Genco Shipping & Trading Limited Announces Q4 2024 Financial Results

Declares Dividend of $0.30 per share for Q4 2024

Represents Genco's 22^nd Consecutive Quarterly Dividend

NEW YORK, Feb. 19, 2025 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) ("Genco” or the "Company”), the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today reported its financial results for the three months and twelve months ended December 31, 2024.

Fourth Quarter 2024 and Year-to-Date Highlights

• Dividend: Declared a $0.30 per share dividend for Q4 2024
  • 22^nd consecutive quarterly dividend
  • Cumulative dividends of $6.615 per share or approximately 45% of our share price¹
  • Q4 2024 dividend is payable on or about March 18, 2025 to all shareholders of record as of March 11, 2025
• Growth: Acquired the Genco Intrepid, a high specification 2016-built 180,000 dwt Capesize vessel that delivered in October 2024
• Financial performance: Net income of $12.7 million for Q4 2024, or basic and diluted earnings per share of $0.29
  • Adjusted EBITDA
    • Q4 2024: $32.7 million
    • FY 2024: $151.2 million, representing a 49% increase over FY 2023²
• Voyage revenues: Totaled $99.2 million in Q4 2024
  • Net revenue² was $66.1 million during Q4 2024
  • Average daily fleet-wide TCE² was $18,007 for Q4 2024
• Fleet-wide TCE for FY 2024: $19,107, which outperformed our scrubber-adjusted internal benchmark by approximately $1,600 per day³
  • Nearly 30% increase in TCE year-over-year led by the combination of the strong drybulk market and a significant contribution from our commercial platform's outperformance
• Estimated TCE to date for Q1 2025: $12,366 for 75% of our owned fleet available days, based on both period and current spot fixtures²
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"At the same time, we've made considerable progress renewing our fleet, divesting older, non-core assets near market highs, while opportunistically redeploying proceeds to capitalize on attractive growth opportunities. Specifically, over the last 15 months, we have invested $134 million to replace smaller and less fuel-efficient vessels with modern, high-specification Capesizes, increasing our investments in the fleet since 2021 to $283 million and further expanding our earnings power.”

Mr. Wobensmith concluded, "Importantly, fleet-wide TCE for the full year increased by 29%, reflecting the strong 2024 drybulk market and our sustained outperformance versus our benchmarks. While freight rates have experienced downward volatility in 2025 to date due to seasonal factors, Genco is well positioned to draw on our industry low financial leverage and cash flow breakeven rate as well as significant access to capital to take advantage of attractive opportunities. Over the last several years, we have considerably lowered our financial risk and remain focused on providing sizable returns to shareholders and taking advantage of our balance sheet strength to pursue accretive growth to increase shareholder value.”

¹ _{Genco share price as of February 18, 2025.}

² _{We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company's operating performance. Please see Summary Consolidated Financial and Other Data below for further reconciliation. Regarding Q1 2025 TCE, actual results will vary from current estimates. Net revenue is defined as voyage revenues minus voyage expenses, charter hire expenses and realized gains or losses on fuel hedges.}

³ _{Our benchmark is defined as the weighted average of the Baltic Supramax Index as published by the Baltic Exchange and the Platts Scrubber/non-Scrubber Fitted Capesize Index net of 5% for commissions, adjusted for our owned-fleet composition as well as the characteristics of our vessels. We compare our actual TCE performance against this benchmark to assess TCE performance. We benchmark our majority scrubber-fitted Capesize fleet against the Platts Scrubber Fitted Capesize Index as we view this as a more relevant benchmark than the Baltic Capesize Index which represents a non-scrubber fitted vessel.}

Comprehensive Value Strategy

Genco's comprehensive value strategy is centered on three pillars:

• Dividends: paying sizeable quarterly cash dividends to shareholders
• Deleveraging: through voluntary debt repayments to maintain low financial leverage, and
• Growth: opportunistically growing and renewing our asset base

Key characteristics of our unique platform include:

• Low cash flow breakeven rate
• Net loan-to-value of 5%⁴
• Strong liquidity position of $381.3 million at December 31, 2024, which consists of:
  • $44.0 million of cash on the balance sheet
  • $337.3 million of revolver availability
• High operating leverage with our scalable fleet across the major and minor bulk sectors

Financial Deleveraging

80% debt reduction since 2021

• Debt outstanding: $90.0 million as of December 31, 2024
  • In Q4 2024, Genco drew down $20.0 million to partially fund the acquisition of the Genco Intrepid, and subsequently paid down $10.0 million in December
• We plan to continue to voluntarily pay down debt with a goal of zero net debt in order to enhance our ability to pay meaningful dividends and take advantage of strategic opportunities throughout drybulk market cycles

Acquired the Genco Intrepid, a 2016-built 180,000 dwt Capesize vessel, for $47.5 million constructed at Dalian Shipbuilding in China. We took delivery of the vessel on the October 23, 2024.

