Genco Shipping & Trading Ltd Aktie

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Second Quarter 2026 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.gencoshipping.com.

[Operator Instructions] A webcast replay will also be available via the link provided in today's press release as well as on the company website. At this time, I will now turn the conference over to the company. Please go ahead.

Good morning. Before we begin our presentation, I note that in this conference call, we'll 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 and terms of similar meaning in connection with the discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on management's current expectations and observations.

For a discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2025, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

At this time, I would like to introduce John Wobensmith, Chairman and CEO of Genco Shipping Trading Limited.

Good morning, everyone. Welcome to Genco's Second Quarter 2026 Conference Call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy, and then we will review our Q2 2026 highlights and dividend outlook for the remainder of the year. We will then provide additional details on our financial results as well as an update on the industry's current fundamentals before opening the call up for questions. For additional information, please also refer to our earnings presentation posted on the website.

Starting on Slide 5. During the second quarter, we continued to make meaningful progress executing our comprehensive value strategy, which is generating compelling returns for shareholders. Since 2021, we have been executing our well-defined capital allocation strategy and have successfully transferred Genco into a low leverage, high dividend company, supported by a fleet of premium earning assets, industry low breakeven levels and a leading commercial operating platform.

Today, our shareholders are continuing to see the benefits of our strategy. We have fortified our balance sheet to effectively operate and grow in various rate environments and provide shareholders with consistent and sizable dividends. We have invested $557 million in high-specification modern vessels with a focus on sectors with compelling supply and demand fundamentals and distributed $308 million in dividends to shareholders since 2021. We have also paid down $119 million in debt, significantly reducing our cash flow breakeven rate and further enhancing our earnings power and dividend capacity.

Moving to Slide 6. Following a strong first quarter, we are pleased to have carried this positive momentum into Q2 2026. During the second quarter, we generated strong cash flow. This was driven by a time charter equivalent rate of over $24,200 per day, our highest quarterly TCE rate since 2022, resulting in adjusted EBITDA of nearly $57 million. These strong results exceeded expectations for the quarter as the dry bulk market continued to strengthen, and we further capitalized on our growing fleet of premium earning assets across the main sectors in which we operate.

We declared a Q2 dividend of $0.80 per share, more than double our first quarter dividend and 433% higher on a year-over-year basis. Notably, our Q2 dividend is the highest we've declared since the inception of our comprehensive value strategy in 2021. This also marks our 28th consecutive quarterly dividend paid to shareholders, the longest uninterrupted period in our dry bulk peer group. Our strong financial performance reflects the deliberate steps we have taken to increase our earnings power and dividend capacity for the benefit of our shareholders.

The second quarter marked the first full quarter in which all of our 2025 vessel acquisitions operated for an entire quarter. These well-timed acquisitions, which grew our asset base by approximately 20% directly and significantly contributed to our strong earnings and dividend during the quarter.

Later this month, we are set to further strengthen our fleet as we expect to take delivery of a 2019 built Capesize vessel, the Genco Volunteer. This will bring our total investment in Capesize and Newcastlemax vessels to $408 million since 2023, a period in which these vessel types have vastly outperformed all others in the dry bulk sector. Importantly, we have achieved an IRR of over 30% to date on these acquisitions.

As we have done with the other vessels we added to our fleet in 2026, we anticipate trading the Genco Volunteer in the spot market and expect the vessel to earn a significant premium to the Baltic Capesize Index given its high specifications.

As depicted on Slide 7 and 8, we achieved multiyear highs for the Q2 dividend, TCE and EBITDA and expect to exceed those metrics going into Q3. Including our Q2 dividend of $0.80 per share, we will have paid $8.715 per share in quarterly dividends over the past seven years. With the growth of our premium earning assets, our spot-focused commercial strategy and our considerable operating leverage in a strengthening dry bulk market, we project a Q3 dividend to achieve another record level.

Based on our Q3 fixtures to date of $28,600 per day for 66% of our available days and assuming the current FFA curve for the balance of the quarter, we project a third quarter dividend of over $1 per share. We have strong prospects in Q4 as well, which we project another dividend north of $1 per share based on the FFA curve. This would bring a projected full year dividend of over $3.15 per share.

The foundation of Genco's strong earnings power and dividend capacity and what we believe drives valuation in public markets is rooted in strong corporate governance and capital allocation decisions, and our strategy is outlined on the next several slides.

Moving to Slide 9. Genco continues to maintain industry-leading corporate governance, which has underpinned our shareholder-focused outperformance. We are consistently ranked in the top quartile on corporate governance among public shipping companies, and we are the only U.S.-listed dry bulk shipping company with no related party transactions.

Turning to Slide 10. Genco has one of the lowest cash flow breakeven levels in our peer group. This is directly related to our industry low net loan to value as well as having no mandatory debt amortization. In addition to significantly increasing our Q2 and Q3 TTE to date on a year-over-year basis, we continue to markedly exceed our low cash flow breakeven rate. Specifically, our Q3 TCE to date of nearly $29,000 per day is approximately $19,000 per day above our breakeven rate prior to maintenance CapEx of approximately $10,000 per day.

On Slide 11, we highlight the strategic benefits of our balanced fleet composition. Following the expected Cape delivery in August, we will own a fleet of 20 Capesize and Newcastlemax vessels as well as 24 Ultramax and Supramax vessels. Importantly, we continue to balance the upside potential of the Capesize sector, along with the steadier earnings profile of minor bulk ships.

On a vessel ownership basis, our splits are 45% Capes and 55% Ultramax/Supramax. However, when viewed on a net revenue basis over the last two years, we are over 50% weighted towards the larger Capesize vessels, putting us in a unique position in our peer group to benefit from the strengthening freight rate environment.

On Slide 12, we highlight the current operating leverage provided by our pro forma fleet of 44 vessels. Every $1,000 fleet-wide TCE increase equates to $16 million of incremental annualized EBITDA or $0.36 per share. Every $5,000 increase in TCE for our 20 Newcastlemax and Capesize vessels equates to $36 million or $0.81 per share of incremental earnings and dividend capacity.

Turning to Slide 13. We also continue to balance our high operating leverage with our low financial leverage, providing us with flexibility to operate across various freight market conditions. In stronger markets, we generate meaningful cash flow with our industry low breakeven rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver capacity enable us to pursue countercyclical growth opportunities.

Importantly, Genco is well positioned today to drive value for our shareholders and play offense in any type of dry bulk market. I will now turn the call over to Peter Allen, our Chief Financial Officer.

Thank you, John. On Slides 15 through 17, we highlight our strong second quarter financial results, which are driven by our sizable operating leverage, growing fleet and industry low breakeven levels.

For the second quarter, Genco recorded net income of $16.6 million or $0.38 and $0.37 basic and diluted earnings per share. Adjusted net income is $29.2 million or $0.67 and $0.65 basic and diluted earnings per share, excluding a gain on sale of vessel of $1.9 million, other operating expenses of $13.1 million, impairment on vessel assets of $1.2 million and an unrealized fuel loss of $0.2 million.

Other operating expenses primarily relate to shareholder and proxy expenses incurred during the quarter, including financial advisory costs associated with inadequacy opinions received for outstanding tender offers at the time. Such opinions are connected to tender offers and served as important information for both the company to determine that the offers were inadequate and for shareholders in making their own determinations regarding the offers.

Adjusted EBITDA for Q2 totaled $56.7 million, an increase of approximately 300% year-over-year. This was led by a time charter equivalent rate of $24,273 per day, which rose by 78% as compared to Q2 2025, while the cost structure was similar on a year-over-year basis, highlighting the operating leverage inherent in our fleet. Our first half of 2026 adjusted EBITDA totaled $92.9 million, which already exceeds the full year 2025 level and is on pace to be our highest earnings year since the 2021 2022 period.

We continue to generate meaningful cash flow and maintain significant financial flexibility. Our cash and debt positions as of June 30, 2026, were $74 million and $330 million, respectively. Our undrawn revolver availability at quarter end was $350 million.

For the Genco Volunteer, the 2019 built Capesize vessel we expect to be delivered in August. We paid an installment of $6.5 million in Q2, and we have $58.5 million of CapEx remaining for this acquisition to be paid in Q3. We drew down $50 million in July to partially fund this acquisition with the remaining CapEx to be funded with cash from the balance sheet.

With our full revolving credit facility structure, we plan to continue actively managing our cash and debt positions to reduce interest expense while maintaining access to capital to act on growth opportunities as we have demonstrated in recent years. We view our strong balance sheet as a core component of our comprehensive value strategy and a strategic asset that enables us to act quickly and decisively as we have demonstrated in recent years with our accretive growth initiatives.

As outlined on Slide 18, we believe Genco is in an advantageous position. A fleet of 43 high-quality modern dry bulk vessels are significant operating leverage combined with low financial leverage, a $10,000 cash flow breakeven rate and $350 million of undrawn revolver availability collectively provide an attractive risk-reward balance for shareholders.

Furthermore, we continue to provide shareholders with compelling quarterly dividends. Our established and transparent dividend policy targets a distribution based on 100% of operating cash flow less a voluntary reserve as described on Slide 19. In the second quarter, our Board declared a dividend of $0.80 per share based on operating cash flow of $55 million and a voluntary quarterly reserve of $19.5 million. Operating cash flow in Q2 increased by 55% relative to the prior quarter, which flowed through the dividend, which more than doubled. The second quarter dividend represents an annualized dividend yield of approximately 12% based on the current stock price. Consistent with previous quarters, other operating expenses are not included in the dividend calculation, which is in line with the methodology used in the previous 4 quarters in which these extraordinary expenses have been incurred.

Q2 also marked the first full quarter in which our 2025 acquisitions were integrated into our fleet. These acquisitions alone had a quarterly dividend impact of approximately $0.15 per share in Q2 2026 or nearly 20% of the $0.80 dividend, underscoring how accretive these acquisitions have been. These acquisitions were fully funded with our existing liquidity, highlighting the benefit of our strong balance sheet. As a result, each Genco share immediately received this uplift in earnings, making these transactions highly accretive to cash flows, dividends and overall shareholder value.

Looking ahead to Q3 2026, we currently have 66% of owned available days fixed at approximately $28,600 per day as compared to our anticipated cash flow breakeven rate, excluding drydocking-related CapEx of approximately $10,000 per vessel per day. Importantly, Q3 2026 TCE is on pace to increase by nearly 80% year-over-year and our highest level since Q2 2022. As a result, we expect a significantly higher dividend in Q3 2026 as compared to both Q2 2026 and Q3 2025.

I will now turn the call over to Michael Orr, our drybulk market analyst, to discuss the industry's current landscape.

Thank you, Peter. Beginning on Slide 21. During the second quarter of 2026, freight rates continue to rise following a strong Q1. Specifically, the Baltic Capesize Index averaged over $36,000 per day in Q2, the highest quarterly level since 2021, while the Baltic Supramax Index averaged over $17,000 per day, the highest mark since 2022.

In Q3 to date, rates continue to be firm with the forward freight curve playing to levels in excess of $35,000 and $18,000 per day across the Capesize and Supramax sectors, respectively. We believe the strong dry bulk earnings environment is due to a continued solid iron ore trade, significant growth in bauxite exports and a reemergence of the coal trade. These demand side catalysts have extended trading distances, accentuating the existing capacity constraints of the dry bulk fleet.

