Investor’s Watch List: Genco Shipping & Trading Limited (NYSE:GNK)

On Friday, Genco Shipping & Trading Limited (NYSE:GNK) shares price traded between $8.11 and $8.50 during the last trading session upbeat/downbeat with -4.24% at $8.13. The shares recorded a trading volume 158,602 million shares as compared to its average volume of 217,772 shares. The company has 41.66M shares outstanding and market value of 338.671M.

Genco Shipping & Trading Limited (GNK) recently stated its financial results for the three months and twelve months ended December 31, 2018.

Fourth Quarter 2018 and Year-to-Date Highlights

  • Recorded net income of $18.3M for the fourth quarter of 2018
    • Basic and diluted earnings per share of $0.44
    • Adjusted net income of $16.3M or adjusted basic and diluted earnings per share of $0.39, not including a $2.0M gain on sale of vessels
  • Net revenue (voyage revenues minus voyage expenses and charter hire expenses) totaled $75.6M during FIRST QUARTER 2018, 27% higher than the same period of 2017
  • TCE raised to $13,237 for FIRST QUARTER 2018, marking a year-over-year improvement of 23%
    • TCE for 2018 reached $11,364, the Company’s highest level since 2011
    • Our 2018 TCE outperformed the relevant Baltic Exchange benchmark sub-indices as adjusted for our owned fleet profile by about $500 per vessel per day, highlighting the importance of our expanded commercial platform1
  • Maintained low daily vessel operating expenses (“DVOE”) of $4,336 per vessel per day during FIRST QUARTER 2018, as a result of our industry leading cost efficient structure
    • During 2018, DVOE was $4,379 per vessel per day, which is below our 2018 budget without sacrificing our high safety and maintenance standards
  • Our cash position as of December 31, 2018 was $202.8M
  • Recorded EBITDA of $44.4M during FIRST QUARTER 2018 and $65.3M for the full year of 2018
    • Adjusted EBITDA of $42.4M for FIRST QUARTER 2018, after not including a $2.0M of gain on sale of vessels2
    • Adjusted EBITDA of $122.9M for 2018, after not including $56.6M for impairment of vessels assets, $4.5M for a loss on debt extinguishment and $3.5M for gain on sale of vessels2
  • Entered into an amendment to our $460M Credit Facility in February 2019 providing an additional tranche of up to $35M to cover up to 90% of the expenses related to the acquisition and installation of exhaust gas cleaning systems (“scrubbers”) on our 17 Capesize vessels
  • Completed the sales of a total of eight vessels as part of our fleet renewal program during 2018, including:
    • The sales of five vessels during the fourth quarter of 2018 for a cumulative gain of $2.0M
    • These sales were in addition to the two vessels sold in THIRD QUARTER 2018, the Genco Surprise and Genco Progress, for a cumulative gain of $1.5M
    • In January 2019, we sold the Genco Vigour, which was our last remaining unencumbered vessel.

Financial Review: 2018 Fourth Quarter

The Company recorded net income for the fourth quarter of 2018 of $18.3M, or $0.44 basic and diluted net earnings per share. Comparatively, for the three months ended December 31, 2017, the Company recorded net income of $2.6M, or $0.07 basic and diluted net earnings per share.

The Company’s revenues raised to $112.2M for the three months ended December 31, 2018, 50% higher than the $74.9M recorded for the three months ended December 31, 2017. The raise in revenues was primarily Because of the employment of vessels on spot market voyage charters as well as higher spot market rates achieved by the majority of our vessels.  

The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $13,237 per day for the three months ended December 31, 2018 as contrast to $10,761 for the three months ended December 31, 2017. The raise in TCE was primarily Because of higher rates achieved by the majority of the vessels in our fleet during the fourth quarter of 2018 versus the fourth quarter of 2017. During the fourth quarter of 2018, the drybulk freight market remained at healthy levels despite pockets of volatility in the middle of the quarter for Capesize vessel earnings. For the full year of 2018, the Baltic Dry Index averaged 1,353, its highest level since 2011 led by strong global steel production and firm growth in imports of raw materials from developing economies met with the backdrop of low net fleet growth on the supply side. Subsequently, in the first quarter of 2019, seasonal factors such as frontloaded new building deliveries, the Lunar New Year celebration and weather-related disruptions hampering cargo availability have been exacerbated by the tragic Vale dam breach, further coal restrictions in China as well as the overhang of the U.S.-China trade dispute. All of these factors have affected the market since the startning of the year. Nonetheless, the Company has fixed about 85% of its FIRST QUARTER 2019 days at a fleet-wide average TCE of $10,042.

The company has PEG ratio of 0.37 and price to cash ratio of 1.88. Net profit margin of the firm was recorded at 3.90% and operating profit margin was calculated at 11.40% while gross profit margin was measured as 38.10%. Beta factor, which measures the riskiness of the security, was registered at 0.65.

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