Q2 2024 Genco Shipping & Trading Ltd Earnings Call

August 8, 2024

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Operator: Ladies and gentlemen, and welcome to the Genco Shipping & Trading Ltd. second quarter 2024 earnings conference call and presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. We will conduct a question and answer session after the opening remarks by dialing 800-770-2030 and entering the passcode 636-5548. At this time, I will now turn the conference over to the company. Please do so.

Operator: Welcome to the Genco Shipping & Trading Ltd. 2nd Quarter 2024 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.GencoShipping.com. To inform everyone, today's conference call is being recorded and is now being webcast at the company's website, www.GencoShipping

Unknown Executive: These forward-looking statements are based on management's current expectations and observations. For discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, materials relating to this call posted on the company's website, and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2023, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC. At this time, I would like to introduce John Wobensmith, Chief Executive Officer of Genco Shipping & Trading Ltd.

Operator: We will conduct a question and answer session after the opening remarks. Instructions will follow at that time. A replay of the conference will be accessible anytime during the next two weeks by dialing 800-770-2030 and entering the passcode 636-5548. At this time, I will now turn the conference over to the company. Please do so.

Speaker Change: Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Ltd. Second Quarter 2024 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call.

Speaker Change: That presentation can be obtained from Genco's website at www.GencoShipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website www.GencoShipping.com.

Speaker Change: We will conduct a question and answer session after the opening remarks.

Instructions will follow at that time. A replay of the conference will be accessible anytime during the next two weeks.

Speaker Change: by dialing 800-770-2030 and entering the passcode 636-5548. At this time, I will now turn the conference over to the company. Please go ahead.

Unknown Executive: Good morning. Before we begin our presentation, I note that in this conference call, we will be making certain forward-looking statements pursuant to the safe harbor provisions of the Private Security Litigations Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intend, plan, believe, and other words of similar meaning in connection with the discussion of potential future events, circumstances, or future operating or financial performance.

Speaker Change: Good morning.

Speaker Change: before begin our presentation i note that in this conferencecall we will be making certain forward-looking statements pursuant to the safe harbor provisions of the private security litigations reform act of one thousand nine hundredand n five

Speaker Change: such forward-looking statements use words such as anticipate budget estimate expect project intend plan believe in other words in terms of similar meaning in connection with a discussion of potential future events circumstances or future operating or financial performance

Unknown Executive: These forward-looking statements are based on management's current expectations and observations. For discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, materials relating to this call posted on the company's website, and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31st, 2023, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the S At this time, I would like to introduce John Wobensmith, Chief Executive Officer of Genco Shipping & Trading Ltd.

Speaker Change: these forwardlooking statements are based on management's current expectations and observations for discussion of factors that could cause results to differ please see the company' ressrelease i was issued yesterday the materials related to this call posted on the company's website and the company's filings with the securities and exchange commission

Speaker Change: including without limitation the company's annual report on Form 10-K for the year ended December 31st, 2023 and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

John Wobensmith: At this time, I would like to introduce John Wobensmith, Chief Executive Officer of Genco Shipping and Trading Limited. John Wobensmith, Chief Executive Officer, Genco Shipping and Trading Limited. Good morning, everyone. Welcome to Genco's second quarter 2024 conference call. I will begin today's call by reviewing our Q2 2024 and year-to-date highlights.

John Wobensmith: Good morning everyone. Welcome to Genco's second quarter 2024 conference call. I will begin today's call by reviewing our Q2 2024 and year-to-date highlights. Additionally, we will provide an update on our value strategy, discuss our financial results for the quarter, as well as the industry's current fundamentals before opening the call up for questions.

John Wobensmith: additionally we will provide an update on our value strategy discuss our financial results for the quarter as well as the industry's current fundamentals before opening the call up for questions

Speaker Change: For additional information, please also refer to our earnings presentation posted on our website.

John Wobensmith: For additional information, please also refer to our earnings presentation posted on our website. Starting on slide five, Q2 2024 marked another strong quarter for Genco. We drew on our sizable dry bulk fleet and firm market conditions to generate nearly $40 million of EBITDA, led by our time chart equivalent rate of just under $20,000 per day for the fleet. Q2 represented another quarter of execution of our differentiated value strategy focused on dividends, deleveraging, and growth.

Speaker Change: starting on slide five

Speaker Change: q two two thousand and twenty four marked another strong quarter for jeno we drew on our sizable drive all fleet and firm market conditions to generate nearly forty million dollars of ebita led by our time charterequiland rate of just under twenty thousand dollars per day for the fleet

Speaker Change: Q2 represented another quarter of execution of our differentiated value strategy focused on dividends, deleveraging, and growth. In terms of shareholder returns, we declared a Q2 dividend of $0.34 per share as our strong earnings flowed into our dividend consistent with our transparent policy.

John Wobensmith: In terms of shareholder returns, we declared a Q2 dividend of $0.34 per share as our strong earnings flowed into our dividend consistent with our transparent policy. During the quarter, we also further improved our risk-reward balance as we voluntarily paid down debt and improved our net leverage position to 2% on a pro forma basis as we approach our goal of net debt zero. On page 6, we highlight the compelling dividends we have provided to shareholders. The second quarter dividend marks our 20th consecutive quarterly dividend payment.

Speaker Change: During the quarter we also further improved our risk-reward balance as we voluntarily paid down debt and improved our net leverage position to 2% on a pro forma basis as we approach our goal of net debt zero.

Speaker Change: On page 6, we highlight the compelling dividends we have provided to shareholders. The second quarter dividend marks our 20th consecutive quarterly dividend payment.

John Wobensmith: It also represents 5 uninterrupted years of providing shareholders with dividends, which is the longest period of consecutive dividends in our peer group. Over this time, we have declared $5.91 per share in dividends, or approximately 33% of our share price as of August 6, 2024. Complementing shareholder returns, during Q2, we continued to prioritize fleet renewal. Following the timely acquisition of two modern, high-specification cape-sized vessels in Q4, 2023, we divested three 2009 to 2010-built vessels to buyers in Q1 and early Q2, 2024.

Speaker Change: It also represents 5 uninterrupted years of providing shareholders with dividends, which is the longest period of consecutive dividends in our peer group.

Speaker Change: Over this time, we have declared $5.91 per share in dividends, or approximately 33% of our share price as of August 6, 2024.

Speaker Change: Complimenting shareholder returns. During Q2, we continued to prioritize fleet renewal.

Speaker Change: following the timely acquisition of two modern high spe specification keepe size vessels in q four two thousand and twenty three we divested three two thousand and nine to two thousand and ten built vessels to buyers in q one and early q two two thousand and twenty four

John Wobensmith: Through these transactions, we have improved the fuel efficiency of our fleet, increased our earnings power, reduced our fleet's average age, and saved approximately $10 million in dry docking capital expenditure for 2024. Furthermore, with the execution of this phase of our fleet renewal plan, we have further advanced our environmental approach to fleet composition, as shown on page 7. We own both Capesize and Ultramax Supermax vessels, enabling Genco to have access to sectors with distinct and attractive characteristics.

Speaker Change: Through these transactions, we have improved the fuel efficiency of our fleet, increased our earnings power, reduced our fleet's average age, and saved approximately $10 million in dry docking CapEx for 2024.

Speaker Change: With the execution of this phase of our Fleet Renewal Plan, we have further advanced our environmental approach to fleet composition, as shown on page 7.

John Wobensmith: We own both Capesize and Ultramax Supermax vessels, enabling Genco to have access to sectors with distinct and attractive characteristics. Capesize vessels provide high operating leverage and upside potential, with a focus on the iron ore, coal, and bauxite trades, while the minor bulk vessels provide more stable earning streams, operate on diverse trade routes, and are more closely linked with global GDP growth. This contributes to Genco's value strategy. Moving forward, we continue to evaluate further opportunities in the sale and purchase market to further renew our fleet.

Speaker Change: we owned both cape size and ultrac supermax vessels enabling jeno to have access to sectors with distinct and attractive characteristics

John Wobensmith: Capesize vessels provide high operating leverage and upside potential, with a focus on the iron ore, coal, and bauxite trades, while minor bulk vessels provide more stable earning streams, operate on diverse trade routes, and are more closely linked with global GDP growth.

Speaker Change: Cape-sized vessels provide high operating leverage and upside potential, with a focus on the iron ore, coal, and bauxite trades, while the minor bulk vessels provide more stable earning streams, operate on diverse trade routes, and are more closely linked with global GDP growth.

John Wobensmith: We believe owning ships in both of these sectors contributes to Genco's value strategy. Moving forward, we continue to evaluate further opportunities in the sale and purchase market to further renew our fleet. To that end, we have sold the Genco Warrior, a 2005-built, 55,000 deadweight-ton supermax for $11.95 million and delivered the vessel to buyers in July. Additionally, we have agreed to sell the Genco Hadrian, a 2008-built, 169,000 deadweight-ton cave-sized vessel for $25 million, with delivery scheduled in mid-October.

Speaker Change: We believe owning ships in both of these sectors

Speaker Change: contribute to Genco's value strategy.

Speaker Change: Moving forward, we continue to evaluate further opportunities in the sale and purchase market to further renew our fleet.

Speaker Change: To that end, we have sold the Genco Warrior, a 2005 built, 55,000 deadweight ton supermax for $11.95 million and delivered the vessel to buyers in July .

Speaker Change: additionally we have agreed to sell the jencohhadrian a two thousand and eight built one hundred and sixty nine thousand deadwayight time cape size vessel for twenty five million dollars with delivery scheduled in mid october

John Wobensmith: This later delivery date has enabled us to capture the firm S&P market today while continuing to trade the vessel over the next several months in what is a solid freight market. The sale of the Genco Hadrian completes the exit from the non-core 169,000 subsector of CAPES.

