Financial Data and Key Metrics Changes - In Q4 2023, the company achieved adjusted net income of $0.43 per share, with a significant 173% quarter-over-quarter increase in dividends to $0.41 per share [13][58] - Net revenues increased by 50% compared to Q3 2023, while the recurring cost structure remained flat, demonstrating high operating leverage [36] - Adjusted EBITDA for Q4 totaled $37.1 million, contributing to a full-year total of $101.5 million [58] Business Line Data and Key Metrics Changes - Capesize vessels achieved an average time charter equivalent (TCE) of over $33,000 per day in Q4, which is 91% higher than in Q3 [36] - The company’s fleet renewal strategy included the purchase of two modern Capesize vessels for $86 million and the divestment of three older vessels, which is expected to enhance earnings and cash flow capacity for 2024 [33][58] Market Data and Key Metrics Changes - The dry bulk freight market is experiencing a positive supply-demand balance, with net fleet growth in 2023 at 3% and a historically low order book [41] - China's iron ore imports rose by 7% year-over-year in 2023, supporting firm iron ore prices at approximately $120 per ton [40] - The company anticipates a strong grain season from South America, particularly with record corn production expected from Argentina [63] Company Strategy and Development Direction - The company is focused on a comprehensive value strategy that emphasizes dividends, deleveraging, and growth, aiming to maintain low financial leverage while providing substantial returns to shareholders [30][57] - The company plans to continue evaluating opportunities in the sale and purchase market to renew its fleet, leveraging its strong liquidity position [17][19] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the market is being driven by low supply and increased demand, with inefficiencies in the Panama Canal contributing to the current dynamics [45][46] - The company expects continued strong performance in Q1 2024, with 81% of available days fixed at over $18,700 per day, indicating a robust outlook despite historical seasonal lows [14][38] Other Important Information - The company closed a $500 million revolving credit facility, enhancing its borrowing capacity and providing flexibility for future growth initiatives [13][59] - The company has paid down nearly $250 million of debt over the last three years, significantly reducing its leverage [19][34] Q&A Session Summary Question: What is driving the current market conditions? - Management indicated that low supply and increased demand are the primary drivers, with inefficiencies in the Panama Canal also impacting the market [45][46] Question: How is the company viewing the sale and purchase market? - The sentiment in the capesize market has improved, and the company is focused on trading out older ships for newer, more efficient vessels [47][70] Question: What is the outlook for iron ore trade and Chinese inventories? - The company expects replenishment of Chinese inventories, with production levels projected to remain flat, but anticipates increased iron ore flow as global demand recovers [78][79] Question: What are the plans for fleet renewal? - The company plans to continue its fleet renewal strategy, with expectations to acquire more Supermax vessels this year as market conditions improve [98]

Financial Performance & Dividends - Genco's Q4 2023 net income was $4937 thousand, with adjusted earnings per share of $043[11, 217] - The company declared a Q4 2023 dividend of $041 per share, marking the 18th consecutive quarterly dividend[106] - Genco estimates Q1 2024 TCE at $18724 based on fixtures for approximately 81% of available days[16, 116, 161] - The estimated Q1 2024 cash flow breakeven rate is $9752 excluding extraordinary annual meeting related expenses[148, 191] - The company has paid down $249 million of debt and invested $236 million in high-specification vessels[118, 123] Fleet & Strategy - Genco purchased two 2016-built scrubber-fitted Capesize vessels that delivered in November 2023[1] - The company's fleet utilization was 973% for both the three months and twelve months ended December 31, 2023[147] - Net fleet growth is reported at +20% and +16%[9] - China's coal imports recorded a +62% increase in 2023[26] Market Overview - Approximately 81% of Q1's available days are fixed[4]

Financial Performance - Net loss attributable to Genco Shipping & Trading Limited for Q3 2023 was $32.0 million, compared to a net income of $40.8 million in Q3 2022, representing a change of $72.8 million[139]. - Total operating expenses increased by 25.2% to $113.7 million in Q3 2023 from $90.8 million in Q3 2022[142]. - EBITDA for Q3 2023 was $(13.6) million, a decrease of $71.9 million from $58.4 million in Q3 2022[139]. - Voyage revenues decreased by $141.7 million, or 34.6%, to $268.3 million for the nine months ended September 30, 2023, compared to $410.0 million in the same period of 2022[160]. - The average Time Charter Equivalent (TCE) rate for the overall fleet decreased by 45.5% to $13,855 per day for the nine months ended September 30, 2023, from $25,425 per day in 2022[161]. Fleet and Operations - The fleet consists of 44 drybulk vessels with a total carrying capacity of approximately 4,635,000 deadweight tons (dwt) and an average age of 11.7 years[115]. - Fleet utilization for Capesize vessels is reported at 99.1%, Ultramax at 96.9%, and Supramax at 96.7% for the three months ended September 30, 2023[126]. - The fleet average utilization rate for the nine months ended September 30, 2023, improved to 97.3%, up from 96.3% in 2022[128]. - The company has a fleet of 44 drybulk vessels, including 17 Capesize, 15 Ultramax, and 12 Supramax vessels, and plans to upgrade a portion of the fleet with energy-saving devices[208]. Debt and Liquidity - The company has reduced its debt by $304.5 million since 2021, resulting in a debt balance of $144.8 million as of September 30, 2023, a 68% reduction from January 1, 2021 levels[118]. - As of September 30, 2023, the company has $52.2 million in cash and undrawn revolver availability of $198.8 million, totaling liquidity of $251.0 million[118]. - The company made voluntary debt prepayments totaling $101.3 million throughout 2022 and the first nine months of 2023, reducing cash flow breakeven rates[176]. - The company has entered into a commitment letter to amend and extend its existing $450 million credit facility to a $500 million revolving credit facility, expected to close in Q4 2023[179]. - A drawdown of $35 million was made under the existing revolver to partially fund the anticipated acquisition of the Genco Ranger, resulting in pro forma debt outstanding of $179.8 million and undrawn revolver availability of $320.3 million[180]. Capital Expenditures and Investments - The company plans to incur capital expenditures of $0.4 million for drydockings and $26.3 million for fuel efficiency upgrades during the remainder of 2023 and 2024, respectively[176]. - Estimated drydocking costs for 2024 are projected to be $21.8 million, with an additional $0.5 million for ballast water treatment systems[210]. - The company incurred $10.7 million in drydocking costs during the nine months ended September 30, 2023, compared to $22.3 million in the same period of 2022[212]. Regulatory Compliance and Environmental Initiatives - The company initiated a plan to comply with IMO regulations aimed at reducing greenhouse gas emissions, with investments in energy-saving devices and upgrades[119][120]. - The company has entered into bunker swap and forward fuel purchase agreements to mitigate fuel price risks, although these do not qualify for hedge accounting[236]. Dividends and Shareholder Returns - Cumulative dividends declared under the company's value strategy from Q4 2021 to Q3 2023 amount to $3.69 per share[118]. - The company announced a quarterly dividend of $0.15 per share on November 8, 2023, subject to compliance with financial covenants and available funds[187]. - Heightened economic uncertainty may lead to a suspension, reduction, or termination of future quarterly dividends[190]. Impairment and Asset Valuation - Impairment of vessel assets was $28.1 million in both Q3 2023 and YTD 2023, indicating a significant write-down[138]. - The company recorded impairment losses of $28.1 million related to vessel assets during the three and nine months ended September 30, 2023, with no impairment losses in the same periods of 2022[220]. - The total carrying value of the fleet as of September 30, 2023, was $812.4 million, down from $871.6 million as of December 31, 2022[225]. Interest Rate Management - The company held two interest rate cap agreements with a total notional amount of $150.0 million as of September 30, 2023, to manage interest rate risks[227]. - A 1% increase in LIBOR or SOFR would result in an increase of $1.2 million in interest expense for the nine months ended September 30, 2023[231]. - The company transitioned from LIBOR to SOFR rates effective June 30, 2023, with a reduction in the applicable margin from 2.15% to 2.10%[230].

