Sharif Al-Mograbi

Sharif Al-Mograbi inquired about the sequential doubling of charter hire costs in Q4 and how it influences Genco's strategy for augmenting its fleet with outside tonnage. He also asked how Genco maintains its stable cash break-even rate below $10,000 per day despite observed operating cost inflation.

Answer

John C. Wobensmith, Chairman and CEO, and Peter Allen, CFO of Genco Shipping & Trading Limited, explained that the chartered-in fleet is utilized opportunistically for arbitrage on forward cargoes, not for speculative long-term charters. They reiterated a focus on larger ships for fleet growth. Regarding the stable cash break-even rate, Mr. Wobensmith acknowledged operating cost inflation, particularly for crew, spares, and stores. However, he emphasized Genco's commitment to managing to budget and ensuring ships are well-maintained, balancing cost control with operational excellence.

Sharif Al-Mograbi asked about the sequential doubling of charter hire costs in Q4 and whether current strong spot rates influence Genco's strategy for augmenting its fleet with chartered-in tonnage. He also questioned how Genco maintains its stable cash break-even rate below $10,000/day amidst industry-wide operating cost inflation.

Answer

Peter Allen, CFO of Genco Shipping & Trading Limited, explained that chartered-in fleet activity is opportunistic, primarily used to create arbitrage on forward cargoes, especially in Q1 when the market may soften from Q4 levels. John C. Wobensmith, Chairman and CEO, emphasized that Genco does not engage in speculative long-term time charters. Regarding break-even costs, Mr. Wobensmith acknowledged operating cost inflation, particularly for crew, spares, and stores. He stated that Genco manages to a strict budget but prioritizes maintaining its ships to high standards for global trading, avoiding being 'penny-wise, pound-foolish' to ensure operational integrity.