Declares $0.66 per Share Dividend for Q3 2007
NEW YORK, Oct. 31 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today reported its financial results for the three months
and nine months ended September 30, 2007.
The following financial review discusses the results for the three months
and for the nine months ended September 30, 2007 and September 30, 2006.
Third Quarter 2007 and Year-to-Date Highlights
- Declared a dividend of $0.66 per share, based on Q3 2007 results,
payable on or about November 30, 2007 to all shareholders of record as
of November 16, 2007;
- Excluding the $3.6 million one-time non-cash deferred financing
charge as well as the $0.5 million gain from our forward currency
contracts, we recorded net income of $19.4 million, or $0.77 basic and
$0.76 diluted earnings per share;
- Recorded net income of $16.3 million, or $0.64 basic and diluted
earnings per share;
- Expanded fleet by 173% on a tonnage basis, by agreeing on the
acquisition of nine capesize vessels from companies within the
Metrostar Management Corporation group for an aggregate purchase price
of approximately $1.1 billion, and the acquisition of six drybulk
vessels from companies within Evalend Shipping Co. S.A. for an
aggregate purchase price of $336 million;
- Closed on a new $1.4 billion revolving credit facility with favorable
terms;
- Completed the closing of a $225 million follow-on offering of our
common stock accompanied by a secondary offering by Fleet Acquisition
LLC, on October 2, 2007, at the price of $67.00;
- Accumulated an 18.2% ownership of the outstanding stock of Jinhui
Shipping and Transportation Limited through September 30, 2007,
resulting in an unrealized gain of $96.4 million based on the closing
price of NOK 79.00 on October 31, 2007(a);
- Took delivery of the Genco Augustus, Genco Tiberius and Genco London,
three of the nine vessels from the Metrostar transaction;
- Reached agreements to sell our two oldest vessels, the Genco Trader a
1990-built Panamax and the Genco Commander a 1994-built Handymax for
$44.0 and $44.45 million respectively;
- Paid a $0.66 per share dividend on August 31, 2007 based on Q2 2007
results; and
Reached agreements on the following time charters:
Time Charter Expected
Vessel Charterer Charter Duration Rate (1) Delivery(2)
------------ --------------- -------------------- ------------ -----------
Genco Cargill 54 to 62 months from $52,750(3) Q2 2008
Constantine International delivery date
S.A.
Genco Hanjin Shipping 35 to 37 months from 42,100
Surprise Co., Ltd. delivery to new -
charterer
Genco Wisdom Hyundai 35 to 37.5 months 34,500
Merchant Marine from delivery to -
Co. Ltd. charterer
Genco Korea Line 35 to 37.5 months 33,000
Success Corporation from delivery to new -
charterer
Genco Hyundai 35 to 37.5 months 38,750 Q4 2007
Warrior Merchant Marine from delivery date
Co. Ltd.
Genco Pacific Basin 35 to 37.5 months 24,000 Q4 2007
Charger Chartering Ltd. from delivery date
Genco Pacific Basin 35 to 37.5 months 24,000 Q4 2007
Challenger Chartering Ltd. from delivery date
Genco Pacific Basin 35 to 37.5 months 24,000 Q4 2007
Champion Chartering Ltd. from delivery date
(1) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 1.25% to 6.25% to
third parties. In a time charter, the charterer is responsible for voyage
expenses such as bunkers, port expenses, agents' fees and canal dues.
(2) Dates for vessels being delivered in the future are estimates based on
guidance received from the sellers and/or the respective shipyards.
(3) The Genco Constantine is scheduled to be on charter with Cargill
International S.A., for 54 to 62 months at a gross rate of $52,750 per day,
less a 5% third party brokerage commission. The charter also includes a 50
percent index-based profit sharing component.
(a) Based on the closing price of NOK 79.00 on October 31, 2007 and a
currency swap rate of 5.875 NOK/$USD for the cost basis and a spot exchange
rate of 5.356 NOK/$USD for the appreciation since the purchase of the
position.
