Genco Shipping & Trading Limited Announces Second Quarter 2012 Financial Results
NEW YORK, Aug. 1, 2012 /PRNewswire/ — Genco Shipping & Trading Limited (NYSE: GNK) (“Genco” or the “Company”) today reported its financial results for the three and six months ended June 30, 2012.
The following financial review discusses the results for the three and six months ended June 30, 2012 and June 30, 2011.
Second Quarter 2012 and Year-to-Date Highlights
- Recorded net loss attributable to Genco for the second quarter of $27.7 million, or $0.65 basic and diluted loss per share;
- Maintained strong cash position of $255.8 million on a consolidated basis, including restricted cash;
- $251.4 million at Genco Shipping & Trading Limited, including restricted cash;
- $4.4 million at Baltic Trading Limited;
- Entered into separate agreements to amend the amortization schedule and extend existing covenant waivers under each of our three credit facilities through and including the quarter ending December 31, 2013; and
- Continued a short time charter strategy by fixing vessels on spot market-related time charters with the option to convert to a fixed rate and on short-term charters while the market remains volatile.
Financial Review: 2012 Second Quarter
The Company recorded net loss attributable to Genco for the second quarter of 2012 of $27.7 million, or $0.65 basic and diluted loss per share. Comparatively, for the three months ended June 30, 2011, net income attributable to Genco was $10.1 million, or $0.29 basic and diluted earnings per share.
EBITDA was $26.8 million for the three months ended June 30, 2012 versus $65.8 million for the three months ended June 30, 2011.
Robert Gerald Buchanan, President, commented, “During the second quarter, we maintained an opportunistic time charter approach in a challenging drybulk market. By preserving the ability to benefit from a rising freight rate environment combined with a large and modern fleet, we intend to drive future performance when market conditions improve while continuing to provide our leading customers with the highest quality service.”
Genco’s voyage revenues decreased to $62.1 million for the three months ended June 30, 2012 versus $98.5 million for the three months ended June 30, 2011. The decrease was due to lower charter rates achieved by the majority of our vessels as well as a higher number of days that our vessels were on planned offhire to complete drydockings during the second quarter of 2012 compared to the second quarter of 2011. The decrease in charter rates was partially offset by the increase in the size of our fleet. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet decreased to $11,067 per day for the three months ended June 30, 2012 compared to $18,299 per day for the three months ended June 30, 2011. The decrease in TCE rates resulted from lower charter rates achieved in the second quarter of 2012 versus the same period in 2011 for the majority of the vessels in our fleet. Continued deliveries of newbuilding vessels coupled with lower growth rates of imported commodities in emerging market economies through the first half of 2012 were the main contributors of reduced rates, which affected the earnings of our vessels. The effect of these contributors was partially offset by increased scrapping of older tonnage.
Total operating expenses increased to $73.4 million for the three months ended June 30, 2012 from $67.7 million for the three-month period ended June 30, 2011. Vessel operating expenses were $29.5 million for the second quarter of 2012 compared to $25.5 million for the same period in 2011. The increase in vessel operating expenses was due to the increase in the size of our fleet, the timing of purchases of spare parts as well as higher maintenance and crew related expenses, which was partially offset by lower lube consumption for the second quarter of 2012 versus the same period in 2011.
Depreciation and amortization expenses slightly increased to $34.5 million for the second quarter of 2012 from $34.0 million for the second quarter of 2011 as a result of the growth of our fleet. General, administrative and management fees marginally increased to $8.4 million in the second quarter of 2012 from $8.3 million in the second quarter of 2011, primarily due to slightly higher third-party management fees due to the growth of our fleet and higher office-related expenses. Increases were partially offset by a decrease in non-cash compensation.
Daily vessel operating expenses, or DVOE, increased to $5,232 per vessel per day during the second quarter of 2012 as compared to $4,700 per vessel per day for the second quarter of 2011, mainly due to the timing of purchases of spare parts as well as higher maintenance and crew related expenses, partially offset by lower lube consumption. We believe daily vessel operating expenses are best measured for comparative purposes over a 12?month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers and management’s expectations, our DVOE budget for the second half of 2012 is $5,200 per vessel per day on a weighted average basis for the 53 vessels in our fleet, excluding vessels owned by Baltic Trading Limited.
