Declares Dividend of $1.00 per Share for Q2 2008
NEW YORK, July 30 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today reported its financial results for the three and six
months ended June 30, 2008.
The following financial review discusses the results for the three and six
months ended June 30, 2008 and June 30, 2007.
Second Quarter 2008 and Year-to-Date Highlights
-- Declared a dividend $1.00 per share, based on Q2 2008 results, payable
on or about August 29, 2008 to all shareholders of record as of August 15,
2008;
-- Excluding the $2.6 million in dividends received from our investment in
Jinhui Shipping and Transportation shares, recorded net income of $58.3
million, or $1.96 basic and $1.95 diluted earnings per share;
-- Recorded net income of $60.9 million, or $2.05 basic and $2.03 diluted
earnings per share;
-- Completed the closing of a $204 million follow-on offering accompanied
by a secondary offering;
-- Agreed to the acquisition of two Panamax and one Supramax vessel from
Bocimar International N.V. and Delphis N.V. for an aggregate purchase price of
$257 million;
-- Agreed to the acquisition of three Capesize and three Handysize vessels
for an aggregate purchase price of $530 million;
-- Took delivery of the Genco Raptor and Genco Cavalier, two of the three
vessels from the Bocimar acquisition;
-- Reached time charter agreements for six vessels, including one from the
Bocimar acquisition and one from the Metrostar acquisition; and
-- Paid a $1.00 per share dividend on May 30, 2008 based on Q1 2008
results.
Financial Review: 2008 Second Quarter
Excluding the $2.6 million dividends received from the investment in
Jinhui Shipping and Transportation shares, the Company recorded net income of
$58.3 million, or $1.96 basic and $1.95 diluted earnings per share. Including
these dividends, the Company recorded net income for the second quarter of
2008 of $60.9 million, or $2.05 basic and $2.03 diluted earnings per share.
Net income was $134.9 million or $4.61 basic and $4.58 diluted earnings per
share for the six months ended June 30, 2008. Comparatively, for the six
months ended June 30, 2007 net income was $33.6 million or $1.33 basic and
$1.32 diluted earnings per share.
EBITDA was $85.7 million for the three months ended June 30, 2008 versus
$25.4 million for the three months ended June 30, 2007.
Robert Gerald Buchanan, President, commented, "During the second quarter,
we benefited from favorable contracts, and, in particular, profit sharing
agreements that enabled the Company to take advantage of robust market
conditions and post strong results. Consistent with our strategy, we
maintained an intense focus on securing our vessels on time charters, during a
time in which we further consolidated the drybulk industry by agreeing to add
nine vessels to our fleet. Specifically, we renewed vessels at attractive
rates and signed newly acquired vessels on charters prior to their delivery.
We currently have approximately 94% of our fleet's available days secured on
contracts for the remainder of 2008 and 60% in 2009. With a modern versatile
fleet, we remain in a strong position to provide charterers with the highest
quality service while capitalizing on the strong demand for essential
commodities such as iron ore and coal."
Genco Shipping & Trading Limited revenues increased 184% to $104.6 million
for the three months ended June 30, 2008 versus $36.8 million for the three
months ended June 30, 2007, due to the operation of a larger fleet as well as
the renewal of time charters at higher charter rates than those contracted
previously.
The average daily time charter equivalent, or TCE, rates obtained by the
Company's fleet increased 95% to $40,945 per day for the three months ended
June 30, 2008 compared to $21,046 for the three months ended June 30, 2007.
The increase in TCE rates was due to higher charter rates achieved in the
second quarter of 2008 versus the second quarter of 2007 for two of the
Panamax vessels, six of the Handymax vessels, and five of the Handysize
vessels in our current fleet. Furthermore, higher TCE rates were achieved in
the second quarter of 2008 versus the same period last year due to the
operation of five Capesize vessels acquired as part of the Metrostar
acquisition.
