Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Stifel 2021 Transportation & Logistics Conference
34 slides from Genco Shipping & Trading's conference presentation, Feb 10, 2021
Slide 1: Stifel's 2021 Transportation & Logistics Conference
Genco Shipping & Trading Limited Stifel’s 2021 Transportation & Logistics Conference NYSE:GNK February 10, 2021
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: Executive Summary
Executive Summary
Slide 4: 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 / swaps consists of 39 modern, high quality drybulk vessels* Our large and scalable fl
Slide 5: Genco's differentiated approach
Genco’s differentiated approach Margin expansion led by benchmark outperformance Fleet-wide benchmark outperformance driven by global presence Active commercial platform booked over 400 fixtures in 2020 Efficient cost structure Focus on long-term, sustainable operations Purchase modern, fuel
Slide 6: 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 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% 39 Genco’s owned fleet post agree
Slide 8: Fleet renewal program: sales nearly completed
Fleet renewal program: sales nearly completed Genco’s pro forma fleet composition (based on sale and purchase activity from 2018 to date) 25 Base Fleet Bought Sold 20 5 # of Vessels 15 4 10 17 16 13 5 8 6 - Cape Pana Ultra/Supra 53s Hmax/Hsize Fleet composition strategy: “barbell” approach to flee
Slide 9: Genco's industry leading balance sheet
Genco’s industry leading balance sheet Key balance sheet items as of September 30, 2020 Cash1 Debt2 Net Debt3 $160.8 million $475.4 million $314.7 million Strong financial position: Genco continues to maintain one of the highest liquidity positions and lowest leverage profiles among our drybulk pe
Slide 10: 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 39-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 11: Freight rate catalysts for 2021
Freight rate catalysts for 2021 We believe 2021 will be an improved year for the drybulk market relative to 2020 due to the following factors… 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 5% i
Slide 12: GNK stock performance
GNK stock performance GNK’s large shareholders’ % ownership* $12 Prior to 58% recent sales* 32% Current* $10 $8 $6 GNK large $4 shareholders began selling on Dec 11, 2020 $2 $- Dec 11, 2020 to Feb 9, 2021: GNK share price has lagged the peer group of listed drybulk shipping companies during a time i
Slide 13: Market update and industry overview
Market update and industry overview
Slide 14: Global drybulk trade and key routes
Global drybulk trade and key routes Commodity and percentage of global drybulk trade Iron Ore 29% Coal 23% Grain 10% Minor Bulks 38% Primary use Steel production Steel production Human consumption Various uses – Power generation Feed livestock linked to global GDP growth Cooking oils Select key trad
Slide 15: Drybulk trade has shown consistent YOY growth
Drybulk trade has shown consistent YOY growth Since 1980, there have only been 6 years in which drybulk trade has contracted on a YOY basis, 4 of which occurred between 1980 to 1990 CAGR per commodity Total drybulk trade 6,000 Time period Iron ore Coal Grain Minor bulk Total 3% Iron ore 1980s 1% 6%
Slide 16: Supply side shock experienced from peak N/B ordering
Supply side shock experienced from peak N/B ordering Record newbuild ordering in boom years + a resurgence of orders in 2013 and 2014… 175 Record N/B ordering 161 Supply shock Newbuilding orderbook has eased in resulted in 11% to 17% recent years, while vessel supply 150 from record net fleet growth
Slide 17: 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 Newbuilding orderbook as a percentage of Jan 2017 the fleet is currently 6% 8 20 Jan 2020 Jan 2018 mdwt 6 Jan 2021 md
Slide 18: Freight rates started 2021 off strong…
$- $- $2,000 $4,000 $6,000 $8,000 $5,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 02-Jan 02-Jan Source: Baltic Exchange 09-Jan 09-Jan 16-Jan 16-Jan 23-Jan 23-Jan 30-Jan 30-Jan 06-Feb 06-Feb 13-Feb 13-Feb 20-Feb 20-Feb 27-Feb 27-Feb 05-Ma
Slide 19: Brazilian IO exports have recovered since June 2020…
Brazilian IO exports have recovered since June 2020… …following poor weather conditions and operational challenges that disrupted production and shipments during most of 1H 2020 Brazilian iron ore exports have exceeded 30MT in 6 out of the last 8 months ― January 2021 exports rose over 8% YOY Va
Slide 20: 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 9% YOY in 2020… 120 2017 2018 110 2019 2020 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 90 2019 2020 80
Slide 21: Inventory levels for key major bulk trades
- 5 100 110 40 50 60 70 80 90 10 15 20 25 30 Jan-18 Jan-18 Feb-18 Feb-18 Mar-18 Mar-18 Apr-18 Apr-18 May-18 May-18 Jun-18 Jun-18 Jul-18 Jul-18 Aug-18 Source: Commodore Research Aug-18 Sep-18 Sep-18 Oct-18 Oct-18 Nov-18 Nov-18 Dec-18 Dec-18 Jan-19 Jan-19 Feb-19 Feb-19 Mar-19 Mar-19 Apr-19 Apr-19 May-
Slide 22: Strong grain trade + improvement in other minor bulk trades
Strong grain trade + improvement in other minor bulk trades China’s soybean imports 105 100 95 90 85 80 Black Sea – 2017 2018 2019 2020e 2021f US – Q4 peak season Aug peak season China Firm exports have Ramping up carried into Q1 to date soybean imports following recovery in demand from the swine fl
Slide 23: Freight rate catalysts for 2021
Freight rate catalysts for 2021 We believe 2021 will be an improved year for the drybulk market relative to 2020 due to the following factors… 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 5% i
Slide 24: Conclusion
Conclusion
Slide 25: 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 + regular quarterly dividend Fleet Opportunistical
Slide 26: Appendix
Appendix
Slide 27: Third Quarter Earnings
Third Quarter Earnings Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollars in thousands, except share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (un
Slide 28: September 30, 2020 Balance Sheet
September 30, 2020 Balance Sheet September 30, 2020 December 31, 2019 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 160,775 $ 162,249 Current assets 222,428 223,195 Total assets 1,317,547 1,528,892 Current liabilities (excluding current portion of long-ter
Slide 29: Third Quarter Highlights
Third Quarter Highlights Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 51 58 51 58 Average number of vessels (1) 51.4 58.0 52.9 58.1 Total ownership days fo
Slide 30: Time Charter Equivalent Reconciliation
Time Charter Equivalent Reconciliation(1) Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 87,524 $ 103,776 $ 260,066 $ 280,790 Voyage expenses (in thousands) 33,487 4
Slide 31: 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 and responsible business built for the long-term Over the last several years, we have invested in our fleet by… Purchasing modern, fuel-efficient vessels Divesting older, less fuel-efficient t
Slide 32: Working towards reducing emissions and protecting the environment
Working towards reducing emissions and protecting the environment By purchasing modern, fuel-efficient vessels and selling older, less fuel-efficient tonnage, our Average Efficiency Ratio and Energy Efficiency Operational Indicator have improved leading to a reduction in our carbon emissions (calcs
Slide 33: 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 Rhone 2011 58,018 Genco Resolute 2015 181,060 Baltic Hornet 2014 63,574 Genco Aquitaine 2009 57,981 Genco Endeavour 2015 181,060 Genco Freedom 201
Slide 34: Thank you
Thank you <<
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