[Corporate Information](index=1&type=section&id=Corporate%20Information) This section provides essential company identification details, including its SEC filing type, stock exchange listing, and filer status - The filing is a **Quarterly Report (Form 10-Q)** for Genco Shipping & Trading Limited for the quarterly period ended **June 30, 2023**[2](index=2&type=chunk) - The registrant is a **Large accelerated filer**[4](index=4&type=chunk) - As of **August 8, 2023**, there were **42,528,689 shares** of common stock outstanding[4](index=4&type=chunk) Title of each class | Title of each class | Trading Symbol(s) | Name of exchange on which registered | | :------------------ | :---------------- | :----------------------------------- | | Common stock, par value $0.01 per share | GNK | New York Stock Exchange (NYSE) | [Website Information](index=4&type=section&id=Website%20Information) The company uses its investor relations website for material non-public information disclosure and Regulation FD compliance - The company uses its website, **www.GencoShipping.com (Investor section)**, for disclosing material non-public information and complying with Regulation FD[8](index=8&type=chunk) - Investors should monitor the Investor portion of the website, in addition to press releases, SEC filings, public conference calls, and webcasts[8](index=8&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This part encompasses the company's unaudited condensed financial statements and management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes providing context and breakdowns of accounting policies, financial instruments, debt, and equity-related activities [Condensed Consolidated Balance Sheets](index=5&type=section&id=a)%20Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202023%20and%20December%2031,%202022) This section presents the company's financial position at specific dates, detailing assets, liabilities, and equity | Metric | June 30, 2023 (USD Thousands) | December 31, 2022 (USD Thousands) | | :------------------------------------------ | :---------------------------- | :------------------------------ | | Total assets | $1,135,393 | $1,173,866 | | Total liabilities | $180,448 | $205,557 | | Total equity | $954,945 | $968,309 | | Cash and cash equivalents | $47,934 | $58,142 | | Long-term debt, net | $148,261 | $164,921 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=b)%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202023%20and%202022) This section presents the company's financial performance, including revenues, operating income, and net income, over specific periods Three Months Ended June 30 | Metric | 2023 (USD Thousands) | 2022 (USD Thousands) | Change (USD Thousands) | % Change | | :-------------------------------- | :------------------- | :------------------- | :--------------------- | :------- | | Voyage revenues | $90,556 | $137,764 | $(47,208) | (34.3)% | | Operating income | $13,027 | $49,195 | $(36,168) | (73.5)% | | Net income attributable to Genco | $11,562 | $47,382 | $(35,820) | (75.6)% | | Earnings per share-basic | $0.27 | $1.12 | $(0.85) | (75.9)% | Six Months Ended June 30 | Metric | 2023 (USD Thousands) | 2022 (USD Thousands) | Change (USD Thousands) | % Change | | :-------------------------------- | :------------------- | :------------------- | :--------------------- | :------- | | Voyage revenues | $184,947 | $273,991 | $(89,044) | (32.5)% | | Operating income | $17,469 | $91,288 | $(73,819) | (80.9)% | | Net income attributable to Genco | $14,196 | $89,071 | $(74,875) | (84.1)% | | Earnings per share-basic | $0.33 | $2.11 | $(1.78) | (84.4)% | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=c)%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202023%20and%202022) This section details comprehensive income components, including net income and other comprehensive income or loss Comprehensive Income Attributable to Genco Shipping & Trading Limited | Period | 2023 (USD Thousands) | 2022 (USD Thousands) | | :------------------------------------------ | :------------------- | :------------------- | | Three Months Ended June 30 | $10,569 | $48,881 | | Six Months Ended June 30 | $11,575 | $93,863 | Other Comprehensive (Loss) Income | Period | 2023 (USD Thousands) | 2022 (USD Thousands) | | :------------------------------------------ | :------------------- | :------------------- | | Three Months Ended June 30 | $(993) | $1,499 | | Six Months Ended June 30 | $(2,621) | $4,792 | [Condensed Consolidated Statements of Equity](index=8&type=section&id=d)%20Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030,%202023%20and%202022) This section outlines changes in total equity over periods, reflecting net income, dividends, and other comprehensive items Total Equity Movement (USD Thousands) | Metric | January 1, 2023 | June 30, 2023 | | :------------------------------------------ | :-------------- | :------------ | | Total Equity | $968,309 | $954,945 | | Net income (six months) | - | $14,196 | | Other comprehensive loss (six months) | - | $(2,621) | | Cash dividends declared (six months) | - | $(27,922) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=e)%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20ended%20June%2030,%202023%20and%202022) This section summarizes cash flows from operating, investing, and financing activities over specific periods Cash Flow Summary (Six Months Ended June 30, USD Thousands) | Cash Flow Activity | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $38,948 | $99,159 | | Net cash used in investing activities | $(3,531) | $(49,980) | | Net cash used in financing activities | $(45,625) | $(119,083) | | Net decrease in cash, cash equivalents and restricted cash | $(10,208) | $(69,904) | | Cash, cash equivalents and restricted cash at end of period | $53,892 | $50,627 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=f)%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed financial statements [1 - General Information](index=11&type=section&id=1%20-%20GENERAL%20INFORMATION) This note describes the company's business operations, fleet composition, and consolidation policies - The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk vessels, operating in **one business segment**[24](index=24&type=chunk) - As of **June 30, 2023**, the fleet consisted of **44 drybulk vessels** (17 Capesize, 15 Ultramax, 12 Supramax) with an aggregate carrying capacity of approximately **4,635,000 dwt** and an average age of approximately **11.3 years**[25](index=25&type=chunk) - The Company consolidates GS Shipmanagement Pte. Ltd. (GSSM), a **50%-owned joint venture** formed with Synergy Marine Pte. Ltd. to provide ship management services, as Genco is deemed the primary beneficiary[26](index=26&type=chunk)[27](index=27&type=chunk) [2 - Summary of Significant Accounting Policies](index=11&type=section&id=2%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines key accounting principles, estimates, and policies applied in preparing financial statements - The financial statements are prepared in accordance with **U.S. GAAP** and **SEC rules** for interim financial statements, and should be read in conjunction with the **2022 Annual Report on Form 10-K**[28](index=28&type=chunk) - Significant