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. 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 of uninterrupted dividends in our dry bulk peer group. Heading into the fourth quarter, we took important steps to maximize fleet-wide utilization in a strong freight rate environment with the completion of 90% of our 2025 dry docking schedule and delivery of a high-quality modern Capesize vessel early in the quarter. During the fourth quarter, these proactive measures enabled us to generate the highest levels of both EBITDA and TCE for the year at $42 million and $20,064 per day, respectively. Additionally, in November, we agreed to purchase 2 2020-built high-quality premium earning Newcastlemax vessels that we expect to take delivery of in March. Importantly, these well-timed investments further increase our operating leverage and expand our presence in a key sector with compelling supply and demand fundamentals. We also ended the fourth quarter with an industry low net loan-to-value of 12%. As depicted on Slide 7, we achieved multiyear highs across key metrics in Q4 and have significant momentum going into Q1 2026, building on our success generating TCE and EBITDA levels that were the highest in 3 years, estimated Q1 TCE of approximately $18,000 per day for 80% of the quarter represents a strong start to the year in what is typically a seasonally slower period. Notably, estimated Q1 2026 TCE is our highest Q1 level since 2024 and over 50% above Q1 2025 levels. Based on our firm fixtures to date and the continued execution of our value strategy, we expect a higher dividend in Q1 on a year-over-year basis. Turning to Slide 8. Genco has one of the lowest cash flow breakeven rates in our peer group. This key differentiator is directly related to our industry low net loan-to-value as well as not having mandatory debt amortization, which further reduces our cash flow breakeven rate compared to peers. As our TCE increased from approximately $12,000 per day in Q1 2025 to $20,000 per day in Q4, our overall profitability and dividend capacity increased as well. As can be seen from the chart, our estimated Q1 TCE also compares favorably to our low breakeven rate on a cash basis. Turning to Slide 9. Through the execution of our value strategy, Genco has paid compelling quarterly dividends to shareholders across cycles. Notably, we have paid 26 consecutive quarterly dividends to shareholders in diverse rate environments, having distributed between $0.15 and $0.50 a quarter over the past 3 years. In addition to the Q4 dividend being the highest since Q4 2022, it also represents a 233% increase over the Q3 2025 dividend. Supporting our dividend and complementing our low breakeven rate is our balanced approach to fleet composition, which we present on Slide 10. In addition to the 2 Newcastlemax vessels we agreed to acquire, we own a fleet of 17 Capesize vessels as well as 15 Ultramax and 11 Supramax vessels. We continue to balance the high beta and upside potential of the Capesize sector along with steadier earnings stream of our minor bulk ships. On a vessel ownership basis, our splits are 40% Capes and 60% Ultra Supras. However, when viewed on a net revenue basis over the last 2 years, we are 50% weighted towards Capesize vessels. With just 20% of our overall fleet fixed for the year, Genco is uniquely positioned relative to some in the peer group to benefit from a strengthening freight rate environment, providing us with meaningful upside exposure to the current strong spot market. Our high operating leverage is balanced against our low financial leverage, which is shown on Slide 11. This provides Genco with significant financial flexibility in various freight market conditions. In strong markets, Genco generates meaningful cash flow with its industry low breakeven rate and scalable fleet. In market downturns, Genco's low financial leverage and undrawn revolver availability allow the company to take advantage of countercyclical growth opportunities. Specifically, as demonstrated on Slide 12, Genco has taken advantage of our strong liquidity position for opportunistic acquisitions of modern, high-specification premium earning vessels at attractive values, including 6 Capesize and Newcastlemax vessels since 2023. I emphasize the positioning of the fleet today is not an artifact of history or chance. It is the result of the steady execution of our plan to optimize the fleet, which began in 2023. At that time, the management team and the Board formed a specific strategy focused on the compelling supply and demand fundamentals of the Capesize sector, which had the lowest order book among the major dry bulk sectors with long-haul ton-mile expansion on the horizon. Since 2023, our strategy has been built upon this thesis and over this time, Capesize vessels have been the best-performing dry bulk class from an earnings and an asset value appreciation perspective. Notably, our Capesize vessels have increased in value by nearly $40 million despite several years of age depreciation. Furthermore, we have generated an IRR of over 30% on these ships, since acquisition. In 2025 alone, we agreed to purchase 3 2020-built Capesize and Newcastlemax vessels, growing our pro forma fleet by 20% on an asset value basis and significantly increasing our earnings and dividend capacity in 2026 and beyond while reducing the average age of our fleet. On Slide 13, both Genco's pro forma 45 vessel fleet and Cape fleet provides significant operating leverage for shareholders. Every $1,000 fleet-wide increase in TCE equates to $16 million of incremental annualized EBITDA or $0.37 per share. Furthermore, our 19 Newcastlemax and Capesize vessels, every $5,000 increase equates to $34 million or $0.77 per share of incremental earnings and dividend capacity. Our fleet strategy has been very successful since we implemented it in 2023. And as you see in these figures, has well positioned the company to continue creating shareholder value going forward. Lastly, turning to Slide 14. Genco continues to prioritize strong corporate governance, which is another key differentiator for the company relative to the peer group. Specifically, Genco is the largest U.S. headquartered dry bulk shipping company, and we are also a U.S. public company subject to robust SEC and New York Stock Exchange disclosure regimes. We are also the only listed dry bulk shipping company with no related party transactions. We have a diverse and independent Board of Directors and observe U.S. public company governance best practices such as having a lead independent director. We provide detailed disclosures on company performance and initiatives while striving to provide a clear and thoughtful strategy to shareholders as we execute our disciplined approach to capital allocation. We are also consistently ranked in the top quartile on corporate governance among public shipping companies by Webber Research. Our corporate governance is a core part of Genco's identity and reflects our Board's commitment to upholding the highest standards of fiduciary duty and governance excellence.