Turning to Slide 22. China continues to import large volumes of iron ore led by abundant seaborne supplies from Brazil and Australia. Specifically, China's iron ore imports in the first half of 2026 increased by 6% on a year-over-year basis, while Brazilian exports were up by 2% over this period. Importantly, in June, we saw record Chinese iron ore imports of 113 million tons as well as all-time high Brazilian shipments of 42 million tons, which were increases of 8% and 18% year-over-year, respectively. Historically, Brazilian exports are approximately 20% higher in the second half as compared to the first half of the year.

The Atlantic Basin for Capesize vessels has also been met with rapidly growing exports of bauxite from West Africa as highlighted on Slides 23 and 24. This trade has been supportive to Capesize vessels in recent months given the ton-mile intensity of the trade route. Furthermore, Simandou iron ore exports have steadily grown since the first shipments in Q4, exceeding 2 million tons in May, with full year volumes expected to be weighted towards the second half of the year following the rainy season.

Going forward, given the scale of the expected growth projects from Simandou on the iron ore side as well as continued iron ore growth from Vale in Brazil and bauxite out of West Africa, these incremental volumes could absorb potentially over 200 Capesize vessels. Supply constraints in newbuilding activity, combined with added long-haul trading distances are two key catalysts for the sector.

Furthermore, as detailed on Slide 25, with the escalation of geopolitical tensions in recent months, the key theme of energy security has once again risen to the forefront. For dry bulk specifically, that translates to augmented demand for coal as a potential replacement for other sources of energy that have either experienced disruptions or rising prices.

Notably, we have seen an increase in coal cargoes originating from the U.S. and Colombia with Asian destinations. These long-haul trade routes once again further stretched the dry bulk fleet. Additionally, a high probability of an El Niño weather event could lead to low water levels in the Panama Canal, resulting in reduced transits, further increasing fleet inefficiencies.

On Slide 27, we highlight the global grain trade. China has increased its purchase of U.S. soybeans with year-to-date imports from the U.S. already exceeding all of last year.

In terms of newbuilding deliveries in the year-to-date, as outlined on Slide 28, net fleet growth in the first half of 2026 was 3.9%, split between 1% net fleet growth for Capesizes and 4% to 6% net fleet growth from Panamaxes down to Handysize. Specifically, we have only seen 21 Capes delivered to the global fleet so far this year, which represents a reduction of 75% as compared to the 15-year average, highlighting the impact of the low order book coming to fruition in 2026, which is a key pillar of the Capesize and dry bulk pieces.

Additionally, as scrapping has remained low in recent years, the age of the global fleet has risen to 13 years old, the highest average age of the global dry bulk fleet since 2010. This has increased the pool of potential scrapping candidates as 12% of the on-the-water fleet is 20 years or older, which is nearly identical to the global dry bulk order book as a percentage of the fleet of 14%. This implies net replacement of tonnage over time as opposed to any material net fleet growth.

While we expect volatility in the freight rate market to persist, the foundation of a low supply growth picture provides a solid basis for our positive view of the dry bulk market going forward.

I will now turn the call back over to John to conclude the call.

Thank you, Michael. Turning to Slide 30. The second quarter marked another period of disciplined execution of our comprehensive value strategy, resulting in strong financial results as we generated EBITDA for the first half of the year that exceeded total EBITDA for all of 2025 and increased our Q2 dividend by over 400% to a value strategy high level.

We are continuing to realize the significant benefits of our sizable operating leverage, strong balance sheet and industry low breakeven levels that have enabled Genco to increase its earnings power and dividend capacity. We are operating in a strong rate environment and asset values have continued to increase, which together with strong cash flow generation, has contributed to Genco's increasing net asset value. As we look ahead, Genco is well positioned to continue driving returns through sizable dividends and creating value for shareholders.

Before we turn the call over to Q&A, I'd like to provide a brief update on the latest proposal we received from Diana Shipping. The Board is continuing to review Diana's nonbinding indicative proposal to acquire all remaining outstanding shares of Genco's common stock in exchange for $24.80 per share in cash, plus 1 share of Diana common stock per Genco share.

As part of that review, our advisers have engaged with Diana's advisers to discuss their proposal, including its price structure and terms. Genco's Board has authorized its financial advisers to continue discussions with Diana's financial advisers with the goal of determining whether a transaction that fully and fairly compensates Genco shareholders is achievable.

The Board has directed its advisers to engage on several key topics, including Genco's current NAV, an appropriate control premium to NAV that reflects the value of Genco's sizable and industry-leading platform in a rising market, how to protect Genco shareholders from the significant potential dilution associated with Diana's proposed issuance of new stock as part of the contemplated transaction and the limited rights granted to Diana shareholders under its existing governing documents, along with Diana's pre-agreed sale of Genco vessels to Star Bulk at a large discount to current market value.

Also, the treatment of Genco's Q2 dividend of $0.80 per share and future dividends as the cash component of Diana's offer is to be reduced by dividends declared. Said differently, Diana's offer is decreasing while Genco's NAV in the dry bulk market is rising. And finally, how to fairly reflect Genco's strong cash flow generation in which dividends to shareholders are projected to be over $1 per share in both Q3 and Q4 of 2026.

Our Board is committed to maximizing shareholder value and we will continue to act in the best interest of all Genco shareholders. We will provide a further update on our review of the proposal in due course.

Please note that the purpose of today's call is to discuss our second quarter results and opportunities ahead in a strengthening dry bulk market. We ask that you please keep your questions focused on our results, performance and industry trends. Thank you in advance. And this concludes our presentation. We'd be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Omar Nokta with Clarksons.

Well, it looks like business is looking good. You declared your biggest dividend so far under your comprehensive value strategy. Next one is looking bigger and perhaps the one after that, too. I guess I appreciate your comments that you just made on Diana. I just wanted to ask in terms of managing the business, how has it been here recently? Has that process that you've been dealing with or at least your advisers and the Board, has that affected business at Genco or strategy to any extent?

Look, I think it's obviously one more thing that has been added to our list, but we have a very well thought out comprehensive value strategy, as you just said, with low leverage, high dividends and growth opportunities. So that is in place. And again, it was a strategy that the Board put in place several years ago at this point. It's been working well. So we're continuing to follow that strategy.

We -- strong governance and capital allocation, the two main components that we believe creates real value for shipping companies in the public market. So we're very focused on those two aspects as well. We did grow our fleet by 20% on an asset value basis in 2025. So acquisitions are still very much on the table. We still have the Genco Volunteer that we're taking delivery of, I believe, next week.

And the investments that we've -- so far since 2023 on the Capesize side, over 30% IRR. So company is running on all cylinders, irrespective of the proxy issues that are now behind us and concluded for the time being. So we're going to continue to look at growth opportunities. We're going to continue to run under the value strategy and return cash to shareholders in the form of dividends.

Yes. And maybe just as a follow-up on that point, just kind of talking about the fleet. As you mentioned, you've got the Volunteer coming in perhaps next week, and you've got those two Newcastlemaxes from earlier this year that were well timed. It looks like you'll be at basically a fleet split of 20 Capes, 24 Ultra Supras. How do you see that balance in general?

Yes. And does the secondhand market, as you mentioned, they're going up in terms of values and your NAV is rising with that. Is it still compelling to look at the secondhand market? And what are your thoughts just on, say, newbuildings in general?

Okay. So in the secondhand market, yes, values continue to firm. Freight rates also have moved back up and started to recover from the early part of the year, which has all been positive. So -- and we are still in a mode of fleet renewal. So even if we were buying assets at higher numbers, we're also selling our older assets at higher numbers. So we're -- again, we want to continue fleet renewal. We're going to do that. We'll have to see on just on large-scale growth, how we accomplish that. But it is nice that our shares are trading fairly well. So at some point, if there is an attractive transaction, there's a possibility of using shares as currency along with cash.

On the newbuilding side, we have -- I wouldn't say we're full scale against them, but it's not something that we typically focus on. And the reason is because you're really talking about 2029 delivery dates at this point in the dry bulk sector. And so you have money that is what I'll call dead money. It's money out the door, but it's not earning anything, which we don't believe works well for public companies. And probably more importantly, when we're buying assets, we like to be able to derisk them on the front end. So we like to get the cash flows as soon as possible. So I think you'll see us focus mostly on the secondhand market rather than looking at newbuilds at this point.

Your next question comes from the line of Liam Burke with B. Riley Securities.

Peter, you're taking delivery of that Capesize. John and Omar went over the puts and takes of the potential adding of assets. But you add about additional debt when you take delivery of that Cape, but how are you going to manage your debt balance, which is fine as it is as well as potential asset acquisitions plus your dividend strategy?

Pete, do you want to.

Sure. Yes, I'll take that. Thanks for the question, Liam. So yes, in terms of our overall debt balance, so we ended the quarter with $330 million of debt outstanding. And in July, we drew down $50 million to fund -- to partially fund the balance of the acquisition that John said we'll be getting shortly here in the month of August. Overall, on a pro forma basis, we're still around a 20% net loan to value, and we'll still have about $300 million of undrawn revolver availability. So a lot of flexibility to continue to grow on an accretive basis as we've shown over the last several years under the value strategy.

But like John said, there's opportunities for fleet renewal, and we'll continue to assess various growth opportunities. The great thing about the revolver is that as we build cash, if there aren't immediate needs for acquisition CapEx, we can pay down the revolver and save interest expense and all that savings flows right into the dividend. So lot of flexibility both to play offense, as John said in the prepared remarks, in all types of earnings environments.

Great. Thank you, Peter. Michael, you talked about iron ore demand in China being so strong, and I get it, you can't argue with the numbers. But steel production generally, not only in China, but worldwide is sort of down single digits. What's creating this demand for the iron ore?

Thank you, Liam. It has not been the traditional construction demand that we've seen in past years. It is a lot of secondary markets such as infrastructure and manufacturing, particularly solar panels as well as electric vehicles that has seen an uptick in demand for this iron ore.

And just to build on that a little bit here, Liam, is we've seen record amounts of iron ore being exported out of Brazil, over 42 million tons in the month of June. And typically, those shipments are weighted towards the second half of the year, and we've also seen a record amount of imports into China in the month of June. So still strong commodity demand. And then when you add that on top of the bauxite trade as well as continued coal demand from an energy security perspective, you have the three main commodities from a major bulk perspective really working at the same time here. So a lot of positives, longer ton miles, longer trading distances, and that accentuates the capacity constraints with the limited net fleet growth.

Your next question comes from the line of Chris Robertson with Deutsche Bank Securities Inc.

I just wanted to kind of follow up here on Liam's line of questions related to iron ore and then especially how it relates to trade patterns through the Panama Canal, and you guys have a nice slide laying out the potential impact here from El Nino. Just wanted to check in on the current status of the wait times at the Panama Canal, if the fees have gone up there? And has that caused any rerouting generally, not only for your fleet, but others in the dry bulk fleet rerouting, just pushing more vessels around Cape of Good Hope rather than going through the canal.

Yes. So there's a few things going on. We obviously have the El Nino and a high probability of it. I think it's 80% in Q4 and all the way up to 97% in the first half of 2027. So we could easily have a situation like what we saw in 2023.

They have cut booking capacity down from 36 to 34 effective the end of July. That doesn't sound like a lot, but it is early to be doing that. And if you remember, I think that number went down to 22 transits in 2023. So we could easily be looking at that situation, which will create more inefficiencies in the dry bulk market, particularly as we get into the fourth quarter when we're into grain season and U.S. agriculture exports ramp up. So stay tuned on how that plays out.

