Genco Shipping & Trading Limited Announces Third Quarter 2012
Financial Results
NEW YORK, Oct. 31, 2012 /PRNewswire/ -- Genco Shipping
& Trading Limited (NYSE: GNK) ("Genco" or the "Company") today
reported its financial results for the three and nine months ended
September 30, 2012.
The following financial review discusses the results for the
three and nine months ended September 30,
2012 and September 30,
2011.
Third Quarter 2012 and
Year-to-Date Highlights
- Recorded net loss attributable to Genco for the third quarter
of $38.4 million, or $0.90 basic and diluted loss per share;
- Maintained cash position of $97.9
million on a consolidated basis, including restricted cash;
- $94.6 million at Genco Shipping
& Trading Limited, including restricted cash;
- $3.3 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-term 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 Third
Quarter
The Company recorded net loss attributable to Genco for the
third quarter of 2012 of $38.4
million, or $0.90 basic and
diluted loss per share. Comparatively, for the three months ended
September 30, 2011, net income
attributable to Genco was $1.6
million, or $0.04 basic and
diluted earnings per share.
EBITDA was $18.4 million for the
three months ended September 30, 2012
versus $57.9 million for the three
months ended September 30,
2011.
Robert Gerald Buchanan,
President, commented, "During the third quarter, we continued to
employ a majority of our vessels on short-term or spot
market-related contracts that preserve the ability to capitalize on
future rate increases. By maintaining an opportunistic time charter
approach combined with a cost-effective operating platform, we
expect to increase the Company's future earnings potential when
market conditions improve. As we remain focused on taking advantage
of the long-term demand for essential drybulk commodities, our
large and modern fleet bodes well for Genco to continue to provide
customers with service that meets the highest industry
standards."
Genco's voyage revenues decreased to $53.6 million for the three months ended
September 30, 2012 versus
$93.5 million for the three months
ended September 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 third
quarter of 2012 compared to the third quarter of 2011. The average
daily time charter equivalent, or TCE, rates obtained by the
Company's fleet decreased to $9,119
per day for the three months ended September
30, 2012 compared to $16,447
per day for the three months ended September
30, 2011. The decrease in TCE rates resulted from lower
charter rates achieved in the third quarter of 2012 versus the same
period in 2011 for the majority of the vessels in our fleet.
Increased vessel supply coupled with negative sentiment on the rate
of growth in emerging economies were the main contributors of
reduced rates during the third quarter. The effect of these
contributors was partially offset by record scrapping of older
tonnage. Chinese iron ore restocking commencing at the end of
September along with a reverse in sentiment appears to have led to
a relative rate improvement with the BDI currently at 1,026.
Total operating expenses increased to $74.6 million for the three months ended
September 30, 2012 from $71.0 million for the three-month period ended
September 30, 2011. Vessel operating
expenses were $28.3 million for the
third quarter of 2012 compared to $26.1
million for the same period in 2011. The slight increase in
vessel operating expenses was primarily due to the increase in the
size of our fleet, as well as higher expenses related to crewing
and maintenance for the third quarter of 2012 versus the same
period in 2011.
Depreciation and amortization expenses slightly increased to
$35.0 million for the third quarter
of 2012 from $34.4 million for the
third quarter of 2011 as a result of the growth of our fleet.
General, administrative and management fees decreased to
$8.6 million in the third quarter of
2012 from $8.8 million in the third
quarter of 2011. The decrease was primarily due to lower non-cash
compensation offset by slightly higher third-party management fees
due to the growth of our fleet and higher office-related
expenses.
Daily vessel operating expenses, or DVOE, increased to
$4,956 per vessel per day during the
third quarter of 2012 as compared to $4,673 per vessel per day for the third quarter
of 2011, mainly due to higher expenses related to crewing and
maintenance. We note that our third quarter of 2012 DVOE is below
our budget set forth at the beginning of the year. 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 fourth quarter 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, "During the third quarter, we
enhanced our financial flexibility by entering into agreements to
amend the Company's three credit facilities. Specifically, we
eliminated the scheduled amortization payments and extended the
existing waivers for both the maximum leverage ratio covenant and
the interest coverage ratio covenant for each facility through and
including the quarter ending December 31,
2013. The ongoing support we have received from our lending
group in a challenging drybulk market continues to serve as a core
differentiator as we remain dedicated to maintaining a strong
financial platform for the benefit of the Company and its
shareholders."
