Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited Fourth Quarter 2025 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 obtained 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. [Operator Instructions] A webcast replay will also be available via the link provided in today's press release as well as on the company's website. At this time, I will now 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'll 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 the 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, 2024, and the company's reports on Form 10-Q and Form 8-K subsequently filed with the SEC. At this time, I would like to introduce John Wobensmith, Chairman and CEO of Genco Shipping & Trading Limited.

Good morning, everyone, and welcome to Genco's Fourth Quarter 2025 Conference Call. I will begin today's call by reviewing the progress we've made executing our comprehensive value strategy since its implementation in 2021, and then we'll review our Q4 2025 and year-to-date highlights. We will then provide additional details on our financial results for the quarter as well as provide an update on the industry's current fundamentals before opening the call up for questions. For additional information, please also refer to our earnings presentation posted on our website. Starting on Slide 5, 2025 marked the fifth year since our Board and management team formulated and began implementing our comprehensive value strategy centered around dividends, financial deleveraging and opportunistic fleet growth. When we launched the strategy in April of 2021, we set out to accomplish 3 main objectives: transform Genco into a low leverage, high dividend company, maintain significant flexibility to grow the fleet and pay a sizable quarterly dividend through the cycles based on an established dividend formula. 5 years later, we are pleased to have made notable success executing against each of these objectives. Among our accomplishments, we fortified our balance sheet to effectively operate in diverse rate environments, provided shareholders with sizable returns and invested in our fleet to further expand our earnings power and dividend capacity. Specifically, over this time, we have invested $347 million in high-quality modern vessels, distributed $270 million in dividends to shareholders and paid down $249 million of debt. Moving to Slide 6. We continue to advance our value strategy in the fourth quarter, ending the year with strong momentum going into the first quarter. We declared our 26th consecutive dividend, representing an annualized yield of 9% on our current share price. Our highest dividend level since Q4 2022 and the longest period…

Thank you, John. On Slide 16 through 18, we highlight our fourth quarter financial results. Genco recorded net income of $15.4 million or $0.35 basic and diluted net earnings per share. Adjusted net income is $17.3 million or $0.40 and $0.39 basic and diluted earnings per share, excluding other operating expense of $1.9 million for shareholder-related expenses. Adjusted EBITDA for Q4 totaled $42 million, an increase of 94% as compared to Q3 and bringing the full year 2025 total to $85.9 million. Our cash and debt positions as of December 31, 2025, were $55.5 million and $200 million, respectively. Our undrawn revolver availability at year-end was $400 million. During March of 2026, we expect to take delivery of 2 2020-built Newcastlemax vessels. We have approximately $131 million of remaining CapEx for these acquisitions, which we expect to fund primarily through proceeds from our revolver. As part of our existing $600 million credit facility, we plan to utilize the accordion feature for $80 million and pledge these 2 vessels as collateral. This would increase our pro forma borrowing capacity to $680 million in total with expected post-acquisition debt outstanding of $330 million and undrawn borrowing capacity of $350 million. Our lenders participating in this revolving credit facility upsizing include Nordea, DNB, ING and SEB. With our full revolving credit facility structure, we will continue to actively manage our cash and debt positions to reduce interest expense while maintaining access to capital to quickly act on growth opportunities as we have demonstrated in recent years. Moving to Slide 19, we highlight the sequential increases in our quarterly EBITDA throughout the year, culminating in a strong fourth quarter performance and an EBITDA increase of 94% from Q3 2025 and also the highest quarterly level since 2022. As outlined on Slide 20, we believe…

Thank you, Peter. Beginning on Slide 23, the dry bulk freight rate environment meaningfully improved in the second half of 2025, reaching its height in Q4, led by the Capesize sector. The Baltic Capesize Index averaged nearly $29,000 per day in Q4 and approached $45,000 per day in early December, driven by all-time high Brazilian iron ore shipments. Supramax rates were also firm, supported by augmented coal shipments to China as well as firm grain exports. Turning to Slide 24. China reported strong levels of iron ore imports in recent months, led by increased seaborne supplies together with the restocking of iron ore inventories. Specifically, the country's iron ore imports in Q4 rose by 7% year-over-year. And for the second half of the year, China's iron ore imports rose by 12% as compared to first half levels. On the seaborne supply side, we saw Brazilian iron ore shipments rise by 26% second half over first half. Turning to Slide 25, we highlight the long-haul iron ore and bauxite trade growth expected from Brazil and West Africa in the coming years. Given the scale of the projects, these volumes could absorb potentially over 200 Capesize vessels, which is more than the current Capesize newbuilding order book. Supply constraints in Capesize newbuilding activity combined with added long-haul trading distances are 2 key catalysts for the sector. We expect West African iron ore flows to ramp up in 2026 after first shipments were made in 2025. In terms of the grain trade, as detailed on Slide 26, China has reportedly fulfilled their 12 million tonne quota from the U.S. as part of the October agreement. However, further reports highlight additional purchases of up to 8 million tons of U.S. soybeans in the coming months. With the onset of South American grain season at…

