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With warchest, Genco in position to strike
New York-listed bulker owner’s $180m in cash allow it to seek growth opportunities, executive and analyst say.
August 8th, 2017 15:45 GMT
by Eric Martin
Published in Finance
Genco Shipping & Trading is positioned with ample liquidity that puts it in a position to take advantage of buying opportunities, an analyst and company executive said after the company’s earnings report.
Clarksons Platou Securities’ John Gandolfo said the bulker owner some $180m in cash on its balance sheet against $526m in debt.
Genco sees narrower loss in second quarter
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“Assuming the application of a modest 50% leverage to potential acquisitions and based on Clarksons current assessments of $32m for a five-year-old capesize, we project the capacity for the company to comfortably take on a potential seven to eight five-year-old capes in the current market environment,” he said.
Chief executive John Wobensmith said in an earnings briefing that the company is “well positioned to capitalise on compelling growth opportunities”.
His note to came after Genco reported a net loss of $14.5m in the second quarter, which is slightly smaller than analysts were expecting.
The John Wobensmith-led company has also put three panamaxes and two handysize bulkers, all built in 1999, on the selling block, with potential lowering the average age of to eight years from nine years, Gandolfo said.
“As the company continues shed its older tonnage, we see it operating a cash-laden platform, primed for opportunistic growth along the course of a dry bulk market recovery,” said the analyst, who rates the company’s New York-listed shares as a “buy”.