NEW YORK, May 08, 2024 (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 March 31, 2024. First Quarter 2024 and Year-to-Date Highlights Dividend: Declared a $0.42 per share dividend for Q1 2024 19th consecutive quarterly payout Cumulative dividends of $5.575 per share or 25% of our share price1 Q1 2024 dividend is payable on or about May 30, 2024 to all shareholders of record as of May 22, 2024. Financial performance: Net income of $18.8 million for Q1 2024, or basic and diluted earnings per share of $0.44 and $0.43, respectively Adjusted net income of $21.4 million or basic and diluted earnings per share of $0.50 and $0.49, respectively, excluding other operating expense of $1.8 million, a loss on sale of vessels of $1.0 million and unrealized fuel gains of $0.2 million Adjusted EBITDA of $41.9 million for Q1 20242 Voyage revenues: Totaled $117.4 million in Q1 2024 Net revenue2 was $76.7 million during Q1 2024 Average daily fleet-wide TCE2 was $19,219 for Q1 2024 Estimated TCE to date for Q2 2024: $20,126 for 65% of our owned fleet available days, based on both period and current spot fixtures2 Fleet renewal: Finalized the sales of three 2009-2010-built 169,000 dwt Capesize vessels in Q1 and Q2 2024 Deleveraging: Paid down $30.0 million of debt in Q1 2024 and an additional $55.0 million of debt in Q2 2024 to date primarily utilizing proceeds from vessel sales John C. Wobensmith, Chief Executive Officer, commented, "During the first quarter, we further executed our value strategy, which is aimed at driving returns through the drybulk cycles and creating sustained long-term shareholder value. Our first quarter dividend increased quarter-over-quarter and represents our 19th consecutive dividend. Notably, dividends over this period have now increased to $5.575 per share in total, or 25% of our stock price. We also continued to voluntarily pay down debt during the quarter and have lowered our debt by 62% since 2021, while reducing our cash flow breakeven rate to the lowest in the peer group. Finally, we continued to take steps to renew the fleet, closing on the sales of three older Capesize vessels scheduled for special survey in 2024." Mr. Wobensmith continued, "We increased first quarter TCE 38% year-over-year, highlighting our leading commercial platform and significant operating leverage. With 65% of our Q2 days fixed at over $20,000 per day, we expect the second quarter to be strong as we further capitalize on the current positive drybulk fundamentals. Progressing through the year, we are well positioned to continue advancing our value strategy for the benefit of shareholders, with a focus on dividends, deleveraging and growth while maintaining industry leading governance standards." 1 Genco share price as of May 7, 2024.2 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 Q2 2024 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. 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 the Company's asset base This strategy is a key differentiator for Genco, which we believe creates a compelling risk-reward balance to drive shareholder value over the long-term. The Company intends to pay a sizeable quarterly dividend across the cyclicality of the drybulk market while maintaining significant flexibility to grow the fleet through accretive vessel acquisitions. Key characteristics of our unique platform include: Industry low cash flow breakeven rate Net loan-to-value of 7%3 Strong liquidity position of $347.6 million at March 31, 2024, which consists of: $48.7 million of cash on the balance sheet $298.9 million of revolver availability High operating leverage with our scalable fleet across the major and minor bulk sectors 3 Represents the principal amount of our credit facility debt outstanding less our cash and cash equivalents as of March 31, 2024 divided by estimates of the market value of our fleet as of May 7, 2024 from VesselsValue.com. These figures are pro form for vessels sales that occurred in Q2 2024. The actual market value of our vessels may vary. Financial Deleveraging Genco has reduced debt outstanding by ~$280 million or 62% since implementation of our value strategy Debt outstanding: $170.0 million as of March 31, 2024 Paid down $30.0 million of debt in Q1 and an additional $55.0 million of debt in Q2 to date primarily utilizing proceeds from vessel sales We plan to continue to actively manage our debt outstanding under our $500 million revolver to reduce interest expense and our cash flow breakeven rate We plan to continue to voluntarily pay down debt with a medium-term 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 Fleet Renewal Sold three of our 169,000 dwt Capesize vessels in Q1 and Q2 2024. The vessels were sold for aggregate gross proceeds of $66.5 million. These sales resulted in approximately $10 million of drydocking savings in 2024 due to the vessels' upcoming third special surveys. We delivered these vessels to their respective buyers on the following dates: Genco Commodus: February 7, 2024 Genco Maximus: April 2, 2024 Genco Claudius: April 