Financial Review: Nine Months
2012
The net loss attributable to Genco was $99.3 million or $2.40 basic and diluted loss per share for the
nine months ended September 30, 2012,
compared to net income attributable to Genco of $25.1 million or $0.71 basic and diluted earnings per share for
the nine months ended September 30,
2011. Voyage revenues decreased to $174.7 million for the nine months ended
September 30, 2012 compared to
$292.6 million for the nine months
ended September 30, 2011. EBITDA was
$70.4 million for the nine months
ended September 30, 2012 versus
$191.8 million for the nine months
ended September 30, 2011. TCE rates
obtained by the Company decreased to $10,218 per day for the nine months ended
September 30, 2012 from $17,935 per day for the nine months ended
September 30, 2011, mainly due to
lower rates achieved for our vessels during the first nine 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 $220.4
million for the nine months ended September 30, 2012 compared to $206.4 million for the nine months ended
September 30, 2011, and daily vessel
operating expenses per vessel were $5,040 versus $4,706 for the comparative periods, mainly due to
higher maintenance and crew related expenses.
Liquidity and Capital
Resources
Cash Flow
Net cash used in operating activities for the nine months ended
September 30, 2012 was $4.0 million versus $121.3
million of net cash provided by operating activities for the
nine months ended September 30, 2011.
The decrease in cash provided by operating activities was primarily
due to a net loss of $108.9 million
for the first nine months of 2012 compared to net income of
$23.4 million for the same period of
2011, which resulted from lower charter rates achieved in the first
nine months of 2012 versus the prior year period for the majority
of the vessels in our fleet.
Net cash used in investing activities for the nine months ended
September 30, 2012 and 2011 was
$3.2 million and $100.4 million, respectively. The decrease
was primarily due to fewer funds used for purchases of vessels
during the first nine months of 2012 compared to the same period in
2011. For the nine months ended September
30, 2012, cash used in investing activities primarily
related to the purchase of fixed assets in the amount of
$1.9 million and vessel related
equipment totaling $0.9 million. For
the nine months ended September 30,
2011, cash used in investing activities predominantly
related to purchases of vessels in the amount of $98.9 million.
Net cash used in financing activities was $132.9 million during the nine months ended
September 30, 2012 as compared to
$39,000 during the nine months ended
September 30, 2011. The
increase in cash used in financing activities was primarily due to
the Company prepaying an aggregate of $99.9
million under its agreements to amend the 2007 Credit
Facility, the $253 Million Term Loan
Facility and the $100 Million Term
Loan Facility in August 2012 as well
as making a scheduled debt repayment under the 2007 Credit Facility
of $48.2 million in July 2012. This was offset by $49.9 million of net proceeds provided by our
follow-on offering in February 2012.
Cash used in financing activities for the first nine months of 2012
consisted of $118.6 million repayment
of debt under the 2007 Credit Facility, $40.6 million repayment of debt under the
$253 Million Term Loan Facility,
$15.4 million repayment of debt under
the $100 Million Term Loan Facility,
$4.3 million of deferred financing
costs and the $3.9 million dividend
payment of our subsidiary, Baltic Trading Limited, to its outside
shareholders. Cash used in financing activities during the first
nine 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 $40.0
million of proceeds from the $100
Million Term Loan Facility related to the Metrostar vessels
acquired offset by the following uses of cash: $37.5 million repayment of debt under the 2007
Credit Facility, $14.8 million
repayment of debt under the $253
Million Term Loan Facility, $3.2
million repayment of debt under the $100 Million Term Loan Facility and the
$5.6 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 one of our
vessels will complete drydocking in the fourth quarter of 2012. We
further anticipate that ten 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:
|
Q4
2012
|
2013
|
|
Estimated
Costs (1)
|
$0.0
million
|
$7.8
million
|
|
Estimated
Offhire Days (2)
|
2
|
200
|
|
|
(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. The
Genco Hunter drydock concluded on October 2, 2012. The
majority of the costs associated with this drydock were incurred
during the third quarter of 2012.