Total operating expenses increased to $33.8 million for the three months
ended June 30, 2008 from $18.3 million for the three-month period ended June
30, 2007, due to higher vessel operating expenses, general and administrative
expenses and depreciation and amortization related to the operation of a
larger fleet. Vessel operating expenses were $11.2 million for the second
quarter of 2008 compared to $6.4 million for the same period last year. The
increase in vessel operating expenses was due to the operation of a larger
fleet, higher crewing and lube expenses, as well as the operation of larger
class vessels, namely Capesize vessels for the second quarter of 2008 versus
the same period last year. We expect our vessel operating expenses, which
generally represent variable costs, to further increase as a result of the
expansion of our fleet. Depreciation and amortization expenses increased to
$16.7 million for the second quarter of 2008 from $7.4 million for the second
quarter of 2007 related to the growth of our fleet. General and administrative
expenses increased to $4.4 million from $3.1 million during the comparative
periods due to costs associated with higher employee non-cash compensation and
other employee related costs. Management fees were $0.7 million for the three
months ended June 30, 2008 and $0.4 million for the three months ended June
30, 2007, respectively, and relate to fees paid to our independent technical
managers.
Daily vessel operating expenses grew to $4,378 per vessel per day during
the second quarter of 2008 from $3,727 for the same quarter last year as a
result of higher crew and lube expenses as well as the operation of five
Capesize vessels. 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 2008 DVOE budget is $4,700 per vessel per day.
Financial Review: First Half 2008
Net income was $134.9 million or $4.61 basic and $4.58 diluted earnings
per share, for the six months ended June 30, 2008 compared to $33.6 million,
or $1.33 basic and $1.32 diluted earnings per share for the six months ended
June 30, 2007. Included in net income for the six months ended June 30, 2008
is a $26.2 million gain from the sale of the Genco Trader, $2.6 million of
income received from our investment in stock of Jinhui Shipping and
Transportation Limited, and a loss from derivative instruments of $1.4
million. Revenues increased 165% to $196.2 million for the six months ended
June 30, 2008 compared to $74.1 million for the six months ended June 30,
2007. EBITDA was $181.5 million for the six months ended June 30, 2008 versus
$55.9 for the six months ended June 30, 2007. TCE rates obtained by the
Company increased to $38,419 per day for the six months ended June 30, 2008
from $20,863 for the same period in 2007. Total operating expenses were $40.1
million for the six months ended June 30, 2008 compared to $33.3 for the six
months ended June 30, 2007, and daily vessel operating expenses per vessel
were $4,328 versus $3,677 for the comparative periods.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the three months ended June
30, 2008 and 2007, was $131.6 million and $47.5 million, respectively. The
increase was primarily due to the operation of a larger fleet, which
contributed to increases in net income, depreciation, and deferred revenues.
Adjustments to operating cash flows include $9.6 million of realized losses on
forward currency contracts offset by $9.9 million of unrealized gains on
hedged short-term investments and $2.6 million of realized income from
dividends. Increases to cash flow were offset by $26.2 million in gains from
the sale of the Genco Trader and $11.6 million of amortization of value of the
time charters acquired as part of the Metrostar and Evalend acquisitions. Net
cash provided by operating activities for the three months ended June 30, 2007
was primarily a result of recorded net income of $33.6 million, less the gain
from the sale of the Genco Glory of $3.6 million, plus depreciation and
amortization charges of $14.6 million.
Net cash used in investing activities was $302.0 million for the six
months ended June 30, 2008 as compared to $90.4 for the six months ended June
30, 2007. For the six months ended June 30, 2008, cash used in investing
activities primarily related to the purchase of vessels in the amount of
$247.1 million, deposits on vessels to be acquired of $80.6 million, the
purchase of $10.3 million of Jinhui stock, and payments on forward currency
contracts of $9.6 million. The above were offset by proceeds from the sale of
the Genco Trader in the amount of $43.1 million. For the three months ended
June 30, 2007 the cash used in investing activities primarily related to the
purchase of short-term investments of $103.1 million, offset by the sale of
the Genco Glory in the amount of $13.0 million.