estimates include vessel valuations, amounts due from charterers, residual value of vessels, useful life of vessels, fair value of time charters acquired, and fair value of derivative instruments[30](index=30&type=chunk) - Bunker swap and forward fuel purchase agreements do not qualify for hedge accounting; unrealized or realized gains and losses are recorded in the Condensed Consolidated Statements of Operations[32](index=32&type=chunk) - Voyage expenses include net (loss) gain from bunker fuel differences of **($269) thousand** for Q2 2023 (vs **$2,421 thousand gain** in Q2 2022) and **($641) thousand** for H1 2023 (vs **$4,425 thousand gain** in H1 2022)[36](index=36&type=chunk)[38](index=38&type=chunk) Cash, Cash Equivalents and Restricted Cash (USD Thousands) | Category | June 30, 2023 | December 31, 2022 | | :------------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $47,934 | $58,142 | | Restricted cash - current | $5,643 | $5,643 | | Restricted cash - noncurrent | $315 | $315 | | **Total** | **$53,892** | **$64,100** | Realized and Unrealized Gains (Losses) on Fuel Hedges (USD Thousands) | Period | Realized (Loss) Gain | Unrealized (Loss) Gain | | :------------------------------------------ | :------------------- | :--------------------- | | Three Months Ended June 30, 2023 | $(27) | $(38) | | Three Months Ended June 30, 2022 | $667 | $321 | | Six Months Ended June 30, 2023 | $81 | $(80) | | Six Months Ended June 30, 2022 | $1,296 | $1,760 | [3 - Cash Flow Information](index=14&type=section&id=3%20-%20CASH%20FLOW%20INFORMATION) This note provides additional details on non-cash investing, financing activities, and cash paid for interest - Non-cash investing activities for H1 2023 included **$749 thousand** for vessel/ballast water treatment systems and **$301 thousand** for other fixed assets, recorded in Accounts payable and accrued expenses[39](index=39&type=chunk) - Non-cash financing activities for H1 2023 included **$853 thousand** for cash dividends payable, recorded in Accounts payable and accrued expenses[39](index=39&type=chunk) - Cash paid for interest, net of capitalized amounts, was **$6,641 thousand** for H1 2023 (vs **$3,739 thousand** for H1 2022), offset by **$3,443 thousand** (2023) and **$41 thousand** (2022) received from interest rate cap agreements[41](index=41&type=chunk) - The Company granted various restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) during Q2 2023, with aggregate fair values ranging from **$25 thousand** to **$1,451 thousand**[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) [4 - Vessel Acquisitions and Dispositions](index=16&type=section&id=4%20-%20VESSEL%20ACQUISITIONS%20AND%20DISPOSITIONS) This note details the company's activities related to acquiring and disposing of vessels - The Company acquired two **2022-built Ultramax vessels** (Genco Mary and Genco Laddey) for **$29,170 thousand each**, delivered on **January 6, 2022**[48](index=48&type=chunk) - Net proceeds of **$5,643 thousand** from the November 2021 sale of the Genco Provence remain restricted cash, with the period to finance replacement vessels extended to **October 28, 2023**[50](index=50&type=chunk) [5 - Earnings Per Share](index=16&type=section&id=5%20%E2%80%93%20EARNINGS%20PER%20SHARE) This note presents basic and diluted earnings per share calculations, including dilutive securities impact - Dilutive effects for the three months ended June 30, 2023, included **170,198 stock options**, **54,712 performance-based restricted stock units**, and **122,324 restricted stock units**[52](index=52&type=chunk) Weighted Average Common Shares Outstanding | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | 42,786,918 | 42,385,423 | 42,709,916 | 42,276,371 | | Diluted | 43,134,152 | 42,996,676 | 43,115,859 | 42,932,370 | [6 - Related Party Transactions](index=17&type=section&id=6%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses any transactions with related parties during the reporting periods - The Company did not have any related party transactions during the three and six months ended **June 30, 2023** and **2022**[53](index=53&type=chunk) [7 - Debt](index=17&type=section&id=7%20%E2%80%93%20DEBT) This note details long-term debt, credit facilities, and compliance with financial covenants - The **$450 Million Credit Facility** transitioned from LIBOR to SOFR for interest calculation effective **June 30, 2023**[56](index=56&type=chunk) - As of **June 30, 2023**, there was **$206,990 thousand** of availability under the **$450 Million Credit Facility**, and the Company was in compliance with all financial covenants[57](index=57&type=chunk)[58](index=58&type=chunk) Long-term Debt, Net (USD Thousands) | Metric | June 30, 2023 | December 31, 2022 | | :------------------------------------------ | :------------ | :---------------- | | Principal amount | $153,500 | $171,000 | | Less: Unamortized deferred financing costs | $(5,239) | $(6,079) | | **Long-term debt, net** | **$148,261** | **$164,921** | Effective Interest Rate | Period | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Three Months Ended June 30 | 8.39% | 3.96% | | Six Months Ended June 30 | 8.06% | 3.43% | [8 - Derivative Instruments](index=19&type=section&id=8%20%E2%80%93%20DERIVATIVE%20INSTRUMENTS) This note describes the company's use of derivative instruments, like interest rate caps, to manage market risks - As of **June 30, 2023**, the Company had **two interest rate cap agreements** outstanding with a total notional amount of **$150,000 thousand** to manage interest rate risk[60](index=60&type=chunk)[63](index=63&type=chunk) - One **$50,000 thousand interest rate cap agreement** expired on **March 10, 2023**[60](index=60&type=chunk) - A portion of one interest rate cap agreement was dedesignated as a hedge in Q2 2022, with subsequent gains/losses recorded in interest expense[61](index=61&type=chunk) - The valuation of interest rate caps transitioned to **SOFR rates** on **June 30, 2023**[65](index=65&type=chunk) - The Company recorded a **$2,621 thousand unrealized loss** for the six months ended June 30, 2023, in Accumulated Other Comprehensive Income (AOCI)[66](index=66&type=chunk) - Estimated income of **$3,859 thousand** recorded in AOCI as of **June 30, 2023**, is expected to be reclassified into earnings within the next **twelve months**[66](index=66&type=chunk) [9 - Fair Value of Financial Instruments](index=22&type=section&id=9%20%E2%80%93%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note provides fair value measurements of the company's financial assets and liabilities - Cash and cash equivalents and restricted cash are considered **Level 1 items**; floating rate debt, interest rate cap agreements, bunker swap agreements, forward fuel purchase agreements, and vessel impairment assessments are **Level 2 items**[73](index=73&type=chunk) - The Company did not have any **Level 3 financial assets or liabilities** as of **June 30, 2023**, and **December 31, 2022**[75](index=75&type=chunk) Fair Values and Carrying Values of Financial Instruments (June 30, 2023, USD Thousands) | Instrument | Carrying Value | Fair Value | | :------------------------------------------ | :------------- | :--------- | | Cash and cash equivalents | $47,934 | $47,934 | | Restricted cash | $5,958 | $5,958 | | Principal amount of floating rate debt | $153,500 | $153,500 | [10 - Accounts Payable and Accrued Expenses](index=23&type=section&id=10%20%E2%80%93%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSES) This note details the composition of the company's accounts payable and accrued expenses Accounts Payable and Accrued Expenses (USD Thousands) | Category | June 30, 2023 | December 31, 2022 | | :------------------------------------------ | :------------ | :---------------- | | Accounts payable | $8,867 | $16,162 | | Accrued general and administrative expenses | $3,554 | $6,171 | | Accrued vessel operating expenses | $6,621 | $7,142 | | **Total** | **$19,042** | **$29,475** | [11 - Voyage Revenues](index=23&type=section&id=11%20%E2%80%93%20VOYAGE%20REVENUES) This note provides a breakdown of the company's voyage revenues by category and period Total Voyage Revenues (USD Thousands) | Period | 2023 | 2022 | | :------------------------------------------ | :----- | :----- | | Three Months Ended June 30 | $90,556 | $137,764 | | Six Months Ended June 30 | $184,947 | $273,991 | Voyage Revenue Breakdown (USD Thousands) | Category | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Lease revenue | $44,926 | $62,752 | $81,893 | $118,557 | | Spot market voyage revenue | $45,630 | $75,012 | $103,054 | $155,434 | [12 - Leases](index=24&type=section&id=12%20%E2%80%93%20LEASES) This note describes lease arrangements, including sublease income and short-term charter-in agreements - Sublease income from the main office in New York was **$306 thousand** for both the three months ended **June 30, 2023** and **2022**, and **$612 thousand** for both the six months ended **June 30, 2023** and **2022**[79](index=79&type=chunk) - All charter-in agreements for third-party vessels were **short-term leases** (less than twelve months), and the Company elected not to recognize right-of-use assets and lease liabilities for these[80](index=80&type=chunk) [13 - Stock-Based Compensation](index=24&type=section&id=13%20%E2%80%93%20STOCK-BASED%20COMPENSATION) This note details stock-based compensation plans, including stock options, restricted stock units, and PRSUs [Stock Options](index=24&type=section&id=Stock%20Options) This sub-note provides information on the company's stock option activity and related compensation expense - The unamortized stock-based compensation balance of **$32 thousand** as of **June 30, 2023**, is expected to be expensed by the end of **2024**[83](index=83&type=chunk) Stock Option Activity (Six Months Ended June 30, 2023) | Metric | Number of Options | Weighted Average Exercise Price | | :------------------------------------------ | :---------------- | :------------------------------ | | Outstanding as of January 1, 2023 | 415,227 | $7.91 | | Exercised | (47,037) | $7.70 | | Outstanding as of June 30, 2023 | 368,190 | $7.93 | | Exercisable as of June 30, 2023 | 331,880 | $7.72 | Stock Option Amortization Expense (USD) | Period | 2023 | 2022 | | :------------------------------------------ | :--- | :--- | | Three Months Ended June 30 | $15 | $55 | | Six Months Ended June 30 | $58 | $168 | [Restricted Stock Units](index=25&type=section&id=Restricted%20Stock%20Units) This sub-note details the activity of restricted stock units and their associated compensation costs - The total fair value of RSUs that vested during H1 2023 was **$3,923 thousand** (vs **$3,733 thousand** in H1 2022)[87](index=87&type=chunk) - Unrecognized compensation cost of **$6,599 thousand** related to RSUs will be recognized over a weighted-average period of **1.84 years** as of **June 30, 2023**[88](index=88&type=chunk) Unvested RSU Activity (Six Months Ended June 30, 2023) | Metric | Number of RSUs | Weighted Average Grant Date Price | | :------------------------------------------ | :------------- | :-------------------------------- | | Outstanding as of January 1, 2023 | 641,972 | $15.74 | | Granted | 205,118 | $16.30 | | Vested | (219,649) | $14.32 | | Forfeited | (49,322) | $16.42 | | Outstanding as of June 30, 2023 | 578,119 | $16.41 | RSU Amortization Expense (USD) | Period | 2023 | 2022 | | :------------------------------------------ | :---- | :---- | | Three Months Ended June 30 | $1,089 | $771 | | Six Months Ended June 30 | $2,605 | $1,348 | [Performance-Based Restricted Stock Units](index=26&type=section&id=Performance-Based%20Restricted%20Stock%20Units) This sub-note describes performance-based restricted stock units, their vesting conditions, and unrecognized compensation costs - PRSUs are contingent upon the Company's relative **Total Shareholder Return (TSR)** and **Return on Invested Capital (ROIC)** for a three-year performance period ending **December 31, 2025**[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Unrecognized compensation cost of **$1,399 thousand** related to PRSUs will be recognized over a weighted-average period of **2.51 years** as of **June 30, 2023**[92](index=92&type=chunk) PRSU Amortization Expense (USD) | Period | 2023 | 2022 | | :------------------------------------------ | :--- | :--- | | Three Months Ended June 30 | $115 | $0 | | Six Months Ended June 30 | $115 | $0 | [14 - Legal Proceedings](index=28&type=section&id=14%20%E2%80%93%20LEGAL%20PROCEEDINGS) This note discloses information regarding ongoing legal claims and the company's defense strategy - A sub-charterer asserted a claim for monetary losses against the Genco Constellation, leading to its arrest in Ghana in **December 2022** and **February 2023**, causing the vessel to not generate revenue[94](index=94&type=chunk) - The Company believes these claims are without merit, has valid defenses, and is vigorously defending them while seeking reimbursement for damages, including lost revenue and legal fees[94](index=94&type=chunk) - Arbitration proceedings have been initiated after obtaining security from BG Shipping Co. Limited[94](index=94&type=chunk) [15 - Subsequent Events](index=29&type=section&id=15%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note reports significant events occurring after the balance sheet date but before financial statement issuance - On **July 3, 2023**, the Company made a voluntary debt repayment of **$8,750 thousand** under the **$450 Million Credit Facility**[96](index=96&type=chunk) - On **August 4, 2023**, a regular quarterly dividend of **$0.15 per share** was announced, expected to be approximately **$6.5 million**, payable around **August 23, 2023**[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operating results, highlighting key performance drivers, market trends, capital allocation strategy, and future outlook. It also includes a 'Safe Harbor' statement for forward-looking information [General Business Overview](index=32&type=section&id=General) This section overviews drybulk shipping operations, fleet, capital allocation strategy, and environmental compliance - The Company operates a fleet of **44 drybulk vessels** (17 Capesize, 15 Ultramax, 12 Supramax) with an average age of approximately **11.4 years**, transporting iron ore, coal, grain, and other drybulk cargoes worldwide[101](index=101&type=chunk) - The capital allocation strategy, implemented in **April 2021**, focuses on compelling