Genco Shipping & Trading Limited Q1 2023 Earnings Call

It's a formulaic approach to the dividend where you've got the Drydock reserve you have debt repayment reserve and then you have this additional reserve, which you toggle. It this past quarter kind of given how strong genco with at the moment.

<unk>.

What are your thoughts on does that additional reserve of that 10 75 do you think thats actually do you think that's still needed or are you being overly conservative with that.

Okay.

The $10 75 as is is <unk>.

Basically off of our quarterly debt repayment, plus plus plus interest I do think it's important to have.

Our reserve for fleet renewal going forward.

These are depreciating asset so you do need to hold back so that we can move into newer tonnage as as the market dictates.

But and clearly we cap the $35 million a year in principle repayments in place so that the goal of getting down the net debt zero over the medium term is still is still there.

So I think it's I think it'll be really interesting once once we get down to that net debt zero.

And continue to have no mandatory amortization theres, obviously additional cash flow that can be returned to shareholders, but just to put a fine point I do believe the reserve is important we've got to make sure that we're setting continuing to set the company up for the future from a fleet renewal standpoint.

Perfect. Thanks, Thanks, very helpful I'll turn it over.

Thank you Omar.

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Your next question comes from Liam Burke from B Riley. Please go ahead. Thank.

Thank you and good morning, John and post close and Peter.

Good morning.

John your time charters.

A rising rate environment. How are you looking at that do you want to capture more of a spot market opportunity or do you see opportunities to.

Time on some of these other big.

Time out some of these other charters.

So where we would where we tend to focus more heavily when we're doing time charter coverage is on the case because of the volatility having.

Having said that.

We're not in the.

The mood so to speak to.

Put anything away for long term on a fixed rate basis.

Just because we do believe.

Firmer rates in our market is coming what we have done.

And we did quite a bit of this.

In in first quarter when rates were really low is we did put.

Vessels away Capesize vessels in particular on index charters at some very good premiums above and beyond the Baltic Capesize index anywhere from 125% to 127% over the Dci plus a scrubber premium on top of that so.

From a portfolio standpoint.

Thats actually paid off really well as again, we're approaching $20000 a day on the on the Dci, but I think in terms of fixed rates.

We're holding back for the time being.

Great. Thank you.

China's steel production is bounce back pretty nicely in the first quarter.

There have been rumblings about environmental initiatives, how are you looking at steel production, obviously the derivative.

Iron ore demand.

Yes, Thanks Graham good question <unk>.

Steel production has obviously been really strong in the year to date up 6% in Q1 still muted utilization in China has been rising almost every week. This year. So there's been a lot of positive indicators there.

Peak steel production in China tends to happen in Q2, so right around now actually.

Peak iron ore exports from Brazil, and Australia, which is really what drives drybulk rates and keeps us right in particular that peaks in the second half of the year and we do think that China needs to restock iron ore inventories had been drawn down significantly from peak levels. There is probably another 30 million tonnes, they need to restock to get back to those highs last year. So that's actually what.

We're focused on more of the commodity flows on the iron ore side.

Because steel production in China typically peaks during spring construction season right about now.

We're very focused on Brazil, and Australia really ramping up iron ore exports.

Months.

Great. Thanks, Peter.

Jeff.

Hopefully.

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Okay.