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 that Genco is in a highly advantageous position. With the current fleet of 43 high-quality modern dry bulk vessels, our significant operating leverage, combined with low financial leverage, a sub-$10,000 cash flow breakeven rate, and $400 million of undrawn revolver availability collectively provide a compelling risk-reward balance for shareholders. Furthermore, we continue to reward shareholders through our quarterly dividend policy, which targets a distribution based on 100% of operating cash flow less a voluntary reserve as described on Slide 21. For Q4, our Board of Directors declared a $0.50 per share dividend based on operating cash flow of $41 million and a voluntary quarterly reserve of $19.5 million, marking our highest payout in 3 years. Looking ahead to Q1 2026, we currently have 80% of owned available days fixed at approximately $18,000 per day as compared to our anticipated cash flow breakeven rate, excluding dry docking related CapEx of approximately $9,715 per vessel per day. Importantly, Q1 2026 TCE is on pace to increase over 50% year-over-year. On the expense side, we anticipate vessel operating expense to marginally increase in Q1 compared to Q4 levels due to the timing of crew-related expenses. However, we expect vessel OpEx to revert to levels similar to Q4 moving forward during the year.

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 the end of Q1, attention is likely to shift to Brazilian soybean volumes. Regarding the supply side outlined on Slide 27, net fleet growth in 2025 was 3%, split between 1.5% net fleet growth for Capesizes and 4% to 5% net fleet growth for Panamaxes down to Handysize. Importantly, 2025 marked the fourth straight year of sub-3% net fleet growth for Capes, which is the first time on record this lower level hasn't materialized for this long. 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 at 11% of the on-the-water fleet is 20 years or older, which is nearly identical to the global dry bulk order book as a percentage of the fleet of 12%. This implies net replacement of tonnage over time as opposed to any material net fleet growth. While we expect volatility in the freight market to persist, the foundation of a low supply growth picture provides a solid basis for our positive view of the dry bulk market going forward.

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.

Your first question comes from the line of Omar Nokta with Jefferies.

It was a solid quarter. The dry bulk market ended 2025 on a strong note, as reflected in your results. This year is progressing well. You've increased your facility by $80 million and are set to receive those two Newcastlemaxes next month. You have a lot of flexibility, and asset values appear to be rising significantly over the past few months. Strategically, where does that position Genco? You mentioned it briefly at the end of your comments, but how are you approaching Genco's strategy and capital allocation as we look ahead to the rest of 2026?

In terms of capital allocation, our focus remains on dividends and value strategy. We plan to continue replacing older vessels and reinvest those funds into more modern, fuel-efficient ships, similar to what we did last year. While not much has changed, it's worth noting that values are increasing, almost on a weekly basis now, which is a positive outcome of last year's acquisitions. This situation does make newer vessels more expensive, but it also strengthens the value of our older ships. Therefore, dividends and our value strategy remain our top priority, which includes a component for fleet replacement and growth.