|
(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
fourth quarter of 2012 portion of the Genco Hunter drydock which
amounted to two days.
|
The Genco Carrier, Genco London,
Genco Thunder and Genco Surprise
completed their respective drydockings during the third quarter of
2012, while the Genco Hunter commenced its drydocking on
September 19, 2012 and completed the
same during the fourth quarter, on October
2, 2012. The vessels were on planned offhire for an
aggregate of 71.4 days in connection with their scheduled
drydockings at a cumulative cost of approximately $3.3 million for the third quarter of 2012.
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
|
|
Nine
Months Ended
|
|
|
|
|
September 30, 2012
|
|
September 30, 2011
|
|
September 30, 2012
|
|
September 30, 2011
|
|
|
|
|
(Dollars
in thousands, except share and per share data)
|
|
(Dollars
in thousands, except share and per share data)
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
INCOME
STATEMENT DATA:
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Voyage
revenues
|
$
53,603
|
|
$
93,484
|
|
$
174,740
|
|
$
292,614
|
|
Service
revenues
|
828
|
|
828
|
|
2,466
|
|
2,457
|
|
|
Total
revenues
|
54,431
|
|
94,312
|
|
177,206
|
|
295,071
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Voyage
expenses
|
2,693
|
|
1,702
|
|
5,099
|
|
2,595
|
|
Vessel
operating expenses
|
28,272
|
|
26,133
|
|
85,622
|
|
76,394
|
|
General,
administrative and management fees
|
8,622
|
|
8,759
|
|
25,680
|
|
25,908
|
|
Depreciation and amortization
|
35,038
|
|
34,378
|
|
103,954
|
|
101,484
|
|
|
Total
operating expenses
|
74,625
|
|
70,972
|
|
220,355
|
|
206,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income
|
(20,194)
|
|
23,340
|
|
(43,149)
|
|
88,690
|
|
|
|
|
|
|
|
|
|
|
|
Other
(expense) income:
|
|
|
|
|
|
|
|
|
Other
(expense) income
|
(43)
|
|
31
|
|
(40)
|
|
(80)
|
|
Interest
income
|
49
|
|
167
|
|
352
|
|
503
|
|
Interest
expense
|
(21,546)
|
|
(21,793)
|
|
(65,160)
|
|
(64,654)
|
|
|
Other
expense:
|
(21,540)
|
|
(21,595)
|
|
(64,848)
|
|
(64,231)
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
Income before income taxes:
|
(41,734)
|
|
1,745
|
|
(107,997)
|
|
24,459
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(303)
|
|
(328)
|
|
(918)
|
|
(1,041)
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
(42,037)
|
|
1,417
|
|
(108,915)
|
|
23,418
|
|
|
|
Less: Net
loss attributable to noncontrolling interest
|
(3,588)
|
|
(145)
|
|
(9,626)
|
|
(1,662)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income attributable to Genco Shipping & Trading
Limited
|
$
(38,449)
|
|
$
1,562
|
|
$
(99,289)
|
|
$
25,080
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income per share - basic
|
$
(0.90)
|
|
$
0.04
|
|
$
(2.40)
|
|
$
0.71
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income per share - diluted(1)
|
$
(0.90)
|
|
$
0.04
|
|
$
(2.40)
|
|
$
0.71
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding - basic
|
42,885,810
|
|
35,157,110
|
|
41,290,719
|
|
35,149,912
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding -
diluted(1)
|
42,885,810
|
|
35,212,840
|
|
41,290,719
|
|
35,212,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
|
|
|
BALANCE
SHEET DATA:
|
|
|
|
(unaudited)
|
|
|
|
|
Cash
(including restricted cash)
|
|
|
$
97,928
|
|
$
237,718
|
|
|
|
Current
assets
|
|
|
113,414
|
|
259,365
|
|
|
|
Total
assets
|
|
|
2,894,573
|
|
3,119,277
|
|
|
|
Current
liabilities
|
|
|
28,277
|
|
221,702
|
|
|
|
Total
long-term debt (including note payable)
|
|
|
1,523,165
|
|
1,694,393
|
|
|
|
Shareholders' equity (including $197.9 million and