Net cash provided by financing activities for the six months ended June
30, 2008 was $194.8 million as compared to $37.1 million for the six months
ended June 30, 2007. For the six months ended June 30, 2008, net cash
provided by financing activities consisted of the drawdown of $321.3 million
related to the purchase of vessels and $195.7 million in net proceeds from our
May 2008 follow-on offering. These inflows were offset by the repayment of
$268.0 million under the 2007 credit facility and the payment of cash
dividends of $53.8 million. For the same period last year, net cash provided
by financing activities consisted of $77.0 million of proceeds from a
short-term line used to finance the purchase of Jinhui shares, and was offset
by the payment of cash dividends of $33.7 million and the repayment of $5.7
million under our 2005 credit facility.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel
acquisitions. Our current fleet consists of five Capesize, seven Panamax, four
Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying
capacity of approximately 2,150,000 dwt. After the expected delivery of 11
vessels the Company has agreed to acquire, Genco Shipping & Trading Limited
will own a fleet of 41 drybulk vessels, consisting of 12 Capesize, eight
Panamax, four Supramax, six Handymax and 11 Handysize vessels, with an
aggregate carrying capacity of approximately 3,516,000 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 five of our vessels will be
drydocked in the remainder of 2008, of which three will be drydocked during
the third quarter of 2008 and two vessels in the fourth quarter of 2008. An
additional five of our vessels will be drydocked in 2009.
We estimate our drydocking costs for our fleet through 2009 to be:
Q3 2008 Q4 2008 2009
Estimated Costs(1) $2.6 million $1.9 million $4.1 million
Estimated Offhire Days(2) 60 40 100
(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. Actual length will vary
based on the condition of the vessel, yard schedules and other
factors.
The Genco Sugar completed its drydocking during the second quarter of 2008
at a cost of approximately $0.7 million. The vessel was on planned offhire for
17.9 days in connection with this scheduled drydocking.
Update on Share Repurchase Program
The Company previously announced that its Board of Directors has approved
a share repurchase program for up to a total of $50 million of the Company's
common stock. As of June 30, 2008, the Company has not bought back any
shares.
As of July 30, 2008, the Company had 31,795,978 shares of common stock
outstanding.
Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited's selected
consolidated financial and other data for the periods indicated below.
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(Dollars in thousands, (Dollars in thousands,
except share and per except share and per
share data) share data)
(unaudited) (unaudited)
INCOME STATEMENT DATA:
Revenues $104,572 $36,847 $196,242 $74,067
Operating expenses:
Voyage expenses 724 1,017 1,468 2,430
Vessel operating
expenses 11,187 6,445 22,106 12,834
General and
administrative expenses 4,431 3,052 8,842 6,247
Management fees 665 393 1,338 744
Depreciation and
amortization 16,748 7,433 32,612 14,619
Gain on sale of vessel - - (26,227) (3,575)
Total operating
expenses 33,755 18,340 40,139 33,299
Operating income 70,817 18,507 156,103 40,768
Other (expense) income:
Income from short-term
investment 2,590 - 2,590 -
(Loss) Income from
derivative instruments (1,315) (1,594) (1,380) (1,594)
Interest income 422 888 975 1,954
Interest expense (11,615) (4,080) (23,402) (7,570)
Other (expense) income: (9,918) (4,786) (21,217) (7,210)
Net income $60,899 $13,721 $134,886 $33,558