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 there has not been much liquidity in the dry bulk time charter market, as you just mentioned, in the tanker sector. A lot of that is tied to the optimism regarding supply and demand growth for the rest of 2026, especially as West African iron ore begins to ramp up going into 2027. I believe owners are hesitant to lock in rates right now because of this optimism and the low supply demand growth. That said, there have been some one- to three-year deals made. For instance, there was a three-year deal for at least one, maybe two Newcastlemaxes from an iron ore major exceeding $30,000 a day. These are firm rates, indicating a bullish market and positive sentiment. From time to time, we have reduced our exposure, particularly in the Capesize sector, taking a portfolio approach. We spend considerable time and analysis on whether to lock in rates. There may come a time this year when we decide to reduce some exposure, but for now, we intend to trade spot. One unique thing about Genco is that we only have 20% of this year fixed, meaning we are 80% exposed to the rising market and positive 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 liked 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, are you asking about the Ultramaxes or the Newcastlemaxes? No, I wouldn't say anything has drastically changed, although the Brazilian trade has consistently kept the Newcastlemaxes filled to capacity. In recent years, that wasn't necessarily the case with Australian loadings, but that has really changed. We've also seen the bauxite trade from West Africa grow, which can be transported on Newcastlemaxes. We're pleased with the Newcastlemaxes we purchased and our Capesize fleet. The Newcastlemaxes are definitely premium earning assets with high specifications and low fuel consumption. Bulkers 2020 did an excellent job with the orders and outfitting of those ships, and we are very happy to take delivery of them. We will continue to explore opportunities with Capes and Newcastlemaxes, which is where I believe we’ll see growth. We also plan to maintain our Ultra Supramax fleet, with some potential fleet renewal for 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, it 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 Christopher Robertson with Deutsche Bank Securities, Inc.

John, following up on Omar and Liam's questions about the S&P market, I wanted to ask if you could comment on the recent trend of Chinese buyers of dry bulk vessels. Is that trend still ongoing? Additionally, where do you see the activity driving potential asset sales in the S&P market?

Yes, I think the Chinese continue to be very active. I would consider them the top buyer right now, especially of older assets, rather than on the modern eco side. China is the largest importer of dry bulk commodities, so seeing them acquire more tonnage is a positive sign for the market's future. They have been active across the board, not only in older Capes but also in buying some older Supramaxes. They likely recognize the same factors we do: the low supply growth for Capes and the aging fleet. Importantly, there will be additional cargo volumes coming through, particularly on the bauxite side and, more significantly, on the iron ore front from 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?

Considering the situation between Russia and Ukraine, if that comes to a resolution and the Black Sea reopens completely, it would likely lead to an increase in grain exports and, to a lesser extent, iron ore, which would positively impact dry bulk shipping. We are aware that some container companies have started navigating through Suez and the Red Sea, but we remain cautious and have not sent our ships into that region. Furthermore, the number of ships that would actually transit through the Red Sea is at most 1% to 2%. Consequently, detours around Africa do not significantly affect dry bulk shipping, although they do impact containers.

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?

In terms of growth, we are definitely focused on the larger ships, and I hope this answers your question. If it doesn’t, please feel free to clarify. When you look at where rates have significantly increased, it is in the larger ships, which has been our strategy for expanding that fleet since 2023. You can definitely see this reflected in the revenue, as it has contributed significantly to the increase in revenues. Did that answer your question?

I was asking about the chartered-in fleet.

Yes, in relation to the charter-in fleet, it represents a very opportunistic aspect of the business. Often, the team will secure forward cargoes, and if it makes more sense at that moment to charter in a vessel to create an arbitrage, they will proceed with that. Over the years, they've been very effective at assessing whether they can achieve significant profits on specific cargoes. Typically, in the first quarter, we tend to see this because we book forward cargoes, and since the market tends to decline compared to Q4, we can capitalize on those arbitrage opportunities. However, it's an opportunistic approach; some quarters will see higher returns than others. But in a strengthening market, being positioned for longer-term commitments while also focusing on the spot market is where we 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.