Thank you, Michael. Turning to Slide 29. We have made outstanding progress executing our comprehensive value strategy, providing shareholders with sizable returns and investing in our fleet to further expand Genco's earnings power. With our high-quality and modern fleet, leading commercial operating platform, strong balance sheet and significant operating leverage, we remain well positioned to create meaningful value for shareholders in 2026 and beyond. As we progress through the year, our unrelenting focus will be on continued capital return for shareholders, further growing our high-specification premium earning fleet as well as maintaining our industry-leading leverage profile and strong corporate governance standards. Before we turn the call over to Q&A, I'd like to briefly address our announcements from last month regarding a nonbinding indicative proposal we received to acquire all outstanding shares of Genco. As detailed in our previous press releases, our Board thoroughly reviewed the proposal with the assistance of external advisers and determined the proposal significantly undervalued Genco. As part of its review, our Board did determine that a differently structured transaction, one organized as an acquisition by Genco would create value for all shareholders. We sought to engage privately on an alternative structure, but our offer to engage was turned down. Our management and Board are focused solely on delivering maximum value for shareholders. With that said, the purpose of today's call is to discuss our fourth quarter and full year 2025 results and the opportunities ahead for Genco. The company is performing very well today, and we are very excited and confident in the future. We ask that you please keep your questions focused on results, performance and industry trends. Thank you for that in advance. This concludes our presentation, and we would now be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Omar Nokta with Clarksons (sic) [ Jefferies ].

Solid quarter. Obviously, John, yes, the dry bulk market ended '25 on a pretty strong note and as shown in your results, obviously. And so far this year, things are progressing quite nicely. You've upsized your facility by the $80 million, and you're going to take delivery of those 2 Newcastlemaxes next month. Obviously, you have plenty of flexibility. Asset values look like they're on the rise and -- or at least have risen a good amount here over the past few months. Where does that leave Genco kind of strategically? I know you touched on this a bit at the end of your comments, John, but how are you thinking about Genco strategically, capital allocation as we look ahead here for the rest of '26?

Look, in terms of the capital allocation, dividends and the value strategy is top of the list. We will endeavor to continue to cycle out some of the older vessels and redeploy those funds more modern fuel-efficient ships such as we've done or such as we did last year. So I don't think much has changed, but you're correct. Values continue to move up. We're actually in a situation where they're moving up almost weekly at this point, which is obviously very positive basis the timing of the acquisitions that we did last year. But it -- look, it makes newer tonnage more expensive, but it also makes our older tonnage more firm in what we can get. So dividends and value strategy is the first. And as part of that value strategy, we have a fleet replacement and growth element.

And maybe just as a follow-up then, as we referenced asset values having risen. I wanted to ask sort of how are you thinking about the term charter markets? Or what are you seeing there? As we kind of think about it from, say, the crude tankers just as what we've seen there, VLCC values have risen and there's been a lot of charter interest. Are you seeing something similar in the Cape market? And how do you feel about deploying ships on term charter today?

I think -- well, there has not been as much liquidity in the dry bulk TC market, as you just mentioned, in the tanker sector. I think a lot of that has to do with the optimism as we look at the supply side and demand growth for the rest of 2026, but then certainly going into 2027 as West African iron ore really starts to ramp up. So I think it's more of a function of, I believe, owners not wanting to lock in currently because of the optimism, again, low supply demand growth coming. Having said that, there have definitely been some 1-, 3-year deals done. I think there was a 3-year deal done on a new -- at least 1, maybe 2 Newcastlemaxes from an iron ore major excess $30,000 a day. Those are firm rates. And clearly, the market is indicating a bullish stance and positive sentiment. You know that we, from time to time, have taken exposure off the table, particularly in the Capesize sector. We really do look at it as a portfolio approach. But we spend a lot of time and analysis looking at whether we want to lock in. And there could easily come a time this year where maybe we take some exposure off the table. But for the time being, we're going to continue to trade spot. And I think it's one of the unique things about Genco. We really only have 20% of this year fixed. So with a rising market, we are fully exposed -- 80% exposed to that positive market and sentiment.

Your next question comes from the line of Liam Burke with B. Riley Securities.

John, in the past discussions on asset acquisitions, you always like the flexibility of the Capes versus the Newcastlemaxes. Has there anything changed in trading patterns that makes you favor more of the Ultramaxes vis-a-vis a Cape?

I'm sorry, the Ultramaxes or the Newcastlemaxes?

Newcastlemaxes, excuse me.

Yes. No. Okay. That's -- yes. No, I wouldn't say anything has drastically changed, though, certainly, on the Brazilian trade, those Newcastlemaxes have always been filled up to their capacity. Over the last several years, that may have not been true with Australia loadings, but that's really changed. And we certainly have seen the bauxite trade develop as well out of West Africa. So that bauxite can go on Newcastlemaxes. So we like the nucs we bought. We like our Capesize fleet. The Newcastlemaxes that we bought are no doubt premium earning assets with very high specifications and low fuel consumption. I think Bulkers 2020 did a fantastic job ordering and kitting out those ships. So we're very happy to be taking delivery of those. But we're going to continue to look at Capes and Newcastlemaxes. And that's where I think you'll see growth for us. And we'll stay steady with our Ultra Supramax fleet, probably do a little bit of fleet renewal on the Supras.