Financial Review: 2007 Third quarter
Excluding the $3.6 million one-time non-cash deferred financing charge, as
well as the $0.5 million gain on forward currency contracts, the Company
recorded net income for the third quarter of 2007 of $19.4 million, or $0.77
basic and $0.76 diluted earnings per share. Net income was $16.3 million or
$0.64 basic and diluted earnings per share for the three months ended
September 30, 2007. Comparatively, for the three months ended September 30,
2006 net income was $12.9 million or $0.51 basic and diluted earnings per
share. Included in net income for the third quarter of 2007 is a $3.6 million
one time, non-cash deferred financing charge as a result of the retirement of
our previous credit facilities. Also included in net income for the third
quarter of 2007 is a $0.5 million gain from forward currency contracts
associated with the cost basis of Jinhui common stock.
EBITDA was $33.0 million for the three months ended September 30, 2007
versus $22.0 million for the three months ended September 30, 2006.
Robert Gerald Buchanan, President, commented, "Our strong performance for
the third quarter is testimony to the considerable success that management has
achieved throughout the year in capitalizing on a robust drybulk market and
locking away a large portion of our fleet on time charters at accretive
levels. During the quarter, we signed time charters for an additional eight
vessels over the long term at attractive rates, including five of the 15
drybulk vessels that we agreed to acquire in July and August of 2007. In
addition to the revenue stream from these time charters, time charters for two
of our vessels include index-based profit sharing components, enabling Genco
to benefit from future rate increases without sacrificing the base rate.
Currently, we have approximately 93% of our fleet's estimated available days
secured on contracts for the remainder of 2007 and 76% for 2008. As we
maintained our focus on expanding our significant time charter coverage, we
also agreed to sell two of the oldest vessels in our fleet at favorable
prices. Consistent with our goal to operate a world-class fleet that meets the
highest standards, the sale of these two vessels further improves the average
age of our fleet and positions Genco well to continue to provide multinational
charterers with high-quality tonnage for the benefit of the Company and our
shareholders."
Genco Shipping & Trading Limited recorded revenues of $45.6 million for
the three months ended September 30, 2007 versus $32.6 million for the three
months ended September 30, 2006, an increase of 39.8%, primarily due to the
operation of a larger fleet.
The average daily time charter equivalent, or TCE, rates obtained by the
Company's fleet increased 19.5% to $24,362 per day for the three months ended
September 30, 2007 compared to $20,387 for the three months ended September
30, 2006. The increase in TCE rates was due to higher time charter rates
achieved in the third quarter of 2007 versus the same period last year for 2
of the Panamax and 3 of the Handymax vessels in our current fleet. Higher
rates were also recorded for the Genco Leader and Genco Trader, the two
vessels which operated in the Baumarine pool during the third quarter of 2006
and were subject to fluctuations of the spot market. Finally, included in Q3
2007 TCE rates are the time charter rates for the 3 Capesize vessels from the
Metrostar acquisition. The increase was countered by lower charter rates
achieved in the third quarter of 2007 versus the third quarter of 2006 for the
five Handysize vessels on charter with Lauritzen Bulkers A/S, which commenced
their time charter contracts at $13,500 per vessel per day during the third
quarter of 2006. The five Handysize vessels commenced time charter extensions
at higher rates of $19,500 per vessel per day on September 5, 2007.
Total operating expenses increased to $20.5 million for the three months
ended September 30, 2007 from $15.9 million for the three-month period ended
September 30, 2006. Vessel operating expenses were $6.7 million for the third
quarter of 2007 compared to $5.8 million for the same period last year. The
increase in vessel operating expenses was due to the operation of a larger
fleet, as well as higher crewing and lube expenses. Our vessel operating
expenses, which generally represent fixed costs, will increase as a result of
the expansion of our fleet. Depreciation and amortization expenses increased
as a result of the operation of a larger fleet. General and administrative
expenses increased to $3.4 million from $2.1 million during the comparative
periods. The rise was due to higher legal expenses, costs associated with
higher employee non-cash compensation and other employee related costs.
