GENCO SHIPPING & TRADING LTD
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
GNK$25.95-0.2%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001558370-24-007375
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001558370-24-011391
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 181 current paragraphs.
101 unchanged; 38 reworded; 33 added; 5 removed; 1 previous and 9 current paragraphs rearranged.
Tables are not compared: 22 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
Additionally, on May 21, 2024, we entered into an agreement to sell the Genco Warrior, a 2005-built Supramax vessel, for $11.95 million less a 3.0% commission payable to a third-party and the sale was completed on July 5, 2024. Also, on July 16, 2024, we entered into an agreement to sell the Genco Hadrian, a 2008-built Capesize vessel, for $25.0 million less a 2.0% commission payable to a third-party. The sale of the Genco Hadrian is expected to be completed in October 2024.
Current report
Fleet utilization decreased marginally from 97.8% during the second quarter of 2023 to 96.5% during the second quarter of 2024 primarily due to additional offhire periods for some of our Capesize vessels. During the year ended December 31, 2025, we expect approximately 575 days of offhire related to scheduled drydockings and special surveys. Refer to “Capital Expenditures” section below for further details.
Current report
Voyage expenses increased from $28.8 million during the three months ended June 30, 2023 to $30.3 million during the three months ended June 30, 2024. The increase was primarily due to higher bunker consumption for our major bulk vessels partially offset by lower bunker consumption for our minor bulk vessels and third-party chartered-in vessels, as well as increased fuel prices during the second quarter of 2024 as compared to the same period during 2023.
Current report
Vessel operating expenses increased by $4.4 million from $22.6 million during the three months ended June 30, 2023 to $27.0 million during the three months ended June 30, 2024. The increase was primarily due to the timing of the purchase of stores and spares, higher crew costs, and higher repair and maintenance costs.
Current report
Charter hire expenses increased by $1.5 million from $1.0 million during the three months ended June 30, 2023 to $2.5 million during the three months ended June 30, 2024. The increase was primarily due to an increase in chartered-in days, as well as an increase in hire rates.
Current report
IMPAIRMENT OF VESSEL ASSETS-
Current report
During the three months ended June 30, 2024, we recorded $5.6 million of impairment of vessel assets. This represents impairment for the Genco Hadrian, a Capesize vessel. There was no vessel impairment recorded during the three months ended June 30, 2023. Refer to Note 2— Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information regarding the impairment of this vessel.
Current report
NET GAIN ON SALE OF VESSELS-
Current report
OTHER (EXPENSE) INCOME –
Current report
Six months ended June 30, 2024 compared to the six months ended June 30, 2023
Current report
VOYAGE REVENUES-
Current report
For the six months ended June 30, 2024, voyage revenues increased by $39.5 million, or 21.4%, to $224.5 million as compared to $184.9 million for the six months ended June 30, 2023. The increase in voyage revenues was primarily due to higher rates earned by our major bulk vessels. Refer to the discussion above included under the section “Three months ended June 30, 2024 compared to the three months ended June 30, 2023 – Voyage Revenues” for further information.
Current report
VOYAGE EXPENSES-
Current report
Voyage expenses were $67.5 million and $66.3 million during the six months ended June 30, 2024 and 2023, respectively. This marginal increase was primarily due to higher bunker consumption for our major bulk vessels partially
Current report
offset by lower bunker consumption for our minor bulk vessels and third-party chartered-in vessels, as well as lower port expenses.
Current report
VESSEL OPERATING EXPENSES-
Current report
Vessel operating expenses increased by $5.9 million from $47.0 million during the six months ended June 30, 2023 to $52.9 million during the six months ended June 30, 2024. The increase was primarily due to the timing of the purchase of stores and spares, higher crew costs, and higher repair and maintenance costs.
Current report
CHARTER HIRE EXPENSES-
Current report
Charter hire expenses increased by $1.3 million from $4.7 million during the six months ended June 30, 2023 to $6.0 million during the six months ended June 30, 2024. The increase was primarily due to an increase in chartered-in days, as well as an increase in hire rates.
Current report
GENERAL AND ADMINISTRATIVE EXPENSES-
Current report
For the six months ended June 30, 2024 and 2023, general and administrative expenses were $14.0 million and $14.7 million, respectively. This decrease was primarily due to lower legal and professional fees.
Current report
TECHNICAL MANAGEMENT FEES-
Current report
DEPRECIATION AND AMORTIZATION-
Current report
IMPAIRMENT OF VESSEL ASSETS-
Current report
During the six months ended June 30, 2024, we recorded $5.6 million of impairment of vessel assets. This represents impairment for the Genco Hadrian, a Capesize vessel. There was no vessel impairment recorded during the six months ended June 30, 2023. Refer to Note 2— Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information regarding the impairment of this vessel.
Current report
NET GAIN ON SALE OF VESSELS-
Current report
During the six months ended June 30, 2024, we recorded a net gain on sale of vessels of $12.2 million related primarily to the gains on the sale of the Genco Claudius and Genco Maximus during the second quarter of 2024, partially offset by losses on the sale of the Genco Commodus during the first quarter of 2024. There were no vessels sold during the six months ended June 30, 2023.