Okay. Just as a follow-on, you just mentioned the Supras. Is there any opportunity or is there any interest in adding to that part of the fleet when you're discussing renewal? Or is it just sell the older vessels on elevated asset values?

Well, it certainly would be selling older vessels. Again, we're focused on the larger ships in terms of redeploying capital, though I'm not going to rule out that we wouldn't buy an Ultramax. I mean that market is doing pretty well. As you know, these are all correlated. It's just that Capes have certainly more upside potential based on higher beta and volatility. And if you look at, again, the supply side on the Capes is the most favorable in the dry bulk sector and demand growth that is coming is Newcastlemax and Capesize oriented.

Your next question comes from the line of Chris Robertson with Deutsche Bank Securities, Inc.

John, just on the back of Omar and Liam's questions around the S&P market, I just wanted to touch on -- last year, it was reported that a large number of Chinese buyers of dry bulk vessels were active in the market. I was wondering if you could comment, is that trend still continuing? And where do you see kind of the activity being driven in the S&P market for potential asset sales?

Yes. I think the Chinese continue to be very active. I would put them as the #1 buyer right now, particularly of older assets, not on the -- not necessarily on the modern eco side, but the older assets, they they're very active on. China is the largest importer of dry bulk commodities, right? So seeing the Chinese go long tonnage, I think that's a positive or a vote of confidence in the market going forward. And you've seen it across the board. I mean, they certainly have been active in older Capes, but they've also been buying some of the older Supramaxes as well. And I'm sure they see the same thing that we see. Again, the low supply growth on the Capes, the age of the fleet. And I think most importantly, there are additional cargo volumes that are going to be coming both on the bauxite side, but more importantly, on the iron ore front out of West Africa.

Got it. Makes sense. My second question is just related to kind of reevaluating the geopolitical environment and the disruptions that we've seen across various shipping segments over the last few years. Where do things stand in terms of the disruption levels related to dry bulk? And let's say, if there was a reversal, whether it's the Red Sea or Russia, Ukraine, et cetera, where do you see kind of puts and takes around some of those themes?

Well, I mean, let's take the Russian-Ukraine situation. If there is a conclusion to that and the Black Sea reopens fully, clearly, that's potential for more grains and to a smaller degree, iron ore. So that would be a net positive for dry bulk shipping. In terms of the Red Sea, we're well aware that there are some container companies that have started operating through Suez and the Red Sea. We're still cautious and we're still not putting our ships through that area. But having said that, it's maybe 1% to 2% max in terms of number of ships that would actually go through the Red Sea. So deviating around Africa is -- it's not a big factor in dry bulk. It certainly is in containers, but it's not for dry bulk.

Your next question comes from the line of Sherif Elmaghrabi with BTIG.

A couple of questions on operating costs here. It looks like the cost of charter hire in Q4 roughly doubled sequentially. So I'm wondering, does the current strength in spot rates change how you think about augmenting your fleet with outside tonnage?

Well, in terms of -- again, in terms of growth, we're definitely focused on the larger ships. And hopefully, this is going to be answering your question. If it's not, please feel free to clarify. But when you look at where rates have really moved up, it is in the larger ships, which, again, that's been our strategy of growing that fleet since 2023. And you can definitely see that in the revenue side. It's driven quite a bit of the upside in revenues. Did that answer your question?

I was asking about the chartered-in fleet.

Okay.

Yes. Sherif. Yes, in terms of the charter-in fleet, that is a very opportunistic part of the business. A lot of the times, the guys will take forward cargoes. And if it makes more sense in the moment to charter in a vessel to create an arbitrage, they'll do that. And that's something that the guys are -- have been really good over the years of assessing whether they can make, whether it's $100,000 plus on a particular cargo. A lot of the times in the first quarter, you'll see that because we'll book forward cargoes. The market will come off relative to Q4, and we'll be able to get that arb. But it's a very opportunistic play. Some quarters, you'll see higher than others. But certainly, in a strengthening market, being on the longer side and having the spot focus that we have is certainly where you want to be right now.

What you're not going to see us do is speculative long-term time charter-ins. It will either be short term backed up by a piece of cargo, as Pete said, but we're not going to just go naked on chartering at Capesize or an Ultramax for that matter, long term into the company. That's not part of the strategy.

Okay. Yes, that's very clear. And then just looking back at the presentation, Slide 8 highlights your remarkably stable cash breakeven, which has remained below $10,000 a day for a few years now. Is there anything you're doing, obviously, besides keeping leverage low to manage breakeven costs while some other owners have seen operating cost inflation?

Look, we've seen operating cost inflation. There's no doubt, particularly on the crew side and when you look at spares and stores just from an inflationary standpoint. We certainly manage to a budget that we set every year, though I want to emphasize, particularly with the larger ships, the bar keeps getting raised calling Australia. So we need to make sure that we are keeping our ships well maintained so that we do not have any issues trading anywhere in the world. So there is a little bit of inflation. We certainly manage and pay very close attention to OpEx, but we're not going to be penny-wise pound foolish.

As there are no further questions at this time, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.