Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Q3 2018 Earnings Presentation
29 slides from Genco Shipping & Trading's earnings presentation, Nov 8, 2018
Slide 1: Genco Shipping & Trading Limited Q3 2018 Earnings Call
Genco Shipping & Trading Limited Q3 2018 Earnings Call November 8th, 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 Third Quarter 2018 and Year to Date Highlights Financial Overview Industry Overview 3
Slide 4: Third Quarter 2018 and Year to Date Highlights
Third Quarter 2018 and Year to Date Highlights
Slide 5: Third Quarter 2018 and Year to Date Highlights
Third Quarter 2018 and Year to Date Highlights Vessel Acquisitions and Fleet Renewal Program Completed the acquisition of a total of six high specification, fuel efficient Capesize and Ultramax vessels ― In July, we took delivery of the Genco Weatherly, a 2014-built Ultramax vessel ― In August, we
Slide 6: Where Genco Is Today
Where Genco Is Today… Following the execution of two new credit facilities, the equity offering and the acquisitions, Genco’s improved fleet and balance sheet is as follows Pro Forma Fleet Distribution Key Metrics Base Fleet Vessels Sold September 30, 2018 balances: Major 22 Minor 39 Bulk Vessels
Slide 7: 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 Options on Select Minor Bulk Vessels Greatest benefit likely to occur in the early stages of compliance Shorter payback period on larger vessels, reducing risk profile Install scrubbers o
Slide 8: 2H 2018 to 2019 Drybulk Outlook
2H 2018 to 2019 Drybulk Outlook Demand growth is forecast to outpace supply growth in the coming years which is expected to lead to further improvement in the drybulk market Drybulk Market Catalysts Supply & Demand Estimates Vessel* 2H 2018 2019 1 2 Iron Ore Iron Ore Trade Capesize Steel Production
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 – 2017 Primary Vessel Type Shipping Market Beta* Genco Fleet Distribution (dwt) Genco Cargoes Carried Pr
Slide 10: 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 $15,000 62% of Q4-18 days TCE (net of voyage expenses & charter hire expenses)
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, 2018 September 30, 2017 September 30, 2018 September 30, 2017 (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, 2018 Balance Sheet
September 30, 2018 Balance Sheet September 30, 2018 December 31, 2017 (Dollars in thousands) (unaudited) BALANCE SHEET DATA: Cash (including restricted cash) $ 166,039 $ 204,946 Current assets 237,308 217,239 Total assets 1,632,274 1,520,959 Current liabilities (excluding current portion of long-ter
Slide 14: Third Quarter Highlights
Third Quarter Highlights Three Months Ended Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 (unaudited) (unaudited) FLEET DATA: Total number of vessels at end of period 64 60 64 60 Average number of vessels (1) 61.7 60.0 60.6 61.1 Total ownership days fo
Slide 15: Revamped Debt Structure
Revamped Debt Structure In June and August 2018, we closed on our $460m and $108m credit facilities, highlighting Genco’s access to high quality commercial bank financing New and simplified debt structure offers more flexibility and visibility into Genco’s capital structure Commercial Bank Financing
Slide 16: Select Balance Sheet Items
Select Balance Sheet Items Selected Financial Information September 30, 2018 (Dollars in thousands) Balance Sheet Cash $165,724 Debt $568,000 Shareholders’ Equity $1,034,583 Strong balance sheet and liquidity position 16
Slide 17: Estimated Q4 2018 Cash Breakeven Rates
Estimated Q4 2018 Cash Breakeven Rates(1) Fleet Breakeven Rates – Estimated Q4 2018 (Detailed Q4 2018 Estimated B/E Rates in Appendix) $12,000 $10,000 $ per vessel per day $2,896 $8,000 $1,445 $6,000 $353 $143 $792 $10,129 $4,000 $2,000 $4,500 $0 DVOE G&A Mgmt Fees Drydocking Interest Fixed Debt Bre
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 crosses 2018 high of $27k and approaches peak $35,000 BCI
Slide 20: Recent Market Developments
Recent Market Developments Key Iron Ore Expansion Plans(2) Recent Developments Significant Brazilian iron ore volume expected in Net vessel supply growth of 2.5% in the YTD 2018 and 2019 60.0 Global steel production has increased by 4.7% BHP Rio Tinto Roy Hill Anglo American* through the first n
Slide 21: Major Bulks – Global Steel Production Growth Remains Strong
Major Bulks – Global Steel Production Growth Remains Strong Coal Power Plant Stockpiles(2) Global Steel Production (million tons)(1) 120 45 9 Mos 2018 9 Mos 2017 % Variance China 699.4 659.4 6.1% China India 40 128.0 126.3 1.3% 100 European Union 35 China Stockpiles (MT) Japan 78.6 78.3 0.4% India S
Slide 22: 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 Argentina 40 42 6% 400 Australia 31 25 -21% +1% 2017 2018F Canada 21 23 9% 350 EU 38 39 2% US 75 76 1% 300 Others 125 129 4% 250 Tot
Slide 23: 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 18 fleet is currently 10% 10 Jan 2017 16 1.8% 8 14 1.5% 12 6 1.3
Slide 24: Q&A
Q&A
Slide 25: Appendix
Appendix
Slide 26: Pro Forma Genco Fleet List
Pro Forma Genco Fleet List* Capesize Major Bulk Minor Bulk Vessel Name Year Built Dwt Vessel Name Year Built Dwt Vessel Name Year Built Dwt 17 Capesize Ultramax Baltic Cougar 2009 53,432 Genco Constantine 2008 180,183 Baltic Hornet 2014 63,574 Genco Loire 2009 53,430 Genco Augustus 2007 180,151 Balt
Slide 27: Time Charter Equivalent Reconciliation
Time Charter Equivalent Reconciliation(1) Three Months Ended Nine Months Ended September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 (unaudited) (unaudited) Total Fleet Voyage revenues (in thousands) $ 92,263 $ 51,161 $ 255,336 $ 134,780 Voyage expenses (in thousands) 31,475 5,
Slide 28: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Three Months Ended September 30, 2018 Adjusted Net Income Reconciliation (unaudited) Net Income $ 5,708 - Gain on sale of vessels (1,509) Adjusted net income $ 4,199 Adjusted net earnings per share - basic $ 0.10 Adjusted net earnings per share - diluted $ 0.10 Wei
Slide 29: Q4 2018 Genco Estimated Breakeven Rates
Q4 2018 Genco Estimated Breakeven Rates (1) Daily Expenses by Category Free Cash Flow(2) Net Income Direct Vessel Operating(3) $4,500 $4,500 General and Administrative 792 871 Expenses(4) Technical Management Fees(5) 353 353 Drydocking(6) 143 - Interest Expense(7) 1,445 1,605 Fixed Debt Repayments(8
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