Speaker Change: This later delivery date has enabled us to capture the firm S&P market today while continuing to trade the vessel over the next several months in what is a solid freight market.

Speaker Change: The sale of the Genco Hadrian completes the exit from the non-core 169,000 subsector of Capes.

John Wobensmith: Collectively, the sale of the Genco Warrior and the Genco Hadrian saves approximately $5 million in dry docking capex in 2025. We believe the sales of these older, less fuel-efficient vessels were well-timed given the firm prices achieved, enabling us to take advantage of cyclically higher asset values to monetize non-core assets. We intend to reinvest these proceeds in high-quality fuel-efficient ships to improve our earnings capacity and further modernize the fleet. Turning to slide 8, we continue to generate strong TCE performance. In Q2, our fleet-wide TCE increased 28% on a year-over-year basis.

Speaker Change: Collectively, the sale of the Genco Warrior and the Genco Hadrian saved approximately $5 million in dry docking CapEx in 2025.

Speaker Change: We believe the sales of these older, less fuel-efficient vessels were well-timed given the firm prices.

Speaker Change: Achieved enabling us to take advantage of cyclically higher asset values to monetize non-core assets We intend to reinvest these proceeds in high-quality fuel efficient ships to improve our earnings capacity and further modernize the fleet

Speaker Change: Turning to slide 8, we continue to generate strong TCE performance.

Speaker Change: In Q2, our fleet-wide TCE increased 28% on a year-over-year basis.

John Wobensmith: Looking ahead to the third quarter, 67% of our available days are fixed to date at $19,291 a day, pointing to another firm quarter as this is well above our cash flow break-even rate. Turning to slide 9, we believe Genco remains in a highly advantageous position moving forward. Specifically, we have an industry low net loan-to-value, a low cash flow break-even rate, and nearly $330 million in undrawn revolve

Speaker Change: Looking ahead to the third quarter, 67% of our available days are fixed to date at $19,291 a day, pointing to another firm quarter as this is well above our cash flow break-even rate.

John Wobensmith: Turning to slide 9, we believe Genco remains in a highly advantageous position moving forward. Specifically, we have an industry-low net loan-to-value, a low cash flow break-even rate, and nearly $330 million in undrawn revolver availability. This provides significant financial flexibility and optionality for the company going forward. Given the volatility and cyclicality of dry bulk shipping, we also believe it creates a favorable risk-reward balance to provide sizable returns to shareholders, opportunities to grow the fleet, and enhance our earnings power through the dry bulk cycle.

Speaker Change: turning to slide nine we believe jenco remains in a highly adantageous position moving forward

Speaker Change: specifically we would have an industry low net loan to value a low cash flow break even rate and nearly three hundred and thirty million dollars and undrawn revolver availability this provides significant financial flexibility and optionality for the company going forward

John Wobensmith: This provides significant financial flexibility and optionality for the company going forward. Given the volatility and cyclicality of dry bulk shipping, we also believe it creates a favorable risk-reward balance to provide sizable returns to shareholders, opportunities to grow the fleet, and enhance our earnings power through the dry bulk cycle. While the dry bulk market has experienced a strong first half of the year, and Genco has booked over 65% of its Q3 days at nearly $20,000 per day, freight rates have pulled back in recent weeks.

Speaker Change: given the volatility and sity of dribal ipping we also believe it creates a favorable risk reward balance to provide sizable returns to shareholders opportunist to ggrow the fleet and enhance our earnings power through dribal cycles

Speaker Change: While the dry bulk market has experienced a strong first half of the year, and Genco has booked over 65% of our Q3 days at nearly $20,000 per day, freight rates have pulled back in recent weeks.

John Wobensmith: We view this as affected by temporary factors including vessel positioning in the Atlantic and the Q3 wet season in Guinea impacting bauxite trade flows. We believe these factors will dissipate, and we maintain a positive outlook for the Q4 market. Looking ahead, there are a number of drivers that are supportive of the dry bulk freight market in what is already a balanced, if not tight, market. This includes the relatively low order book, ongoing environmental regulations, continued commodity demand, policy easing cycles, and geopolitical factors. I will now turn the call over to Peter Allen, our Chief Financial Officer.

Speaker Change: we view this as affected by temporary factors including vessel positioning in the atlantic and the q three wet season in guinea impacting box ite trade flows we believe these factors will dissipate and we maintain a positive outlook for the q four market

Speaker Change: Looking ahead, there are a number of drivers that are supportive of the drybulk freight market in what is already a balanced, if not tight, market.

Speaker Change: This includes the relatively low order book, ongoing environmental regulations, continued commodity demand, policy easing cycles, and geopolitical factors. I will now turn the call over to Peter Allen, our Chief Financial Officer.

Peter Allen: Thank you, John. On slides 11 through 13, we highlight our second quarter financial results. Genco recorded net income of $23.5 million, or 54 basic and diluted earnings per share. Adjusted net income amounted to $19.9 million, or basic and diluted earnings per share of $0.46. Adjusted EBITDA for Q2 totaled $40 million, approximately 33% higher than the total from Q2 2023. For the first half of 2024, adjusted EBITDA amounted to $81.6 million, an increase of 64% year-over-year, putting the company on pace to well exceed last year's full year adjusted EBITDA of $101.5 million. During Q2, our net revenues increased by 22% on a year-over-year basis.

Peter Allen: Thank you, John . On slides 11 through 13, we highlight our second quarter financial results. Genco recorded net income of $23.5 million, or 54 basic and diluted earnings per share.

John Wobensmith: Adjusted net income amounted to $19.9 million, or basic and diluted earnings per share of 46 cents. Adjusted EBITDA for Q2 totaled $40 million, approximately 33% higher than the total for Q2 2023. For the first half of 2024, adjusted EBITDA amounted to $81.6 million, an increase of 64% year-over-year, putting the company on pace to well exceed last year's full year adjusted EBITDA of $101.5 million. During Q2, our net revenues increased by 22% on a year-over-year basis.

Speaker Change: Adjusted net income amounted to $19.9 million, or basic and diluted earnings per share of $0.46. Adjusted EBITDA for Q2 totaled $40 million, approximately 33% higher than the total from Q2 2023.

Peter Allen: For the first half of 2024, Adjusted EBITDA amounted to $81.6 million, an increase of 64% year-over-year, putting the company on pace to well exceed last year's full year Adjusted EBITDA of $101.5 million.

Speaker Change: during q two our net revenues increased by twenty-two percent on a yearover-year basis

Peter Allen: The strong level and the strong Boost in Revenue were led by our Cape Size Vessels, which earned a TCE of $29,145 per day in Q2 2024, nearly $10,000 per day higher than the same period of last year, highlighting the operating leverage and upside potential of that sector. On slide 14, we show the trajectory of our debt outstanding and our continued voluntary debt repayment. Since the end of 2020, we have paid down nearly 80% of our debt, or $349 million, which has resulted in a pro forma net loan-to-value ratio of only 2%.

Peter Allen: The strong level and the strong boost in revenue was led by our Cape Size Vessels, which earned a TCE of $29,145 per day in Q2 2024, nearly $10,000 per day higher than the same period of last year, highlighting the operating leverage and upside potential of that sector.

John Wobensmith: On slide 14, we show the trajectory of our debt outstanding and our continued voluntary debt repayment. Since the end of 2020, we have paid down nearly 80% of our debt, or $349 million, which has resulted in a pro forma net loan-to-value ratio of only 2%. The company is currently on track to achieve our goal of net debt zero in the short term, a metric that we have been targeting since the announcement of our value strategy in April 2021.

Peter Allen: onslide fourteen we show the trajectory of our debt outstanding and our continued voluntary debt repayments

Peter Allen: Since the end of 2020, we have paid down nearly 80% of our debt, or $349 million, which has resulted in a pro forma net loan-to-value ratio of only 2%.

Peter Allen: The company is currently on track to achieve our goal of net debt zero in the short term, a metric that we have been targeting since the announcement of our value strategy in April 2021. Specifically, this year, we have voluntarily paid down $100 million of debt under our revolving credit facility. We estimate these voluntary debt repayments in the year to date will reduce interest expense by $5 million on an annualized basis, or approximately $350 per vessel per day at our cash flow break-even rate.

Peter Allen: company is currently on track to achieve our goal of net dead zero in the short term a metric that we have been targeting since the announcement of our value strategy in apriltwo thousand and twenty one

John Wobensmith: Specifically, this year, we have voluntarily paid down $100 million of debt under our revolving credit facility. We estimate these voluntary debt repayments in the year-to-date will reduce interest expense by $5 million on an annualized basis, or approximately $350 per vessel per day at our cash flow break-even rate. This highlights the importance and significant flexibility that our current 100% revolver structure offers us, and that we can pay down debt to actively manage interest expense in this still high interest rate environment without losing borrowing capacity to capture accretive growth opportunities. Thank you, Peter.

Peter Allen: Specifically, this year, we have voluntarily paid down $100 million of debt under our revolving credit facility. We estimate these voluntary debt repayments in the year to date will reduce interest expense by $5 million on an annualized basis or approximately $350 per vessel per day on our cash flow break-even rate.

Peter Allen: This highlights the importance and significant flexibility that our current 100% revolver structure offers us, and that we can pay down debt to actively manage interest expense in this still high interest rate environment without losing borrowing capacity to capture accretive growth opportunities. Moving to slide 15, we highlight our quarterly dividend policy, which targets a distribution based on 100% of excess quarterly cash flow, excluding dry docking and a voluntary reserve. The nature of our variable quarterly dividend and our fleet's operating leverage enables shareholders to directly benefit from free rate increases, as we've seen over the last couple of quarters. Our Q2 2024 dividend of $0.34 per share represents an annualized yield of 8% on our current share price, double the two-year U.S. Treasury rate of approximately 4%.