Management fees were $0.4 million for the three months ended September 30,
2007 and for the three months ended September 30, 2006, respectively, and
relate to fees paid to our independent technical managers.
Daily vessel operating expenses decreased to $3,665 per vessel per day
during the third quarter of 2007 from $3,681 for the same quarter last 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. Through the first nine months of 2007 daily vessel operating
expenses of $3,673 compare favorably to our initial 2007 budget of $3,682 per
vessel per day for our current fleet excluding the capesize vessels. Based on
estimates provided by our technical managers and management's expectations, we
anticipate the budget for the Capesize vessels expected to be delivered
through the end of 2007 to be $4,900 per vessel per day. The Company expects
an increase in its 2008 budget to reflect the anticipated increased cost for
crewing and lubes.
Financial Review: Nine Months 2007
Net income was $49.9 million or $1.97 basic and $1.96 diluted earnings per
share, for the nine months ended September 30, 2007 compared to $47.0 million,
or $1.86 basic and diluted earnings per share for the nine months ended
September 30, 2006. Included in net income for the nine months ended September
30, 2007 is a loss from our forward currency contracts of $1.1 million, a $3.6
million one time, non-cash deferred financing charge as a result of the
retirement of our previous credit facilities, and a gain of $3.6 million
related to the sale of the Genco Glory. Revenues increased 22.7% to $119.7
million for the nine months ended September 30, 2007 compared to $97.5 million
for the nine months ended September 30, 2006. EBITDA was $88.9 million for the
nine months ended September 30, 2007 versus $74.1 for the nine months ended
September 30, 2006. TCE rates obtained by the Company increased 7.6% to
$22,065 per day for the nine months ended September 30, 2007 from $20,462 for
the same period in 2006. Total operating expenses were $53.8 million for the
nine months ended September 30, 2007 compared to $45.7 for the nine months
ended September 30, 2006, and daily vessel operating expenses per vessel were
$3,673 versus $3,237 for the comparative periods.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the nine months ended
September 30, 2007 increased 3.5% to $68.8 million from $66.3 million. The
increase was primarily due to the operation of a larger fleet, which
contributed to increases in net income, depreciation, accounts payable, and
deferred revenues. These increases were offset by an unrealized net gain of
$5.9 million, which includes an unrealized gain on currency translation on
Jinhui common stock and an unrealized loss on derivative instruments, as well
as a $3.6 million gain related to the sale of the Genco Glory for the nine
months ended September 30, 2007 as opposed to an unrealized gain of $0.02
million for the nine months ended September 30, 2006 related to derivative
instruments. Net cash provided by operating activities for the nine months
ended September 30, 2007 was primarily a result of recorded net income of
$49.9 million, less the gain from the sale of the Genco Glory of $3.6 million,
less the unrealized gain on derivative instruments of $5.9 million, plus
depreciation and amortization charges of $22.8 million. For the nine months
ended September 30, 2006, net cash provided by operating activities was mostly
a result of recorded net income of $47.0 million, and depreciation and
amortization charges of $19.6 million.
Net cash used in investing activities increased to $648.0 million for the
nine months ended September 30, 2007 from $9.3 million for the nine months
ended September 30, 2006. For the nine months ended September 30, 2007, the
cash used in investing activities related primarily to the purchase of $115.5
million of Jinhui stock, the purchase of vessels of $348.3 million, and
deposits made on vessels of $196.6 million, slightly offset by proceeds
received from the sale of the Genco Glory of $13.0 million. For the nine
months ended September 30, 2006, the cash used in investing activities
primarily related to the purchase of fixed assets for $1.1 million and
deposits on vessels to be acquired of $8.1 million.
