Shares of Genco Shipping & Trading Limited (NYSE:GNK) soared Tuesday after the US drybulk shipowner beat Wall Street’s fourth-quarter estimates, thanks to a surge in the hiring of its vessels.
In the three months until December 31, Genco posted net income of $18.3 million, or $0.44 per share, up from profits of $2.6 million, or $0.07 per share in the year-ago quarter. On an adjusted basis, its earnings came in at $0.39, excluding a $2 million gain on the sale of vessels, which zipped past analysts’ consensus of $0.29.
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Genco’s revenues, meanwhile, amounted to $112.2 million, coming in ahead of the $74.9 million posted in the year-ago quarter, as well as the consensus of $71.87 million.
Investors applauded the results, sending Genco shares up 4.9% to $8.80 in afternoon trade Tuesday.
Genco specializes in the ocean transport of dry bulk cargoes, including iron ore, coal, steel and grains.
The New York company’s fleet now consists of 58 vessels, including 17 Capesize, two Panamax, six Ultramax, 20 Supramax and 13 Handysize vessels.
Its rental prices have increased as the average daily time charter equiValent rate obtained by Genco’s fleet was $13,237 per day in the quarter compared with $10,761 in the year-ago period.
During the fourth quarter, the drybulk freight market remained at healthy levels despite pockets of volatility in the middle of the quarter for Capesize vessel earnings.
Since the start of 2019, however, freight rates have been less predictable, taking a hit from weather-related disruptions and the miner Vale’s dam tragedy in the state of Minas Gerais in Brazil.
“So far in 2019, seasonal factors coupled with events such as the Vale dam tragedy have led to volatility in freight rates in the short-term,” said John Wobensmith, CEO of Genco, in a statement. “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 drybulk commodities both of which present strong long-term demand prospects underpinned by a backdrop of low net fleet growth.”
Contact Ellen Kelleher at ellen@proactiveinvestors.com