Peter Allen: This highlights the importance and significant flexibility that our current 100% revolver structure offers us and that we can pay down debt to actively manage interest expense in this still high interest rate environment without losing borrowing capacity to capture accretive growth opportunities.

Peter Allen: Moving to slide 15, we highlight our quarterly dividend policy, which targets a distribution based on 100% of excess quarterly cash flow, excluding dry docking and a voluntary reserve.

Peter Allen: The nature of our variable quarterly dividend and our fleet's operating leverage enables shareholders to directly benefit from free rate increases as we've seen over the last couple of quarters.

Peter Allen: Our Q2 2024 dividend of $0.34 per share represents an annualized yield of 8% on our current share price, double the two-year U.S. Treasury rate of approximately 4%.

Peter Allen: Looking ahead to Q3 2024, we anticipate our cash flow breakeven rate to be $10,911 per vessel per day, which includes $2,324 per vessel per day of dry docking capex for the quarter. Additionally, we expect our daily vessel operating expenses in Q3 to decline from Q2 levels. During the second quarter, our DVOE was $6,855 per vessel per day, primarily due to higher expenses related to maintenance, as well as the timing of spares and stores purchases.

Peter Allen: Looking ahead to Q3 2024, we anticipate our cash flow break-even rate to be $10,911 per vessel per day, which includes $2,324 per vessel per day of dry docking capex for the quarter.

Peter Allen: Additionally, we expect our daily vessel operating expenses in Q3 to decline from Q2 levels.

Speaker Change: during the second quarter our dvwe was six thousand eight hundred and fifty five dollars per vessel per day primarily due to higher expenses related to maintenance as well as the timing of spares and stores purchases

Peter Allen: In Q3, we anticipate DVOE to decline to a budgeted figure of $6,150 per vessel per day. Lastly, our Q3 TC estimates to date are $19,291 per day for 67% fixed, led by our cape-sized vessels which are currently fixed at nearly $28,000 per day for 58% of the quarter. We'll now turn the call over to Michael Orr, our Dry Book Market Analyst, to discuss Industry Fundamentals.

Peter Allen: in q three we anticipate deve to decline to a budgeted figure of six thousand one hundred and fifty dollars per vessel perday

Peter Allen: lastly our q three t c estimates to ate are nineteen thousand two hundred and ninety one dollars per day for sixty seven percent fixed led by er cape siz vessels which are currently fixed nearly twenty eight thousand dollars per day for fifty eight percent of the quarter

Michael Orr: I will now turn the call over to Michael Orr, our Dry Book Market Analyst, to discuss industry fundamentals.

Unknown Executive: Thank you, Peter. As depicted on slide 17, the dry bulk market remained at elevated levels during the second quarter. The BCI averaged over $22,000 per day as Australian miners pushed to achieve their fiscal year-end guidance targets by the end of June. Augmented seaborne iron ore supply, together with higher inventories, have been factors behind the decline in the iron ore price to approximately $100 per tonne currently. Furthermore, China's steel production is 1% lower year-over-year through the first half of 2024. However, as China's property sector has impacted domestic steel demand, China's steel exports have grown by 22% in the year-to-date, and are on pace for their strongest year since 2016.

Michael Orr: Thank you, Peter. As depicted on slide 17, the dry bulk market remained at elevated levels during the second quarter. The BCI averaged over $22,000 per day as Australian miners pushed to achieve their fiscal year-end guidance target by the end of June. While rates have pulled back recently, July was still the second strongest month of the year at $25,500 per day. Q3 rates this year, on average, are approximately 80% and 50% higher than their Q3 2023 for case sizes and supermaxes, respectively. Keepsides and super-end rates are currently $20,000 and $14,000 per day, respectively.

Unknown Executive: thank you peter has depicted on slide seventeen the dryball's market remained at elevated levels during the second quarter the dci average over twenty two thousand dollars per day as australian minorsers pushed to achieve their fiscal year and guidance target by the end of june

Speaker Change: While rates have pulled back recently, July still represented the second strongest month of the year at $25,500 per day.

Speaker Change: Q3 rates this year, on average, are approximately 80% and 50% higher than their Q3 2023 for Cape Sizes and Supermaxes, respectively. Cape Size and Supermax rates are currently $20,000 and $14,000 per day, respectively.

Michael Orr: Regarding the steel complex, several of the indicators that we track are highlighted on slide 18. China's iron ore imports rose by 7% through July year-over-year, led by strong export volumes in the seaborne market, most notably from Brazil. The portion of China's higher imports has replenished previously drawn-down inventories. Iron ore port inventories currently stand at 151 million tons, an increase of 23% year-over-year. However, these levels remain below the 2022 highs and absolute terms and are only marginally higher than historical average levels on a days on hand basis.

Unknown Executive: Regarding the steel complex, several of the indicators that we track are highlighted on slide 18.

Unknown Executive: china's ironnore imports rose by seven percent through july year-over-year led by strong export volumes in the seabborne market most notably from brazil

Unknown Executive: A portion of China's higher imports have replenished previously drawn-down inventories. Iron ore port inventories currently stand at 151 million tons, an increase of 23% year-over-year.

Unknown Executive: however these levels remain below the thousand and few high and absolute terms and are only marginally higher than historical average levels on a days on hand basis

Michael Orr: Augmented seaborne iron ore supply together with higher inventories have been factors behind the decline in the iron ore price to approximately $100 per tonne currently. Furthermore, China's steel production is 1% lower year over year through the first half of 2024. As China's property sector has impacted domestic steel demand, China's steel exports have grown by 22% in the year to date and are on pace for their strongest year since 2016. On slides 19 through 20, we highlight the growing long haul 10-mile story that we believe is quite encouraging for the Cape Side segment.

Unknown Executive: Augmented seaborne iron ore supply together with higher inventories have been factors behind the decline in the iron ore price to approximately $100 per ton currently.

Unknown Executive: Furthermore, China's steel production is 1% lower year over year through the first half of 2024. As China's property sector has impacted domestic steel demand, China's steel exports have grown by 22% in the year to date and are on pace for their strongest year since 2016.

Speaker Change: On slides 19 through 20, we highlight the growing long-haul 10-mile story that we believe is quite encouraging for the capesize segment.

Michael Orr: The massive Simundu iron ore project in Guinea is on track to begin production in late 2025, which is expected to ramp up over 30 months, eventually hitting annualized production of 60 million tons. There is also significant bauxite growth in this region with an 8% annual growth rate over the past 10 years. The bauxite and iron ore expansion in West Africa, as well as incremental production growth from Bali, bode well for the Cape Side segment given the origins of these export volumes, as these routes have three times the ton-mile impact of Australia to China cargo.

Unknown Executive: The massive Simundu iron ore project in Guinea is on track to begin production in late 2025, which is expected to ramp up over 30 months, eventually hitting annualized production of 60 million tons. There is also significant bauxite growth in this region, with an 8% annual growth rate over the past 10 years.

Speaker Change: the oxide ironore expansion in westafrica as well as incremental proproduactction growth from valley both wellalth for the case segment given the origins of these export volumes as these routes have three times the timemile impact of australia china cargos

Michael Orr: In terms of the grain trade, while we're in between peak North and South American grain seasons, we are seeing firm corn export volumes from Brazil, as is typically the case this time of year. Regarding the Ukrainian grain trade, shipments have been firm despite the Black Sea Grain Initiative no longer being in place. August and September are typically peak grain export months from the Black Sea, and market expectations are for exports to reach their highest levels since the war began in early 2022.

Unknown Executive: In terms of the grain trade, while we're in between peak North and South American grain seasons, we are seeing firm corn export volumes from Brazil, as is typically the case this time of year. Regarding the Ukrainian grain trade, shipments have been firm despite the Black Sea Grain Initiative no longer being in place.

Speaker Change: augustin september are typically peak grain export months for from the black sea in market expectations to our exports to reach their highest levels since the war began in early two thousand and twenty two

Michael Orr: Regarding the supply side, outlined on slides 22 to 23, net peak growth in the first half of 2024 was 3.3%. The Historically Low Order Book as a percentage of the fleet, as well as near-term and longer-term environmental regulations, are expected to keep net fleet growth low in the coming years. While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for a constructive view of the dry bulk market going forward. This concludes our presentation, and we would now be happy to take your questions.

Speaker Change: regarding the supply side outlin on slide twenty two to twenty three net re growth in the first half of twenty four with three point three percent the historically low order book as a present of the fleet as well as a near term and longer term environmental regulations are expecting to keep net fleet growth low in the coming years

Unknown Executive: While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for a constructive view of the dry bulk market going forward.

Unknown Executive: This concludes our presentation and we would now be happy to take your questions.

Operator: Thank you. Ladies and gentlemen, we'll now conduct the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, please simply press star 1 again. If you are called upon to ask a question and are listening via a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And your first question comes from the line of Omar Nokta of Jefferies. Please go ahead.

Operator: If you are called upon to ask a question and are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Please go ahead.

Omar Nokta: Thank you. Hey guys, good morning.

John Wobensmith: Thanks for the update. Just a couple questions on my end, and maybe, you know, John, Peter, you mentioned LTV or net LTV is now down to 2%, and you're set to be at 0% here fairly soon. And this was your target from the get-go, starting in 21, when you went down this capital allocation path. I wanted to ask, you know, once you get to that zero level, does that change anything for you guys at Genco, whether it's strategically or from a capital allocation perspective?

Speaker Change: Does that change anything for you guys at Genco as it were.

Operator: Whether it's strategically or from a capital allocation perspective.