Net cash provided by (used in) financing activities for the nine months
ended September 30, 2007 and 2006 was $556.8 million and ($38.4) million,
respectively. For the nine months ended September 30, 2007, net cash provided
by financing activities consisted of the drawdown of $77.0 million related to
the purchase of the Jinhui shares, the drawdown of $826.2 million related to
deposits for vessel acquisitions, the completion of three vessel acquisitions,
the refinancing of our prior credit facilities, the payment of cash dividends
of $50.5 million and the repayment of $288.9 million under our prior credit
facilities. For the same period last year, net cash used in financing
activities consisted primarily of the payment of dividends of $45.8 million.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel
acquisitions. Our current fleet consists of three Capesize drybulk carriers,
seven Panamax drybulk carriers, seven Handymax drybulk carriers and five
Handysize drybulk carriers. After the sale of the Genco Trader and the Genco
Commander as well as the delivery of six vessels from affiliates of Evalend
Shipping Co. S.A. and the six remaining vessels from companies within the
Metrostar Management Corporation group, Genco Shipping & Trading Limited will
own a fleet of 32 drybulk vessels, consisting of nine Capesize, six Panamax,
three Supramax, six Handymax and eight Handysize vessels, with a carrying
capacity of approximately 2,700,000 dwt.
In addition to acquisitions that we may undertake in future periods, we
will incur additional capital expenditures due to special surveys and
drydockings for our fleet. We estimate that two vessels will be drydocked
during the fourth quarter of 2007. One of these vessels, the Genco Beauty,
will be drydocked for an intermediate survey and we therefore anticipate a
shorter offhire period of five days. An additional four vessels are estimated
to be drydocked in 2008 and five in 2009. We estimate our drydocking costs for
our fleet through 2009 to be:
Q4 2007 2008 2009
Estimated Costs (1) $1.0 million $2.7 million $3.8 million
Estimated Offhire Days (2) 25 80 100
(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 (except for the Genco Beauty
which will undergo an intermediate survey and is only expected to be offhire
for 5 days). Actual length will vary based on the condition of the vessel,
yard schedules and other factors.
The Genco Wisdom completed its drydocking during the third quarter of 2007
at a cost of approximately $0.8 million.
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 September September September
30, 2007 30, 2006 30, 2007 30, 2006
(Dollars in thousands, (Dollars in thousands,
except share and per except share and per
share data) share data)
(unaudited) (unaudited)
INCOME STATEMENT DATA:
Revenues $45,630 $32,642 $119,697 $97,516
Operating expenses:
Voyage expenses 1,853 1,056 4,284 3,220
Vessel operating expenses 6,702 5,757 19,536 15,022
General and
administrative expenses 3,395 2,055 9,642 6,808
Management fees 414 353 1,157 1,047
Depreciation and
amortization 8,159 6,681 22,778 19,638
Gain on sale of vessel - - (3,575) -
Total operating expenses 20,523 15,902 53,822 45,735
Operating income 25,107 16,740 65,875 51,781
Other (expense) income:
Gain (Loss) income from
derivative instruments 475 (2,195) (1,119) 2
Interest income 823 827 2,777 2,080
Interest expense (10,085) (2,468) (17,655) (6,859)
Other (expense) income: (8,787) (3,836) (15,997) (4,777)
Net income $16,320 $12,904 $49,879 $47,004
Earnings per share - basic $0.64 $0.51 $1.97 $1.86
Earnings per share -
diluted $0.64 $0.51 $1.96 $1.86
Weighted average shares
outstanding - basic 25,336,587 25,288,695 25,319,479 25,270,831
Weighted average shares
outstanding - diluted 25,481,948 25,371,882 25,453,502 25,338,031
September 30, 2007 December 31, 2006
BALANCE SHEET DATA: (unaudited)
Cash $51,238 $73,554
Current assets, including cash 316,271 88,118
Total assets 1,338,347 578,262
Current liabilities, including
current portion of long-term debt 283,680 15,173
Total long-term debt, including
current portion 826,200 211,933
Shareholders' equity 438,661 353,533
Nine Months Ended
