Genco Shipping & Trading Limited, the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today announced the removal of the drydocking capex line item from its formula used to calculate its quarterly dividend. This will increase the amount of cash available for distribution to shareholders beginning in the third quarter of 2024.
The amount available for quarterly dividends is to be calculated based on the following updated formula, commencing in Q3 2024:
| Dividend calculation | ||
| Net revenue | ||
| Less: operating expenses | ||
| Operating cash flow | ||
| Less: voluntary quarterly reserve | ||
| Cash flow distributable as dividends | ||
The voluntary quarterly reserve for the third quarter of 2024 under the Company’s dividend formula is $19.50 million, which remains fully within the Company’s discretion. We plan to continue to review the voluntary reserve to further enhance shareholder value over the long-term.
For the balance of 2024 and 2025, drydocking capex is estimated to be as follows:
- Q3 2024: $11 million or $0.25 per share
- Q4 2024: $7 million or $0.16 per share
- FY 2025: $41 million or $0.95 per share
Actual drydocking capex will vary based on various factors, including where the drydockings are actually performed.
John C. Wobensmith, Chief Executive Officer, commented, “Based on Genco’s notable achievements in executing its capital allocation strategy, we have enhanced our quarterly dividend formula by eliminating the drydocking capex line item within our calculation. As we approach our goal of net debt zero, we are pleased to take another important step to reward shareholders aimed at further strengthening shareholder returns. This enhancement to our dividend formula reflects our belief that our low leverage will support larger dividends to shareholders. At the same time, we continue to maintain significant financial strength to grow and renew our fleet and further improve our earnings power.”
Mr. Wobensmith continued, “Since implementing our comprehensive value strategy three years ago, we have made demonstrable progress executing on all three core pillars. Notably, Genco has distributed 20 consecutive quarterly dividends to shareholders, returning a total of $5.915 per share, or ~35% of our share price as of September 9, 2024. We have also further modernized our sizeable drybulk fleet, while lowering our debt nearly 80% since 2021, significantly reducing our net loan to value and cash flow breakeven to industry lows.”