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GENCO SHIPPING & TRADING LTD (GNK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was soft on reported GAAP with a net loss and negative margins, but set up improved into Q3 with stronger TCE to date, a 24th consecutive dividend, and expanded liquidity via a new $600M revolver .
  • EPS: GAAP diluted EPS was -$0.16; adjusted EPS was -$0.14; Wall Street’s S&P Global consensus was -$0.13, a slight miss; revenue materially beat consensus ($80.9M vs $49.4M) and EBITDA was in line/slightly above ($14.5M vs $14.4M) *.
  • Guidance signals: management reduced the voluntary reserve to pay a $0.15 dividend in Q2; Q3 TCE to date of $15,926/day (70% fixed) and breakeven guidance near ~$8,900/day point to better profitability 2H25; DVOE budget $6,375/day for Q3 .
  • Strategic catalysts: closed a $600M revolver (margin cut to 1.75–2.15% over SOFR, no commitment reductions until Mar-2027) and agreed to acquire a high-spec 2020 Capesize (“Genco Courageous”) to increase operating leverage to improving Capesize rates .
  • Note: CFO remarks referenced -$0.17 EPS on the call; the 8-K/press release shows -$0.16; we anchor GAAP EPS to the 8-K as authoritative (discrepancy immaterial) .

What Went Well and What Went Wrong

What Went Well

  • Liquidity and flexibility improved: upsized credit facility to $600M with better pricing, extended maturity to 2030, and $500M undrawn availability as of the press date .
  • Dividend continuity and capital return: paid $0.15/share in Q2 (24th consecutive), with management reducing the voluntary reserve to enable distribution despite formula headwinds; cumulative dividends now $6.915/share .
  • Operating setup for 2H: sequential TCE improved in Q2 vs Q1, and Q3 TCE to date is stronger ($15,926/day total; Capesize $20,951/day at 69% fixed), indicating rate tailwinds and operating leverage; “We remain in a strong position to capitalize on improving drybulk fundamentals” .

What Went Wrong

  • Earnings softness: GAAP net loss of $6.8M with negative EBIT and net margins; adjusted EBITDA fell YoY; rates remained below 2024 levels, and heavy drydocking weighed on results .
  • Rates and revenue down YoY: voyage revenues were $80.9M vs $107.0M in Q2 2024; fleet TCE $13,631/day vs $19,938/day a year ago; lower rates and smaller fleet drove declines .
  • Voyage and G&A pressures: voyage expenses rose (more chartered-in days, higher bunker consumption on Ultramax) and G&A increased (legal/professional fees, stock amortization), further compressing margins .

Financial Results

Income, Earnings, TCE (vs prior periods and estimates)

MetricQ4 2024Q1 2025Q2 2025
Voyage Revenues ($USD)$99.203M $71.269M $80.939M
GAAP Diluted EPS ($USD)$0.29 -$0.28 -$0.16
Adjusted EPS ($USD)$0.29–$0.30 -$0.28 -$0.14
Adjusted EBITDA ($USD)$32.707M $7.915M $14.298M
Fleet TCE ($/day)$18,007 $11,884 $13,631
Q2 2025 vs S&P Global ConsensusConsensusActual
Primary EPS (USD)-$0.129*-$0.14*
Revenue (USD)$49.427M*$80.939M*
EBITDA (USD)$14.404M*$14.521M*
EPS # of Estimates7*—
Revenue # of Estimates4*—

Values with asterisk (*) retrieved from S&P Global.

Margins (quarterly)

MetricQ1 2025Q2 2025
EBITDA Margin (%)11.08%*17.94%*
EBIT Margin (%)-13.71%*-4.46%*
Net Income Margin (%)-16.73%*-8.40%*

Values with asterisk (*) retrieved from S&P Global.

Vessel-type TCE and DVOE

MetricQ1 2025Q2 2025
Capesize TCE ($/day)$13,059 $17,019
Ultramax TCE ($/day)$12,039 $12,361
Supramax TCE ($/day)$9,804 $10,810
Fleet DVOE ($/day)$6,592 $6,213

KPIs

KPIQ1 2025Q2 2025
Fleet Utilization (%)98.0% 98.3%
Ownership Days3,780 3,822
Chartered-in Days273 189
Total Available Days (Fleet)3,777 3,630

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareQ2 2025Formula would not produce dividend $0.15/share; voluntary reserve reduced to $7.91M Raised payout (via reserve reduction)
Voluntary ReserveQ2 2025$19.50M $7.91M Lowered
Voluntary ReserveQ3 2025—Expected $19.50M; flexible based on rates/liquidity Set/maintained
DVOE BudgetQ3 2025—~$6,375/day fleet-wide Set
TCE to Date (Total)Q3 2025—$15,926/day; 70% fixed Informational
TCE to Date (Capesize)Q3 2025—$20,951/day; 69% fixed Informational
Cash Flow Breakeven (ex DD CapEx)Q3 2025—~ $8,900/day; Q4 expected revert to ~$9,800/day Set expectation
Revolving Credit FacilityOngoing$500M capacity; margin 1.85–2.15% Upsized to $600M; margin 1.75–2.15%; no commitment reductions until Mar-2027; maturity 2030 Improved terms/capacity
Fleet AcquisitionSep–Oct 2025 delivery—Agreement to acquire 2020 scrubber-fitted Capesize (“Genco Courageous”) $63.6M Growth

