Good morning, ladies and gentlemen, and welcome to the Genco Shipping & Trading Limited First Quarter 2018 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. 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 888-203-1112 or 719-457-0820 and entering the passcode 7776519. 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 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, 2017, and the Company's report subsequently filed with the SEC. At this time, I would like to introduce John Wobensmith, Chief Executive Officer of Genco Shipping & Trading Limited.

Good morning everyone. Welcome to Genco's first quarter 2018 conference call. I will begin today's call by reviewing our first quarter highlights, we will then discuss our financial results for the quarter, ending industries current fundamentals and then open up the call for questions. Turning to Slide 5, we review Genco's first quarter highlights. During the first quarter, we benefited from our success transforming and strengthening our lean commercial platform as well as strategic fleet deployment initiatives we implemented to prepare for the seasonally softer first quarter. We're pleased to have outperformed our benchmark consisting of the average of the Baltic Dry indices less commissions adjusted for our vessel specifications and waited by vessel class. This was driven by strong performance of our Capesize and minor bulk fleet. Specifically the company was able to effectively navigate a seasonally lower first quarter freight rate environment with a marginal drop off from the strong fourth quarter of 2017. Importantly, as we progressed through the year, we have maintained significant operating leverage to capitalize on the ongoing recovery in the Dry Bulk market. Before discussing our performance in the quarter in more detail, I would like to highlight our recent success entering into a commitment letter for a senior secured loan facility for up to $460 million. We believe the new facility will strengthen our ability to create value for shareholders during the current market recovery through the removal of restrictions on vessel acquisitions and additional indebtedness while providing the company with the ability to pay dividends. The new credit facility commitments are expected to be oversubscribed by approximately 40%. Specifically the mandated lead arrangers and bookrunners for this facility are Nordea Bank, SEB, ABN AMRO, DVB, Crédit Agricole and Danish Ship Finance. We appreciate the ongoing support of our leading banking group…

Thank you, John. Turning to Slide 9, our financial results represented. For the first quarter ended March 31, 2018 the company's revenues more than doubled to $76.9 million as compared with revenues for the first quarter of 2017 of $38.2 million. The increased revenues were primarily due to higher spot market rates achieved by the majority of the vessels in our fleet and the employment of vessels on spot markets voyage charters. These increases were partially offset by the operation of fewer vessels during the first quarter of 2018 as compared to the prior year period. For the first quarter of 2018, the company recorded a net loss of $55.8 million or basic and diluted loss per share of $1.61. This compares to a net loss of $15.6 million or $0.47 basic and diluted loss per share for the first quarter of 2017. Adjusted net income for the first quarter of 2018, was $600,000 or adjusted basic and diluted earnings per share of $0.02 per share excluding $56.4 million of non-cash impairment charges. Turning to Slide 10, represent key balance sheet items out of March 31, 2018. Our cash position including restricted cash was $201.2 million. Our total assets were $1.5 billion which consist primarily of the vessels in our fleet and cash. Our total debt outstanding gross of $8.5 million of unamortized debt issuance cost, was $509.8 million as of March 31, 2018. Moving to Slide 11, our utilization rate were 98.9% for the first quarter of 2018. Our TCE for first three months of the year was $10,463 per vessel per day which compares to $6,321 per vessel per day recorded in the first quarter of 2017. The increase in TCE was primarily due to higher rate achieved by the vessels in our fleet and the progress we've…