John C. Wobensmith, Chief Financial Officer, commented, “Genco ended the second quarter with a sizeable cash balance of $251.4 million, enhancing the Company’s ability to operate in a soft rate environment. Consistent with our objective to preserve the Company’s financial strength and flexibility, we entered into agreements in August to amend our three credit facilities under favorable terms. Specifically, Genco’s scheduled amortization payments have been eliminated for each facility through and including the quarter ending December 31, 2013. In addition, the existing waivers for both the maximum leverage ratio covenant and the interest coverage ratio covenant have been extended for each facility through and including the quarter ending December 31, 2013. We appreciate the continued support of our lending group, a core differentiator for our Company, as we remain committed to a strong financial foundation for the benefit of our shareholders.”
Financial Review: First Half 2012
The net loss attributable to Genco was $60.8 million or $1.50 basic and diluted loss per share for the six months ended June 30, 2012, compared to net income attributable to Genco of $23.5 million or $0.67 basic and diluted earnings per share for the six months ended June 30, 2011. Voyage revenues decreased to $121.1 million for the six months ended June 30, 2012 compared to $199.1 million for the six months ended June 30, 2011. EBITDA was $52.0 million for the six months ended June 30, 2012 versus $133.9 million for the six months ended June 30, 2011. TCE rates obtained by the Company decreased to $10,774 per day for the six months ended June 30, 2012 from $18,720 per day for the six months ended June 30, 2011, mainly due to lower rates achieved for our vessels during the first six months of 2012 as compared to the prior year period as well as the operation of a greater number of smaller class vessels. Total operating expenses were $145.7 million for the six months ended June 30, 2012 compared to $135.4 million for the six months ended June 30, 2011, and daily vessel operating expenses per vessel were $5,082 versus $4,723 for the comparative periods, mainly due to the timing of purchases of spare parts as well as higher maintenance and crew related expenses, partially offset by lower lube consumption.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the six months ended June 30, 2012 and 2011 was $0.6 million and $83.0 million, respectively. The decrease in cash provided by operating activities was primarily due to a net loss of $66.9 million for the first six months of 2012 compared to net income of $22.0 million for the same period of 2011, which resulted from lower charter rates achieved in the first half of 2012 versus the prior year period for the majority of the vessels in our fleet.
Net cash used in investing activities for the six months ended June 30, 2012 and 2011 was $2.7 million and $68.3 million, respectively. The decrease was primarily due to fewer funds used for purchases of vessels during the first half of 2012 compared to the same period in 2011. For the six months ended June 30, 2012, cash used in investing activities primarily related to the purchase of fixed assets in the amount of $1.8 million and vessel related equipment totaling $0.8 million. For the six months ended June 30, 2011, cash used in investing activities predominantly related to purchases of vessels in the amount of $67.2 million.
Net cash provided by financing activities was $20.1 million during the six months ended June 30, 2012 as compared to $0.7 million during the six months ended June 30, 2011. The increase in cash provided by financing activities was primarily due to $49.9 million of net proceeds provided by our follow-on offering in February 2012. Cash used in financing activities for the first six months of 2012 consisted of a $12.5 million repayment of debt under the 2007 Credit Facility, $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.8 million repayment of debt under the $100 Million Term Loan Facility, $0.2 million of deferred financing costs and the $3.1 million dividend payment of our subsidiary, Baltic Trading Limited, to its outside shareholders. Cash provided by financing activities during the first six months of 2011 mainly consisted of $21.5 million of proceeds from the $253 Million Term Loan Facility related to the Bourbon vessels acquired and $20.0 million of proceeds from the $100 Million Term Loan Facility related to the Metrostar vessels acquired offset by the following uses of cash: a $25.0 million repayment of debt under the 2007 Credit Facility, $9.8 million repayment of debt under the $253 Million Term Loan Facility, $1.8 million repayment of debt under the $100 Million Term Loan Facility, $0.3 million of deferred financing costs and the $3.9 million dividend payment of our subsidiary, Baltic Trading Limited, to its outside shareholders.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. Excluding Baltic Trading Limited’s vessels, we own a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, with an aggregate carrying capacity of approximately 3,810,000 dwt. In addition, our subsidiary Baltic Trading Limited currently owns a fleet of nine drybulk vessels, consisting of two Capesize, four Supramax, and three Handysize vessels with an aggregate carrying capacity of approximately 672,000 dwt.
In addition to acquisitions that we may undertake in future periods, we will incur additional expenditures due to special surveys and drydockings for our fleet. We estimate that six of our vessels will complete drydockings in the third quarter of 2012 and one additional vessel will be drydocked in the fourth quarter of 2012. We further anticipate that seven of our vessels will be drydocked in 2013.
