Genco Shipping & Trading Ltd

Good morning, ladies and gentlemen, and welcome to the Genco Shipping and Trading Limited Fourth Quarter 2025 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 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 webcast replay will also be available via the link provided in today's press release, as well as on the company's website. 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've been 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, 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 the Without limitation, the company's annual report on Form 10-K for the year ended December 31st, 2024, 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 Robinsmith, Chairman and CEO of Genco Shipping and Trading Limited.

Good morning, everyone, and welcome to Genco's fourth quarter 2025 conference call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy since its implementation in 2021, and then we'll review our Q4 2025 and year-to-date highlights. We will then provide additional details on our financial results for the quarter, as well as provide an update on 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, 2025 marked the fifth year since our board and management team formulated and began implementing our comprehensive value strategy centered around dividends, financial deleveraging, and opportunistic fleet growth. When we launched the strategy in April of 2021, we set out to accomplish three main objectives. transform Genco into a low leverage, high dividend company, maintain significant flexibility to grow the fleet, and pay a sizable quarterly dividend through the cycles based on an established dividend formula. Five years later, we are pleased to have made notable success executing against each of these objectives. Among our accomplishments, we fortified our balance sheet, to effectively operate in diverse rate environments, provided shareholders with sizable returns, and invested in our fleet to further expand our earnings power and dividend capacity. Specifically, over this time, we have invested $347 million in high-quality modern vessels, distributed $270 million in dividends to shareholders, and paid down $249 million of debt. Moving to slide six, we continued to advance our value strategy in the fourth quarter, ending the year with strong momentum going into the first quarter. We declared our 26th consecutive dividend, representing an annualized yield of 9% on our current share price, our highest dividend level since Q4 2022, and the longest period of uninterrupted dividends in our dry bulk peer group. Heading into the fourth quarter, we took important steps to maximize fleet-wide utilization in a strong freight rate environment with the completion of 90% of our 2025 dry docking schedule and delivery of a high-quality modern cape-sized vessel early in the quarter. During the fourth quarter, these proactive measures enabled us to generate the highest levels of both EBITDA and TCE for the year at $42 million and $20,064 per day respectively. Additionally, in November, we agreed to purchase two 2020 built high quality premium earning NewcastleMax vessels that we expect to take delivery of in March. Importantly, These well-timed investments further increase our operating leverage and expand our presence in a key sector with compelling supply and demand fundamentals. We also ended the fourth quarter with an industry-low net loan devalue of 12%. As depicted on slide seven, we achieved multi-year highs across key metrics in Q4 and have significant momentum going into Q1 2026. Building on our success generating TCE and EBITDA levels that were the highest in three years, estimated Q1 TCE of approximately $18,000 per day for 80% of the quarter represents a strong start to the year in what is typically a seasonally slower period. Notably, estimated Q1 2026 TCE is our highest Q1 level since 2024, and over 50% above Q1 2025 levels. Based on our firm fixtures today and the continued execution of our value strategy, we expect a higher dividend in Q1 on a year-over-year basis. Turning to slide eight, Gento has one of the lowest cash flow breakeven rates in our peer group. This key differentiator is directly related to our industry low net loan-to-value as well as not having mandatory debt amortization, which further reduces our cash flow breakeven rate compared to peers. As our TCE increased from approximately $12,000 per day in Q1 2025 to $20,000 per day in Q4, our overall profitability and dividend capacity increased as well. As can be seen from the chart, our estimated Q1 TCE also compares favorably to our low break-even rate on a cash basis. Turning to slide nine, through the execution of our value strategy, Genco has paid compelling quarterly dividends to shareholders across cycles. Notably, we have paid 26 consecutive quarterly dividends to shareholders in diverse rate environments, having distributed between 15 cents and 50 cents a quarter over the past three years. In addition to the Q4 dividend being the highest since Q4 2022, it also represents a 233% increase over the Q3 2025 dividend. Supporting our dividend and complementing our low breakeven rate is our balanced approach to fleet composition, which we present on slide 10. In addition to the two new CastleMax vessels we agreed to acquire, we own a fleet of 17 Cape-sized vessels, as well as 15 Ultramax and 11 Supermax vessels. We continue to balance the high data and upside potential of the Cape-sized sector, along with steadier earning stream of our minor bulk ships. On a vessel ownership basis, our splits are 40% Capes and 60% Ultra Supras. However, when viewed on a net revenue basis over the last two years, we are 50% weighted towards cape-sized vessels. With just 20% of our overall fleet fixed for the year, Genco is uniquely positioned relative to some in the peer group to benefit from a strengthening freight rate environment, providing us with meaningful upside exposure to the current strong spot markets. Our high operating leverage is balanced against our low financial leverage, which is shown on slide 11. This provides Genco with significant financial flexibility in various freight market conditions. In strong markets, Genco generates meaningful cash flow with its industry-low break-even rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver availability allow the company to take advantage of countercyclical growth opportunities. Specifically, as demonstrated on slide 12, GENCO has taken advantage of our strong liquidity position for opportunistic acquisitions of modern high specification premium earning vessels at attractive values, including six Cape Sides and Newcastle Max vessels since 2023. I emphasize the positioning of the fleet today is not an artifact of history or chance. It is the result of the steady execution of our plan to optimize the fleet, which began in 2023. At that time, the management team and the board formed a specific strategy focused on the compelling supply and demand fundamentals of the Cape size sector, which had the lowest order book among the major dry bulk sectors. with long-haul ton-mile expansion on the horizon. Since 2023, our strategy has been built upon this thesis and over this time. Cape-sized vessels have been the best-performing dry bulk class from an earnings and an asset value appreciation perspective. Notably, our Cape-sized vessels have increased in value by nearly $40 million despite several years of age depreciation. Furthermore, we have generated an IRR of over 30% on these ships since acquisition. In 2025 alone, we agreed to purchase three 2020 built Cape size and Newcastle Max vessels, growing our pro forma fleet by 20% on an asset value basis and significantly increasing our earnings and dividend capacity in 2026 and beyond while reducing the average age of our fleet. On slide 13, both GENCOs perform a 45-vessel fleet and Cape fleet, provide significant operating leverage for shareholders. Every $1,000 fleet-wide increase in TCE equates to $16 million of incremental annualized EBITDA, or 37 cents per share. Furthermore, our 19 NewcastleMax and Cape-sized vessels, every $5,000 increase equates to $34 million or $0.77 per share of incremental earnings and dividend capacity. Our fleet strategy has been very successful since we implemented it in 2023. And as you see in these figures, has well positioned the company to continue creating shareholder value going forward. Lastly, turning to slide 14, Genco continues to prioritize strong corporate governance, which is another key differentiator for the company relative to the peer group. Specifically, Genco is the largest U.S. headquartered dry bulk shipping company, and we are also a U.S. public company subject to robust SEC and New York Stock Exchange disclosure regimes. We are also the only listed dry bulk shipping company with no related party transactions. We have a diverse and independent board of directors and observe U.S. public company governance best practices such as having a lead independent director. We provide detailed disclosures on company performance and initiatives while striving to provide a clear and thoughtful strategy to shareholders as we execute our disciplined approach to capital allocation. We are also consistently ranked in the top quartile on corporate governance among public shipping companies by Weber Research. Our corporate governance is a core part of Genco's identity and reflects our board's commitment to upholding the highest standards of fiduciary duty and governance excellence. I will now turn the call over to Peter Allen, our Chief Financial Officer.