John Wobensmith: Yeah, so that's a great question and good morning, Omar. I think it gives us even more flexibility to, you know, take a look at what we want to do from a dividend standpoint and what we want to do for continued growth. So I don't have a specific answer but, you know, there's no doubt that that is a mild zone and, you know, I think we'll take a look at quite a few things once we get to that net dead zero, which, as you said, we're approaching pretty quickly now.

Speaker Change: Yes, that's a great.

John Wobensmith: Question on good morning Omar.

John Wobensmith: I think it gives us even more flexibility to.

John Wobensmith: Take a look at at what we wanted to do from a dividend standpoint, what we wanted to do for continued growth.

John Wobensmith: So I don't have a specific answer but you know that there is no doubt that that is a a milestone and you know I.

John Wobensmith: I think we will we'll take a look at quite a few things once we once we get to that net debt zero, which as you said, we're approaching pretty quickly now.

John Wobensmith: Okay, yeah, so we'll look forward to seeing how things progress from there. Wanted to also just ask about, you know, you sold the three capes last year and you replaced them. Here recently, you sold an older Cape, which you mentioned is non-core, same for the Supra. What are your thoughts on replacing them in this market? Do you, is there a plan on your part to replace those two ships? And would you do so via the S&P market, or would you do a charter-in approach?

John Wobensmith: Okay, yeah, so we'll look forward to seeing how things progress from there. Wanted to also just ask about when you sold the three capes last year. You replaced them. Here recently, you sold an older Cape, which you mentioned is non-core, same for the Supra. What are your thoughts on replacing them in this market? Is there a plan on your part to replace those two ships? And would you do so via the S&P market, or would you use a charter-in approach?

Omar: Okay. Yeah, So we'll look forward to seeing.

John Wobensmith: How things progress from there.

Speaker Change: I wanted to also just ask about the you sold the three capes last year you replace them here recently, you sold an older Cape which you mentioned as noncore same for the supra what are your thoughts on replacing them in this market.

Speaker Change: Do you is there a plan on Europe on your part to replace those two shifts.

Speaker Change: And would you do so via the S&P market or would you do a chartering approach.

John Wobensmith: No, I think, well, first of all, we would do it in terms of the S&P market. I anticipate we will replace those two vessels in a relatively short period of time. Values are firm in both the older vessels, which is why we elected to sell the Hadrian, particularly right now. And they continue to be firm in the newer and the eco-vessels, but we still think the cash on cash returns are justified.

Speaker Change: No I think well first of all we would do it do it in terms of the S&P market.

John Wobensmith: I anticipate we will replace those two vessels in a relatively short period of time. Values are firm in both the older vessels, which is why we elected to sell the Hadrian, particularly right now. And they continue to be firm on the newer and the eco-vessels, but we still think the cash on cash returns are justified. And so we like the idea of being able to, you know, particularly the older ships, take advantage of that high market.

Speaker Change: I anticipate we will replace those two vessels in a relatively short period of time.

John Wobensmith: Values are our firm and in both the older vessels, which is why we are why we elected to sell the Hadrian, particularly right now.

John Wobensmith: And there they continue to be firm and are in the in the newer in the eco vessels, but we still think the cash on cash returns are justified.

John Wobensmith: And so we like the idea of being able to you know, particularly the older ships take advantage of that high market and then we are redeploying capital for the long term with the with the newer ships and we think that makes a lot of sense. So we'll continue to do that and I again I'll just say the intention is to put those funds back to us.

John Wobensmith: And so we like the idea of being able to, you know, particularly the older ships, take advantage of that high market, and then we're redeploying capital for the long term with the newer ships. And we think that makes a lot of sense. So we'll continue to do that. And again, I'll just say, the intention is to put those funds back to use in a relatively short period of time.

John Wobensmith: And then we're redeploying capital for the long term with the newer ships. And we think that makes a lot of sense. So we'll continue to do that. And again, I'll just say, the intention is to put those funds back to use in a relatively short period of time.

John Wobensmith: In a relatively short period of time.

Unknown Executive: Okay. Yeah. And then, I mean, that makes sense.

Omar Nokta: Okay. Yeah. And then, I mean, that makes sense.

Speaker Change: Okay, Yeah, and then I mean that makes sense and I guess just in terms of putting that capital to good use here in a short amount of time B, you mentioned seasonality and some repositioning of vessels in the broader market has impacted freight rates, although there is still fairly decent relatively.

John Wobensmith: And I guess, just in terms of putting that capital to good use here in a short amount of time, you mentioned seasonality and some repositioning of vessels and the broader market have impacted freight rates, although they're still fairly decent and relatively healthy. Has there been any kind of impact on the sale and purchase market? Has there been, I mean, it seems like that market's been fairly busy for the past almost, I guess, year and a half. Has there been any sort of slowdown in S&P? Activities are still fairly active, and being able to get a deal done is just as slow as it has been.

John Wobensmith: A relatively healthy.

John Wobensmith: Has there been any kind of impact on the sale and purchase market has there been I mean, it seemed like that market's been fairly busy for the past almost I guess year plus.

Speaker Change: Has there been any sort of slowdown in S&P activities are still fairly active in and being able to get a deal done is it.

Speaker Change: Just as full as it has been.

John Wobensmith: I have a few things to say. One, I would say it's still active. Having said that, we're in the month of August, and S&P deals do tend to slow down a little bit just from a pure seasonal summer standpoint, but there's still transactions being done, and they're being done at last on prices as well, so we haven't really seen any softening on the price front. Okay.

Speaker Change: A few things one I would say it's still active.

John Wobensmith: Having said that you know where were in the month of August.

John Wobensmith: S&P deals do tend to slow down a little bit just from a pure seasonal summer standpoint.

John Wobensmith: But there are still transactions being done and they're being done at last on prices as well. So we haven't we haven't really seen any softening on the on the price front.

Unknown Executive: Okay, yeah, as firm as you say. Yeah, great. All right, John. Thank you. I'll pass it over.

Omar Nokta: Okay, yeah, as firm as you say. Yeah, great. All right, John. Thank you. I'll pass it over.

Speaker Change: Okay. So a firm as you say.

John Wobensmith: Yeah, Great Alright, John.

Speaker Change: I'll pass it over.

John Wobensmith: Great. Thanks Omar.

Liam Burke: Your next question comes from the line of Liam Burke from B. Reilly. Please go ahead.

Speaker Change: Your next question comes from the line of Liam Burke from B Riley. Please go ahead.

Liam Burke: Yeah, thank you. Good morning, John, Peter, and Michael.

Speaker Change: Yes. Thank you good morning, John Peter Michael.

John Wobensmith: Good morning.

Speaker Change: Good morning, good morning.

John Wobensmith: John, you've got a time charter on one of your capes at $35,000 a day, which is a pretty healthy rate. Has there been any interest in the market for time chartering out any of your other capes that are trading in the spot market?

Unknown Executive: John you've got a time charter on one of your Capes are 35000 a day.

Speaker Change: Which is pretty healthy rate has there been any interest in the market.

Speaker Change: Time chartering out any of your other capes that are trading in the spot market.

Unknown Executive: Okay.

John Wobensmith: I would say, you know, where rates are, and particularly now that we're in the summer, I would say liquidity's a little lower on the one-year TC market. I mean, you could certainly do one today, but we think rates are actually gonna improve as we get into late third and early fourth quarter. I think assessing it is better left for another month or so. Having said that, we've done some index deals, and as you're aware, those index transactions allow us to fix at any time within the index period.

Unknown Executive: I would say.

Speaker Change: At the where rates are and particularly in that were in the in the summer I would say liquidity is a little lower on the on the one year TC market. I mean, you could certainly do one today, but we think rates are actually going to improve as we get into late third and early fourth quarter. So.

John Wobensmith: I think assessing it is better left for another month or so. Having said that, we've done some index deals, and as you're aware, those index transactions allow us to fix at any time within the index period. And so we have a couple options available, a couple levers to pull. When things firm up in the latter part of the year, if it makes sense, we'll take some exposure off the table. But I think right now, you know, during the summer, what I would call more of a traditional summer lull, I think waiting is the best strategy.

Speaker Change: I think assessing it is better left for for another month or so.

Speaker Change: Having said that you know the we've done some index deals and as you're aware those index transactions allow us to fix it.

John Wobensmith: At any time within within the index period.

John Wobensmith: And so we have a couple options available, a couple levers to pull. When things firm up in the latter part of the year, if it makes sense, we'll take some exposure off the table. But I think right now, you know, during the summer, what I would call more of a traditional summer lull, I think waiting is the best strategy.

John Wobensmith: And so we.

John Wobensmith: We have a couple options available a couple of levers to pull if if when when things firm up in the in the latter part of the year if it makes sense we'll.

John Wobensmith: We will take some exposure off the table.

John Wobensmith: But I think right now.

John Wobensmith: During the summer.

John Wobensmith: What I would call more of a traditional summer lull.

Speaker Change: Weighting is.

Speaker Change: Is that strategy.

John Wobensmith: Okay, you talked about redeploying the proceeds of your vessel sales to higher return opportunities that should come to pass pretty soon. You have a few older vessels. Specifically, you've got two non-capes that are similar to the Warrior. Is there any interest in moving them out and redeploying them to higher return opportunities, or are you just going to maintain them right here? No, I know. Look on at the supers. As you pointed out, there are

John Wobensmith: Okay.

Speaker Change: You talked about redeploying the proceeds of the vessel sales to higher return.

John Wobensmith: Opportunities that should come to pass pretty soon.

Speaker Change: I have a few older vessels specific specifically you've got two non capes that are similar to the warrior.

Speaker Change: Any interest to move them out and to redeploy into higher return opportunities or are you just going to maintain a pressure.

John Wobensmith: No, look, on the supers, as you pointed out, there are 205s that are there that are 55s. Those are definitely in the box to move out and redeploy. And then there are some of the, you know, maybe the 09s and 10s supers we'll also look at. So I think you'll continue to see more of the same until we can, you know, until we can find a larger transaction, which, as you know, we're always trying to do.