Current report
OTHER OPERATING EXPENSE-
Current report
INTEREST EXPENSE –
Current report
Interest expense increased by $3.3 million from $4.2 million during the six months ended June 30, 2023 to $7.5 million during the six months ended June 30, 2024. The increase was primarily a result of lower settlement payments received under our interest rate cap agreements during the first half of 2024 as compared to the same period during 2023 as a result of the expiration of these agreements, as well as higher interest rates.
Current report
INTEREST INCOME –
Current report
OTHER (EXPENSE) INCOME –
Current report
Other income (expense) decreased by $0.2 million from $0.2 million of other expense during the six months ended June 30, 2023 to $0.02 million of other expense during the six months ended June 30, 2024. The fluctuation was primarily due to a change in the realized and unrealized gains (losses) related to our bunker swap and forward fuel purchase agreements.
Removed paragraphs (5)
Previous report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report
Voyage expenses decreased marginally from $37.4 million during the three months ended March 31, 2023 to $37.2 million during the three months ended March 31, 2024.
Previous report
Vessel operating expenses increased by $1.5 million from $24.4 million during the three months ended March 31, 2023 to $25.9 million during the three months ended March 31, 2024. The increase was primarily due to the operation of a larger fleet during the first quarter of 2024 as compared to the first quarter of 2023, as well as the timing of the purchase of stores and higher repair and maintenance costs.
Previous report
Charter hire expenses decreased marginally by $0.2 million from $3.7 million during the three months ended March 31, 2023 to $3.5 million during the three months ended March 31, 2024. The decrease was primarily due to a decrease in chartered-in days.
Previous report
LOSS ON SALE OF VESSELS-
Reworded paragraphs (38)
Previous wording
We are a New York City-based company incorporated in the Marshall Islands that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk vessels. Our fleet currently consists of 43 drybulk vessels, including 16 Capesize, 15 Ultramax and twelve Supramax vessels, with an aggregate carrying capacity of approximately 4,490,000 deadweight tons (“dwt”) and an average age of approximately 11.8 years. We seek to deploy our vessels on time charters, spot market voyage charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers.
Current wording
We are a New York City-based company incorporated in the Marshall Islands that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes through the ownership and operation of drybulk vessels. After the anticipated sale of the Genco Hadrian in October 2024, our fleet will consist of 41 drybulk vessels, including 15 Capesize, 15 Ultramax and eleven Supramax vessels, with an aggregate carrying capacity of approximately 4,266,000 deadweight tons (“dwt”) and an average age of approximately 11.8 years. We seek to deploy our vessels on time charters, spot market voyage charters, spot market-related time charters or in vessel pools trading in the spot market, to reputable charterers.
Previous wording
See pages 31 – 32 for a table of our current fleet.
Current wording
See pages 34 - 35 for a table of our current fleet.
Previous wording
Our approach towards fleet composition is to own a high-quality fleet of vessels focused on Capesize, Ultramax and Supramax vessels. Capesize vessels represent our major bulk vessel category, while Ultramax and Supramax vessels represent our minor bulk vessel category. Our major bulk vessels are primarily used to transport iron ore, coal and bauxite, while our minor bulk vessels are primarily used to transport grains, steel products and other drybulk cargoes such as cement, scrap, fertilizer, nickel ore, salt and sugar. This approach of owning ships that transport both major and minor bulk commodities provide us with exposure to a wide range of drybulk trade flows. We employ an active commercial strategy which consists of a global team located in the U.S., Copenhagen and Singapore. Overall, we utilize a portfolio approach to revenue generation through a combination of short-term, spot market employment, index-linked time chartersas well as opportunistically booking longer term fixed-rate coverage. Our fleet deployment strategy currently is weighted towards short-term fixtures, which provides us with optionality on our sizeable fleet. However, depending on market conditions, we may seek to enter into additional longer term time charter contracts or contracts of affreightment. In addition to both short and long-term time charters, we fix our vessels on spot market voyage charters as well as spot market-related time charters depending on market conditions and management’s outlook.
Current wording
Our approach towards fleet composition is to own a high-quality fleet of vessels focused on Capesize, Ultramax and Supramax vessels. Capesize vessels represent our major bulk vessel category, while Ultramax and Supramax vessels represent our minor bulk vessel category. Our major bulk vessels are primarily used to transport iron ore, coal and bauxite, while our minor bulk vessels are primarily used to transport grains, steel products and other drybulk cargoes such as cement, scrap, fertilizer, nickel ore, salt and sugar. This approach of owning ships that transport both major and minor bulk commodities provide us with exposure to a wide range of drybulk trade flows. We employ an active commercial strategy which consists of a global team located in the U.S., Copenhagen and Singapore. Overall, we utilize a portfolio approach to revenue generation through a combination of short-term, spot market employment, index-linked time chartersas well as opportunistically booking longer term fixed-rate coverage. Our fleet deployment strategy currently is weighted towards short-term fixtures, which provides us with optionality on our sizeable fleet. However, depending on market conditions, we may seek to enter into additional longer term time charters or contracts of affreightment. In addition to both short and long-term time charters, we fix our vessels on spot market voyage charters as well as spot market-related time charters depending on market conditions and management’s outlook.