$210.0 million of non-controlling
|
|
|
1,309,009
|
|
1,361,618
|
|
|
|
interest at September 30, 2012 and December 31, 2011,
respectively)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine
Months Ended
|
|
|
|
|
|
|
|
|
|
September 30, 2012
|
|
September 30, 2011
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
(used in) provided by operating activities
|
|
|
$
(4,012)
|
|
$
121,336
|
|
|
|
Net cash
used in investing activities
|
|
|
(3,242)
|
|
(100,389)
|
|
|
|
Net cash
used in financing activities
|
|
|
(132,936)
|
|
(39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) The convertible notes were anti-dilutive for the quarter and
year to date periods ending September 30,
2012 and September 30,
2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
|
|
September 30, 2012
|
|
September 30, 2011
|
|
September 30, 2012
|
|
September 30, 2011
|
|
|
|
|
|
|
(Dollars
in thousands)
|
|
(Dollars
in thousands)
|
|
|
EBITDA
Reconciliation:
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
Net
(Loss) Income attributable to Genco Shipping & Trading
Limited
|
$
(38,449)
|
|
$
1,562
|
|
$
(99,289)
|
|
$
25,080
|
|
|
|
+
|
Net
interest expense
|
21,497
|
|
21,626
|
|
64,808
|
|
64,151
|
|
|
|
+
|
Income tax
expense
|
303
|
|
328
|
|
918
|
|
1,041
|
|
|
|
+
|
Depreciation and amortization
|
35,038
|
|
34,378
|
|
103,954
|
|
101,484
|
|
|
|
|
|
EBITDA(1)
|
$
18,389
|
|
$
57,894
|
|
$
70,391
|
|
$
191,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
September 30, 2012
|
|
September 30, 2011
|
|
September 30, 2012
|
|
September 30, 2011
|
GENCO
STANDALONE FLEET DATA:
|
(unaudited)
|
|
|
(unaudited)
|
|
Total
number of vessels at end of period
|
53
|
|
52
|
|
53
|
|
52
|
Average
number of vessels(2)
|
53.0
|
|
51.8
|
|
53.0
|
|
50.5
|
Total
ownership days for fleet(3)
|
4,876
|
|
4,765
|
|
14,522
|
|
13,777
|
Total
available days for fleet(4)
|
4,755
|
|
4,753
|
|
14,146
|
|
13,713
|
Total
operating days for fleet(5)
|
4,715
|
|
4,725
|
|
14,054
|
|
13,626
|
Fleet
utilization(6)
|
99.2%
|
|
99.4%
|
|
99.4%
|
|
99.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
DAILY RESULTS:
|
|
|
|
|
|
|
|
Time
charter equivalent(7)
|
$
9,437
|
|
$
17,058
|
|
$
10,613
|
|
$
18,926
|
Daily
vessel operating expenses per vessel (8)
|
4,920
|
|
4,635
|
|
5,037
|
|
4,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
|
September 30, 2012
|
|
September 30, 2011
|
|
September 30, 2012
|
|
September 30, 2011
|
CONSOLIDATED FLEET DATA:
|
(unaudited)
|
|
|
(unaudited)
|
|
Total
number of vessels at end of period
|
62
|
|
61
|
|
62
|
|
61
|
Average
number of vessels(2)
|
62.0
|
|
60.8
|
|
62.0
|
|
59.5
|
Total
ownership days for fleet(3)
|
5,704
|
|
5,593
|
|
16,988
|
|
16,234
|
Total
available days for fleet(4)
|
5,583
|
|
5,581
|
|
16,603
|
|
16,170
|
Total
operating days for fleet(5)
|
5,536
|
|
5,544
|
|
16,494
|
|
16,069
|
Fleet
utilization(6)
|
99.2%
|
|
99.3%
|
|
99.3%
|
|
99.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE
DAILY RESULTS:
|
|
|
|
|
|
|
|
Time
charter equivalent(7)
|
$
9,119
|
|
$
16,447
|
|
$
10,218
|
|
$
17,935
|
Daily
vessel operating expenses per vessel (8)
|
4,956
|
|
4,673
|
|
5,040
|
|
4,706
|
|
|
|
|
|
|
|
|
|
|
|
(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 October 31, 2012, the
average age of our fleet was 7.5 years, as compared to the average
age for the world fleet of approximately 10 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
|
Year
Built
|
Charterer
|
Charter Expiration (1)
|
Cash
Daily
Rate
(2)
|
|
|
|
|
|
Capesize Vessels
|
|
|
|
|
Genco Augustus
|
2007
|
Cargill International S.A.
