Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Fourth Quarter 2015 Earnings Conference Call and Presentation. Before we begin, please note that there will be a slide presentation accompanying today’s conference call. That presentation can be found from Genco’s website at www.gencoshipping.com. To inform everyone, today’s conference is being recorded and is now being webcast at the company’s website, www.gencoshipping.com. We will conduct a question-and-answer session after the opening remarks, instructions will follow at that time. A replay of the conference will be accessible anytime during the next two weeks by dialing 1-888 203-1112 or 1-719-457-0820 and entering the passcode 7273462. At this time I will turn the conference over to the company. Please go ahead.

Good morning. Before we begin our presentation, I note that in this conference call, we will be making certain forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as anticipate, budget, estimate, expect, project, intend, plan, believe and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance. These forward-looking statements are based on management’s current expectations and observations. For a discussion of factors that could cause results to differ, please see the company’s press release that was issued yesterday, the materials relating to this call posted on the company’s website and the company’s filings with the Securities and Exchange Commission, including, without limitation, the company’s Annual Report on Form 10-K for the year ended December 31, 2014, as amended and the company’s subsequent reports filed with the SEC. At this time, I would like to introduce John Wobensmith, President of Genco Shipping & Trading Limited.

Good morning. Welcome to Genco’s fourth quarter 2015 conference call. With me today is our Chairman, Peter Georgiopoulos; and our Chief Financial Officer, Apostolos Zafolias. As outlined on Slide 3 of the presentation, I will begin today’s call by reviewing our fourth quarter highlights. We will then discuss our financial results for the quarter and the industry’s current fundamentals and then finally open up the call for questions. Starting with Slide 5, we review Genco’s fourth quarter highlights. During the fourth quarter, we recorded a net loss of $49.5 million, or $0.69 basic and diluted loss per share for the period ended December 31, 2015. Against a backdrop of a challenging drybulk market, we continue to take important steps to enhance our liquidity position and increase our operating efficiency. With respect to our liquidity position on November 10, 2015, we completed the funding of $98 million secured loan facility with funds associated with Hayfin Capital Management and Breakwater Capital Limited. Including this facility we entered into a total of $158 million in new loan facility starting in 2015. As described in more detail on our earnings release, the current market conditions and historically low charter rates have negatively impacted our liquidity position and may continue to do so. As a result of this impact on our liquidity and a continued decline in vessel values, we face credit facility covenant compliance issues. We are currently in communication with our banks to address such covenant compliance issues and are considering a number of options. Additionally, during the fourth quarter, we did take delivery of the Baltic Mantis, completing our Ultramax newbuilding program. We reached an agreement to charter the vessel for 14 to 18.5 months at a rate based on a 115% of the Baltic Supramax Index. In terms our cash position as of December 31, 2015, we had $140.9 million in cash, including restricted cash. Turning to Slide 6, we provide an overview of our fleet. With the delivery of the last Ultramax newbuilding Genco’s fleet consist of 70 drybulk vessels made up of 13 Capesize, 8 Panamax, 4 Ultramax, 21 Supramax, 6 Handymax, and 18 Handysize vessels with a total carrying capacity of approximately 5.2 million deadweight tons. Drawing upon our increased scale, which was a direct result of our merger with Baltic Trading. In July of 2015, we reduced our direct vessel operating expenses on a per vessel basis for the year, resulting in savings of approximately $4 million. In addition to operational efficiencies, we believe our increased scale has created a stronger global competitor strengthening both our long-term commercial prospects and ability to deliver value to shareholders. At this time, I would like to turn the call over to Apostolos.

