NEW YORK, Oct 28, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Genco Shipping & Trading Limited (NYSE: GNK) today reported its financial results for the three months ended September 30, 2009.
The following financial review discusses the results for the three months and nine months ended September 30, 2009 and September 30, 2008.
Third Quarter 2009 and Year-to-Date Highlights
-- Recorded net income of $34.3 million, or $1.10 basic and $1.09 diluted
earnings per share for the third quarter;
-- Took delivery of the Genco Commodus and delivered the vessel to Morgan
Stanley Capital Group Inc. for the commencement of a 23 to 25 month time
charter at a rate of $36,000 per day;
-- Took delivery of the Genco Maximus and delivered the vessel to Cargill
International S.A. for the commencement of a 3 to 5.5 month time charter
at a rate of $31,750 per day; and
-- Signed short-term time charter agreements for three Panamax vessels, two
Supramax vessels and two Handymax vessels.
Financial Review: 2009 Third Quarter
The Company recorded net income for the third quarter of 2009 of $34.3 million, or $1.10 basic and $1.09 diluted earnings per share. Comparatively, for the three months ended September 30, 2008 net income was $63.0 million or $2.00 basic and $1.99 diluted earnings per share.
EBITDA was $72.5 million for the three months ended September 30, 2009 versus $93.2 million for the three months ended September 30, 2008.
Robert Gerald Buchanan, President, commented, "Our strong performance for the third quarter highlights management's success in locking away a large portion of our fleet on long-term time charters with a diverse group of leading multi-national companies. Currently, we have approximately 75% of our fleet's available days secured on contracts for the remainder of 2009 and 45% in 2010. Genco's sizeable contracted revenue streams provide shareholders with a high degree of earnings visibility while maintaining the ability to benefit from future rate increases. As we remain focused on executing our time charter strategy, we will seek to continue to deliver service that meets the highest operational standards for our leading customers."
Genco Shipping & Trading Limited revenues decreased 13.7% to $92.9 million for the three months ended September 30, 2009 versus $107.6 million for the three months ended September 30, 2008 due to lower charter rates achieved for some of our vessels.
The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet decreased 21.9% to $30,743 per day for the three months ended September 30, 2009 compared to $39,349 for the three months ended September 30, 2008. The decrease in TCE rates resulted from lower charter rates achieved in the third quarter of 2009 versus the third quarter of 2008 for five of the Panamax vessels, six of the Supramax and Handymax vessels, and five of the Handysize vessels in our current fleet. Furthermore, lower TCE rates were achieved in the third quarter of 2009 versus the same period last year due to the comparatively lower revenue from the profit sharing agreements on two of our Capesize vessels. This was slightly offset by higher revenues on one of our Handymax vessels.
Total operating expenses increased to $42.7 million for the three months ended September 30, 2009 from $36.9 million for the three month period ended September 30, 2008 due to higher vessel operating expenses, management fees and depreciation and amortization related to the operation of a larger fleet. Vessel operating expenses were $14.8 million for the third quarter of 2009 compared to $11.5 million for the same period last year. The increase in vessel operating expenses was due to the operation of a larger fleet, higher crewing expenses, as well as the operation of more Capesize vessels for the third quarter of 2009 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 as well as general inflation associated with costs of insurance, crewing, lube oil and spare parts.
Depreciation and amortization expenses increased to $22.3 million for the third quarter of 2009 from $18.8 million for the third quarter of 2008 as a result of the growth of our fleet. General and administrative expenses decreased to $3.8 million from $4.1 million during the comparative periods due to a decrease in costs associated with employee non-cash compensation, and other administrative costs. Management fees were $0.9 million for the three months ended September 30, 2009 and $0.7 million for the three months ended September 30, 2008, respectively, and relate to fees paid to our independent technical managers.
Daily vessel operating expenses, or DVOE, grew to $4,878 per vessel per day during the third quarter of 2009 from $4,187 for the same quarter last year as a result of higher crew and insurance expenses as well as the operation of a greater number of Capesize vessels. Daily vessel operating expenses year to date have been below budget due to the timing of purchases of spare parts as well as lower than anticipated crew costs. We believe daily vessel operating expenses are best measured for comparative purposes over a 12month 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 2009 DVOE budget is $5,350 per vessel per day on a weighted average basis.