The other thing that's been going on is, obviously, there have been -- because of our moves, there's been a lot of tankers and gas that have been going through the canal. So I think the sheer number of vessels that have canal demand use has also gone up.

Yes, that makes sense. John, if you could further elaborate when it comes to the number of transits per day, how does that wait time look in terms of people bidding for priority slots? I guess, is it kind of a two-lane traffic there? And what are the logistics around that?

Well, there's definitely -- so everybody, for the most part, is securing slots ahead of time. There's no transit that they're allowing to occur without a book slot. We have definitely seen auction prices go up again, but it's volatile. There's been a range of $0.5 million to $1.5 million. I think there was even one as high as 2.9 million this week. So it's a little bit all over the place, but we expect that auction system to remain, and those numbers will probably go up as you get into the end of this year and early next year if El Nino does what everyone thinks it's going to do.

This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited First Quarter 2026 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com.

To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.gencoshipping.com [Operator Instructions]. A webcast replay will also be available via link provided in today's press release as well as on the company's website.

At this time, I will now turn the conference over to the company. Please go ahead.

Good morning. 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, the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2025, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

At this time, I would like to introduce John Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited.

Good morning, everyone. Welcome to Genco's First Quarter 2026 Conference Call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy, and then we'll review our Q1 2026 highlights and dividend outlook for the remainder of the year.

We will then provide additional details on our financial results as well as an update on the industry's current fundamentals before opening the call up for questions. For additional information, please also refer to our earnings presentation posted on our website.

Starting on Slide 5. We believe that how a management team and Board allocate capital is critical for generating returns and value to shareholders, especially in a capital-intensive industry such as shipping. With this goal in mind, we created our comprehensive value strategy, a well-defined capital allocation strategy, which has resulted in Genco significantly increasing its earnings power and dividend capacity for the benefit of shareholders.

When we implemented the strategy in 2021, we set out to achieve 3 main objectives: transform Genco into a low leverage, high dividend company, maintain significant flexibility to grow the fleet and pay a sizable quarterly dividend based on a transparent dividend formula.

Over the last 5 years, we have successfully delivered on each pillar of our differentiated strategy. We fortified our balance sheet to effectively operate and grow in various rate environments and provided shareholders with consistent and sizable dividends. We also increased the number of premium earning Capesize vessels in our fleet to better take advantage of a strengthening dry bulk market and enhance shareholders' upside potential.

Specifically, over this time, we have invested $557 million in high-quality modern vessels and distributed $293 million in dividends to shareholders. We also paid down $119 million in debt, reducing our cash flow breakeven rate.

Moving to Slide 6. Following a strong finish to 2025, we are pleased to have carried this positive momentum into 2026. During the first quarter, we generated strong cash flows driven by a time charter equivalent rate of over $19,300 per day, our highest first quarter TCE since 2022. We also maximized our revenue generation days during the quarter, achieving fleet-wide utilization of 99.2%.

In what is typically a seasonally softer period, we declared a Q1 dividend of $0.35 per share, more than double our first quarter 2025 dividend. The Q1 dividend also marks our 27th consecutive dividend, the longest uninterrupted period in our dry bulk peer group.

Complementing our strong financial performance, we continue to grow and renew the fleet with modern, high-specification premium earnings assets and reduce exposure to older, less fuel-efficient vessels.

In March, we took delivery of two 2020-built high-specification Newcastlemax vessels that were immediately deployed in the spot market at firm rates. With both vessels expected to operate for a full quarter in Q2, we anticipate the vessels to have a positive impact on our results and earn a premium to benchmark indices in the spot market. Capitalizing on the strong and liquid sale and purchase market, we also divested the two oldest and smallest vessels in our fleet during March and April. These sales were at levels above recent broker valuations and demonstrate the rising asset value environment that we currently operate in.

Importantly, we will be redeploying these sale proceeds into a high-specification 2019 Imabari-built scrubber-fitted Capesize vessel that we agreed to acquire in April and expect to take delivery of in June.

Looking at our recent sale and purchase activity together, these were well-timed investments that further enhanced our operating leverage and increased our focus on sectors with compelling near- and long-term supply and demand fundamentals.

Specifically, we have added to our fleet growth through immediate cash flow accretion and further increased our operating leverage, asset value and dividend capacity for the benefit of shareholders. We also ended the first quarter with a low net loan-to-value of 20%, which supports our low cash flow breakeven levels and increased earnings power.

As depicted on Slide 7, we achieved multiyear highs in Q1 dividend and TCE with strong momentum going into the remainder of the year. Based on our strong Q2 fixtures to date of $23,900 per day for 66% of our available days, we are well positioned to provide shareholders with growing dividends.

Slide 8 underscores how the current market is demonstrating the power of our dividend model. Including our Q1 dividend, we will have paid $340 million or $7.915 per share in quarterly dividends over the past 7 years. Our Q1 dividend of $0.35 per share reflects an increase of 133% year-over-year. With the growth of our premium earning assets, our spot focused commercial strategy and our sizable operating leverage in a strengthening dry bulk market, we expect to significantly increase our dividend starting in the second quarter and have strong prospects for Q3 and Q4.

Based on our fixtures to date and assuming the FFA curve for the balance of the quarter, we project a Q2 dividend of approximately $0.70 per share. Assuming the current forward freight rate curve for the balance of the year, our dividend formula would produce a Q3 dividend of $0.75 per share and a Q4 dividend of $0.70 per share, bringing our full year dividend to approximately $2.50 per share. Of course, the FFA curve is subject to change, but these projections show the opportunities provided by our low leverage, high dividend model.

On the next few slides, we outline the foundation of Genco's strong earnings power and dividend capacity.

Turning to Slide 9. Genco has one of the lowest cash flow breakeven rates in our peer group. This key differentiator is directly related to our industry low net loan to value as well as not having mandatory debt amortization, which further reduces our cash flow breakeven rate and increases our earnings potential.

In addition to increasing Q1 and Q2 TCE to date by 63% and 76%, respectively, we continue to far exceed our low cash flow breakeven rate. Specifically, our Q2 TCE of nearly $24,000 per day compares very favorably to our cash flow breakeven rate prior to maintenance CapEx of under $10,000 per day.

Complementing our low breakeven rate is our balanced approach to fleet composition, which we present on Slide 10. Following recent fleet renewal and the expected Cape delivery in June, we will own a fleet of 20 Capesize and Newcastlemax vessels as well as 24 Ultramax and Supramax vessels. We continue to balance the high beta and the upside potential of the Capesize sector, along with the steadier earnings profile of minor bulk ships. On a vessel ownership basis, our splits are 45% Capes and 55% Ultra Supras.

However, when viewed on a net revenue basis over the last 2 years, we are over 50% weighted towards Capesize vessels, putting us in a unique position in our peer group to benefit from a strengthening freight rate environment.

Turning to Slide 11. We balance our high operating leverage with low financial leverage, which provides us with financial flexibilities in various freight market conditions. In strong markets, Genco generates meaningful cash flow with its industry low breakeven rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver availability allow the company to take advantage of countercyclical growth opportunities.

On Slide 12, we highlight the significant operating leverage provided by our pro forma fleet of 44 vessels. Every $1,000 fleet-wide TCE increase equates to $16 million of incremental annualized EBITDA or $0.36 per share. Every $5,000 increase in TCE for our 20 Newcastlemax and Capesize vessels equates to $36 million or $0.81 per share of incremental earnings and dividend capacity.

The positioning of our fleet today is the result of a steady execution of our strategic plan over multiple years. In 2023, our management team and Board formulated a strategy focused on capitalizing on the compelling supply and demand fundamentals of the Capesize sector, led by the sector having the lowest order book with long-haul ton mile expansion on the horizon.

Our thesis has played out as expected. Since we began reinvesting in Capes in Q4 2023, Capesize vessels have been the best-performing dry bulk class from an earnings and asset value appreciation perspective. Notably, we have generated an IRR of over 30% on these ships since acquisition.

Lastly, turning to Slide 13. Genco continues to prioritize strong corporate governance, which has distinguished our company from our peers and underpinned our shareholder-focused outperformance. We are the only U.S.-listed dry bulk shipping company with no related party transactions, and we provide detailed disclosures on our strategy and performance with compensation aligned to shareholders' interest.

We have a majority independent and diverse Board with 50% female directors, and we are the only U.S.-listed dry bulk company with an annually elected Board. We are also consistently ranked in the top quartile on corporate governance among public shipping companies by Weber Research.

Our corporate governance is a core part of our identity and reflects our Board's commitment to upholding the highest standards of fiduciary duty and governance excellence.

I will now turn the call over to Peter Allen, our Chief Financial Officer.

Thank you, John. On Slides 15 through 17, we highlight our first quarter financial results. Genco recorded net income of $9.3 million or $0.21 basic and diluted earnings per share. Adjusted net income is $11.3 million or $0.26 basic and diluted earnings per share, excluding a gain on sale of vessels of $2.1 million, other operating expenses of $3.8 million for shareholder-related expenses, impairment on vessel assets of $0.5 million and unrealized fuel gains of $0.2 million.

Adjusted EBITDA for Q1 totaled $36.2 million, an increase of 358% as compared to Q1 2025. This was led by a TCE of $19,346 per day, which rose by 63% as compared to Q1 2025, while the cost structure was similar on a year-over-year basis, highlighting the operating leverage inherent in our fleet.

We continue to generate meaningful cash flow and maintain significant financial flexibility. Our cash and debt positions as of March 31, 2026, were $55 million and $330 million, respectively. Our undrawn revolver availability at quarter end was $350 million. We also continue to make good progress renewing and growing our fleet, having entered into sale and purchase transactions that were immediately accretive to cash flow and net asset value.

In March, we took delivery of 2 2020 built Newcastlemax vessels. We drew down $130 million from our revolver to fund the remaining CapEx. Additionally, in March, we sold the Genco Pacardy, a 2005-built Supramax vessel to third-party buyers for gross proceeds of $10.6 million, well above broker estimates, demonstrating the rising asset value environment.

We recorded a gain of $2.1 million in the first quarter relating to the sale. In April, we delivered the Genco creditor, another 2005-built Supramax vessel to buyers, and we expect to record a similar gain in Q2.

Also in April, we agreed to purchase a 2019-built high-specification Capesize vessel, which we expect to take delivery of in June. We have $65 million of CapEx for this acquisition, which we expect to fund primarily through proceeds from our revolver and redeployment of capital from the aforementioned vessel sales.

We believe that the Capesize sector will continue to be the best performer in the dry bulk market with the highest returns given low net fleet growth and longer trading distances. We believe the tightness in the Capesize market is not temporary, but structural, providing Capesize with the highest baseline earnings profile, but also the highest upside potential. Despite multiple years of outperformance from an earnings and asset value appreciation perspective, Capes still offer the best returns among the dry bulk sectors.

With our full revolving credit facility structure, we plan to continue to actively manage our cash and debt positions to reduce interest expense while maintaining access to capital to act on growth opportunities as we have demonstrated in recent years.

We view our strong balance sheet as a strategic asset that enables us to act quickly and decisively as we have demonstrated in recent years with our accretive growth initiatives.

As outlined on Slide 18, we believe that Genco is in an advantageous position, a pro forma fleet of 44 high-quality modern dry bulk vessels, our significant operating leverage combined with low financial leverage, a sub-$10,000 cash flow breakeven rate and $350 million of undrawn revolver availability. Collectively provide an attractive risk-reward balance for shareholders.