Earnings per share -
basic $2.05 $0.54 $4.61 $1.33
Earnings per share -
diluted $2.03 $0.54 $4.58 $1.32
Weighted average shares
outstanding - basic 29,750,309 25,312,593 29,242,118 25,310,783
Weighted average shares
outstanding - diluted 29,957,698 25,456,413 29,436,024 25,439,043
June 30, 2008 December 31, 2007
BALANCE SHEET DATA: (unaudited)
Cash $95,964 $71,496
Current assets, including cash 270,895 267,594
Total assets 1,951,696 1,653,272
Current liabilities, including
current portion of long-term debt 29,742 70,364
Total long-term debt, including
current portion 989,250 936,000
Shareholders' equity 877,282 622,185
Six Months Ended
June 30, 2008 June 30, 2007
(unaudited)
Net cash provided by operating activities 131,627 47,540
Net cash used in investing activities (302,000) (90,401)
Net cash provided by financing activities 194,841 37,105
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
FLEET DATA: (unaudited) (unaudited)
Total number of vessels at end of
period 29 19 29 19
Average number of vessels (1) 28.1 19.0 28.1 19.3
Total ownership days for fleet (2) 2,555 1,729 5,107 3,491
Total available days for fleet (3) 2,536 1,703 5,070 3,434
Total operating days for fleet (4) 2,518 1,668 5,033 3,371
Fleet utilization (5) 99.3% 98.0% 99.3% 98.2%
AVERAGE DAILY RESULTS:
Time charter equivalent (6) $40,945 $21,046 $38,419 $20,863
Daily vessel operating expenses per
vessel (7) 4,378 3,727 4,328 3,677
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(Dollars in (Dollars in
thousands) thousands)
EBITDA Reconciliation: (unaudited) (unaudited)
Net Income $60,899 $13,721 $134,886 $33,558
+ Net interest expense 11,193 3,192 22,427 5,616
+ Depreciation and amortization 16,748 7,433 32,612 14,619
+ Amortization of nonvested stock
compensation 1,607 585 3,195 1,171
+ Amortization of value of time
charters acquired (4,761) 461 (11,610) 917
EBITDA(8) 85,686 25,392 181,510 55,881
(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 five Capesize, seven Panamax, four Supramax,
six Handymax and eight Handysize drybulk carriers with an aggregate carrying
capacity of approximately 2,150,000 dwt. Our current fleet contains seven
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 June 30, 2008, the average age of our current
fleet was 6.5 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 22 months as of June
30, 2008.
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:
Net
Cash Revenue Expected
Vessel Year Charter Daily Daily Delivery
Built Charterer Expiration(1) Rate(2) Rate(3) (4)
Capesize Vessels
Genco 2007 Cargill December 2009 45,263 62,750 -
Augustus International S.A.
Genco 2007 Cargill January 2010 45,263 62,750 -
Tiberius International S.A.
Genco 2007 SK Shipping August 2010 57,500 64,250 -
London Co., Ltd
Genco 2007 Cargill September 2011 45,000 46,250 -
Titus International S.A. (5)
Genco 2008 Cargill August 2012 52,750 -
Constantine International S.A. (5)
Genco 2008 Cargill 46 to 62 months 65,000 Q4
Hadrian (6) International S.A. from delivery (5) 2008
Genco 2009 To be determined TBD TBD Q2
Commodus (6) ("TBD") 2009
Genco 2009 TBD TBD TBD Q2
Maximus (6) 2009
Genco 2009 TBD TBD TBD Q2
Aurelius (6) 2009
Genco 2009 TBD TBD TBD Q3
Claudius (6) 2009
Genco 2009 TBD TBD TBD Q3
Julian (6) 2009
Genco 2009 TBD TBD TBD Q4
Valerian (6) 2009
Panamax Vessels
Genco 1999 Cargill May 2009 31,500 -
Beauty International S.A.
Genco 1999 SK Shipping Ltd. May 2009 37,700 -
Knight
Genco 1999 A/S Klaveness December 2008 25,650 -
Leader Chartering (7)
Genco 1999 STX Panocean (UK) March 2009 29,000 -
Vigour Co. Ltd. (8)
Genco 1999 ArcelorMittal July 2011 55,250 -
Acheron (9)
Genco 1998 Hanjin Shipping December 2010 42,100 -
Surprise Co., Ltd.
