Genco Shipping & Trading Expects Solid Second Quarter Earnings, With Majority of Fleet Fixed at Time-Charters of Over $27,000

Genco Shipping & Trading Limited, the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today reported its financial results for the three months ended March 31, 2022.

The following financial review discusses the results for the three months ended March 31, 2022 and March 31, 2021.

First Quarter 2022 and Year-to-Date Highlights

Declared a $0.79 per share dividend for the first quarter of 2022, an increase of 18% compared to the previous quarter

Represents the second dividend payment under our value strategy and first full payout utilizing our run rate voluntary quarterly debt repayment figure of $8.75 million

Marks the Company’s 11th consecutive quarterly payout, reflecting cumulative dividends totaling $2.515 per share

Q1 2022 dividend represents an annualized yield of 14% on Genco’s closing share price on May 3, 2022

Payable on or about May 24, 2022 to all shareholders of record as of May 16, 2022

Prepaid $48.75 million of debt on a voluntary basis during Q1 2022, to reduce our debt to $197.3 million, consisting of:

$8.75 million: target quarterly voluntary debt prepayment as previously communicated

$40.00 million: revolver prepayments as part of working capital management to save interest expense without impacting the dividend calculation

Net loan-to-value of 12%1 as of May 3, 2022

Recorded net income of $41.7 million for the first quarter of 2022

Basic and diluted earnings per share of $0.99 and $0.97, respectively

Voyage revenues totaled $136.2 million and net revenue2 (voyage revenues minus voyage expenses, charter hire expenses and realized gains or losses on fuel hedges) totaled $90.8 million during Q1 2022

Our average daily fleet-wide time charter equivalent, or TCE2, for Q1 2022 was $24,093, 98% higher YOY and our highest first quarter TCE since 2010

We estimate our TCE to date for Q2 2022 to be $27,596 for 68% of our owned fleet available days, based on both period and current spot fixtures

Recorded EBITDA of $58.0 million during Q1 20222

Maintained a strong liquidity position of $270.9 million as of March 31, 2022, including:

$49.1 million of cash on the balance sheet

$221.8 million of revolver availability

Took delivery of the Genco Mary and the Genco Laddey, two high quality, fuel-efficient Ultramax vessels built in 2022 at Dalian Cosco KHI Ship Engineering Co. Ltd. (DACKS)

These two deliveries complete the acquisitions of six Ultramax vessels Genco agreed to acquire from April to July 2021

Completed the transfer of technical management of all of our vessels to our joint venture with the Synergy Group, GS Shipmanagement

John C. Wobensmith, Chief Executive Officer, commented, “During the first quarter we generated strong TCE in a seasonally softer market, as we benefited from our past success fixing forward cargoes at attractive rates. We also made further progress implementing our value strategy, resulting in the first full payout based on our quarterly debt repayment run rate. We are pleased with the execution of our value strategy to date, which is focused on growth, financial deleveraging and maintaining low breakeven levels, to position Genco to pay meaningful and sustainable dividends throughout the drybulk cycle. Notably, the first quarter dividend, which marked our eleventh consecutive quarterly payout, increased by 18% over the prior quarter despite the traditional seasonality of freight rates during the period.”

Mr. Wobensmith, continued, “Looking ahead to the second quarter of 2022, we have the majority of our available days booked at over $27,500 per day, highlighting the significant operating leverage of our sizeable fleet, best-in class commercial operating platform and barbell approach to fleet composition. Genco remains well positioned to capitalize on favorable drybulk fundamentals, which remain intact and are driven by the attractive supply and demand balance and, specifically, the historically low newbuilding orderbook. We continue to monitor near-term changes in drybulk trade flows as result of Russia’s war in Ukraine as we meet customer needs and support our crew during these challenging times.”

1 Represents the principal amount of our credit facility debt outstanding less our cash and cash equivalents as of March 31, 2022 divided by estimates of the market value of our fleet as of May 3, 2022 from VesselsValue.com. The actual market value of our vessels may vary.

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 a further reconciliation.

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 prepayments to maintain low financial leverage, and

Growth: opportunistically growing the Company’s asset base

We believe this strategy is a key differentiator for Genco and will drive shareholder value over the long-term. We therefore believe Genco has created a compelling risk-reward balance positioning the Company to pay a sizeable quarterly dividend across diverse market environments. At the same time, we also maintain 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 12% as of May 3, 2022

Strong liquidity position of $270.9 million consisting of cash and our undrawn revolver as of March 31, 2022

High operating leverage with our scalable fleet across the major and minor bulk sectors

In 2022 to date, Genco has taken the following steps in line with our corporate strategy:

Dividends: declared a dividend of $0.79 per share for Q1 2022, marking the first full payout under our value strategy utilizing our run rate voluntary quarterly debt repayment

Deleveraging: paid down $48.8 million of debt during Q1 2022. Since the beginning of 2021, we have paid down $252.0 million or 56% of our debt

Growth: completed the acquisition of two high quality, fuel efficient Ultramax vessels in January 2022
Source: Genco Shipping & Trading Limited