Thank you, Apostolos. I'll begin with Slide 16, which represents the Baltic Dry Index. Following a strong fourth quarter of 2017 in which multi-year highs were reached, the BTI came under seasonal pressure during the first quarter of 2018. This was primarily due to the front loaded nature of the order book leading to increase new building deliveries in January together with weather related disruptions in Brazil and Australia, hampering cargo availability as well as the occurrence of the Chinese New Year celebration in February. Of note, is that the BTI average 1,175 in Q1, 2018 which is nearly 25% higher on a year-over-year basis. Subsequently, in the second quarter the BTI's rapidly increased over 1,400 led by the Capsize sector which more than doubled over a two-week period which included three consecutive days of 15% to 20% increases from April 18 to April 20. Turning to Slide 17, we outline some of the key market developments influencing this increase in freight rates. After reaching near record of 100 million tonnes in January. China's iron ore imports ease during the following three months and are essentially flat year-over-year. to feel output restrictions in Northern China that were originally supposed to be lifted in mid-March extended onwards for several weeks thereafter which negatively impacted iron ore buying activity. This trend is reversed in Q2 as the lifting of these restrictions in the onset of peak spring construction season have had positive impact on demand for raw materials into second half of April. We believe the recent reaction of Capsize rates to the increased volume seen over the last few weeks is a healthy sign for the market going forward. To that point, Brazilian iron ore shipments remain critical to overall performance of the Capsize sector. During the first quarter Brazilian exports…

[Operator Instructions] and our first question today comes from Jon Chappell from Evercore. Please go ahead. Your line is open.

John, question for you. Is on the fleet renewal plan, you reported three months ago the plan to sell some of these older non-core unencumbered vessels and kind of three months has passed not much update there. So just wondering, is the S&P market been pretty liquid, is that what's kind of you on sideline from executing that. I remember your vessel sales from the prior sales process move much quicker, was it seasonality kind of holding now massive values maybe holding up for higher prices, how should we think about you proceeding with that plan?

I think you'll start to see us execute on that relatively shortly. You're correct. First quarter being softer on the freight rate side, which again you can see something that we obviously predicted and what we did with the Capsize fixtures. We obviously want to be in a firmer market where there is more liquidity and asset prices have probably moved up a little bit since the beginning of the year, so I think in terms of executing the sales side of it, we're getting into the right window now.

Okay and then that naturally leads to the purchase side of it, too. So just trying to think about your financial flexibility now, great refinancing, a lot of flexibility from that lower cost of debt, all the benefits you laid and as we think about this market recovering and the cash flow generation building an already pretty strong cash balance, how are you thinking about adding to the fleet at this point in the cycle versus like a target leverage area that you want to be in on the debt side versus reintroduction and a potential acceleration of the dividend. And the reason I ask is, I think there's some healthy debate out there right now about one, whether now is a time to buy or act quickly before the window closely versus kind of return to capital to shareholders and a big question, that it's not out there yet should be, is do you really get paid in a cyclical industry for dividend. So super long question, any insights on that would be helpful?

Look we still - I mean the one thing I'll tell you, we still believe that at least as it stands today, asset prices are still at historical low numbers. We think there are good opportunities in both the case, in the Ultramax's the values have been relatively flat and I think I've said on the last quarterly conference call, we could be entering a period this year where, asset values may not move significantly until we get into the third, fourth quarter next year of this year, 2018. So be able to take advantage of that, you could wind up getting some real outsized return on capital numbers. If you're able to - today, so to speak. So I still think there's an opportunity there. Clearly by structuring the credit facility the way we did, as it pertains to dividends. We obviously have those conversations as a company in terms of what the right strategy is there. I think, overall John you're right this is a big question. Do you get paid for having a dividend in place? I think the argument is that, if you can put in a place a sustainable dividend that is there, that can be there throughout any market cycle that I would be hopeful that you would have a valuation, that would be taken into the valuation now of the equity going forward. I think unpredictability obviously is a problem in that, if you structure dividend where you're paying out necessarily a variable dividend each quarter, I think that becomes a little more difficult. But I think the ability to put something stable in place and it's certainly something that we're going - we'll look at going forward, we've made no decisions on it. It could be the way to go.

All right, I agree with that. And then just last one because it was lost in the prior question. Now with this refinancing in place. I mean does this kind - I know you've been focused on deleveraging for a long time now for obvious reasons. Does this feel like the right place? This $460 million facility you're comfortable with that, both at this point in the cycle and if god forbid, if things were to worsen a little bit.