John C. Wobensmith, Chief Financial Officer, commented, "During the third quarter, Genco further strengthened its leadership position by taking delivery of two Capesize newbuildings. Drawing upon our considerable financial strength, we intend to take delivery of our remaining Capesize newbuilding during the fourth quarter of 2009. As we continue to execute our growth strategy, we expect to increase the earnings power of our modern fleet and capitalize on the positive long-term demand for essential commodities in China, India and other developing countries. Management remains committed to actively consolidating the drybulk industry as we have consistently done since going public in July of 2005. In pursuing future growth opportunities, we intend to maintain our disciplined approach by adhering to a strict set of return criteria related to earnings and cash flow accretion as well as return on capital hurdles."
Financial Review: Nine Months 2009
Net income was $113.1 million or $3.62 basic and $3.60 diluted earnings per share for the nine months ended September 30, 2009, compared to $197.9 million or $6.60 basic and $6.56 diluted earnings per share for the nine months ended September 30, 2008. Included in net income for the nine months ended September 30, 2008 is a $26.2 million gain from the sale of the Genco Trader, $7.0 million of income received from our investment in stock of Jinhui Shipping and Transportation Limited, and a loss from derivative instruments of $2.0 million. Revenues decreased to $283.3 million for the nine months ended September 30, 2009 compared to $303.8 million for the nine months ended September 30, 2008. EBITDA was $222.5 million for the nine months ended September 30, 2009 versus $283.2 for the nine months ended September 30, 2008. TCE rates obtained by the Company decreased to $32,044 per day for the nine months ended September 30, 2009 from $38,742 for the same period in 2008. Total operating expenses were $124.7 million for the nine months ended September 30, 2009 compared to $77.1 for the nine months ended September 30, 2008, and daily vessel operating expenses per vessel were $4,789 versus $4,279 for the comparative periods.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the nine months ended September 30, 2009 and 2008 was $166.3 million and $207.4 million, respectively. The decrease in cash provided by operating activities was primarily due to a decrease in cash flows generated by the operation of our fleet due to lower charter rates and higher operating expenses. In addition, cash paid for interest increased by $7.2 million during the nine months ended September 30, 2009 as a result of an increase in the debt outstanding under the Company's 2007 Credit Facility. During the nine months ended September 30, 2008, a $26.2 million gain on sale of vessels was recognized from the sale of the Genco Trader and $7.0 million of income was received from our investment in stock of Jinhui Shipping and Transportation Limited.
Net cash used in investing activities for the nine months ended September 30, 2009 and 2008 was $210.1 million and $426.3 million, respectively. The decrease was primarily due to decreases in cash used for the purchase of vessels and deposits on vessels offset by a decline in cash provided by the sale of vessels. For the nine months ended September 30, 2009, cash used in investing activities primarily related to the purchase of vessels in the amount of $191.5 million and deposits of restricted cash in the amount of $17 million. For the nine months ended September 30, 2008, net cash used in investing activities primarily related to the purchase of vessels in the amount of $412.0 million as well as deposits on vessels in the amount of $57.4 million and the purchase of short term investments of $10.3 million, offset by the proceeds from the sale of the Genco Trader in the amount of $43.1 million and $7.0 million of income received from our investment in Jinhui Shipping and Transportation Limited.
Net cash provided by financing activities was $162.6 million during the nine months ended September 30, 2009 as compared to $289.8 million during the nine months ended September 30, 2008. The $127.2 million decrease in net cash provided by financing activities was primarily due to the issuance of common stock in the amount of $195.6 million, completed during the nine month period last year, and was offset by $85.6 million of cash dividends paid during the same period. For the nine months ended September 30, 2009 cash provided by financing activities consisted of $166.2 million of proceeds from the 2007 credit facility slightly offset by $3.5 million of deferred financing costs. For the same period last year, net cash provided by financing activities consisted of the drawdown of $461.5 million related to the purchase of vessels and $195.6 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 $85.6 million.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. Our current fleet consists of eight Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,734,000 dwt. After the expected delivery of the Genco Claudius, the last of the vessels that the Company has agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,905,000 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 one of our vessels will be drydocked in the fourth quarter of 2009. We further anticipate that nine of our vessels will be drydocked in 2010.
We estimate our drydocking costs for our fleet through 2010 to be:
Q4 2009 2010
Estimated Costs (1) $0.6 million $5.1 million
Estimated Offhire Days (2) 20 160
(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.
