Genco Shipping & Trading Announces Fleet Renewal Program
International seaborne drybulk transportation services Genco Shipping & Trading plans to undergo a fleet optimization and renewal plan aimed at modernizing its fleet.
As part of this plan, the Company has decided to dispose a total of 15 vessels in its fleet at times and on terms to be determined in the future including vessels it had already decided to dispose of.
The plan includes eight Supramax vessels, one Handymax vessel and all of its vessels built in 1999 or earlier.
As a result of this decision the estimated future undiscounted cash flows for nine of the vessels which are part of this plan did not exceed their net book values, and it has therefore adjusted their values to fair market value during the first quarter.
"We therefore anticipate a non-cash impairment charge of approximately $56 million in the first quarter of 2018. We plan to redeploy the net sales proceeds from these 15 vessels, subject to lender consent, towards the purchase of modern, high specification vessels that complement our commercial strategy and management’s view of the drybulk supply and demand fundamentals," said a company statement.
The Company recorded net income for the fourth quarter of 2017 of $2.6 million, or $0.07 basic and diluted net earnings per share. Comparatively, for the three months ended December 31, 2016, the Company recorded a net loss of $25.1 million, or $3.43 basic and diluted net loss per share.
Genco's revenues increased by 71% to $74.9 million for the three months ended December 31, 2017, compared to $43.9 million for the three months ended December 31, 2016.
The increase in revenues was primarily due to the employment of vessels on spot market voyage charters as well as higher spot market rates achieved by the majority of the vessels in our fleet. These increases were partially offset by the operation of fewer vessels during the fourth quarter of 2017 as compared to the same period of 2016.
