Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Jefferies 5th Annual Shipping, Logistics & Offshore Services Conference 2008
31 slides from Genco Shipping & Trading's conference presentation, Sep 16, 2008
Slide 1: Genco Shipping & Trading Limited
Genco Shipping & Trading Limited Jefferies 5th Annual Shipping Logistics & Offshore Services Conference September 16, 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: Genco Overview
Genco Overview Founded in December 2004, completed IPO in July 2005 High quality, modern fleet of 30 vessels ― Average age of 6.5 years compared to the average age of the world fleet of approximately 15 years ― Expected delivery of 11 additional vessels through the fourth quarter of 2009 Dividend su
Slide 4: Management
Management Peter Georgiopoulos Gerry Buchanan John C. Wobensmith Chairman President Chief Financial Officer Over 20 years of Over 40 years of 15 years of experience in experience in the shipping experience in the shipping the shipping industry industry industry Formerly Senior Vice Chairman and foun
Slide 5: 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 Technic
Slide 6: Execution of Growth Strategy
Execution of Growth Strategy Genco Muse acquisition in August Evalend 6 vessel acquisition in 2005 - $34.5 million August 2007 - $336.0 million Franco 3 vessel acquisition in July Bocimar 3 vessel acquisition in May 2006 - $81.3 million 2008 - $257.0 million Metrostar 9 vessel acquisition in 6 vesse
Slide 7: Built-In Growth
Built-In Growth Ownership days expected to more than double after the completion of our expansion program as compared to 2007 Significant time charter coverage supports dividend through volatile freight rate environments ― Over 90% of the remaining 2008 available days covered ― Over 60% of 2009 avai
Slide 8: Diversified and Modern Fleet
Diversified and Modern Fleet A Portfolio Approach to Maximize ROC Vessel Name Year Built Dwt Capesize Modern, diversified fleet Genco Augustus 2007 180,151 Genco Tiberius 2007 175,874 ― 5 Capesize Genco London 2007 177,833 Genco Titus 2007 177,729 ― 7 Panamax Genco Constantine Panamax 2008 180,183 G
Slide 9: Acquisition Vessels to be Delivered
Acquisition Vessels to be Delivered Cash Year Duration/ Vessel Type Vessel Name DWT Yard Delivery(1) Charterer Daily Built(1) Expiration Rate Capesize Cargill International 46 to 62 months 65,000(3) Genco Hadrian(2) 170,500 Sungdong Q1 2009 2009 S.A. (2) from delivery Genco 170,500 Sungdong Q2 2009
Slide 10: Financial Overview
Financial Overview
Slide 11: Balance Sheet
Balance Sheet Selected Financial Information Updated Pro Forma 06/30/08 (Dollars in thousands) Balance Sheet Liquidity Position Cash(1) $64,168 Revolving Credit Facility $1,377,000 Term Facility 320,000 Debt(2) $1,129,500 Drawn Portion (1,129,500) Shareholders’ Equity(3) $845,486 Undrawn Portion $56
Slide 12: Q3 2008 Estimated Break-Even Levels
Q3 2008 Estimated Break-Even Levels(1) Daily Expenses by Category Free Cash Flow(2) Net Income Direct Vessel Operating(3) 4,700 4,700 General & Administrative(4) 1,021 1,556 Management Fees(5) 259 259 Dry Docking (6) 952 - Interest Expense (7) 5,490 4,901 Depreciation(8) - 6,841 Daily Break-Even(9)
Slide 13: Capital Structure Update
Capital Structure Update Revolving Facility Term Facility Amount Up to $1.4 billion Amount $320 million Term 10 Years Term 5 Years Amortization 5 Years non- Amortization 6 x $16.0 million (Semiannual) amortizing (Semiannual) starting June 30, 2009 10 x $96.4 million 4 x $10.7 million Balloon $413.1
Slide 14: Dividend Declaration & Policy
Dividend Declaration & Policy Disciplined Asset Growth Paid a Q2 2008 dividend of $1.00 and T/C Strategy on August 29, 2008 to all shareholders of record as of Period Declared Dividend August 15, 2008 Q3 2005 $0.60 Quarterly target rate of $1.00 per Q4 2005 $0.60 share for 2008 Q1 2006 $0.60 Q2 2006
Slide 15: 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 reduces d