September 30, 2007 September 30, 2006
(unaudited)
Net cash provided by operating activities $68,800 $66,321
Net cash used in investing activities (647,955) (9,251)
Net cash provided by (used in)
financing activities 556,840 (38,383)
Three Months Ended Nine Months Ended
September September September September
30, 2007 30, 2006 30, 2007 30, 2006
FLEET DATA: (unaudited) (unaudited)
Total number of vessels at end of
period 22 17 22 17
Average number of vessels (1) 19.9 17.0 19.5 17.0
Total ownership days for fleet (2) 1,829 1,564 5,319 4,641
Total available days for fleet (3) 1,797 1,549 5,231 4,608
Total operating days for fleet (4) 1,792 1,535 5,163 4,571
Fleet utilization (5) 99.7% 99.1% 98.7% 99.2%
AVERAGE DAILY RESULTS:
Time charter equivalent (6) $24,362 $20,387 $22,065 $20,462
Daily vessel operating expenses
per vessel (7) 3,665 3,681 3,673 3,237
Three Months Ended Nine Months Ended
September September September September
30, 2007 30, 2006 30, 2007 30, 2006
(Dollars in (Dollars in
thousands) thousands)
EBITDA Reconciliation: (unaudited) (unaudited)
Net Income $16,320 $12,904 $49,878 $47,004
+ Net interest expense 9,262 1,641 14,878 4,779
+ Depreciation and amortization 8,159 6,681 22,778 19,638
+ Amortization of nonvested stock
compensation 470 318 1,641 1,334
+ Amortization of value of time
charters acquired (1,176) 466 (259) 1,383
EBITDA(8) 33,035 22,010 88,915 74,138
(1) 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.
(2) 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.
(3) 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. 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.
(4) 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.
(5) 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.
(6) 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.
(7) 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.
(8) EBITDA represents net income plus net interest expense, income tax
expense, depreciation and amortization, amortization of nonvested stock
compensation, and amortization of the value of time charter acquired. 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 consolidating internal
financial statements and it is presented for review at our board meetings.
EBITDA is also used by our lenders in certain loan covenants. For these
reasons, we believe that EBITDA is a useful measure to present to our
investors. 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.
Genco Shipping & Trading Limited's Fleet
Our current fleet consists of three Capesize, seven Panamax, seven
Handymax and five Handysize drybulk carriers with an aggregate carrying
capacity of approximately 1,522,000 dwt. Our current fleet contains four
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 September 30, 2007, the average age of our
current fleet was 8.3 years, as compared to the average age for the world
fleet of approximately 16 years for the drybulk shipping segments in which we
compete. All of the vessels in our current fleet are currently on long-term
time charters with an average remaining life of approximately 19 months as of
September 30, 2007.
The following table reflects the current employment of Genco's current
fleet as well as the employment or other status of vessels expected to join
Genco's fleet:
Revenue
Charter Daily Expected
Year Expiration Cash Daily Rate Delivery
Vessel Built Charterer (1) Rate (2) (3) (4)
-------------- ------- ------------- ---------- ---------- ------ --------
Capesize
Vessels
--------
Genco Augustus 2007 Cargill December 45,263 62,750 -
International 2009
Genco Tiberius 2007 Cargill January 45,263 62,750 -
International 2010
S.A.
Genco London 2007 SK Shipping August 57,500 64,250
Co., Ltd 2010
Genco Titus 2007(5) Cargill 48 to 62 45,000(6) 46,250 Q4 2007
International months
S.A. from
delivery
date
Genco 2008(5) Cargill 54 to 62 52,750(7) Q2 2008
Constantine International months
S.A. from
delivery
date
Genco Hadrian 2008(5) To be TBD TBD Q4 2008
determined
("TBD")
Genco Commodus 2009(5) TBD TBD TBD Q2 2009
Genco Maximus 2009(5) TBD TBD TBD Q2 2009
Genco Claudius 2009(5) TBD TBD TBD Q3 2009
Panamax
Vessels
--------
Genco Beauty 1999 Cargill May 2009 31,500 -
International
S.A.
