New York-listed Genco Shipping & Trading remains eager to expand on its current fleet of 44 bulkers and thinks opportunities might emerge in the first part of 2023. Genco chief executive John Wobensmith confirmed the ambition in answer to a question from BTIG analyst Greg Lewis on an earnings call, saying that while asset prices have come off in recent months, they may have further to go. “The short answer is ‘yes,’” Wobensmith told the researcher. “We’ve set this company up to always play offence. We’ve put ourselves in that position pretty solidly. We have an overall goal of expanding the fleet beyond normal fleet renewal. It’s a matter of finding the right opportunity. Asset prices have come down a little. But I still don’t think they match where freight rates are today.”

Wobensmith suggested that because newbuilding prices remain high, values are the secondhand market “could be a little more sticky and less correlated” to freight markets for the next few years. “But we think there could be some opportunities in the first part of next year. We’re focused on buying at the right time,” he said.

While the conversation did not go there, TradeWinds has reported that Genco investigated the acquisition of an entire company, Singapore-based Grindrod Shipping Holdings, earlier this year while values were still much closer to the top of the market. Genco submitted a shares-based offer for the company but was unwilling to improve it on request with the dry rates market starting to deteriorate. Connecticut neighbor Eagle Bulk Shipping then backed off a cash offer and Grindrod went to UK-listed Taylor Maritime Investments, subject to a tender offer that remains pending.

When Wobensmith talks about setting up the company to play offence, much of it has to do with Genco’s low debt levels, which fell to $180m or 11% on a loan-to-value (LTV) basis at the end of the third quarter. Its aggressive debt repayment within 2022 is also tied to a high-payout dividend strategy which saw Genco dish out $0.78 per share, a 56% improvement over the second quarter. But with the yield at 22%, the numbers also show Genco has some way to go to fully execute the strategy. It would like its share price to run up to the point that the dividends reflect a single-digit yield, and that’s not happening yet.

Genco recorded spot rates for its supramaxes and ultramaxes that were some $7,000 above the Baltic Supramax Index, and this without the benefit of exhaust gas scrubbers. Wobensmith told analysts his team had looked ahead in the second quarter and worried Ukraine grain shipments would be severely impacted by Russia’s invasion, so booked forward cover as a hedge. “We purposely began taking forward cover for third and fourth quarter. We didn’t believe there was going to be a whole lot of grain coming out of Ukraine,” Wobensmith said.