John Wobensmith: No, I know. Look on the supers. As you pointed out, there are

Speaker Change: No no look on the supers as you pointed out there. There are there are two O fives that are that are there that are 55 those are definitely.

John Wobensmith: In the box to to move out and redeploy.

John Wobensmith: And then Theres some of that may be the nines and tens Supers will also look at so I think youll continue to see more more of the same.

Unknown Executive: 2nd quarter, 2024 Earnings Conference Call and Presentation Before we begin, please note that there will be a slight presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com To inform everyone today's conference is being recorded and is now being webcast as a company's website www.gencoshipping.com We will conduct a question and answer session after the opening remarks. Instructions will follow at that time.

John Wobensmith: Until we can.

Speaker Change: Until we can find a larger transaction, which as you know we're always trying to.

John Wobensmith: Uncover.

John Wobensmith: Great. Thank.

Speaker Change: Thank you Jonathan.

Speaker Change: Thanks Liam.

Ben Nolan: Your next question comes from the line of Ben Nolan of Stifo. Please go ahead.

Speaker Change: Your next question comes from the line of Ben Nolan of Stifel. Please go ahead.

Ben Nolan: All right, thanks. Good morning, guys. I have a couple.

Speaker Change: Alright, Thanks, Hey, good morning, guys.

John Wobensmith: So.

Speaker Change: I have a couple first of all.

Speaker Change: And this maybe goes back to <unk> question, a little bit.

Unknown Executive: A replay of the conference will be accessible anytime during the next two weeks by dialing 800-770-2030 and entering the passcode 636-5548.

Speaker Change: Can you maybe walk me through the calculus as to sort of how you come up with that $19 $5 million of.

John Wobensmith: The effective reserve when when you're allocating capital towards the dividend just maybe what's the what's the math behind that or how do you think about that going forward now that you really don't have any debt.

Unknown Executive: At this time, I will now turn the conference over to the company. Please go ahead.

Ben Nolan: First of all, and this maybe goes back to Omar's question a little bit. Can you maybe walk me through the calculus as to sort of how you come up with that $19.5 million of effective reserve when you're allocating capital towards the dividend? Just maybe what's the math behind that? Or how do you think about that going forward now that you really don't have any debt?

Peter Allen: Hey, Ben. Yeah, I'll take that one. Thanks for the question. So the $19.5 million voluntary reserve is, just to be clear; it's 100% at the board's discretion in terms of the use of that. And we have moved it up or down in previous quarters. But to answer your question, to get to the calculus of it, when we first announced the value strategy, we had a debt repayment line item of $8.75 million, and then we had a voluntary reserve of $10.75 million. Since we now have no mandatory debt amortization and we actively manage the debt with the RCF that we put in place last Q4, we decided to simplify the calculation and consolidate So that's how you get to the 19.5.

Unknown Executive: Good morning. Before we begin our presentation, I note that in this conference call we will be making certain forward-looking statements pursuant to the Safe Harbor provisions of the Private Security Litigations Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intent, plan, believe, and other words in terms of similar meaning in connection with the discussion of potential future events. Circumstances or future operating or financial performance.

John Wobensmith: Hey, Ben Yeah, I'll take that one thanks for the question so.

Peter Allen: Hey, Ben. Yeah, I'll take that one.

Peter Allen: The $19 $5 million of voluntary reserve as just to just to be clear, it's 100% in the board's discretion in terms of the use of that and we have moved it up or down in previous quarters, but to answer your question to get to the calculus of it when we first announced the value strategy. We had a debt repayment line item of $8 $75 million and then we had a.

Peter Allen: Thanks for the question. So the $19.5 million voluntary reserve is just to be clear; it's 100% at the board's discretion in terms of the use of that, and we have moved it up or down in previous quarters. But to answer your question, to get to the calculus of it, when we first announced the value strategy, we had a debt repayment line item of $8.75 million, and then we had a voluntary reserve of $10.75 million.

Peter Allen: Voluntary reserve of $10 $75 million and since we now have no mandatory debt amortization and we.

Unknown Executive: These forward-looking statements are based on management's current expectations and observations. For discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday. The materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including without limitation the company's annual report on form 10K for the year ended December 31st, 2023, and the company's reports on form 10Q and form 8K subsequently filed with the SEC.

Peter Allen: And since we now have no mandatory debt amortization, and we actively manage the debt with the RCF that we put in place last Q4, we decided to simplify the calculation and consolidate those two line items into one. So that's how you get to $19.5. But essentially, again, like I mentioned earlier, it is fully discretionary in terms of board management's view of it, and in the past, we have flexed that reserve as well. So hopefully, that answers your question.

Peter Allen: Actively manage the debt with the Rcs that we put in place last Q4, we decided to simplify the calc and consolidate those two line items into one so that's how you get to the 19 five.

Peter Allen: But essentially again like I mentioned earlier it is fully discretionary in terms of our board and management's view of it.

Peter Allen: But essentially, again, like I mentioned earlier, it is fully discretionary in terms of board management's view of it. And in the past, we have had a flex debt reserve as well. Ben, keep in mind, we gave that guidance at the beginning of this year, and as Pete said, we've lowered it in 2023 to pay dividends in the second and third quarters when the formula may have produced a zero, so we still have that flexibility going forward, depending on freight rates.

Speaker Change: And in.

John Wilkinsmith: This time, I would like to introduce John Wilkinsmith, Chief Executive Officer of Genco Shipyard Training Limited. Good morning, everyone. Welcome to Genco's second quarter, 2024 Conference Call. I will begin today's call by reviewing our Q2-2024 in year-to-date highlights. Additionally, we will provide an update on our value strategy, discuss our financial results for the quarter, as well as the industry's current fundamentals before opening the call-up for questions. For additional information, please also refer to our earnings presentation posted on our website.

Speaker Change: In the past, we have flex that reserve as well so hopefully that answer your question, yes, but keep in mind that was.

John Wobensmith: Ben, keep in mind that was, you know, we gave that guidance at the beginning of this year and as Pete said, we've lowered it in 2023 to pay dividends in the second and third quarter when the formula may have produced a zero, which, you know, we still have that flexibility going forward depending on freight rates, but, you know, that reserve gets assessed at least once a year, so we'll be looking at it again towards the end of this year to give forward guidance for the following year and as I said earlier on the call, getting down to net-debt zero, you know, is a milestone, so I think we'll be looking at quite a few things as we get in towards the end of the year.

Peter Allen: We gave that we gave that guidance at the beginning of this year and as Pete said we've.

Ben: We've lowered it.

Peter Allen: In 2023 to <unk> to pay dividends in the second and third quarter. When the Permian may have produced a zero, which we we still have that flexibility going forward.

Ben: Depending on freight rates, but that reserve gets assessed at least once a year. So we'll be looking at it again towards the end of this year to give forward guidance for our for the following year and as I said earlier on the call getting down the net debt zero.

Peter Allen: But that reserve gets assessed at least once a year, so we'll be looking at it again towards the end of this year to give forward guidance for the following year. And as I said earlier on the call, getting down to net-debt zero is a milestone, so I think we'll be looking at quite a few things as we get closer to the end of the year.

John Wilkinsmith: Starting on slide 5, Q2-2024 marked another strong quarter for Genco. We drew on our sizable drive-all fleet and firm market conditions to generate nearly $40 million of EBITDA, led by our Time Charter Equivalent Rate of just $120,000 per day for the fleet. Q2 represented another quarter of execution of our differentiated value strategy focused on dividends, de-leveraging, and growth. In terms of shareholder returns, we declared a Q2 dividend of $0.34 per share, as our strong earnings flowed into our dividend consistent with our transparent policy.

Peter Allen: Is a milestone so I think we'll be looking at quite a few things as we get in towards the end of the year.

Ben Nolan: Okay, I appreciate that color there. And then my next question really is just more for modeling, but in general, as you think about the OPEX, I know it looks like the Cape Size OPEX came up a little bit this year. Are you seeing much in the way of inflation at all in terms of that OPEX? Or maybe it was just, you know? I know that sometimes things can be a little lumpy from quarter to quarter.

Unknown Executive: Okay, I appreciate that color there. And then my next question really is just more for modeling, but in general, as you think about OPEX, I know that the cape-size OPEX came up a little bit this year. Are you seeing much in the way of inflation at all in terms of that OPEX? And, or maybe it was just, you know, I know that sometimes things can be a little lumpy from quarter to quarter?

Speaker Change: Okay I appreciate the color there and then my next question really is just more for <unk>.

Unknown Executive: The modeling, but in general as you think about the Opex I know it looks like the Capesize Opex came up a little bit. This year are you seeing much in way of inflation at all in terms of that Opex.

John Wilkinsmith: During the quarter, we also further improved our risk-reward balance as we voluntarily paid down debt and improved our net leverage position to 2% on a pro-former basis, as we approach our goal of net debt zero. On page 6, we highlight the compelling dividends we have provided to shareholders. The second quarter dividend marks our 20th consecutive quarterly dividend payment. It also represents five uninterrupted years of providing shareholders with dividends, which is the longest period of consecutive dividends in our peer group. Over this time, we have declared $5.91.5 per share in dividends. We're approximately 33% of our share price as of August 6, 2024.

Unknown Executive: Or maybe it was it just.

Unknown Executive: I know that sometimes things can be a little lumpy.

Unknown Executive: From quarter to quarter.

Peter Allen: Yeah, that's exactly it. So Q2, sure, it was higher. We were guiding to a higher DVOE figure for the quarter. But yeah, to your point, when you do look at OPEX over a three-month period, it does get very lumpy. We kind of, we like to look at at least 12 months. I mean, if you stretch it out to the last six quarters, the last 18 months, our DVOE average is about 6,200, which is in line with our Q3 guidance that we provided.