Previous wording
Our approach to capital allocation, through the implementation of our value strategy in April 2021, focuses on three key factors:
Current wording
Our approach to capital allocation, through our comprehensive value strategy, focuses on three key factors:
Previous wording
Since 2021, we have executed this strategy by reducing our debt by $279.2 million cumulatively through March 31, 2024 while expanding our core Capesize and Ultramax fleet. This has resulted in a debt balance of $170.0 million as of March 31, 2024, a 62% reduction from January 1, 2021 levels. After voluntary debt prepayments of $25.0 million and $30.0 million on April 9, 2024 and April 30, 2024, respectively, our debt balance was reduced to $115.0 million. These actions have enabled us to further reduce our cash flow breakeven rate positioning us to pay sizeable quarterly dividends across diverse market environments. In addition to the $48.7 million of cash on our balance sheet as of March 31, 2024, we have undrawn revolver availability of $298.9 million, bringing our total liquidity to $347.6 million. Furthermore, since the fourth quarter of 2021 through the first quarter of 2024, we have declared cumulative dividends under our value strategy of $4.52 per share.
Current wording
Since 2021, we have executed this strategy by reducing our debt by $344.2 million cumulatively through June 30, 2024 while expanding our core Capesize and Ultramax fleet. This has resulted in a debt balance of $105.0 million as of June 30, 2024, a 78% reduction from January 1, 2021 levels. After a voluntary debt prepayment of $5.0 million on July 12, 2024, our debt balance was reduced to $100.0 million. These actions have enabled us to further reduce our cash flow breakeven rate positioning us to pay sizeable quarterly dividends across diverse market environments. In addition to the $42.3 million of cash on our balance sheet as of June 30, 2024, we have undrawn revolver availability of $327.7 million, bringing our total liquidity to $370.0 million. Furthermore, since the fourth quarter of 2021 through the second quarter of 2024, we have declared cumulative dividends under our value strategy of $4.86 per share.
Previous wording
In 2021, Genco initiated a comprehensive plan to comply with upcoming International Maritime Organization (“IMO”) regulations that took effect in 2023, namely the Energy Efficiency Existing Ship Index (“EEXI”) and the Carbon Intensity Indicator (“CII”) metrics, which call for a reduction in vessel greenhouse gas emissions. These metrics are intended to assess and measure the energy efficiency of all ships and these new regulations set required attainment values, with the goal of reducing the carbon intensity of international shipping.
Current wording
In 2021, Genco initiated a plan to comply with upcoming International Maritime Organization (“IMO”) regulations that took effect in 2023, namely the Energy Efficiency Existing Ship Index (“EEXI”) and the Carbon Intensity Indicator (“CII”) metrics, which call for a reduction in vessel greenhouse gas emissions. These metrics are intended to assess and measure the energy efficiency of all ships and these new regulations set required attainment values, with the goal of reducing the carbon intensity of international shipping.
Previous wording
In order to opportunistically renew our fleet, in addition to the above vessel purchases, we agreed to divest three older, less fuel efficient vessels with their third special survey due in 2024. During the fourth quarter of 2023, we entered into agreements to sell three of our Capesize vessels, the Genco Claudius, Genco Commodus and Genco Maximus. The Genco Commodus was delivered to its third-party buyer on February 7, 2024. On February 24, 2024, we terminated the agreements to sell the Genco Claudius and the Genco Maximus due to the buyers’ breach of the agreements’ terms. During the first quarter of 2024 we commenced arbitration with the buyers , seeking a declaration that we validly terminated the agreements due to the buyers’ breach, and to retain the deposits paid by the buyers in connection with the sales, totaling approximately $3.7 million. During the second quarter of 2024, we and the buyers reached an agreement in principle to settle this matter and conclude the arbitration proceeding in exchange for the buyers releasing the deposits to us. On March 1, 2024, the Company entered into new agreements to sell the Genco Claudius and Genco Maximus to a separate unaffiliated third-party buyer for an aggregate purchase price of $47,000 less a 2.0% commission payable to a third party. The sales of the Genco Claudius and Genco Maximus were completed on April 22, 2024 and April 2, 2024, respectively.
Current wording
In order to opportunistically renew our fleet, in addition to the above vessel purchases, we agreed to divest three older, less fuel efficient vessels with their third special survey due in 2024. During the fourth quarter of 2023, we entered into agreements to sell three of our Capesize vessels, the Genco Claudius, Genco Commodus and Genco Maximus. The Genco Commodus was delivered to its third-party buyer on February 7, 2024. On February 24, 2024, we terminated the agreements to sell the Genco Claudius and the Genco Maximus due to the buyers’ breach of the agreements’ terms. During the first quarter of 2024 we commenced arbitration with the buyers, seeking a declaration that we validly terminated the agreements due to the buyers’ breach, and to retain the deposits paid by the buyers in connection with the sales, totaling approximately $3.7 million. During the second quarter of 2024, we and the buyers reached an agreement to settle this matter and concluded the arbitration proceeding in exchange for the buyers releasing the deposits to us. On May 13, 2024, we received the deposits and recorded the $3,650 as part of the net gain on sale of vessels in the Condensed Consolidated Statement of Operation during the three and six months ended June 30, 2024, closing the matter. On March 1, 2024, the Company entered into new agreements to sell the Genco Claudius and Genco Maximus to a separate unaffiliated third-party buyer for an aggregate purchase price of $47.0 million less a 2.0% commission payable to a third party. The sales of the Genco Claudius and Genco Maximus were completed on April 22, 2024 and April 2, 2024, respectively.
