Good morning, ladies and gentlemen, and welcome to the Junko Shipping and Trading Limited second 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 Junko's website at www.junkoshipping.com. To inform everyone, today's conference is being recorded and is now being webcast at the company's website, www.jenkoshipping.com. We will conduct a question and answer session after the opening remarks. Instructions will follow at that time. A webcast replay will also be available via link provided in today's conference 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 would 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, reject, intend, plan, believe, and other words in 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 31st, 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, Chief Executive Officer of JNCO Shipping and Trading Limited.

Good morning, everyone. I will begin today's call by reviewing our Q2 2025 and year-to-date highlights. Additionally, we will provide an update on our value strategy, discuss our financial results for the quarter, as well as 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 five, during the second quarter, we continue to prioritize returning cash to shareholders through market cycles while taking additional steps to further expand our earnings power. For the second quarter, we declared a dividend of 15 cents per share despite an intensive dry docking quarter, extending our track record of 24 quarters of consecutive dividends and marking the longest period of uninterrupted dividends. Including the Q2 dividend, Genco has declared $6.91.5 in dividends per share, representing 41% of our current share price. Notably, for the second quarter of 2025, our dividend formula, including a voluntary reserve of $19.5 million, would not have produced a dividend. However, management and the board chose to maintain the voluntary reserve, but reduce it from $19.5 million to $7.9 million for the quarter, resulting in the $0.15 per share dividend. This highlights our commitment to regular shareholder returns, as well as our favorable view of the long-term fundamentals of the dry bulk industry and the seasonally stronger freight rate environment that has emerged in the second half of the year thus far. To that end, we have front-loaded the majority of our dry dockings, having completed 12 to date. In the coming weeks, we'll be completed with the majority of our 2025 dry docking schedule, and our cash flow break-even rate is expected to revert back to approximately $9,800 a day by Q4 of this year. Subsequent to the end of the quarter, we took steps to further strengthen our capital structure and enhance our financial flexibility as we seek to further modernize our asset base for the benefit of shareholders. Following our success, expanding Genco's borrowing capacity by 50 percent with the closing of our new $600 million revolving credit facility, we acted decisively to grow our capesized fleet. Specifically, we agreed to purchase a 2020 Imabari-built scrubber-fitted capesized vessel to be renamed the Genco Courageous. The vessel is scheduled to deliver to Genco in September, October of this year, and we plan to utilize capital from the recently closed revolver to fund the transaction. This purchase represents the fourth high-specification fuel-efficient cape-size vessel that Genco has agreed to acquire since Q4 2023, further expanding the company's presence in a key sector with compelling supply and demand fundamentals. Moving to slide six, capitalizing on our compelling vessel acquisitions and providing shareholders with uninterrupted dividends are key components of our capital allocation strategy, which has been well-balanced since inception of our value strategy in early 2021. Over the past four years, we have invested nearly $350 million in high-quality modern vessels, distributed $257 million in dividends to shareholders, and paid down $349 million in debt. Collectively, these actions have transformed Genco's balance sheet, created a highly differentiated risk-reward balance, and increased the earnings power of the company to continue to pay regularly quarterly dividends. On page seven, we highlight our fleet composition. Proforma, for the latest agreed-upon acquisition, we will own a fleet of 17 Cape Size vessels and 26 Ultramax and Supermax vessels. We continue to balance the high beta and the upside potential of the capesized sector along with the steadier earnings stream of the minor bulk ships. On a vessel ownership basis, our ownership splits are 40% capes and 60% Ultramax Supermax. However, when we view these splits on an asset value or a net revenue basis, we are over 50% weighted towards capesized vessels, providing us significant operating leverage. Importantly, since we began reinvesting in the Cape Size sector, the Baltic Cape Size Index has averaged over $20,000 per day in 17 of the last 22 months, or approximately 80% of the time. Looking at the prior 22 months, the BCI only crossed $20,000 a day in four of those, or just 18% of the time. Turning to slide eight, with an industry low net loan-to-value ratio, a low cash flow break-even rate, and $500 million in undrawn revolver availability, we believe Genco remains in a highly advantageous position to successfully operate in the current volatile freight rate environment and continue to differentiate itself from its dry bulk peer group. Genco has the scale and operating leverage to benefit from a rising market by also having significant access to capital to take advantage of counter-cyclical opportunities if they were to arise. Building on the sequential TCE improvement in Q2, our estimated Q3 TCE to date is strong, and we continue to see a pickup in CAPE size and supermax rates. With our leading commercial platform and significant operating leverage, we remain in a strong position to capitalize on improving dry bulk fundamentals. Going forward, we remain focused on executing the three pillars of our value strategy, dividends, deleveraging, and growth. Lastly, turning to page nine, Genco continues to prioritize strong corporate governance, which we believe is another key differentiator for the company relative to the peer group. Specifically, Genco is the only listed dryball company with no related party transactions. We have a diverse and independent board of directors, are highly transparent and provide detailed disclosures on company performance and initiatives while striving to provide a clear and thoughtful strategy to shareholders as we execute on our approach to capital allocation. We view this as a key part of Genco's identity as a company and are proud to have been ranked number one in the Weber Research ESG scorecard for four consecutive years. I will now turn the call over to Peter Allen, our Chief Financial Officer.

