Genco Shipping & Trading Q2 2025 Earnings Report

Genco Shipping & Trading EPS Results

• Actual EPS: -$0.14
• Consensus EPS: -$0.15
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.46

Genco Shipping & Trading Revenue Results

• Actual Revenue: $46.90 million
• Expected Revenue: $50.19 million
• Beat/Miss: Missed by -$3.29 million
• YoY Revenue Growth: -24.40%

Genco Shipping & Trading Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 8:30AM ET

Genco Shipping & Trading (NYSE:GNK) Ltd. is an international ship owning company, which engages in the transportation of iron ore, coal, grain, bauxite, steel products, and other drybulk cargoes. It operates through the Major Bulk and Minor Bulk segments. The Major Bulk segment focuses on Capesize vessels. The Minor Bulk segment consists of Ultramax and Supramax vessels. The company was founded on September 27, 2004 and is headquartered in New York, NY.

Genco Shipping & Trading Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: During Q2, Genco declared a $0.15 per share dividend, marking 24 consecutive quarters of payouts and returning 41% of its share price to investors.
• Positive Sentiment: The company closed a $600 million revolving credit facility, boosting borrowing capacity by 50% to $600 million with $500 million undrawn and maintaining a low net loan-to-value ratio.
• Positive Sentiment: Genco agreed to acquire a 2020-built, scrubber-fitted Capesize vessel (to be named Genco Courageous) in Q3/Q4, expanding its high-spec fleet and modernizing its asset base.
• Negative Sentiment: In Q2, the company reported a net loss of $6.8 million (eps loss $0.17) and an adjusted loss of $0.14 per share, though cash flow breakeven is expected to revert to ~$9,800/day by Q4.
• Positive Sentiment: Market fundamentals remain strong with Q3 TCE rates up ~17% vs Q2 and Capesize rates ~25% higher to ~$21,000/day amid tight supply, aging fleet dynamics, and seasonal freight rate strength.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Junko Shipping and Trading Limited Second Quarter twenty twenty five 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.

[Operator]

Instructions will follow at that time. A webcast replay will also be available via link provided in today's conference 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.

[Peter Allen, CFO at Genco Shipping & Trading]

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 and 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, 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 ks for the year ended 12/31/2024, and the company's reports on Form 10 Q and Form eight k subsequently filed with the SEC.

[Peter Allen, CFO at Genco Shipping & Trading]

At this time, I would like to introduce John Wovensmith, Chief Executive Officer of Genco Shipping and Trading Limited.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Good morning, everyone. I will begin today's call by reviewing our Q2 twenty twenty five and year 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.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

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 drydocking quarter, extending our track record of twenty four quarters of consecutive dividends and marking the longest period of uninterrupted dividends in our drybulk period. Including the Q2 dividend, Genco has declared $6.915 in dividends per share, representing 41% of our current share price. Notably, for the 2025, our dividend formula, including a voluntary reserve of $19,500,000 would not have produced a dividend. However, management and the board chose to maintain the voluntary reserve, but reduce it from 19,500,000.0 to $7,900,000 for the quarter resulting in the $0.15 per share dividend.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

This highlights our commitment to regular shareholder returns as well as our favorable view of the long term fundamentals of the drybulk 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 can will be completed with the majority of our 2025 dry docking schedule, and our cash flow break breakeven rate is expected to revert back to approximately $9,800 a day by q four 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 $600,000,000 revolving credit facility, we acted decisively to grow our Capesize fleet.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Specifically, we agreed to purchase a 2,020 Imovari built scrubber fitted Capesize vessel to be renamed the Genco Courageous. The vessel is scheduled to deliver to Genco in September, October, 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 twenty twenty three, further expanding the company's presence in a key sector with compelling supply and demand fundamentals. Moving to Slide six, capitalizing on our compelling 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 twenty twenty one. Over the past four years, we have invested nearly $350,000,000 in high quality modern vessels, distributed $257,000,000 in dividends to shareholders and paid down $349,000,000 in debt.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

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 seven, we highlight our fleet composition. Pro form a for the latest agreed upon acquisition, we will own a fleet of 17 Capesize vessels and 26 Ultramax and Supramax vessels. We continue to balance the high beta and the upside potential of the Capesize sector along with the steadier earnings stream of the minor bulk ships. On a vessel ownership basis, our ownership splits are 40% Capes and 60% Ultramax Supramax.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

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 Capesize Index has averaged over $20,000 per day in 17 of the last twenty two months or approximately 80% of the time. Looking at the prior twenty two months, the BCI only crossed $20,000 a day in four of those or just 18% of the time. Turning to Slide eight. With an industry low net loan to value ratio, a low cash flow breakeven rate and $500,000,000 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 tribal peer group.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Genco has the 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 Supramax rates. With our leading commercial platform and significant operating leverage, we remain in a strong position to capitalize on improving drybulk fundamentals. Going forward, we remain focused on executing the three pillars of our value strategy: dividends, deleveraging and growth. Lastly, turning to Page nine.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

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 drybulk 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 score scorecard for four consecutive years. I will now turn the call over to Peter Allen, our Chief Financial Officer.

