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Genco Shipping & Trading Limited Announces Fourth Quarter 2012 Financial Results

NEW YORK, Feb. 20, 2013 /PRNewswire/ -- Genco Shipping & Trading Limited (NYSE: GNK) ("Genco" or the "Company") today reported its financial results for the three and twelve months ended December 31, 2012.

The following financial review discusses the results for the three months and years ended December 31, 2012 and December 31, 2011.

Fourth Quarter 2012 and Year-to-Date Highlights

Recorded net loss attributable to Genco for the fourth quarter of $45.7 million, or $1.06 basic and diluted loss per share; Maintained cash position of $82.8 million on a consolidated basis, including restricted cash; $79.5 million at Genco Shipping & Trading Limited, including restricted cash; $3.3 million at Baltic Trading Limited; and Continued a short-term time charter strategy by fixing vessels on spot market-related time charters with the option to convert to a fixed rate and on short-term charters while the market remains volatile.

Financial Review: 2012 Fourth Quarter

The Company recorded net loss attributable to Genco for the fourth quarter of 2012 of $45.7 million, or $1.06 basic and diluted loss per share. Comparatively, for the three months ended December 31, 2011, net income attributable to Genco was $0.3 million, or $0.01 basic and diluted earnings per share.

EBITDA was $12.1 million for the three months ended December 31, 2012 versus $57.3 million for the three months ended December 31, 2011. 

Robert Gerald Buchanan, President, commented, "During the fourth quarter and full year 2012, management maintained an opportunistic time charter approach in a challenging drybulk market. Our goal is to enhance future performance by employing our vessels on short-term and spot market-related contracts that preserve the ability to benefit from a rising freight rate environment while maintaining an efficient cost structure. With a large and modern fleet, we are in a strong position to capitalize on the positive long-term demand for iron ore, coal, steel and other core commodities and continue to provide multinational charterers with high-quality tonnage."

Genco's voyage revenues decreased to $48.4 million for the three months ended December 31, 2012 versus $96.3 million for the three months ended December 31, 2011, mainly due to lower charter rates achieved by the majority of the vessels in our fleet. The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet decreased to $8,206 per day for the three months ended December 31, 2012 compared to $16,805 per day for the three months ended December 31, 2011. The decrease in TCE rates resulted from lower charter rates achieved in the fourth quarter of 2012 versus the same period in 2011 for the majority of the vessels in our fleet. Increased vessel supply due to the high pace of deliveries experienced through the first half of 2012, weighed on freight rates during the fourth quarter.  This was partially offset by elevated levels of scrapping of older tonnage and greater iron ore exports out of Brazil.

Total operating expenses increased to $75.4 million for the three months ended December 31, 2012 from $73.2 million for the three-month period ended December 31, 2011. Vessel operating expenses were $28.7 million for the fourth quarter of 2012 compared to $29.1 million for the same period in 2011. The decrease in vessel operating expenses was primarily due to lower maintenance related expenses partially offset by higher crewing expenses for the fourth quarter of 2012 versus the same period in 2011.  

Depreciation and amortization expenses slightly increased to $35.1 million for the fourth quarter of 2012 from $34.7 million for the fourth quarter of 2011 due to a full quarter of depreciation for the Genco Spirit which was delivered to the Company in November 2011, as well as drydock amortization for the vessels in our fleet that underwent drydockings in 2012. General, administrative and management fees increased to $10.0 million in the fourth quarter of 2012 from $8.0 million in the fourth quarter of 2011.

Daily vessel operating expenses, or DVOE, decreased to $5,031 per vessel per day during the fourth quarter of 2012 as compared to $5,142 per vessel per day for the fourth quarter of 2011, mainly due to lower maintenance related expenses partially offset by higher crewing expenses. We note that our fourth quarter and full year 2012 DVOE are below our budget set forth at the beginning of the year. We believe daily vessel operating expenses are best measured for comparative purposes over a 12month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers and management's expectations, our DVOE budget for 2013 is $5,250 per vessel per day on a weighted average basis for the 53 vessels in our fleet, excluding vessels owned by Baltic Trading Limited.

John C. Wobensmith, Chief Financial Officer, commented, "During the year, management took proactive measures enabling Genco to enhance its financial strength and flexibility. Specifically, we amended our three credit facilities under favorable terms and completed a follow-on equity offering."

Financial Review: Full Year 2012

The net loss attributable to Genco was $144.9 million or $3.47 basic and diluted loss per share for the year ended December 31, 2012, compared to net income attributable to Genco of $25.4 million or $0.72 basic and diluted earnings per share for the year ended December 31, 2011. Voyage revenues decreased to $223.2 million for the year ended December 31, 2012 compared to $388.9 million for the year ended December 31, 2011. EBITDA was $82.5 million for the year ended December 31, 2012 versus $249.1 million for the year ended December 31, 2011. TCE rates obtained by the Company decreased to $9,706 per day for the year ended December 31, 2012 from $17,644 per day for the year ended... More