On Slides 11 through 13, we highlight our second quarter financial results. JNCO recorded a net loss of $6.8 million, or $0.17 basic and diluted net loss per share. Adjusted net loss is $0.14 per share, excluding a non-cash impairment charge of $0.7 million. Adjusted EBITDA for Q2 totaled $14.3 million. dollars our cash position as of june 30th 2025 was 35.8 million dollars and we have 100 million dollars of debt outstanding resulting in a net loan to value of seven percent as stated on slide 14. pro forma for the acquisition of the 2020 built cape size vessel we expect our net loan to value to be approximately 13 with capital utilized from the revolver to fund the vessel purchase in july we closed our 600 million dollar evolving credit facility under attractive terms achieving several key objectives as highlighted on slide 15. we increased our borrowing capacity by 200 million dollars or 50 percent further strengthening our ability to pursue accretive growth opportunities for the benefit of shareholders while lowering margin and commitment fees additionally with no commitment reductions until march 31st 2027 jenco maintains the full 600 million dollars of borrowing capacity for an extended period of time adding to our optionality as markets develop furthermore the accordion feature could provide an additional 300 million dollars of potential capacity to fund acquisitions with the revolver structure we plan to 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 did with the most recent agreement to acquire a high specification fuel efficient cap-sized vessel. We appreciate the continued support of our high-quality bank group as we continue to execute Genco's strategy. Moving to slide 16, we highlight our quarterly dividend policy, which targets a distribution based on 100% of operating cash flow, less a voluntary reserve. For Q2, our board of directors declared a $0.15 per share dividend based on operating cash flow of approximately $14.5 million and a voluntary quarterly reserve of $7.9 million. Looking ahead to Q3 2025, we currently have 70% of owned available days fixed at a rate of approximately $15,900 per day as compared to our anticipated cash flow break-even rate, excluding dry docking-related CAPEX of approximately $8,900 per vessel per day. Q3 TC estimates are currently 17% higher than the actual Q2 TC, which highlights the freight rate improvement seen in June that carried over into July and August to date. This improvement has been led by our capesized vessels, which in Q3 to date are currently fixed at approximately $21,000 per day, an increase of nearly 25% from $17,000 per day in Q2, further highlighting the significant operating leverage of the sector. We note that JNCO, like much of the industry, has a large-scale dry docking program in 2025. During the first half of the year, we completed dry docking for nine vessels and have completed three more dry dockings in Q3 to date, with another five vessels expected to be completed in the coming weeks this will result in jenco completing 90 of our full year 2025 dry dockings by the end of q3 with only two dry dockings remaining for q4 i'll now turn the call over to michael or our dry bulk market analyst to discuss industry fundamentals thank you peter beginning on slide 18 the dry bulk freight rate environment meaningfully improved in june crossing the three thousand dollar per day level in the middle of month or double the May average.