Yes, look I think. Again I don't think our thought process has changed. We want to be in that sort of 40% to 50% leverage again. Unfortunately and we think this market is going to be relatively strong for at least next 18 months basis the supply and demand fundamentals, but invariably there will be a softer period and we want the company to obviously be able to take advantage of that softer period and the way you do that is managing your leverage.

All right, very helpful. Thanks John.

Thank you. Our next question today comes from Amit Mehrotra from Deutsche Bank. Please go ahead.

This is Chris Snyder on for Amit. So my first question kind of follows up on the potential acquisitions. Obviously your fleets are pretty diverse, but I think the 15 vessels you guys have targeted to seller on the smaller side. So when you're kind of looking at what vessels you guys will be interested in, will it be just very opportunistic based on prices there, specific asset class you guys have kind of, will be focusing on.

So first of all the vessels that we've identified for sale are the older Panamaxes, two of the older Handysize and then the 53,000 deadweight ton Supramaxes. So it's a combination of the older vessels and then the 53,000 deadweight ton. Again, strategy of the company has not changed in the sense that we have built a strong commercial team around the Capsize sectors at our capes as well as the minor bulk sector which are the Ultramax's all the way down to the Handysize. In terms of where we want to grow, I would say it's opportunistic but again the focus is going to be around growing the Capsize because of what we see on the demand side and the growth on the iron ore trades and then in the minor bulks, where we also see growth basis well GDP growth on the grain side, growth in the box side trades. So that's what we're going to focus on, we'll focus less on the mid-range, the [indiscernible] or the Panamax's. From an equity strategy, we've been telling the story for a while. We like the idea of having this minor bulk fleet, a very strong commercial team that can use that fleet to trade and be efficient and increase margins and providing a little more of the stable revenue flow. But then having the capes, which have your clearly a volatile but can have significant upside particularly with the all the iron ore volumes that are predicted to come on this year and next year from the [indiscernible] trade in Brazil.

Yes, that's helpful. And the part of the reason I was asking because obviously you guys have a very healthy balance sheet. Cash flows are starting to inflect higher well above cash breakeven so it does seem like you know you could almost handle more risk in the business by kind of going after more capes, just kind of given kind of the healthy status of the company.

I think that's right, but with any risk you want to be paid for it and we think that Capesize sector will do just that.

Okay, thank you. And then just next question. As I think you guys mentioned that the current facility was 40% oversubscribed, your LTV at the moment is still very low. I think you guys kind of said you're targeting 40% to 50%, we have you below that range. So do you have the ability to kind of upsize this facility to take on more leverage and kind of get into that 40% to 50% range or is that kind of be a future transaction down the road.

I think if anything we will take advantage of that additional capacity that is available to us down the road, we will not be adding an upsize off this credit facility at this point.

Okay, thanks. That does it for me. Thanks for your time guys.

Thank you. Our next question comes from Randy Gibbons from Jefferies. Please go ahead.

Few quick questions. One, looking at your strategy for spot versus kind of time charters in the quarters ahead. I know you mentioned your kind of allowing some of the short-term contracts to expire in the coming months, so it sounds like you're getting a little more focused on kind of true spot exposure in the coming quarters, is that kind of accurate?

Yes, but I think we've been focused on that since even middle of last year. the entire minor bulk fleet is really spot, in the sense that we're doing direct cargo liftings, short-term voyages anywhere from 25 to 45 days that has not changed and then on the Capesize sector again, we for the most part have been doing short-term voyage, short-term trip charters because we do believe again that as we go through this year both from a seasonal standpoint, but also from a demand and supply standpoint we believe the second half of the year will continue to move up.

Okay and then looking at the new facility using kind of current EBITDA run rate. I know the kind of future margin is 300 to 350 basis points, is kind of tied to that last 12-month EBITDA. So what using current - what would that kind of equate to going forward after that 325 would be lower to 300, closer to 350 just trying some sensitivity around what is driving that move?

Yes, expect it to closer to 300 mark beginning in the first quarter of 2019.

Excellent. All right and then one quick market question. Recently announced Chinese iron ore imports last months were basically in line with 2017 at 82, 83 million tonnes. Do you see any impact on that government mandated kind of production restrictions that have kind of continued in some parts of China affecting the drybulk market in coming months?

