Genco has secured a new loan facility that will be used to finance scrubber installations, it revealed today alongside a profitable fourth quarter.
The New York-listed company said it had entered into an amendment to its $460m credit facility, which will provide extra funds for fitting scrubbers.
The revised loan will provide up to $35m in additional cash to cover up to 90% of the expenses related to buying and installing exhaust gas cleaning systems on 17 capesize vessels, Genco said.
Genco recorded net income of $18.3m for the last three months, but the profitable quarter was not enough to improve the company’s overall result for 2018.
During the full year, Genco posted a net loss of $32.9m, which is an improvement on the loss of $58.7m during 2017.
The full-year result was impacted by a $56.6m non-cash vessel impairment charge and a $4.5m loss on debt extinguishment,.
Genco did, however, receive a $3.5m gain from its sale of eight vessels during the year.
The results equate to basic and diluted earnings of $0.44 per share during the fourth quarter and a loss of $0.86 per share for the full year.
John C Wobensmith, Genco’s chief executive officer, said the company had taken steps during the year to optimise its fleet composition and enhance its capital structure.
“Specifically, under the first full year of our revamped commercial operation, we outperformed our benchmarks meaningfully which, together with firm market conditions, led Genco to generate significant operating cash flows, while reinforcing an already strong balance sheet,” he said in the company's financial report.
Genco’s timecharter equivalent (TCE) rate increased to $13,237 for the fourth quarter 2018.
Its full-year TCE rate reached $11,364, its highest level since 2011 and a 28% improvement over 2017.
Genco is in a solid financial position with which to weather short-term volatility in freight rates and the rest of the year ahead, its chief executive said.
“We believe such short-term volatility highlights the importance of our solid liquidity position as well as our approach of deploying a fleet with direct exposure to the major and minor dry bulk commodities, both of which present strong long-term demand prospects underpinned by a backdrop of low net fleet growth,” said Wobensmith.
