Diana Shipping’s unique features and key May 14 discussions

By

Updated

Diana Shipping Inc.

Diana Shipping Inc. (DSX) is a ~$900 million market cap company that transports dry bulk commodities such as coal, iron ore, and grain using dry bulk ships. Its peers include DryShips Inc. (DRYS), Navios Maritime Partners (NMM), Navios Maritime Holdings Inc. (NM), and Safe Bulkers Inc. (SB). Surprisingly, unlike those peers, Diana Shipping isn’t part of the Guggenheim Shipping ETF (SEA), which invests in financially strong shipping companies worldwide.

Fleet profile

Article continues below advertisement

Diana’s fleet consists of 38 dry bulk vessels (two Newcastlemax, ten Capesize, three Post-Panamax, three Kamsarmax, and 20 Panamax) as of May 12, 2014. The company plans to receive two new-build Newcastlemax dry bulk vessels and one Kamsarmax dry bulk vessel during the second quarter of 2016. Diana’s combined fleet carrying capacity, excluding the three vessels not yet delivered, is approximately 4.21 million dwt (deadweight tonnage) with a weighted average age of 6.70 years. Note that the company also owns approximately 9.51% of the issued and outstanding shares of Diana Containerships Inc. (DCIX), a shipping company that currently owns eight container vessels.

Quarterly performance

For the first quarter of 2014, DSX recorded a net loss of $6 million, compared to a net loss of $3.2 million in the same quarter the year before. Time charter revenues stood at $41.1 million, compared to $42.6 million in first-quarter 2013 due to lower TCE (time charter equivalent) rates of $11,820 during the first quarter compared to $14,398 in the previous quarter. Vessel expenses amounted to $20.7 million, a 15% increase from the first quarter of 2013, mainly led by a 17% increase in ownership days resulting from the fleet’s expansion.

However, the decline in time charter revenues was partially offset by revenues derived from a rise in  ownership days—to 3,280 compared to 2,806 in first-quarter 2013. This further resulted from an increase in the average number of vessels from 31.2 a year ago to 36.4 last quarter.

Note: This report was co-prepared by Xun Yao Chen.

Advertisement

More From Market Realist