Previous wording
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, chartered-in days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three months ended March 31, 2024 and 2023 on a consolidated basis.
Current wording
We believe that the following table reflects important measures for analyzing trends in our results of operations. The table reflects our ownership days, chartered-in days, available days, operating days, fleet utilization, TCE rates and daily vessel operating expenses for the three and six months ended June 30, 2024 and 2023 on a consolidated basis.
Previous wording
The following tables represent the operating data for the three months ended March 31, 2024 and 2023 on a consolidated basis.
Current wording
The following tables represent the operating data for the three and six months ended June 30, 2024 and 2023 on a consolidated basis.
Previous wording
For the three months ended March 31, 2024, voyage revenues increased by $23.0 million, or 24.4%, to $117.4 million as compared to $94.4 million for the three months ended March 31, 2023. The increase in voyage revenues was primarily due to higher rates earned by our major bulk vessels. In the first quarter of 2024, the drybulk market remained at firm levels following a strong end to 2023 led by increased Brazilian iron ore exports, as well as solid coal and bauxite trades together with continued commodity demand from China.
Current wording
For the three months ended June 30, 2024, voyage revenues increased by $16.5 million, or 18.2%, to $107.0 million as compared to $90.6 million for the three months ended June 30, 2023. The increase in voyage revenues was primarily due to higher rates earned by our major bulk vessels. In the second quarter of 2024, the drybulk market remained at firm levels following a strong start to 2024 led by increased Brazilian iron ore exports, as well as solid coal and bauxite trades together with continued commodity demand from China. In the first half of 2024, firm Chinese iron ore demand has led to import growth of 6% year-over-year, while also leading to growing iron ore port stockpiles.
Previous wording
The average TCE rate of our overall fleet increased 37.8% to $19,219 a day during the first quarter of 2024 from $13,947 a day during the first quarter of 2023. The TCE for our major bulk vessels increased by 60.7% from $15,929 a day during the first quarter of 2023 to $25,601 a day during the first quarter of 2024. This increase was primarily a result of higher rates achieved by our Capesize vessels. The TCE for our minor bulk vessels increased by 16.6% from $12,752 a day during the first quarter of 2023 to $14,871 a day during the first quarter of 2024, primarily a result of higher rates achieved by our Supramax vessels.
Current wording
The average TCE rate of our overall fleet increased 28.2% to $19,938 a day during the second quarter of 2024 from $15,556 a day during the second quarter of 2023. The TCE for our major bulk vessels increased by 49.7% from $19,468 a day during the second quarter of 2023 to $29,145 a day during the second quarter of 2024. This increase was primarily a result of higher rates achieved by our Capesize vessels. The TCE for our minor bulk vessels increased by 10.3% from $12,994 a day during the second quarter of 2023 to $14,337 a day during the second quarter of 2024 primarily a result of higher rates achieved by our Ultramax vessels.
Previous wording
The DVOE budget for the second quarter of 2024 is expected to be $6,350 per vessel per day on a fleet-wide basis, primarily due to the timing of expenses. The potential impacts of various macroeconomic events, including but not limited to the war in Ukraine, the Israel-Hamas war and the Houthi conflict in the Red Sea, are unpredictable, and the actual amount of our DVOE could be higher or lower than budgeted as a result.
Current wording
The DVOE budget for the third quarter of 2024 is expected to be $6,150 per vessel per day on a fleet-wide basis. The potential impacts of various macroeconomic events, including but not limited to the war in Ukraine, the Israel-Hamas war and the Houthi conflict in the Red Sea, are unpredictable, and the actual amount of our DVOE could be higher or lower than budgeted as a result.
Previous wording
For the three months ended March 31, 2024 and 2023, general and administrative expenses decreased marginally from $7.8 million during the three months ended March 31, 2023 to $7.7 million during the three months ended March 31, 2024.
Current wording
For the three months ended June 30, 2024 and 2023, general and administrative expenses decreased marginally from $6.9 million during the three months ended June 30, 2023 to $6.3 million during the three months ended June 30, 2024. This decrease was primarily due to lower legal and professional fees.
Previous wording
Technical management expenses include the direct costs incurred by GSSM for the technical management of the vessels under its management. Technical management fees were $1.0 million and $0.8 million during the three months ended March 31, 2024 and 2023, respectively, with the variance due to timing of expenses during the year.
Current wording
Technical management expenses include the direct costs incurred by GSSM for the technical management of the vessels under its management. Technical management expenses were $1.3 million during the three months ended June 30, 2024 and 2023.
Previous wording
Depreciation and amortization expense increased by $1.3 million to $17.2 million during the three months ended March 31, 2024 as compared to $15.9 million during the three months ended March 31, 2023. This increase was primarily due to an increase in drydocking amortization expense for certain vessels that completed their respective drydockings during 2023.
Current wording
Depreciation and amortization expense increased by $0.3 million to $17.1 million during the three months ended June 30, 2024 as compared to $16.8 million during the three months ended June 30, 2023. This increase was primarily due to an increase in drydocking amortization expense for certain vessels that completed their respective drydockings during 2023.