|
December 2012
|
100% of
BCI
|
Genco Tiberius
|
2007
|
Cargill International S.A.
|
September 2013
|
100% of
BCI(3)
|
Genco London
|
2007
|
Cargill International S.A.
|
July 2013
|
100% of
BCI
|
Genco Titus
|
2007
|
Swissmarine Services S.A.
|
June 2013
|
100% of
BCI
|
Genco Constantine
|
2008
|
Cargill International S.A.
|
October 2013
|
100% of
BCI
|
Genco Hadrian
|
2008
|
Cargill International S.A.
|
November 2012
|
100% of
BCI(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
|
Genco Knight
|
1999
|
Swissmarine Services S.A.
|
March 2013
|
98% of
BPI
|
Genco Leader
|
1999
|
J. Aron & Company
|
December 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
|
Swissmarine Services S.A.
|
September 2013
|
97% of
BPI(5)
|
Genco Raptor
|
2007
|
Global Maritime Investments Ltd.
|
March 2013
|
100% of
BPI
|
Genco Thunder
|
2007
|
Swissmarine Services S.A.
|
June 2013
|
97% of
BPI
|
|
|
|
|
|
Supramax Vessels
|
|
|
|
|
Genco Predator
|
2005
|
D'Amico Dry Ltd.
|
April 2013
|
103% of
BSI
|
Genco Warrior
|
2005
|
Pacific Basin Chartering Ltd.
|
May 2014
|
101% of
BSI(6)
|
Genco Hunter
|
2007
|
Pacific Basin Chartering Ltd.
|
July 2013
|
105% of
BSI
|
Genco Cavalier
|
2007
|
Great Pacific Navigation Corp., Ltd.
|
November 2012
|
$5,900
|
Genco Lorraine
|
2009
|
Pioneer Navigation Ltd.
|
July 2013
|
$9,400
|
Genco Loire
|
2009
|
Clipper Bulk Shipping N.V.
|
July 2013
|
$9,950
|
Genco Aquitaine
|
2009
|
Pioneer Navigation Ltd.
|
March 2013
|
100% of
BSI
|
Genco Ardennes
|
2009
|
Hamburg Bulk Carriers
|
February 2014
|
$10,250
|
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
|
Genco Languedoc
|
2010
|
Clipper Bulk Shipping N.V.
|
January 2013
|
$8,500(7)
|
Genco Normandy
|
2007
|
Bulk Marine
|
November 2012
|
$9,000(8)
|
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
|
Genco Prosperity
|
1997
|
SK Shipping Co. Ltd.
|
November 2012
|
$8,000
|
Genco Wisdom
|
1997
|
Cargill International S.A.
|
November 2012
|
$4,000(9)
|
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
|
February 2013
|
Spot(10)
|
Genco Pioneer
|
1999
|
Lauritzen Bulkers A/S
|
February 2013
|
Spot(10)
|
Genco Progress
|
1999
|
Lauritzen Bulkers A/S
|
November 2013
|
Spot(10)
|
Genco Reliance
|
1999
|
Lauritzen Bulkers A/S
|
November 2013
|
Spot(10)
|
Genco Sugar
|
1998
|
Lauritzen Bulkers A/S
|
November 2013
|
Spot(10)
|
Genco Charger
|
2005
|
AMN Bulk Carriers Inc.