Genco Knight 1999 SK Shipping May 2009 37,700 -
Ltd.
Genco Leader 1999 A/S Klaveness December 25,650(8) -
2008
Genco 1990 Baumarine AS November 25,750(8) -
Trader(9) 2007
Genco Vigour 1999 STX Panocean March 29,000(10) -
(UK) Co. Ltd. 2009
Genco Acheron 1999 STX Panocean February 30,000 -
(UK) Co. Ltd. 2008
Genco Surprise 1998 Cosco Bulk November 25,000 -
Carrier Co., 2007
Ltd.
Hanjin 35 to 37 42,100 -
Shipping Co., months
Ltd. from
delivery
to new
charterer
Supramax
Vessels
--------
Genco Predator 2005(5) Intermare January 22,500(11) 41,000 Q4 2007
Transport GmbH 2008
Genco Warrior 2005(5) Hyundai 35 to 38,750 Q4 2007
Merchant 37.5
Marine months
Co. Ltd. from
delivery
date
Genco Hunter 2007(5) TBD TBD TBD Q4 2007
Handymax
Vessels
--------
Genco Success 1997 Korea Line March 24,000/ -
Corporation 2008/ 33,000(12)
January
2011
Genco 1994 A/S Klaveness November 19,750 -
Commander(13) 2007
Genco Carrier 1998 Pacific Basin February 24,000 -
Chartering 2008
Ltd.
Genco 1997 Pacific Basin April 26,000 -
Prosperity Chartering 2008
Ltd.
Genco Wisdom 1997 Hyundai February 24,000 -
Merchant 2008(14) 34,500
Marine January
Co. Ltd. 2011
Genco Marine 1996 NYK Bulkship February 24,000 -
Europe S.A. 2008
Genco Muse 2001 Qatar November 26,500(15) -
Navigation QSC 2007
Handysize
Vessels
--------
Genco Explorer 1999 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco Pioneer 1999 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco Progress 1999 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco Reliance 1999 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco Sugar 1998 Lauritzen August 19,500 -
Bulkers A/S 2009
Genco Charger 2005(5) Pacific Basin 35 to 24,000 Q4 2007
Chartering 37.5
Ltd. months
from
delivery
date
Genco 2003(5) Pacific Basin 35 to 24,000 Q4 2007
Challenger Chartering 37.5
Ltd. months
from
delivery
date
Genco Champion 2006(5) Pacific Basin 35 to 24,000 Q4 2007
Chartering 37.5
Ltd. months
from
delivery
date
(1) The charter expiration dates presented represent the earliest dates
that our charters may be terminated in the ordinary course. Except as
indicated for the Genco Titus in note 6 below, under the terms of each
contract, the charterer is entitled to extend 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.
(2) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 1.25% to 6.25% to
third parties, except as indicated for the Genco Trader and the Genco Leader
in note 8 below. In a time charter, the charterer is responsible for voyage
expenses such as bunkers, port expenses, agents' fees and canal dues.
(3) For the vessels acquired with a below-market time charter rate, the
approximate amount of revenue on a daily basis to be recognized as revenues is
displayed in the column named "Revenue Daily Rate" and is net of any third-
party commissions. Since these vessels were acquired with existing time
charters with below-market rates, we allocated the purchase price between the
respective 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.
For cash flow purposes, we will continue to receive the rate presented in the
"Cash Rate" column until the charter expires.
(4) Dates for vessels being delivered in the future are estimates based on
guidance received from the sellers and/or the respective shipyards.
(5) Year built for vessels being delivered in the future are estimates
based on guidance received from the sellers and/or the respective shipyards.