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Capital allocation (Dividends/Reserve)Enhanced dividend policy; paid $0.30; reserve set at $19.50M Paid $0.15; reserve cut to $7.91M to enable payout Maintains dividend priority; tactical reserve use
Revolver & leverage$500M revolver; net LTV ~5–6% Revolver upsized to $600M; margin cut; net LTV 7% (13% pro forma acquisition) More capacity; still low leverage
Fleet renewal (Capesize weighting)2016 Capesize acquired; sold older Capes 2020 Capesize acquisition; likely disposal of two 20-year Supras under consideration Increasing Capesize exposure
Drybulk rates & TCE trajectoryQ1 softness; Q1 TCE estimate $12,366/day Q2 TCE improved; Q3 TCE to date stronger, led by Capes Sequential improvement
Tariffs/macroQ1: port fee/tariff clarifications; minimal impact expected Tariff clarity improved sentiment; grain/coal supportive for Supras/Ultras Macro uncertainty easing
ESG/governanceOnly US-listed drybulk with no related party transactions; Weber ESG #1 Board succession: CEO appointed Chairman; new Lead Independent Director Governance focus sustained
Efficiency techEnergy saving devices, coatings, robotic hull cleaning; biofuel mixes explored Continued upgrades; ~5% fuel savings targeted; exploring carbon capture/nuclear long-shot Ongoing efficiency investments

Management Commentary

  • “Declaration of our Q2 dividend marks our 24th consecutive dividend…the longest uninterrupted dividend period among our drybulk peer group.”
  • “We closed our new $600 million revolving credit facility…we also acted decisively to grow our Capesize fleet…to further modernize our asset base and improve our earnings capacity.”
  • “Adjusted net loss is $0.14 per share…cash position $35.8M…net loan to value of 7% [13% pro forma].”
  • “Our estimated Q3 TCE to date is strong…we continue to see a pick-up in Capesize and Supramax rates.”
  • “We think the Capesize sector has the most compelling supply and demand fundamentals…we definitely have more appetite.”

Q&A Highlights

  • Capesize acquisition appetite: management sees best fundamentals in Capes; will likely tilt fleet more toward larger vessels; expects to sell two ~20-year Supramaxes (Predator, Picardi) before year-end to renew fleet .
  • Minor bulk drivers: stronger Brazil corn/soy, coal volumes recovering, tariff clarity improved sentiment; Supramax rates up ~40% off lows, increasing S&P liquidity even for older ships .
  • Capital return mix: buyback is supplemental to dividend and opportunistic; not used continuously; retained to respond to extreme volatility .
  • Tariff/port fee exposure: minimal impact expected due to exemptions (sub-80k dwt minors; Capes in ballast when entering U.S.) .
  • Q4 setup: most drydockings completed by end of Q3; breakeven expected to ~ $9,800/day in Q4 with high utilization .

Estimates Context

  • Q2 2025 vs Wall Street consensus (S&P Global): EPS -$0.14 vs -$0.13 (slight miss); revenue $80.9M vs $49.4M (significant beat); EBITDA $14.5M vs $14.4M (in line to slight beat). Coverage counts: 7 EPS, 4 revenue estimates *.
  • Given stronger Q3 TCE to date and breakeven guidance, estimates for 2H25 likely need upward revision for revenue/TCE-driven EBITDA, while GAAP EPS sensitivity remains to drydocking cadence and bunker costs .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Sequential rate improvements and stronger Q3 TCE to date suggest earnings power recovery in 2H25; Capesize strength provides operating leverage .
  • Capital structure now a differentiator: $600M revolver with reduced margin and extended maturity, $500M undrawn as of press date amplifies growth optionality and risk-managed leverage .
  • Dividend durability remains core: board flexed reserve to maintain distributions in a soft quarter; expect continued payouts across cycles .
  • Fleet strategy: continued modernization and Capesize weighting, with potential disposals of older Supras to optimize ROIC amid firm asset values .
  • Cost discipline: DVOE trending lower QoQ and Q3 budget at ~$6,375/day supports margin recovery alongside TCE gains .
  • Macro setup constructive: long-haul iron ore/bauxite volumes into 2026–27 and low Capesize supply growth underpin multi-year thesis; grain and coal flows support minor bulks .
  • Near-term trading: catalysts include strong Q3 booking levels, dividend continuity, credit facility terms, and Capesize acquisition delivery (Sep–Oct) .

Appendix: Additional Data and Reconciliations

  • Liquidity snapshot (Q2): cash $35.439M; total liquidity $335.6M (cash + revolver availability); long-term debt $92.968M; net LTV ~7% (13% pro forma with acquisition) .
  • Dividend formula (actual Q2): net revenue $46.90M; operating expenses $(32.41)M; operating cash flow $14.49M; reserve $(7.91)M; distributable $6.58M; dividend $0.15/share .
  • TCE reconciliation (Q2): voyage revenues $80.939M; voyage expenses $32.005M; charter hire $2.035M; realized fuel hedge gain $4k → net revenue $46.903M; TCE $13,631/day on 3,441 owned available days .