This increase was driven by record Port Headland iron ore shipments as Australian miners pushed to hit June 30th fiscal year-end targets while in the Atlantic Basin exports from Brazil ramped up over lower levels seen earlier in the year together with continued strong bauxite shipments. Notably Brazilian iron ore exports from April to June increased by 20 percent which on an annualized basis represents enough cargo to absorb approximately 100 capes or nearly 5% of the capesized fleet. Limited capesized net fleet growth combined with augmented seaborne cargo availability have resulted in a 30% increase in volatility in the capesized sector this year versus last year. In July, we once again saw the BCI exceed the $30,000 threshold, hitting a year-to-date high of nearly $32,000 a day on July 25th and representing a 132% increase from the prior two-week period. We believe that freight rate developments so far in 2025 represent a more traditional trajectory than what we've seen in recent years, as this year we've seen a softer Q1 and a sequential improvement in Q2, followed by a stronger market in the second half of Over the last decade, 90% of the time, the highest quarter for CAPES has occurred in Q3 or Q4, which appears to be playing out once again. Turning to page 19, we point to China's steel complex. Specifically, the country's iron ore imports fell by 3% during the first half of the year but increased to over 100 million tons in June as seaborne supplies recovered. China's iron ore port inventories have been drawn down by 11% from the earlier year high and are now 9% lower on a year-over-year basis. Iron ore prices continue to be resilient around the $100 per ton threshold while steel prices have risen, increasing margins for steel mills. China's steel production has decreased year-over-year by 3 percent. China continues to export over 10 percent of the steel it produces, mostly going to other Asian countries. China's excess steel has remained a point of contention, prompting protectionist measures from various countries. We believe that if China's exports come under pressure, the country will likely boost demand domestically through stimulus measures to achieve growth targets, which could result in augmented demand for raw materials. During the pages 20 and 21, we highlight the long haul iron ore and oxide trade growth expected from Brazil and West Africa in the coming years. While growth this year is expected to be marginal, there are significant growth volumes expected in 2026 and 2027 that can absorb potentially over 200 cape size vessels, which is more than the current cape size new building order book. Supply constraints and cape size new building activity combined with added long haul trading distances are two key catalysts for the sector. In terms of the grain trade, as detailed on page 22, China has ramped up purchases of Brazilian soybeans this year, securing supplies ahead of Q4 U.S. grain season. Firm grain shipments, in addition to an uptick in coal volumes of late, have been supportive of the supermax sector in recent weeks. Regarding geopolitical trade deals and negotiations, we note that with some recent deals, most notably Japan and Indonesia, there have been commitments to purchase U.S. agricultural products. These potential purchases could be supportive of long-haul grain trades to possibly provide another market for U.S. agricultural products in case of lower shipments to China this Q4 during peak season. Regarding the supply side outline on slide 23, net fleet growth in the year-to-date is 3% on an annualized basis, so between 2% net fleet growth for Cape sizes and 3% to 5% net fleet growth for Panamax's down to Handyside. Cape size segment continues to have the smallest order book among the dry bulk sectors at 9% of the fleet. Specifically, only 20 CAPEs delivered in the first half of the year, the least amount of first-half CAPE deliveries in over 15 years. Additionally, as scrapping has remained low in recent years, the age of the global fleet has risen to nearly 13 years old, the highest average age of the global dry bulk fleet since 2010. This has increased the pool of potential scrapping candidates as over 10% of the on-the-water fleet is 20 years or older, which is identical to the global dry bulk order book as a percentage of the fleet. This implies net replacement of tonnage over time as opposed to any material net fleet growth. While we expect volatility in the freight market, the foundation of a low supply growth picture provides a solid basis for a constructive view of the dry bulk market moving forward. This concludes our presentation and we would now be happy to take your questions.

Thank you. Ladies and gentlemen, we'll now conduct a question and answer session and our first question comes from the line of Omar Nocta with Jeffries.

The line is open thank you hey guys thanks for the presentation uh morning um congrats by the way uh congrats on the the new credit facility obviously gives you plenty of flexibility and and perhaps some firepower um you you've acquired this 2020 built cape um looks like a high quality ship um could you maybe just talk about you know the attractiveness of that vessel why you made it and what's your appetite for more?