Two of the Capesize vessels drydocking in 2010 are anticipated to complete
the required maintenance in only ten days.
The Genco Beauty, Reliance and Warrior completed their drydockings during the third quarter of 2009 at an aggregate cost of approximately $1.5 million. The vessels were on planned offhire for 35 days in connection with their scheduled drydocking.
Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited's selected consolidated financial and other data for the periods indicated below.
Three Months Ended Nine Months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
---------- ---------- ---------- ----------
(Dollars in thousands, (Dollars in thousands,
except share and except share and
per share data) per share data)
(unaudited) (unaudited)
---------------------- ----------------------
INCOME STATEMENT
DATA:
Revenues $92,949 $107,557 $283,301 $303,798
Operating expenses:
Voyage expenses 1,002 1,748 3,866 3,216
Vessel operating
expenses 14,766 11,509 42,235 33,615
General and
administrative
expenses 3,782 4,133 11,775 12,975
Management fees 878 712 2,620 2,050
Depreciation and
amortization 22,297 18,840 64,179 51,453
Gain on sale of
vessel - - - (26,227)
----------- ---------- ---------- ----------
Total
operating
expenses 42,725 36,942 124,675 77,082
----------- ---------- ---------- ----------
Operating income 50,224 70,615 158,626 226,716
----------- ---------- ---------- ----------
Other (expense)
income:
Income from
investment - 4,410 - 7,001
Other expense (15) (629) (298) (2,009)
Interest income 104 634 169 1,609
Interest expense (16,042) (12,031) (45,366) (35,433)
---------- ---------- ---------- ----------
Other
(expense): (15,953) (7,616) (45,495) (28,832)
---------- ---------- ---------- ----------
Net income $34,271 $62,999 $113,131 $197,884
========== ========== ========== ==========
Earnings per share
- basic $1.10 $2.00 $3.62 $6.60
========== ========== ========== ==========
Earnings per share
- diluted $1.09 $1.99 $3.60 $6.56
========== ========== ========== ==========
Weighted average
shares outstanding
- basic 31,295,916 31,423,483 31,275,061 29,974,547
========== ========== ========== ==========
Weighted average
shares outstanding
- diluted 31,473,369 31,610,262 31,420,304 30,166,060
========== ========== ========== ==========
September 30, 2009 December 31, 2008
------------------ -----------------
BALANCE SHEET DATA: (unaudited)
Cash & cash equivalents
(Including restricted
cash) $260,757 $124,956
Current assets, including
cash 275,125 140,748
Total assets 2,296,140 1,990,006
Current liabilities (including
current portion of long-term
debt) 82,063 30,192
Total long-term debt
(including current portion) 1,339,500 1,173,300
Shareholders' equity 862,060 696,478
Nine Months Ended
September 30, 2009 September 30, 2008
------------------ ------------------
(unaudited)
Net cash provided by
operating activities $166,280 207,426
Net cash used in investing
activities (210,127) (426,278)
Net cash provided by
financing activities 162,648 289,811
Three Months Ended Nine Months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
--------- --------- --------- ---------
FLEET DATA: (unaudited) (unaudited)
Total number of vessels at
end of period 34 31 34 31
Average number of
vessels (1) 32.9 29.9 32.3 28.7
Total ownership days for
fleet (2) 3,027 2,749 8,819 7,856
Total available days for
fleet (3) 2,991 2,689 8,720 7,759
Total operating days for
fleet (4) 2,976 2,656 8,637 7,693
Fleet utilization (5) 99.5% 98.8% 99.0% 99.1%
AVERAGE DAILY RESULTS:
Time charter
equivalent (6) $30,743 39,349 $32,044 $38,742
Daily vessel operating
expenses per vessel (7) 4,878 4,187 4,789 4,279
----- ----- ----- -----
Three Months Ended Nine Months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
(Dollars in thousands) (Dollars in thousands)
---------------------- ----------------------
(unaudited) (unaudited)
EBITDA Reconciliation:
Net Income 34,271 $62,999 $113,131 $197,884
+ Net interest expense 15,938 11,397 45,197 33,824
+ Depreciation and
amortization 22,297 18,840 64,179 51,453
------ ------ ------- -------
EBITDA(8) 72,506 93,236 222,507 283,161
====== ====== ======= =======
(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 and
depreciation and amortization. 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 our consolidating internal financial
statements, and it is presented for review at our board meetings. The
Company believes that EBITDA is useful to investors as the shipping
industry is capital intensive which often results in significant
depreciation and cost of financing. EBITDA presents investors with a
measure in addition to net income to evaluate the Company's performance
prior to these costs. 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
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 34 drybulk vessels and after the expected delivery of the Genco Claudius the last of the vessels that the Company has agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,905,000 dwt.