dividends, financial deleveraging, and accretive fleet growth[104](index=104&type=chunk)[105](index=105&type=chunk) - Since **2021**, the Company has paid down **$295.7 million** of debt, resulting in a debt balance of **$153.5 million** as of **June 30, 2023** (a **66% reduction** from January 1, 2021)[104](index=104&type=chunk) - Total liquidity as of **June 30, 2023**, was **$260.9 million**, comprising **$53.9 million cash** and **$207.0 million undrawn revolver availability**[104](index=104&type=chunk) - The Company initiated a comprehensive plan to comply with **IMO 2023 regulations (EEXI and CII)** and plans to invest in energy-saving devices and high-performance paint systems[105](index=105&type=chunk)[107](index=107&type=chunk) - New IMO targets for greenhouse gas emissions reductions compared to 2008 levels are **20%** (striving for **30%**) by **2030**, **70%** (striving for **80%**) by **2040**, and **net zero** at or around **2050**[108](index=108&type=chunk) [Factors Affecting Our Results of Operations](index=35&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) This section analyzes key operational metrics and their impact on financial performance, including fleet data Fleet Data (Three Months Ended June 30) | Metric | 2023 | 2022 | Increase (Decrease) | % Change | | :------------------------------------------ | :----- | :----- | :------------------ | :------- | | Total Ownership days | 4,004.0 | 4,004.0 | — | — % | | Total Chartered-in days | 70.0 | 145.7 | (75.7) | (52.0)% | | Total Available days (owned & chartered-in) | 3,969.2 | 3,655.5 | 313.7 | 8.6 % | | Total Operating days | 3,918.9 | 3,610.7 | 308.2 | 8.5 % | | Fleet utilization | 97.8 % | 97.2 % | 0.6 % | 0.6 % | Average Daily Results (Three Months Ended June 30) | Metric | 2023 | 2022 | Increase (Decrease) | % Change | | :------------------------------------------ | :----- | :----- | :------------------ | :------- | | Fleet average TCE rate | $15,556 | $28,756 | $(13,200) | (45.9)% | | Major bulk vessels TCE rate | $19,468 | $27,034 | $(7,566) | (28.0)% | | Minor bulk vessels TCE rate | $12,994 | $29,551 | $(16,557) | (56.0)% | | Fleet average daily vessel operating expenses | $5,641 | $7,358 | $(1,717) | (23.3)% | Fleet Data (Six Months Ended June 30) | Metric | 2023 | 2022 | Increase (Decrease) | % Change | | :------------------------------------------ | :----- | :----- | :------------------ | :------- | | Total Ownership days | 7,964.0 | 7,953.9 | 10.1 | 0.1 % | | Total Chartered-in days | 305.6 | 456.6 | (151.0) | (33.1)% | | Total Available days (owned & chartered-in) | 8,034.7 | 7,729.9 | 304.8 | 3.9 % | | Total Operating days | 7,898.0 | 7,568.0 | 330.0 | 4.4 % | | Fleet utilization | 97.2 % | 95.6 % | 1.6 % | 1.7 % | Average Daily Results (Six Months Ended June 30) | Metric | 2023 | 2022 | Increase (Decrease) | % Change | | :------------------------------------------ | :----- | :----- | :------------------ | :------- | | Fleet average TCE rate | $14,757 | $26,354 | $(11,597) | (44.0)% | | Major bulk vessels TCE rate | $17,759 | $25,649 | $(7,890) | (30.8)% | | Minor bulk vessels TCE rate | $12,869 | $26,749 | $(13,880) | (51.9)% | | Fleet average daily vessel operating expenses | $5,899 | $7,100 | $(1,201) | (16.9)% | [Operating Data](index=40&type=section&id=Operating%20Data) This section presents a summary of key operating and financial performance metrics for the reported periods Operating Data (Three Months Ended June 30, USD Thousands) | Metric | 2023 | 2022 | Change | % Change | | :------------------------------------------ | :----- | :----- | :----- | :------- | | Voyage revenues | $90,556 | $137,764 | $(47,208) | (34.3)% | | Total operating expenses | $77,529 | $88,569 | $(11,040) | (12.5)% | | Operating income | $13,027 | $49,195 | $(36,168) | (73.5)% | | Net income attributable to Genco | $11,562 | $47,382 | $(35,820) | (75.6)% | | EBITDA | $29,964 | $64,240 | $(34,276) | (53.4)% | Operating Data (Six Months Ended June 30, USD Thousands) | Metric | 2023 | 2022 | Change | % Change | | :------------------------------------------ | :----- | :----- | :----- | :------- | | Voyage revenues | $184,947 | $273,991 | $(89,044) | (32.5)% | | Total operating expenses | $167,478 | $182,703 | $(15,225) | (8.3)% | | Operating income | $17,469 | $91,288 | $(73,819) | (80.9)% | | Net income attributable to Genco | $14,196 | $89,071 | $(74,875) | (84.1)% | | EBITDA | $49,802 | $122,212 | $(72,410) | (59.2)% | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section provides a detailed comparative analysis of financial performance for Q2 and H1 2023 versus 2022 [Q2 2023 vs Q2 2022 Performance Analysis](index=44&type=section&id=Three%20months%20ended%20June%2030,%202023%20compared%20to%20the%20three%20months%20ended%20June%2030,%202022) This sub-section analyzes quarter-over-quarter changes in voyage revenues, operating expenses, and other financial metrics - Voyage revenues decreased by **$47.2 million (34.3%)** to **$90.6 million**, primarily due to lower rates for minor and major bulk vessels, as spot freight rates remained volatile and demand softened[129](index=129&type=chunk) - The average TCE rate for the overall fleet decreased **45.9%** to **$15,556 per day**, with major bulk vessels down **28.0%** and minor bulk vessels down **56.0%**[130](index=130&type=chunk)[131](index=131&type=chunk) - Voyage expenses decreased by **$3.6 million (11.2%)** to **$28.8 million**, mainly due to lower bunker consumption and decreased fuel prices[124](index=124&type=chunk)[133](index=133&type=chunk) - Vessel operating expenses decreased by **$6.9 million (23.3%)** to **$22.6 million**, driven by lower COVID-19 related expenses, reduced purchase of stores/spare parts, and lower repair/maintenance costs[124](index=124&type=chunk)[134](index=134&type=chunk) - Average daily vessel operating expenses (DVOE) decreased to **$5,641 per vessel per day** from **$7,358 per day**[135](index=135&type=chunk) - Charter hire expenses decreased by **$4.0 million (79.4%)** to **$1.0 million**, due to a decrease in chartered-in days and lower hire rates[124](index=124&type=chunk)[138](index=138&type=chunk) - General and administrative expenses increased by **$0.5 million (8.7%)** to **$6.9 million**, primarily due to higher nonvested stock amortization expense[124](index=124&type=chunk)[140](index=140&type=chunk) - Depreciation and amortization expense increased by **$2.3 million (15.6%)** to **$16.8 million**, primarily due to increased drydocking amortization for major bulk vessels[124](index=124&type=chunk)[142](index=142&type=chunk) - Interest expense decreased by **$0.3 million** to **$2.1 million**, mainly due to lower outstanding debt and settlement payments from interest rate cap agreements, partially offset by higher interest rates[143](index=143&type=chunk) [H1 2023 vs H1 2022 Performance Analysis](index=49&type=section&id=Six%20months%20ended%20June%2030,%202023%20compared%20to%20the%20six%20months%20ended%20June%2030,%202022) This sub-section analyzes year-to-date changes in voyage revenues, operating expenses, and other financial metrics - Voyage revenues decreased by **$89.0 million (32.5%)** to **$184.9 million**, primarily due to lower rates earned by minor and major bulk