Genco Shipping and Trading Limited – Press Release.
Lots of earnings reports over these last 3 days of the week, so I will be busy trying to get my 2ยข worth in. Additional notes may show up when I get to listen to conference calls.
The link above goes to the year-end and 4th quarter results for Genco Shipping and Trading Ltd. GNK. For 2008 the company had a pretty good year, increasing their fleet size and revenues. The company also took some financial hits which forced it to suspend to very nice dividend and make nice, nice with their creditors.
In the 4th quarter GNK took $160 million in unusual item losses. $104 million was a write-down of the value in the company’s holdings in Jinhui Shipping and Transportation Limited, a non-cash event. $54 million was the lost deposits when the company cancelled the purchase of 6 new cargo ships. That is a real money loss. Excluding the one time losses, GNK earned $1.55 per share for the 4th quarter.
I think management has done a pretty good job of managing the current slow down in bulk shipping. The cancelling of the 6 new ships was definitely a positive. The reworking of the $1.4 billion line of credit allows them to stay in business without worrying about the current value of the fleet. Unfortunately, the management team has some big challenges still ahead of them concerning the charters on their ships. Let me make a list:
- One ship (Genco Cavalier) has a charter which has filed for bankruptcy and future payments are in doubt.
- Three new-build ships will enter the fleet in the next 2 quarters, needing homes.
- I count approximately a third of the current fleet coming off charter between now and August 2009.
At this point I see no compelling reason to own GNK. I want to see what kind of rates they can charter out the next few ships they have available. By June we will be able to get a good idea about the longer term prospects of Genco Shipping.
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Genco Shipping 4th quarter and year end results
Genco Shipping and Trading Limited – Press Release.
Lots of earnings reports over these last 3 days of the week, so I will be busy trying to get my 2ยข worth in. Additional notes may show up when I get to listen to conference calls.
The link above goes to the year-end and 4th quarter results for Genco Shipping and Trading Ltd. GNK. For 2008 the company had a pretty good year, increasing their fleet size and revenues. The company also took some financial hits which forced it to suspend to very nice dividend and make nice, nice with their creditors.
In the 4th quarter GNK took $160 million in unusual item losses. $104 million was a write-down of the value in the company’s holdings in Jinhui Shipping and Transportation Limited, a non-cash event. $54 million was the lost deposits when the company cancelled the purchase of 6 new cargo ships. That is a real money loss. Excluding the one time losses, GNK earned $1.55 per share for the 4th quarter.
I think management has done a pretty good job of managing the current slow down in bulk shipping. The cancelling of the 6 new ships was definitely a positive. The reworking of the $1.4 billion line of credit allows them to stay in business without worrying about the current value of the fleet. Unfortunately, the management team has some big challenges still ahead of them concerning the charters on their ships. Let me make a list:
At this point I see no compelling reason to own GNK. I want to see what kind of rates they can charter out the next few ships they have available. By June we will be able to get a good idea about the longer term prospects of Genco Shipping.