(6) The Genco Titus is scheduled to be on charter with Cargill
International S.A., for 48 months at a gross rate of $45,000 per day, less a
5% third party brokerage commission. The charter, which is due to expire in
December 2011, also includes a 50 percent index-based profit sharing
component. The charterer has the option to extend the charter for a period of
one year.
(7) The Genco Constantine is scheduled to be on charter with Cargill
International S.A., for 54 to 62 months at a gross rate of $52,750 per day,
less a 5% third party brokerage commission. The charter also includes a 50
percent index-based profit sharing component.
(8) For the Genco Leader and the Genco Trader, the time charter rate
presented is the net daily charterhire rate. There are no payments of
brokerage commissions associated with these time charters.
(9) We have entered into an agreement to sell the Genco Trader to SW
Shipping Co., Ltd. for approximately $44 million, less a 2% brokerage
commission. The delivery is expected to occur in the first quarter of 2008.
(10) We have entered into a time charter for 23 to 25 months at a rate of
$33,000 per day for the first 11 months, $25,000 per day for the following 11
months and $29,000 per day thereafter, less a 5% third-party brokerage
commission. For purposes of revenue recognition, the time charter contract is
reflected on a straight-line basis at approximately $29,000 per day for 23 to
25 months in accordance with generally accepted accounting principles in the
United States, or U.S. GAAP. The time charter, commenced following the
expiration of the vessel's previous time charter on May 5, 2007.
(11) The Genco Predator is currently on charter with Intermare Transport
GmbH at a gross rate of $22,500 per day. The charter is due to expire between
January 2008 and March 2008.
(12) We intend to extend the time charter for an additional 35 to 37.5
months at a rate of $33,000 per day less a 5% third party brokerage
commission. The new charter will commence following the expiration of the
previous charter on March 1, 2008.
(13) We have entered into an agreement to sell the Genco Commander to Dan
Sung Shipping Co. Ltd for approximately $44.5 million, less a 2% brokerage
commission. The delivery is expected to occur in the fourth quarter of 2007.
(14) We have reached an agreement to extend the time charter for an
additional 35 to 37.5 months at a rate of $34,500 per day less a 5% third
party brokerage commission. The new charter will commence following the
expiration of the previous charter on March 1, 2008.
(15) Since this vessel was acquired with an existing time charter at an
above-market rate, we allocated the purchase price between the vessel and an
intangible asset for the value assigned to the above-market charterhire. This
intangible asset was being amortized as a reduction to voyage revenues over
the remaining term of the charter, resulting in a daily rate of approximately
$22,000 recognized as revenues. For cash flow purposes, we will continue to
receive $26,500 per day until the charter expires. Effective September 3,
2007, we will record the full $26,500 per day as revenue, since the
amortization period has ended.
Q3 2007 Dividend Announcement
The Company's Board of Directors declared a third quarter 2007 dividend of
$0.66 per share payable on or about November 30, 2007 to all shareholders of
record as of November 16, 2007. As previously announced, the Company plans to
declare quarterly dividends to shareholders by each February, May, August and
November, in amounts substantially equal to its available cash from operations
during the previous quarter, less cash expenses for that quarter (principally
vessel operating expenses and debt service) and any reserves the Board of
Directors determines the Company should maintain. These reserves may cover,
among other things: drydocking, repairs, claims, liabilities and other
obligations, interest expense and debt amortization, acquisitions of
additional assets and working capital. The Q3 2007 dividend of $0.66 equates
to an annualized yield of 3.9% based on the closing price of Genco Shipping &
Trading's common stock as of October 30, 2007 at $67.05.
John C. Wobensmith, Chief Financial Officer, commented, "We are pleased to
declare a third quarter dividend of $0.66 per share, our fourth consecutive
dividend under the Company's increased quarterly target for 2007. With our
agreements to acquire nine Capesize vessels from companies within the
Metrostar Management Corporation group and six drybulk vessels from affiliates
of Evalend Shipping Co. S.A. entered into in the third quarter, Genco
continues to successfully execute its growth strategy. These acquisitions,
which adhere to our strict return criteria, further Genco's goal to become the
industry bellwether and enhance our ability to distribute sizable dividends
going forward. Of the 15 vessels Genco has agreed to acquire, we have already
taken delivery of three Capesize ships and expect to take delivery of seven
additional vessels by the end of 2007."
