Genco Shipping and Trading Limited – Press Release.
Linked above is the press release for the 1st quarter from Genco Shipping GNK. It is hard to imagine that just 6 months ago this company was still paying $1.00 per share in quarterly dividends. Looking at the 1st quarter number one can see that things are getting tighter for this one time high flyer. Here are some numbers that caught my eye. I threw out the one time gain for the sale of a vessel and have the Q1 2009 results followed by the Q1 2008 number:
- Net income: $41.2 million vs. $47.8 million
- EBITDA: $76.1 million vs. $74.9 million
- Average daily TCE: $33,203 vs. $35,891
- Vessel operating expenses: $14.2 million vs. $10.9 million
With a larger fleet, only 60% of the rest of 2009 charter days locked in and well over $1 billion in debt, I do not think the trends are positive for Genco. I do think the company management has done a good job transisitioning from a growth model to a “let’s keep this thing going” model, but the dry bulk market need a significant swing to higher rates for GNK to really get things back to attractive numbers.
Genco stock has rallied very nicely since early March, but for the next several quarters I think there are more attractive companies in the dry bulk space.
One Comment
GNK proved technical support 4/30, and the astute trader could have bought it that day for $18.15. GNK has entered into my probationary period as a result of the perceived weakness, and if the price fails to maintain support, this would be an indicator to go shopping elsewhere. Short term technical support had failed previously, so this trade was a bit elusive.
From a long term perspective, proving technical support has been an elusive process since 2/20, while the price has rallied over 30%. The risk is high, along with potential for reward.