We estimate our drydocking costs for our fleet, excluding the vessels owned by Baltic Trading Limited, through 2013 to be:
Q3 2012 Q4 2012 2013
------- ------- ----
Estimated Costs (1) $3.0 million $0.5 million $5.0 million
Estimated Offhire Days (2) 105 20 140
(1) Estimates are based on our
budgeted cost of drydocking
our vessels in China. Actual
costs will vary based on
various factors, including
where the drydockings are
actually performed. We expect
to fund these costs with cash
from operations.
(2) Assumes 20 days per
drydocking per vessel. Actual
length will vary based on the
condition of the vessel, yard
schedules and other factors.
Included in the total
estimated offhire days is the
third quarter of 2012 portion
of the Genco Carrier drydock
which amounted to five days.
The Genco Knight, Genco Raptor, Genco Cavalier, Genco Success and Genco Beauty completed their respective drydockings during the second quarter of 2012, while the Genco Carrier commenced its drydocking on June 19, 2012 and completed the same during the third quarter, on July 5, 2012. The vessels were on planned offhire for an aggregate of 105.4 days in connection with their scheduled drydockings at a cumulative cost of approximately $3.4 million for the second quarter of 2012.
Credit Facility Amendments
On August 1, 2012, the Company entered into separate agreements to amend provisions of its 2007 Credit Facility, $253 Million Term Loan Facility and $100 Million Term Loan Facility. DnB Nor Bank ASA, Deutsche Bank AG Filiale Deutschlandgeschaft and Credit Agricole CIB, respectively, acted as the lead arranger of each facility.
Under the terms of the agreements, Genco’s scheduled amortization payments have been eliminated through and including the quarter ending December 31, 2013. As a result, the Company’s next scheduled amortization payment under its three credit facilities will be due in the first quarter of 2014 in the amount totaling $55.2 million. Additionally, the existing waivers for both the maximum leverage ratio covenant and the interest coverage ratio covenant have been extended under all three facilities from March 31, 2013 through and including the quarter ending December 31, 2013.
As part of these agreements, the Company prepaid an aggregate of $99.9 million in principal loan amounts reducing the facility amounts for each facility. Specifically, $57.9 million was allocated to the 2007 Credit Facility, $30.5 million was allocated to the $253 Million Term Loan Facility and $11.5 million allocated to the $100 Million Term Loan Facility.
Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below.
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
------------- ------------- ------------- -------------
(Dollars in thousands, except share and per (Dollars in thousands, except share and per
share data) share data)
(unaudited) (unaudited)
---------- ----------
INCOME STATEMENT DATA:
Revenues:
Voyage revenues $62,112 $98,511 $121,137 $199,130
Service revenues 819 819 1,638 1,629
Total revenues 62,931 99,330 122,775 200,759
------ ------ ------- -------
Operating expenses:
Voyage expenses 995 (74) 2,405 894
Vessel operating expenses 29,516 25,465 57,351 50,260
General, administrative and management fees 8,362 8,298 17,058 17,149
Depreciation and amortization 34,491 34,025 68,916 67,106
Total operating expenses 73,364 67,714 145,730 135,409
------ ------ ------- -------
Operating (loss) income (10,433) 31,616 (22,955) 65,350
------- ------ ------- ------
Other (expense) income:
Other income (expense) 20 (56) 4 (111)
Interest income 148 163 303 335
Interest expense (19,884) (21,540) (43,614) (42,861)
Other expense: (19,716) (21,433) (43,307) (42,637)
------- ------- ------- -------
(Loss) Income before income taxes: (30,149) 10,183 (66,262) 22,713
Income tax expense (343) (355) (615) (714)
-----
Net (loss) income (30,492) 9,828 (66,877) 21,999
Less: Net loss attributable to noncontrolling interest (2,751) (262) (6,037) (1,517)
------ ---- ------ ------
Net (loss) income attributable to Genco Shipping & Trading Limited $(27,741) $10,090 $(60,840) $23,516
======== ======= ======== =======
Net (loss) income per share - basic $(0.65) $0.29 $(1.50) $0.67
====== ===== ====== =====
Net (loss) income per share - diluted (1) $(0.65) $0.29 $(1.50) $0.67
====== ===== ====== =====
Weighted average common shares outstanding - basic 42,878,228 35,150,352 40,484,409 35,146,254
========== ========== ========== ==========
Weighted average common shares outstanding - diluted(1) 42,878,228 35,204,649 40,484,409 35,211,636
========== ========== ========== ==========
June 30, 2012 December 31, 2011
------------- -----------------
BALANCE SHEET DATA: (unaudited)
Cash (including restricted cash) $255,768 $237,718
Current assets 274,292 259,365
Total assets 3,074,139 3,119,277
Current liabilities (including current portion of long term debt) 250,597 221,702
Total long-term debt (including current portion and note payable) 1,670,084 1,694,393
Shareholders' equity (including $201.9 million and $210.0 million of non-controlling 1,352,461 1,361,618
interest at June 30, 2012 and December 31, 2011, respectively)
Six Months Ended
June 30, 2012 June 30, 2011
------------- -------------
(unaudited)
Net cash provided by operating activities $558 82,965
Net cash used in investing activities (2,650) (68,318)
Net cash provided by financing activities 20,142 706
1) The convertible notes were anti-dilutive for the quarter and year to date periods ending June 30, 2012 and June 30, 2011.