Yeah, so on the vessel front, Omar, you know, it's a gem. It's Japanese built. We know that that's, you know, from a performance standpoint, the highest quality that's turned out. It's 2020, so it's relatively new, so very high and the fuel efficiency standpoint, and then also has a scrubber. It's just a very well-rounded vessel that we're very happy that we were able to conclude. In terms of further appetite, we definitely have more appetite on the capesite sector that we referenced in the opening remarks. We think that sector, while we're positive on all the dry bulk vessels, we think the capesite sector has the most compelling supply and demand fundamentals because there is demand growth coming for the larger ships in terms of iron ore out of West Africa, more bauxite, and we expect even valet to continue to up their production. So you've got demand growth, but then you also have a very low supply situation. It's actually the lowest supply situation within the dry bulk sector um it doesn't mean that uh you know we're we're still focused on minor bulks and we have a very robust commercial platform that uh that we're able to use for trading as well um on on the arbitrage side but i think you'll see most of what we do at least for the time being um a little more uh trying to wait a little more towards the larger vessels okay thanks thanks john and and i guess to be just on that point, you monetized some of the older vessels last year.

Do you think you'll do more of that, maybe selling more of the Supras to fund the CAPE acquisitions to kind of get more weight in there? Or do you want to keep that fleet intact?

Look, in general, we want to keep the fleet. However, you know, there are two ships right now, the Genco Predator and the Genco Picardi, which are 20 years old. So those are definitely a focus for divesting from a fleet renewal standpoint. You know, we tend to time our buys and our sells at pretty attractive opportunities. And quite frankly, a few months ago, the supermax market was soft. You know, at $9,000 a day. And there was not a lot of action on the older ships in the S&P market. That has now changed. Supermax rates are up 40% since then. And we're seeing a lot more interest on even the older ships. And as you know, we're always about maximizing you know, price on these ships. So, and we have the balance sheet to be patient during these periods of time. So, yeah, I do think before the end of the year, you'll see a couple more go. Okay.

Thanks, John. I appreciate it. I'll pass it back.

Thanks, Omar.

And your next question comes from the line of Liam Burke with B. Riley Securities. Your line is open.

Thank you. Good morning, John. Good morning, Peter. Good morning, Michael.

Good morning, Liam.

John, the supply-demand layoff for the CAPE size is pretty clear. We've seen a nice move on the non-CAPE size rates. Is it just grain, as Michael laid out, or what do you see driving this 40% growth in rates from the bottom?

It's definitely a robust corn crop out of Brazil, soybeans as well. That has been helpful. I would say coal is also starting to come back. We had a lull for a few months on the coal side, but we're seeing more coal being shipped also. So I think it's a combination. And, you know, this is a big intangible, but we're mostly on the other side of knowing what's happening on the tariff front. And I do think while it never directly affected dry bulk shipping, I do believe that it added some negative sentiment into the market. And that seems to be, while the tariffs may not be behind us, I think knowing what the tariffs are going to be is pretty clear now. So we're able to operate effectively.

Okay. On the getting back to the capes, you've got good news, bad news. You've got tight supply, steady demand, asset values are higher, especially in your fleet assets. What does that bode for potential asset purchases on the capes side?

Are there still deals out there that make sense? there are deals that make sense and then there are deals that don't make sense we do a lot of analysis looking at you know from a historical standpoint where we're buying in terms of percentiles and I mean I just give you an example the 2020 that we bought when when you actually ran the cash flows and the return numbers that what we paid for it versus we You were also looking at a 2017 bill and the 2021 out. So, you know, we obviously moved in that direction. So it all comes down to price. I agree. Asset values are firm, particularly in the in the modern vessels. But starting in the second half of next year, which is when we believe the real demand growth will come. from the iron ore front and West Africa, going into very low supply in 27, 28, we just see a longer runway than maybe what history has given to us. Having said that, the volatility is not going away. So that's important to recognize, but we do have a positive view for the next, at least the next few years in terms of what we can see on the supply side. volatility and shipping rates yeah not profound i know shocking anyway thanks john thanks again if you would like to ask a question press star 1 on your telephone and keypad and your next question comes from the line of Chris Robertson with Deutsche Bank.