Thank you, John. Turning to Slide 8, our financial results are presented. Before I discuss the results, I would like to reiterate that as of July 9, 2014 following the completion of the company’s restructuring, Genco adopted and applied fresh start reporting provisions to its financial statements. As a result of the adoption of fresh start reporting, the company’s consolidated balance sheet and consolidated statements of operations subsequent to July 9, 2014 will not be comparable in many respects to our consolidated balance sheets and statements of operations prior to July 9, 2014, as further discussed in our SEC filings and Forms 10-K and 10-Q. For the three months ended December 31, 2015, the company generated revenues of $35 million versus $55.7 million for the same period of 2014. For the year-ended December 31, 2015, revenues declined by $66.9 million to $154 million, compared to the year ended December 31, 2014. The decrease in total revenues for the fourth quarter and year-ended periods as compared to the prior year periods was primarily due to lower spot market rates achieved by the majority of the vessels in our fleet, marginally offset by the increase in the size of our fleet following the delivery of three Ultramax newbuilding vessels. For the fourth quarter of 2015, the company recorded a net loss of $49.5 million, or $0.69 basic and diluted loss per share. This compares to a net loss of $164 million, or $2.72 basic and diluted loss per share for the fourth quarter of 2014. Turning to Slide 9, we present key balance sheet items as of December 31, 2015. As previously mentioned by John, the current market conditions and historically low charter rates have negatively impacted our liquidity position and have resulted in a continued decline in vessel values. Although we…

Okay. I’ll start with Slide 12, which represents the Baltic Dry Index. The Baltic Dry Index continued to come under pressure throughout the fourth quarter of 2015, including reaching a then all-time low of 471 on December 16. Since the beginning of the year, the BDI has declined further following below the 300 point threshold for the first time on record in February. Subsequently, the BDI has marginally increased over 375 while posting gains in each trading days since the trough on February 11. Turning to Slide 13, we outlined some of the recent market developments. We believe various seasonal factors are currently affecting the freight market, which has exacerbated the already fragile supply and demand balance. These factors include firm newbuilding deliveries, cargo disruptions, and the Chinese New Year celebration. Specifically relating to iron ore cyclones in Australia caused Port Hedland to halt shipments through two days in January. This resulted in Australian exports declining by 3% year-on-year during the month and well below the fourth quarter of 2015 pace. Additionally, the Brazilian government ordered the Port of Tubarão to temporarily seize shipments due to environmental issues. While through the first two months of February, Brazilian iron ore exports have increased by 13% year-on-year, the monthly export average of 27.5 million tons in 2016 to-date is far below the monthly export average of 33.9 million tons registered in Q4 of 2015. Reduced iron ore cargo available in the international market led to China’s iron ore imports falling from a record of 96.3 million ton in December 2015 to 73.6 million ton in February of this year. Despite the decrease from the December figure, China’s iron ore imports have still been able to increase by 6% year-on-year for the first two months of 2016. Turning to Slide 15, we highlight…

[Operator Instructions] And we’ll go first to Doug Mavrinac with Jefferies.

Thank you, operator. Good morning, guys.

Hey, Doug.

Hey, John, just a handful of follow-up questions for you. The first one being on the point that you just touched on that has to do with the fleet of being rationalized and the way that you do that is through scrapping. So when you look at kind of what’s being scrapped and the average age of what’s being scrapped, and how that compares to secondhand values? At what age ship do you see that there are being a point of indifference of saying, all right, well, 17-year old ship or 19-year old ship, this is worth scrap now. So where is that point of indifference of operating versus scrapping? And then secondly, as that continues to get younger and younger, how does that affect the proportion of ships that are now in the scrapping zone?

Well, okay, let me take the second part of the question.

Okay.

Obviously the younger we get, the greater percentage of ships that can go to scrap.

Right.

I mean, we have actually seen 15-year-old Capesize ships scrapped over the last couple of months….

Right.

We even saw that starts to happen in third and fourth quarter of or really fourth quarter of last year. What is encouraging is scrap prices have been increasing. I think that when you get to a ship that’s 15-years old, you then have to do special surveys every 2.5 years instead of every five years. So your CapEx expense numbers can go up dramatically, particularly with steel renewal. So I think these decisions particularly on the larger Capes and the Panamaxes from a financial standpoint are pretty easy to make right now, Cape rates running at $500, $600 a day on the spot market. I think you’re – we’ve seen some layups, but not a lot of them expanding on your question a little bit. But you really need a 12-month earnings number in Capes, for example, of somewhere around $3,000 a day to say, we want to continue to operate the ship and not layup or scrap and clearly we’re not near that right now.

Right, right. So kind of taken that and kind of seeing right, well, [ph], we’re starting to see some 15-year old ships being scraped, and it’s not really worth operating at these levels. Does that mean that like if you look at the proportion of ships that are over 15 years of age, are we talking like, 15% of the fleet, 20% of the fleet, such that, that’s starting to get to be a pretty big number that you can start to say all right, well, we can start to see a pretty – and even more meaningful reduction of the existing fleet that can go towards the rebalancing?

