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News Article | May 11, 2017
Site: www.businesswire.com

TORONTO--(BUSINESS WIRE)--Americas Silver Corporation (TSX: USA) (NYSE “MKT”: USAS) (“Americas Silver” or the “Company”) today reported consolidated financial and operational results for the first quarter of 2017. This earnings release should be read in conjunction with the Company’s First Quarter Production and Cost Update, Management’s Discussion and Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company’s website at www.americassilvercorp.com. All figures are in U.S. dollars unless otherwise noted. “The first quarter showed major improvements in both our cash flow and net loss compared to the previous year and quarter despite being our expected lowest production quarter of the year,” said Americas Silver Corporation President and CEO Darren Blasutti. “We expect to build on these positive results further through the second quarter with our operational challenges at Galena behind us, and in the latter half of the year as San Rafael begins production. With zinc and lead prices continuing to be strong, the mine will bring a step change reduction in our company-wide all-in costs in the fourth quarter.” 1 Cost of sales per silver equivalent ounce, cash costs per silver ounce, and all-in sustaining costs per silver ounce in Q1, 2017 excludes pre-production of 62,714 silver ounces and 89,042 silver equivalent ounces mined from El Cajón during its commissioning period. Pre-production revenue and cost of sales from El Cajón are capitalized as development costs. A net loss of ($0.2) million was recorded for the quarter, compared to a net loss of ($1.7) million for the first quarter of 2016. The improvement in net loss is primarily attributable to higher net revenue on concentrate sales, lower cost of sales, and lower care, maintenance and restructuring costs, partially offset by lower metal production, higher one-time corporate general and administrative expenses related to the NYSE “MKT” listing and share-based compensation. Further information is available in the Company’s Management’s Discussion and Analysis for the three months ending March 31, 2017. Consolidated silver production for the first quarter of 2017 was 523,747 ounces which represents a decrease of 22% year-over-year. Silver equivalent production was approximately 1.1 million ounces, down 13% year-over-year. Consolidated cash costs increased 7% to $10.49 per silver ounce year-over-year, and all-in sustaining costs increased 19% to $14.27 per silver ounce year-over-year. Consolidated production levels for the remainder of the year are expected to improve and become similar to fiscal 2016 production levels subsequent to the mill repairs at the Galena Complex during the quarter. During the first quarter, the Company obtained a low-interest, $15.0 million concentrate pre-payment facility with a subsidiary of Glencore PLC to fund a portion of the project costs for San Rafael. At the end of the quarter, the facility was drawn in full and the Company fully repaid its previously outstanding debt of approximately $8.0 million during the quarter. In addition, the Company made a payment of approximately $7.0 million for purchase of the option to acquire 100% interest of the San Felipe property located in Sonora, Mexico. The cash balance as at March 31, 2017 was $17.6 million and the Company expects to be able to fully fund the development of San Rafael. The Company expects to provide a separate update on its progress on its San Rafael project as well as drilling results from both the Cosalá Operations and the Galena Complex before the end of the second quarter. Further information concerning the consolidated and individual mine operations is included in the Company’s first quarter Condensed Interim Consolidated Financial Statements for the three months ended March 31, 2017 and Management’s Discussion and Analysis for the same period. Americas Silver is a silver mining company focused on growth in precious metals from its existing asset base and execution of targeted accretive acquisitions. It owns and operates the Cosalá Operations in Sinaloa, Mexico and the Galena Complex in Idaho, USA. The Company has acquired an option on the San Felipe development project in Sonora, Mexico. Daren Dell, Chief Operating Officer and a Qualified Person under Canadian Securities Administrators guidelines, has approved the applicable contents of this news release. For further information please see SEDAR or americassilvercorp.com. This news release contains “forward‐looking information” within the meaning of applicable securities laws. Forward‐looking information includes, but is not limited to, the Company’s expectations intentions, plans, assumptions and beliefs with respect to, among other things, the realization of operational and development plans (including completion of the San Rafael Project), the Cosalá Operations and Galena Complex as well as the Company’s financing efforts. Often, but not always, forward‐looking information can be identified by forward‐looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “estimate”, “may”, “assume” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward‐looking information is based on the opinions and estimates of the Company as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward looking information. This includes the ability to develop and operate the Cosalá and Galena properties, risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), ground conditions and factors other factors limiting mine access, failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration and production activities, possible variations in ore grade or recovery rates, permitting timelines, capital expenditures, reclamation activities, social and political developments and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific that contribute to the possibility that the predictions, forecasts, and projections of various future events will not occur. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. 1 Cash flow generated from operating activities is a non-IFRS financial measure calculated as net cash flow used in operating activities less changes in non-cash working capital items such as trade and other receivables, inventories, prepaid expenses, and trade and other payables. 2 Silver equivalent production throughout this press release was calculated based on average silver, zinc, lead and copper spot prices during each respective period. 3 Cash cost per ounce and all-in sustaining cost per ounce are non-IFRS performance measures with no standardized definition. For further information and detailed reconciliations, please refer to the Company’s 2016 year-end and quarterly MD&A.


