Genco’s Quarterly Net Loss Diminishes

US-headquartered ship owner Genco Shipping & Trading Limited has managed to decrease its net loss to USD 49.5 million in the fourth quarter of 2015, compared to a net loss of USD 164 million seen in the corresponding period a year earlier.

Genco’s revenues dropped to USD 35 million for the fourth quarter, compared to USD 55.7 million recorded in the same period in 2014. The decrease was primarily due to lower spot market rates.

The average daily time charter equivalent (TCE) rates obtained by Genco’s fleet was USD 4,711 per day during the fourth quarter of 2015, compared to USD 8,310 for the three months ended December 31, 2014.

“Against the backdrop of a challenging drybulk market, we took steps to strengthen our liquidity position and increase our operating efficiency. After the merger with Baltic Trading, we created a stronger global competitor in the drybulk industry with a modern fleet that seeks to adhere to the highest operational standards. During the year, we also drew upon our increased scale to reduce our direct vessel operating expenses on a per vessel basis, and entered into new loan facilities under favorable terms enhancing the company’s liquidity position by USD 158 million,” John C. Wobensmith, President of Genco, said.

During the quarter Genco completed the funding of a USD 98 million secured loan facility with funds associated with Hayfin Capital Management and Breakwater Capital Ltd. The loan has a term of approximately five years and no fixed amortization payments for the first two years, the company said.

“During the fourth quarter, we continued to enhance Genco’s liquidity position and entered into a USD 98 million five-year loan facility with favorable terms. In total, we entered into USD 158 million in new loan facilities for the year in an effort to strengthen the company’s balance sheet,” Apostolos Zafolias, Chief Financial Officer, said.

For the full year of 2015 the company recorded a net loss of USD 194.9 million, down from a net loss of USD 938.5 million seen in 2014.

Genco said that the persistent weak drybulk industry conditions and historically low charter rates may continue to negatively impact the company’s liquidity in the future.

“The negative impact on our liquidity, together with a continued decline in vessel values, presents difficulties for remaining in compliance with our credit facility covenants relating to minimum cash, leverage ratios, and collateral maintenance, which could potentially result in defaults and acceleration of the repayment of our outstanding indebtedness. These factors, as well as recurring losses from operations and negative working capital, raise substantial doubt about our ability to continue as a going concern. We therefore anticipate receiving a “going concern” opinion from Deloitte & Touche LLP, our independent registered public accountants,” Genco added.

Genco Shipping & Trading Limited has a fleet of 13 Capesize, eight Panamax, four Ultramax, 21 Supramax, six Handymax and 18 Handysize vessels with an aggregate capacity of approximately 5,158,000 dwt.