Genco Shipping & Trading Ltd

intend, plan, believe, in 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 a 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 31, 2024, and the company's reports on Form 10Q and Form 8K subsequently followed at the SEC. At this time, I would like to introduce John Woebensmith, Chief Executive Officer of Genco Shipping and Trading Limited.

Good morning, everyone. I will begin today's call by reviewing our Q2 2025 and -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. Starting on slide five, during the second quarter, we continue to prioritize returning cash to shareholders through market cycles while taking additional steps to further expand our earnings power. For the second quarter, we declared a dividend of $0.15 per share, despite an intensive dry docking quarter, extending our track record of 24 quarters of consecutive dividends and marking the longest period of uninterrupted dividends in our dry flow period. Including the Q2 dividend, Genco has declared .91.50 in dividends per share, representing 41% of our current share price. Notably, for the second quarter of 2025, our dividend formula, including a voluntary reserve of $19.5 million, would not have produced a dividend. However, management and the board chose to maintain the voluntary reserve but reduced it from $19.5 million to $7.9 million for the quarter, resulting in the 15 cents per share dividend. This highlights our commitment to regular shareholder returns as well as our favorable view of the long-term fundamentals of the dry bulk industry and the seasonally stronger freight rate environment that has emerged in the second half of the year thus far. To that end, we have front-loaded the majority of our dry dockings, having completed 12 to date. In the coming weeks, we'll be completed with the majority of our 2025 dry docking schedule and our cash flow break-even rate is expected to revert back to approximately $9,800 a day by Q4 of this year. Subsequent to the end of the quarter, we took steps to further strengthen our capital structure and enhance our financial flexibility as we seek to further modernize our asset base for the benefit of shareholders. Following our success, expanding Genco's borrowing capacity by 50%, with the closing of our new $600 million revolving credit facility, we acted decisively to grow our capesize fleet. Specifically, we agreed to purchase a 2020 Imabari-built scrubber-fitted capesize vessel to be renamed the Genco Courageous. The vessel is scheduled to deliver to Genco in September-October of this year and we plan to utilize capital from the recently closed revolver to fund the transaction. This purchase represents the fourth high specification fuel-efficient capesize vessel that Genco has agreed to acquire since Q4 2023, further expanding the company's presence in a key sector with compelling supply and demand fundamentals. Moving to slide 6, capitalizing on our compelling vessel acquisitions and providing shareholders with uninterrupted dividends are key components of our capital allocation strategy, which has been well balanced since inception of our value strategy in early 2021. Over the past four years, we have invested nearly $350 million in high-quality modern vessels, distributed $257 million in dividends to shareholders, and paid down $349 million in debt. Collectively, these actions have transformed Genco's balance sheet, created a highly differentiated risk-reward balance, and increased the earnings power of the company to continue to pay regularly quarterly dividends. On page 7, we highlight our fleet composition. Pro forma for the latest agreed-upon acquisition, we will own a fleet of 17 capesize vessels and 26 ultramacs and supermax vessels. We continue to balance the high beta and the upside potential of the capesize sector along with the steadier earning stream of the minor bulk ships. On a vessel ownership basis, our ownership splits are 40% capes and 60% ultramacs supermax. However, when we view these splits on an asset value or a net revenue basis, we are over 50% weighted towards capesize vessels, providing us significant operating leverage. Importantly, since we began reinvesting in the capesize sector, the Baltic Cape Size index has averaged over $20,000 per day in 17 of the last 22 months, or approximately 80% of the time. Looking at the prior 22 months, the DCI only crossed $20,000 a day in four of those, or just 18% of the time. Turning to slide 8, with an industry low net loan to value ratio, a low cash flow breakeven rate, and $500 million in undrawn revolver availability, we believe GENCO remains in a highly advantageous position to successfully operate in the current volatile freight rate environment and continue to differentiate itself from its dry bulk peer group. GENCO has a scale and operating leverage to benefit from a rising market by also having significant access to capital to take advantage of countercyclical opportunities if they were to arise. Building on the sequential TCE improvement in Q2, our estimated Q3 TCE to date is strong, and we continue to see a pickup in capesize and supermax rates. With our leading commercial platform and significant operating leverage, we remain in a strong position to capitalize on improving dry bulk fundamentals. Going forward, we remain focused on executing the three pillars of our value strategy, dividends, deleveraging, and growth. Lastly, turning to page 9, GENCO continues to prioritize strong corporate governance, which we believe is another key differentiator for the company relative to the peer group. Specifically, GENCO is the only listed dry bulk company with no related party transactions. We have a diverse and independent board of directors, are highly transparent and provide detailed disclosures on company performance and initiatives while striving to provide a clear and thoughtful strategy to shareholders as we execute on our approach to capital allocation. We view this as a key part of GENCO's identity as a company and are proud to have been ranked number one in the Weber Research ESG scorecard for four consecutive years. 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 a net loss of $6.8 million or $0.17 basic in the alluded net loss per share. Adjusted net loss is $0.14 per share, excluding a non-cash impairment charge of $0.7 million. Adjusted EBITDA for Q2 totaled $14.3 million. Our cash position as of June 30, 2025, was $35.8 million and we have $100 million of debt outstanding, resulting in a net loan to value of 7% as stated on slide 14. Pro forma for the acquisition of the 2020 built cape-sized vessel, we expect our net loan to value to be approximately 13% with capital utilized from the revolver to fund the vessel purchase. In July, we closed our $600 million revolving credit facility under attractive terms, achieving several key objectives as highlighted on slide 15. We increased our borrowing capacity by $200 million or 50%, further strengthening our ability to pursue accretive growth opportunities for the benefit of shareholders while lowering margin and commitment fees. Additionally, with no commitment reductions until March 31, 2027, GENCO maintains the $600 million of borrowing capacity for an extended period of time, adding to our optionality as markets develop. Furthermore, the accordion feature could provide an additional $300 million of potential capacity to fund acquisitions. With the revolver structure, we plan to continue to actively manage our cash and debt positions to reduce interest expense while maintaining access to capital to quickly act on growth opportunities as we did with the most recent agreement to acquire a high-specification and fuel-efficient Cape-sized vessel. We appreciate the continued support of our high-quality bank group as we continue to execute GENCO's strategy. Moving to slide 16, we highlight our quarterly dividend policy, which targets a distribution based on 100% of operating cash flow plus a voluntary reserve. For Q2, our board of directors declared a 15-cent per share dividend based on operating cash flow of approximately $14.5 million and a voluntary quarterly reserve of $7.9 million. Looking ahead to Q3 2025, we currently have 70% of owned available days fixed at a rate of approximately $15,900 per day as compared to our anticipated cash flow breakeven rate, excluding dry docking-related capex of approximately $8,900 per vessel per day. Q3 TC estimates are currently 17% higher than the actual Q2 TC, which highlights the freight rate improvement seen in June that carried over into July and August to date. This improvement has been led by our Cape-sized vessels, which in Q3 to date are currently fixed at approximately $21,000 per day, an increase of nearly 25% from $17,000 per day