[Peter Allen, CFO at Genco Shipping & Trading]

Thank you, John. On Slides 11 through 13, we highlight our second quarter financial results. Genco recorded a net loss of $6,800,000 or $0.17 basic and diluted net loss per share. Adjusted net loss is $0.14 per share excluding a non cash impairment charge of $700,000 Adjusted EBITDA for Q2 totaled $14,300,000 Our cash position as of 06/30/2025 was $35,800,000 and we have $100,000,000 of debt outstanding resulting in a net loan to value of 7% as stated on slide 14. Pro form a for the acquisition of the 2020 built Capesize vessel, we expect our net loan to value to be approximately 13% with capital utilized from the revolver to fund the vessel purchase.

[Peter Allen, CFO at Genco Shipping & Trading]

In July, we closed our $600,000,000 revolving credit facility under attractive terms, achieving several key objectives as highlighted on slide 15. We increased our borrowing capacity by $200,000,000 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 03/31/2027, Genco maintains the full $600,000,000 of borrowing capacity for an extended period of time, adding to our optionality as markets develop. Furthermore, the accordion feature could provide an additional $300,000,000 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 most recent agreement to acquire a high specification fuel efficient Capesize vessel.

[Peter Allen, CFO at Genco Shipping & Trading]

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, less a voluntary reserve. For Q2, our Board of Directors declared a $0.15 per share dividend based on operating cash flow of approximately $14,500,000 and a voluntary quarterly reserve of $7,900,000 Looking ahead to Q3 twenty twenty five, 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 TCE estimates are currently 17% higher than the actual Q2 TCE, which highlights the freight rate improvements seen in June that carried over into July and August to date. This improvement has been led by our Capesize 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 in Q2 further highlighting the significant operating leverage of the sector.

[Peter Allen, CFO at Genco Shipping & Trading]

We note that Genco like much of the industry has a large scale drydocking program in 2025. During the first half of the year, we completed drydocking for nine vessels and have completed three more drydockings in Q3 to date, with another five vessels expected to be completed in the coming weeks. This will result in Genco completing 90% of our full year 2025 drydockings by the end of Q3 with only two drydockings remaining for Q4. I'll now turn the call over to Michael Orr, our drybulk market analyst to discuss industry fundamentals.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

Thank you, Peter. Beginning on Slide 18, the drybulk freight rate environment meaningfully improved in June crossing the $30,000 per day level in the middle of the month or double the May average. This increase was driven by record port headland iron ore shipments as Australian miners pushed to hit June 30 fiscal year end targets. While in the Atlantic Basin exports from Brazil ramped up over lower levels seen earlier in the year together with continued strong bauxite shipments. Notably, Brazilian iron ore exports from April to June increased by 20%, which on an annualized basis represents enough cargo to absorb approximately 100 Capes or nearly 5% of the Capesize fleet.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

Limited Capesize net fleet growth combined with augmented seaborne cargo availability have resulted in a 30% increase in volatility in the Capesize sector this year versus last year. In July, we once again saw the PCI exceed the $30,000 threshold, hitting a year to date high of nearly $32,000 a day on July 25, representing a 132% increase from the prior two week period. We believe that freight rate developments so far in 2025 represent a more traditional trajectory than what we've seen in recent years, as this year we've seen a softer q one and a sequential improvement in q two followed by a stronger market in the second half of the year. Over the last decade, 90% of the time, the highest quarter per case has occurred in q three or q four, which appears to be playing out once again. Turning to page 19, we point to China's steel complex.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

Specifically, country's iron ore imports fell by 3% during the first half of the year, but increased to over 100,000,000 tons in June as seaborne supplies recovered. China's iron ore port inventories have been drawn down by 11% from earlier from the earlier year high, they're now 9% lower on a year over year basis. Iron ore prices continue to be resilient around the $100 per ton threshold, while steel prices have risen increasing margin for steel mills. China's steel production has decreased year over year by 3%. China continues to export over 10% of the steel it produces, mostly going to other Asian countries.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