News Article | May 8, 2017
Site: globenewswire.com

NEW YORK, May 08, 2017 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”) today reported its financial results for the three months ended March 31, 2017. The following financial review discusses the results for the three months ended March 31, 2017 and March 31, 2016. 1 We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. The Company recorded a net loss for the first quarter of 2017 of $15.6 million, or $0.47 basic and diluted net loss per share. Comparatively, for the three months ended March 31, 2016, the Company recorded a net loss of $54.5 million, or $7.55 basic and diluted net loss per share. Basic and diluted net loss per share for the three months ended March 31, 2016 has been adjusted for the one-for-ten reverse stock split of Genco’s common stock effected on July 7, 2016. John C. Wobensmith, Chief Executive Officer, commented, “During the first quarter, our focus remained on further enhancing the Company’s commercial strategy and advancing Genco’s position as a leading low-cost operator. Specifically, we have taken steps during the quarter to strengthen our chartering team to further enhance our commercial prospects focusing on both major and minor bulks, improve the age profile of our fleet and maintain a low breakeven level. As supply and demand fundamentals continue to come into balance, we believe Genco is well positioned to take advantage of a market recovery due to our improved platform and significant operating leverage. Our financial flexibility also provides the Company the potential to pursue compelling growth opportunities for shareholders.” The Company’s revenues increased to $38.2 million for the three months ended March 31, 2017, compared to $20.9 million for the three months ended March 31, 2016. The increase was primarily due to higher spot market rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the same period last year partially offset by the operation of fewer vessels during the first quarter of 2017 as compared to the first quarter of 2016. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $6,498 per day for the three months ended March 31, 2017 as compared to $2,629 for the three months ended March 31, 2016. The increase in TCE was primarily due to higher spot rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the first quarter of 2016. During January and February of 2017, the drybulk market experienced various seasonal events that pressured freight rates, including increased newbuilding vessel deliveries, weather related disruptions and the Chinese New Year holiday. In March, however, freight rates found support led by heightened Chinese demand for iron ore cargoes particularly from Brazil due to augmented Chinese steel production, increased coal shipments to China as well as the onset of the South American grain season. Specifically, on March 29, 2017 the BDI reached a year-to-date high of 1,338, with Capesize freight rates, as quoted by the Baltic Exchange, trading significantly higher than the same point of last year. Total operating expenses were $46.8 million for the three months ended March 31, 2017 compared to $67.9 million for the three months ended March 31, 2016. Vessel operating expenses declined to $24.9 million for the three months ended March 31, 2017 compared to $29.1 million for the three months ended March 31, 2016. This decrease was primarily due to the operation of fewer vessels during the first quarter of 2017 as compared to the same period of the prior year. This decrease was also due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. General and administrative expenses were $4.9 million for the first quarter of 2017 compared to $10.6 million for the first quarter of 2016, primarily due to a decrease in non-cash compensation expenses. Included in general and administrative expenses is nonvested stock amortization expense of $0.7 million and $5.5 million for the first quarter of 2017 and 2016, respectively. Depreciation and amortization expenses decreased to $18.2 million for the three months ended March 31, 2017 from $20.3 million for the three months ended March 31, 2016, primarily due to the revaluation of ten of our vessels to their estimated net realizable value during the first half of 2016. Daily vessel operating expenses, or DVOE, decreased to $4,395 per vessel per day for the first quarter of 2017 compared to $4,573 per vessel per day for the same quarter of 2016 predominantly due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. We believe daily vessel operating expenses are best measured for comparative purposes over a 12‑month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Furthermore, based on estimates provided by our technical managers and management’s views, our DVOE budget for 2017 is $4,440 per vessel per day on a weighted average basis for the entire year for the core fleet of 60 vessels. Apostolos Zafolias, Chief Financial Officer, commented, “Genco continues to maintain a strong financial foundation, ending the first quarter with $174 million in cash. Our continued focus on cost-saving initiatives has enabled Genco to significantly lower its cash breakeven levels, which are among the lowest in the industry. We believe our low-cost structure, as well as our significant liquidity position, will serve the Company well in a drybulk recovery.” Net cash used in operating activities for the three months ended March 31, 2017 and 2016 was $6.0 million and $27.3 million, respectively.  Included in the net loss during the three months ended March 31, 2016 are $1.7 million of non-cash impairment charges. Also included in the net loss during the three months ended March 31, 2017 and 2016 was $0.7 million and $5.5 million, respectively, of non-cash amortization of non-vested stock compensation related to Genco’s 2014 Management Incentive Plan. There was also a gain on sale of vessels in the amount of $6.4 million due to the sale of four vessels and paid in kind interest of $1.5 million related to the $400 Million Credit Facility during the three months ended March 31, 2017. Depreciation and amortization expense decreased by $2.2 million due to the sale or scrapping of nine vessels during the nine months ended December 31, 2016 and the three months ended March 31, 2017.  Additionally, the fluctuation in prepaid expense and other current assets decreased by $1.3 million due to the timing of prepaid payments made.  Lastly, there was a $2.8 million increase in deferred drydocking costs incurred because there were more vessels that completed drydocking during the three months ended March 31, 2017 as compared to the same period during 2016. Net cash provided by investing activities was $13.2 million during the three months ended March 31, 2017 as compared to $0.4 million during the three months ended March 31, 2016.  The increase is primarily due to $12.6 million of proceeds from the sale of four vessels during the three months ended March 31, 2017. Additionally, there was a decrease in deposits of restricted cash during the three months ended March 31, 2017 as a result of the release of $0.6 million of restricted cash for required capital expenditures for our vessels.  These increases were partially offset by a decrease of $0.9 million for the proceeds from the sale of available-for-sale securities. Net cash used in financing activities was $1.7 million and $18.6 million during the three months ended March 31, 2017 and 2016, respectively. Net cash used in financing activities of $1.7 million for the three months ended March 31, 2017 consisted primarily of the following: $1.0 million payment of Series A Preferred Stock issuance costs; $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.1 million repayment of debt under the $400 Million Credit Facility.  Net cash used in financing activities of $18.6 million for the three months ended March 31, 2016 consisted primarily of the following: $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.0 million repayment of debt under the $148 Million Credit Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $1.6 million repayment of debt under the 2015 Revolving Credit Facility, $0.7 million repayment of debt under $44 Million Term Loan Facility, $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.4 million repayment of debt under the $22 Million Term Loan Facility.  On November 15, 2016, the $400 Million Credit Facility refinanced the following six credit facilities: the $253 Million Term Loan Facility, the $148 Million Credit Facility, the $100 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility and the $22 Million Term Loan Facility. We make capital expenditures from time to time in connection with vessel acquisitions. As of May 8, 2017, our fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. Six of our vessels were drydocked during the first quarter of 2017. We currently expect nine of our vessels to be drydocked during the remainder of 2017 of which six are expected to be drydocked during the second quarter of 2017. We estimate our capital expenditures related to drydocking for our fleet through 2017 to be: (1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash from operations. These costs do not include drydock expense items that are reflected in vessel operating expenses or potential costs associated with the installation of ballast water treatment systems. (2) Actual length will vary based on the condition of the vessel, yard schedules and other factors. Six vessels drydocked during the first quarter of 2017. The planned offhire days recorded for these vessels during the first quarter of 2017 amounted to 102.4 days. Capitalized costs associated with drydocking incurred during the first quarter of 2017 were approximately $2.8 million. Summary Consolidated Financial and Other Data The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below. 1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. 2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period. 3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. 4) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues. 5) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 6) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. 7) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses (including voyage expenses to Parent)) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. 8) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Our current fleet contains 16 groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of May 8, 2017, the average age of our current fleet was 9.3 years. The following table reflects the employment of Genco’s fleet as of May 8, 2017: (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. (2) Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues. (3) We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 8.5 to 12.5 months at a rate based on 106% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about June 3, 2017. (4) We have reached an agreement with Louis Dreyfus Company Freight Asia Pte. Ltd. on a time charter for 4.5 to 8 months at a rate of $12,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 6, 2017 after completion of drydocking for scheduled maintenance. The vessel had redelivered to Genco on February 23, 2017. (5) We have reached an agreement with Koch Shipping Pte. Ltd. on a time charter for 5 to 8.5 months at a rate of $15,300 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 19, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. (6) We have reached an agreement with Cargill International S.A. on a time charter for 9 to 12.5 months at a rate of $15,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 5, 2017. (7) We have reached an agreement with Cargill International S.A. on a time charter for approximately 70 days at a rate of $7,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 3, 2017 after repositioning. The vessel had redelivered to Genco on January 30, 2017. (8) The vessel redelivered to Genco on April 17, 2017 and is currently in drydocking for scheduled maintenance. (9) We have reached an agreement with Cofco Agri Freight Geneva, S.A. on a time charter for approximately 75 days at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 18, 2017. (10) We have reached an agreement with Glencore Agriculture B.V. Rotterdam on a time charter for approximately 75 days at a rate of $11,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 21, 2017 after repositioning. The vessel had redelivered to Genco on March 11, 2017. (11) The vessel redelivered to Genco on April 10, 2017 and is currently in drydocking for scheduled maintenance. (12) We have reached an agreement with ED&F Man Shipping Ltd. on a time charter for approximately 30 days at a rate of $13,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 21, 2017 after repositioning. The vessel had redelivered to Genco on April 17, 2017. (13) We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice. (14) We have reached an agreement with Gearbulk Pool Ltd., Norway on a time charter for approximately 40 days at a rate of $16,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 29, 2017 after repositioning. The vessel had redelivered to Genco on April 10, 2017. (15) We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw a vessel with a minimum notice of six months. (16) We have reached an agreement with Western Bulk Pte. Ltd., Singapore on a time charter for 3 to 5.5 months at a rate of $9,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 19, 2017 after repositioning. The vessel had redelivered to Genco on March 16, 2017. (17) We have agreed to an extension with Centurion Bulk Pte. Ltd., Singapore on a time charter for 4 to 6.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advances less a 5.00% third-party broker age commission. The extension began on March 8, 2017. (18) We have reached an agreement with Eastern Bulk A/S on a time charter for 2 to 4.5 months at a rate of $11,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party commission. The vessel delivered to charterers on April 20, 2017 after repositioning. The vessel redelivered to Genco on April 18, 2017. (19) We have reached an agreement with Cargill International S.A. on a time charter for approximately 40 days at a rate of $15,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 11, 2017 after repositioning. The vessel had redelivered to Genco on March 27, 2017. (20) We have agreed to an extension with Centurion Bulk Pte. Ltd. on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The extension began on April 3, 2017. (21) We have reached an agreement with Centurion Bulk Pte. Ltd. Singapore on a time charter for 2.5 to 5.5 months at a rate of $10,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 9, 2017. (22) We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw the vessels with a minimum notice of six months. (23) We have reached an agreement with Ultrabulk A/S on a time charter for 2.5 to 5.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 23, 2017. (24) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 15, 2017 after repositioning. The vessel had redelivered to Genco on February 21, 2017. (25) We have reached an agreement with Falcon Navigation A/S on a time charter for 3.5 to 6.5 months at a rate of $8,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on December 31, 2016. (26) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 28, 2017. (27) We have reached an agreement with Falcon Navigation A/S on a time charter for 2.5 to 5.5 months at a rate of $9,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 10, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Genco Shipping & Trading Limited will hold a conference call on Tuesday, May 9, 2017 at 8:30 a.m. Eastern Time to discuss its 2017 first quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (800) 723-6604 or (785) 830-7977 and enter passcode 6277973. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 6277973. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call. We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address.  The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements made 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 a 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. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) further declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or further declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; and other factors listed from time to time in our public 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, 2016 and its subsequent reports on Form 10-Q and Form 8-K. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.  We do not undertake any obligation to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise.


News Article | May 12, 2017
Site: www.engineeringnews.co.za

Public Enterprises Minister Lynne Brown has defended her decision to accept the Eskom board’s much-criticised recommendation that Brian Molefe be reinstated as CEO and see out his five-year contract to 2020 on the basis that it offered “better value” than the alternative of paying him a R30-million pension. The Eskom board made the shock recommendation in response to Brown’s April 23 refusal to accept the proposed pension pay-out. The board's remedy, accepted by Brown, is that the 50-year-old Molefe agree to repay any pension money received and be reinstated as CEO for the remainder of his contract period. In addition, the terms of the contract would be revised to ensure the pension plan was revalued to be more reflective of five years service and in to be line with Cabinet-approve remuneration standards. "I believe the board's proposal ultimately presents a significantly better value proposition to the South African fiscus than the previous pension proposal," Brown said during a media briefing in Cape Town on Friday afternoon. Molefe stepped down as CEO of electricity utility on January 1 in the wake of the Public Protector’s ‘State of Capture’ report, which recommended the establishment of a judicial commission of inquiry to further probe serious allegations relating to contracts involving the Gupta family and several State-owned companies, including Eskom. The report contained cellphone records showing that, between the period August 2, 2015, and March 22, 2016, Molefe called Ajay Gupta 44 times and Gupta called Molefe 14 times. It also “observed” that the sole purpose of awarding contracts to Tegeta to supply Arnot power station was to fund Tegeta and enable it to purchase all shares in Optimum Coal Holdings, a company owned hitherto by mining giant Glencore. In addition, a hastily approved R650-million prepayment to Tegeta was held up as suspicious, as it appeared to have been used by Tegeta to buy all the shares in OCH shortly after bank funding was refused. Molefe subsequently became an African National Congress MP amid strong speculation that President Jacob Zuma intended appointment him to replace Pravin Gordhan as Finance Minister. In the event, Malusi Gigaba was appointed during the early hours of March 31 in a Cabinet reshuffle that precipitated downgrade by both S&P Global Ratings and Fitch Ratings. On Friday, Parliament confirmed the resignation of Molefe as an MP effective from Sunday, May 14 and the Eskom board indicated that he would resume duties at Eskom on Monday May 15. Brown also confirmed that interim CEO Matshela Koko, who is the subject of a forensic and legal investigation by Cliffe Dekker Hofmeyr, would “take leave” until the investigation was concluded. The probe was meant to be finalised in May, but the timeframe had been extended by the board at the request of the firm of attorneys investigating the matter. "In the interests of the process, the interim group chief executive has decided to take leave until the investigation is finalised in mid-June." Cliffe Dekker Hofmeyr had been instructed to conduct a forensic and legal investigation in respect of a potential conflict of interest relating to Koko’s stepdaughter, Koketso Choma, who, according to media reports, was a shareholder in Impulse International, which received Eskom contracts value at around R1-billion from a division overseen by Koko. Brown said she had accepted the board’s recommendation that Molefe be reinstated on the proviso that it was legal, for which she had received assurances. However, she indicated that further technical details would be provided during a joint media briefing with the Eskom board in the coming days. She said she was fully aware of the public outrage, but refused to comment on a statement issued by the ANC condemning Molefe’s reinstatment as “unfortunate and reckless”. The governing party indicated that it would be seeking “an engagement with Comrade Lynne Brown, the Minister of Public Enterprises, under whose authority Eskom falls and under whose direction the entity should operate on this matter.” Condemnation also flowed from labour and civil society organisations, political parties and business, with Business Leadership South Africa (BLSA) calling for the decision to be reversed. BLSA chairperson Jabu Mabuza said the reappointment made a “mockery of Mr Molefe's own words about leaving Eskom in the interest of the country and good governance. His reappointment is willfully disrespectful of the citizens of this country.” The organisation noted that five separate reports, including the Public Protector’s ‘State of Capture’ report had found “prima facie evidence of serious malfeasance at Eskom during Mr Molefe's tenure”. “We call on the government to use its powers as Eskom’s shareholder to reverse this decision immediately and to replace the existing board,” Mabuza said, while welcoming the ANC’s statement on the matter. The National Union of Mineworkers said it awaited a “proper invitation from Eskom so that we can comment appropriately on this joke”, while the National Union of Metalworkers of South Africa’s Irvin Jim general-secretary told eNCA that the reinstatement raised serious governance concerns and called for the firing of the entire Eskom board. Trade union Solidarity noted that Molefe had resigned “under a dark cloud” and that his reinstatement had been made under “ suspicious circumstances”. Questioned on the ethics of Molefe’s reinstatement, Brown said: “The man hasn’t been found guilty yet. He must be seen as innocent until he’s proven guilty.” However she reiterated her support for a judicial commission of inquiry to deal with the allegations contained in the Public Protector’s report, arguing that such an intervention was necessary to clear the air surrounding Eskom and other SoCs. The Minister refused, however, to offer either the board or Molefe her unequivocal support. “I can’t give anybody unequivocal support. I’m saying: come back, you do your job, when you prove your job’s well done, then I give you my support.” Eskom, she argued, was in a better financial and operational position in 2017 than had been the case when Molefe joined Eskom. Initially seconded from Transnet in April 2015. Molefe was appointed permanently to the position on September 25, 2015.