Furthermore, we continue to reward shareholders through our compelling quarterly dividends. Our established and transparent dividend policy targets a distribution based on 100% of operating cash flow less a voluntary reserve as described on Slide 19. In the first quarter, our Board declared a $0.35 per share dividend based on operating cash flow of $35 million and a voluntary quarterly reserve of $19.5 million, which is more than double our first quarter 2025 dividend.

Looking ahead to Q2 2026, we currently have 66% of owned available days fixed at a rate of approximately $23,900 per day as compared to our anticipated cash flow breakeven rate, excluding drydocking-related CapEx of approximately $9,800 per vessel per day.

Importantly, Q2 2026 TCE is on pace to increase by over 70% year-over-year. As a result, we expect a significantly higher dividend in Q2 as compared to both Q1 2026 and Q2 2025. Our quarterly dividend has a near perfect correlation to dry bulk freight rates. Said differently, when freight rates move up like they have been in 2026, so do our dividends.

Q2 will also mark the first quarter in which our 2025 acquisitions will be fully integrated into our fleet. These acquisitions alone are expected to have a quarterly dividend impact of approximately $0.15 per share in Q2 to Q4 of 2026, exemplifying how accretive these acquisitions have been. These acquisitions, which grew the fleet 20% were funded with our existing liquidity, accentuating the benefit for shareholders as each share immediately received this uplift in earnings, making these transactions highly accretive to cash flows, to the dividend and to all Genco shareholders.

I will now turn the call over to Michael Orr, our drybulk market analyst, to discuss the current industry landscape.

Thank you, Peter. Beginning on Slide 21, the dry bulk freight rate market ended 2025 on a strong note and carried that momentum over to the start of 2026. The Baltic Capesize Index averaged approximately $23,000 per day during the first quarter, one of the highest first quarter averages over the last 15 years. In Q2 to date, the BCI has averaged over $32,000 per day, while the forward curve points to continued strength at similar levels through the remainder of the year.

Turning to Slide 22. China continues to import large volumes of iron ore led by abundant seaborne supplies from Brazil and Australia. Specifically, China's iron ore imports in Q1 2026 increased by 11% on a year-over-year basis. Brazilian iron ore export growth has been flat to start the year, but expected to ramp up as the year progresses. Historically, Brazilian exports are approximately 20% higher in the second half as compared to the first half of the year.

Turning to Slide 23. We highlight the long-haul iron ore and bauxite trade growth expected from Brazil and West Africa in the coming years. In the first quarter of 2026, the bauxite trade continued to exhibit firm growth rates. China's imports rose by 23% year-over-year in Q1 to nearly 60 million tons with any accumulating approximately 80% market share. This trade has been supported to Capesize vessels in recent months given the ton-mile intensity of the trade route.

Going forward, given the scale of the expected growth projects from Simandou on the iron ore side as well as continued iron ore growth from Vale in Brazil and Bauxite out of West Africa, these incremental volumes could absorb potentially over 200 Capesize vessels, which is the majority of the current Capesize newbuilding order book. Supply constraints in the newbuilding activity, combined with added long-haul trading distances are two key catalysts for the sector. We expect West African iron ore flows to ramp up in 2026 and in the years ahead after first shipments were made in 2025.

Furthermore, as detailed on Slide 24, with the escalation of geopolitical tensions in recent months, the key theme of energy security has once again risen to the forefront. For drybulk specifically, that translates to augmented demand for coal as a potential replacement for other sources of energy that have either experienced disruptions or rising prices. Notably, we have seen an increase in coal cargoes originating from the United States and Colombia with Asian destinations.

These long-haul trade routes once again further stretch the drybulk fleet. With the increase in fuel prices, we've also seen an approximate 3% decrease in global fleet speeds, which is another driver of a reduction in fleet capacity supporter of freight rates.

In terms of newbuilding deliveries in the year-to-date, as outlined on Slide 25, net fleet growth in Q1 2026 was 3.7%, split between 1% net fleet growth for the Capesizes and 4% to 6% net fleet growth for Panamaxes down to Handysize.

Specifically, we have only seen 11 Capes delivered to the global fleet so far this year, which represents a reduction of 75% as compared to the 15-year average, highlighting the impact of the low order book coming to fruition in 2026, which is a key pillar of the Cape and drybulk thesis.

Additionally, as scrapping has remained low in recent years, the average age of the global fleet has risen to nearly 13 years old, the highest average age of the global drybulk fleet since 2010. This has increased the pool of potential scrapping candidates as 12% of the on-the-water fleet is 20 years old or older, which is directly identical to the global drybulk order book as a percentage of the fleet of 12%. This implies net replacement tonnage over time as opposed to any material net fleet growth. While we expect volatility in the freight market to persist, the foundation of a low supply growth picture provides a solid basis for a positive view of the drybulk market going forward.

I'll now turn the call back over to John to conclude the call.

Thank you, Michael. Turning to Slide 27. We are pleased with the significant momentum we achieved in the first quarter, building off a strong end to 2025. The first quarter marked another period of disciplined execution of our comprehensive value strategy, highlighted by fleet growth and increased earnings power and dividend capacity.

With the expansion of our premium earning asset base, our leading commercial operating platform, strong balance sheet and significant operating leverage in a strengthening drybulk market, we are well positioned to create meaningful value and superior returns for shareholders in 2026 and beyond.

Assuming the current forward freight rate curve for the balance of the year, our dividend formula would produce a total dividend of approximately $2.50 per share in 2026. I also note that asset values continue to move higher, and our NAV has significantly increased thus far in 2026. The average NAV published by five Genco equity analysts is $25.80 per share.

As we move through the year, we remain focused on advancing our low leverage, high dividend payout model, further growing our high specification premium earning fleet and maintaining our industry-leading corporate governance standards to benefit all Genco shareholders.

Before we turn the call over to Q&A, I'd like to briefly address the important vote our shareholders will have at our upcoming annual meeting. This morning, we filed our definitive proxy statement, which includes the Board's recommendation that Genco shareholders vote for the reelection of our highly qualified and experienced directors, all of whom are deeply committed to driving shareholder value.

As many of you know, one of our direct competitors, Diana Shipping, is attempting to take control of Genco at a discount. To achieve its objective, Diana has made a series of inadequate private and public acquisition proposals. Our Board established a committee comprised of independent directors, which evaluated Diana's recent proposals with the assistance of external advisers. That committee and the full Board unanimously rejected Diana's proposals, determining that they undervalued the company.

Instead of engaging constructively, Diana has acquired a significant stake in Genco stock and recently commenced a tender offer. They have also nominated directors to replace the entire Genco Board with their own handpick nominees. Our Board has addressed Diana's actions appropriately in accordance with its fiduciary duties at every step of the way, and we'll continue to take actions that are in the best interest of all Genco shareholders.

The earnings results that we announced today demonstrate that our comprehensive value strategy is working. We are delivering strong results and returns, and our shareholders are poised to continue benefiting as we create additional value in a strengthening drybulk market.

In contrast, Diana's lowball proposals and its proxy fight put our shareholders' investments at serious risk. If Diana's nominees are added to our Board, they could force Genco into a sale at an inadequate price that deprive shareholders of the full value of their investment or they could take other value-destructive actions.

That is why we are standing firm in our belief that the current Genco Board is best positioned to guide the company forward and drive superior returns for shareholders. After saying all that, please note that the purpose of today's call is to discuss our strong first quarter results and compelling opportunities ahead given our differentiated position in the strengthening drybulk market. We ask that you please keep your questions focused on our results, performance and industry trends.

Thank you in advance. This concludes our presentation, and we are now happy to take your questions.

[Operator Instructions] And your first question comes from Omar Nokta from Clarksons.

I appreciate the comments on Diana. So that's helpful. And I'll just stick as you ask to the industry and the company. And maybe just touching on -- and I know you discussed this in the opening comments, but just clearly, you've had a nice quarter. It's nice to see drybulk rates really gaining some momentum here. And I guess just from your perspective, what's really been kind of driving this strength? There's been a lot of focus on, you say, within the energy sectors on the impact of Hormuz. Is that having an impact on drybulk? Is that driving things?

Or is there -- is it more structural in terms of what we're seeing in the iron ore trade?

I think it's more of a structural supply and demand balance, which is obviously very positive. The order book is very low, as Mike pointed out, but we have not had a lot of growth. I think there's only been 11 capes delivered all year, which is down, I don't know, 70%, 75% from the 15-year run rate.

So you've got a low supply situation, but then you also have a growing demand side. Iron ore was up 11% in Q1 year-over-year. Bauxite was up 23% in Q1 year-over-year. So I -- big picture, it's the supply and demand balance in a very favorable position for rising freight rates. And then we also have -- we clearly have volume growth. So I don't think too much is centered around Hormuz Strait. It's only around 2% of the drybulk trade actually goes in and out of there. So it's not very much.

The other thing that's been happening is that we've seen a real increase in coal exports out of Baltimore and Colombia in particular. And when you start to see those increases in those ports, it really indicates a firming demand picture. And so the added coal that we've seen really come on in April, we think is going to continue for a while even after the Hormuz situation is solved.

Yes, makes sense. Yes. I mean 11 ships on a base of 2,000 is not going to move the needle in terms of supply. The -- I guess we've seen this sort of strength in Capes. I think a lot of expectation coming into the year was that Capes would outperform, and we've certainly seen that. But we've also seen the Ultras kind of continue to muscle upwards close to that 20,000 number.

What's been driving that, you think? Is that a trickle down from the Capes? Or is there something specific to the Ultras, you think?

No. I think there's a trickle-down effect that certainly happens. There's a high corelation between Capes and the minor bulks. I also think the minor bulk trades are quite strong. It's -- we've had bookings that are $20,000 and above on some voyages. Which, again, is quite strong, and you can see it in our numbers.

I think in general, commodities have been doing well across the board in drybulk, not just iron ore, bauxite and coal. The minor bulk commodities also have seen demand growth.

Okay. Yes, makes sense. And then maybe just one final one for you, John. Just in terms of like the fleet strategy, you would think just based off of what we're seeing in the spot market, that time charter interest starts to gain momentum. And I think we've been seeing some reports of increased inquiry.

How do you think about that in terms of Genco adding coverage? Do you think now is the time to consider it? Or you really want to be more exposed to spot as we move forward?

Well, I think now is the time to think about it and analyze it for sure, which we're doing almost on a daily basis. We have not done anything in the long-term market as of yet. But as you know, we have in the past, we do like to run a portfolio approach to the Cape sector because of the volatility. So it's something we're going to continue to look at and monitor, but we have not pulled the trigger yet.

And quite frankly, we believe strongly in the second half of the year. Second half of the year tends to be stronger than the first half, and we've obviously started out very well.

And your next question comes from Chris Robertson from Deutsche Bank.

John, just taking a look at the -- again, the strong rate environment, as everyone alluded to here and the lack of substantial deliveries. But on the other side of the equation, just wondering if you could give some commentary around the scrapping or ship retirement environment this year.

Has the strong rate environment kind of incentivized people to hold on longer? What are you seeing there? And what's your outlook given the rate strength around ship retirements for the rest of the year?

Look, at these rates, I would think that the numbers will be on the low side for scrapping. Having said that, it eventually will have to come. I mean you have almost 12% of the existing fleet that's 20 years or older. So you can only stretch that for so far. But to answer your question directly, I think it's probably going to be on the low side this year.