Furthermore, we sold the Genco Hadrian, a 2008-built 169,000 dwt Capesize vessel, for $25.0 million. The vessel delivered to its buyer on October 4, 2024.

Dividend Policy

Genco declared a cash dividend of $0.30 per share for the fourth quarter of 2024. The Q4 2024 dividend is payable on or about March 18, 2025 to all shareholders of record as of March 11, 2025.

Quarterly dividend policy: 100% of quarterly operating cash flow less a voluntary reserve.

Under the quarterly dividend policy adopted by our Board of Directors, the amount available for quarterly dividends is to be calculated based on the formula in the table below. Genco recently enhanced its dividend policy to exclude the drydocking capex line item from the dividend calculation. The table includes the calculation of the actual Q4 2024 dividend and estimated amounts for the calculation of the dividend for Q1 2025:

Operating cash flow is defined as net revenue (consisting of voyage revenue less voyage expenses, charter hire expenses, and realized gains or losses on fuel hedges), less operating expenses (consisting of vessel operating expenses, general and administrative expenses other than non-cash restricted stock expenses, technical management expenses, and interest expense other than non-cash deferred financing costs), for purposes of the foregoing calculation. Estimated expenses for Q1 2025 are estimates and subject to change.

The voluntary quarterly reserve for the first quarter of 2025 under the Company's dividend formula is expected to be $19.50 million, which remains fully within our discretion. A key component of Genco's value strategy is maintaining a voluntary quarterly reserve, as well as the optionality for the use of the reserve as Genco seeks to pay sizeable dividends across the cyclicality of the drybulk market. Subject to the development of freight rates for the remainder of the first quarter and our assessment of our liquidity and forward outlook, we maintain flexibility to reduce the quarterly reserve to pay dividends or increase the amount of dividends otherwise payable under our formula. The reserve is set by our Board of Directors at its discretion, and our Board has generally allotted an amount for anticipated debt prepayments plus an additional amount. We plan to set the voluntary reserve on a quarterly basis for the subsequent quarter.

Anticipated uses for the voluntary reserve include, but are not limited to:

• Vessel acquisitions
• Debt repayments, and
• General corporate purposes

Peter Allen, Chief Financial Officer, commented, "Capitalizing on our sizeable drybulk fleet and significant operating leverage, we generated full-year adjusted EBITDA of $151.2 million, representing a nearly 50% increase year-over-year. Notably, we repaid $110 million of debt in 2024, taking advantage of our full revolving credit facility structure to reduce financial leverage and interest expense without sacrificing borrowing capacity. With $337 million of undrawn revolver availability, Genco has significant financial flexibility in addition to an already strong balance sheet and low leverage profile. Consistent with our strategic objectives, we continue to invest in our fleet and voluntarily pay down debt. Since our value strategy's inception, we have reduced our cash flow breakeven rate to the among the lowest in the industry and strengthened our foundation to build on Genco's track record of significant dividends to shareholders.”

Genco's Active Commercial Operating Platform and Fleet Deployment Strategy

We utilize a portfolio approach towards revenue generation through a combination of:

• Short-term, spot market employment, and
• Opportunistically booking longer term coverage

Our barbell approach towards fleet composition enables Genco to gain exposure to both the major and minor bulk commodities with a fleet whose cargoes carried align with global commodity trade flows. This approach continues to serve us well given the upside potential in major bulk rates together with the relative stability of minor bulk rates.