Previous wording
During the first quarter of 2024, we recorded a net loss on sale of vessels of $1.0 million related primarily to the sale of the Genco Commodus during the first quarter of 2024. There were no vessels sold during the first quarter of 2023.
Current wording
During the second quarter of 2024, we recorded a net gain on sale of vessels of $13.2 million related primarily to the sale of the Genco Claudius and Genco Maximus during the second quarter of 2024. There were no vessels sold during the second quarter of 2023.
Previous wording
Other operating expense of $1.8 million recorded during the three months ended March 31, 2024 consists of costs incremental to routine expenses that were incurred related to our 2024 annual meeting to be held on May 23, 2024. Additionally, we expect to incur approximately $4.5 million of such incremental costs during the second quarter of 2024.
Current wording
Other operating expense of $3.9 million recorded during the three months ended June 30, 2024 consists of costs incremental to routine expenses that were incurred related to our 2024 annual meeting held on May 23, 2024.
Previous wording
Interest expense increased from $2.0 million during the three months ended March 31, 2023 to $4.0 million during the three months ended March 31, 2024. Interest expense during the three months ended March 31, 2024 and 2023 consisted primarily of interest expense under our credit facilities and amortization of deferred financing costs for those facilities. The increase was primarily a result of lower settlement payments received under our interest rate cap agreements as a result of the expiration of these agreements, as well as higher interest rates and average outstanding debt during the first quarter of 2024 as compared to the first quarter of 2023.
Current wording
Interest expense increased from $2.1 million during the three months ended June 30, 2023 to $3.5 million during the three months ended June 30, 2024. Interest expense during the three months ended June 30, 2024 and 2023 consisted primarily of interest expense under our credit facilities and amortization of deferred financing costs for those facilities. The increase was primarily a result of lower settlement payments received under our interest rate cap agreements as a result of the expiration of these agreements. There were no interest rate cap agreements during the second quarter of 2024.
Previous wording
Interest income increased by approximately $0.1 million from $0.8 million during the three months ended March 31, 2023 to $0.8 million during the three months ended March 31, 2024 primarily due to higher interest income earned on our cash and cash equivalents.
Current wording
Interest income increased by $0.2 million from $0.5 million during the three months ended June 30, 2023 to $0.7 million during the three months ended June 30, 2024 primarily due to higher interest income earned on our cash and cash equivalents.
Previous wording
Other income (expense) fluctuated by $0.4 million from $0.3 million of other expense during three months ended March 31, 2023 to $0.1 million of other income during the three months ended March 31, 2024. The fluctuation was primarily due to a decrease in tax related expenses related to our Denmark subsidiary.
Current wording
Other (expense) income fluctuated by $0.2 million from $0.1 million of other income during three months ended June 30, 2023 to $0.1 million of other expense during the three months ended June 30, 2024. The fluctuation was primarily due to an increase in tax related expenses related to our Denmark subsidiary.
Previous wording
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST –
Current wording
NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST –
Previous wording
During the three months ended March 31, 2024 and 2023, net income attributable to noncontrolling interest was $0.1 million and $0.2 million, respectively, which is associated with the net income attributable to the noncontrolling interest of GSSM.
Current wording
During the three months ended June 30, 2024 and 2023, net income (loss) attributable to noncontrolling interest was $0.03 million and ($0.02) million, respectively, which is associated with the net income (loss) attributable to the noncontrolling interest of GSSM.
Previous wording
Fleet utilization decreased marginally from 96.6% during the first quarter of 2023 to 96.2% during the first quarter of 2024.
Current wording
Fleet utilization decreased marginally from 97.2% during the first half of 2023 to 96.3% during the first half of 2024.
Previous wording
Average daily vessel operating expenses (“DVOE”) for our fleet increased to $6,275 per vessel per day for the three months ended March 31, 2024 from $6,160 per day for the three months ended March 31, 2023. The increase in daily vessel operating expense was primarily due to the timing of the purchase of stores and higher repair and maintenance costs. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.
Current wording
DVOE for our fleet increased to $6,558 per vessel per day for the six months ended June 30, 2024 from $5,899 per day for the six months ended June 30, 2023. The increase in daily vessel operating expense was primarily due to the timing of the purchase of stores and spares, higher crew costs, and higher repair and maintenance costs. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.
Previous wording
We believe, given our current cash holdings, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the year, are sufficient to fund our operations for at least the next twelve months. Such resources include unrestricted cash and cash equivalents of $48.4 million as of March 31, 2024 in addition to the $298.9 availability under the $500 Million Revolver as of March 31, 2024, which compares to a minimum liquidity requirement under our credit facility of approximately $22.5 million as of March 31, 2024. Given anticipated capital expenditures related to drydockings and fuel efficiency upgrade costs of $19.3 million and $40.8 million during the remainder of 2024 and 2025, respectively, as well as any quarterly dividend payments, we anticipate to continue to have significant cash expenditures. Refer to “Capital Expenditures” below for further details. However, if market conditions were to worsen significantly due to the war in Ukraine, the Houthi conflict in the Red Sea, the Israel-Hamas war, or other causes, then our cash resources may decline to a level that may put at risk our ability to pay dividends per our capital allocation strategy or at all.
