Genco Shipping & Trading Ltd

Good morning, ladies and gentlemen, and welcome to the Genco Shipping and Trading Limited 4th Quarter 2023 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 the 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. 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 1-877-674-7070 and entering the passcode 373966. 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're 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 and connection with a 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, 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 10-K for the year ended December 31st, 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 Wovensmith, Chief Executive Officer of Drenco Shipping and Trading Limited.

Good morning, everyone. Welcome to Genco's fourth quarter 2023 conference call. In addition to reviewing our Q4 2023 and year-to-date highlights, we want to use this opportunity to provide an update on the progress we are making three years into our comprehensive value strategy, as well as on the industry's current fundamentals. We will then open up the call for questions. For additional information, please also refer to our earnings presentation posted on our website. Starting on page five, 2023 marked another strong year for Genco. We took concrete steps to drive sustainable long-term value while achieving the top corporate governance rating across 64 public shipping companies for the third consecutive year. We also made progress enhancing the company's ability to thrive through all industry cycles as we executed across the three pillars of our comprehensive value strategy. focused on dividends, deleveraging, and growth. We ended 2023 with our strongest quarter of the year as outlined on slide six. For the fourth quarter, we achieved adjusted net income of 43 cents per share and declared a 41 cents per share dividend representing 173% quarter over quarter increase to the dividend. Complementing the sizable returns we provided shareholders during the quarter, we also continued to de-lever while executing several key strategic growth initiatives. This included increasing our earnings capacity by implementing the next phase of our fleet renewal program. Additionally, we closed on a $500 million revolving credit facility that meaningfully increased our borrowing capacity, reduced margin, extended maturities, and enhanced our ability to take advantage of opportunistic growth. Turning to the fleet, Performance was strong in the fourth quarter and underscores the meaningful operating leverage of Genco's asset base and the importance of our barbell approach to fleet composition. During the quarter, our operating leverage was evident as capesize rates spiked to multi-year highs in December, enabling us to increase Q4 TCE by 44% and achieve our highest TCE of the year at over $17,000 per day. We also generated our lowest cash flow breakeven rate for the year, resulting in significant margin expansion and an increased Q4 dividend, which I mentioned a moment ago. Notably, in the fourth quarter, we once again achieved the time chart equivalent benchmark outperformance and are pleased to have seeded our internal benchmarks for the year by $1,300 per day, while generating adjusted EBITDA of over $100 million. Looking ahead, we expect the positive momentum and our strong performance to continue in the first quarter. For Q1, 81% of our available days are fixed at over $18,700 per day, an increase of 34% versus Q4 levels. This strong performance is notable, especially considering that Q1 has historically been the seasonal low point in the dry bulk freight market. On page seven, we look back on the development of our comprehensive value strategy based on our ongoing progress in 2023. In April 2021, management and the board laid out a clear path and related objectives to transfer Genco into a low leverage, high dividend yielding company with significant financial flexibility to provide shareholders with returns and opportunistically grow through the dry bulk shipping cycles. Since that time, we have made significant progress towards these goals, and importantly, have balanced our capital allocation priorities, having paid $170 million in dividends, acquired $236 million of vessels, and paid down $249 million in debt. Moving to slide eight, we have declared compelling dividends over the last four and a half years, including nine since the announcement of our value strategy. Over this 18-quarter period, cumulative dividends to shareholders amount to $5.15 per share, or 29% of the current share price. Further supporting our ability to pay sustainable dividends is our recent success executing the next steps of our fleet renewable strategy, as displayed on slide 9. In November 2023, we purchased two 2016-built scrubber-fitted cape-sized vessels for $86 million while divesting three 2009 and 2010 Cape-sized vessels. This trade further modernized our Cape-sized fleet and reduced the risk profile while also increasing 2024 earnings and cash flow capacity. Following the sales of the three older Capes, we expect 2024 dry dock savings of approximately $10 million as we avoided the expensive third special surveys for these ships. In line with our barbell approach to fleet composition noted on slide 10, we'll continue to evaluate further opportunities in the sale and purchase market to renew our fleet. Turning to slide 11, we believe Genco is in a highly advantageous position going forward. Specifically, based on our success lowering our debt outstanding by 55% over the last three years, we have an industry low net loan to value an industry-low cash flow breakeven rate, and nearly $300 million in undrawn revolver availability. This provides significant financial flexibility and optionality for the company going forward in a cyclical and capital-intensive business. As such, we believe that Genco is well positioned to operate in both up and down markets, as shown on slide 12. With approximately $1 million in fleet value, and taking into consideration our scale and operating leverage, we expect Genco's fleet to significantly benefit from a rising market. With that said, and given our access to capital, we are also able to take advantage of counter-cyclical opportunities to buy vessels to increase our earnings power, much like we did prior to the recent Cape Sizer rally in early Q4. Going forward, a key priority for Genco is continuing to be good stewards of capital for shareholders. and continuously evaluating capital allocation priorities. On slide 13, we summarize the key tenets of our approach to capital allocation. First, maintain low financial leverage to lower cash flow breakeven levels based on the significant operating leverage inherent in the business. Second, pay compelling quarterly dividends consistently to shareholders. The third, opportunistically grow the asset base. And the fourth is to employ a borrowable approach to fleet composition by maintaining a fleet of cape-sized vessels for upside potential while owning Ultramax and Supermax vessels with a more stable earning stream. We believe our low leverage, high dividend payout model executed in scale is industry leading in the dry bulk shipping public markets. Given the volatility and the cyclicality of dry bulk shipping, we also believe it creates the optimal risk-reward balance to provide sizable returns to shareholders, opportunistically grow the fleet, and enhance our earnings power through the cycles. I will now turn the call over to Peter Allen, our Chief Financial Officer.