Our current fleet consists of eight Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize drybulk carriers with an aggregate carrying capacity of approximately 2,734,000 dwt. Our current fleet contains nine 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 October 28, 2009, the average age of our current fleet was 6.9 years, as compared to the average age for the world fleet of approximately 15 years for the drybulk shipping segments in which we compete. The majority of the vessels in our current fleet are currently on long-term time charters with an average remaining life of approximately 10 months as of October 28, 2009.
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
Charter Cash Revenue Expected
Year Expiration Daily Daily Delivery
Vessel Built Charterer (1) Rate(2) Rate(3) (4)
Capesize Vessels
Genco Cargill December
Augustus 2007 International 2009 45,263 62,750 -
S.A.
Genco Cargill January
Tiberius 2007 International 2010 45,263 62,750 -
S.A.
Genco SK Shipping August
London 2007 Co., Ltd 2010 57,500 64,250 -
Genco Cargill September
Titus 2007 International 2011 45,000(5) 46,250 -
S.A.
Genco Cargill August
Constantine 2008 International 2012 52,750(5) -
S.A.
Genco Cargill October
Hadrian 2008 International 2012 65,000(5) -
S.A.
Genco Morgan Stanley
Commodus 2009 Capital Group June 2011 36,000 -
Inc.
Genco Cargill December
Maximus 2009 International 2009 31,750 -
S.A.
Genco To Be
Claudius 2009(6) Determined TBD TBD Q4 2009
("TBD")
Panamax Vessels
Genco Cargill Oct 09/ 15,000/
Beauty 1999 International Feb 10 19,125(7) -
S.A./LD
Commodities
Suisse,
Geneva
Genco Swissmarine January
Knight 1999 Services 2010 16,500(8) -
S.A.
Genco November
Leader 1999 Baumarine AS 2009 20,742(9) -
Genco C Transport November
Vigour 1999 Panamax Ltd. 2009 20,000 -
Genco Global
Acheron 1999 Chartering Ltd July 55,250 -
(a subsidiary 2011
of
ArcelorMittal
Group)
Genco Hanjin December
Surprise 1998 Shipping Co., 2010 42,100 -
Ltd.
Genco COSCO Bulk
Raptor 2007 Carriers Co., April 52,800 -
Ltd. 2012
Genco Baumarine AS/ Dec 09/ 20,079/
Thunder 2007 Klaveness Mar 10 20,000(10) -
Chartering
Supramax Vessels
Genco Bulkhandling
Predator 2005 Handymax A/S April Spot(11) -
2010
Genco Hyundai November
Warrior 2005 Merchant 2010 38,750 -
Marine
Co. Ltd.
Genco Pacific Oct 09/ 16,000/
Hunter 2007 Basin Jan 10 17,000(12) -
Chartering
Ltd.
Genco Clipper Bulk November
Cavalier 2007 Shipping NV 2009 16,750 -
Handymax Vessels
Genco Korea Line February
Success 1997 Corporation 2011 33,000(13) -
Genco Louis Dreyfus
Carrier 1998 Corporation March 37,000 -
2011
Genco Pacific
Prosperity 1997 Basin June 2011 37,000 -
Chartering
Ltd.
Genco Hyundai February
Wisdom 1997 Merchant 2011 34,500 -
Marine
Co. Ltd.
Genco STX Pan Nov 09/ 13,750/
Marine 1996 Ocean Co. Feb 10 15,500(14) -
Ltd.
Genco Muse 2001 Global November
Maritime 2009 15,000 -
Investments
Ltd.