vessels[147](index=147&type=chunk) - The average TCE rate for the overall fleet decreased **44.0%** to **$14,757 per day**, with major bulk vessels down **30.8%** and minor bulk vessels down **51.9%**[148](index=148&type=chunk) - Fleet utilization increased from **95.6%** to **97.2%**, primarily due to less offhire and repair periods for Supramax vessels and less scheduled drydocking for Capesize vessels[149](index=149&type=chunk) - Voyage expenses decreased by **$4.7 million (6.6%)** to **$66.3 million**, due to decreased bunkers consumed during short-term time charters and lower fuel prices[125](index=125&type=chunk)[150](index=150&type=chunk) - Vessel operating expenses decreased by **$9.5 million (16.8%)** to **$47.0 million**, attributed to lower COVID-19 related expenses, reduced purchase of stores/spare parts, and lower repair/maintenance costs[125](index=125&type=chunk)[151](index=151&type=chunk) - Average daily vessel operating expenses (DVOE) decreased to **$5,899 per vessel per day** from **$7,100 per day**[152](index=152&type=chunk) - Charter hire expenses decreased by **$8.0 million (62.9%)** to **$4.7 million**, due to a decrease in chartered-in days and lower hire rates[125](index=125&type=chunk)[153](index=153&type=chunk) - General and administrative expenses increased by **$2.3 million (18.2%)** to **$14.7 million**, due to an increase in nonvested stock amortization expense and higher legal/professional fees[125](index=125&type=chunk)[155](index=155&type=chunk) - Depreciation and amortization expense increased by **$4.2 million (14.5%)** to **$32.7 million**, primarily due to increased drydocking amortization for major bulk vessels[125](index=125&type=chunk)[157](index=157&type=chunk) - Interest expense decreased by **$0.4 million** to **$4.2 million**, mainly due to lower outstanding debt and settlement payments from interest rate cap agreements, partially offset by higher interest rates[158](index=158&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses liquidity sources and uses, capital allocation strategy, debt management, and dividend policy - Primary liquidity sources include cash flow from operations, cash on hand, equity offerings, and credit facility borrowings, used for vessel acquisitions, fleet renewal, drydocking, dividends, and debt repayments[161](index=161&type=chunk) - As of **June 30, 2023**, the Company had **$47.9 million** in unrestricted cash and cash equivalents, plus **$207.0 million** in undrawn revolver availability, totaling **$260.9 million** in liquidity[162](index=162&type=chunk) - The Company made **$92.5 million** in voluntary debt prepayments throughout **2022** and H1 2023, reducing its cash flow breakeven rate[164](index=164&type=chunk) - There are no mandatory debt repayments until **$153.5 million** in **2026**, and the Company intends to continue voluntary debt reduction towards a medium-term goal of **zero net debt**[164](index=164&type=chunk) - The **$450 Million Credit Facility** requires the aggregate appraised value of collateral vessels to be at least **140%** of the outstanding loan principal[165](index=165&type=chunk) - The quarterly dividend policy, adopted in **April 2021**, calculates distributable cash flow based on operating cash flow less debt repayments, drydocking capital expenditures, and a reserve[169](index=169&type=chunk)[171](index=171&type=chunk) - The declaration and payment of dividends are subject to legally available funds, compliance with obligations, and the Board's discretion, considering financial performance and market developments[172](index=172&type=chunk)[174](index=174&type=chunk) - The Company completed drydocking for **three vessels** in H1 2023 and estimates **two more** for the remainder of 2023 and **13 vessels** in 2024[199](index=199&type=chunk) Estimated Drydocking and Fuel Efficiency Upgrade Costs (USD Millions) | Period | Estimated Drydocking Costs | Estimated Fuel Efficiency Upgrade Costs | Estimated Off-hire Days | | :------------------------------------------ | :------------------------- | :-------------------------------------- | :---------------------- | | July 1 - December 31, 2023 | $3.2 | $2.4 | 70 | | 2024 | $19.4 | $4.0 | 385 | [Critical Accounting Policies](index=60&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) This section highlights accounting policies requiring significant judgment and estimates, particularly for vessel valuation [Vessels and Depreciation](index=61&type=section&id=Vessels%20and%20Depreciation) This sub-section details the company's depreciation policy for vessels and its assessment of potential impairment - Vessels are depreciated on a **straight-line basis** over an estimated useful life of **25 years** from delivery, based on cost less an estimated residual scrap value of **$400/lwt**[203](index=203&type=chunk) - As of **June 30, 2023**, **15 Capesize vessels** had carrying values exceeding their vessel valuations (aggregate **$100.5 million**), indicating impairment, but no impairment losses were recorded based on anticipated undiscounted future net cash flows[206](index=206&type=chunk)[207](index=207&type=chunk) - The Company was in compliance with the collateral maintenance covenant under its **$450 Million Credit Facility** as of **June 30, 2023**[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily interest rate risk on its floating rate debt, which is managed through interest rate cap agreements. It also addresses derivative financial instruments and currency risk [Interest Rate Risk](index=64&type=section&id=Interest%20rate%20risk) This section describes the company's exposure to interest rate fluctuations on floating rate debt and mitigation strategies - The Company manages interest rate risk on its floating rate debt using **two interest rate cap agreements** with a total notional amount of **$150.0 million** as of **June 30, 2023**, expiring in **December 2023** and **March 2024**[211](index=211&type=chunk) - A **1% increase** in LIBOR or SOFR would result in an increase of **$0.8 million** in interest expense for the six months ended **June 30, 2023**[215](index=215&type=chunk) - The Company transitioned from LIBOR to **SOFR rates** for interest calculation effective **June 30, 2023**[214](index=214&type=chunk) - As of **June 30, 2023**, AOCI included **$3.9 million** related to interest rate cap agreements, expected to be reclassified into income over the next **12 months**[213](index=213&type=chunk) [Derivative Financial Instruments](index=64&type=section&id=Derivative%20financial%20instruments) This section explains the company's use of derivative instruments, like interest rate caps and bunker swaps, and their accounting - The two interest rate cap agreements were initially designated and qualified as cash flow hedges, with changes in value deferred in AOCI and reclassified into Interest expense[217](index=217&type=chunk) - A portion of one interest rate cap agreement was dedesignated as a cash flow hedge in Q2 2022 due to outstanding debt being below the notional amount[218](index=218&type=chunk) - Bunker swap and forward fuel purchase agreements are used to reduce fuel price risk but do not qualify for hedge accounting; unrealized or realized gains/losses are recognized as other income (expense)[220](index=220&type=chunk) [Currency and Exchange Rates Risk](index=65&type=section&id=Currency%20and%20exchange%20rates%20risk) This section assesses the company's exposure to foreign currency exchange rate fluctuations - The majority of transactions and operating costs are denominated in **U.S. Dollars**, and the foreign exchange risk associated with operating expenses in other currencies is immaterial[221](index=221&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=65&type=section&id=EVALUATION%20OF%20DISCLOSURE%20CONTROLS%20AND%20PROCEDURES) This section reports on management's assessment of the effectiveness of disclosure controls and procedures - Management, including the CEO and CFO, concluded that the disclosure controls and procedures were **effective** as of **June 30, 2023**[222](index=222&type=chunk) [Changes in Internal Control Over Financial Reporting](index=65&type=section&id=CHANGES%20IN%20INTERNAL%20CONTROL%20OVER%20FINANCIAL%20REPORTING) This section discloses any material changes in internal control over financial reporting during the quarter - There were **no changes** in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting[223](index=223&type=chunk) [PART II —OTHER INFORMATION](index=65&type=section&id=PART%20II%20%E2%80%94OTHER%20INFORMATION) This part includes updates to risk factors and a list of exhibits filed with the quarterly report [Item 1A. Risk Factors](index=65&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factor related to acts of war, specifically highlighting the unpredictable impact of Russia's exit from the Black Sea Grain Initiative on Ukrainian grain shipments and drybulk markets, which could adversely affect the company's business and ability to pay dividends - Russia's exit from the **Black Sea Grain Initiative** on **July 17, 2023**, and subsequent attacks on ports, make future Ukrainian grain shipments and drybulk market impacts unpredictable[224](index=224&type=chunk) - Failure to reinstate the agreement or worsening of the war in Ukraine could adversely affect the Company's business, financial condition, results of operations, and ability to pay dividends[224](index=224&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists all supplementary documents and agreements filed as part of the quarterly report - The exhibits include various corporate governance documents such as **Articles of Incorporation** and **By-Laws**[226](index=226&type=chunk) - Stock-based compensation agreements, including **Restricted Stock Unit Grant Agreements** and **Performance PRSU Grant Agreements**, are filed as exhibits[226](index=226&type=chunk)[229](index=229&type=chunk) - The **Second Amendment to Credit Agreement** dated **May 30, 2023**, is included as an exhibit[229](index=229&type=chunk) - Certifications of the **Chief Executive Officer and President (31.1, 32.1)** and **Chief Financial Officer (31.2, 32.2)** are part of the exhibits[229](index=229&type=chunk) - Inline XBRL formatted financial statements (**Exhibit 101**) and the **Cover Page Interactive Data File (Exhibit 104)** are also included[229](index=229&type=chunk)

GENCO SHIPPING & TRADING LIMITED Forward Looking Statements With PR safe harbor on 8/3 "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as "anticipate," "budget," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in con ...

Financial Data and Key Metrics Changes - For Q2 2023, the company recorded net income of $11.6 million, translating to $0.27 basic and diluted earnings per share [25][38] - The time charter equivalent rate achieved was $15,556 per day, approximately $2,500 above the scrubber adjusted benchmark [3] - The company declared a dividend of $0.15 per share for the quarter, utilizing a portion of its quarterly reserve [4][38] Business Line Data and Key Metrics Changes - The Baltic Capesize Index crossed $20,000 per day in early May but has since pulled back, with current spot Capesize rates around $15,000 per day [26][40] - Supramax rates have declined from approximately $13,000 per day at the start of Q2 to about $8,000 [26] Market Data and Key Metrics Changes - Cargo volumes into China, particularly iron ore and coal, increased by 8% and 93% respectively through June [8] - China's Q1 GDP growth was unexpectedly strong, leading to a premature easing of policy support, but lending declined by about 50% in Q2 [27] Company Strategy and Development Direction - The company continues to focus on a value strategy, providing substantial dividends while proactively paying down debt, aiming to reduce net debt to zero [5][39] - The company has maintained a low cash flow breakeven rate and low financial leverage, which supports its dividend policy [39] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook on the drybulk market, citing strong demand catalysts and historically low supply growth [28][40] - There is an expectation of a seasonal increase in iron ore volumes from Brazil and Australia, which may help China restock depleted inventories [43] Other Important Information - As of June 30, the company's cash position was $54 million, with outstanding debt of $153.5 million and total liquidity of $261 million [7] - The company was ranked 1 in the Weber Research ESG report for the third consecutive year, highlighting its leadership in sustainability and capital stewardship [6] Q&A Session Summary Question: Outlook on the dividend policy and potential adjustments - Management indicated that while the dividend is important, they are cautious about setting a floor for payouts, especially with over 50% of their fleet fixed [31][47] Question: Management's view on fleet management and market conditions - Management noted a shift in the market regarding forward cargo bookings and expects this to be a short-term phenomenon, with a focus on fleet renewal and improving fuel efficiency [32][48] Question: Triggers for the midsize segment to push higher - Management highlighted that a slight increase in demand could drive the midsize segment higher, but emphasized the need for global GDP growth to support this [11][45]

Genco Shipping & Trading Ltd (NYSE:GNK) Q1 2023 Earnings Conference Call May 4, 2023 8:30 AM ET Company Participants Peter Allen - SVP, Strategy & Finance John Wobensmith - CEO, President, Secretary & Director Apostolos Zafolias - CFO & EVP, Finance Conference Call Participants Omar Nokta - Jefferies Liam Burke - B. Riley Securities Operator Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited First Quarter 2023 Earnings Conference Call and Presentation. Before we begin, ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33393 GENCO SHIPPING & TRADING LIMITED (Exact name of registrant as specified in its charter) Republic of the Marshall Is ...

Genco Shipping & Trading Limited (NYSE:GNK) Q4 2022 Results Conference Call February 23, 2023 8:30 AM ET Company Participants John Wobensmith - Chief Executive Officer Apostolos Zafolias - Chief Financial Officer Peter Allen - SVP of Strategy Conference Call Participants Omar Nokta - Jefferies Greg Lewis - BTIG Liam Burke - B. Riley Operator Good morning, ladies and gentlemen. And welcome to the Genco Shipping & Trading Limited Fourth Quarter 2022 Earnings Conference Call and Presentation. Before we begin, ...

