As Russia’s war on Ukraine drags into another month with no end in sight, a cloud is hanging over peak grain season for bulker owners. Genco Shipping & Trading chief executive John Wobensmith acknowledged on an earnings call on Thursday that it’s difficult to piece together exactly how the scenario might play out. “I still have the opinion that not a lot of grain will flow out of Ukraine,” Wobensmith told B Riley Securities analyst Liam Burke. “I think there’s a possibility that the US may make up some of that. Brazil as it comes into its growing season later in the year will make up some of that.”

But Ukraine is a significant producer, typically generating a fifth of the world’s high-grade wheat and 7% of all wheat. The UN’s World Food Program buys about half its wheat from Ukraine. The country also has about 30 MMT of wheat in storage. But nearly all Ukrainian grain exports move by ship, and Russia’s navy has effectively blockaded cargoes from Black Sea ports. “I think there will be a tonne-mile expansion,” Wobensmith said, as alternative sources come into the picture. “It’s difficult to determine whether it will be a net gain or a net loss. I do look at it as a risk. I’m not sure whether it’s an upside risk or a downside risk right now. But we’re not going to have massive volatility” given an abundance of other cargoes, he said.

Genco is looking at hedging some of the risk through charter coverage “at very good rates,” Wobensmith said. The discussion came after Genco reported net income of $41.7m, or $0.97 per share, for the first quarter, its strongest start to a year since 2010. The owner had voyage revenue of $136.2m, up 189% from the first quarter of 2021. Genco’s first dividend under its new high-payout strategy came to $0.79 per share. The policy remained a major talking point in Wobensmith’s exchange with analysts.

Continued debt repayment has left Genco with a 12% loan-to-value ratio. “Our medium-term goal is to get down to net-debt zero,” Wobensmith said. “We’re not there yet. We might get down to net-debt zero by the end of 2023, depending on what values do.” Genco owns 17 capesize, 15 ultramax and 12 supramax vessels with an average age of 10.2 years.