Based on current fixtures to date, our estimated TCE to date for the first quarter of 2025 on a load-to-discharge basis is presented below. Actual rates for the first quarter will vary based upon future fixtures. These estimates are based on time charter contracts entered by the Company as well as current spot fixtures on the load-to-discharge method, whereby revenue is recognized ratably over the voyage from the commencement of loading to the completion of discharge. The actual TCE rates to be earned will depend on the number of contracted days and the number of ballast days at the end of the period. According to the load-to-discharge accounting method, the Company does not recognize revenue for any ballast days or uncontracted days at the end of the first quarter of 2025. At the same time, expenses for uncontracted days will be recognized.

Our index-linked and period time charters are listed below:

Financial Review: 2024 Fourth Quarter

The Company recorded net income for the fourth quarter of 2024 of $12.7 million, or $0.29 basic and diluted earnings per share. Adjusted net income amounted to $12.8 million, or $0.30 and $0.29 basic and diluted earnings per share, respectively, excluding a loss on sale of vessels of $0.2 million and unrealized fuel gains of $0.1 million. Comparatively, for the three months ended December 31, 2023, the Company recorded net income of $4.9 million, or $0.12 and $0.11 basic and diluted earnings per share, respectively. Adjusted net income is $18.6 million or $0.43 basic and diluted loss per share excluding a non-cash vessel impairment charge of $13.6 million. 

Revenue / TCE

The Company's revenues decreased to $99.2 million for the three months ended December 31, 2024, as compared to $115.5 million recorded for the three months ended December 31, 2023, primarily due to the operation of a smaller fleet as well as lower voyage revenues earned by our major and minor bulk vessels. The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet was $18,007 per day for the three months ended December 31, 2024 as compared to $17,373 per day for the three months ended December 31, 2023.

Voyage expenses

Voyage expenses decreased to $31.3 million for the three months ended December 31, 2024 from $42.5 million during the prior year period. The decrease was primarily due to lower voyage expenses for our major bulk vessels as a result of the operation of fewer vessels as well as lower bunker consumption and port expenses.

Vessel operating expenses

Vessel operating expenses decreased to $23.9 million for the three months ended December 31, 2024 from $25.4 million for the three months ended December 31, 2023. The decrease was due to the operation of a smaller fleet. Daily vessel operating expenses, or DVOE, amounted to $6,211 per vessel per day for the fourth quarter of 2024 compared to $6,153 per vessel per day for the fourth quarter of 2023. The increase was primarily due to higher repair and maintenance costs and crew costs partially offset by the timing of the purchase of stores and spares. Based on current estimates, our DVOE budget for Q1 2025 is $6,375 per vessel per day on a fleet-wide basis.

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.

General and administrative expenses

General and administrative expenses increased to $8.3 million for the fourth quarter of 2024 compared to $7.0 million for the fourth quarter of 2023 due to higher compensation related expenses.

Depreciation and amortization expenses

Depreciation and amortization expenses increased to $17.7 million for the three months ended December 31, 2024 from $16.7 million for the three months ended December 31, 2023.

Financial Review: Twelve Months 2024

The Company recorded net income of $76.4 million or $1.77 and $1.75 basic and diluted earnings per share, respectively, for the twelve months ended December 31, 2024. Adjusted net income amounted to $72.3 million, or $1.68 and $1.66 basic and diluted earnings per share, respectively, excluding a gain on sale of vessels of $16.5 million, non-cash vessel impairment charges of $6.6 million, and other operating expense of $5.7 million. This compares to a net loss of $12.9 million or $0.30 basic and diluted loss per share for the twelve months ended December 31, 2023. Adjusted net income in 2023 amounted to $28.9 million or $0.68 basic and diluted earnings per share excluding a non-cash vessel impairment charge of $41.7 million and unrealized fuel losses of $0.1 million.

Revenue / TCE

The Company's revenues increased to $423.0 million for the twelve months ended December 31, 2024 compared to $383.8 million for the twelve months ended December 31, 2023. The increase in voyage revenues was primarily due to higher rates earned by both our major bulk vessels and our minor bulk vessels. TCE rates obtained by the Company increased to $19,107 per day for the twelve months ended December 31, 2024 from $14,766 per day for the twelve months ended December 31, 2023.

Voyage expenses

Voyage expenses decreased to $127.0 million for the twelve months ended December 31, 2024 from $143.0 million for the same period in 2023. This decrease was primarily due to a decrease in voyage expenses for our major bulk vessels and for our Supramax vessels, part of our minor bulk fleet.  The decrease overall was primarily due to the operation of fewer major bulk and Supramax vessels operating during 2024 as compared to 2023. Additionally, there was a decrease in bunker consumption for our Supramax vessels due to lower bunker prices. 