Current wording
We believe, given our current cash holdings, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the year, are sufficient to fund our operations for at least the next twelve months. Such resources include unrestricted cash and cash equivalents of $42.0 million as of June 30, 2024 in addition to the $327.7 million availability under the $500 Million Revolver as of June 30, 2024, which compares to a minimum liquidity requirement under our credit facility of approximately $21.5 million as of June 30, 2024, as well as the net proceeds from our agreed upon vessel sales of approximately $36 million. Given anticipated capital expenditures related to drydockings and fuel efficiency upgrade costs of $15.8 million and $41.2 million during the remainder of 2024 and 2025, respectively, as well as any quarterly dividend payments, we anticipate to continue to have significant cash expenditures. Refer to “Capital Expenditures” below for further details. However, if market conditions were to worsen significantly due to the war in Ukraine, the Houthi conflict in the Red Sea, the Israel-Hamas war, or other causes, then our cash resources may decline to a level that may put at risk our ability to pay dividends per our capital allocation strategy or at all.
Previous wording
Throughout 2022, 2023 and the three months ended March 31, 2024, the Company made a total of $141.0 million of voluntary debt prepayments, resulting in a reduced cash flow breakeven rate from previous levels. During the fourth quarter of 2023, partially offsetting this debt reduction, we opportunistically drew down $65 million under the revolver of the $450 Million Credit Facility to partially fund the purchase of two Capesize vessels that were delivered during the fourth quarter of 2023. Going forward, given the nature of our new revolving credit facility, we plan to actively manage our debt balance to reduce interest expense and may also opportunistically draw down debt to assist in funding accretive growth opportunities. As of March 31, 2024, there are no mandatory debt repayments until we must repay $170.0 million in 2028. Although we do not have any mandatory debt repayments until 2028, we intend to continue to pay down debt on a voluntary basis with a medium-term goal of zero net debt.
Current wording
fourth quarter of 2023. Going forward, given the nature of our new revolving credit facility, we plan to actively manage our debt balance to reduce interest expense and may also opportunistically draw down debt to assist in funding accretive growth opportunities. As of June 30, 2024, there are no mandatory debt repayments until we must repay $105.0 million in 2028. Although we do not have any mandatory debt repayments until 2028, we intend to continue to pay down debt on a voluntary basis with a medium-term goal of zero net debt.
Previous wording
As of March 31, 2024, the $500 Million Revolver contained collateral maintenance covenants that require the aggregate appraised value of collateral vessels to be at least 140% of the principal amount of the loan outstanding under such facility. If the values of our vessels were to decline as a result of the various geopolitical factors previously mentioned or otherwise, we may not satisfy this collateral maintenance requirement. If we do not satisfy the collateral
Current wording
As of June 30, 2024, the $500 Million Revolver contained collateral maintenance covenants that require the aggregate appraised value of collateral vessels to be at least 140% of the principal amount of the loan outstanding under such facility. If the values of our vessels were to decline as a result of the various geopolitical factors previously mentioned or otherwise, we may not satisfy this collateral maintenance requirement. If we do not satisfy the collateral maintenance requirement, we will need to post additional collateral or prepay outstanding loans to bring us back into compliance, or we will need to seek waivers, which may not be available or may be subject to conditions.
Previous wording
On May 8, 2024, we announced a quarterly dividend of $0.42 per share. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facilities) and our Board’s determination that each declaration and payment is at that time in the best interests of the Company and its shareholders after its review of our financial performance.
Current wording
On August 7, 2024, we announced a quarterly dividend of $0.34 per share. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facilities) and our Board’s determination that each declaration and payment is at that time in the best interests of the Company and its shareholders after its review of our financial performance.
Previous wording
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, or a "non-corporate U.S. Holder," will generally be treated as "qualified dividend income" that is taxable to such non-corporate U.S. Holder at preferential tax rates, provided that (1) our common shares are readily tradable on an established securities market in the United States (such as the NYSE, on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we have been, are, or will be); (3) the non-corporate U.S. Holder's holding period of our common shares includes more than 60 days in the 121-day period beginning 60 days before the date on which our common shares becomes ex-dividend; and (4) the non-corporate U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. A non-corporate U.S. Holder will be able to take qualified dividend income into account in determining its deductible investment interest (which is generally limited to its net investment income) only if it elects to do so; in such case, the dividend will be taxed at ordinary income rates. Non-corporate U.S. Holders also may be required to pay a 3.8% surtax on all or part of such holder's "net investment income," which includes, among other items, dividends on our shares, subject to certain limitations and exceptions. Investors are encouraged to consult their own tax advisors regarding the effect, if any, of this surtax on their ownership of our shares.
