Genco Shipping & Trading Limited · NYSE:GNK
Genco Shipping & Trading — Noble Capital Markets' 15th Annual Investor Conference (January 2019)
32 slides from Genco Shipping & Trading's conference presentation, Jan 28, 2019
Slide 1: Genco Shipping & Trading Limited
Genco Shipping & Trading Limited Noble Capital Markets’15th Annual Investor Conference NYSE:GNK January 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: Executive Summary
Executive Summary
Slide 4: Genco is Attractively Positioned to Capture Market Upside
Genco is Attractively Positioned to Capture Market Upside Primary Differentiators of the Genco Platform Key Company Developments Commercial platform investments driving revenue growth and margin expansion Experienced U.S. High corporate based management governance team standards Short duration c
Slide 5: Since the beginning of 2017, Genco has executed on its strategic plan
Since the beginning of 2017, Genco has executed on its strategic plan At the end of 2016, management began the transition from a tonnage provider to an active commercial strategy At the same time, Genco has been executing on its fleet renewal and growth strategy Transformed commercial platform to dr
Slide 6: Where Genco Is Today…
Where Genco Is Today… Following the execution of two new credit facilities, an equity offering and two vessel 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 19 Minor 39 Bulk Ve
Slide 7: How do Fundamentals Look Today as Compared to the Past
How do Fundamentals Look Today as Compared to the Past Drybulk Supply & Demand Growth over Last 20 Years (%) Demand growth is forecast Fleet Growth Drybulk Trade Growth to outpace supply growth 18% for 3 consecutive years Demand outpaced Chinese Record 16% supply leading to stimulus fleet growth str
Slide 8: Drybulk Supply and Demand Outlook in the Short Term
Drybulk Supply and Demand Outlook in the Short Term Demand growth is forecast to outpace supply growth once again which is expected to lead to further improvement in the drybulk market Drybulk Market Catalysts Supply & Demand Estimates Vessel* 2018 2019 1 2 Iron Ore Iron Ore Trade Capesize Steel Pro
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 Primary Vessel Type Shipping Market Beta* Genco Fleet Distribution (dwt) Genco Cargoes Carried (# owned
Slide 10: Commercial Platform
Commercial Platform
Slide 11: The Genco Platform: Positioned to Capture Market Upside
The Genco Platform: Positioned to Capture Market Upside Enhanced commercial strategy focused on increasing margins and outperforming benchmarks Full in-house logistics solution to major cargo owners Revamped Commercial Fleet concentrated on major and minor bulks Strategy ― Capesize: upside pot
Slide 12: Active Commercial Strategy to Drive Margins
Active Commercial Strategy to Drive Margins Fleet deployment strategy remains weighted towards short-term fixtures providing optionality Major Bulk Minor Bulk Iron ore demand growth from long ton-mile origins to propel Demand from developing economies to support coal, grain and seaborne demand as fo
Slide 13: Genco's Global Footprint: Ability to Maximize Revenue
Genco’s Global Footprint: Ability to Maximize Revenue with all Major Geographical Regions Covered Genco has vessels trading all of the world, a global presence has enabled the Company the ability to instantly capture market trends to maximize revenue generation Americas Europe Asia Copenhagen
Slide 14: Sensitivity to Net Revenues
Sensitivity to Net Revenues Every $1,000 increase in TCE equates to ~$21 million of incremental cash flow $600 $500 Highlights the significant operating leverage of Genco’s sizeable fleet Annualized Net Revenue ($ in millions) $400 $300 $200 $10,696 $100 $0 Q3 2018 TCE $12,500 $15,000 $17,500 $20,00
Slide 15: IMO 2020 Strategy
IMO 2020 Strategy
Slide 16: Current Fleet-Wide Strategy for IMO 2020 Compliance
Current Fleet-Wide Strategy for IMO 2020 Compliance Plan Reflects Balanced Approach Install scrubbers Consume compliant LS fuel on Minor # of Vessels % of Fleet % of Fuel Cons. on Capesize vessels Bulk ships Install 17 Scrubbers Vessels 27% 41% To burn Portfolio Approach HSFO to IMO 2020 Scrubber op
Slide 17: Financial Overview
Financial Overview
Slide 18: 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 Commercial Bank Financing Key Takeaways Simplified debt structure $460m Credit $108m Credit F
Slide 19: 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 19
Slide 20: Industry Overview
Industry Overview
Slide 21: 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 $35,000 BCI crossed $30k for the BCI crossed 2018 high of $27k
Slide 22: Recent Drybulk Supply and Demand Developments
Recent Drybulk Supply and Demand Developments Drybulk market is supported by positive supply side fundamentals & low orderbook providing a lesser bar for demand to exceed Recent Developments Key Iron Ore Expansion Plans(2) Major Bulks BHP Rio Tinto Capesize spot rates reached 2018 highs in Q3 and
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 fleet is currently 10.7% 10 Jan 2017 14 8 12 1.4% 1.2% 1.2% 1.3%
Slide 24: Conclusion
Conclusion
Slide 25: Preparing for the Year Ahead – 2019 Drybulk Outlook
Preparing for the Year Ahead – 2019 Drybulk Outlook Demand growth in 2019 is anticipated to outpace net fleet growth for the third consecutive year 2019 Demand Fundamentals 2019 Supply Fundamentals Demand growth: 3.3% Supply growth: 2.3% Iron ore trade to expand with Brazilian volumes Orderb
Slide 26: 2019: The New Path Forward To Continue to Deliver Results
2019: The New Path Forward To Continue to Deliver Results Genco is attractively positioned to capture market upside Leadership Experienced US-based management team Genco’s Fleet Large fleet mirrors global trade dynamics – scale provides significant operating leverage Commercial Platform Active
Slide 27: Appendix
Appendix
Slide 28: 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 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
Slide 29: 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 share and per share data) (Dollars in thousands, except share and per share data) (unaudited) (un
Slide 30: 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 31: 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 32: 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,