and Year to Date Highlights Equity Offering In June 2018, we completed a common stock offering for gross proceeds of $115.7 million ― Issued 7,015,000 new shares, which included the exercise in full of the underwriters’ option to purchase up to 915,000 shares of common stock Ve
Slide 6: Genco Continues to Display a Proven Track Record of Execution
Genco Continues to Display a Proven Track Record of Execution Executed initiatives successfully undertaken since May 2018 include… Credit Facility Acquisition Credit Refinancing > Equity Offering > Vessel Acquisitions > Facility $460m $116m 6 ~$107m credit facility Vessels to be Credit facility to o
Slide 7: Where Genco Stands – Post Completion of Announced Transactions
Where Genco Stands – Post Completion of Announced Transactions Following the execution of the refinancing, the equity offering and the acquisitions, Genco’s improved fleet and balance sheet are expected to be as follows Pro Forma Fleet Distribution Pro Forma Metrics* Base Fleet Acquisitions Sales Ma
Slide 8: Genco's Leading Market Position
Genco’s Leading Market Position Significant improvement in margins driven by successful implementation of our commercial platform together with continued cost optimization and improved market conditions Genco TCE vs. DVOE 62% of Q3-18 days $13,000 TCE (net of voyage expenses & Incorporates strategic
Slide 9: Financial Overview
Financial Overview
Slide 10: Second Quarter Earnings
Second Quarter Earnings Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (unaudited) INCOME STATE
Slide 11: June 30, 2018 Balance Sheet
June 30, 2018 Balance Sheet June 30, 2018 December 31, 2017 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 270,311 $ 204,946 Current assets 322,282 217,239 Total assets 1,508,098 1,520,959 Current liabilities (excluding current portion of long-term debt) 32
Slide 12: Second Quarter Highlights
Second Quarter Highlights Three Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 60 60 60 60 Average number of vessels (1) 60.0 60.5 60.0 61.7 Total ownership days for fleet (2) 5,460 5,
Slide 13: Revamped Debt Structure
Revamped Debt Structure In June 2018, we closed on our $460 million credit facility which refinanced 4 previously existing credit facilities into one This credit facility was oversubscribed, highlighting Genco’s access to commercial bank financing New and simplified debt structure offers more flexib
Slide 14: Pro Forma Balance Sheet Items
Pro Forma Balance Sheet Items Selected Financial Information June 30, 2018 (Dollars in thousands) Balance Sheet Cash $152,961 Debt $567,000 Shareholders’ Equity $1,028,243 Pro forma cash and debt balances reflect the remaining installment payment obligations for the acquisition vessels, estimated
Slide 15: Estimated Q3 2018 Cash Breakeven Rates
Estimated Q3 2018 Cash Breakeven Rates(1) Fleet Breakeven Rates – Estimated Q3 2018 (Detailed Q3 2018 Estimated B/E Rates in Appendix) $8,000 $7,000 $- $1,266 $ per vessel per day $6,000 $149 $353 $5,000 $792 $4,000 $7,000 $3,000 $2,000 $4,440 $1,000 $0 DVOE G&A Mgmt Fees Drydocking Interest Fixed D
Slide 16: Industry Overview
Industry Overview
Slide 17: Drybulk Freight Rate Development Since Jan 2017
Drybulk Freight Rate Development Since Jan 2017 Capesize exposure provides upside earnings potential while minor bulk fleet provides a steadier income stream Capesize Panamax Baltic Dry Index Performance – 2017 to date Supramax Handysize BCI crosses 2018 high of $27k and approaches peak $35,000 BCI
Slide 18: Recent Market Developments
Recent Market Developments Key Iron Ore Expansion Plans(2) Recent Developments Significant Brazilian iron ore volume expected over Net vessel supply growth of 1.9% in the YTD the next two years 75.0 Global steel production has increased by 4.6% BHP Rio Tinto Roy Hill Anglo American* through the
Slide 19: Major Bulks – Global Steel Production Growth Remains Strong
Major Bulks – Global Steel Production Growth Remains Strong Coal Power Plant Stockpiles(2) (1) Global Steel Production (million tons) 120 45 6 Mos 2018 6 Mos 2017 % Variance China India 40 China 451.2 425.4 6.0% 100 European Union 87.3 86.0 1.6% 35 China Stockpiles (MT) India Stockpiles (MT) Japan 5
Slide 20: Minor Bulks – Steady Grain Trade with Seasonal Impact
Minor Bulks – Steady Grain Trade with Seasonal Impact Clarksons Global Grain Trade Estimates Seaborne Wheat / Course Grain Trade (MT) Exporter 2017 2018 (f) % Variance +0% Argentina 40 42 5% 350 2017 2018F Australia 31 27 -13% Canada 21 22 6% 300 EU 38 39 1% US 75 71 -5% 250 Others 125 131 5% Total
Slide 21: Supply Side Fundamentals
Supply Side Fundamentals Current Drybulk Vessel Orderbook by Type Drybulk Vessel Deliveries vs. Scrapping Capesize Panamax Handymax Handysize (mdwt) (mdwt) Deliveries Scrapping Net Additions Newbuilding orderbook as a percentage of the fleet is currently 9.7% 10 14 Jan 2017 12 1.4% 8 10 1.2% 1.1% 1.
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: Pro Forma Genco Fleet List
Pro Forma 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 Handymax 17 Genco Constantine 2008 180,183 Baltic Hornet 2014 63,574 Genco Muse 2001 48,913 Genco Augustus 2007 180,151 Baltic Mantis 2015 63,
Slide 25: Time Charter Equivalent Reconciliation
Time Charter Equivalent Reconciliation(1) Three Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 86,157 $ 45,370 $ 163,073 $ 83,619 Voyage expenses (in thousands) 25,983 951 47,075 4,192 Charter
Slide 26: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended June 30, 2018 Adjusted Net Income Reconciliation (unaudited) Net loss $ (1,120) + Impairment of vessel assets 184 + Loss on debt extinguishment 4,533 Adjusted net income $ 3,597 Adjusted net earnings per share - basic $ 0.10 Adjusted net earnings
Slide 27: Pro Forma Balance Sheet Items Reconciliation
Pro Forma Balance Sheet Items Reconciliation ($ in thousands) Jun 30, 2018 Actual Adjustment Jun 30, 2018 Pro Forma Cash(1) $270,311 $(117,350) $152,961 Debt(2) $460,000 $107,000 $567,000 Shareholders’ Equity $1,028,243 - $1,028,243 (1) June 30, 2018 pro forma cash is reduced by the remaining instal
Slide 28: Q3 2018 Genco Estimated Breakeven Rates
Q3 2018 Genco Estimated Breakeven Rates (1) Daily Expenses by Category Free Cash Flow(2) Net Income Direct Vessel Operating(3) $4,440 $4,440 General and Administrative 792 986 Expenses(4) Technical Management Fees(5) 353 353 Drydocking(6) 149 - Interest Expense(7) 1,266 1,409 Fixed Debt Repayments(8
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