Current wording
Dividends paid on our common shares to a U.S. Holder who is an individual, trust or estate, or a "non-corporate U.S. Holder," will generally be treated as "qualified dividend income" that is taxable to such non-corporate U.S. Holder at preferential tax rates, provided that (1) our common shares are readily tradable on an established securities market in the United States (such as the NYSE, on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (which we do not believe we have been, are, or will be); (3) the non-corporate U.S. Holder's holding period of our common shares includes more than 60 days in the 121-day period beginning 60 days before the date on which our common shares becomes ex-dividend; and (4) the non-corporate U.S. Holder is not under an obligation to make related payments with respect to positions in
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2024 and 2023 was $32.3 million and $19.6 million, respectively. This increase in cash provided by operating activities was primarily due to higher freight rates earned by our major bulk vessels and changes in working capital. There was also a decrease in drydocking costs incurred during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2024 and 2023 was $61.3 million and $38.9 million, respectively. This increase in cash provided by operating activities was primarily due to higher freight rates earned by our major bulk vessels and changes in working capital. There was also a decrease in drydocking costs incurred during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Previous wording
Net cash provided by (used in) investing activities for the three months ended March 31, 2024 and 2023 was $17.5 million and ($2.9) million, respectively. This fluctuation was primarily a result of $18.5 million of proceeds from the sale of the Genco Commodus during the first quarter of 2024.
Current wording
Net cash provided by (used in) investing activities for the six months ended June 30, 2024 and 2023 was $65.1 million and ($3.5) million, respectively. This fluctuation was primarily a result of $67.7 million of proceeds from the sale of the Genco Commodus, the Genco Claudius and the Genco Maximus during the six months ended June 30, 2024.
Previous wording
Net cash used in financing activities during the three months ended March 31, 2024 and 2023 was $47.9 million and $30.4 million, respectively. The increase is primarily due to a $21.3 million increase in debt repayments made during the first quarter of 2024 as compared to the first quarter of 2023. This increase was partially offset by a $3.8 million decrease in the payment of dividends during the first quarter of 2024 as compared to the first quarter of 2023.
Current wording
Net cash used in financing activities during the six months ended June 30, 2024 and 2023 was $130.9 million and $45.6 million, respectively. The increase is primarily due to a $77.5 million increase in debt repayments made during the first half of 2024 as compared to the first half of 2023. There was also a $7.7 million increase in the payment of dividends during the first half of 2024 as compared to the first half of 2023.
Previous wording
We make capital expenditures from time to time in connection with our vessel acquisitions. Our fleet currently consists of 43 drybulk vessels, including 16 Capesize, 15 Ultramax and twelve Supramax vessels.
Current wording
We make capital expenditures from time to time in connection with our vessel acquisitions. After the anticipated sale of the Genco Hadrian in October 2024, our fleet will consist of 41 drybulk vessels, including 15 Capesize, 15 Ultramax and eleven Supramax vessels.
Previous wording
During the three months ended March 31, 2024 and 2023, we incurred a total of $2.2 million and $4.1 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.
Current wording
During the six months ended June 30, 2024 and 2023, we incurred a total of $6.2 million and $7.7 million of drydocking costs, respectively, excluding costs incurred during drydocking that were capitalized to vessel assets or vessel equipment.
Previous wording
The drydockings for two of our vessels began during the first quarter of 2024 and completed during the second quarter of 2024. We estimate that eight of our vessels will be drydocked during the remainder of 2024 and 20 of our vessels will be drydocked during 2025.
Current wording
We completed the drydocking of three of our vessels during the six months ended June 30, 2024. Additionally, the drydocking for one of our vessels began during the second quarter of 2024 and completed during the third quarter of 2024. We estimate that six of our vessels will be drydocked during the remainder of 2024 and 18 of our vessels will be drydocked during 2025.
Previous wording
During the three months ended March 31, 2024 and 2023, there were no impairment losses for vessel assets recorded. During the year ended December 31, 2023, we recorded an impairment loss for three of our Capesize vessels (the Genco Commodus, the Genco Claudius and the Genco Maximus). The Genco Claudius and the Genco Maximus have been classified as held for sale as of March 31, 2024 and the Genco Commodus, the Genco Claudius and the Genco Maximus have been classified as held for sale as of December 31, 2023. Refer to Note 2— Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information.
Current wording
During the three and six months ended June 30, 2024, we recorded an impairment loss for the Genco Hadrian, one of our Capesize vessels, and the vessel has been classified as held for sale as of June 30, 2024. Additionally, as of June 30, 2024, the Genco Warrior has been classified as held for sale. The sale of the Genco Warrior was completed on July 5, 2024 and the sale of the Genco Hadrian is expected to be completed in October 2024. During the year ended December 31, 2023, we recorded an impairment loss for three of our Capesize vessels (the Genco Commodus, the Genco Claudius and the Genco Maximus). The Genco Commodus, the Genco Claudius and the Genco Maximus have been classified as held for sale as of December 31, 2023 and the sale of these vessels were completed during the six months ended June 30, 2024. Refer to Note 2— Summary of Significant Accounting Policies in our Condensed Consolidated Financial Statements for further information.
Previous wording
We compare the carrying value of our vessels with the vessel valuations obtained for covenant compliance purposes to determine whether an indicator of impairment is present (excluding the three vessels held for sale as noted above). As of March 31, 2024 and December 31, 2023, eight of our Capesize vessels had carrying values that exceeded their vessel valuations, which is an indicator of impairment. However, based on an analysis of the anticipated undiscounted future net cash flows to be derived from each of these vessels as described in the 2023 10-K, there were no impairment losses recorded for these vessels incurred during the three months ended March 31, 2024 or the three months ended December 31, 2023 (excluding the three vessels held for sale as of December 31, 2023 as noted above).