Environmental Regulations - As of January 1, 2015, ships operating within Emission Control Areas (ECAs) are not permitted to use fuel with sulfur content exceeding 0.1% m/m[66] - The International Maritime Organization (IMO) has designated four ECAs, including portions of the Baltic Sea, North Sea, North American area, and United States Caribbean area[66] - The new ECA in the Mediterranean, effective May 1, 2025, may lead to significant capital expenditures for compliance with stricter emission controls[66] - Tier III Nitrogen Oxide (NOx) standards apply to ships with marine diesel engines installed after January 1, 2016, in designated ECAs[69] - By 2025, all new ships built will be 30% more energy efficient than those built in 2014, as mandated by the Energy Efficiency Design Index (EEDI)[71] - The Energy Efficiency Existing Ship Index (EEXI) and operational carbon intensity indicator (CII) requirements will come into effect from January 1, 2023, for ships over 400 gross tonnage[72] - Compliance with the revised standards may incur substantial costs, impacting the company's financial condition and cash flows[73] - The Ballast Water Management Convention requires compliance with the D-2 standard by September 8, 2024, which may involve significant installation costs for treatment systems[86] - The company plans to continue investing in its existing fleet to improve fuel efficiency and comply with revised standards through its comprehensive IMO 2023 plan[74] - New SOLAS amendments effective January 1, 2024, will introduce additional operational requirements that may impact operational costs[84] - The cost of ballast water treatment systems ranges from $0.5 million to $1.09 million each, depending on vessel size[90] - The EU mandates that ships over 5,000 gross tonnage must monitor and report carbon dioxide emissions annually, which may lead to increased operational expenses[116] - The EU Emissions Trading System will require shipping companies to surrender allowances for greenhouse gas emissions, starting with 40% in 2024 and reaching 100% by 2026[120] - The International Maritime Organization aims to reduce greenhouse gas emissions from ships by at least 50% by 2050 compared to 2008 levels, with significant technological innovations needed[123] - Compliance with various international and U.S. regulations may require significant financial expenditures, although exact costs are currently unpredictable[127] - The EPA's Vessel Incidental Discharge Act requires compliance with new ballast water discharge regulations, potentially incurring substantial costs for vessel modifications[113] Liability and Insurance - The U.S. Coast Guard adjusted the limits of liability under the Oil Pollution Act (OPA) effective March 23, 2022, to the greater of $1,300 per gross ton or $1,076,000[101] - Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), liability for vessels carrying hazardous substances is limited to the greater of $300 per gross ton or $5.0 million[103] - The company maintains pollution liability coverage insurance of $1 billion per incident for each vessel[110] - Compliance with U.S. and European Union regulations is critical, as noncompliance may lead to increased liability and operational restrictions[98] - The company is subject to various state regulations that may impose stricter liability for oil pollution incidents[109] - The U.S. Clean Water Act imposes strict liability for unauthorized discharges, with substantial penalties for violations[112] Operational Risks - The company is actively monitoring and adapting to changes in environmental regulations that could impact operational costs[108] - Increased regulatory scrutiny and inspection procedures could lead to higher operational costs and potential disruptions in business[161] - The company’s vessels are exposed to various international risks, including piracy and geopolitical tensions, which could adversely affect revenue and operational stability[163] - Increased tensions between the U.S. and China could disrupt shipping routes and adversely affect the company's operations and financial condition[165] - Damage to vessels may lead to unexpected drydocking costs, negatively impacting earnings and cash flows[166] - Operational risks associated with drybulk vessels could result in hull breaches and loss of vessels, affecting the company's reputation and financial health[167] - Acts of piracy in regions like the Gulf of Aden and Gulf of Guinea could hinder vessel operations and increase insurance costs[168] - The ongoing war in Ukraine has led to higher commodity prices and potential disruptions in trade volumes, impacting the drybulk market[171] - Compliance with safety regulations imposed by classification societies is essential; failure to maintain certification could render vessels unemployable[173] Financial Performance and Market Conditions - The company operates in a seasonal market, with expected weaker revenues during the fiscal quarters ending June 30 and September 30, and stronger revenues during December 31 and March 31[136] - A prolonged downturn in the drybulk charter market could negatively impact earnings, as evidenced by the volatility of the Baltic Dry Index over the past five years[146] - The company is significantly affected by economic conditions in the Asia Pacific region, particularly in China, which has been a major driver of demand for drybulk shipping[143] - Inflation has led to increased operational costs, including crew and maintenance expenses, which may not be fully offset by rising charter rates[154] - The COVID-19 pandemic has adversely impacted global trade patterns and industrial activity, particularly in key markets like China, potentially reducing demand for shipping services[157] - The company faces liquidity issues if conditions in the drybulk market worsen for a prolonged period, potentially leading to insufficient liquidity to fund operations[193] - The aging fleet and reliance on previously owned vessels may result in increased operating costs, adversely affecting earnings[198] - The company is subject to market risks related to changes in LIBOR rates, which could increase interest costs on floating rate debt[201] - Charterhire rates for vessels have sometimes declined below operating costs, exposing the company to spot market volatility[189] - Approximately 39% of revenues were derived from ten charterers, indicating a significant reliance on a limited customer base[197] Corporate Governance and Taxation - Genco satisfied the publicly traded test and qualified for the Section 883 exemption in 2022 and 2021, avoiding a 4% tax on U.S. source shipping income[221] - Genco's U.S. source shipping income is subject to a 21% federal corporate income tax if considered effectively connected income[222] - Genco does not intend to operate vessels on a regularly scheduled basis to avoid U.S. source shipping income being classified as effectively connected income[224] - If Genco's shipping income does not qualify for the Section 883 exemption, gains from vessel sales may be subject to U.S. tax[225] - Legislative changes, such as the OECD's minimum 15% tax rate agreement, could materially impact Genco's tax position[235] - Genco's corporate governance is governed by the Marshall Islands law, which may limit shareholder protections compared to U.S. corporations[238] - Future capital needs may require Genco to raise additional funds, potentially diluting existing shareholders' interests[240] Financial Instruments and Risk Management - The company has entered into bunker swap and forward fuel purchase agreements to mitigate the risk of changing fuel prices, although these do not qualify for hedge accounting treatment[419] - The majority of the company's transactions are denominated in U.S. Dollars, with foreign exchange risk associated with operating expenses in other currencies being immaterial[420] - The company held three interest rate cap agreements designated as cash flow hedges, with changes in their value deferred in AOCI[416] - During Q2 2022, a portion of one interest rate cap agreement was dedesignated as a cash flow hedge, affecting interest expense[417] - The company manages interest costs and risks associated with changing interest rates through derivative financial instruments such as swaps and caps[415] - The company aims to manage the impact of interest rate changes on earnings and cash flow related to borrowings[410] - As of December 31, 2022, the total notional amount of interest rate cap agreements held by the company is $200.0 million[415] - The total asset associated with the interest rate caps is $6.7 million, with $6.3 million classified as a current asset[411] - A 1% increase in LIBOR would have resulted in an increase of $2.0 million in interest expense for the year ended December 31, 2022[412] - The company has accumulated other comprehensive income (AOCI) of $6.5 million related to the interest rate cap agreements, with $6.1 million expected to be reclassified into income over the next 12 months[411] Dependence on Joint Ventures and Technology - The company depends significantly on the GSSM joint venture for technical management, and any failure could adversely affect operations[203] - Genco's reliance on information technology systems exposes it to risks from cybersecurity breaches and operational disruptions[250]