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
(Dollars in thousands) (Dollars in thousands)
--------------------- ---------------------
EBITDA Reconciliation: (unaudited) (unaudited)
Net (Loss) Income attributable to Genco Shipping & Trading
Limited $(27,741) $10,090 $(60,840) $23,516
+ Net interest expense 19,736 21,377 43,311 42,526
+ Income tax expense 343 355 615 714
+ Depreciation and amortization 34,491 34,025 68,916 67,106
EBITDA(1) $26,829 $65,847 $52,002 $133,862
======= ======= ======= ========
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
------------- ------------- ------------- -------------
GENCO STANDALONE FLEET DATA: (unaudited) (unaudited)
Total number of vessels at end of period 53 51 53 51
Average number of vessels(2) 53.0 50.6 53.0 49.8
Total ownership days for fleet(3) 4,823 4,600 9,646 9,012
Total available days for fleet(4) 4,713 4,568 9,391 8,961
Total operating days for fleet(5) 4,696 4,542 9,339 8,906
Fleet utilization(6) 99.6% 99.4% 99.4% 99.4%
AVERAGE DAILY RESULTS:
Time charter equivalent(7) $11,435 19,325 $11,209 $19,917
Daily vessel operating expenses per vessel (8) 5,234 4,714 5,096 4,722
----- ----- ----- -----
Three Months Ended Six Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
------------- ------------- ------------- -------------
CONSOLIDATED FLEET DATA: (unaudited) (unaudited)
Total number of vessels at end of period 62 60 62 60
Average number of vessels(2) 62.0 59.6 62.0 58.8
Total ownership days for fleet(3) 5,642 5,419 11,284 10,641
Total available days for fleet(4) 5,523 5,387 11,020 10,590
Total operating days for fleet(5) 5,498 5,357 10,956 10,531
Fleet utilization(6) 99.6% 99.4% 99.4% 99.4%
AVERAGE DAILY RESULTS:
Time charter equivalent(7) $11,067 18,299 $10,774 $18,720
Daily vessel operating expenses per vessel (8) 5,232 4,700 5,082 4,723
----- ----- ----- -----
(1) EBITDA represents net (loss)
income attributable to Genco
Shipping & Trading Limited plus net
interest expense, taxes and
depreciation and amortization.
EBITDA is included because it is
used by management and certain
investors as a measure of operating
performance. EBITDA is used by
analysts in the shipping industry as
a common performance measure to
compare results across peers. Our
management uses EBITDA as a
performance measure in our
consolidating internal financial
statements, and it is presented for
review at our board meetings. The
Company believes that EBITDA is
useful to investors as the shipping
industry is capital intensive which
often results in significant
depreciation and cost of financing.
EBITDA presents investors with a
measure in addition to net income to
evaluate the Company's performance
prior to these costs. EBITDA is not
an item recognized by U.S. GAAP and
should not be considered as an
alternative to net income, operating
income or any other indicator of a
company's operating performance
required by U.S. GAAP. EBITDA is
not a source of liquidity or cash
flows as shown in our consolidated
statement of cash flows. The
definition of EBITDA used here may
not be comparable to that used by
other companies. The foregoing
definition of EBITDA differs from
the definition of Consolidated
EBITDA used in the financial
covenants of our 2007 Credit
Facility, our $253 Million Term Loan
Credit Facility, and $100 Million
Term Loan Credit Facility.