|
March 2013
|
100% of
BHSI(11)
|
Genco Challenger
|
2003
|
AMN Bulk Carriers Inc.
|
December 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(12)
|
Genco Bay
|
2010
|
Cargill International S.A.
|
January 2013
|
$8,500-$13,500 with 50% profit sharing(12)
|
Genco Avra
|
2011
|
Cargill International S.A.
|
March 2014
|
$8,500-$13,500 with 50% profit sharing(12)
|
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(12)
|
|
|
|
|
|
(1) The charter expiration dates presented represent the
earliest dates that our charters may be terminated in the ordinary
course. Under the terms of each contract, the charterer is
entitled to extend the time charter from two to four months in
order to complete the vessel's final voyage plus any time the
vessel has been off-hire.
(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 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 extension
began on October 25, 2012.
(4) We have agreed to an extension with Cargill International
S.A. for one voyage from Australia
to China at a rate 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. The extension began on October 30, 2012.
(5) We have reached an agreement with Swissmarine Services S.A.
on a spot market-related time charter for 10.5 to 13.5 months based
on 97% of the Baltic Panamax Index (BPI), published by the Baltic
Exchange, as reflected in daily reports, except for the initial 45
days in which hire is based on 97% of the rate for the Baltic
Panamax 3A 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 October 22, 2012 after previously being fixed
with BHP Billiton on a spot market-related time charter based on
100% of the Baltic Panamax 3A route.
(6) We have reached an agreement with Pacific Basin Chartering
Ltd. on a spot market-related time charter based on 101% of the
Baltic Supramax Index (BSI), published by the Baltic Exchange, as
reflected in daily reports, except for the initial 45 days in which
hire is based on 101% of the rate for the Baltic Supramax S2
route. The minimum and maximum expiration dates are
May 20, 2014 and August 20, 2014, respectively. 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 101%. The vessel will
deliver to charterers on or about November
7, 2012 after previously being fixed with Trafigura Beheer
B.V. on a spot market-related time charter based on 102% of the
BSI.
(7) We have reached an agreement with Clipper Bulk Shipping N.V.
on a time charter for 3 to 5.5 months at a rate of $7,350 per day for the initial 50 days and
$8,500 per day thereafter. Hire
is paid every 15 days in advance less a 5.00% third party brokerage
commission. The vessel delivered to charterers on
October 16, 2012.
(8) We have reached an agreement with Bulk Marine on a time
charter for approximately 25 days at a rate of $9,000 per day less a 5.00% third party brokerage
commission. Hire is paid every 15 days in advance. The
vessel delivered to charterers on October
13, 2012 after repositioning. The vessel's previous
time charter ended on October 6,
2012.
(9) We have reached an agreement with Cargill International S.A.
on a time charter for approximately 25 days at a rate of
$4,000 per day less a 5.00% third
party brokerage commission. Hire is paid every 15 days in
advance. The vessel delivered to charterers on October 27, 2012 after previously being fixed
with Pacific Basin Chartering Ltd. on a time charter for
$8,500 per day.
(10) 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.
(11) We have agreed to an extension with AMN Bulk Carriers Inc.
for an additional 60 days from the maximum expiration date of the
spot market-related time charter to March
1, 2013. The rate will continue to be based on 100% of
the Baltic Handysize Index (BHSI), published by the Baltic
Exchange, as reflected in daily reports. Hire is paid every
15 days in arrears net of a 5.00% third party brokerage
commission. Genco maintains the option to convert to a fixed
rate based on Handysize FFA values at 100%.
(12) 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
BHSI, 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, November 1,
2012 at 8:30 a.m. Eastern
Time, to discuss its 2012 third 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) 438-5524 or (719) 785-1753 and enter passcode 4044657. 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
4044657. 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; 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