News Article | May 8, 2017
Site: globenewswire.com

NEW YORK, May 08, 2017 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”) today reported its financial results for the three months ended March 31, 2017. The following financial review discusses the results for the three months ended March 31, 2017 and March 31, 2016. 1 We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. The Company recorded a net loss for the first quarter of 2017 of $15.6 million, or $0.47 basic and diluted net loss per share. Comparatively, for the three months ended March 31, 2016, the Company recorded a net loss of $54.5 million, or $7.55 basic and diluted net loss per share. Basic and diluted net loss per share for the three months ended March 31, 2016 has been adjusted for the one-for-ten reverse stock split of Genco’s common stock effected on July 7, 2016. John C. Wobensmith, Chief Executive Officer, commented, “During the first quarter, our focus remained on further enhancing the Company’s commercial strategy and advancing Genco’s position as a leading low-cost operator. Specifically, we have taken steps during the quarter to strengthen our chartering team to further enhance our commercial prospects focusing on both major and minor bulks, improve the age profile of our fleet and maintain a low breakeven level. As supply and demand fundamentals continue to come into balance, we believe Genco is well positioned to take advantage of a market recovery due to our improved platform and significant operating leverage. Our financial flexibility also provides the Company the potential to pursue compelling growth opportunities for shareholders.” The Company’s revenues increased to $38.2 million for the three months ended March 31, 2017, compared to $20.9 million for the three months ended March 31, 2016. The increase was primarily due to higher spot market rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the same period last year partially offset by the operation of fewer vessels during the first quarter of 2017 as compared to the first quarter of 2016. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $6,498 per day for the three months ended March 31, 2017 as compared to $2,629 for the three months ended March 31, 2016. The increase in TCE was primarily due to higher spot rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the first quarter of 2016. During January and February of 2017, the drybulk market experienced various seasonal events that pressured freight rates, including increased newbuilding vessel deliveries, weather related disruptions and the Chinese New Year holiday. In March, however, freight rates found support led by heightened Chinese demand for iron ore cargoes particularly from Brazil due to augmented Chinese steel production, increased coal shipments to China as well as the onset of the South American grain season. Specifically, on March 29, 2017 the BDI reached a year-to-date high of 1,338, with Capesize freight rates, as quoted by the Baltic Exchange, trading significantly higher than the same point of last year. Total operating expenses were $46.8 million for the three months ended March 31, 2017 compared to $67.9 million for the three months ended March 31, 2016. Vessel operating expenses declined to $24.9 million for the three months ended March 31, 2017 compared to $29.1 million for the three months ended March 31, 2016. This decrease was primarily due to the operation of fewer vessels during the first quarter of 2017 as compared to the same period of the prior year. This decrease was also due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. General and administrative expenses were $4.9 million for the first quarter of 2017 compared to $10.6 million for the first quarter of 2016, primarily due to a decrease in non-cash compensation expenses. Included in general and administrative expenses is nonvested stock amortization expense of $0.7 million and $5.5 million for the first quarter of 2017 and 2016, respectively. Depreciation and amortization expenses decreased to $18.2 million for the three months ended March 31, 2017 from $20.3 million for the three months ended March 31, 2016, primarily due to the revaluation of ten of our vessels to their estimated net realizable value during the first half of 2016. Daily vessel operating expenses, or DVOE, decreased to $4,395 per vessel per day for the first quarter of 2017 compared to $4,573 per vessel per day for the same quarter of 2016 predominantly due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. We believe daily vessel operating expenses are best measured for comparative purposes over a 12‑month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Furthermore, based on estimates provided by our technical managers and management’s views, our DVOE budget for 2017 is $4,440 per vessel per day on a weighted average basis for the entire year for the core fleet of 60 vessels. Apostolos Zafolias, Chief Financial Officer, commented, “Genco continues to maintain a strong financial foundation, ending the first quarter with $174 million in cash. Our continued focus on cost-saving initiatives has enabled Genco to significantly lower its cash breakeven levels, which are among the lowest in the industry. We believe our low-cost structure, as well as our significant liquidity position, will serve the Company well in a drybulk recovery.” Net cash used in operating activities for the three months ended March 31, 2017 and 2016 was $6.0 million and $27.3 million, respectively.  Included in the net loss during the three months ended March 31, 2016 are $1.7 million of non-cash impairment charges. Also included in the net loss during the three months ended March 31, 2017 and 2016 was $0.7 million and $5.5 million, respectively, of non-cash amortization of non-vested stock compensation related to Genco’s 2014 Management Incentive Plan. There was also a gain on sale of vessels in the amount of $6.4 million due to the sale of four vessels and paid in kind interest of $1.5 million related to the $400 Million Credit Facility during the three months ended March 31, 2017. Depreciation and amortization expense decreased by $2.2 million due to the sale or scrapping of nine vessels during the nine months ended December 31, 2016 and the three months ended March 31, 2017.  Additionally, the fluctuation in prepaid expense and other current assets decreased by $1.3 million due to the timing of prepaid payments made.  Lastly, there was a $2.8 million increase in deferred drydocking costs incurred because there were more vessels that completed drydocking during the three months ended March 31, 2017 as compared to the same period during 2016. Net cash provided by investing activities was $13.2 million during the three months ended March 31, 2017 as compared to $0.4 million during the three months ended March 31, 2016.  The increase is primarily due to $12.6 million of proceeds from the sale of four vessels during the three months ended March 31, 2017. Additionally, there was a decrease in deposits of restricted cash during the three months ended March 31, 2017 as a result of the release of $0.6 million of restricted cash for required capital expenditures for our vessels.  These increases were partially offset by a decrease of $0.9 million for the proceeds from the sale of available-for-sale securities. Net cash used in financing activities was $1.7 million and $18.6 million during the three months ended March 31, 2017 and 2016, respectively. Net cash used in financing activities of $1.7 million for the three months ended March 31, 2017 consisted primarily of the following: $1.0 million payment of Series A Preferred Stock issuance costs; $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.1 million repayment of debt under the $400 Million Credit Facility.  Net cash used in financing activities of $18.6 million for the three months ended March 31, 2016 consisted primarily of the following: $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.0 million repayment of debt under the $148 Million Credit Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $1.6 million repayment of debt under the 2015 Revolving Credit Facility, $0.7 million repayment of debt under $44 Million Term Loan Facility, $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.4 million repayment of debt under the $22 Million Term Loan Facility.  On November 15, 2016, the $400 Million Credit Facility refinanced the following six credit facilities: the $253 Million Term Loan Facility, the $148 Million Credit Facility, the $100 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility and the $22 Million Term Loan Facility. We make capital expenditures from time to time in connection with vessel acquisitions. As of May 8, 2017, our fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. Six of our vessels were drydocked during the first quarter of 2017. We currently expect nine of our vessels to be drydocked during the remainder of 2017 of which six are expected to be drydocked during the second quarter of 2017. We estimate our capital expenditures related to drydocking for our fleet through 2017 to be: (1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash from operations. These costs do not include drydock expense items that are reflected in vessel operating expenses or potential costs associated with the installation of ballast water treatment systems. (2) Actual length will vary based on the condition of the vessel, yard schedules and other factors. Six vessels drydocked during the first quarter of 2017. The planned offhire days recorded for these vessels during the first quarter of 2017 amounted to 102.4 days. Capitalized costs associated with drydocking incurred during the first quarter of 2017 were approximately $2.8 million. Summary Consolidated Financial and Other Data The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below. 1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. 2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period. 3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. 4) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues. 5) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 6) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. 7) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses (including voyage expenses to Parent)) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. 8) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Our current fleet contains 16 groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of May 8, 2017, the average age of our current fleet was 9.3 years. The following table reflects the employment of Genco’s fleet as of May 8, 2017: (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. (2) Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues. (3) We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 8.5 to 12.5 months at a rate based on 106% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about June 3, 2017. (4) We have reached an agreement with Louis Dreyfus Company Freight Asia Pte. Ltd. on a time charter for 4.5 to 8 months at a rate of $12,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 6, 2017 after completion of drydocking for scheduled maintenance. The vessel had redelivered to Genco on February 23, 2017. (5) We have reached an agreement with Koch Shipping Pte. Ltd. on a time charter for 5 to 8.5 months at a rate of $15,300 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 19, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. (6) We have reached an agreement with Cargill International S.A. on a time charter for 9 to 12.5 months at a rate of $15,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 5, 2017. (7) We have reached an agreement with Cargill International S.A. on a time charter for approximately 70 days at a rate of $7,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 3, 2017 after repositioning. The vessel had redelivered to Genco on January 30, 2017. (8) The vessel redelivered to Genco on April 17, 2017 and is currently in drydocking for scheduled maintenance. (9) We have reached an agreement with Cofco Agri Freight Geneva, S.A. on a time charter for approximately 75 days at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 18, 2017. (10) We have reached an agreement with Glencore Agriculture B.V. Rotterdam on a time charter for approximately 75 days at a rate of $11,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 21, 2017 after repositioning. The vessel had redelivered to Genco on March 11, 2017. (11) The vessel redelivered to Genco on April 10, 2017 and is currently in drydocking for scheduled maintenance. (12) We have reached an agreement with ED&F Man Shipping Ltd. on a time charter for approximately 30 days at a rate of $13,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 21, 2017 after repositioning. The vessel had redelivered to Genco on April 17, 2017. (13) We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice. (14) We have reached an agreement with Gearbulk Pool Ltd., Norway on a time charter for approximately 40 days at a rate of $16,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 29, 2017 after repositioning. The vessel had redelivered to Genco on April 10, 2017. (15) We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw a vessel with a minimum notice of six months. (16) We have reached an agreement with Western Bulk Pte. Ltd., Singapore on a time charter for 3 to 5.5 months at a rate of $9,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 19, 2017 after repositioning. The vessel had redelivered to Genco on March 16, 2017. (17) We have agreed to an extension with Centurion Bulk Pte. Ltd., Singapore on a time charter for 4 to 6.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advances less a 5.00% third-party broker age commission. The extension began on March 8, 2017. (18) We have reached an agreement with Eastern Bulk A/S on a time charter for 2 to 4.5 months at a rate of $11,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party commission. The vessel delivered to charterers on April 20, 2017 after repositioning. The vessel redelivered to Genco on April 18, 2017. (19) We have reached an agreement with Cargill International S.A. on a time charter for approximately 40 days at a rate of $15,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 11, 2017 after repositioning. The vessel had redelivered to Genco on March 27, 2017. (20) We have agreed to an extension with Centurion Bulk Pte. Ltd. on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The extension began on April 3, 2017. (21) We have reached an agreement with Centurion Bulk Pte. Ltd. Singapore on a time charter for 2.5 to 5.5 months at a rate of $10,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 9, 2017. (22) We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw the vessels with a minimum notice of six months. (23) We have reached an agreement with Ultrabulk A/S on a time charter for 2.5 to 5.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 23, 2017. (24) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 15, 2017 after repositioning. The vessel had redelivered to Genco on February 21, 2017. (25) We have reached an agreement with Falcon Navigation A/S on a time charter for 3.5 to 6.5 months at a rate of $8,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on December 31, 2016. (26) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 28, 2017. (27) We have reached an agreement with Falcon Navigation A/S on a time charter for 2.5 to 5.5 months at a rate of $9,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 10, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Genco Shipping & Trading Limited will hold a conference call on Tuesday, May 9, 2017 at 8:30 a.m. Eastern Time to discuss its 2017 first quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (800) 723-6604 or (785) 830-7977 and enter passcode 6277973. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 6277973. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call. We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address.  The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements made 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 a 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. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) further declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or further declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; and other factors listed from time to time in our public 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, 2016 and its subsequent reports on Form 10-Q and Form 8-K. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.  We do not undertake any obligation to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise.