China's excess steel has remained a point of contention, prompting protection measures from various countries. We believe that if China's exports come under pressure, the country will likely boost demand domestically through stimulus measures to achieve growth targets, which could result in augmented demand for raw materials. Turning to pages twenty and twenty one, we highlight the long haul iron ore and bauxite trade growth expected from Brazil and West Africa in the coming years. While growth this year is expected to be marginal, there are significant growth volumes expected in 2026 and 2027 that can absorb potentially over 200 Capesize vessels, which is more than the current Capesize newbuilding order book. Supply constraints in Capesize newbuilding activity combined with added long haul trading distances are two key catalysts for the sector.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

In terms of the grain trade as detailed on page 22, China has ramped up purchases of Brazilian soybeans this year, securing supplies ahead of peak q four US grain season. Firm grain shipments in addition to an uptick in coal volumes of late have been supportive of the supermax sector in recent weeks. Regarding geopolitical trade deals and negotiations, we note that with some recent deals, most notably Japan and Indonesia, there have been commitments to purchase US agricultural products. These potential purchases could be supportive of long haul grain trades and possibly provide another market for US agricultural products in case of lower shipments to China this q four during peak season. Regarding the supply side outlined on slide 23, net fleet growth in the year to date is 3% on an annualized basis, up between 2% net fleet growth for Capesizes and 3% to 5% net fleet growth for Panamaxes down to Handysize.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

Capesize segment continues to have the smallest order book among the dry bulk sectors at 9% of the fleet. Typically, only 20 Capes delivered in the first half of the year, the least amount of first half Capes deliveries in over fifteen years. Additionally, as scrapping has remained low in recent years, the age of the global fleet has risen to nearly thirteen years old, the highest average age of the global dry bulk fleet since 02/2010. This has increased the pool of potential scrapping candidates as over 10% of the on the water fleet is twenty years or older, which is identical to the global dry bulk order book as a percentage of the fleet. This implies net replacement of tonnage over time as opposed to any material net fleet growth.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for a constructive view of the drybulk market moving forward. This concludes our presentation, and we would now be happy to take your questions.

[Operator]

Thank you. Ladies and gentlemen, we'll now conduct a question and answer session. And our first question comes from the line of Omar Nokta with Jefferies. Your line is open.

[Omar Nokta, Managing Director at Jefferies]

Thank you. Hey, guys. Thanks for the presentation. Good morning. Good morning.

[Omar Nokta, Managing Director at Jefferies]

Congrats, by the way. Congrats on the new credit facility. Obviously, it gives you plenty of flexibility and perhaps some firepower. You've acquired this 2020 built Cape. Looks like a high quality ship.

[Omar Nokta, Managing Director at Jefferies]

Could you maybe just talk about the attractiveness of that vessel, why you made it, and what's your appetite for more?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Yeah. So on on the vessel front, Omar, you know, it's, it's it's a gem. It's it's Japanese built. We know that that's, you know, from a from a performance standpoint, the highest quality that that's that's turned out. It's 02/2020, so it's relatively new.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So very high in the fuel efficiency standpoint. And then also has a a scrubber. It's it's just a very well rounded vessel that, that we're very happy that we were able to conclude. In terms of further appetite, we we definitely have more appetite on the Capesize sector that, you know, that we referenced in the in the opening remarks. We think that sector, you know, while we're positive on all the the the the dry bulk vessels, we think the Capesize sector has the most compelling supply and demand fundamentals because there is demand growth coming for the larger ships in terms of iron ore out of West Africa, more bauxite, and, and we expect even Vale to, continue to up their production.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So you've got demand growth, but then you also have a very low supply situation. It's actually the lowest supply situation within the within the dry bulk sector. It doesn't mean that, you know, we're we're still focused on minor bulks, and we have a very robust commercial platform that, that we're able to use for trading as well, on on the arbitrage side. But I think you'll see most of what we do, at least for the time being, a little more, trying to weight a little more towards the larger vessels.

[Omar Nokta, Managing Director at Jefferies]

Okay. Thanks thanks, John. And and I guess, maybe just on that point, you monetized some of the older vessels last year. Do you think you'll do more of that, maybe selling more of the Supras to fund the Cape acquisitions to kind of get more weighted there? Or do you want to keep that fleet intact?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

I think look, in general, want to keep the fleet. However, you know, there there are two ships right now, the Genco Predator and the the Genco Picardi, which are 20 years old. So those are definitely a focus for, divesting from a fleet renewal standpoint. You know, we tend to to time our our our buys and ourselves at pretty attractive opportunities. And quite frankly, a few months ago, the supermax market was soft.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

You know, we were at $9,000 a day, and there was not a lot of, action on the older ships in the S and P market. That that has now changed. Supramax rates are up 40% since then, and we're seeing a lot more interest on even the older ships. And, you know, we're we're as you know, we're always about maximizing, you know, price on these ships. So and we have the balance sheet to be patient during these periods of time.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So, yeah, I do think before the end of the year, you'll see a couple more go.