Just following up, I think your commentary about stretching it, that's kind of the heart of what I'm trying to ask about, which is as these ships age, they get to that 20-year mark or maybe even beyond.

What are the realistic limitations there? How long can they be stretched out until it's just an immediate need, something that has to get done rather than something that someone opts to just extend?

Right. So the average age overall of scrapping is somewhere around -- or the useful life is somewhere around 25 years for the total fleet. If you take Capes, that number, the number of years reduces and ultra Supers and the handysize vessels, they can go for a longer period of time. It really has to do with cost of drydocking, steel renewal and fuel efficiency.

So it's -- I think when you get into the third and fourth special surveys, it becomes very expensive and you're really looking at a pure economic equation, and you have to decide make a decision that you're spending money that you're going to get back and not just get back, but have a return on it as well. So it's why -- it's actually a prime example why you're seeing a cycle out of the older, smaller, less fuel-efficient vessels into the larger, more fuel-efficient vessels, which we've been very consistent with.

Got it. That makes sense. A follow-up question for me, just a second question here as it relates to the Middle East. We've heard some maybe commentary and thoughts around in the tanker market around potential air pockets here if this conflict continues to go on. I realize the dynamics for drybulk are much different. But is there any situation here fallout or ramifications of the current conflict, whether now or in the future that could create some type of air pockets for the sector?

Look, on the positive side, particularly to us, scrubber spreads have increased. So that's increased our earnings capacity, the spread between HSFO and VLSFO. I talked about the coal earlier on the call, and I think there are 2 functions or 2 aspects of the coal. The first is just pure increased demand. But then you're also having a list of countries, Japan, South Korea, the EU, who are all changing their stance to some degree on coal because they're focusing much more now on energy security.

So you've got sort of a double effect that's going on in the coal market. So stay tuned on that. And then the other aspect of or moves is obviously higher fuel prices, quite a bit higher than what we've -- than what we saw even a few months ago. And so that is encouraging slow steaming. And we've definitely seen the drybulk fleet slow down, which, as you know, effectively decreases the supply situation in the supply and demand equation.

And your next question comes from Liam Burke from B. Riley Securities.

John, you were -- 2 years ago, you were moving towards a net positive cash position on your balance sheet. You chose to allocate the capital towards very nice investments, primarily on Capesize.

So we're looking forward here, are there opportunities to add to the fleet? Or are you just going to go back and look at reducing your debt load?

I think we'll keep our fleet renewal plan intact. You'll continue to see us execute on selling some of the older minor bulk vessels and focus on the larger more -- and then in a more fuel-efficient capacity in the Capesize Newcastlemax. If you look at what we've done over the last, I think, 2.5 years, we've invested somewhere around $400 million. We've created a 30% IRR on those investments.

So I -- while we'll continue to pay down debt, and we're going to continue to have a reserve on a quarterly basis, we will still be focused on the fleet renewal side. We do want to grow. I think it's difficult to do large-scale transactions with just cash because of where vessel values have gone. I mean you've seen our NAV has creeped up quite a bit just this year alone. So that's indicative of what's going on in asset pricing. But we also -- at some point, there may be an opportunity to use our equity as a currency as well. But again, that's got to be done on a solely an accretive basis to not just cash flows, but NAV.

Great. And this is for Michael, I think. Coal, as you point out, could structurally the demand has come back for a number of reasons. Thinking that the growth in bauxite has sort of shifted coal away from the cape to the smaller vessels.

Is that how you see it moving? Or are the capes carrying enough coal and it's to the benefit across the fleet?

Yes. No, Capes are definitely carrying coal. We've done a few just over the last month of coal lifting. So I mean, I think coal overall is increasing, and it really comes down to what port the demand increase is coming from and what that port can handle in terms of size of vessels. I don't -- there's no shift going on. I would say it's normalized, except we're seeing increased volumes.

And your next question comes from the line of Sherif Elmaghrabi from BTIG.

Just one for me today, kind of sticking with what Liam was asking about fleet growth. Thinking about tools in your tool belt, you highlighted -- Peter highlighted the pace Genco is on for a healthy Q2 dividend.

And I'm wondering, how do you think about the voluntary reserve? Any thought to a temporary increase, which would keep more dry powder for opportunistic growth? You talked about to do large-scale transactions and have the added benefit of adding the NAV with some stable value.

Yes. So the advantage of having that low cash flow breakeven and a low net loan to value allows us to pay high dividends as well as grow, and we've got a large revolver in place that's non-amortizing if we find the right opportunity.

In terms of the reserve, look, we think the reserve is important. It's a depreciating asset -- asset base. So you need to be able to renew the fleet. But I don't see us changing our dividend policy this year. So the reserve will stay as is for the remainder of the year.

[Operator Instructions] And your next question comes from Poe Fratt from Alliance Global Partners.

The fuel cost issue? And then also maybe you could talk about insurance. Can you just highlight any potential bottom line impact on cost escalation in those 2 areas?

Sure, Poe. So on the fuel side, almost everything we're doing is on a spot basis. So when we're pricing cargo, we're pricing the current fuel price. We do a little bit of hedging because we've seen fuel so volatile. So if we lock something in, then we may hedge the fuel. But there's no additional cost on the fuel side for us that we've experienced, and I don't expect that to occur. Again, everything when we price a spot cargo, we price the current fuel price into the quote.

In terms of insurance, we're not -- you know we're not going into the Red Sea. We've made that very prominent in our strategy for the time being and foreseeable future. We're not in the Persian Gulf. So we really haven't had to deal with any increased insurance costs.

Great. And then, John, can you just talk -- you talked -- well, actually, Peter, for you, can you just highlight what the potential cost might be from a shareholder -- shareholder perspective, annual meeting perspective. I think you said $3.8 million that was broken out in the second -- first quarter.

Can you give a ballpark number for the second quarter?

Thanks for the question. Yes, so historically, with these types of situations, our costs have run anywhere between $2 million and $4 million, as you've seen in Q4 and Q1 here as well as in 2024. We didn't specifically provide Q2 guidance, but I think looking at history, that's a fair assumption in the $2 million to $4 million range.

Great. And then, John, on corporate governance, I'm not sure where I can ask this question before the annual meeting in a public forum. But can you just answer one question for me on the poison pill.

Why did you put the poison pill vote into the annual meeting instead of waiting until it expired in September? And then why also did you increase that 10% threshold for the poison pill to 15%.

Right. So in terms of the shareholder vote, we just think that is proper governance. We think that's the right move to allow shareholders to have a vote on it and putting it in place for a medium-term period. So that's the answer to that.

And your other question on moving the 10% to 15%, it's simply a matter of -- we talk to shareholders a lot and the Board and the management team look at data and how things are done from a governance standpoint, and we elected to move the 10% to 15% basis all of that.

Was there any consultation with the proxy consultants or proxy recommendations at all?

We have a full host of advisers, obviously. So everybody gets to weigh in. But again, the way we make decisions is very definitive. It's based on data, and it's based on very high governance standards.

There are no further questions at this time. This concludes your conference call for today, and we thank you for participating and ask that you please disconnect your line. Thank you.

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Fourth Quarter 2025 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.gencoshipping.com. [Operator Instructions] A webcast replay will also be available via the link provided in today's press release as well as on the company's website.

At this time, I will now turn the conference over to the company. Please go ahead.

Good morning. Before we begin our presentation, I note that in this conference call, we'll 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 the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2024, and in the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

At this time, I would like to introduce John Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited.

Good morning, everyone, and welcome to Genco's Fourth Quarter 2025 Conference Call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy since its implementation in 2021, and then we'll review our Q4 2025 and year-to-date highlights. We will then provide additional details on our financial results for the quarter as well as provide an update on the industry's current fundamentals before opening the call up for questions. For additional information, please also refer to our earnings presentation posted on our website.

Starting on Slide 5. 2025 marked the fifth year since our Board and management team formulated and began implementing our comprehensive value strategy centered around dividends, financial deleveraging and opportunistic fleet growth. When we launched the strategy in April of 2021, we set out to accomplish 3 main objectives: transform Genco into a low leverage, high dividend company, maintained significant flexibility to grow the fleet and pay a sizable quarterly dividend through the cycles based on an established dividend formula.

5 years later, we are pleased to have made notable success executing against each of these objectives. Among our accomplishments, we fortified our balance sheet to effectively operate in diverse rate environments, provided shareholders with sizable returns and invested in our fleet to further expand our earnings power and dividend capacity. Specifically, over this time, we have invested $347 million in high-quality modern vessels distributed $270 million in dividends to shareholders and paid down $249 million of debt.

Moving to Slide 6. We continue to advance our value strategy in the fourth quarter. Ending the year with strong momentum going into the first quarter. We declared our 26th consecutive dividend, representing an annualized yield of 9% on our current share price, our highest dividend level since Q4 2022 and the longest period of uninterrupted dividends in our dry bulk peer group. Heading into the fourth quarter, we took important steps to maximize fleet-wide utilization in a strong freight rate environment with the completion of 90% of our 2025 drydocking schedule and delivery of a high-quality modern Capesize vessel early in the quarter.

During the fourth quarter, these proactive measures enabled us to generate the highest levels of both EBITDA and TCE for the year at $42 million and $20,064 per day, respectively. Additionally, in November, we agreed to purchase 2 2020 built high-quality premium earning Newcastlemax vessels that we expect to take delivery of in March. Importantly, these well-timed investments further increase our operating leverage and expand our presence in a key sector with compelling supply and demand fundamentals. We also ended the fourth quarter with an industry low net loan to value of 12%.

As depicted on Slide 7, we achieved multiyear highs across key metrics in Q4 and and have significant momentum going into Q1 2026, building on our success generating TCE and EBITDA levels that were the highest in 3 years estimated Q1 TCE of approximately $18,000 per day for 80% of the quarter represents a strong start to the year in what is typically a seasonally slower period. Notably, estimated Q1 2026 TCE is our highest Q1 level since 2024 and over 50% above Q1 2025 levels. Based on our firm fixtures to date and the continued execution of our value strategy, we expect a higher dividend in Q1 on a year-over-year basis.

Turning to Slide 8. Genco has 1 of the lowest cash flow breakeven rates in our peer group. This key differentiator is directly related to our industry loan net loan-to-value as well as not having mandatory debt amortization, which further reduces our cash flow breakeven rate compared to peers. As our TCE increased from approximately $12,000 per day in Q1 2025 to $20,000 per day in Q4, our overall profitability and dividend capacity increased as well. As can be seen from the chart, our estimated Q1 TCE also compares favorably to our low breakeven rate on a cash basis.

Turning to Slide 9. Through the execution of our value strategy, Genco has paid compelling quarterly dividends to shareholders across cycles. Notably, we have paid 26 consecutive quarterly dividends to shareholders in diverse rate environments, having distributed between $0.15 and $0.50 a quarter over the past 3 years. In addition to the Q4 dividend being the highest since Q4 2022, it also represents a 233% increase over the Q3 2025 dividend. Supporting our dividend and complementing our low breakeven rate is our balanced approach to fleet composition, which we present on Slide 10.

In addition to the 2 Newcastlemax vessels we agreed to acquire, we own a fleet of 17 Capesize vessels as well as 15 Ultramax and 11 Supramax vessels. We continue to balance the high beta and upside potential of the Capesize sector, along with steadier earnings stream of our minor bulk ships. On a vessel ownership basis, our splits are 40% gates and 60% Ultrasuprus. However, when viewed on a net revenue basis over the last 2 years, we are 50% weighted towards Capesize vessels.

