Movers and SHAKERS
Genco Shipping & Trading Limited (GNK)
Solid Quarter, But Rough Sledding Ahead Before 2H2020 Recovery
Genco Shipping & Trading Limited, incorporated on September 27, 2004, transports iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes through the ownership and operation of drybulk carrier vessels. The Company is engaged in the ocean transportation of drybulk cargoes around the world through the ownership and operation of drybulk carrier vessels. As of December 31, 2016, its fleet consisted of 61 drybulk carriers, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,735,000 deadweight tons (dwt). Of the vessels in its fleet, 15 are on spot market-related time charters, and 27 are on fixed-rate time charter contracts. As of December 31, 2016, additionally, 19 of the vessels in its fleet were operating in vessel pools.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Adjusted 1Q2020 EBITDA of $17.9 million was below our estimate of $19.3 million, mainly due to lower than expected TCE rates of $9.8k/day, or ~$700 below our estimate. Operating results were partially insulated from weak market conditions due to the forward cover of 79% of 1Q2020 days booked at $10.9k/day, but the remainder of the quarter was weaker than expected. Scrubbers on Capes and lower downtime were positives versus last year.
Lowering 2020 EBITDA estimate to $83.4 million from $108.2 million based on lower TCE rates of $10.7k/day due to dry bulk market weakness, tighter fuel spreads and a smaller fleet. Forward cover is not as attractive this quarter with 62% of 2Q2020 days booked at $6.8k/day, and EBITDA is likely to be much weaker in 2Q2020. Softer market fundamentals have extended into the quarter and...
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.