Well I think we really saw a pick up in the second half of April in particular and you saw that with Capes really spiking [indiscernible] $20,00 today from approximately $7,000 earlier in April. So I think seasonally as we peak steel construction season right now and as that continues and we get into a seasonally stronger second half of the year, we'll see Chinese iron ore imports pick up.

I mean I think Randy, I think the biggest thing is what Peter Allen mentioned earlier in the call and that is, that Vale's production was below their sales, which means at least what we takeaway from it is, that they actually drew down inventories in order to push product. So that's why we think from here going forward and particularly in the second half of the year, there's pent up volume that wasn't produced and wasn't shipped in the first quarter from Vale that we will see appearing in the second half and then on top of that, you've got this 23 million tonne of growth coming from their new S11D. I think you know, so on the iron ore front, we expect quite a lot of growth in the second half of this year over the first half. The only thing I'll add is, the steel inventories in China there was a lot of talk about that, a few months ago and we've seen few inventories come down faster than we've ever seen in bearing this decade and really does tell you that, that the steel industry is strong, the construction industry is strong. And the margins in the steel industry are strong. So again it kind of plays into this higher quality sea born iron ore trade and the growth attached to that.

Appreciate. All my other questions are asked, so thanks again and congrats.

Our next question today comes from Aspen [indiscernible] from [indiscernible]. Please go ahead.

Just following up on the rate comment [indiscernible] as [indiscernible] back up [indiscernible] is essentially flat to confirm by the guidance you have for 2Q. seasonally this segment is going to taper off in April, May and now you also see the Chinese calling for prices down substantially, which historically has been good indicator for where the Panama super rates are going. I mean, I know this will be a smaller part of your portfolio longer term, but what's your take on the outlook for the coal prone vessels for remainder of 2018.

Well coal in general is a difficult one. I think coal imports into China in general will be flat. I think you saw a lot of growth in the first part of the year, some of that maybe tampered, the Chinese government has closed some of the ports to coal import, but I think it's very difficult to sell in China. I think it's a black box in terms of imports, when it gets turned on, when it gets turned off. What I'm more optimistic on is, coal imports into India both on the coking coal side to support their growing steel industry as well as imported thermal coal because of the inefficiencies they have from an infrastructure standpoint on domestic coal production and transportation moving it around the country. And I also see growth on the coal side in the Philippines, in Taiwan and Vietnam in particular. So again China is very difficult I think because of the policies of the government on the coal industry, but as I said, I'm more optimistic on growth in India this year as well as some of the well say lesser Asian countries such as Philippines, Vietnam and Taiwan.

All right, and then maybe can you talk a bit about - the progress you're doing on the commercial side, fleet positioning the new office in Denmark and you know whether you've feel you've gained any market knowledge so far through these measures.

Well there's no doubt, we've gained market knowledge, it's an everyday flow of real-time information. I think the we have now for the last few quarters been doing more and more direct business with cargo and cutting out the operator, cutting out the middleman and keeping that margin for ourselves. What we've also begun doing is performing arbitrage trades where we have booked the piece of cargo for one of our ships and when it comes time to ship that cargo, maybe there's a situation where there's another ship that we can take from someone else that's cheaper, we charter in [indiscernible] move that piece of cargo and then take our ship and do something with it and capture that spread. So we've been doing few of those trades and that's one of the main reasons for opening up the Copenhagen office to be in a position to more of those arbitrage trades as well as grow the presence in Europe and lot of those cargo trades take place before New York gets up and going. So we definitely want to make sure that we're attached to that market. It's a big market on the grain side.

Yes, that's interesting. And then you, I mean you mentioned 50-50 kind of voyage lump sum time charter [indiscernible] correct me, if I'm wrong but I think that's the among the highest in the industry. How does that split across the feed? I mean are you able to do this on the cape now or is this potentially still going Supra and then downplay.