Speaker Change: Yeah, that's exactly it so Q2 sure. It was higher we were guiding to a higher dvoa figure for the quarter.

Speaker Change: But yes to your point when you do look at Opex over a three month period. It does get very lumpy, we kind of we like to look at at least 12 months I mean, if you stretch it out to the last six quarters last 18 months are dvoa averages about 6200, which is in line with our Q3 guidance that we provided.

Peter Allen: So it does get a little bit lumpy, and in Q2, a lot of it was timing-related. But when we look ahead to Q3, we're guiding for a lower number of 6,150 per vessel per day compared to the 6,850 in Q2. So on a year-to-date basis, we're looking at about 6,200 DVOE figures per vessel per day.

Speaker Change: So it does get a little bit lumpy in Q2, a lot of it was timing related but when we look ahead to Q3, we're guiding for a lower number of $61 50 per vessel per day compared to the 68% in Q2 so.

John Wilkinsmith: Complimenting shareholder returns. During Q2, we continue to prioritize fleet renewal, following the timely acquisition of two modern high specification capesized vessels in Q4, 2023. We divested 3, 2009 to 2010 built vessels to buyers in Q1 and early Q2, 2024. Through these transactions, we have improved the fuel efficiency of our fleet, increased our earnings power, reduced our fleet's average age and saved approximately $10 million in dry docking cap ex for 2024. With the execution of this phase of our fleet renewal plan, we have further advanced our build approach to fleet composition as shown on page 7.

Speaker Change: On a year over year basis, maybe slightly higher with typical inflation crew wages is obviously, a large part of the overall dvoa mix.

Speaker Change: Yes, nothing out of the ordinary in more timing in Q2, okay.

Peter Allen: Yeah, and Ben, you know, Ben, as we, you know, as we...

Unknown Executive: Okay and.

Unknown Executive: Dan.

Unknown Executive: Yeah.

Unknown Executive: As we typically do as we get.

Speaker Change: Above the 90% fixed rate on the TCE, we will we will continue to put out guidance for that and we'll also we'll put our guidance out for.

Unknown Executive: For Q3, Opex as well at that time.

Ben Nolan: Great. I appreciate it. Thank you, guys.

Unknown Executive: Great. I appreciate it. Thank you, guys.

Unknown Executive: Great.

Unknown Executive: I appreciate it thank you guys.

Pat: Thanks Pat.

Operator: Your next question comes from the line of Ben Dick Neatingness of Clarkson Securities. Please go ahead.

Bendik Nyttingnes: Your next question comes from the line of Bendik Nyttingnes of Clarkson Securities. Please go ahead.

Speaker Change: Your next question comes from the line of Bendick Neediness of Clarksons Securities. Please go ahead.

John Wilkinsmith: We own both Cape Size and Ultramax Supermax vessels, enabling Genco to have access to sectors with distinct and attractive characteristics. Cape size vessels provide high operating leverage and upside potential, with a focus on the iron ore coal and oxide trades, while the minor bulk vessels provide more stable earning strains, operate on diverse trade routes, and are more closely linked with global GDP growth. We believe owning ships in both of these sectors contribute to Genco's value strategy.

Operator: Yeah.

Unknown Executive: Thank you. Morning, guys. Morning.

Bendik Nyttingnes: Thank you, good morning guys. Good morning.

Speaker Change: Thank you good morning, guys.

Speaker Change: Good morning.

John Wobensmith: Just back to capital allocation and your balance sheet. You have a lot of liquidity at hand with your CS structure and you're also at, I think, 41 vessels. Do you have any sort of sweet spot in terms of how many vessels you want to operate or any sort of brief from an operational perspective?

Speaker Change: Just back to capital allocation.

John Wobensmith: Your balance sheet do you have a lot of liquidity.

John Wobensmith: Tom with the Rcs structure.

Speaker Change: And Youre also thank you.

Speaker Change: 41 vessels do you have any sort of sweet spot in terms of how many vessels you want to operate.

John Wobensmith: Or sort of a brief from an operational perspective.

John Wilkinsmith: Moving forward, we continue to evaluate further opportunities in the talent purchase market to further renew our fleet. To that end, we have sold the Genco Warrior a 2005 built 55,000 deadweight tons Supermax for 11.95 million dollars and delivered the vessel to buyers in July. Additionally, we have agreed to sell the Genco Hadrian a 2008 built 169,000 deadweight tons Cape size vessel for 25 million dollars with delivery scheduled in mid-October. This later delivery date has enabled us to capture the firm as in key market today while continuing to trade the vessel over the next several months in what is a solid freight market.

John Wobensmith: I wouldn't say there's a sweet spot, but you know we are net down in terms of what we have sold, so we definitely are going to be adding, if you know, as I said, in the short term, two to three ships to replace what we've recently sold. That will definitely occur. We're going to continue on with the fleet renewal approach for some of the older super maxes as well and replace those. We certainly don' And so we certainly are not going to lever up, so to speak, in this market with firm asset prices. But again, the right transaction, if you can figure out a way to do NAV to NAV type transactions with shares, then those types of things make more sense.

John Wobensmith: I wouldn't say there's a sweet spot, but you know we are net down in terms of what we have sold, so we definitely are going to be adding, if you know, as I said in the short term, you know, two to three ships to replace what we've recently sold, so that will definitely occur. We're going to continue on with the fleet renewal approach for some of the older super maxes as well and replace those. And But, you know, it is not the easiest thing to define.

Speaker Change: I Wouldnt say theres, a sweet spot, but we are we are net down in terms of what we have sold so we definitely are going to be adding.

John Wobensmith: As I said in the in the short term.

John Wobensmith: You know two to three shifts to replace what we've recently sold so that that will definitely occur we're going to continue with the fleet renewal approach for for some of the older Supermaxilla as well and replace those.

John Wobensmith: And if you know again, we continue to look for the right transaction to grow.

John Wobensmith: Yeah.

Speaker Change: On a bigger scale.

John Wilkinsmith: The sale of the Genco Hadrian completes the exit from the non-core 169,000 sub-sector of capes. Collectively, the sale of the Genco Warrior and the Genco Hadrian save approximately 5 million dollars in dry docking capex in 2025. We believe the sales of these older, less fuel-efficient vessels were well-timed given the firm prices achieved, enabling us to take advantage of cyclically higher asset values to monetize non-core assets. We intend to reinvest these proceeds in high-quality fuel-efficient ships to improve our earnings capacity and further modernize the fleet.

John Wobensmith: But not not the easiest thing to define and we certainly.

John Wobensmith: And we certainly don't want to, we've worked very hard to get to net-debt zero, and so we certainly are not going to lever up, so to speak, in this market with firm asset prices. But again, the right transaction, if you can figure out a way to do NAV to NAV type transactions with shares, then those types of things make more sense. It's a longer answer to your question.

John Wobensmith: We're certainly don't want to we've worked very hard to get to net debt zero and so we certainly are not going to lever up so to speak.

John Wobensmith: In this market with firm asset prices, but.

John Wobensmith: The REIT transaction, if you can figure out a way to to do AAV NAV type transactions with with shares and those types of things make more make more sense.

Speaker Change: It's a long longer answer to your question.

John Wobensmith: Okay.

John Wobensmith: Yeah.

Speaker Change: Thank you.

John Wilkinsmith: Turning to slide 8, we continue to generate strong TCE performance. In Q2, our fleetwide TCE increased 28% on a year-over-year basis, looking ahead to the third quarter, 67% of our available days are fixed to date at $19,291 a day, pointing to another firm quarter, as this is well above our casual, very given rate. Turning to Slide 9, we believe Genco remains in a highly-avantageous position moving forward. Specifically, we have an industry low net loan to value, a low cash flowbreak even rate, and nearly $330 million in undrawn for volver availability.

Operator: Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad. Your next question comes from the line of Paul Fratt with Alliance Global Partners. Please go ahead.

John Wobensmith: Thank you again.

Speaker Change: You would like to ask a question press Star then the number one on your telephone keypad.

Operator: Your next question comes from the line of Paul Fratt with Alliance Global Partners. Please go ahead.

Paul <unk>: Your next question comes from the line of Paul <unk> with Alliance Global Partners. Please go ahead.

Paul Fratt: Yeah, good morning. John, you know, where do stock buybacks fit in your capital allocation program or strategy?

Paul Fratt: Yes, good morning, John.

Paul Fratt: We would expect buybacks fit in your capital allocation program or a strategy.

Paul Fratt: Sorry, say that again, Poe. It just broke up a little bit.

Paul Fratt: Sorry, say that again, it just broke up a little bit, yes, sorry, where do stock buybacks debt within the capital allocation strategy.

John Wobensmith: Yeah, sorry. Where do stock buybacks fit within the capital allocation strategy?

John Wobensmith: Look, you know, buybacks, as you're aware, we've talked about these, you know, rather recently, quite extensively. It's in our tool belt.

Speaker Change: Look the buybacks as you're as you're aware we've talked about these.

John Wilkinsmith: This provides significant financial flexibility and optionality for the company going forward. Given the volatility and security of dry bulk shipping, we also believe it creates a favorable risk reward balance to provide sizable returns to shareholders, opportunists to grow the fleet and enhance our earnings power through dry bulk cycles. While the dry bulk market has experienced a strong first half of the year, and Genco has booked over 65% of our Q3 days at nearly $20,000 per day, freight rates have pulled back in recent weeks.

Speaker Change: Rather recently quite extensively.

Speaker Change: In our tool belt.

Operator: There is no doubt there is that there is a time to do those.