With just 20% of our overall fleet fixed for the year, Genco is uniquely positioned relative to some in the peer group the benefit from a strengthening freight rate environment, providing us with meaningful upside exposure to the current strong spot market. Our high operating leverage is balanced against our low financial leverage which is shown on Slide 11.

This provides Genco with significant financial flexibility in various freight market conditions. In strong markets, Genco generates meaningful cash flow with its industry low breakeven rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver availability, allow the company to take advantage of countercyclical growth opportunities.

Specifically, as demonstrated on Slide 12, Genco has taken advantage of our strong liquidity position for opportunistic acquisitions of modern high-specification premium earning vessels at attractive values including 6 Capesize and Newcastlemax vessels since 2023. I emphasize the positioning of the fleet today is not an artifact of history or chance. It is the result of the steady execution of our plan to optimize the fleet, which began in 2023. At that time, the management team and the Board formed a specific strategy focused on the compelling supply and demand fundamentals of the Capesize sector, which had the lowest order book among the major dry bulk sectors with long-haul ton mile expansion on the horizon.

Since 2023, our strategy has been built upon this thesis. And over this time, Capesize vessels have been the best-performing dry bulk class from an earnings and an asset value appreciation perspective. Notably, our Capesize vessels have increased in value by nearly $40 million despite several years of age depreciation. Furthermore, we have generated an IRR of over 30% on these ships since acquisition. In 2025 alone, we agreed to purchase 3 2020 built Capesize and Newcastlemax vessels growing our pro forma fleet by 20% and on an asset value basis and significantly increasing our earnings and dividend capacity in 2026 and beyond while reducing the average age of our fleet.

On Slide 13, both Genco's pro forma 45-vessel fleet in Cape fleet, provide significant operating leverage for shareholders. Every $1,000 fleet-wide increase in TCE equates to $16 million of incremental annualized EBITDA or $0.37 per share. Furthermore, our 19 Newcastlemax and Capesize vessels every $5,000 increase equates to $34 million or $0.77 per share of incremental earnings and dividend capacity. Our fleet strategy has been very successful since we implemented it in 2023. And as you see in these figures, has well positioned the company to continue creating shareholder value going forward.

Lastly, turning to Slide 14. Genco continues to prioritize strong corporate governance, which is another key differentiator for the company relative to the peer group. Specifically, Genco is the largest U.S. headquartered dry bulk shipping company, and we are also a U.S. public company subject to robust SEC and New York Stock Exchange disclosure regime. We are also the only listed dry bulk shipping company with no related party transactions. We have a diverse and independent Board of Directors and observed U.S. public company governance best practices such as having a lead independent director. We provide detailed disclosures on company performance and initiatives while striving to provide a clear and thoughtful strategy to shareholders as we execute our disciplined approach to capital allocation.

We are also consistently ranked in the top quartile on corporate governance among public shipping companies by Webber Research. Our corporate governance is a core part of Genco's identity and reflects our Board's commitment to upholding the highest standards of fiduciary duty and governance excellence.

I will now turn the call over to Peter Allen, our Chief Financial Officer.

Thank you, John. On Slide 16 through 18, we highlight our fourth quarter financial results. Genco recorded net income of $15.4 million or $0.35 basic and diluted net earnings per share. Adjusted net income is $17.3 million or $0.40 and $0.39 basic and diluted earnings per share, excluding our operating expense of $1.9 million for shareholder-related expenses. Adjusted EBITDA for Q4 totaled $42 million, an increase of 94% and as compared to Q3 and bringing the full year 2025 total to $85.9 million. Our cash and debt positions as of December 31, 2025, were $55.5 million and $200 million, respectively. Our undrawn revolver availability at year-end was $400 million.

During March of 2026, we expect to take delivery of 2 2020 built Newcastlemax vessels, we have approximately $131 million of remaining CapEx for these acquisitions, which we expect to fund primarily through proceeds from our revolver. As part of our existing $600 million credit facility, we plan to utilize the accordion feature for $80 million and pledge these 2 vessels as collateral. This would increase our pro forma borrowing capacity to $680 million in total with expected post-acquisition debt outstanding of $330 million and undrawn borrowing capacity of $350 million. Our lenders participating in this revolving credit facility upsizing, include Nordea, DNB, ING and SEB.

With our full revolving credit facility structure, we will 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 have demonstrated in recent years.

Moving to Slide 19, we highlight the sequential increases in our quarterly EBITDA throughout the year, culminating in a strong fourth quarter performance and an EBITDA increase of 94% from Q3 2025 and also the highest quarterly level since 2022.

As outlined on Slide 20, we believe that Genco is in a highly advantageous position with the current fleet of 43 high-quality modern dry bulk vessels, our significant operating leverage, combined with low financial leverage, a sub-$10,000 cash flow breakeven rate and $400 million of undrawn revolver availability collectively provide a compelling risk-reward balance for shareholders. Furthermore, we continue to reward shareholders through our quarterly dividend policy, which targets a distribution based on 100% of operating cash flow less a voluntary reserve as described on Slide 21.

For Q4, our Board of Directors declared a $0.50 per share dividend based on operating cash flow of $41 million and a voluntary quarterly reserve of $19.5 million, marking our highest payout in 3 years.

Looking ahead to Q1 2026, we currently have 80% of owned available days fixed at approximately $18,000 per day as compared to our anticipated cash flow breakeven rate, excluding drydocking related CapEx of approximately $9,715 per vessel per day. Importantly, Q1 2026 TCE is on pace to increase over 50% year-over-year. On the expense side, we anticipate vessel operating expense to marginally increase in Q1 and compared to Q4 levels due to the timing of crew-related expenses. However, we expect vessel OpEx to revert to levels similar to Q4 moving forward during the year.

I will now turn the call over to Michael Orr, our dry bulk market analyst, to discuss the current industry landscape.

Thank you, Peter. Beginning on Slide 23. The dry bulk freight rate environment meaningfully improved in the second half of 2025 and reaching its height in Q4, led by the Capesize sector. The Baltic Capesize Index averaged nearly $29,000 per day in Q4 and approached $45,000 per day in early December, driven by all-time high Brazilian iron ore shipments. Supramax rates were also firm, supported by augmented coal shipments to China as well as firm grain exports.

Turning to Slide 24. China reported strong levels of iron ore imports in recent months led by increased seaborne supplies together with the restocking of iron ore inventories. Specifically, the country's iron ore imports in Q4 rose by 7% year-over-year. And for the second half of the year, China's iron ore imports rose by 12% and as compared to first half levels. On the seaborne supply side, we saw Brazilian iron ore shipments rise by 26% second half over first half.

Turning to Slide 25, we highlight the long-haul iron ore and oxide trade growth expected from Brazil and West Africa in the coming years. Given the scale of the projects, these volumes could absorb potentially over 200 Capesize vessels which is more than the current Capesize new building order book. Supply constraints in Capesize newbuilding activity combined with added long-haul trading distances are 2 key catalysts for the sector. We expect West African iron ore flows to ramp up in 2026 and after per shipments were made in 2025.

In terms of the grain tray, as detailed on Slide 26, China has reported fulfilled their 12 million-ton quota from the U.S. as part of the October agreement. However, further reports highlight additional purchase of up to 8 million tons of U.S. soybeans in the coming months. With the onset of -- American brain season at the end of Q1, the tension is likely to shift to Brazilian soybean volumes.

Regarding the supply side outlined on Slide 27. Net fee growth in 2025 was 3%, slip between 1.5% net growth for Capesizes and 4% to 5% net fleet growth for Panamaxes down to Handysize. Importantly, 2025 marked the fourth straight year of sub-3% net fleet growth for Capes, which is the first time on record at this lower level as it materialized for this line.

Additionally, as scrapping has remained low in recent years, the age of the global fleet has risen to nearly 13 years old, the highest average age of the global dry bulk fleet since 2010. This has increased the pool of potential scrap and candidates that 11% of the on-the-water fleet is 20 years or older, which is nearly identical to the global dry bulk order book as a percentage of the fleet of 12%. This implies net replacement of tonnage over time as opposed to any material net fleet growth. While we expect volatility in the freight market to persist, the foundation of a low supply growth picture provides a solid basis for our positive view of the dry bulk market going forward.

I'll now turn the call back over to John to conclude the call.

Thank you, Michael. Turning to Slide 29. We have made outstanding progress, executing our comprehensive value strategy, providing shareholders with sizable returns and investing in our fleet to further expand Genco's earnings power. With our high quality and modern fleet, leading commercial operating platform, strong balance sheet and significant operating leverage, we remain well positioned to create meaningful value for shareholders in 2026 and beyond. As we progress through the year, our unrelenting focus will be on continued capital return for shareholders, further growing our high-specification premium earning fleet as well as maintaining our industry-leading leverage profile and strong corporate governance standards.

Before we turn the call over to Q&A, I'd like to briefly address our announcements from last month regarding a non-mining indicative proposal we received to acquire all outstanding shares of Genco. As detailed in our previous press releases, our Board thoroughly reviewed the proposal with the assistance of external advisers and determined the proposal significantly undervalued Genco.

As part of its review, our Board did determine that a differently structured transaction, 1 organized as an acquisition by Genco would create value for all shareholders. We sought to engage privately on an alternative structure, but our offer to engage was turned down. Our management and Board are focused solely on delivering maximum value for shareholders.

With that said, the purpose of today's call is to discuss our fourth quarter and full year 2025 results and the opportunities ahead for Genco the company is performing very well today, and we are very excited and confident in the future. We ask that you please keep your questions focused on results, performance and industry trends. Thank you for that in advance.

This concludes our presentation, and we would now be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Omar Nokta with Clarksons.

Yes, the dry bulk market ended '25 on a pretty strong note and as shown in our results, obviously. And so far this year, things are progressing quite nicely you've upsized your facility by the $80 million and you're going to take delivery of those 2 Newcastlemax next month. Obviously, you have plenty of flexibility. Asset values look like they're on the rise and -- or at least have risen a good amount here over the past few months. Where does that leave Genco kind of strategically? I know you touched on this a bit at the end of your comments, John, but how are you thinking about Jinko strategically capital allocation as we look ahead here for the rest of '26?

Look, in terms of the capital allocation, dividends and the value strategy is top of the list. We will endeavor to continue to cycle out some of the older vessels and redeploy those funds on more modern fuel-efficient ships such as we've done such as we did last year. So I don't think much has changed. But you're correct, values continue to move up. We're actually in a situation where they're moving up almost weekly at this point, which is obviously very positive basis the the timing of the acquisitions that we did last year. But look, it makes newer tons more expensive, but it also makes our older tonnage more firm in what we can get. So dividends and value strategy is the first -- and as part of that value strategy, we have a fleet replacement and growth element.

And maybe just as a follow-up, then you -- as we referenced, asset values having risen, I wanted to ask you how are you thinking about the term charter markets? Or what are you seeing there as we kind of think about it from, say, the crude tank is just as what we've seen there, VLCC values have risen and there's been a lot of charter interest. Are you seeing something similar in the cape market -- and how do you feel about deploying ships on term charter today?

I think -- well, there has not been as much liquidity in the dry ball TC market, as you just mentioned in the tanker sector. I think a lot of that has to do with the optimism as we look at the supply side and demand growth for the rest of 2026, but then certainly going into as West African iron ore really starts to ramp up. So I think it's more of a function of, I believe, owners not wanting to lock in currently because of the optimism, again, low supply demand growth coming.