Genco 2007 COSCO Bulk April 2012 52,800 -
Raptor Carriers Co., Ltd.
Genco 2007 TBD TBD TBD Q4
Thunder 2008
Supramax Vessels
Genco 2005 A/S Klaveness October 2008 58,000 -
Predator Chartering (10)
Genco 2005 Hyundai Merchant November 2010 38,750 -
Warrior Marine Co. Ltd.
Genco 2007 Pacific Basin June 2009 62,000 -
Hunter Chartering Ltd. (11)
Genco 2007 Samsun Logix July 2010 48,500 47,700 -
Cavalier Corporation (12)
Handymax Vessels
Genco 1997 Korea Line February 2011 33,000 -
Success Corporation (13)
Genco 1998 Louis Dreyfus March 2011 37,000 -
Carrier Corporation
Genco 1997 Pacific Basin June 2011 37,000 -
Prosperity Chartering Ltd (14)
Genco 1997 Hyundai Merchant February 2011 34,500 -
Wisdom Marine Co. Ltd.
Genco 1996 NYK Bulkship March 2009 47,000 -
Marine Europe S.A.
Genco 2001 Norden A/S August 2008 47,650 -
Muse
Handysize Vessels
Genco 1999 Lauritzen August 2009 19,500 -
Explorer Bulkers A/S
Genco 1999 Lauritzen August 2009 19,500 -
Pioneer Bulkers A/S
Genco 1999 Lauritzen August 2009 19,500 -
Progress Bulkers A/S
Genco 1999 Lauritzen August 2009 19,500 -
Reliance Bulkers A/S
Genco 1998 Lauritzen August 2009 19,500 -
Sugar Bulkers A/S
Genco 2005 Pacific Basin November 2010 24,000 -
Charger Chartering Ltd.
Genco 2003 Pacific Basin November 2010 24,000 -
Challenger Chartering Ltd.
Genco 2006 Pacific Basin December 2010 24,000 -
Champion Chartering Ltd.
Genco 2008 TBD TBD TBD Q4
Eagle 2008
Genco 2008 TBD TBD TBD Q1
Falcon 2009
Genco 2008 TBD TBD TBD Q1
Hawk 2009
(1) The charter expiration dates presented represent the earliest dates
that our charters may be terminated in the ordinary course. Except for the
Genco Titus, 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. The charterer of the
Genco Titus has the option to extend the charter for a period of one year.
(2) Time charter rates presented are the gross daily charterhire rates
before third party commissions ranging from 1.25% to 6.25%, except as
indicated for the Genco Leader in note 7 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 "Net 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 Daily 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) These charters include a 50% index-based profit sharing component
above the respective base rates listed in the table. The profit sharing
between the charterer and us for each 15-day period is calculated by taking
the average over that period of the published Baltic Cape Index of the four
time charter routes, as reflected in daily reports. If such average is more
than the base rate payable under the charter, the excess amount is allocable
50% to each of the charterer and us. A third-party brokerage commission of
3.75% based on the profit sharing amount due to us is payable out of our
share.
(6) Year built for vessels being delivered in the future are estimates
based on guidance received from the sellers and/or the respective shipyards.
(7) The time charter rate presented is the net daily charterhire rate.
There are no payments of commissions associated with this time charter.
(8) 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 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.
(9) We have entered into a time charter agreement with ArcelorMittal for
35 to 37 months at a rate of $55,250 per day less a 5% third-party commission.
The vessel is currently in drydocking and is expected to deliver to its new
charterer on or about August 1, 2008.
(10) We have entered into a short-term time charter with A/S Klaveness
Chartering for 3 to 5 months at a rate of $58,000 per day less a 5%
third-party commission. The new charter commenced following the completion of
the prior time charter on July 18, 2008.
(11) We have reached an agreement to extend the time charter with Pacific
Basin Chartering Ltd. for 11 to 13.5 months at a rate of $62,000 per day, less
a 5% third party brokerage commission. The time charter commenced following
the expiration of the vessel's prior time charter on July 21, 2008.
