Gener8 Maritime’s Loss Almost Doubled in Q3

Nov 10, 2017

New York-based shipping company Gener8 Maritime increased its net loss to USD 67.5 million in the third quarter of this year from USD 37.4 million posted in the corresponding period a year earlier.

Operating loss for the quarter stood at USD 47.7 million, against an operating loss of USD 25.2 million reported in Q3 2016.

Net voyage revenues dropped to USD 47.9 million in the quarter ended September 30, 2017, from USD 69.1 million seen in the same period of 2016. The decrease was due to a drop in the company’s average TCE rate by USD 6,130.

On October 9, 2017, the company took delivery of Gener8 Nestor, a 2017-built VLCC newbuilding which entered the VL8 Pool. In the third quarter of this year, Gener8 Maritime entered into an agreement to lower the final installment payment for the ship by USD 19.3 million.

During the quarter, Gener8 Maritime into a series of transactions that are expected to increase cash on the balance sheet by approximately USD 99.2 million and reduce total indebtedness by approximately USD 187.7 million.

The company sold the 2002-built Aframax Gener8 Elektra, two 1999-built Suezmax tankers, Gener8 Horn and Gener8 Phoenix, and two 2016-built VLCCs, Gener8 Noble and Gener8 Theseus, generating net cash proceeds of USD 65.9 million.

Subsequent to the end of the quarter, the company sold or entered into agreements to sell the 2003-built Aframax Gener8 Pericles, the 2000-built Suezmax Gener8 Argus, the 2002-built VLCC Gener8 Poseidon, and the 2010-built VLCC Gener8 Zeus for expected net cash proceeds of USD 33.2 million.

“We have taken a series of steps this year to enhance our fleet profile, increase liquidity, and improve our balance sheet,” Peter Georgiopoulos, Chairman and Chief Executive Officer of Gener8 Maritime, explained.

“By the end of this year, we expect that over 75% of our fleet will be comprised of ECO VLCCs on a DWT basis… Combined with reduced breakeven costs resulting from our unscheduled debt repayments, we believe that we have positioned Gener8 to stay competitive in the current weak rate environment and outperform the market when it recovers,” he added.

“Almost all of the vessels we have sold this year were financed under the company’s more expensive debt facility; this was done strategically to strengthen our balance sheet. In 2017 through the end of the third quarter, Gener8 has made unscheduled debt repayments of over USD 163 million, and we expect to pre-pay approximately USD 64 million of additional outstanding debt following vessel sales that have closed or are expected to close subsequent to the end of the third quarter,” Leo Vrondissis, Chief Financial Officer of Gener8 Maritime, commented.

As of November 9, 2017, Gener8 Maritime has a fleet of 31 wholly-owned vessels comprised of 22 VLCCs, 6 Suezmax, one Aframax, and two Panamax tankers with a total carrying capacity of approximately 7.8 million DWT and an average age of approximately 3.2 years on a DWT basis.

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