Current wording
We compare the carrying value of our vessels with the vessel valuations obtained for covenant compliance purposes to determine whether an indicator of impairment is present (excluding the three vessels held for sale as noted above). As of June 30, 2024 and December 31, 2023, four and eight of our Capesize vessels, respectively, had carrying values that exceeded their vessel valuations, which is an indicator of impairment. However, based on an analysis of the anticipated undiscounted future net cash flows to be derived from each of these vessels as described in the 2023 10-K, there were no impairment losses recorded for these vessels incurred during the three and six months ended June 30, 2024 or the three months ended December 31, 2023 (excluding the one and three vessels held for sale as of June 30, 2024 and December 31, 2023, respectively as noted above).
Previous wording
The amount by which the carrying value at March 31, 2024 of eight of our Capesize vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.2 million to $5.2 million per vessel, and $17.9 million on an aggregate fleet basis. Comparatively, the amount by which the carrying value at December 31, 2023 of eight of our Capesize vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $4.1 million to $8.3 million per vessel, and $47.9 million on an aggregate fleet basis. The average amount by which the carrying value of these vessels exceeded the valuation of such vessels for covenant compliance purposes was $2.2 million at March 31, 2024 and $6.0 million as of December 31, 2023. However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters, if any, related to some of our vessels.
Current wording
The amount by which the carrying value at June 30, 2024 of four of our Capesize vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $0.9 million to $3.2 million per vessel, and $8.0 million on an aggregate fleet basis. Comparatively, the amount by which the carrying value at December 31, 2023 of eight of our Capesize vessels exceeded the valuation of such vessels for covenant compliance purposes ranged, on an individual vessel basis, from $4.1 million to $8.3 million per vessel, and $47.9 million on an aggregate fleet basis. The average amount by which the carrying value of these vessels exceeded the valuation of such vessels for covenant compliance purposes was $2.0 million at June 30, 2024 and $6.0 million as of
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Average daily vessel operating expenses (“DVOE”) for our fleet increased to $6,855 per vessel per day for the three months ended June 30, 2024 from $5,641 per day for the three months ended June 30, 2023. The increase in daily vessel operating expense was primarily due to the timing of the purchase of stores and spares, higher crew costs, and higher repair and maintenance costs. In addition, we recorded a lower level of expenditures relative to budgeted amounts in the second quarter of 2023, while in the second quarter of 2024, we incurred additional maintenance related expenses on our Capesize vessels. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.
Current report — wording carried from elsewhere
The average TCE rate of our overall fleet increased 32.6% to $19,564 a day during the six months ended June 30, 2024 from $14,757 a day during the six months ended June 30, 2023. The TCE for our major bulk vessels increased by 53.4% from $17,759 a day during the first half of 2023 to $27,249 a day during the first half of 2024. This increase was primarily a result of higher rates achieved by our Capesize vessels. The TCE for our minor bulk vessels increased by 13.5% from $12,869 a day during the first half of 2023 to $14,607 a day during the first half of 2024 primarily a result of higher rates achieved by our Ultramax vessels.
Current report — wording carried from elsewhere
Technical management fees were $2.3 million and $2.1 million during the six months ended June 30, 2024 and 2023, respectively, with the variance due to timing of expenses during the year.
Current report — wording carried from elsewhere
Depreciation and amortization expense increased by $1.6 million from $32.7 million during the six months ended June 30, 2023 to $34.3 million during the six months ended June 30, 2024. This increase was primarily due to an increase in drydocking amortization expense for certain vessels that completed their respective drydockings during 2023.
Current report — wording carried from elsewhere
Other operating expense of $5.7 million recorded during the six months ended June 30, 2024 consists of costs incremental to routine expenses that were incurred related to our 2024 annual meeting held on May 23, 2024.
Current report — wording carried from elsewhere
Interest income increased by $0.2 million from $1.3 million during the six months ended June 30, 2023 to $1.5 million during the six months ended June 30, 2024 primarily due to higher interest income earned on our cash and cash equivalents.
Current report — wording carried from elsewhere
Throughout 2022, 2023 and the six months ended June 30, 2024, the Company made a total of $206.0 million of voluntary debt prepayments, resulting in a reduced cash flow breakeven rate from previous levels. During the fourth quarter of 2023, partially offsetting this debt reduction, we opportunistically drew down $65 million under the revolver of the $450 Million Credit Facility to partially fund the purchase of two Capesize vessels that were delivered during the
Current report — wording carried from elsewhere
substantially similar or related property. A non-corporate U.S. Holder will be able to take qualified dividend income into account in determining its deductible investment interest (which is generally limited to its net investment income) only if it elects to do so; in such case, the dividend will be taxed at ordinary income rates. Non-corporate U.S. Holders also may be required to pay a 3.8% surtax on all or part of such holder's "net investment income," which includes, among other items, dividends on our shares, subject to certain limitations and exceptions. Investors are encouraged to consult their own tax advisors regarding the effect, if any, of this surtax on their ownership of our shares.
Current report — wording carried from elsewhere
December 31, 2023. However, neither such valuation nor the carrying value in the table below reflects the value of long-term time charters, if any, related to some of our vessels.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
maintenance requirement, we will need to post additional collateral or prepay outstanding loans to bring us back into compliance, or we will need to seek waivers, which may not be available or may be subject to conditions.