Vessel operating expenses

Vessel operating expenses increased to $101.6 million for the twelve months ended December 31, 2024 from $97.1 million for the twelve months ended December 31, 2023. DVOE was $6,440 per vessel per day in 2024 versus $6,017 per vessel per day in 2023. The increase was primarily due to higher repair and maintenance costs, the timing of the purchase of stores and spares and higher crew costs.

General and administrative expenses

General and administrative expenses for the twelve months ended December 31, 2024 increased to $29.1 million as compared to $28.3 million in the same period of 2023 primarily due to higher compensation related expenses, partially offset by lower ordinary legal and professional fees.

EBITDA

EBITDA for the twelve months ended December 31, 2024 amounted to $155.4 million compared to $59.7 million during the prior year period. During 2024 and 2023, EBITDA included non-cash impairment charges, other operating expenses, gains on sale of vessels as well as gains and losses on fuel hedges. Excluding these items, our adjusted EBITDA would have amounted to $151.2 million and $101.5 million, for the respective periods.

Liquidity and Capital Resources

Cash Flow

Net cash provided by operating activities for the years ended December 31, 2024 and 2023 was $126.8 million and $91.8 million, respectively.  This increase in cash provided by operating activities was primarily due to higher rates earned by our major and minor bulk vessels, as well as changes in working capital. These increases were partially offset by an increase in drydocking costs incurred during 2024 as compared to 2023.

Net cash provided by (used in) investing activities during the years ended December 31, 2024 and 2023 was $47.8 million and ($91.6) million, respectively.  This fluctuation was primarily a result of $103.3 million of net proceeds from the sale of the Genco Commodus, the Genco Claudius, the Genco Maximus, the Genco Warrior and the Genco Hadrian during 2024.  There was also a decrease in the purchase of vessels by $37.7 million as we purchased two Capesize vessels that delivered during the fourth quarter of 2023 as compared to one Capesize vessel that delivered during the fourth quarter of 2024. These fluctuations were partially offset by a $1.2 million decrease in insurance proceeds for hull and machinery claims for our vessels.

Net cash used in financing activities during the years ended December 31, 2024 and 2023 was $177.5 million and $17.4 million, respectively.  During 2024, there was a $139.0 million increase in total net cash used in financing activities related to our credit facilities as compared to 2023. This was primarily due to a $94.0 million increase in debt repayments during 2024 as compared to 2023.  Additionally, excluding the refinancing of the $450 Million Credit Facility with the $500 Million Revolver, there was a $45.0 million decrease in drawdowns during 2024 as compared to 2023 as there was a $20.0 million draw down during the fourth quarter of 2024 to partially finance the purchase of one Capesize vessel that was delivered during the fourth quarter of 2024 as compared to total drawdowns of $65.0 million drawn down during the fourth quarter of 2023 used to partially finance the purchase two Capesize vessels that delivered during the fourth quarter of 2023. Additionally, there was a $26.6 million increase in the payment of dividends during 2024 as compared to 2023.  These increases were partially offset by a $5.5 million decrease in deferred financing costs during 2024 as compared to 2023 related to the $500 Million Revolver that was entered into on November 29, 2023 to amend our $450 Million Credit Facility.

Capital Expenditures

Genco's fleet consists of 42 vessels with an average age of 12.2 years and an aggregate capacity of approximately 4,446,000 dwt as follows:

• 16 Capesizes
• 15 Ultramaxes
• 11 Supramaxes

We estimate our capital expenditures related to drydocking, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment system costs, fuel efficiency upgrades and scheduled off-hire days for our fleet for the balance of 2025 to be:

(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 on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses.

(2) Estimated costs associated with the installation of ballast water treatment systems are expected to be funded with cash on hand.

(3) Estimated costs associated with the installation of fuel efficiency upgrades are expected to be funded with cash on hand.

(4) Actual length will vary based on the condition of the vessel, yard schedules and other factors. The estimated offhire days per sector scheduled for Q1 2025 consists of 140 days for four Capesizes, 30 days for one Ultramax and 120 days for four Supramaxes.

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.