(12) The time charter for this vessel commenced on July 19, 2008. In
completing the negotiation of certain changes we required for novation of the
existing charter, we agreed to reduce the daily gross rate and received a
rebate from the brokers involved in the vessel sale. Since the vessel was
acquired with 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.
(13) We extended the time charter for an additional 35 to 37.5 months at a
rate of $40,000 per day for the first 12 months, $33,000 per day for the
following 12 months, $26,000 per day for the next 12 months and $33,000 per
day thereafter less a 5% third-party commission. In all cases, the rate for
the duration of the time charter will average $33,000 per day. For purposes of
revenue recognition, the time charter contract is reflected on a straight-line
basis at approximately $33,000 per day for 35 to 37.5 months in accordance
with U.S. GAAP.
(14) We recently extended the time charter for an additional 35 to 37.5
months at a rate of $37,000 per day less a 5% third-party commission. The new
charter commenced on July 10, 2008, following the expiration of the previous
charter.
Q2 2008 Dividend Announcement
The Company's Board of Directors declared a second quarter 2008 dividend
of $1.00 per share payable on or about August 29, 2008 to all shareholders of
record as of August 15, 2008. 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 Q2 2008 dividend of $1.00 equates
to an annualized yield of 6.3% based on the closing price of Genco Shipping &
Trading's common stock as of July 29, 2008 at $63.27.
John C. Wobensmith, Chief Financial Officer, commented, "Genco's strong
quarterly results are testament to the sizeable earnings power of the fleet.
During the quarter, we remained true to our objective of becoming the industry
bellwether and acquired nine high-quality vessels. With the addition of these
vessels, Genco has expanded its fleet approximately 345% on a net tonnage
basis since going public in July 2005. During the quarter, we also completed
a $204 million equity offering, underscoring the ongoing support we have
received from the capital and banking markets as we execute our growth
strategy. Going forward, we intend to continue to seek opportunities to
consolidate the industry in a manner that meets our strict earnings and cash
flow criteria as well as return on capital hurdles. Complementing this focus,
we intend to continue to draw upon our significant time charter coverage to
distribute sizeable dividends to shareholders."
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 30 drybulk vessels
consisting of five Capesize, seven Panamax, four Supramax, six Handymax and
eight Handysize vessels, with an aggregate carrying capacity of approximately
2,150,000 dwt. After the expected delivery of 11 vessels the Company has
agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 41
drybulk vessels, consisting of 12 Capesize, eight Panamax, four Supramax, six
Handymax and 11 Handysize vessels, with an aggregate carrying capacity of
approximately 3,516,000 dwt.
.
Conference Call Announcement
Genco Shipping & Trading Limited announced that it will hold a conference
call on Thursday, July 31, 2008 at 8:30 a.m. Eastern Time, to discuss its 2008
second quarter financial results. The conference call and a presentation will
be simultaneously webcast and will be available on the Company's website,
http://www.GencoShipping.com. To access the conference call, dial
(888) 204-4610 or (913) 312-1300 and enter passcode 1470749. A replay of the
conference call can also be accessed through August 14, 2008 by dialing
(888) 203-1112 or (719) 457-0820 and entering the passcode 1470749. 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, or the execution of customary
additional documentation for, the Company's agreements to acquire a total of
11 drybulk vessels; 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, 2007 and its reports on Form 10-Q and Form 8-K. The timing and
amount of purchases under the Company's share repurchase program will be
determined by management based upon market conditions and other factors.
Purchases may be made pursuant to a program adopted under Rule 10b5-1 under
the Securities and Exchange Act. The program does not require the Company to
purchase any specific number or amount of shares and may be suspended or
reinstated at any time in the Company's discretion and without notice.
Repurchases will be subject to restrictions under the Company's existing
credit facility. 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,
Genco Shipping &
Trading Limited,
+1-646-443-8555
Web site: http://www.gencoshipping.com
(GNK)