News Article | May 8, 2017
Site: globenewswire.com

NEW YORK, May 08, 2017 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”) today reported its financial results for the three months ended March 31, 2017. The following financial review discusses the results for the three months ended March 31, 2017 and March 31, 2016. 1 We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. The Company recorded a net loss for the first quarter of 2017 of $15.6 million, or $0.47 basic and diluted net loss per share. Comparatively, for the three months ended March 31, 2016, the Company recorded a net loss of $54.5 million, or $7.55 basic and diluted net loss per share. Basic and diluted net loss per share for the three months ended March 31, 2016 has been adjusted for the one-for-ten reverse stock split of Genco’s common stock effected on July 7, 2016. John C. Wobensmith, Chief Executive Officer, commented, “During the first quarter, our focus remained on further enhancing the Company’s commercial strategy and advancing Genco’s position as a leading low-cost operator. Specifically, we have taken steps during the quarter to strengthen our chartering team to further enhance our commercial prospects focusing on both major and minor bulks, improve the age profile of our fleet and maintain a low breakeven level. As supply and demand fundamentals continue to come into balance, we believe Genco is well positioned to take advantage of a market recovery due to our improved platform and significant operating leverage. Our financial flexibility also provides the Company the potential to pursue compelling growth opportunities for shareholders.” The Company’s revenues increased to $38.2 million for the three months ended March 31, 2017, compared to $20.9 million for the three months ended March 31, 2016. The increase was primarily due to higher spot market rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the same period last year partially offset by the operation of fewer vessels during the first quarter of 2017 as compared to the first quarter of 2016. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $6,498 per day for the three months ended March 31, 2017 as compared to $2,629 for the three months ended March 31, 2016. The increase in TCE was primarily due to higher spot rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the first quarter of 2016. During January and February of 2017, the drybulk market experienced various seasonal events that pressured freight rates, including increased newbuilding vessel deliveries, weather related disruptions and the Chinese New Year holiday. In March, however, freight rates found support led by heightened Chinese demand for iron ore cargoes particularly from Brazil due to augmented Chinese steel production, increased coal shipments to China as well as the onset of the South American grain season. Specifically, on March 29, 2017 the BDI reached a year-to-date high of 1,338, with Capesize freight rates, as quoted by the Baltic Exchange, trading significantly higher than the same point of last year. Total operating expenses were $46.8 million for the three months ended March 31, 2017 compared to $67.9 million for the three months ended March 31, 2016. Vessel operating expenses declined to $24.9 million for the three months ended March 31, 2017 compared to $29.1 million for the three months ended March 31, 2016. This decrease was primarily due to the operation of fewer vessels during the first quarter of 2017 as compared to the same period of the prior year. This decrease was also due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. General and administrative expenses were $4.9 million for the first quarter of 2017 compared to $10.6 million for the first quarter of 2016, primarily due to a decrease in non-cash compensation expenses. Included in general and administrative expenses is nonvested stock amortization expense of $0.7 million and $5.5 million for the first quarter of 2017 and 2016, respectively. Depreciation and amortization expenses decreased to $18.2 million for the three months ended March 31, 2017 from $20.3 million for the three months ended March 31, 2016, primarily due to the revaluation of ten of our vessels to their estimated net realizable value during the first half of 2016. Daily vessel operating expenses, or DVOE, decreased to $4,395 per vessel per day for the first quarter of 2017 compared to $4,573 per vessel per day for the same quarter of 2016 predominantly due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. We believe daily vessel operating expenses are best measured for comparative purposes over a 12‑month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Furthermore, based on estimates provided by our technical managers and management’s views, our DVOE budget for 2017 is $4,440 per vessel per day on a weighted average basis for the entire year for the core fleet of 60 vessels. Apostolos Zafolias, Chief Financial Officer, commented, “Genco continues to maintain a strong financial foundation, ending the first quarter with $174 million in cash. Our continued focus on cost-saving initiatives has enabled Genco to significantly lower its cash breakeven levels, which are among the lowest in the industry. We believe our low-cost structure, as well as our significant liquidity position, will serve the Company well in a drybulk recovery.” Net cash used in operating activities for the three months ended March 31, 2017 and 2016 was $6.0 million and $27.3 million, respectively.  Included in the net loss during the three months ended March 31, 2016 are $1.7 million of non-cash impairment charges. Also included in the net loss during the three months ended March 31, 2017 and 2016 was $0.7 million and $5.5 million, respectively, of non-cash amortization of non-vested stock compensation related to Genco’s 2014 Management Incentive Plan. There was also a gain on sale of vessels in the amount of $6.4 million due to the sale of four vessels and paid in kind interest of $1.5 million related to the $400 Million Credit Facility during the three months ended March 31, 2017. Depreciation and amortization expense decreased by $2.2 million due to the sale or scrapping of nine vessels during the nine months ended December 31, 2016 and the three months ended March 31, 2017.  Additionally, the fluctuation in prepaid expense and other current assets decreased by $1.3 million due to the timing of prepaid payments made.  Lastly, there was a $2.8 million increase in deferred drydocking costs incurred because there were more vessels that completed drydocking during the three months ended March 31, 2017 as compared to the same period during 2016. Net cash provided by investing activities was $13.2 million during the three months ended March 31, 2017 as compared to $0.4 million during the three months ended March 31, 2016.  The increase is primarily due to $12.6 million of proceeds from the sale of four vessels during the three months ended March 31, 2017. Additionally, there was a decrease in deposits of restricted cash during the three months ended March 31, 2017 as a result of the release of $0.6 million of restricted cash for required capital expenditures for our vessels.  These increases were partially offset by a decrease of $0.9 million for the proceeds from the sale of available-for-sale securities. Net cash used in financing activities was $1.7 million and $18.6 million during the three months ended March 31, 2017 and 2016, respectively. Net cash used in financing activities of $1.7 million for the three months ended March 31, 2017 consisted primarily of the following: $1.0 million payment of Series A Preferred Stock issuance costs; $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.1 million repayment of debt under the $400 Million Credit Facility.  Net cash used in financing activities of $18.6 million for the three months ended March 31, 2016 consisted primarily of the following: $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.0 million repayment of debt under the $148 Million Credit Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $1.6 million repayment of debt under the 2015 Revolving Credit Facility, $0.7 million repayment of debt under $44 Million Term Loan Facility, $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.4 million repayment of debt under the $22 Million Term Loan Facility.  On November 15, 2016, the $400 Million Credit Facility refinanced the following six credit facilities: the $253 Million Term Loan Facility, the $148 Million Credit Facility, the $100 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility and the $22 Million Term Loan Facility. We make capital expenditures from time to time in connection with vessel acquisitions. As of May 8, 2017, our fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. Six of our vessels were drydocked during the first quarter of 2017. We currently expect nine of our vessels to be drydocked during the remainder of 2017 of which six are expected to be drydocked during the second quarter of 2017. We estimate our capital expenditures related to drydocking for our fleet through 2017 to be: (1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash from operations. These costs do not include drydock expense items that are reflected in vessel operating expenses or potential costs associated with the installation of ballast water treatment systems. (2) Actual length will vary based on the condition of the vessel, yard schedules and other factors. Six vessels drydocked during the first quarter of 2017. The planned offhire days recorded for these vessels during the first quarter of 2017 amounted to 102.4 days. Capitalized costs associated with drydocking incurred during the first quarter of 2017 were approximately $2.8 million. Summary Consolidated Financial and Other Data The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below. 1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. 2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period. 3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. 4) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues. 5) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 6) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. 7) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses (including voyage expenses to Parent)) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. 8) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Our current fleet contains 16 groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of May 8, 2017, the average age of our current fleet was 9.3 years. The following table reflects the employment of Genco’s fleet as of May 8, 2017: (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. (2) Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues. (3) We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 8.5 to 12.5 months at a rate based on 106% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about June 3, 2017. (4) We have reached an agreement with Louis Dreyfus Company Freight Asia Pte. Ltd. on a time charter for 4.5 to 8 months at a rate of $12,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 6, 2017 after completion of drydocking for scheduled maintenance. The vessel had redelivered to Genco on February 23, 2017. (5) We have reached an agreement with Koch Shipping Pte. Ltd. on a time charter for 5 to 8.5 months at a rate of $15,300 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 19, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. (6) We have reached an agreement with Cargill International S.A. on a time charter for 9 to 12.5 months at a rate of $15,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 5, 2017. (7) We have reached an agreement with Cargill International S.A. on a time charter for approximately 70 days at a rate of $7,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 3, 2017 after repositioning. The vessel had redelivered to Genco on January 30, 2017. (8) The vessel redelivered to Genco on April 17, 2017 and is currently in drydocking for scheduled maintenance. (9) We have reached an agreement with Cofco Agri Freight Geneva, S.A. on a time charter for approximately 75 days at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 18, 2017. (10) We have reached an agreement with Glencore Agriculture B.V. Rotterdam on a time charter for approximately 75 days at a rate of $11,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 21, 2017 after repositioning. The vessel had redelivered to Genco on March 11, 2017. (11) The vessel redelivered to Genco on April 10, 2017 and is currently in drydocking for scheduled maintenance. (12) We have reached an agreement with ED&F Man Shipping Ltd. on a time charter for approximately 30 days at a rate of $13,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 21, 2017 after repositioning. The vessel had redelivered to Genco on April 17, 2017. (13) We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice. (14) We have reached an agreement with Gearbulk Pool Ltd., Norway on a time charter for approximately 40 days at a rate of $16,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 29, 2017 after repositioning. The vessel had redelivered to Genco on April 10, 2017. (15) We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw a vessel with a minimum notice of six months. (16) We have reached an agreement with Western Bulk Pte. Ltd., Singapore on a time charter for 3 to 5.5 months at a rate of $9,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 19, 2017 after repositioning. The vessel had redelivered to Genco on March 16, 2017. (17) We have agreed to an extension with Centurion Bulk Pte. Ltd., Singapore on a time charter for 4 to 6.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advances less a 5.00% third-party broker age commission. The extension began on March 8, 2017. (18) We have reached an agreement with Eastern Bulk A/S on a time charter for 2 to 4.5 months at a rate of $11,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party commission. The vessel delivered to charterers on April 20, 2017 after repositioning. The vessel redelivered to Genco on April 18, 2017. (19) We have reached an agreement with Cargill International S.A. on a time charter for approximately 40 days at a rate of $15,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 11, 2017 after repositioning. The vessel had redelivered to Genco on March 27, 2017. (20) We have agreed to an extension with Centurion Bulk Pte. Ltd. on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The extension began on April 3, 2017. (21) We have reached an agreement with Centurion Bulk Pte. Ltd. Singapore on a time charter for 2.5 to 5.5 months at a rate of $10,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 9, 2017. (22) We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw the vessels with a minimum notice of six months. (23) We have reached an agreement with Ultrabulk A/S on a time charter for 2.5 to 5.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 23, 2017. (24) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 15, 2017 after repositioning. The vessel had redelivered to Genco on February 21, 2017. (25) We have reached an agreement with Falcon Navigation A/S on a time charter for 3.5 to 6.5 months at a rate of $8,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on December 31, 2016. (26) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 28, 2017. (27) We have reached an agreement with Falcon Navigation A/S on a time charter for 2.5 to 5.5 months at a rate of $9,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 10, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Genco Shipping & Trading Limited will hold a conference call on Tuesday, May 9, 2017 at 8:30 a.m. Eastern Time to discuss its 2017 first quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (800) 723-6604 or (785) 830-7977 and enter passcode 6277973. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 6277973. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call. We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address.  The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements made 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 a 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. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) further declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or further declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; and other factors listed from time to time in our public 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, 2016 and its subsequent reports on Form 10-Q and Form 8-K. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.  We do not undertake any obligation to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise.