22, 2024 We continue to further evaluate fleet renewal and growth opportunities in the sale and purchase market. Dividend Policy Genco declared a cash dividend of $0.42 per share for the first quarter of 2024. This represents our tenth dividend payment under our value strategy with cumulative dividends declared to date of $4.52 per share. The Q1 2024 dividend is payable on or about May 30, 2024 to all shareholders of record as of May 22, 2024. Quarterly dividend policy: 100% of excess quarterly operating cash flow ex-maintenance and withholding for future investment 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. The table includes the calculation of the actual Q1 2024 dividend and estimated amounts for the calculation of the dividend for Q2 2024: Dividend calculation Q1 2024 actual Q2 2024 estimates Net revenue $ 76.74   Fixtures + market Operating expenses   (35.96 )   (34.54 ) Less: capex for dydocking/BWTS/ESDs   (3.05 )   (5.64 ) Operating cash flow less DD capex $ 37.73   Sum of the above Less: voluntary quarterly reserve   (19.50 )   (19.50 ) Cash flow distributable as dividends $ 18.23   Sum of the above Number of shares to be paid dividends   43.6     43.6   Dividend per share $ 0.42     Numbers in millions except per share amounts     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 and capital expenditures for Q2 2024 are estimates and subject to change. Operating expenses exclude incremental annual meeting related expenses for the first quarter and are expected to exclude such expenses for the second quarter. The voluntary quarterly reserve for the second quarter of 2024 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 The Board expects to reassess the payment of dividends as appropriate from time to time. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facility) and the Board of Directors' determination that each declaration and payment is at the time in the best interests of the Company and its shareholders after its review of our financial performance. Peter Allen, Chief Financial Officer, commented, "In the year-to-date, we have utilized the built-in flexibility of our $500 million revolving credit facility to voluntarily pay down $85 million of debt so far this year. This active management of our balance sheet has enabled Genco to further lower interest expense and our cash flow breakeven rate, supplementing our earnings and dividend capacity. We continue to improve upon our strong financial position in this firm market while maintaining optionality given the Company's undrawn revolver availability, low cash flow breakeven rate and a net loan-to-value ratio at an industry low of 7%." 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 fleet deployment strategy currently remains weighted towards short-term fixtures, which provide us with optionality on our sizeable fleet. 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 second quarter of 2024 on a load-to-discharge basis is presented below. Actual rates for the second 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 second quarter of 2024. At the same time, expenses for uncontracted days will be recognized. Estimated net TCE - Q2 2024 to Date       Vessel Type Fleet-wide % Fixed Capesize $ 30,546     58 % Ultra/Supra $ 14,658     69 % Total $ 20,126     65 %               Our index-linked and period time charters are listed below. Vessel Type DWT Year Built Rate Duration Min Expiration Genco Resolute Capesize 181,060 2015 BCI + 27% + scrubber 11-14 months Jul-24 Genco Defender Capesize 180,021 2016 BCI + 25% + scrubber 11-14 months Jul-24 Genco Reliance Capesize 181,146 2016 BCI + 28% + scrubber 10-12 months Jan-25 Genco Ranger Capesize 180,882 2016 BCI + 28% + scrubber 11-14 months Feb-25 Genco Liberty Capesize 180,032 2016 $ 35,000   11-14 months Feb-25                   Financial Review: 2024 First Quarter The Company recorded net income for the first quarter of 2024 of $18.8 million, or $0.44 and $0.43 basic and diluted earnings per share, respectively. Adjusted net income of $21.4 million, or $0.50 and $0.49 basic and diluted earnings per share, respectively, excluding other operating expense of $1.8 million, a loss on sale of vessels of $1.0 million and unrealized fuel gains of $0.2 million. Comparatively, for the three months ended March 31, 2023, the Company recorded net income of $2.6 million, or $0.06 basic and diluted earnings per share, respectively. Revenue / TCEThe Company's revenues increased to $117.4 million for the three months ended March 31, 2024, as compared to $94.4 million recorded for the three months ended March 31, 2023, primarily due to higher freight rates earned by our major bulk vessels. The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet was $19,219 per day for the three months ended March 31, 2024 as compared to $13,947 per day for the three months ended March 31, 2023. Voyage expensesVoyage expenses decreased marginally to $37.2 million for the three months ended March 31, 2024 from $37.4 million during the prior year period. Vessel operating expensesVessel operating expenses increased to $25.9 million for the three months ended March 31, 2024 from $24.4 million for the three months ended March 31, 2023. Daily vessel operating expenses, or DVOE, amounted to $6,275 per vessel per day for the first quarter of 2024 compared to $6,160 per vessel per day for the first quarter of 2023. The increase was primarily due to the timing of the purchase of stores and higher repair and maintenance costs. 