John Wobensmith: There's no doubt there's a time to do those things. We discuss it with the board continuously. And, you know, right now, I would say we're not in that mode. But that doesn't mean that there is a wider disconnect between where vessel values are and NAVs and where our share price is trading. Clearly, we're going to look at that and make a decision. I mean, there is... You know, there's a discount right now. If you actually look at where vessel values are today, they'd have to come down, I think, somewhere around 25% to actually justify today's share price, so which doesn't make a lot of sense to us.

Speaker Change: We discuss it with the board continuously.

Operator: And.

Operator: Right now I would say, we're not in that mode, but that doesn't mean that if there becomes a wider disconnect between where vessel values are in <unk>.

Speaker Change: And where our share price is trading clearly we're going to we're going to we're going to look at that and make a decision I mean, it's there is.

John Wilkinsmith: We view this as affected by temporary factors, including vessel positioning in the Atlantic and the Q3 wet season in Guinea impacting box site trade flows. We believe these factors will dissipate and we maintain a positive outlook for the Q4 market. Looking ahead, there are a number of drivers that are supportive of the dry bulk freight market and what is already a balanced if not tight market. This includes the relatively low order book, ongoing environmental regulations, continued commodity demand, policy easing cycles and geopolitical factors.

Speaker Change: There's a discount right now.

Speaker Change: You actually look at where vessel values are today they'd have to come down I think somewhere around 25% to actually justify today's share price, so which is.

unknown: is

Operator: <unk>.

John Wobensmith: But there's a lot of things in the equity markets right now that are in dislocation and don't make a lot of sense. So, but yes, it is, it's definitely in our tool belt, Poe, and there is a time, you know, to put that in place.

Speaker Change: Doesn't make a lot of sense to us, but there's a lot of things in the equity markets right now that are with dislocation and don't make a lot of sense so but.

unknown: Yes. It is it's definitely in our tool belt Poe and and there is a time.

unknown: To put that in place.

Peter Allen: I will now turn the call over to Peter Allen, our chief financial officer. Thank you, John. On slides 11 through 13, we highlight our second quarter financial results. Genco recorded an income of $23.5 million or 54 basic and diluted earnings per share. Adjusted an income amounted to $19.9 million or basic and diluted earnings per share of 46 cents. Adjusted EBITDA for Q2 told $40 million, approximately 33% higher than the total from Q2 2023.

Peter Allen: Great, and Peter, if you could just clarify, it sounds like the reserve is going to be reviewed on an annual basis, not a quarterly basis.

Paul Fratt: Great, and Peter, if you could just clarify, it sounds like the reserve is going to be reviewed on an annual basis, not a quarterly basis.

Paul Fratt: Great and Peter if you could just clarify it sounds like would we go we're going to be.

Peter Allen: We reviewed on an annual basis, not a quarter to quarter basis.

Peter Allen: I don't think that's the case, Paul. I mean, I think we're always looking at the reserve every single quarter. But in terms of giving, you know, real guidance to the market, and we've said this, you know, since the beginning of the strategy, we wanted to give at least a 12-month look. But that doesn't mean we don't, you know, again, look at it on a quarter by quarter basis. But we're very quickly coming into the end of the year where, you know, we're going to take a deep dive on our capital allocation strategy. So it's not far away.

Peter Allen: No I don't think Thats the case, Paul I mean I.

Peter Allen: We're always looking at deserve every single quarter, but in terms of giving real guidance to the market and we said this you know.

Peter Allen: Since the beginning of the strategy, we wanted to give at least at 12 month look but that doesn't mean, we don't you know.

Peter Allen: For the first half of 2024, Adjusted EBITDA amounted to $81.6 million in increase of 64% year-over-year, putting the company on pace to well exceed last year's full year, adjusted EBITDA of $101.5 million. During Q2, our net revenues increased by 22% on a year-over-year basis. The strong level and the strong boost in revenue was led by our capesized vessels which earned a TCE of $29,145 per day in Q2 2024, nearly $10,000 per day higher than the same period of last year highlighting the operating leverage and upside potential of that sector.

Peter Allen: Again look at it on a quarter by quarter basis, but we're very quickly coming into the end of the year where.

Peter Allen: Again, it will take a deep dive on our capital allocation strategy. So it's not far away.

Paul Fratt: And then, John, you know, you mentioned the share-to-share transaction. Have you seen any pickup in interest in a share-to-share transaction over the last quarter or so?

John Wobensmith: And then, John, you know, you mentioned the, you know, share-to-share transaction. Have you seen any pickup and interest in a share-to-share transaction over the last quarter or so?

Peter Allen: And then John you mentioned.

John Wobensmith: Sure sure transaction.

John Wobensmith: Have you seen any pickup in interest in its share of the share transaction over the last quarter or so.

John Wobensmith: I don't know if there's a trend, I'm not so sure if it ebbs and flows, so to speak. Yeah, I mean, when when you're obviously when you have wider discounts.

John Wobensmith: I don't know if I don't know if there's a I'm not so sure if it ebb and flows so to speak.

John Wobensmith: It's.

John Wobensmith: Yeah, I mean, when you're obviously when you have wider discounts on NAV, it's it becomes more difficult. So maybe maybe we have had a little bit here, but

John Wobensmith: Yeah.

Speaker Change: When you.

Speaker Change: See when you have wider discounts on our NAV.

Peter Allen: On slide 14, we showed the trajectory of our debt outstanding and our continued voluntary debt repayments. Since the end of 2020, we have paid down nearly 80% of our debt, or $349 million, which has resulted in a pro forma net loan to value ratio of only 2%. The company is currently on track to achieve our goal of net debt zero in the short term, a metric that we have been targeting since the announcement of our value strategy in April 2021.

John Wobensmith: It becomes more and more difficult so.

John Wobensmith: Maybe we have had a little bit here, but.

Speaker Change: We're always looking at transactions and.

Speaker Change: Hopefully hopefully we will be able to execute on.

Speaker Change: Some time in this market I I wish I had a better answer for you, but but it's they are not easy transactions to do as you're well aware.

Peter Allen: Specifically this year, we have voluntarily paid down $100 million of debt under our revolving credit facility. We estimate these voluntary debt repayments in the year-to-date will reduce interest expense by $5 million on an annualized basis or approximately $350 per vessel per day on our cash flow of breakeven rate. This highlights the importance and significant flexibility that our current 100% revolver structure offers us and that we can pay down debt to actively manage interest expense in this still high interest rate environment. Without losing borrowing capacity to capture a creative growth opportunity.

Speaker Change: Sounds good thanks for your time.

Paul: Thanks, Paul.

Speaker Change: As there are no further questions at this time that concludes our conference call for today. Thank you for participating and ask that you. Please disconnect your lines.

John Wobensmith: Okay.

John Wobensmith: [music].

John Wobensmith: Yes.

John Wobensmith: Okay.

John Wobensmith: [music].

John Wobensmith: Sure.

John Wobensmith: Yes.

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John Wobensmith: Sure.

John Wobensmith: Yes.

John Wobensmith: [music].

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John Wobensmith: Okay.

John Wobensmith: Yes.

John Wobensmith: [music].

Unknown Executive: [inaudible] Ltd. Ltd. [inaudible] Ltd. Ltd Ltd. Ltd. [inaudible] Times. There's also a significant box-side growth in this region with an 8% annual growth rate over the past 10 years. The box-side and iron ore expansion of West Africa, as well as incremental production growth from Valley, both developed by the capeside segment given the origins of these export volumes as these routes have three times the 10 mile impact of Australian and China cargo.

Unknown Executive: In terms of the grain trade, while we're in between peak North and South American grain seasons, we are seeing firm corn export volume from Brazil as is typically the case this time of year. Regarding the Ukrainian grain trade, shipment 7 firm despite the Black Sea grain initiative no longer being in place. August and September are typically peak grain export months from the Black Sea and market expectations are for exports to reach their highest levels since the war began in early 2022.

Unknown Executive: Regarding the supply side outlined on slide 22 to 23, net fleet growth in the first half of 2024 was 3.3%. The historically low-order bloc as a percentage of the fleet, as well as near-term and longer-term environmental regulations, are expected to keep net fleet growth low in the coming years. While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for our constructive view of the dry block market going forward.

Unknown Executive: This includes our presentation and we would now be happy to take your questions. Thank you.

Unknown Executive: Ladies and gentlemen, we'll now conduct the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the few. If you would like to withdraw your question, please simply press star one again.

Unknown Executive: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Omar Nokta: And your first question comes from the line of Omar Nocta of Jeff Fees. Please go ahead. Thank you. Hey guys, good morning. Thanks for the update. Just a couple questions on my end and maybe John Peter, you mentioned LTV or net LTV is now down to 2% and you're set to be at 0% here fairly soon. And this was your target from the get go starting in 21 when you went down this capital allocation path.

John Wilkinsmith: I wanted to ask, once you get to that zero level, does that change anything for you guys that junk goes at whether it's strategically or from a capital allocation perspective? Yeah, so that's a great question and good morning, Omar. I think it gives us even more flexibility to, you know, take a look at what we want to do from a dividend standpoint, what we want to do for continued growth. So I don't have a specific answer, but, you know, that there's no doubt that that is a mild zone. And, you know, I think we'll we'll take a look at quite a few things once we once we get to that net that zero, which as you said, we're approaching pretty quickly now.

Omar Nokta: Okay, yes, it'll look forward to seeing how things progressed from there.

John Wilkinsmith: One is also just to ask about, you know, the you sold the three caves last year, you replaced them here recently. You sold an older cave, which you mentioned is non core, same for the Supra. What are your thoughts on replacing them in this market? Do you, is there a plan on your on your part to replace those two shifts? And would you do so via the S&P marketer? Would you do a charter and approach?

