New York Stock Exchange-listed dry bulk operator Genco Shipping has managed to narrow its loss in the first quarter of 2019, crediting its barbell strategy for the results.
The company recorded a net loss of USD 7.8 million for the three months ended March 31, 2019, compared to a net loss of USD 55.8 million for the same period a year before.
Revenues increased to USD 93.5 million, marking a 22 percent rise compared to the USD 76.9 million recorded last year.
The increase in revenues was primarily due to the increased employment of vessels on spot market voyage charters as compared to more time-charter employment in the first quarter of 2018.
Genco also attributed the improved results to relatively strong earnings of the smaller class vessels during the quarter.
“We drew upon our active commercial strategy and our barbell approach to fleet composition as we effectively operated through a volatile and challenging freight rate environment. This period highlighted the key advantage of our barbell strategy that provides direct exposure to both major and minor drybulk commodities,” John C. Wobensmith, Chief Executive Officer, commented.
“Specifically, while the Capesize market came under pressure, the earnings for the smaller class vessels exhibited relative strength during the quarter. Subsequently, the Capesize market has shown signs of improvement and we remain positive on long-term drybulk fundamentals, led by steady demand growth and low net fleet growth.”
The quarter further saw the company arrange USD 35 million in funding to cover up to 90 percent of the expenses related to the scrubbers acquisition and installation as part of its IMO 2020 strategy.
In January 2019, Genco also completed the sale of the last of its 1999-built Panamax vessels, the Genco Vigour, in line with its fleet renewal plan.
“Throughout the year-to-date, we have also continued to successfully execute Genco’s strategic initiatives, which we believe enhances our position to capitalize on a strengthening market,” Wobensmith added.
“In particular, we have further developed our commercial platform, which outperformed our benchmark by approximately USD 2,100 per day on a fleet-wide basis during the first quarter. This outperformance together with our efficient cost structure, is expected to continue to allow for increased margins.”