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 current estimates, our DVOE budget for Q2 2024 is $6,350 per vessel per day on a fleet-wide basis. General and administrative expensesGeneral and administrative expenses decreased marginally to $7.7 million for the first quarter of 2024 compared to $7.8 million for the first quarter of 2023. Other operating expenseOther operating expense of $1.8 million recorded during the three months ended March 31, 2024 consists of costs incremental to routine expenses that were incurred related to the Company's 2024 annual meeting to be held on May 23, 2024. Depreciation and amortization expensesDepreciation and amortization expenses increased to $17.2 million for the three months ended March 31, 2024 from $15.9 million for the three months ended March 31, 2023, primarily due to an increase in drydocking amortization expense for certain vessels that completed their respective drydockings during 2023. Liquidity and Capital Resources Cash Flow Net cash provided by operating activities for the three months ended March 31, 2024 and 2023 was $32.3 million and $19.6 million, respectively. This increase in cash provided by operating activities was primarily due to higher freight rates earned by our major bulk vessels and changes in working capital.  There was also a decrease in drydocking costs incurred during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Net cash provided by (used in) investing activities for the three months ended March 31, 2024 and 2023 was $17.5 million and ($2.9) million, respectively. This fluctuation was primarily a result of $18.5 million of proceeds from the sale of the Genco Commodus during the first quarter of 2024. Net cash used in financing activities for the three months ended March 31, 2024 and 2023 was $47.9 million and $30.4 million, respectively.  The increase is primarily due to a $21.3 million increase in debt repayments made during the first quarter of 2024 as compared to the first quarter of 2023.  This increase was partially offset by a $3.8 million decrease in the payment of dividends during the first quarter of 2024 as compared to the first quarter of 2023. Capital Expenditures Genco's fleet of 43 vessels as of May 8, 2024, consists of: 16 Capesizes 15 Ultramaxes 12 Supramaxes The fleet's average age is 11.8 years and has an aggregate capacity of approximately 4,490,000 dwt. In addition to acquisitions that we may undertake, we will incur additional capital expenditures due to special surveys and drydockings. Furthermore, we plan to upgrade a portion of our fleet with energy saving devices and apply high performance paint systems to our vessels in order to reduce fuel consumption and emissions. We estimate our capital expenditures related to drydocking, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment system costs, fuel efficiency upgrades and scheduled off-hire days for our fleet for the balance of 2024 to be: Estimated costs ($ in millions) Q2 2024 Q3 2024 Q4 2024 Drydock Costs (1) $ 4.38   $ 5.55   $ 5.85   Estimated BWTS Costs (2) $ 0.58   $ -   $ -   Fuel Efficiency Upgrade Costs (3) $ 0.68   $ 1.23   $ 0.96   Total Costs $ 5.64   $ 6.78   $ 6.81   Estimated Offhire Days (4)   85     85     90                       (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 Q2 2024 consists of 64 days for three Ultramaxes and 21 days for one Supramax. 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 EndedMarch 31, 2024   Three Months EndedMarch 31, 2023   (Dollars in thousands, except share and per share data)   (unaudited) INCOME STATEMENT DATA:       Revenues:       Voyage revenues $ 117,435     $ 94,391   Total revenues   117,435       94,391           Operating expenses:       Voyage expenses   37,200       37,435   Vessel operating expenses   25,932       24,393   Charter hire expenses   3,510       3,664   General and administrative expenses (inclusive of nonvested stock amortization expense of $1,382 and $1,559, respectively)   7,664       7,750   Technical management expenses   1,031       762   Depreciation and amortization   17,223       15,944   Loss on sale of vessels   978       -   Other operating expense   1,804       -   Total operating expenses   95,342       89,948                   Operating income   22,093       4,443           Other income (expense):       Other income (expense)   66       (324 ) Interest income   824       770   Interest expense   (4,040 )     (2,029 ) Other expense, net   (3,150 )     (1,583 )                 Net income $ 18,943     $ 2,860           Less: Net income attributable to noncontrolling interest