News Article | May 8, 2017
Site: globenewswire.com

NEW YORK, May 08, 2017 (GLOBE NEWSWIRE) -- Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”) today reported its financial results for the three months ended March 31, 2017. The following financial review discusses the results for the three months ended March 31, 2017 and March 31, 2016. 1 We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. The Company recorded a net loss for the first quarter of 2017 of $15.6 million, or $0.47 basic and diluted net loss per share. Comparatively, for the three months ended March 31, 2016, the Company recorded a net loss of $54.5 million, or $7.55 basic and diluted net loss per share. Basic and diluted net loss per share for the three months ended March 31, 2016 has been adjusted for the one-for-ten reverse stock split of Genco’s common stock effected on July 7, 2016. John C. Wobensmith, Chief Executive Officer, commented, “During the first quarter, our focus remained on further enhancing the Company’s commercial strategy and advancing Genco’s position as a leading low-cost operator. Specifically, we have taken steps during the quarter to strengthen our chartering team to further enhance our commercial prospects focusing on both major and minor bulks, improve the age profile of our fleet and maintain a low breakeven level. As supply and demand fundamentals continue to come into balance, we believe Genco is well positioned to take advantage of a market recovery due to our improved platform and significant operating leverage. Our financial flexibility also provides the Company the potential to pursue compelling growth opportunities for shareholders.” The Company’s revenues increased to $38.2 million for the three months ended March 31, 2017, compared to $20.9 million for the three months ended March 31, 2016. The increase was primarily due to higher spot market rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the same period last year partially offset by the operation of fewer vessels during the first quarter of 2017 as compared to the first quarter of 2016. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $6,498 per day for the three months ended March 31, 2017 as compared to $2,629 for the three months ended March 31, 2016. The increase in TCE was primarily due to higher spot rates achieved by the majority of the vessels in our fleet during the first quarter of 2017 versus the first quarter of 2016. During January and February of 2017, the drybulk market experienced various seasonal events that pressured freight rates, including increased newbuilding vessel deliveries, weather related disruptions and the Chinese New Year holiday. In March, however, freight rates found support led by heightened Chinese demand for iron ore cargoes particularly from Brazil due to augmented Chinese steel production, increased coal shipments to China as well as the onset of the South American grain season. Specifically, on March 29, 2017 the BDI reached a year-to-date high of 1,338, with Capesize freight rates, as quoted by the Baltic Exchange, trading significantly higher than the same point of last year. Total operating expenses were $46.8 million for the three months ended March 31, 2017 compared to $67.9 million for the three months ended March 31, 2016. Vessel operating expenses declined to $24.9 million for the three months ended March 31, 2017 compared to $29.1 million for the three months ended March 31, 2016. This decrease was primarily due to the operation of fewer vessels during the first quarter of 2017 as compared to the same period of the prior year. This decrease was also due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. General and administrative expenses were $4.9 million for the first quarter of 2017 compared to $10.6 million for the first quarter of 2016, primarily due to a decrease in non-cash compensation expenses. Included in general and administrative expenses is nonvested stock amortization expense of $0.7 million and $5.5 million for the first quarter of 2017 and 2016, respectively. Depreciation and amortization expenses decreased to $18.2 million for the three months ended March 31, 2017 from $20.3 million for the three months ended March 31, 2016, primarily due to the revaluation of ten of our vessels to their estimated net realizable value during the first half of 2016. Daily vessel operating expenses, or DVOE, decreased to $4,395 per vessel per day for the first quarter of 2017 compared to $4,573 per vessel per day for the same quarter of 2016 predominantly due to lower expenses related to crewing and insurance as well as the timing of purchases of stores and spares partially offset by higher drydocking related expenses. We believe daily vessel operating expenses are best measured for comparative purposes over a 12‑month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Furthermore, based on estimates provided by our technical managers and management’s views, our DVOE budget for 2017 is $4,440 per vessel per day on a weighted average basis for the entire year for the core fleet of 60 vessels. Apostolos Zafolias, Chief Financial Officer, commented, “Genco continues to maintain a strong financial foundation, ending the first quarter with $174 million in cash. Our continued focus on cost-saving initiatives has enabled Genco to significantly lower its cash breakeven levels, which are among the lowest in the industry. We believe our low-cost structure, as well as our significant liquidity position, will serve the Company well in a drybulk recovery.” Net cash used in operating activities for the three months ended March 31, 2017 and 2016 was $6.0 million and $27.3 million, respectively.  Included in the net loss during the three months ended March 31, 2016 are $1.7 million of non-cash impairment charges. Also included in the net loss during the three months ended March 31, 2017 and 2016 was $0.7 million and $5.5 million, respectively, of non-cash amortization of non-vested stock compensation related to Genco’s 2014 Management Incentive Plan. There was also a gain on sale of vessels in the amount of $6.4 million due to the sale of four vessels and paid in kind interest of $1.5 million related to the $400 Million Credit Facility during the three months ended March 31, 2017. Depreciation and amortization expense decreased by $2.2 million due to the sale or scrapping of nine vessels during the nine months ended December 31, 2016 and the three months ended March 31, 2017.  Additionally, the fluctuation in prepaid expense and other current assets decreased by $1.3 million due to the timing of prepaid payments made.  Lastly, there was a $2.8 million increase in deferred drydocking costs incurred because there were more vessels that completed drydocking during the three months ended March 31, 2017 as compared to the same period during 2016. Net cash provided by investing activities was $13.2 million during the three months ended March 31, 2017 as compared to $0.4 million during the three months ended March 31, 2016.  The increase is primarily due to $12.6 million of proceeds from the sale of four vessels during the three months ended March 31, 2017. Additionally, there was a decrease in deposits of restricted cash during the three months ended March 31, 2017 as a result of the release of $0.6 million of restricted cash for required capital expenditures for our vessels.  These increases were partially offset by a decrease of $0.9 million for the proceeds from the sale of available-for-sale securities. Net cash used in financing activities was $1.7 million and $18.6 million during the three months ended March 31, 2017 and 2016, respectively. Net cash used in financing activities of $1.7 million for the three months ended March 31, 2017 consisted primarily of the following: $1.0 million payment of Series A Preferred Stock issuance costs; $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.1 million repayment of debt under the $400 Million Credit Facility.  Net cash used in financing activities of $18.6 million for the three months ended March 31, 2016 consisted primarily of the following: $10.2 million repayment of debt under the $253 Million Term Loan Facility, $3.0 million repayment of debt under the $148 Million Credit Facility, $1.9 million repayment of debt under the $100 Million Term Loan Facility, $1.6 million repayment of debt under the 2015 Revolving Credit Facility, $0.7 million repayment of debt under $44 Million Term Loan Facility, $0.7 million repayment of debt under the 2014 Term Loan Facilities; and $0.4 million repayment of debt under the $22 Million Term Loan Facility.  On November 15, 2016, the $400 Million Credit Facility refinanced the following six credit facilities: the $253 Million Term Loan Facility, the $148 Million Credit Facility, the $100 Million Term Loan Facility, the 2015 Revolving Credit Facility, the $44 Million Term Loan Facility and the $22 Million Term Loan Facility. We make capital expenditures from time to time in connection with vessel acquisitions. As of May 8, 2017, our fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. Six of our vessels were drydocked during the first quarter of 2017. We currently expect nine of our vessels to be drydocked during the remainder of 2017 of which six are expected to be drydocked during the second quarter of 2017. We estimate our capital expenditures related to drydocking for our fleet through 2017 to be: (1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash from operations. These costs do not include drydock expense items that are reflected in vessel operating expenses or potential costs associated with the installation of ballast water treatment systems. (2) Actual length will vary based on the condition of the vessel, yard schedules and other factors. Six vessels drydocked during the first quarter of 2017. The planned offhire days recorded for these vessels during the first quarter of 2017 amounted to 102.4 days. Capitalized costs associated with drydocking incurred during the first quarter of 2017 were approximately $2.8 million. Summary Consolidated Financial and Other Data The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below. 1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. For these reasons, we believe that EBITDA is a useful measure to present to our investors. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company's operating performance required by U.S. GAAP. EBITDA is not a source of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies. 2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period. 3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. 4) We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels between time charters. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues. 5) We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. 6) We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. 7) We define TCE rates as our net voyage revenue (voyage revenues less voyage expenses (including voyage expenses to Parent)) divided by the number of our available days during the period, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. 8) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Our current fleet contains 16 groups of sister ships, which are vessels of virtually identical sizes and specifications. We believe that maintaining a fleet that includes sister ships reduces costs by creating economies of scale in the maintenance, supply and crewing of our vessels. As of May 8, 2017, the average age of our current fleet was 9.3 years. The following table reflects the employment of Genco’s fleet as of May 8, 2017: (1) The charter expiration dates presented represent the earliest dates that our charters may be terminated in the ordinary course. Under the terms of each contract, the charterer is entitled to extend the time charter from two to four months in order to complete the vessel's final voyage plus any time the vessel has been off-hire. (2) Time charter rates presented are the gross daily charterhire rates before third-party brokerage commission generally ranging from 1.25% to 6.25%. In a time charter, the charterer is responsible for voyage expenses such as bunkers, port expenses, agents’ fees and canal dues. (3) We have agreed to an extension with Swissmarine Services S.A. on a spot market-related time charter for 8.5 to 12.5 months at a rate based on 106% of the Baltic Capesize Index (BCI), published by the Baltic Exchange, as reflected in daily reports. Hire is paid every 15 days in arrears less a 5.00% third-party brokerage commission. The extension is expected to begin on or about June 3, 2017. (4) We have reached an agreement with Louis Dreyfus Company Freight Asia Pte. Ltd. on a time charter for 4.5 to 8 months at a rate of $12,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 6, 2017 after completion of drydocking for scheduled maintenance. The vessel had redelivered to Genco on February 23, 2017. (5) We have reached an agreement with Koch Shipping Pte. Ltd. on a time charter for 5 to 8.5 months at a rate of $15,300 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 19, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. (6) We have reached an agreement with Cargill International S.A. on a time charter for 9 to 12.5 months at a rate of $15,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on May 5, 2017. (7) We have reached an agreement with Cargill International S.A. on a time charter for approximately 70 days at a rate of $7,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 3, 2017 after repositioning. The vessel had redelivered to Genco on January 30, 2017. (8) The vessel redelivered to Genco on April 17, 2017 and is currently in drydocking for scheduled maintenance. (9) We have reached an agreement with Cofco Agri Freight Geneva, S.A. on a time charter for approximately 75 days at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on February 18, 2017. (10) We have reached an agreement with Glencore Agriculture B.V. Rotterdam on a time charter for approximately 75 days at a rate of $11,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 21, 2017 after repositioning. The vessel had redelivered to Genco on March 11, 2017. (11) The vessel redelivered to Genco on April 10, 2017 and is currently in drydocking for scheduled maintenance. (12) We have reached an agreement with ED&F Man Shipping Ltd. on a time charter for approximately 30 days at a rate of $13,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 21, 2017 after repositioning. The vessel had redelivered to Genco on April 17, 2017. (13) We have reached an agreement to enter these vessels into the Bulkhandling Handymax A/S Pool, a vessel pool trading in the spot market of which Torvald Klaveness acts as the pool manager. Genco can withdraw a vessel with three months’ notice. (14) We have reached an agreement with Gearbulk Pool Ltd., Norway on a time charter for approximately 40 days at a rate of $16,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 29, 2017 after repositioning. The vessel had redelivered to Genco on April 10, 2017. (15) We have reached an agreement to enter these vessels into the Clipper Sapphire Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw a vessel with a minimum notice of six months. (16) We have reached an agreement with Western Bulk Pte. Ltd., Singapore on a time charter for 3 to 5.5 months at a rate of $9,350 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 19, 2017 after repositioning. The vessel had redelivered to Genco on March 16, 2017. (17) We have agreed to an extension with Centurion Bulk Pte. Ltd., Singapore on a time charter for 4 to 6.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advances less a 5.00% third-party broker age commission. The extension began on March 8, 2017. (18) We have reached an agreement with Eastern Bulk A/S on a time charter for 2 to 4.5 months at a rate of $11,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party commission. The vessel delivered to charterers on April 20, 2017 after repositioning. The vessel redelivered to Genco on April 18, 2017. (19) We have reached an agreement with Cargill International S.A. on a time charter for approximately 40 days at a rate of $15,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 11, 2017 after repositioning. The vessel had redelivered to Genco on March 27, 2017. (20) We have agreed to an extension with Centurion Bulk Pte. Ltd. on a time charter for 2.5 to 5.5 months at a rate of $8,500 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The extension began on April 3, 2017. (21) We have reached an agreement with Centurion Bulk Pte. Ltd. Singapore on a time charter for 2.5 to 5.5 months at a rate of $10,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 9, 2017. (22) We have reached an agreement to enter these vessels into the Clipper Logger Pool, a vessel pool trading in the spot market of which Clipper Group acts as the pool manager. Genco can withdraw the vessels with a minimum notice of six months. (23) We have reached an agreement with Ultrabulk A/S on a time charter for 2.5 to 5.5 months at a rate of $9,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on April 23, 2017. (24) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 15, 2017 after repositioning. The vessel had redelivered to Genco on February 21, 2017. (25) We have reached an agreement with Falcon Navigation A/S on a time charter for 3.5 to 6.5 months at a rate of $8,600 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on December 31, 2016. (26) We have reached an agreement with Clipper Bulk Shipping on a time charter for 3 to 5.5 months at a rate of $8,000 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel delivered to charterers on March 28, 2017. (27) We have reached an agreement with Falcon Navigation A/S on a time charter for 2.5 to 5.5 months at a rate of $9,250 per day. Hire is paid every 15 days in advance less a 5.00% third-party brokerage commission. The vessel is expected to deliver to charterers on or about May 10, 2017. The vessel has not been delivered to the charterer by the date specified in the agreement, and the charterer therefore has the option through the date of the vessel’s readiness to cancel the agreement. Genco Shipping & Trading Limited transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. As of May 8, 2017, Genco Shipping & Trading Limited’s fleet consists of 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize vessels with an aggregate capacity of approximately 4,735,000 dwt. Genco Shipping & Trading Limited will hold a conference call on Tuesday, May 9, 2017 at 8:30 a.m. Eastern Time to discuss its 2017 first quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (800) 723-6604 or (785) 830-7977 and enter passcode 6277973. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 6277973. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call. We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address.  The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only. "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements made 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 a 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. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) further declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or further declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube, oil, bunkers, repairs, maintenance and general, administrative, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete repairs on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; and other factors listed from time to time in our public 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, 2016 and its subsequent reports on Form 10-Q and Form 8-K. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.  We do not undertake any obligation to update or revise any forward‑looking statements, whether as a result of new information, future events or otherwise.