Specifically, Consolidated EBITDA
substitutes gross interest expense
(which includes amortization of
deferred financing costs) for net
interest expense used in our
definition of EBITDA, includes
adjustments for restricted stock
amortization and non-cash charges
for deferred financing costs related
to the refinancing of the other
credit facilities or any non-cash
losses from our investment in Jinhui
and excludes extraordinary gains or
losses and gains or losses from
derivative instruments used for
hedging purposes or sales of assets
other than inventory sold in the
ordinary course of business.
(2) Average number of vessels is the
number of vessels that constituted
our fleet for the relevant period,
as measured by the sum of the number
of days each vessel was part of our
fleet during the period divided by
the number of calendar days in that
period.
(3) We define ownership days as the
aggregate number of days in a period
during which each vessel in our
fleet has been owned by us.
Ownership days are an indicator of
the size of our fleet over a period
and affect both the amount of
revenues and the amount of expenses
that we record during a period.
(4) We define available days as the
number of our ownership days less
the aggregate number of days that
our vessels are off-hire due to
scheduled repairs or repairs under
guarantee, vessel upgrades or
special surveys and the aggregate
amount of time that we spend
positioning our vessels between time
charters. Companies in the shipping
industry generally use available
days to measure the number of days
in a period during which vessels
should be capable of generating
revenues.
(5) We define operating days as the
number of our available days in a
period less the aggregate number of
days that our vessels are off-hire
due to unforeseen circumstances. The
shipping industry uses operating
days to measure the aggregate number
of days in a period during which
vessels actually generate revenues.
(6) We calculate fleet utilization
by dividing the number of our
operating days during a period by
the number of our available days
during the period. The shipping
industry uses fleet utilization to
measure a company's efficiency in
finding suitable employment for its
vessels and minimizing the number of
days that its vessels are off-hire
for reasons other than scheduled
repairs or repairs under guarantee,
vessel upgrades, special surveys or
vessel positioning.
(7) We define TCE rates as our net
voyage revenue (voyage revenues less
voyage expenses) divided by the
number of our available days during
the period, which is consistent with
industry standards. TCE rate is a
common shipping industry performance
measure used primarily to compare
daily earnings generated by vessels
on time charters with daily earnings
generated by vessels on voyage
charters, because charterhire rates
for vessels on voyage charters are
generally not expressed in per-day
amounts while charterhire rates for
vessels on time charters generally
are expressed in such amounts. Since
some vessels were acquired with an
existing time charter at a below-
market rate, we allocated the
purchase price between the vessel
and an intangible liability for the
value assigned to the below-market
charterhire. This intangible
liability is amortized as an
increase to voyage revenues over the
minimum remaining term of the
charter.
(8) We define daily vessel operating
expenses to include crew wages and
related costs, the cost of insurance
expenses relating to repairs and
maintenance (excluding drydocking),
the costs of spares and consumable
stores, tonnage taxes and other
miscellaneous expenses. Daily vessel
operating expenses are calculated by
dividing vessel operating expenses
by ownership days for the relevant
period.
Genco Shipping & Trading Limited’s Fleet
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Excluding Baltic Trading’s vessels, we own a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, with an aggregate carrying capacity of approximately 3,810,000 dwt. In addition, our subsidiary Baltic Trading Limited currently owns a fleet of nine drybulk vessels, consisting of two Capesize, four Supramax, and three Handysize vessels.
Our current fleet, other than Baltic Trading’s vessels, contains ten groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of August 1, 2012, the average age of our fleet was 7.2 years, as compared to the average age for the world fleet of approximately 11 years for the drybulk shipping segments in which we compete.