Slide 16: 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 approximately $10 billion (1) Drybulk industry has similarities to the tanker industry in 1999 Ownership 100.0% 80.0% %
Slide 17: Industry Overview
Industry Overview
Slide 18: Global Seaborne Trade – 2007E
Global Seaborne Trade – 2007E Total Seaborne Trade Drybulk Seaborne Trade General Bulk Steam Coal Drybulk 9% 19% Container 16% Coking 38% 38% 7% Coal 37% 10% 26% Liquid Iron Ore (Oil / Gases / Grain Chemical) 8.0 billion tons 3.0 billion tons Source: Clarkson’s Research Services; 2007 Estimated 18
Slide 19: Drybulk Indices
W W ee k 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 ee W 1 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 k W 1 ee k ee W 3 k W 3 ee k ee W 5 k W 5 ee k ee W 7 k ee W 7 W k9 ee Source: Clarkson’s ee W k9 k (BDI Points) ee W 11 k (BPI Points) ee W 11 ee W k 13 k ee W 13 ee k W 15 k ee W 15 ee k W
Slide 20: Major Drybulk Trade Routes
Major Drybulk Trade Routes Iron Ore Coal Source: Drewry Grains 20
Slide 21: China’s Development – Macro Picture
China’s Development – Macro Picture Chinese economic growth is predominantly domestically driven by urbanization and industrialization $555 billion investment on transportation infrastructure to be invested as per the 11th five year plan $244 billion investment on reconstruction of earthquake-strick
Slide 22: Demand Side Fundamentals
Demand Side Fundamentals Continued demand resulted in YOY growth for Chinese steel production at 10% and iron ore imports at 22% through July 2008 Volatility in iron ore market due to Chinese stock piling ― Vale trying to impose an additional 11.0% -11.5% price increase Slowdown in Indian iron ore e
Slide 23: Commodity Volume Expansion
Commodity Volume Expansion Volume expansion might put pressure on commodity prices, but its transportation will benefit the dry bulk industry Ongoing Asian investments in Brazilian and Australian mining companies Iron ore production of approximately 600 Mt in 2007 ― Potential to grow to 1,110 Mt in
Slide 24: Supply Side Fundamentals
Supply Side Fundamentals 23% of Capesize orders for 2009 delivery and 33% of orders for 2010 being constructed at Greenfield yards(1) Credit crunch poses threat to new yards Newbuilding delivery delays starting to occur due to engine, crane and other part shortages Rising cost of steel has made some
Slide 25: Conclusions
Conclusions
Slide 26: Key Investment Highlights
Key Investment Highlights Modern high-quality fleet with contracted growth U.S.-based management team with strong track record Dividend policy supported by time charters Strong growth with dividends to Cost efficient operations shareholders Built-In Growth Favorable industry fundamentals 26
Slide 27: Appendix
Appendix
Slide 28: Pro Forma Reconciliation 06/30/08
Pro Forma Reconciliation 06/30/08 (Dollars in thousands) 06/30/08 Actual Adjustment 06/30/08 Pro Forma Cash(1) $95,964 ($31,796) $64,168 Debt(2) $989,250 $140,250 $1,129,500 Shareholders’ Equity(3) $877,282 ($31,796) $845,486 Capitalization $1,866,532 - $1,974,986 (1) June 30, 2008 pro forma cash ta
Slide 29: Year to Date Earnings
Year to Date Earnings Three Months Ended Six Months Ended June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007 (Dollars in thousands, except share and per (Dollars in thousands, except share and per share share data) data) (unaudited) (unaudited) INCOME STATEMENT DATA: Revenues $ 104,572 $ 36,847
Slide 30: June 30, 2008 Balance Sheet
June 30, 2008 Balance Sheet June 30, 2008 December 31, 2007 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash $ 95,964 $ 71,496 Current assets, including cash 270,895 Dwt 267,594 Total assets 1,951,696 1,653,272 Current liabilities, including current portion of long-term debt 29,742 70,364
Slide 31: 2nd Quarter Highlights
2nd Quarter Highlights Three Months Ended Six Months Ended June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 29 19 29 19 Average number of vessels (1) 28.1 19.0 28.1 19.3 Total ownership days for fleet (2) 2,555 1,729