[Omar Nokta, Managing Director at Jefferies]

Okay. Thanks, John. Appreciate it. I'll pass it back.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Thanks, Omar.

[Operator]

And your next question comes from the line of Liam Burke with B. Riley Securities. Your line is open.

[Liam Burke, Managing Director at B. Riley Financial]

Thank you. Good morning, John. Good morning, Peter. Good morning, Michael.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Good morning, Liam.

[Liam Burke, Managing Director at B. Riley Financial]

John, the supply demand layout for the Capesize is pretty clear. We've seen nice move on the non Capesize rates. Is it just grain as Michael laid out? Or what do you see driving this 40% growth in rates from the bottom?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

It's definitely a robust, corn crop out of Brazil, soybeans as well. That that has been helpful. I would say coal is also starting to come back. We had a, we had a lull for a few months on the on the coal side, but we're seeing more coal being shipped, also. So I think it's, I think it's a combination.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

And, you know, it it this is a this is a big intangible, but we're mostly on the other side of knowing what's happening on the tariff front. And and I do think while it does it it never directly affected dry bulk shipping, I I do believe that it added some negative sentiment into the market, and that seems to be while the tariffs may not be behind us, I think knowing of knowing what the, what the tariffs are gonna be is is pretty clear now. So we're able to to operate effectively.

[Liam Burke, Managing Director at B. Riley Financial]

Okay. On the getting back to the Capes, you've got good news, bad news. You've got tight supply, steady demand, asset values are higher, especially in your fleet assets. What does that, bode for potential, asset purchases on the Cape size? Are there still deals out there that make sense?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

There are deals that make sense, and then there are deals that don't make sense. We do a lot of analysis looking at, you know, from a historical standpoint, where we're buying in terms of percentiles. And, I mean, I just give you an example. The twenty twenty that we bought when when you actually ran the cash flows and the return numbers at what we paid for versus we were also looking at a 2,017 bill and the, and the 2021 out. So, you know, we, we obviously moved in that direction.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So it it look. It all comes down to, to price. I agree. Asset values are firm, particularly in the, in the modern vessels. But starting in the second half of next year, which is when we believe the real demand growth will come, from the iron ore front and and West Africa going into very low supply in 2728.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

You know, we we just see a longer runway, than maybe what we've what what, you know, what history is has given to us. Having said that, the volatility is not going away, so that that's important to recognize. But but we do have a a positive view for the next at least the next few years in terms of what we can see on the supply side.

[Liam Burke, Managing Director at B. Riley Financial]

Volatility in shipping rates?

[Christopher Robertson, VP & Equity Research Analyst at Deutsche Bank]

Thanks, John.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Yeah. Not profound. I know.

[Michael Orr, VP - Finance at Genco Shipping & Trading]

Shocking. Anyway, thanks, John.

[Omar Nokta, Managing Director at Jefferies]

Thanks, Sam. Sam.

[Operator]

And our next question comes from the line of Chris Robertson with JPMorgan with Deutsche Bank. Sorry about that.

[Christopher Robertson, VP & Equity Research Analyst at Deutsche Bank]

Good morning, and thanks for taking my questions. John, just returning to the fleet renewal front, obviously, the purchase of the modern Cape here. But can you touch on other vessel upgrades and equipment that you guys are currently looking at and working on during your dry docking process that makes the current ships more efficient? Can you talk about that in terms of kind of fuel efficiency and performance? And what do you think the next technological landscape kinda looks like over the coming years outside of the normal discussion around alternative fuels?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So we have, we've been installing energy saving devices on our ships as we've been dry docking, and and that can vary from used docks, new propellers, certainly new paint systems. We're using much more robust paint systems. We are, and and I should add, we're we're exploring, which goes a little bit to your next question, but it it we're exploring certain, robotic cleaning devices, which stay with the ship so that, so that we can clean more often and and and actually cut costs on the cleaning side. So that's that's a a small thing we're looking at as well. But it's really the energy saving devices, and, you know, we think we can save around 5% on the fuel side.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So very quick payback on the money that we're that we're spending. In terms of things, you know, outside of alternative fuels, which I, unfortunately, I I still think are quite a ways away in terms of really being used. We have been doing we have been using biofuel and biofuel mixes. That that's been helpful, particularly with the with the EU system. We've looked at carbon capture.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

We're not we're not fully there on that yet, but but we've looked at it. And, you know, then there's always the the long shot, but interesting, and that's the the nuclear option, so to speak. Because I I do think that that's a a really interesting technology that could be one of these days in the future developed by the shipping industry.