The following table reflects the current employment of Genco’s current fleet, excluding Baltic Trading’s vessels:
Vessel Charterer Charter Cash Daily
Year Expiration (1) Rate (2)
Built
--- -----
Capesize Vessels
----------------
Genco Augustus 2007 Cargill International S.A. October 2012 100% of BCI
Genco Tiberius 2007 Cargill International S.A. September 2012 100% of BCI
Genco London 2007 Cargill International S.A. July 2013 100% of BCI(3)
Genco Titus 2007 Swissmarine Services S.A. September 2012 100% of BCI
Genco Constantine 2008 Cargill International S.A. Aug. 2012/Oct. 2013 $52,750/100% of BCI(4)(5)
Genco Hadrian 2008 Cargill International S.A. October 2012 $65,000(4)
Genco Commodus 2009 Swissmarine Services S.A. May 2013 99% of BCI
Genco Maximus 2009 Swissmarine Services S.A. January 2013 98.5% of BCI
Genco Claudius 2010 Swissmarine Services S.A. December 2012 98.5% of BCI
Panamax Vessels
---------------
Genco Beauty 1999 Global Maritime Investments Ltd. May 2013 97% of BPI(6)
Genco Knight 1999 Swissmarine Services S.A. March 2013 98% of BPI
Genco Leader 1999 J. Aron & Company November 2012 100% of BPI
Genco Vigour 1999 Global Maritime Investments Ltd. January 2013 97% of BPI
Genco Acheron 1999 Global Maritime Investments Ltd. December 2012 97% of BPI
Genco Surprise 1998 Global Maritime Investments Ltd. August 2012 97% of BPI
Genco Raptor 2007 Global Maritime Investments Ltd. March 2013 100% of BPI
Genco Thunder 2007 Swissmarine Services S.A. July 2012 97% of BPI(7)
Supramax Vessels
----------------
Genco Predator 2005 D'Amico Dry Ltd. April 2013 103% of BSI(8)
Genco Warrior 2005 Trafigura Beheer B.V. October 2012 102% of BSI
Genco Hunter 2007 Pacific Basin Chartering Ltd. August 2012/July 2013 106% of BSI/105% of BSI(9)
Genco Cavalier 2007 D/S Norden August 2012 $10,000
Genco Lorraine 2009 Olam International Ltd. August 2012 $18,500
Genco Loire 2009 Clipper Bulk Shipping N.V. July 2013 $9,950(10)
Genco Aquitaine 2009 Pioneer Navigation Ltd. March 2013 100% of BSI
Genco Ardennes 2009 Klaveness Chartering August 2012 $19,000
Genco Auvergne 2009 Pacific Basin Chartering Ltd. April 2013 100% of BSI
Genco Bourgogne 2010 Western Bulk Carriers A/S November 2012 $12,250
Genco Brittany 2010 D'Amico Dry Ltd. April 2013 100% of BSI(11)
Genco Languedoc 2010 Wan Bong Chartering Co. Ltd. September 2012 $8,750(12)
Genco Normandy 2007 Olam International Ltd. September 2012 $8,500(13)
Genco Picardy 2005 Trafigura Beheer B.V. December 2012 98% of BSI
Genco Provence 2004 Hamburg Bulk Carriers December 2012 $12,000
Genco Pyrenees 2010 Navig8 Inc. February 2013 100% of BSI
Genco Rhone 2011 AMN Bulk Carriers Inc. March 2013 100% of BSI
Handymax Vessels
----------------
Genco Success 1997 ED & F MAN Shipping Ltd. April 2013 91.5% of BSI
Genco Carrier 1998 Klaveness Chartering June 2013 91% of BSI(14)
Genco Prosperity 1997 SK Shipping Co. Ltd. October 2012 $8,000(15)
Genco Wisdom 1997 Klaveness Chartering September 2012 92% of BSI
Genco Marine 1996 ED & F MAN Shipping Ltd. April 2013 91% of BSI
Genco Muse 2001 Trafigura Beheer B.V. March 2013 93.5% of BSI
Handysize Vessels
-----------------
Genco Explorer 1999 Lauritzen Bulkers A/S November 2012 Spot(16)
Genco Pioneer 1999 Lauritzen Bulkers A/S November 2012 Spot(16)
Genco Progress 1999 Lauritzen Bulkers A/S August 2013 Spot(16)
Genco Reliance 1999 Lauritzen Bulkers A/S August 2013 Spot(16)
Genco Sugar 1998 Lauritzen Bulkers A/S August 2013 Spot(16)
Genco Charger 2005 AMN Bulk Carriers Inc. October 2012 100% of BHSI
Genco Challenger 2003 AMN Bulk Carriers Inc. November 2012 100% of BHSI
Genco Champion 2006 Pacific Basin Chartering Ltd. March 2013 100% of BHSI
Genco Ocean 2010 Cargill International S.A. June 2013 $8,500-$13,500 with 50% profit sharing(17)
Genco Bay 2010 Cargill International S.A. January 2013 $8,500-$13,500 with 50% profit sharing(17)
Genco Avra 2011 Cargill International S.A. March 2014 $8,500-$13,500 with 50% profit sharing(17)
Genco Mare 2011 Cargill International S.A. May 2015 115% of BHSI
Genco Spirit 2011 Cargill International S.A. September 2014 $8,500-$13,500 with 50% profit sharing(17)
(1) The charter expiration dates
presented represent the earliest
dates that our charters may be
terminated in the ordinary
course. Except for the Genco
Constantine and the Genco
Hadrian, under the terms of each
contract, the charterer is
entitled to extend the time
charters from two to four months
in order to complete the vessel's
final voyage plus any time the
vessel has been off-hire. The
charterer of the Genco Hadrian
has the option to extend the
charter for a period of one year.
