Genco Shipping & Trading (GNK) - 2025 Q2 - Quarterly Results

markdown [Second Quarter 2025 and Year-to-Date Highlights](index=1&type=section&id=Second%20Quarter%202025%20and%20Year-to-Date%20Highlights) Genco declared a **$0.15** Q2 2025 dividend, acquired a Capesize vessel, reported a **$6.8 million** net loss, and upsized its credit facility - Declared a **$0.15 per share dividend** for Q2 2025, marking the **24th consecutive quarterly dividend**. The cumulative dividend paid reached **$6.915 per share**[3](index=3&type=chunk) - Agreed to acquire a **2020-built, scrubber-fitted 182,000 dwt Capesize vessel**, to be named the Genco Courageous, with delivery expected between September and October 2025[3](index=3&type=chunk) Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Loss | $6.8 million | | Net Loss per Share (basic & diluted) | $0.16 | | Adjusted Net Loss | $6.2 million | | Adjusted Loss per Share (basic & diluted) | $0.14 | | Adjusted EBITDA | $14.3 million | | Voyage Revenues | $80.9 million | | Average Daily Fleet-wide TCE | $13,631 | - Estimated Time Charter Equivalent (TCE) for Q3 2025 to date is **$15,926** for **70%** of the owned fleet's available days[3](index=3&type=chunk) - Amended its credit facility in July to establish a **$600 million Revolving Credit Facility (RCF)**, significantly increasing borrowing capacity[3](index=3&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Wobensmith highlighted Genco's value strategy, focusing on dividends, strategic vessel acquisition, and expanded borrowing capacity - The company is executing a **value strategy** focused on returning capital to shareholders and expanding earnings power[4](index=4&type=chunk) - The acquisition of a new Capesize vessel is part of a strategy to modernize the asset base, with approximately **$200 million invested** in the Capesize sector over the last two years[4](index=4&type=chunk) - The company's borrowing capacity was expanded by **50%** to a new **$600 million revolving credit facility** to support growth[4](index=4&type=chunk) - Management observes a pick-up in Capesize and Supramax rates and believes the company is well-positioned to capitalize on improving drybulk fundamentals due to its commercial platform and operating leverage[4](index=4&type=chunk) [Comprehensive Value Strategy](index=2&type=section&id=Comprehensive%20Value%20Strategy) Genco's value strategy focuses on dividends, deleveraging, and opportunistic fleet growth, maintaining strong liquidity and low leverage - The company's strategy is centered on three pillars: **Dividends, Deleveraging, and Growth**[7](index=7&type=chunk)[8](index=8&type=chunk) - As of June 30, 2025, the company had a strong liquidity position of **$335.6 million**, comprising **$35.8 million in cash** and **$299.8 million in revolver availability**[8](index=8&type=chunk) - Maintained low financial leverage with a **net loan-to-value (LTV) of 7%** as of June 30, 2025, which is pro forma **13%** after the agreed vessel acquisition[8](index=8&type=chunk)[9](index=9&type=chunk) [Growth and Capital Structure](index=3&type=section&id=Growth%20and%20Capital%20Structure) Genco pursues growth via a **$63.6 million** Capesize acquisition, backed by a new **$600 million** revolving credit facility with improved terms [Vessel Acquisition](index=3&type=section&id=Vessel%20Acquisition) Genco agreed to acquire a **2020-built, 182,000 dwt Capesize vessel** for **$63.6 million**, its fourth high-specification Capesize acquisition since October 2023 - Agreed to acquire a **2020-Imabari built 182,000 dwt scrubber-fitted Capesize vessel** for a purchase price of **$63.6 million**[11](index=11&type=chunk) - This is the **fourth high-specification, fuel-efficient Capesize vessel** acquired since October 2023, expanding the company's presence in a key sector[12](index=12&type=chunk) [New $600 Million Revolving Credit Facility](index=3&type=section&id=New%20%24600%20Million%20Revolving%20Credit%20Facility) Genco upsized its credit facility to a **$600 million revolving credit facility**, increasing borrowing capacity by **50%** with improved pricing and extended maturity - Closed a **$600 million revolving credit facility**, increasing borrowing capacity by **50% ($200 million)**[14](index=14&type=chunk)[20](index=20&type=chunk) - Key terms include an extended maturity to **July 2030**, improved pricing with a margin of **1.75% to 2.15% over SOFR**, and a **100% revolving structure** for flexibility[15](index=15&type=chunk)[20](index=20&type=chunk) - As of the press release date, Genco has **$100 million of debt outstanding** and **$500 million of undrawn revolver availability**[15](index=15&type=chunk) [Dividend Policy](index=3&type=section&id=Dividend%20Policy) Genco declared a **$0.15 per share** Q2 2025 dividend, enabled by adjusting the voluntary reserve to maintain payouts and provide capital flexibility - Declared a cash dividend of **$0.15 per share** for Q2 2025, payable around August 25, 2025[17](index=17&type=chunk) - The dividend was enabled by reducing the Q2 voluntary reserve from **$19.50 million to $7.91 million**, as the standard formula would not have produced a dividend[17](index=17&type=chunk) Q2 2025 Dividend Calculation (in millions) | Description | Amount ($) | | :--- | :--- | | Net revenue | 46.90 | | Operating expenses | (32.41) | | **Operating cash flow** | **14.49** | | Less: voluntary quarterly reserve | (7.91) | | **Cash flow distributable as dividends** | **6.58** | | **Dividend per share** | **0.15** | - The voluntary quarterly reserve for Q3 2025 is expected to