Having said that, there have definitely been some 1-, 3-year deals done. I think there was a 3-year deal, done, on a new -- at least 1, maybe 2 Newcastlemax from an iron ore major excess $30,000 a day. Those are firm rates. And clearly, the market is indicating bullish staffs and positive sentiment. You know that we, from time to time, have taken exposure off the table, particularly in the Capesize sector. We really do look at it as a portfolio approach. But we spend a lot of time and analysis looking at whether we want to lock in and there could easily come a time this year where maybe we take some exposure off the table. But for the time being, we're we're going to continue to trade spot. And I think it's 1 of the unique things about Genco. We really only have 20% of this year's fixed. So with a rising market, we are fully exposed 80% exposed to that positive market and sentiment.

Your next question comes from the line of Liam Burke with B. Riley Securities

John, in the past discussions on asset acquisitions, you always like the flexibility of the Capes versus the Newcastlemax. Has there anything changed in trading patterns that makes you favor more of the Ultramaxes vis-a-vis a Cape?

Sorry, the Ultramaxes or the Newcastlemaxes.?

Newcastlemax, excuse me.

Yes. No, okay. Yes. No, I wouldn't say anything has drastically changed, though certainly, on the Brazilian trade, those Newcastlemax have always been filled up to their capacity. Over the last several years that may have not been true with Australia loadings, but that's really changed. And we certainly have seen the bauxite trade develop as well as out of West Africa. So that bauxite can go on Newcastlemax. So we like the news we bought. We like our Capesize fleet. The Newcastlemax that we bought are no doubt premium earning assets with very high specifications and low fuel consumption. I think Bulkers 2020 did a fantastic job ordering and kitting out those ships. So we're very happy to be taking delivery of those. But we're going to continue to look at Capes and Newcastlemax. And that's where I think you'll see growth for us, and we'll stay steady with our Ultra Supramax fleet probably do a little bit of fleet renewal on the supers.

Okay. Just as a follow-on, you just mentioned the supers. Is there any opportunity? Or is there any interest in adding to that part of the fleet when you're discussing renewal? Or is it just sell the older vessels on elevated asset values?

It certainly would be selling older vessels. Again, we're focused on the larger shifts in terms of redeploying capital to -- I'm not going to rule out that we wouldn't buy an Ultramax. I mean that market is doing pretty well. As you know, these are all correlated. It's just the Cape has certainly more upside potential based on higher beta and volatility. And if you look at, again, the supply side on the Capes is the most favorable in the dry bulk sector and demand growth that is coming is Newcastlemax and Capesize oriented.

Your next question comes from the line of Chris Robertson with Deutsche Bank Securities Inc.

John, just on the back of Omar and Liam's questions around the S&P market. I just wanted to touch on -- last year, it was reported that a large number of Chinese buyers of dry bulk vessels were active in the market. I was wondering if you could comment, is that trend still continuing? And where do you see kind of the activity being driven in the S&P market for potential asset sales?

Yes. I think the Chinese continue to be very active. I would put them as the #1 buyer right now, particularly of older assets, not on the -- not necessarily on the modern eco side, but the older assets, they are very active on. China is the largest importer of dry bulk commodities, right? So seeing the Chinese go long tonnage, I think that's a positive yes, a vote of confidence in the market going forward. You've -- and you've seen it across the board. I mean they certainly have been active in older tapes, but they've also been buying some of the older Supramaxes as well. And I'm sure they see the same thing that we see again, the low supply growth on the cases, the age of the fleet. And I think most importantly, there are additional cargo volumes that are going to be coming both on the bauxite side, but more importantly, on the iron ore front out of West Africa.

Got it. Makes sense. My second question is just related to kind of reevaluating the geopolitical environment and the disruptions that we've seen across various shipping segments over the last few years. Where do things stand in terms of the disruption levels related to dry bulk -- and let's say, if there was a reversal, whether it's the Red Sea or Russia, Ukraine, et cetera, where do you see kind of puts and takes around some of those themes?

Well, I mean, let's take the Russian Ukraine situation. If there is a conclusion of that and the Black Sea reopens fully, clearly, that's potential for more grains and to a smaller degree, iron ore. So that would be a net positive for dry bulk shipping. In terms of the Red Sea, we're well aware that there are some container companies that have started operating through Suez and the Red Sea we're still cautious and we're still not putting our ships through that area. But having said that, it's maybe 1% to 2% max in terms of number of ships that would actually go through the Red Sea. So deviating around Africa is it's not a big factor in dry bulk. It certainly isn't containers, but it's not for dry bulk.

Your next question comes from the line of Sherif Elmaghrabi with BTIG.

A couple of questions on operating costs here. It looks like the cost of charter higher in Q4 roughly doubled sequentially. So I'm wondering, does the current strength in spot rates change, how you think about augmenting your fleet with outside tonnage?

Well, -- in terms of -- again, in terms of growth, we're definitely focused on the larger ships. And hopefully, this is going to be answering your question. If it's not, please feel free to clarify. But when you look at where rates have really moved up, it is in the larger ships, which, again, that's been our strategy of growing that fleet since 2023. And -- and you can definitely see that in the revenue side. It's driven quite a bit of the upside in revenues. Did that answer your question?

I was asking about the chartered in fleet.

Yes. Sure, in terms of the chartering fleet, that is a very opportunistic part of the business. A lot of the times, the guys will take forward cargoes. And if it makes more sense in the moment to to charter in a vessel to create an arbitrage, they'll do that. And that's something that the guys are -- have been really good over the years of assessing whether they can make whether it's 100,000 plus on a particular cargo. A lot of the times in the first quarter, you'll see that because we'll look forward cargoes, the market will come off relative to Q4, and we'll be able to get that arm. But it's a very opportunistic play. Some quarters, you'll see higher than others. But certainly, in a strengthening market being on the longer side and having the spot focus that we have is certainly where you want to be right now?

What you're not going to see us do is speculative long-term time charter-ins. It will either be short term, backed up by a piece of cargo as Pete said, but we're not going to adjust go make it on chartering a Capesize or an Ultramax for that matter long term into the company. That's not part of the strategy.

Okay. Yes, that's very clear. And then just looking back at the presentation, Slide 8, highlights your remarkably stable cash breakeven which has remained below 10,000 days for a few years now. So is there anything you're doing, obviously, decide to keep leverage low to manage breakeven costs while some other owners have seen operating cost inflation.

We've seen operating cost inflation. There's no doubt, particularly on the crew side and when you look at spares and stores just from an inflationary standpoint. We certainly manage to a budget that we set every year, though I want to emphasize, particularly with the larger ships, the bar keeps getting raised calling Australia. So we need to make sure that we are keeping our ships well maintained so that we do not have any issues trading anywhere in the world. So there is a little bit of inflation. We certainly manage and pay very close attention to OpEx -- but we're not going to be penny-wise town foolish.

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

Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Third Quarter 2025 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today's conference call. That presentation can be obtained from Genco's website at www.gencoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.gencoshipping.com.

[Operator Instructions] A webcast replay will also be available via the link provided in today's press release as well as the company's website.

At this time, I will now turn the conference over to the company. Please go ahead.

Good morning. Before we begin our presentation, I note that in this conference call, we 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 and terms of similar meaning in connection with the discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on management's current expectations and observations. For a discussion of factors that could cause results to differ, please see the company's press release that was issued yesterday, the materials relating to this call posted on the company's website and the company's filings with the Securities and Exchange Commission, including, without limitation, the company's annual report on Form 10-K for the year ended December 31, 2024, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC.

At this time, I'd like to introduce John Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited.

Good morning, everyone. Welcome to Genco's third quarter 2025 conference call. I will begin today's call by reviewing our Q3 2025 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 5. During the third quarter, we continued to advance our value strategy, prioritizing returning cash to shareholders through market cycles and taking additional steps to further expand our earnings power for the benefit of shareholders. For the third quarter, we declared a dividend of $0.15 per share despite an intensive drydocking quarter, extending our track record of 25 quarters of consecutive dividends and marking the longest period of uninterrupted dividends in our drybulk peer group. Including the Q3 dividend, Genco has declared $7.065 in dividends per share, representing 43% of our current share price. In terms of Genco's ability to capitalize on a strong freight market, we remain optimistic for the remainder of 2025 and into 2026.

By the start of Q4, we have completed 90% of our drydocking schedule for the year, which positions us well to maximize utilization in what has been a strong Q4 to date. Specifically, our Q4 TCE is currently estimated to be up more than 25% to over $20,000 per day on a fleet-wide basis for 72% of the quarter with strong freight rates being achieved by both our Capesize vessels at approximately $27,000 per day as well as our minor bulk fleet at approximately $16,000 per day. These rates compare favorably to our Q4 cash flow breakeven rate, which is estimated to be approximately $10,000 per day and represents an industry low breakeven rate.

In October, we took delivery of a 2020-built Capesize vessel, adding a modern high-specification vessel to our fleet during a seasonally strong point in the freight market. Notably, our first fixture on the vessel following delivery was booked for $29,000 per day net over 50 days, immediately generating earnings while also derisking the investment. This vessel acquisition represents the fourth high-specification fuel-efficient Capesize vessel that Genco has agreed to acquire since Q4 of 2023, further expanding the company's presence in a key sector with compelling supply and demand fundamentals.

Moving on to Slide 6. When we implemented our value strategy in April 2021, we set out to accomplish 3 main objectives: transfer Genco into a low leverage, high dividend company, maintain significant flexibility for growth and pay a quarterly dividend based on cash flows less a voluntary quarterly reserve. Four years later, we are pleased to have made progress on each of these objectives. We have implemented a well-balanced capital allocation strategy, successfully capitalized on compelling vessel acquisitions, provided shareholders with uninterrupted dividends and opportunistically paid down debt. Specifically, over the past 4 years, we have invested nearly $347 million in high-quality modern vessels, distributed $264 million in dividends to shareholders and paid down $279 million in debt.

Collectively, these actions have enabled Genco to establish a balance sheet that is built to effectively operate in a volatile market, create a highly differentiated risk/reward balance and increase the earnings power of the company to continue to pay regular quarterly dividends and create enduring long-term shareholder value.

On Page 7, we highlight our fleet composition. We currently 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% Ultras/Supras. However, when we view these splits on an asset value or net revenue basis, we are over 50% weighted towards the Capesize vessels, providing us significant operating leverage.

Turning to Slide 8. With an industry low net loan-to-value ratio, a low cash flow breakeven rate and $430 million 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 dry bulk peer group. Genco has the scale and operating leverage to benefit from a rising market while also having significant access to capital to take advantage of opportunities if they were to arise as we've demonstrated throughout the cycle. Going forward, we remain focused on executing the 3 pillars of our value strategy, dividends, deleveraging and growth. Importantly, as we progress through the fourth quarter and position Genco for 2026, we do so with the majority of our drydock schedule complete, a further reduced cash flow breakeven level and significant operating leverage to capitalize on improving drybulk fundamentals.

Lastly, turning to Page 9. Genco continues to prioritize strong corporate governance, which we believe is another key differentiator for the company relevant to the peer group. Specifically, Genco is the only listed drybulk shipping company with no related party transaction. 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.

I will now turn the call over to Peter Allen, our Chief Financial Officer.

