Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q4 2018 Earnings Presentation
30 slides from Genco Shipping & Trading's earnings presentation, Mar 5, 2019
Slide 1: Genco Shipping & Trading Limited Q4 2018 Earnings Call
Genco Shipping & Trading Limited Q4 2018 Earnings Call March 5th, 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 Fourth Quarter 2018 and Full Year Highlights Financial Overview Industry Overview 3
Slide 4: Fourth Quarter 2018 and Full Year Highlights
Fourth Quarter 2018 and Full Year Highlights
Slide 5: Q4 2018 Financials and Scrubber Facility
Fourth Quarter 2018 and Full Year Highlights Q4 2018 Financials Net income: $18.3 million ― Basic and diluted earnings per share: $0.44 Adjusted net income: $16.3 million ― Adjusted basic and diluted earnings per share: $0.39 (excluding $2.0 million gain on sale of vessels) EBITDA: $44.4 milli
Slide 6: How 2018 Stacks Up Versus 2017
How 2018 Stacks Up Versus 2017 2018 proved to be a successful year for Genco as increased operating cash flow generation further solidified our already strong balance sheet 2017 2018 Adjusted EBITDA more than doubled in 2018 Operating $24 $66 cash flow million million compared to 2017 Adjusted $56
Slide 7: 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 2018 2018 Quarterly TCE & DVOE Q1 2019 to date Outperformance TCE $14,000 Relevant adj Baltic Exc
Slide 8: 2019 Drybulk Market Outlook
2019 Drybulk Market Outlook Following two consecutive years of demand growth outpacing supply growth, in 2019, drybulk market fundamentals appear more balanced Drybulk Market Catalysts 2019 Supply & Demand Estimates Vessel* Clarksons Marsoft 1 2 Iron Ore Coal Trade Linked Iron Ore Trade Capesize to
Slide 9: Genco's Fleet Directly Aligns with Global Trade Dynamics
Genco’s Fleet Directly Aligns with Global Trade Dynamics Genco’s Capesize exposure provides upside earnings potential while minor bulk fleet provides steadier income Commodity Percentage of Trade - 2018 Primary Vessel Type Shipping Market Beta Genco Fleet Distribution (dwt) Genco Cargoes Carried Pro
Slide 10: Balanced IMO 2020 Strategy – Optimal for Evolving Marine Fuel Market
Balanced IMO 2020 Strategy – Optimal for Evolving Marine Fuel Market Install Scrubbers on Capesize Vessels Evaluate Installation on Select Minor Bulk Vessels Greatest benefit likely to occur in the early stages of compliance Genco’s Comprehensive Plan Shorter payback period on larger vessels, re
Slide 11: Financial Overview
Financial Overview
Slide 12: Fourth Quarter Earnings
Fourth Quarter Earnings Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 (Dollars in thousands, except s hare and per share data) (Dollars in thousands, except share and per s hare data) (unaudited)
Slide 13: December 31, 2018 Balance Sheet
December 31, 2018 Balance Sheet December 31, 2018 December 31, 2017 (Dollars in thousands ) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 202,761 $ 204,946 Current assets 270,451 217,239 Total assets 1,627,470 1,520,959 Current liabilities (excluding current portion of long-term
Slide 14: Fourth Quarter Highlights
Fourth Quarter Highlights Three Months Ended Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 59 60 59 60 Average number of vessels (1) 62.1 60.0 61.0 60.8 Total ownership days for
Slide 15: Favorable Debt Structure
Favorable Debt Structure Simplified and efficient debt structure offers more flexibility and visibility into Genco’s capital structure – Highlights Genco’s access to high quality commercial bank financing Consolidation of our credit facilities enabled Genco to: Reduce interest expense Ease restr
Slide 16: Select Balance Sheet Items
Select Balance Sheet Items Selected Financial Information December 31, 2018 (Dollars in thousands) Balance Sheet Cash $202,761 Debt $551,420 Shareholders’ Equity $1,053,307 Following $6.4 million of net proceeds from the sale of the Genco Vigour in January 2019, our pro forma cash position is $209
Slide 17: Estimated Q1 2019 Cash Breakeven Rates
Estimated Q1 2019 Cash Breakeven Rates(1) Fleet Breakeven Rates – Estimated Q1 2019 (Detailed Q1 2019 Estimated B/E Rates in Appendix) $12,000 $10,000 $3,160 $ per vessel per day $8,000 $1,481 $6,000 $478 $361 $11,019 $1,014 $4,000 $2,000 $4,525 $0 DVOE G&A Mgmt Fees Drydocking Interest Fixed Debt B
Slide 18: Industry Overview
Industry Overview
Slide 19: 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 crossed $30k for the $35,000 BCI crossed 2018 high of $27k
Slide 20: Current Drybulk Market Drivers
Current Drybulk Market Drivers Typical first quarter seasonality has been exacerbated by recent events described below but near term drivers could support the drybulk market in the months ahead Seasonal factors affecting freight rates Potential near term demand drivers 1) Frontloaded orderbook leadi
Slide 21: Vale Incident and Impact on Drybulk Trade
Vale Incident and Impact on Drybulk Trade What Vale has said: Incremental 2019 iron ore trade forecast 40MT of iron ore production to be impacted as similar dams are decommissioned Prior to Vale incident Output is to be partially made up from other mines Vale has yet to provide updated product
Slide 22: Major Bulks – Global Steel Production Growth Remains Strong
Major Bulks – Global Steel Production Growth Remains Strong Coal Power Plant Stockpiles(2) 120 45 (1) Global Steel Production (million tons) China India 40 2018 2017 % Variance 100 35 928.3 870.9 6.6% China Stockpiles (MT) China India Stockpiles (MT) European Union 168.1 168.5 -0.3% 80 30 Japan 104.
Slide 23: 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 (e) 2019 (f) % Variance Argentina 40 41 1% 400 Australia 22 24 10% +3% 2018E 2019F Canada 23 24 2% 350 EU 35 38 7% 300 US 80 83 4% Others 128 129 1% 250
Slide 24: 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 11% 10 Jan 2017 14 1.5% 1.5% 1.4% 8 12 1.4% 1
Slide 25: Q&A
Q&A
Slide 26: Appendix
Appendix
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 Twelve Months Ended December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 112,185 $ 74,918 $ 367,522 $ 209,698 Voyage expenses (in thousands) 36,305 15,
Slide 29: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended December 31, 2018 Adjusted Net Income Reconciliation (unaudited) Net Income $ 18,283 - Gain on sale of vessels (2,004) Adjusted net income $ 16,279 Adjusted net earnings per share - basic $ 0.39 Adjusted net earnings per share - diluted $ 0.39 We
Slide 30: Q1 2019 Genco Estimated Breakeven Rates
Q1 2019 Genco Estimated Breakeven Rates (1) Daily Expenses by Category Free Cash Flow(2) Net Income Direct Vessel Operating(3) $4,525 $4,525 General and Administrative 1,014 1,089 Expenses(4) Technical Management Fees(5) 361 361 Drydocking(6) 478 - Interest Expense(7) 1,481 1,653 Fixed Debt Repaymen
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