No, the capes we've been - we've actually started doing voyage charters directly with the majors. We have been also doing short-term trip charters particularly and partnering with somebody maybe on a coal tender which actually allows us to outperform the market. So it's definitely happening in the capes as well. There are 13 cape, so it's a smaller fleet, so we're not doing as much but as we're doing in the minor bulks, but yes it's the same strategy on capes as the minor bulk except everything is based in Singapore for obvious reason.

Perfect. That's good color. Thank you guys.

[Operator Instructions] our next question come from Magnus Fyhr from Seaport Global. Please go ahead.

Just one question left. You gave good guidance on the drydocking cost and days for 2018. Have you given any thoughts on the 2019 what you're going to do as far as [indiscernible] water ballast treatment system installations and down base?

Magnus we have some guidance already in the last and we'll put some updated guidance in this Q [ph]. In total we expect our 2019 dry-docking including ballast water treatment systems to be $37.5 million but that includes some of the vessels that are sales candidates. So excluding those, it would be about $20 million for the full year of 2019 and again that would be dry-docking and ballast water treatment systems included.

And that's about a $1 million per vessel or should we assume about 20 vessels down?

It would be 13 vessels or so.

Okay, great. Thanks for that guidance.

Yes Magnus I would focus on the 20 because as you know the fleet renewal plan will be executed.

Yes, all right very good. Thank you guys.

Our next question comes from Paul Frat [ph] from Noble Capital Markets. Please go ahead.

Not much left to talk about, but when you look at tying up the loose ends on the new credit facility, when do you expect that to be done?

We expect that to be within the second quarter.

And is that a - John you allude to executing on the fleet renewal program stay tuned, is that a gaining factor getting this credit facility gone first and then moving forward? And then when you look at the dividend, will you talk about whether you're thinking about special versus a regular dividend and sort of the timing of that decision?

All right, so let me take the dividend first. Again we have not made any - look we obviously talk about the idea of dividend and again that's why we structure the credit facility as we did, but no decision has been taken by the board in terms of a dividend going forward at this point. In terms of the fleet renewal, you have to keep in mind, commitment letter has been signed on the bank facility, so that is in place. So it is just in documentation. Apostolos said by the end of the second quarter, that's not too far away. So this is - I believe this will happen relatively quickly and no it's not holding up us in terms of setting up the fleet renewal plan. As you know when you sell a ship it still takes usually a couple months to get from executing in MLA to physical delivery. So those credit facilities will be closed before we get to that. Meaning just to be very clear, we're actively working on fleet renewal program now.

Thanks for the clarification and then Apostolos on the working capital is pretty negative for the first quarter or at least use of cash. Can you walk we through the rest of the year as far as working capital changes?

Yes so for the first quarter, I think the majority of it was debt paid down amount of $11.2 million beyond that, I mean our cash balance went from $205 million at the end of last quarter to $201 million. And usually the first quarter is seasonally heavier in terms of working capital movements because insurance payments and other payments are weighted towards the first half of the year, the first quarter of the year. I mean going forward I think we have provided a pro forma balance sheet as of March 31, but pro forma for the credit facilities on Slide 13 of the presentation that doesn't include any of the vessel sales or anything like that, but it gives you an indication of what the pro forma cash balance will be after the refinancing.

Great and then, if we could just talk about the commercial strategy opening office in Copenhagen, you talked a little bit about it. But what's the best measure of success there. I think in the last call you mentioned that you were doing direct business with 40 customers, is that a number to focus on and is that expanded into the second quarter sort of give me color on sort of how to measure that commercial success.

Yes, so we're now dealing with 50 plus new customers and I expect that number to continue to grow. I mean, I would expect it to get up to 100 over the next sort of six to nine months. I think the best way to measure how that office was doing and we talked about this earlier, but how the company is doing compared to the adjusted indices. For this quarter, we outperformed by $800 a day, if you adjust the indices to our fleet specifications and that's something that we will continue to report going forward, I think that's probably one of the biggest judges.

Great. Thanks a lot.

Ladies and gentlemen, that will conclude today's conference call. Thank you very much for your participation today. You may now disconnect.