Mr. Wobensmith added, "During a time when we continue to consolidate the
drybulk industry utilizing our disciplined approach, Genco improved its
financial flexibility in the third quarter by entering into a new 10-year,
$1.4 billion revolving credit facility at an attractive rate. We also received
strong support from the capital markets by recently completing a follow-on
offering of our common stock. Our equity offering was significant in that it
generated approximately $213.9 million in net proceeds, which enabled us to
pay down debt and position the company for further growth."
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel
products and other drybulk cargoes along worldwide shipping routes. Genco
Shipping & Trading Limited currently owns a fleet of 22 drybulk vessels
consisting of three Capesize, seven Panamax, seven Handymax and five Handysize
vessels, with a carrying capacity of approximately 1,522,000 dwt. After the
sale of the Genco Trader and the Genco Commander as well as the delivery of
six vessels from affiliates of Evalend Shipping Co. S.A. and the six remaining
vessels from companies within the Metrostar Management Corporation group,
Genco Shipping & Trading Limited will own a fleet of 32 drybulk vessels,
consisting of nine Capesize, six Panamax, three Supramax, six Handymax and
eight Handysize vessels, with a carrying capacity of approximately 2,700,000
dwt.
Conference Call Announcement
Genco Shipping & Trading Limited announced that it will hold a conference
call on Thursday, November 1, 2007 at 8:30 a.m. Eastern Time, to discuss its
2007 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 (877) 857-6173 or
(719) 325-4832 and enter passcode 3416172. A replay of the conference call
can also be accessed through November 15, 2007 by dialing (888) 203-1112 or
(719) 457-0820 and entering the passcode 3416172. 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. 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) changes in demand
or rates in the drybulk shipping industry; (ii) changes in the supply of or
demand for drybulk products, generally or in particular regions; (iii) changes
in the supply of drybulk carriers including newbuilding of vessels or lower
than anticipated scrapping of older vessels; (iv) 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; (v) increases in costs and
expenses including but not limited to: crew wages, insurance, provisions,
repairs, maintenance and general and administrative expenses; (vi) the
adequacy of our insurance arrangements; (vii) changes in general domestic and
international political conditions; (viii) 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; (ix) the number of
offhire days needed to complete repairs on vessels and the timing and amount
of any reimbursement by our insurance carriers for insurance claims including
offhire days; (x) the Company's acquisition or disposition of vessels; (xi)
the fulfillment of the closing conditions under the Company's agreement to
acquire the remaining six drybulk vessels from companies within the Metrostar
Management Corporation group; (xii) the fulfillment of the closing conditions
under the Company's agreements to acquire the six drybulk vessels from
affiliates of Evalend Shipping Co. S.A.; (xii) the fulfillment of the closing
conditions under the Company's agreement to sell the Genco Commander; (xiii)
the fulfillment of the closing conditions under Company's agreement to sell
the Genco Trader; 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, 2006, its quarterly reports on Form 10-Q and its reports on Form
8-K. Our ability to pay dividends in any period will depend upon factors,
including the limitations under our loan agreements, applicable provisions of
Marshall Islands law and the final determination by the Board of Directors
each quarter after its review of our financial performance. The timing and
amount of dividends, if any, could also be affected by factors affecting cash
flows, results of operations, required capital expenditures, or reserves. As
a result, the amount of dividends actually paid may vary.
SOURCE Genco Shipping & Trading Limited
CONTACT:
John C. Wobensmith, Chief Financial Officer of Genco Shipping &
Trading Limited, +1-646-443-8555
Web site: http://www.gencoshipping.com
(GNK)