be **$19.50 million**, but the Board maintains flexibility to adjust it to pay dividends or for other uses like vessel acquisitions and debt repayments[22](index=22&type=chunk)[24](index=24&type=chunk) [Commercial and Fleet Strategy](index=5&type=section&id=Genco%27s%20Active%20Commercial%20Operating%20Platform%20and%20Fleet%20Deployment%20Strategy) Genco employs a flexible portfolio approach for revenue, favoring short-term fixtures, with **70%** of Q3 2025 available days fixed at **$15,926** TCE - The company utilizes a portfolio approach for revenue generation, combining short-term spot market fixtures and longer-term coverage, with a current weighting towards short-term fixtures for optionality[27](index=27&type=chunk) Estimated Net TCE - Q3 2025 to Date | Vessel Type | TCE ($) | % Fixed | | :--- | :--- | :--- | | Capesize | 20,951 | 69% | | Ultra/Supra | 13,326 | 70% | | **Total** | **15,926** | **70%** | [Financial Review](index=6&type=section&id=Financial%20Review) Genco reported a Q2 2025 net loss of **$6.8 million** and a H1 2025 net loss of **$18.7 million**, primarily due to lower TCE rates and reduced revenues [Second Quarter 2025 Financial Review](index=6&type=section&id=Financial%20Review%3A%202025%20Second%20Quarter) Genco reported a Q2 2025 net loss of **$6.8 million** and an average daily TCE of **$13,631**, with lower revenues and higher G&A expenses offsetting reduced operating costs Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income | ($6.8M) | $23.5M | | Adjusted Net (Loss) Income | ($6.2M) | $19.9M | | Revenues | $80.9M | $107.0M | | Average Daily TCE | $13,631 | $19,938 | | Adjusted EBITDA | $14.3M | $39.8M | - Daily vessel operating expenses (DVOE) decreased to **$6,213 per vessel per day** from **$6,855** in Q2 2024, mainly due to the timing of stores/spares purchases and lower repair costs[36](index=36&type=chunk) - General and administrative expenses increased to **$7.4 million** from **$6.3 million** year-over-year due to higher legal/professional fees and nonvested stock amortization[38](index=38&type=chunk) [Six Months 2025 Financial Review](index=7&type=section&id=Financial%20Review%3A%20Six%20Months%202025) For H1 2025, Genco reported a net loss of **$18.7 million** and an average daily TCE of **$12,750**, driven by decreased revenues and lower charter rates compared to H1 2024 H1 2025 vs H1 2024 Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net (Loss) Income | ($18.7M) | $42.3M | | Revenues | $152.2M | $224.5M | | Average Daily TCE | $12,750 | $19,564 | | Adjusted EBITDA | $22.2M | $81.6M | - Daily vessel operating expenses (DVOE) for the first half of 2025 decreased slightly to **$6,401** from **$6,558** in H1 2024[45](index=45&type=chunk) [Liquidity and Capital Resources](index=8&type=section&id=Liquidity%20and%20Capital%20Resources) Genco maintains solid liquidity despite decreased H1 2025 operating cash flow of **$8.3 million**, with plans to expand its **42-vessel fleet** and significant capital expenditures for upgrades [Cash Flow Analysis](index=8&type=section&id=Cash%20Flow) H1 2025 net cash from operations decreased to **$8.3 million** due to lower charter rates and higher drydocking costs, while investing and financing activities also saw significant shifts Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $8.3M | $61.3M | | Net Cash (Used in) Provided by Investing Activities | ($6.7M) | $65.1M | | Net Cash Used in Financing Activities | ($9.9M) | ($130.9M) | [Fleet and Capital Expenditures](index=8&type=section&id=Capital%20Expenditures) Genco's **42-vessel fleet** (average age **12.7 years**) will expand to **43** with a new acquisition, with significant capital expenditures budgeted for upgrades through 2026 - The current fleet consists of **42 vessels** with an average age of **12.7 years**. The planned acquisition will expand the fleet to **43 vessels** and lower the average age to **12.5 years**[54](index=54&type=chunk)[55](index=55&type=chunk) Estimated Capital Expenditures (Balance of 2025 & 2026, in millions) | Quarter | Total Costs ($) | Estimated Offhire Days | | :--- | :--- | :--- | | Q3 2025 | 21.52 | 228 | | Q4 2025 | 3.24 | 55 | | Q1 2026 | 11.12 | 100 | | Q2 2026 | - | - | | Q3 2026 | 10.27 | 100 | | Q4 2026 | 5.15 | 68 | [Summary Consolidated Financial and Other Data](index=10&type=section&id=Summary%20Consolidated%20Financial%20and%20Other%20Data) This section presents unaudited financial statements and operational data, including Q2 2025 voyage revenues of **$80.9 million** and a net loss of **$6.8 million**, with total assets of **$1.04 billion** Consolidated Income Statement Data (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Voyage Revenues | $80,939 | $107,047 | $152,208 | $224,482 | | Total Operating Expenses | $85,201 | $80,733 | $166,239 | $176,075 | | Operating (Loss) Income | ($4,262) | $26,314 | ($14,031) | $48,407 | | Net (Loss) Income | ($6,809) | $23,493 | ($18,771) | $42,436 | | Net (Loss) EPS - basic | ($0.16) | $0.54 | ($0.43) | $0.98 | Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $35,439 | $43,690 | | Total Current Assets | $78,972 | $97,990 | | Vessels, net | $897,156 | $915,022 | | **Total Assets** | **$1,040,250** | **$1,056,602** | | Total Current Liabilities | $48,547 | $40,660 | | Long-term debt, net | $92,968 | $82,175 | | **Total Liabilities** | **$147,208** | **$128,374** | | **Total Equity** | **$893,042** | **$928,228** | EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | EBITDA | $13,647 | $43,294 | $21,568 | $82,531 | | Adjusted EBITDA | $14,298 | $39,767 | $22,213 | $81,626 |