Thank you, John. On Slides 11 through 14, we highlight our third quarter financial results. Genco recorded a net loss of $1.1 million or $0.02 basic and diluted net loss per share. Adjusted net loss was $0.01 per share, excluding a loss on debt extinguishment of $0.7 million. Adjusted EBITDA for Q3 totaled $21.7 million, an increase of 52% as compared to Q2. Our cash position as of September 30 was $90 million, which increased due to a drawdown of debt in the third quarter for the purchase of the Genco Courageous, which delivered in the fourth quarter. Our debt outstanding also increased to $170 million due to this purchase. The final installment representing 90% of the purchase price or $57.2 million was funded in October.

Overall, since 2021, we have reduced our cash -- our debt balance from $450 million down to the current $170 million level, a reduction of 62%. Pro forma for this acquisition, our net loan-to-value is approximately 12%. Furthermore, our undrawn revolver availability is currently $430 million. With our full revolving credit facility 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 our most recent acquisition of a high-specification fuel-efficient Capesize vessel.

Moving to Slide 15, we highlight our quarterly dividend policy, which targets a distribution based on 100% of operating cash flow less a voluntary reserve. For Q3, our Board of Directors declared a $0.15 per share dividend based on operating cash flow of approximately $21.5 million and a voluntary quarterly reserve of $14.9 million. Notably, for the third quarter of 2025, our dividend formula, including a voluntary reserve of $19.5 million, would have produced a $0.05 per share dividend. However, on management's recommendation, the Board chose to reduce the voluntary reserve to $14.9 million for the quarter, resulting in the $0.15 per share dividend. This highlights our commitment to regular shareholder returns as well as our favorable view on the long-term fundamentals of the drybulk industry and the seasonally stronger freight rate environment that has emerged in the second half of this year.

Looking ahead to Q4 2025, we currently have 72% of owned available days fixed at approximately $20,000 per day as compared to our anticipated cash flow breakeven rate, excluding drydocking-related CapEx of approximately $9,000 per vessel per day. Our TCE has increased each quarter of this year and Q4 TCE estimates are currently projected to not only be the highest TCE of the year, but the highest quarterly level since 2022, highlighting the freight rate improvement seen in the second half of this year thus far.

Notably, this improvement has been led by our Capesize vessels, which in Q4 to date are currently fixed at approximately $27,000 per day, an increase of nearly 30% from $21,000 per day in Q3, further highlighting the significant operating leverage of the sector. We note that Genco, like much of the industry, has a large-scale drydocking program in 2025. Through the first 9 months of the year, we have completed 16 of 19 scheduled drydockings with one more completed in early November. This resulted in Genco completing 90% of our full year 2025 drydockings with only 2 drydockings remaining as we look to maximize utilization in Q4. We believe Genco's high operating leverage as displayed in the second half of this year, combined with our low financial leverage, creates a solid risk/reward balance for shareholders while providing Genco with increased optionality for the company.

I will now turn the call over to Michael Orr, our drybulk market analyst, to discuss industry fundamentals.

Thank you, Peter. Beginning on Slide 17, the drybulk freight rate environment meaningfully improved in Q3 and into Q4 to date as compared to earlier in the year levels. Capesize rates were driven by all-time high Brazilian iron ore shipments during the quarter, including exceeding 40 million tons of both July and August for the first time on record. Brazilian iron ore miner, Vale also reported their highest quarterly production since 2018. Supramax rates were led by augmented coal shipments to China as the country's domestic coal output declined during a period of strong demand. Furthermore, increased South American grain shipments were also supportive for the smaller class vessels. These factors resulted in the Baltic Capesize Index and Baltic Supramax Index to average approximately $26,000 and $14,000 per day, respectively, in Q3.

Turning to Page 18, we point to China's strong level of iron ore imports in recent months, led by increased seaborne supplies together with the restocking of iron ore inventories. Specifically, the country's iron ore imports in Q3 rose by 6% year-over-year after a softer first half. While China's iron ore stockpiles were drawn down as much as 8% in the year-to-date, stockpiles have now increased by 6% off of the [ 2025 lows ]. China's steel production has decreased year-over-year by 3%, while China continues to export over 10% of the steel produces mostly going to other Asian countries.

Turning to Page 19, we highlight the long-haul iron ore and bauxite trade growth expected from Brazil and West Africa in the coming years. While the growth this year is expected to be marginal with first shipments likely to materialize in November, there are significant growth volumes expected in the coming years. Given the scale of the project, these volumes could absorb potentially over 200 Capesize vessels, which is more than the current Capesize newbuilding order book. Supply constraints and Capesize newbuilding activity combined with added long-haul train distances are 2 key catalysts for the sector.

In terms of the grain trade as detailed on Page 20, China has reportedly purchased at least 4 U.S. soybean cargoes following the meeting of President Trump and President [ Xi ] last week. China has agreed to purchase a minimum of 25 million tons of soybeans per year from the U.S. over the next 3 years. Prior to the summit, China had not purchased any U.S. soybean cargoes as they had ramped up purchases of Brazilian agricultural products for much of the year.

Regarding the supply side outlined on Slide 21, net fleet growth in the year-to-date is 3% on an annualized basis, split between 1% net fleet growth for Capesizes and 4% to 5% net fleet growth for Panamaxes down to Handysize. The Capesize segment continues to have the smallest order book among the drybulk sectors at 9% of the fleet. Additionally, as scrapping has remained low in recent years, the age of the global fleet has risen to nearly 13 years old, the highest average age of the global drybulk fleet since 2010. This has increased the pool of potential scrapping candidates as over 10% of the on-the-water fleet is 20 years or older, which is identical to the global drybulk order book as a percentage of the fleet.

This implies net replacement of tonnage over time as opposed to any material net fleet growth. While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for our constructive view of the drybulk market going forward.

This concludes our presentation, and we would now be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Omar Nokta with Jefferies.

Just wanted to get maybe just a sense, I know you talked about it a bit, but just sort of in terms of what we're seeing in the freight market, it looks like we've been building on this improvement that was -- you first were talking about back in August when you reported 2Q results. Capes have gotten stronger. We've seen the Panamax and Supramax segments have all started lifting here into year-end. I just wanted to get a sense from your perspective, is this a seasonality thing? Or is this something much bigger? Is it Simandou? How would you characterize sort of this improvement that we've just been continuing to see here in the second half?

Yes, Omar. So I think it's sort of all of the above in the sense that, yes, it's seasonal. We typically have a late Q3, Q4 stronger freight market. But this time around, we're also seeing record Brazilian iron ore exports in the second half. That obviously has been very positive because of the long-haul ton-mile creation nature of that. And we've had an increase on the coal trades. China domestic demand has increased when domestic coal production actually has gone down. There's been a strong grain trade driven by South America on the minor bulk side, a lot of soybeans being bought by the Chinese really in record quantities at this point. And then we've also had the USTR with the self-sanctioning, which really reduced some of the tonnage count in the Atlantic, which we've been able to actually take full advantage of.

Yes. So it seems like, as you said, just a handful of things coming together. And then maybe just on that -- as a follow-up, just on that final point you brought up the USTR, the China fees that went into effect briefly against U.S. shipping. Those have now been postponed for 12 months. Just want to get a sense, how did that affect things, I guess, from your view in terms of how it affected, say, drybulk rates, that the Chinese fees? And then how did it affect Genco?

So from affecting revenues and affecting Genco, it's completely immaterial. Affecting the management team, we, as I like to say, had a lost weekend, that Columbus Day weekend because we spent an inordinate amount of time diverting ships. We had 4 ships that were going in. And so -- but we were able to successfully divert those vessels to different discharge ports. And then, of course, Monday of Columbus Day weekend, the Chinese clarified the port fee side of it and it will allow U.S. companies to come in with Chinese-built vessels and not have any port fees.

Of course, 80% of our fleet is Chinese-built. So that was -- that took a lot of risk off the table. And we -- even if those port fees had remained in place, we're really talking about 7 to 8 Capesize vessels that we had already worked out a way to trade those ships at the same earnings level as they're trading now. Good news is all of that's been taken off the table for at least a year, but we're well prepared if that comes back into effect for some reason.

Okay. Yes. So if indeed it does come back in 12 months' time, it seems like it's a fairly negligible impact on Genco.

It's just a change of strategy a little bit. I mean our minor bulks are trading very much so in the Atlantic anyway and not doing a lot of Chinese business. And on the Capes, as I said, there are plenty of other trades on the Capes that the 7 or 8 that we have that are Japanese and South Korean-built, we'll find alternative employment without any material impact on the company.

Your next question comes from the line of Liam Burke with B. Riley Securities.

John, you've been investing in the Capesize on the investments. But do you have a look at the non-Capesize? Or is it just the asset coming online that's attractive and gives you the proper return?

Yes. So look, we have a strong minor bulk fleet. We continue to operate that, and we have no plans to divest out of minor bulks. We have quite a commercial operating platform there. But when we look at the market as a whole, and we look at the low order book, which Michael Orr pointed out at a little more than 10% versus ships that are 20 years and older overall basically match that number.

So there is no fleet growth that is anticipated at least now for the drybulk industry as a whole. The Capesize sector has better supply dynamics and being much lower than on the minor bulk side. And when we couple that with the demand growth that we see coming, particularly out of West Africa, but also I think Vale is going to have some growth as well, and there'll be some further growth on the bauxite trade. But that Simandou and the tonnage that is really going to ramp up, we think, in the second half of next year also creates demand growth. So low supply and demand growth, that bodes well for the sector, and that's why we're focused in terms of acquisitions more on the larger vessels than the midsize.

Great. With your fleet renewal, your debt balance has moved up to finance the asset acquisitions. Outside of fleet renewal, do you anticipate accelerating that debt reduction as you're seeing strong cash flows on the higher rates?

Look, we have a dividend formula in place. So we will definitely be sticking to that. We have a reserve of a little less than $20 million a quarter that's built into that. We think that is sufficient at this point. So I see us continuing to do fleet renewal. And as I said, we here before, we're concentrated right now anyway on the larger vessels.

[Operator Instructions] Your next question comes from the line of Michael Mathison with [ Sidoti ].

Congratulations on the demand growth. I just had a question regarding Chinese demand for coal. You mentioned that their demand is up. Have you seen any signs of switching the source of their imports from the U.S. to Brazil or other providers?

Yes. I think because of the USTR, we've seen less -- a lot less coal come out of the U.S., and it has come from other areas. From a ton-mile standpoint, I would say it's been fairly neutral, but we do expect U.S. coal exports to tick up in the next 6 months because of USTR going away. And I think the -- I think there's also a push in the U.S. right now by the current administration to beef up coal export. So we do expect to see some growth again in that area.

Your final question comes from the line of Poe Fratt with AGP, Alliance Global Partners.

John, you -- on Page 9 of your presentation, you highlight your corporate governance and how it's very strong and the best in the industry. Can you just give us a reason for adopting a poison pill in early October?

Yes. I mean I think it's -- we had a shareholder that quickly accumulated a little less than a 15% position. And so as all poison pills, we want to do what's right for all shareholders. And so what that means is that we can slow things down so that we can make sure that if there is something to be done, that again, we can get the best transaction for shareholders. And we also -- I'll add, we did it in the most shareholder-friendly way in that we put it in place for just less than a year, and we spent a lot of time on structuring that, again, to be as shareholder-friendly as we could.

Would you categorize the move, John, as preemptive? Or was it in response to signals from the largest shareholder?

No, I would characterize it only to the speed in which the 15% was acquired. And again, if there was any process, you want to slow it down. And again, the idea is to maximize value for all shareholders, and that can be accomplished by putting that in place.

There are no further questions at this time. This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.