News Article | May 11, 2017
Site: www.marketwired.com

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 11, 2017) - Trevali Mining Corporation ("Trevali" or the "Company") (TSX:TV)(LMA:TV)(OTCQX:TREVF)(FRANKFURT:4TI) announces it has received initial delivery of part of its new Sandvik underground mining fleet for the Caribou Zinc Mine in the Bathurst Mining Camp of northeastern New Brunswick. Components of the new fleet, specifically new haul trucks and loaders, have arrived as scheduled and are currently being transitioned into operations where they are expected to deliver higher availability and production performance upon integration (Figure 1). To view "Figure 1: New Sandvik loaders and haul trucks getting delivered to Trevali's Caribou Zinc Mine in NB" accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/1094389_Fig1.pdf As part of a site-wide optimization initiative, the new underground mining fleet for the Caribou Zinc Mine is an approximately Cdn$20-million investment through a partnership with Sandvik Mining that will supply and maintain a full fleet of mining equipment for Caribou operations. This initiative and transition to owner-operated status is expected to deliver safer and more productive operational capabilities and significant savings in overall Caribou operating costs. Currently there are three loaders and four TH540 trucks onsite at Caribou as part of this initial equipment delivery. Additional components of the new Sandvik underground mining fleet are scheduled to be delivered over the next several weeks. The project is currently approximately a Quarter ahead of schedule for full transition of mining activities by the end of Q2-2017. Trevali also announces commencement of its 2017 underground diamond drilling program. Boart Longyear Canada have been awarded the 14,400-metre contract for underground diamond drilling services. The program is a follow up to the 14,000-metre 2016 drill program that targeted inferred and indicated resources on both the North and East limbs of the deposit. The 2017 program will continue this effort below the current workings on both the North Limb and East Limb, with a concerted emphasis on the down-plunge area of the North Limb that shows the greatest potential for addition of inferred resources (Figures 2 & 3). The goal for the 2017 program is to upgrade a significant portion of inferred resources (approximately 2-2.5 million tonnes) to the indicated category. A portion of the 2017 program is also slated to further delineate and upgrade indicated resources into the measured category. The proposed Caribou underground drilling for 2017 is shown in the longitudinal section views below (Figures 2 & 3). To view "Figure 2: Caribou Mine - North Limb 2017 underground drill program plan" accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/1094389_Fig2.pdf To view "Figure 3: Caribou Mine - East Limb 2017 underground drill program plan" accompanying this press release, please visit the following link: http://media3.marketwire.com/docs/1094389_Fig3.pdf In addition to the Caribou underground drill program, a surface drill campaign is currently underway to test near-mine targets. Trevali is a zinc-focused, base metals mining company with two commercially producing operations. The Company is actively producing zinc and lead-silver concentrates from its 2,000-tonne-per-day Santander mine in Peru and its 3,000-tonne-per-day Caribou mine in the Bathurst Mining Camp of northern New Brunswick. Trevali also owns the Halfmile and Stratmat base metal deposits, located in New Brunswick, that are currently undergoing a Preliminary Economic Assessment reviewing their potential development. Additionally, the Company has entered into a definitive agreement with Glencore PLC to acquire a portfolio of zinc assets from Glencore, including an 80% interest in the Rosh Pinah mine in Namibia, a 90% interest in the Perkoa mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namibia, an option to acquire 100% interest in the Heath Steele property in Canada and certain related exploration properties and assets. The common shares of Trevali are listed on the TSX (symbol TV), the OTCQX (symbol TREVF), the Lima Stock Exchange (symbol TV), and the Frankfurt Exchange (symbol 4TI). For further details on Trevali, readers are referred to the Company's website (www.trevali.com) and to Canadian regulatory filings on SEDAR at www.sedar.com. On Behalf of the Board of Directors of This news release contains "forward-looking statements" within the meaning of the United States private securities litigation reform act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results and the Company does not intend, and does not assume any obligation to, update such statements containing the forward-looking information. Such forward-looking statements and information include, but are not limited to statements as to: the expected benefits of the proposed Transaction, the closing the Transaction,, including the anticipated timing thereof, the satisfaction of all conditions to closing the Transaction and the Offering including, without limitation, obtaining all necessary consents and approvals, the completion of the debt financing, the Company's plan to prepare a new PEA for its Halfmile and Stratmat properties, the accuracy of estimated mineral resources, anticipated results of future exploration, and forecast future metal prices, expectations that environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other issues will not materially affect estimates of mineral resources. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in spot and forward markets for silver, zinc, base metals and certain other commodities (such as natural gas, fuel oil and electricity); fluctuations in currency markets (such as the Canadian dollar and Peruvian sol versus the U.S. dollar); risks related to the technological and operational nature of the Company's business; changes in national and local government, legislation, taxation, controls or regulations and political or economic developments in Canada, the United States, Peru or other countries where the Company may carry on business in the future; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, cave-ins and flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with and claims by local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses and permits and the presence of laws and regulations that may impose restrictions on mining; diminishing quantities or grades of mineral resources as properties are mined; global financial conditions; business opportunities that may be presented to, or pursued by, the Company; the Company's ability to complete and successfully integrate acquisitions and to mitigate other business combination risks; challenges to, or difficulty in maintaining, the Company's title to properties and continued ownership thereof; the actual results of current exploration activities, conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors; increased competition in the mining industry for properties, equipment, qualified personnel, and their costs. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law. Trevali's production plan at the Caribou Mine is based only on measured, indicated and inferred mineral resources, and not mineral reserves, and does not have demonstrated economic viability. Trevali's production plan at the Santander Mine is based only on measured, indicated and inferred mineral resources, and not mineral reserves, and does not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is therefore no certainty that the conclusions of the production plans and Preliminary Economic Assessment (PEA) will be realized. Additionally, where Trevali discusses exploration/expansion potential, any potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. We advise US investors that while the terms "measured resources", "indicated resources" and "inferred resources" are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize these terms. US investors are cautioned not to assume that any part or all of the material in these categories will ever be converted into reserves. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state and may not be offered or sold within the United States, absent such registration or an applicable exemption from such registration requirements. The TSX has not approved or disapproved of the contents of this news release.


$43.1 million at March 31, 2017 in cash and equivalents VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 9, 2017) - Sabina Gold & Silver Corp. ("Sabina") or (the "Company") (TSX:SBB) reports the financial results for the quarter ended March 31, 2017. "Much was accomplished during the first quarter as we continued to de-risk the Back River Project. On the permitting front, we continued to work with all stakeholders on the Project prior to the NIRB final hearing at the end of this month," said Bruce McLeod, President & CEO. "We have worked particularly hard on our wildlife mitigation proposals which we believe are now the best in class in the north. We continue to build support for the Project through further community engagement efforts, and have also continued to progress project development with basic engineering underway and have completed a high impact drilling program for which assay results are pending. We look forward to the next steps for the Company and the Project as we work towards becoming a gold producer." For the three-month period ended March 31, 2017, the Company reported a net loss of $1.4 million, unfavourable by $0.8 million compared to the same period of 2016. The difference was largely the result of higher stock-based payments and lower finance income partially offset by deferred income tax recovery. The Company had cash and cash equivalents and short-term investments of $43.1 million at March 31, 2017 compared to cash and cash equivalents and short-term investments of $39.9 million at December 31, 2016. For the full March 31, 2017 interim financial statements and Management's Discussion and Analysis, please see the Company website at www.sabinagoldsilver.com or on SEDAR. Sabina Gold & Silver Corp. is a well-financed, emerging precious metals company with district scale, world class undeveloped assets in one of the world's newest, politically stable mining jurisdictions: Nunavut, Canada. In September, 2015, Sabina released a Feasibility Study on its 100% owned Back River Gold Project which presents a project that has been designed on a fit-for purpose basis, with the potential to produce ~200,000 ounces a year for ~11 years with a rapid payback of 2.9 years. At a US$1,150 gold price and a 0.80 exchange rate, the Study delivers a potential after tax internal rate of return of approximately 24.2% with an initial CAPEX of $415 million. In addition to Back River, Sabina also owns a significant silver royalty on Glencore's Hackett River Project. The silver royalty on Hackett River's silver production is comprised of 22.5% of the first 190 million ounces produced and 12.5% of all silver produced thereafter. All news releases and further information can be found on the Company's website at www.sabinagoldsilver.com or on SEDAR at www.sedar.com. All technical reports have been filed on www.sedar.com. This news release contains "forward-looking information" within the meaning of applicable securities laws (the "forward-looking statements"), including our belief as to the extent, results and timing of exploration programs and various studies including the FS, and exploration results, reserves estimates, potential production from and viability of the Company's properties, production and operating costs and permitting submission, timing and receipt of necessary permits and project approvals for future operations and access to project funding. These forward-looking statements are made as of the date of this news release. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements. Such factors and assumptions include, among others, the effects of general economic conditions, commodity prices, changing foreign exchange rates and actions by government and regulatory authorities and misjudgments in the course of preparing forward-looking statements. In addition, there are known and unknown risk factors which could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks associated with exploration and project development; the need for additional financing; the calculation of mineral resources and reserves; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; government regulation; obtaining and renewing necessary licences and permits; environmental liability and insurance; reliance on key personnel; the potential for conflicts of interest among certain of our officers or directors; the absence of dividends; currency fluctuations; labour disputes; competition; dilution; the volatility of the our common share price and volume; future sales of shares by existing shareholders; and other risks and uncertainties, including those relating to the Back River Project and general risks associated with the mineral exploration and development industry described in our Annual Information Form, financial statements and MD&A for the fiscal period ended December 31, 2016 filed with the Canadian Securities Administrators and available at www.sedar.com. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We are under no obligation to update or alter any forward-looking statements except as required under applicable securities laws. This news release has been authorized by the undersigned on behalf of Sabina Gold & Silver Corp.


