Genco Shipping & Trading Ltd

Good morning, ladies and gentlemen, and welcome to the Genco Shipping and Trading Limited first quarter 2026 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, and 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 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. Good morning. Before we begin our presentation, I note that in this conference call, we will 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. 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 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, 2025, 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 Woodsmith, Chairman and CEO of Genco Shipping and Trading Limited. Good morning, everyone.

Welcome to Genco's first quarter 2026 conference call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy, and then we'll review our Q1 2026 highlights and dividend outlook for the remainder of the year. We will then provide additional details on our financial results, as well as 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, we believe that how a management team and board allocate capital is critical for generating returns and value to shareholders, especially in a capital-intensive industry such as shipping. With this goal in mind, we created our comprehensive value strategy, a well-defined capital allocation strategy, which has resulted in Genco significantly increasing its earnings power and dividend capacity for the benefit of shareholders. When we implemented the strategy in 2021, we set out to achieve three main objectives, transform Genco into a low leverage, high dividend company, maintain significant flexibility to grow the fleet, and pay a sizable dip quarterly dividend based on a transparent dividend formula. Over the last five years, we have successfully delivered on each pillar of our differentiated strategy. We fortified our balance sheet to effectively operate and grow in various rate environments and provided shareholders with consistent and sizable dividends. We also increased the number of premium earning Cape size vessels in our fleet to better take advantage of a strengthening dry bulk market and enhance shareholders upside potential. Specifically over this time, we have invested $557 million in high-quality modern vessels and distributed $293 million in dividends to shareholders. We also paid down $119 million in debt, reducing our cash flow breakeven rate. Moving to slide six, following a strong finish to 2025, we are pleased to have carried this positive momentum into 2026. During the first quarter, we generated strong cash flows driven by a time charter equivalent rate of over $19,300 per day, our highest first quarter TCE since 2022. We also maximized our revenue generation days during the quarter, achieving fleet-wide utilization of 99.2%. In what is typically a seasonally softer period, we declared a Q1 dividend of 35 cents per share, more than double our first quarter 2025 dividend. The Q1 dividend also marks our 27th consecutive dividend, the longest uninterrupted period in our dry bulk peer group. Complementing our strong financial performance, we continue to grow and renew the fleet with modern high specification premium earnings assets. and reduce exposure to older, less fuel-efficient vessels. In March, we took delivery of two 2020-built, high-specification NewcastleMax vessels that were immediately deployed in the spot market at firm rates. With both vessels expected to operate for a full quarter in Q2, we anticipate the vessels to have a positive impact on our results and earn a premium to benchmark indices in the spot market. Capitalizing on the strong and liquid sale and purchase market, we also divested the two oldest and smallest vessels in our fleet during March and April. These sales were at levels above recent broker valuations and demonstrate the rising asset value environment that we currently operate in. Importantly, we will be redeploying these sale proceeds into a high specification 2019 IMABARI-built, scrubber-fitted, cape-sized vessel that we agreed to acquire in April and expect to take delivery of in June. Looking at our recent sale and purchase activity together, these were well-timed investments that further enhanced our operating leverage and increased our focus on sectors with compelling near and long-term supply and demand fundamentals. Specifically, we have added to our fleet growth through immediate cash flow accretion, and further increased our operating leverage, asset value, and dividend capacity for the benefit of shareholders. We also ended the first quarter with a low net loan to value of 20%, which supports our low cash flow breakeven levels and increased earnings power. As depicted on slide seven, we achieved multi-year highs in Q1 dividend and TCE with strong momentum going into the remainder of the year. Based on our strong Q2 fixtures to date of $23,900 per day for 66% of our available days, we are well positioned to provide shareholders with growing dividends. Slide 8 underscores how the current market is demonstrating the power of our dividend model. including our Q1 dividend, we will have paid $340 million or $7.91 and a half cents per share in quarterly dividends over the past seven years. Our Q1 dividend of 35 cents per share reflects an increase of 133% year over year. With the growth of our premium earning assets, our spot-focused commercial strategy, and our sizable operating leverage in a strengthening dry bulk market, we expect to significantly increase our dividends starting in the second quarter and have strong prospects for Q3 and Q4. Based on our fixtures to date and assuming the FFA curve for the balance of the quarter, we project a Q2 dividend of approximately 70 cents per share. Assuming the current forward freight rate curve for the balance of the year, Our dividend formula would produce a Q3 dividend of 75 cents per share and a Q4 dividend of 70 cents per share, bringing our full-year dividend to approximately $2.50 per share. Of course, the FFA curve is subject to change, but these projections show the opportunities provided by our low-leverage, high-dividend model. On the next few slides, we outline the foundation of Genco's strong earnings power and dividend capacity. Turning to slide nine, Genco 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 and increases our earnings potential. In addition to increasing Q1 and Q2 TCE today by 63% and 76% respectively, we continue to far exceed our low cash flow breakeven rate. Specifically, our Q2 TCE of nearly $24,000 per day compares very favorably to our cash flow breakeven rate prior to maintenance CapEx of under $10,000 per day. Complimenting our low breakeven rate is our balanced approach to fleet composition, which we present on slide 10. Following recent fleet renewal and the expected CAPE delivery in June, we will own a fleet of 20 CAPE size and Newcastle MAX vessels, as well as 24 Ultramax and Supermax vessels. We continue to balance the high beta and the upside potential of the CAPE size sector, along with the steadier earnings profile of minor bulk ships. On a vessel ownership basis, our splits are 45% capes and 55% ultra supras. However, when viewed on a net revenue basis over the last two years, we are over 50% weighted towards cape-sized vessels, putting us in a unique position in our peer group to benefit from a strengthening freight rate environment. Turning to slide 11, we balance our high operating leverage with low financial leverage, which provides us with financial flexibilities in various freight market conditions. In strong markets, Genco generates meaningful cash flow with its industry-low breakeven rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver availability allow the company to take advantage of counter-cyclical growth opportunities. On slide 12, we highlight the significant operating leverage provided by our pro forma fleet of 44 vessels. Every $1,000 fleet-wide TCE increase equates to $16 million of incremental annualized EBITDA, or 36 cents per share. Every $5,000 increase in TCE for our 20 Newcastle MAX and Cape size vessels equates to $36 million or 81 cents per share of incremental earnings and dividend capacity. The positioning of our fleet today is the result of a steady execution of our strategic plan over multiple years. In 2023, our management team and board formulated a strategy focused on capitalizing on the compelling supply and demand fundamentals of the Cape size sector, led by the sector having the lowest order book, with long-haul ton-mile expansion on the horizon. Our thesis has played out as expected. Since we began reinvesting in capes in Q4 2023, cape-sized vessels have been the best performing dry bulk classroom in earnings and asset value appreciation perspective. Notably, we have generated an IRR of over 30% on these ships since acquisition. Lastly, turning to slide 13, Genco continues to prioritize strong corporate governance, which has distinguished our company from our peers and underpinned our shareholder-focused outperformance. We are the only U.S.-listed dry bulk shipping company with no related party transactions, and we provide detailed disclosures on our strategy and performance with compensation aligned to shareholders' interests. We have a majority independent and diverse board with 50% female directors, and we are the only US-listed dry bulk company with an annually elected board. 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 our 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.