Genco Shipping & Trading Ltd

Good morning, ladies and gentlemen, and welcome to the Genco Shipping and Trading Limited fourth quarter 2022 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. 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. We'll conduct a question and answer session after the opening remarks. Instructions will follow at that time. A replay of the conference will be accessible at any time during the next two weeks by dialing 1-877-674-7070 and entering the passcode 378900. At this time, I will now turn the conference over to the company. Please go ahead. Good morning.

Before we begin our presentation, I note that in this conference call, we'll be making certain forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intend, 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. 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, 2022, 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 Bobensmith, Chief Executive Officer of Banco Shipping and Trading Limited.

Good morning, everyone. Welcome to GENCO's fourth quarter 2022 conference call. I will begin today's call by reviewing our Q4 2022 and year-to-date highlights, providing an update on our comprehensive value strategy, financial results for the quarter, and the industry's current fundamentals before opening the call up for Q&A. For additional information, please also refer to our earnings presentation posted on our website. During the fourth quarter of 2022, Genco continued to achieve solid financial results, which capped off another strong year of earnings and shareholder returns. Notably, during 2022, we generated EBITDA of $227 million, which marked our second consecutive year of EBITDA well in excess of $200 million. Our earnings were driven by a fleet-wide TCE of $23,824 per day, as we drew on our best-in-class commercial platform, outperforming our scrubber-adjusted benchmarks by nearly $3,000 per day, which added $44 million to the bottom line from our commercial platform alone. After a transformational 2021, in which Genco embarked on a path to become a low-leverage, high-dividend payout company, the first of its kind in the dry bulk public markets, 2022 marked the first full year of this value strategy. Our successful execution resulted in declared dividends totaling $2.57 per share for the full year of 2022, representing a dividend yield of 14% based on our February 21, 2023 closing stock price. Importantly, during the fourth quarter, we declared a dividend of $0.50 per share, marking our 14th consecutive quarterly dividend. Since Q3 2019, we have now declared a total of $4.29 per share in dividends, or approximately 24% of our current share price. We believe our track record of meaningful and sustainable dividends over three and a half years through varying cycles speaks to the strength of the company's balance sheet and our prudent approach to capital allocation. In addition to paying meaningful dividends, we also continue to focus on other pillars of our value strategy. Proactively paying down debt has enabled us to further reduce our cash flow breakeven levels for the benefit of shareholders. Continuing to pay down debt during a time in which we have no mandatory debt repayment is consistent with our medium-term goal to reduce our net debt position to zero, creating a compelling risk-reward balance. Irrespective of the broader macro environment, we remain in a strong position to pay sizable dividends to shareholders while seeking opportunities to take advantage of attractive growth opportunities as markets develop. We believe the dry bulk market is currently experiencing a typical seasonal lull, and we anticipate an improvement in freight rates based on catalysts that include China's reopening from restrictive COVID-related policies, together with improving cargo flows as the year progresses. Importantly, this positive demand outlook coincides with a backdrop of a historically low new building order book. Given constraints in fleet capacity, demand growth has a low threshold to exceed in order to outpace supply growth to further tighten market fundamentals and move freight rates up. Ahead of this anticipated freight rate pullback in Q1, we fixed 84% of our Q1 days at a firm rate of $14,217 per day, well above current spot rates published by the Baltic Arctic Exchange for non-scrubber fitted Cape size and Supermax vessels. Importantly, our Cape size suite is fully scrubber fitted and able to earn a meaningful premium above this daily published index. Our TCE is also well above our cash flow breakeven rate of approximately $9,500 per day. As we've highlighted, since the announcement of our value strategy in April of 2021, Dry bulk shipping is highly seasonal, with significant operating leverage inherent in the business. Periods like what we are currently seeing in the first quarter, although temporary in our view, are why we chose to prepay over 60% of our debt over the last two years, substantially reducing our financial leverage and bringing our cash flow breakeven rate down to industry lows, a core differentiator for Genco compared to the peer group. This provides us with a high degree of flexibility within our dividend policy in regard to both our voluntary debt prepayments and our quarterly reserve. With no mandatory debt amortization until our credit facility's maturity in 2026, our capital structure is built to support our value strategy in diverse market environments with amounts of both debt prepayments and our reserve remaining under management's control. While we plan to continue to pay down debt, as we stated in the past, we maintain flexibility to reduce the quarterly reserve to pay dividends subject to the development of freight rates for the remainder of the first quarter and our assessment of our liquidity and forward outlook. The company remains very well capitalized, and we are beginning to see freight rates improve off of early year lows, supporting our thesis of a dry bulk market recovery. At this point, I will now turn the call over to Apostolos Sofolios, our Chief Financial Officer.