Gener8 Maritime Earns Almost Double in Q1 amid Fleet Growth

US-based Gener8 Maritime almost doubled its earnings in the first three months of this year when compared to the corresponding period from 2015 booking a net income of USD 60.9 million against USD 30.9 million in the same period in the prior year.

 Adjusted EBITDA for the Q1, 2016 increased by USD 38 million to USD 87.7 million compared to USD 49.7 million for Q1, 2015.

During the quarter, the average daily spot TCE rates obtained by the company’s VLCC fleet jumped by USD 16,397, or 37% year-on-year reaching USD 60,229.

“Following a transformative year for our company in 2015, we are pleased to report that 2016 has gotten off to a strong start as we continue to execute on our strategic plan.  In the first quarter of 2016, we more than doubled our adjusted net income from the first quarter of 2015 and dramatically increased our net voyage revenue,” said Peter Georgiopoulos, Chairman and Chief Executive Officer of Gener8 Maritime.

According to Georgiopoulos, the company’s newbuilding “ECO” VLCCs continue to be delivered into a strong tanker market, with five vessels delivered in the first quarter of 2016 and an additional vessel delivered in April 2016.

“Our earnings potential increases with every incremental delivery, and our fleet becomes younger (based on average age) and more efficient.  This ultimately helps to position us for the future.  On a fully delivered basis, the DWT-weighted average age of our fleet will be 5.0 years, and our VLCCs will have an average age of just 3.1 years, giving us the youngest VLCC fleet among our public peers,” Georgiopoulos adds.

On May 2, 2016, three subsidiaries of the company entered into interest rate swap transactions, which are intended to be cash flow hedges that effectively fix the interest rates for all of the company’s existing credit facilities with floating interest rate exposure.

“We have also recently entered into a series of interest rate swap transactions with an aggregate initial notional amount of USD 832.3 million and a maximum notional amount of USD 1.2 billion.  The interest rate swap transactions are meant to be cash flow hedges, which effectively fix the interest rate on a significant portion of our existing credit facilities where we have interest rate exposure,” Leo Vrondissis, Chief Financial Officer, added.

At the moment, the company has 33 vessels on the water and anticipates to take delivery of 10 more VLCCs this year and the final two VLCCs in early 2017.

The company has agreed to deliver each of its newbuilding VLCCs into the VL8 Pool managed by Navig8 Group upon their respective deliveries.