The charterer of the Genco
Constantine has the option to
extend the charter for a period
of eight months.
(2) Time charter rates presented
are the gross daily charterhire
rates before third-party
commissions generally ranging
from 1.25% to 6.25%. In a time
charter, the charterer is
responsible for voyage expenses
such as bunkers, port expenses,
agents' fees and canal dues.
(3) We have agreed to an extension
with Cargill International S.A.
on a spot market-related time
charter for 11.5 to 14.5 months
based on 100% of the Baltic
Capesize Index (BCI), published
by the Baltic Exchange, as
reflected in daily reports. Hire
is paid every 15 days in arrears
less a 5.00% third party
brokerage commission. Genco
maintains the option to convert
to a fixed rate based on Capesize
FFA values at 100%. The vessel
went to drydock for scheduled
repairs on July 28, 2012. The
extension will begin when the
vessel is out of drydock on or
about August 8, 2012.
(4) These charters include a 50%
index-based profit sharing
component above the respective
base rates listed in the table.
The profit sharing between the
charterer and us for each 15-day
period is calculated by taking
the average over that period of
the published BCI of the four
time charter routes, as reflected
in daily reports. If such average
is more than the base rate
payable under the charter, the
excess amount is allocable 50% to
each of the charterer and us. A
third-party brokerage commission
of 3.75% based on the profit
sharing amount due to us is
payable out of our share.
(5) We have agreed to an extension
with Cargill International S.A.
on a spot market-related time
charter for 14 to 16.5 months
based on 100% of the BCI, as
reflected in daily reports. Hire
is paid every 15 days in arrears
less a 5.00% third party
brokerage commission. Genco
maintains the option to convert
to a fixed rate based on Capesize
FFA values at 100%. The
extension will begin on or about
August 21, 2012.
(6) We have reached an agreement
with Global Maritime Investments
Ltd. on a spot market-related
time charter for a minimum of
eleven months based on 97% of the
Baltic Panamax Index (BPI),
published by the Baltic Exchange,
as reflected in daily reports,
except for the initial 50 days in
which hire is based on 97% of the
rate for the Baltic Panamax P3A
route. Hire is paid every 15 days
in arrears less a 5.00% third
party brokerage commission.
Genco maintains the option to
convert to a fixed rate based on
Panamax FFA values at 97%. The
vessel delivered to charterers on
June 15, 2012 after drydock for
scheduled repairs was completed.
(7) The vessel redelivered to
Genco on July 28, 2012 and is
currently in drydock for
scheduled repairs.
(8) We have reached an agreement
with D'Amico Dry Ltd. on a spot
market-related time charter for
11 to 13.5 months based on 103%
of the Baltic Supramax Index
(BSI), published by the Baltic
Exchange, as reflected in daily
reports. Hire is paid every 15
days in arrears less a 5.00%
third party brokerage commission.
Genco maintains the option to
convert to a fixed rate based on
Supramax FFA values at 103%. The
vessel delivered to charterers on
May 23, 2012.
(9) We have agreed to an extension
with Pacific Basin Chartering
Ltd. on a spot market-related
time charter for 11.5 to 14.5
months based on 105% of the BSI,
as reflected in daily reports,
except for the initial 45 days in
which hire is $4,000 per day.
Hire is paid every 15 days in
arrears less a 5.00% third party
brokerage commission. Genco
maintains the option to convert
to a fixed rate based on Supramax
FFA values at 105%. The
extension will begin on or about
August 12, 2012.
(10) We have reached an agreement
with Clipper Bulk Shipping N.V.
on a time charter for 11 to 14.5
months at a rate of $9,950 per
day less a 5.00% third party
brokerage commission. Hire is
paid every 15 days in advance.
The vessel will deliver to
charterers on or about August 13,
2012 after repositioning. The
vessel was previously on a time
charter with Oldendorff GMBH &
Co. at a rate of $6,250 per day
less a 5.00% third party
brokerage commission which began
on June 7, 2012 and concluded on
July 28, 2012.
(11) We have reached an agreement
with D'Amico Dry Ltd. on a spot
market-related time charter for
11 to 13.5 months based on 100%
of the average of the daily rates
of the BSI, as reflected in daily
reports. Hire is paid every 15
days in arrears less a 5.00%
third party brokerage commission.