Yes, I mean, look, I think we mentioned before we’re at really 10% for 20 plus, but you could – you’re adding another call it…

A pretty decent number.

…probably another 10%, Doug.

Right, quite right, yes. And that’s kind of what’s interesting about seeing that average A, it’s kind of creeping up either, because scrap values are increasing, or because secondhand values are decreasing. It seems like you’re kind of getting closer to that inflection point of or that, at least, that point of indifference?

I think it’s a combination of both, I think you’re correct.

Yes, gotcha. Okay, great. Thank you. And then as a follow-up, when you guys are doing internal projections, and you mentioned how we’re still seeing a lot of growth delivery is expected for 2016, that’s not necessarily the case, if you look at the order book for 2017 and 2018 or whatnot. So at what point do you or if you guys look at this from this perspective, do you start to see the potential that you could actually see the fleet starting to shrink, i.e., more demolitions than deliveries. Is it at some point later this year, or is it at some point in 2017, or do you even look at it from that perspective?

No, we look at it from that perspective. And in fact, if you take the month of February, there was actually a very small shrinkage if you compare demolitions to what was delivered. January was a high delivery month that’s – and that’s normal. I mean, you only said people pushing December deliveries in the January to get the newer date. But we did see February show negative fleet growth. I’d certainly think as you get into 2017, you could see negative fleet growth. And I also – we’re talking about 15% of the order book and a lot of that being delivered in 2016, we still are very skeptical about what the actual order book is in terms of what will be delivered. We still think there are lot of cancellations that haven’t been reported and that that are probably to come down the line.

Gotcha, very helpful. Thank you. And then just final question, as it pertains to the reclassification of your debt as current. Whenever you look at your balance sheet, I see a $140 million in cash, I see significant equity value. So, kind of given those two dynamics and also kind of seeing over the last couple of weeks a lot of the U.S. listed peers getting amend and extend agreements, kind of done. How would you describe your current positioning within that current environment? I mean, are those the types of conversations that you guys are having as far as saying, okay, well, debt prepayment is a potential option given our cash on hand. I mean, how is – how would you describe the tenor of your conversations on that topic of amendment extend?

Well, look, let’s talk in general. Having a over $100 million of cash on the balance sheet, I think is helpful. I don’t think there are many peers that that actually have that kind of cash position. So that that make things a little more helpful and constructive. We said in our press release, I said on the call that we are in conversations with our banks.

Right.

Of course, everybody wants details. But at this point, we can’t provide any…

All right.

We can’t predict the actual outcome of what things will look like. But I think as everyone knows, we’ve always had a good and a productive relationship with our commercial banks. I would say we’re having constructive conversations. But look, the industry is challenging, nothing is easy. And but like I said, you fall back on your relationships and clearly we’re – as I said, we’re having constructive conversations there. I can’t really comment beyond that.

Those are very helpful. And actually everything was very helpful. So thank you for the time, John.

Thanks, Dough.

[Operator Instructions] And we’ll go next to Sherif Elmaghrabi with Morgan Stanley. Please check your mute function. Your line is open.

Well, can you hear me now?

Yes. Hi, how are you?

Hey, good morning. Sorry about that. Just a quick modeling question for me. I realize that you guys said that you need to see a one-year rate around $3,000 maybe justify the layup. But I’ve heard from some other owners that they’ve seen vessels in layup. So should I take that to mean that do you guys don’t have any ships in layup just for modeling purposes and especially aroundsome of the older vessels, what considerations would you need to take to look at selling the vessels, or putting them away for certain amount of time?

So, look, first of all, we don’t have any ships on layup. The $3,000 number is particular to Capes, as you get into the smaller ships that number comes down. I think what you’ve seen is that, if you look at our employment details, we have been doing some transactions on the charter side and the Capesize sector, where we’ve been setting a floor of $3,250 with a 50-50 profit share above that. .:

Got it. That’s very helpful. Thank you, gentlemen.

You’re welcome.

At this time there are no more questions. This concludes the Genco Shipping conference call. Thank you, and have a nice day.