Handysize Vessels
Genco Lauritzen January
Explorer 1999 Bulkers A/S 2010 Spot(15) -
Genco Lauritzen January
Pioneer 1999 Bulkers A/S 2010 Spot(15) -
Genco Lauritzen January
Progress 1999 Bulkers A/S 2010 Spot(15) -
Genco Lauritzen October
Reliance 1999 Bulkers A/S 2010 Spot(15) -
Genco Lauritzen October
Sugar 1998 Bulkers A/S 2010 Spot(15) -
Genco Pacific November
Charger 2005 Basin 2010 24,000 -
Chartering
Ltd.
Genco Pacific November
Challenger 2003 Basin 2010 24,000 -
Chartering
Ltd.
Genco Pacific December
Champion 2006 Basin 2010 24,000 -
Chartering
Ltd.
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, Genco Constantine, and Genco Hadrian under the terms of
each contract, the charterer is entitled to extend the 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 and
Genco Hadrian has the option to extend the charter for a period of one
year. The Genco Constantine has the option to extend the charter for a
period of eight months.
2) Time charter rates presented are the gross daily charterhire rates
before third-party commissions ranging from 1.25% to 6.25%. 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 vessels 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) We have reached an agreement to charter the vessel for 4 to 6.5 months
at a rate of $19,125 per day, less a 5% third-party commission. The vessel
is expected to enter into the time charter following the completion of its
previous time charter on or about October 29, 2009.
8) We have extended the short-term time charter for approximately 3.5 to
6.5 months at a rate of $16,500 per day, less a 5% third-party commission.
The vessel entered into the time charter following the completion of its
previous time charter on October 4, 2009.
9) We reached an agreement to enter the vessel into the Baumarine Pool
with an option to convert the balance period of the charter party to a
fixed rate, but only after June 1, 2009. We exercised the option to
convert the balance period of the charter party to a fixed rate on June 3,
2009 at a gross rate of $20,742 per day.
10) We have reached an agreement to charter the vessel for 3.5 to 6 months
at a rate of $20,000 per day, less a 5% third-party commission. The vessel
is expected to enter into the time charter following the completion of its
previous time charter on December 15, 2009.
11) We entered the vessel into the Bulkhandling Handymax Pool with an
option to convert the balance period of the charter party to a fixed rate,
but only after January 1, 2009. We extended the charter party by an
additional 5 to 7.5 months starting November 5, 2009. In addition to a
1.25% third-party brokerage commission, the charter party calls for a
management fee.
12) We have reached an agreement to extend the time charter contract for
this vessel for 3 to 5.5 months at a rate of $17,000 per day less a 5%
third-party commission. The extension began following the completion of
its previous time charter on October 25, 2009.
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 have reached an agreement to extend the time charter contract for
this vessel for 3 to 5.5 months at a rate of $15,500 per day less a 5%
third-party commission. The extension is expected to commence following
the completion of its current time charter on or about November 11, 2009.
15) We have reached an agreement to enter these vessels into a spot pool
managed by Lauritzen Bulkers beginning at the expiration of their current
time charters in August 2009. Under the pool agreement, we can withdraw up
to three vessels with three months' notice until December 31, 2009 and the
remaining two vessels with 12 months' notice. After December 31, 2009, we
can withdraw up to two vessels with three months' notice and the remaining
three vessels with 12 months' notice.
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 34 drybulk vessels consisting of eight Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,734,000 dwt. After the expected delivery of one additional vessel the Company has agreed to acquire, Genco Shipping & Trading Limited will own a fleet of 35 drybulk vessels, consisting of nine Capesize, eight Panamax, four Supramax, six Handymax and eight Handysize vessels, with an aggregate carrying capacity of approximately 2,905,000 dwt.
Conference Call Announcement
Genco Shipping & Trading Limited announced that it will hold a conference call on Thursday, October 29, 2009 at 8:30 a.m. Eastern Time, to discuss its 2009 third quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company's website, www.GencoShipping.com. To access the conference call, dial (800) 344-6698 or (785) 830-7979 and enter passcode 6514558. A replay of the conference call can also be accessed available through Thursday, November 12, 2009 at (888) 203-1112 or (719) 457-0820 and entering the passcode 6514558. 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 agreement to acquire one drybulk vessel; (xii) the completion of definitive documentation with respect to time charters; (xiii) charterers' compliance with the terms of their charters in the current market environment; 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 Reports on Form 10-K for the year ended December 31, 2008 and its reports on Form 10-Q and Form 8-K.
SOURCE Genco Shipping & Trading Limited
http://www.GencoShipping.com
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