Genco maintains the option to
convert to a fixed rate based on
Supramax FFA values at 100%. The
vessel delivered to charterers on
May 9, 2012.
(12) We have reached an agreement
with Wan Bong Chartering Co. Ltd.
on a time charter for two laden
legs at a rate of $8,750 per day
less a 5.00% third party
brokerage commission. Hire is
paid every 15 days in advance.
The vessel delivered to
charterers on June 7, 2012.
(13) We have agreed to an
extension with Olam International
Ltd. on a time charter for 2 to 5
months at a rate of $8,500 per
day less a 5.00% third party
brokerage commission. Hire is
paid every 15 days in advance.
The extension began on July 13,
2012.
(14) We have reached an agreement
with Klaveness Chartering on a
spot market-related time charter
for 11 to 13.5 months based on
91% of the average of the daily
rates of the BSI, as reflected in
daily reports, except for the
initial 35 days in which hire is
based on 91% of the rate for the
Baltic Supramax S2 route. Hire
is paid every 15 days in arrears
less a 5.00% third party
brokerage commission. Genco
maintains the option to convert
to a fixed rate based on Supramax
FFA values at 91%. The vessel
went to drydock on June 19, 2012
and delivered to charterers on
July 6, 2012.
(15) We have reached an agreement
with SK Shipping Co. Ltd. on a
time charter for 3.5 to 6 months
at a rate of $8,000 per day less
a 5.00% third party brokerage
commission. Hire is paid every
15 days in advance. The vessel
delivered to charterers on June
20, 2012.
(16) We have reached an agreement
to enter these vessels into the
LB/IVS Pool whereby Lauritzen
Bulkers A/S acts as the pool
manager. We can withdraw up to
two vessels with three months'
notice and the remaining three
vessels with 12 months' notice.
(17) The rate for the spot market-
related time charter is linked
with a floor of $8,500 and a
ceiling of $13,500 daily with a
50% profit sharing arrangement to
apply to any amount above the
ceiling. The rate is based on
115% of the average of the daily
rates of the Baltic Handysize
Index (BHSI), published by the
Baltic Exchange, as reflected in
daily reports. Hire is paid every
15 days in advance net of a 5.00%
third party brokerage commission.
These vessels were acquired with
existing time charters with
below-market rates. For these
below-market time charters,
Genco allocates the purchase
price between the respective
vessels and an intangible
liability for the value assigned
to the below-market charter-
hire. This intangible liability
is amortized as an increase to
voyage revenues over the minimum
remaining terms of the applicable
charters, at which point the
respective liabilities will be
amortized to zero and the vessels
will begin earning the ''Cash
Daily Rate.'' For cash flow
purposes, Genco will continue to
receive the rate presented in the
''Cash Daily Rate'' column until
the charter expires.
Specifically, for the Genco
Spirit, Genco Avra, Genco Ocean
and Genco Bay, the daily amount
of amortization associated with
the below-market rates are
approximately $200, $350, $700
and $750 per day over the actual
cash rate earned, respectively.
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Excluding Baltic Trading Limited’s fleet, we own a fleet of 53 drybulk vessels, consisting of nine Capesize, eight Panamax, 17 Supramax, six Handymax and 13 Handysize vessels, with an aggregate carrying capacity of approximately 3,810,000 dwt. In addition, our subsidiary Baltic Trading Limited currently owns a fleet of nine drybulk vessels, consisting of two Capesize, four Supramax, and three Handysize vessels. References to Genco’s vessels and fleet in this press release exclude vessels owned by Baltic Trading Limited.
Conference Call Announcement
Genco Shipping & Trading Limited announced that it will hold a conference call on Thursday, August 2, 2012 at 8:30 a.m. Eastern Time, to discuss its 2012 second quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (888) 452-4030 or (719) 325-2334 and enter passcode 7066040. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 7066040. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995
This press release 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 words such as “anticipate,” “budget,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward looking statements are based on management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines in demand or rates in the drybulk shipping industry; (ii) prolonged weakness in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the fulfillment of post-closing actions required under our recent credit facility amendments, including effecting a second priority security interest in favor of lenders under our 2007 Credit Facility in vessels pledged under our other two credit facilities; and other factors listed from time to time in our public filings with the Securities and Exchange Commission including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and its reports on Form 10-Q and Form 8-K.
SOURCE Genco Shipping & Trading Limited