To be prudent, however, and in order to exercise due diligence, the Audit Committee of the Board of Directors has retained a U.S.-based outside law firm to commence a third-party investigation into the matters set forth in the Prosecutor's Office announcement, as more fully described below. In light of the Prosecutor's Office announcement, the Company´s auditor for 2014-2015 has said it is not ready to consent to the use of its opinion in connection with the filing of the Form 20-F, and accordingly will continue to monitor the progress of the third-party investigation. In order to address the non-filing of the 2016 Form 20-F, the Company will hold a conference call tomorrow May 17 at 3.45 pm Bogotá (4.45 pm EST). Details of the call will follow shortly. Due to the inability of the Company to file its 2016 Form 20-F by May 16, we consider relevant to update on the current status of the most significant ongoing investigations and proceedings with regards to Reficar. Ecopetrol is a corporation majority owned by the Colombian Government that administers public resources and Reficar is a wholly owned subsidiary of Ecopetrol. Ecopetrol's employees have a statutory responsibility to ensure the proper use of public resources. Reficar´s employees also have a duty for proper management of public resources. The conduct of Ecopetrol's and Reficar's employees is generally subject to the control and supervision of the following control entities, among others: The following are the most significant investigations and proceedings carried out by the aforementioned state entities: 1. The Office of the Comptroller General's investigations and proceedings: As a result of the modifications of the schedule and budget related to Reficar´s expansion and modernization project (the "Project"), the Office of the Comptroller General initiated a special audit investigation of the Project in 2016 and delivered a final report to Reficar on December 5, 2016. The report made 36 findings, most of which were related to increased costs compared to budget for services, labor and materials, which were appropriately explained by the company. As required, on January 18, 2017, Reficar submitted an action plan addressing the 36 findings in the following areas: (i) contract management, (ii) supervision of engineering standards contracted with third parties and (iii) documentation of the control, reporting and monitoring mechanisms of subcontracts. As a result of the findings described above, the Office of the Comptroller General recently opened actions for financial responsibility (proceso de responsabilidad fiscal) against 36 individuals and the six companies involved in the Project, including current and former members of Ecopetrol´s board of directors (including the current CEO of Ecopetrol); former members of Reficar´s board of directors; current and former employees of Ecopetrol; and former employees of Reficar, as well as Chicago Bridge & Iron Company N.V., CBI-Chicago Bridge & Iron Company (CB&I) Americas Ltd., Chicago Bridge & Iron Company CB&I UK Limited, CBI Colombiana S.A., Foster Wheeler USA Corporation and Process Consultants Inc. These actions pertain to an eventual reduction of the value of state assets due to a lower than expected profitability of Reficar as a result of the modifications of the schedule and budget of the Project. In January 2017, the Office of the Comptroller General initiated another special audit of Reficar. As of the date of this release, the audit is in its preliminary stage. The Attorney General´s Office has two ongoing investigations relating to the Project: (i) the first, initiated in 2012 against members of Reficar's board of directors at the time, as well as certain current and former officers of Reficar; and (ii) a more recent investigation regarding delays in the completion of the Project, focusing on the role of current and former officers of Ecopetrol, as well as current and former members of Ecopetrol's board of directors. The Prosecutor's Office is conducting a confidential investigation. In connection therewith, on April 27, 2017, the Prosecutor's Office announced in a press release his intention to pursue charges (including document forgery, illegal interest in the execution of agreements, misappropriation of public funds and unjust enrichment) against: (i) four former executives and officials of Ecopetrol and Reficar, (ii) one current employee of Ecopetrol who  was assigned to work in Reficar between 2012 and 2016, (iii) two executives of CB&I and (iv) Reficar's statutory auditor for 2013-15. No current executives of Ecopetrol, Reficar or members of the board of directors of Ecopetrol or Reficar are included in the Prosecutor's Office press release. In the press release, the Prosecutor's Office also announced that, in order to conclude the next phases of the investigation -- related to, among others, the selection of a strategic partner, the exit of Glencore International AG (the former majority owner of the Project) and the selection of the contractor -- it would be interviewing executives of Ecopetrol, Reficar, Glencore and the supervisory joint venture conformed by Foster Wheeler USA Corporation and Process Consultants Inc. Ecopetrol and Reficar have cooperated closely and extensively with the control entities in furthering their investigations and will continue to monitor the status and development of these investigations. In March 2016, Reficar filed a Request for Arbitration before the International Chamber of Commerce against Chicago Bridge & Iron Company N.V., CB&I (UK) Limited, and CBI Colombiana S.A. with respect to the Engineering, Procurement, and Construction Contract entered into by and between Reficar and CB&I for the expansion of the Cartagena Refinery in Cartagena, Colombia.  Reficar seeks no less than US$2 billion in damages plus lost profits. On May 25, 2016, CB&I filed an answer and counterclaim in the amount of approximately USD $213 million. On June 27, 2016, Reficar responded to CB&I's counterclaim by denying any liability to CB&I. On April 28, 2017, Reficar submitted its Non- Exhaustive Statement of Claim and CB&I submitted its Statement of Counterclaim. The ICC proceeding is currently in its preliminary stage and is scheduled for a hearing in October 2018. Ecopetrol is the largest company in Colombia and is an integrated oil & gas company; it is among the top 50 oil companies in the world and among the four top ones in Latin America. Besides Colombia - where it generates over 60% of the national production - it has exploration and production activities in Brazil, Peru & the US (Gulf of Mexico). Ecopetrol owns the largest refinery in Colombia and most of the pipeline and multi-product pipeline network in the country, and is significantly increasing its participation in bio-fuels. This release contains statements that may be considered forward looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties, including in respect of the Company's prospects for growth and its ongoing access to capital to fund the Company's business plan, among others. Consequently, changes in the following factors, among others, could cause actual results to differ materially from those included in the forward-looking statements: market prices of oil & gas, our exploration and production activities, market conditions, applicable regulations, the exchange rate, the Company's competitiveness and the performance of Colombia's economy and industry, to mention a few. We do not intend, and do not assume any obligation to update these forward-looking statements. For further information, please contact: To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ecopetrol-announces-the-non-filing-of-its-annual-report-on-form-20-f-for-the-year-ended-december-31-2016-300459064.html


News Article | May 16, 2017
Site: www.engineeringnews.co.za

Swiss trading giant Glencore and US private equity investor Carlyle Group have teamed up in an attempt to buy Morocco's only oil refinery, hoping to recoup about $600-million in loans they issued to the plant before it went bankrupt, industry sources said. Two sources close to the process said the Moroccan government wanted at least $2-billion for the plant at Mohammedia, on the Atlantic coast near Casablanca. However, no decision on any sale is imminent, due partly to its complex debts. The 200 000 barrel per day refinery fell foul of the global oil price crash. It stopped operating in August 2015 after the government froze the bank accounts of its loss-making operator, Samir, seeking 13-billion dirham ($1.35-billion) in unpaid taxes. If the deal goes through, it would become Glencore's first oil refinery and allow the plant to restart production, a crucial condition for repaying debts to a wide group of foreign creditors. A Moroccan court ruled last year that Samir should be liquidated despite attempts to restart production by the company, which was controlled by the Corral Petroleum Holdings group of Saudi-billionaire Mohammed al-Amoudi. On top of the unpaid taxes, several large oil companies and trading houses, including Glencore, are owed around $1-billion by Samir. This debt was extended mainly in the form of crude oil which they lent to the refiner in return for repayment in cash or refined products later. However, Samir became the biggest casualty of the 2014-2015 oil price crash in the Mediterranean region, becoming unable to repay the debts from sales of petroleum products. Glencore, the world's second largest oil trader after Vitol, has repeatedly insisted the plant needs to restart production so creditors can gradually recoup the money. It has now joined Carlyle, which already co-owns refineries in Switzerland and Germany with Vitol, in offering to buy the plant, four industry sources familiar with talks said. The sources declined to be named as talks are confidential. Mohammed El-Krimi, appointed by a Moroccan court to oversee the plant's liquidation, said information about bidders and the process was confidential. "I cannot confirm or deny," he told Reuters. Glencore has a $200-million prepayment deal with Samir funded by loans from banks Natixis and APICORP. A source familiar with the situation said negotiations to restructure the debt were on hold until there was clarity on the fate of the plant. Trading houses have been specialising for decades in lending to clients in financial difficulty and earning extra money by getting preferential access to their oil or product flows. Apart from Glencore, Samir's creditors include Vitol, BB Energy, Socar Trading and the trading arm of oil major BP. Among Samir's biggest lenders is Carlyle Commodity Management, a subsidiary formerly called Vermillion, which has been previously unseen in active commodities lending in Europe, the Middle East and Africa. Vermillion loaned oil worth over $400-million to Samir. DIFFICULT PROCESS The price sought by the government remains up in the air. "Estimates are ranging wildly between $2-billion to $3.5-billion with or without debts and overdue taxes," one of the sources close to the process said, adding that there was no deadline for completing a sale and that a decision was not close. At stake for Morocco are rebuilding its strategic fuel stocks, which had been stored at the plant, and the livelihood of the town of Mohammedia. According to Samir's website, the refinery and accompanying assets provided employment for 4,200 people. However, the sale process has been described by several participants as lacking transparency on the total debts involved. Any buyer will also have to upgrade the plant after a long shutdown, which could cost hundreds of-millions of dollars more. "No adviser was approved to interact with potential investors... That is not the way to sell a desperate refiner to a foreign investor," a source with one of the creditors, who is not bidding for Samir, said. "If you want to get documents about court proceedings, the only option is to go and read them in court," the source said, adding that photocopies were not allowed. "The process can be best described as the blind leading the blind."

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