Sorry about that.

Hey, good morning, and thanks for taking my questions. John, returning to the fleet renewal front, obviously with the purchase of the modern Cape here, but can you touch on other vessel upgrades and equipment that you guys are currently looking at and working on during your dry docking process that makes the current ships more efficient. Can you talk about that in terms of fuel efficiency and performance? And what do you think the next technological landscape kind of looks like over the coming years outside of the normal discussion around alternative fuels?

So we've been installing energy-saving devices on our ships as we've been dry docking. And that can vary from used ducts, new propellers, certainly new paint systems. We're using much more robust paint systems. We are, and I should add, we're exploring, which goes a little bit to your next question, but we're exploring certain robotic cleaning devices which stay with the ship so that we can clean more often and actually cut costs on the cleaning side. So that's a small thing we're looking at as well. But it's really the energy saving devices. And, you know, we think we can save around 5% on the fuel side. So very quick payback on the money that we're spending. In terms of things outside of alternative fuels, which unfortunately I still think are quite a ways away in terms of really being used. We have been using biofuel and biofuel mixes. That's been helpful, particularly with the EU system. system. We've looked at carbon capture. We're not fully there on that yet, but we've looked at it. And then there's always the long shot, but interesting, and that's the nuclear option, so to speak. Because I do think that that's a really interesting technology that could be one of these days in the future developed by the shipping industry all right yeah interesting color uh that's it on my end thank you okay thanks chris your next question comes from the line of toe fret with agp alliance global partners your line is open hey john you covered a lot of ground about the market just capital allocation can you just close the loop on how you're going to use the stock buyback program yeah so we we um we did not do any um any shares during the last quarter and i think the most important thing is that the program is viewed as supplemental to dividends it's it's an add-on um because dividends are the primary means of returning capital in our mind to shareholders um but as of you know this quarter we didn't really observe market conditions that would have led us to buy under the program. So it's in place. And if we have downward volatility, you know, such as we saw a few months ago, then we have it at our disposal.

Great. That's helpful. And then, you know, history never is exactly the same, but you now have a shareholder that's close to 10%. I'm not sure you want to comment, but can you just give us a flavor for whether you've had any discussions with the new shareholder?

So look, I mean, we speak to investors all the time, but we clearly don't talk details about you know who we're speaking to or or or the nature of that conversation um i i would refer you to diana's public statements which indicate this is a passive investment but i i can't comment any further on that at this point sounds good thanks thanks po and your next question comes from the

line of Michael Matheson with Sidoti. Your line is open.

Good morning, gentlemen. Good morning. Just a couple questions for me. In your slides last quarter, you showed that Chinese coal demand had declined overall and there was a shift in demand from the U.S. to Brazil. What did you see in terms of Chinese demand this quarter?

From an import standpoint, we've definitely seen it fall off. The exception to that is over the last month or so, we've started to see the Chinese buying again. You know, we could see recovery as we're going into the end of the year, but for the quarter, we definitely saw soft Chinese buying on the coal side.

Okay, there was a lot of information about a rebound in TCE rates in Q3 here. Do you have an early read on what TCE might look like in Q4?

No. I mean, you can look at the forward curve and the forward curve is showing a nice strong Q4, but predicting actual rate levels is difficult. We're fairly adept at predicting direction, but I would say the fleet is mostly spot. We have maybe not even five percent fixed for the fourth quarter so we will be able to uh we will be able to take advantage of um of what what the fourth quarter brings in terms of rates and the other nice thing is as we mentioned earlier um we we have most of our dry dockings done i think there are only two dry dockings in q4 so we're going to have very high utilization of the fleet in q4 And our break-even, casual break-even comes back down below $10,000 a day at somewhere around $9,800 a day. So we're set up nicely for Q4.

Terrific. That's the information I was looking for. I never thought you could pick a number to the dime or anything like that. Well, thanks, gentlemen.

Thank you.

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