John Wilkinsmith: No, I think well, first of all, we would do it in terms of the S&P market. I anticipate we will replace those two vessels in a relatively short period of time. You know, values are firm in both the older vessels, which is why we elected to sell the Hadrian particularly right now. And they continue to be firm in the newer and the eco vessels, but we still think the cash on cash returns are justified.

John Wilkinsmith: And so we like the idea of being able to, you know, particularly the older ships take advantage of that high market, and then we're redeploying capital for the long term with the with the newer ships and we think that makes a lot of sense. So we'll continue to do that. And I again, I'll just say the intention is to put those funds back to use in a relatively short period of time.

John Wilkinsmith: Okay, yeah, and then that makes sense. And I guess just in terms of putting that capital to good use here in a short amount of time, you mentioned seasonality and some repositioning of vessels in the broader market has impacted freight rate, although they're still fairly decent and relatively healthy. Has there been any kind of impact on the sale and purchase market? Has there been a, I mean, it seems like that market's been fairly busy for the past almost, I guess, year, year plus.

John Wilkinsmith: Has there been any sort of slowdown and S&P activities are still fairly active and being able to get a deal done is just as slow as it has been. I would a few things. One, I would say it's still active. Having said that, you know, we're, we're in the month of August and, you know, S&P deals do tend to slow down a little bit just from a pure seasonal summer standpoint. But there's still transactions being done and they're being done at last on prices as well. So we haven't, we haven't really seen any softening on the on the price front. Okay, yeah, so firm as you say.

Unknown Executive: Yeah, great.

Unknown Executive: All right, John. Thank you.

Unknown Executive: I'll pass it over. Great.

Unknown Executive: Thanks so much.

Liam Burke: Your next question comes from the line of Liam Burke from B Riley. Please go ahead. Yeah, thank you.

John Wilkinsmith: Good morning, John. Peter, Michael. Good morning. John, you've got a time charter on one of your capes at 35,000 a day, which is pretty healthy rate. Has there been any any interest in the market of time charting out any of your other capes that are trading in the spot market? I would say, you know, at the where rates are, and particularly in, you know, that we're in the summer, I would say liquidity is a little lower on the on the one year TC market.

John Wilkinsmith: I mean, you could certainly do one today. But we think rates are actually going to improve as we get into late third and early fourth quarter. So I think assessing it is better left for for another month or so. Having said that, you know, we've done some index deals and as you're aware, those index transactions allow us to fix at any time within within the index period. And so, you know, we have a couple options available, couple levers to pull if, you know, when, when things firm up in the in the latter part of the year, if it makes sense will, you know, we'll take some exposure off the table. But I think right now, you know, in during the summer, you know, what I would call more of a traditional summer law. I think waiting is, is, is that strategy?

John Wilkinsmith: You talked about redeploying the proceeds of your vessel sales to higher return opportunities that should come to pass pretty soon. You have a few older vessels specifically you've got two non-capes that are similar to the warrior. Is there any interest to move them out and to redeploy it to higher return opportunities? Are you just going to maintain it right here? No, look on the supers as you pointed out there are two O5's that are there that are 55's.

John Wilkinsmith: Those are definitely in the box to move out and redeploy. And then there's some of the maybe the O9's and 10 supers will also look at. So I think you'll continue to see more of the same until we can find a larger transaction which as you know, we're always trying to uncover.

Liam Burke: Great. Thank you, John. Thanks, Liam.

Ben Nolan: Your next question comes from the line of Ben Nolan of Steve Ho. Please go ahead. All right, thanks.

Peter Allen: Hey, good morning, guys. So I have a couple. First of all, and this maybe goes back to Omar's question a little bit. Can you maybe walk me through the calculus as to sort of how you come up with that $19.5 million of effective reserve when you're allocating capital towards the dividend? And just maybe what's the what's the math behind that? Or how do you think about that going forward now that you really don't have any debt?

Peter Allen: Hey, Ben. Yeah, I'll take that one. Thanks for the question. So the the $19.5 million voluntary reserve is just to be clear it's 100% in the board's discretion in terms of the use of that. And we have moved it up or down in previous quarters, but to answer your question to get to the calculus of it. When we first announced the value strategy, we had a debt repayment line item of 8.75 million, and then we had a voluntary reserve of 10.75 million.

Peter Allen: And since we now have no mandatory debt memorization, and we actively manage the debt with the RCF that we put in place last Q4, we decided to simplify the calc and consolidate those two line items into one. So that's how you get to the $19.5 million. But essentially, again, like I mentioned earlier, it is a fully discretionary in terms of board management's view of it. And in the past, we have that reserve as well.

Peter Allen: So hopefully that answer your question. Ben, keep in mind that was, we gave that guidance at the beginning of this year. And as Pete said, we've lowered it in 2023 to pay dividends in the second and third quarter when the formula may have produced a zero. Which we still have that flexibility going forward, depending on freight rates. But that reserve gets assessed at least once a year. So we'll be looking at it again towards the end of this year to give forward guidance for the following year.

Peter Allen: And as I said earlier on the call, getting down the net debt zero is a milestone. So I think we'll be looking at quite a few things as we get in towards the end of the year.

Peter Allen: Okay, I appreciate the color there and then my next question really is just more for them modeling but in general as you think about the the op-ax I know it looks like the capesize op-ax came up a little bit this year are you seeing much in the way of inflation at all in terms of that op-ax or maybe was it just you know I know that sometimes things can be a little lumpy from quarter to quarter. Yeah, that's exactly it so Q2 sure it was higher we were we were guiding to a higher DVE figure for the quarter but yeah to your point when you do look at op-ax over a three-month period it does get very lumpy we kind of we like to look at at least 12 months I mean if you stretch it out to the last six quarters last 18 months or DVE average of about 6200 which is in line with our Q3 guidance that we've provided so it does get a little bit lumpy and Q2 a lot of it was timing related.

Peter Allen: But when we look ahead to Q3 we're guiding for a lower number of 6150 per vessel per day compared to the 6850 and Q2 so on a year over your basis maybe slightly higher with typical inflation crew ages is obviously a large part of the overall DVE mix but yeah nothing out of the ordinary and more timing and Q2. Yeah and as we you know as we typically do as we get above the 90% fixture rate on the TCE we will you know we'll continue to put out guidance for that and and we'll also we'll put a guidance out for for Q3 op-ax as well at that time. Great. I appreciate it. Thank you guys. Thanks Ben.

Bendik Nyttingnes: Your next question comes from the line of BENDIC. Meetingness of Clarkson Securities. Please go ahead. Thank you. Morning guys. Morning. Just back to the capital allocation and your balance sheet. Do you have a lot of liquidity at hand with your CS structure and you're also at can get out for the one vessel. Do you have any sort of sweet spots in terms of how many vessels you want to operate or sort of a brief from an operational perspective.

Bendik Nyttingnes: I wouldn't say there's a sweet spot but you know we are we are net down in terms of what we have sold so we definitely are going to be adding if you know as I said in the in the short term. You know two to three ships to replace what we've recently sold so that that will definitely occur. We're going to continue on with the fleet renewal approach for for some of the older super maxes as well and and replace those.

Bendik Nyttingnes: And if you know again we continue to look for the right transaction to grow you know on a on a bigger scale but you know not not the easiest thing to define and we certainly we're certainly don't want to we've worked very hard to get to net that zero. So we certainly are not going to lever up so to speak in this market with firm asset prices but again the right transaction if if you can figure out a way to do NAB to NAB type transactions with with shares and those types of things make more make more sense. Again, if you would like to ask a question, press star, then the number one on your telephone keypad.

Charles Fratt: Your next question comes from the line of Poe Fratt with a live global partners. Please go ahead. Yeah, good morning. John, where do stocks buybacks that your capital allocation program or strategy? Sorry, say that again, Poe. It's just broke up a little bit. Yeah, sorry, where do stock buybacks that within the capital allocation strategy? Look, the buybacks as you're aware, we've talked about these rather recently, quite extensively. It's in our tool belt.

Charles Fratt: There's no doubt there's a time to do those. We discuss it with the board continuously and right now I would say we're not in that mode, but that doesn't mean that there becomes a wider disconnect between where Vessel values are and NAVs and where our share price is trading. Clearly, we're going to look at that and make a decision. There's a discount right now. If you actually look at where Vessel values are today, they'd have to come down.

Charles Fratt: I think some around 25% to actually justify today's share price, which doesn't make a lot of sense to us, but there's a lot of things in the equity markets right now that are with dislocation and don't make a lot of sense. It's definitely in our tool belt, Poe, and there is a time to put that in place.

Peter Allen: Great. Peter, if you can just clarify, it sounds like the record is going to be reviewed on an annual basis, not a quarter to quarter basis. I don't think that's the case, Poe. I mean, I think we're always looking at the reserve every single quarter, but in terms of giving real guidance to the market and we said this since the beginning of the strategy, we wanted to give at least a 12-month look, but that doesn't mean we don't again look at it on a quarter by quarter basis, but we're very quickly coming into the end of the year where we're going to take a deep dive on our capital allocation strategy, so it's not far away.

Peter Allen: And then, Tom, you mentioned the share-to-share transaction. Have you seen any pickup and interest in a share-to-share transaction over the last quarter or so? I don't know if there's a, I'm not so sure if it ebb and flows, so to speak. Obviously, when you have wider discounts on NAV, it becomes more difficult, so maybe we have had a little bit here, but we're always looking at transactions. Hopefully we will be able to execute on some time in this market. I wish I had a better answer for you but they're not easy transactions to do as you're well aware.

Charles Fratt: Sounds good. Thanks for your time. Thanks, Po.

Unknown Executive: As there are no further questions at this time, that concludes your conference call for today.

Unknown Executive: We thank you for participating and ask that you please disconnect your minds.

Q2 2024 Genco Shipping & Trading Ltd Earnings Call

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