[Christopher Robertson, VP & Equity Research Analyst at Deutsche Bank]

All right. Yes. Interesting color. That's it on my end. Thank you.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Okay. Thanks, Chris.

[Operator]

Your next question comes from the line of Paul Fratt with AGP Alliance Global Partners. Your line is open.

[C.K. Poe Fratt, MD - Equity Research & Senior Transportation Analyst at Alliance Global Partners]

Hey, John. You covered a lot of ground about the market and just capital allocation. Can you just close the loop on how you're gonna use the stock buyback program?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Yeah. So we we, we did not do any any shares during the last quarter. And I think the most important thing is that the program is viewed as supplemental to dividends. It's an it's an add on because dividends are the primary means of returning capital in our mind to shareholders. But as of, you know, this quarter, we didn't really observe market conditions that would have led us to buy, under the program.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So it's in place. And, if we have downward volatility, you know, such as we saw a few months ago, then, then we have it at our disposal.

[C.K. Poe Fratt, MD - Equity Research & Senior Transportation Analyst at Alliance Global Partners]

Great. That's helpful. And then, you know, history never is exactly the same. It but you now have a shareholder that's close to 10%. I'm not sure you wanna comment, but can you just give us a flavor for, you know, whether you've had any discussions with the new shareholder?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So look. I mean, we speak to investors all the time, but we we clearly don't talk details about, you know, who we're speaking to or or or the nature of that conversation. I I would refer you to Diana's public statements, indicate this is a passive investment, but I I can't comment any further on that at this point.

[C.K. Poe Fratt, MD - Equity Research & Senior Transportation Analyst at Alliance Global Partners]

Sounds good. Thanks.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Thanks, Kyle.

[Operator]

And your next question comes from the line of Michael Mathison with Sidoti. Your line is open.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Good morning, gentlemen.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Good morning.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Just a couple of questions for me. In your slides last quarter, you showed that Chinese coal demand had declined overall, and there was a shift in demand from The U. S. To Brazil. What did you see in terms of Chinese demand this quarter?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

From an import standpoint, we've we've definitely seen it fall off. The exception of that is over the last month or so, we've started to see the the Chinese buying again. Yeah. We we could we could see a recovery as we're going into the end of the year. But for the for the quarter, we definitely saw soft Chinese buying on the coal side.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Okay. There was a lot of information about a a rebound in TCE rates in q three here. Do you have an early read on what TCE might look like in q four?

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

No.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

I mean, you can look at you can look at the forward curve, and the forward curve is showing, you know, a nice strong q four. But, you know, predicting actual rate levels is is difficult. We're, we're fairly adept at predicting direction. But I would say the fleet is is mostly spot. We have, you know, maybe not even 5% fixed for the fourth quarter.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

So we will be able to we will be able to take advantage of, of what what the fourth quarter brings in terms of rates. And the other nice thing is, as we mentioned earlier, we we have most of our dry dockings done. I think there are only two dry dockings in q four, so we're gonna have very high utilization of the fleet in q four. And our our breakeven catch up breakeven comes back down below $10,000 a day at somewhere around $9,800 a day. So we're we're set up nicely for for q four.

[Michael Mathison, Senior Equity Analyst at Sidoti & Company]

Terrific. That's the information I was looking for. I never thought you could pick a number to the dime or anything like that. Well, thanks, gentlemen.

[John Wobensmith, President, CEO & Director at Genco Shipping & Trading]

Thank you.

[Operator]

As there are no further questions at this time, this concludes your conference call for today. We thank you for your participating and ask you to please disconnect your lines.

Participants

Executives

• Peter Allen, CFO
• John Wobensmith, President, CEO & Director
• Michael Orr, VP - Finance

Analysts

• Omar Nokta, Managing Director at Jefferies
• Liam Burke, Managing Director at B. Riley Financial
• Christopher Robertson, VP & Equity Research Analyst at Deutsche Bank
• C.K. Poe Fratt, MD - Equity Research & Senior Transportation Analyst at Alliance Global Partners
• Michael Mathison, Senior Equity Analyst at Sidoti & Company