Diana Shipping, Inc. Q2 FY2024 earnings call

• Company snapshot: Founded in 1972, listed on NYSE since 2005, operates a fleet of 39 dry bulk vessels, 5 mortgage-free with average age 11 years, total deadweight ~4.4 million tons. Expecting delivery of two methanol dual-fuel newbuildings Kamsarmax dry bulk vessels in 2027 and 2028. Fleet utilization in Q2 2024 reached 99.5%. Employed 1,000 people at sea and shore.
• Key developments: Recharted 8 vessels year-to-date with average charter rate increase of 11%; announced pricing of $150 million placement in Norwegian market of senior unsecured bonds; raised $25.3 million from exercise of warrant with further $65 million possible; signed $167.3 million six years secured term loan facility; secured revenue for 74% of 2024 remaining ownership days and 26% for 2025; declared quarterly cash dividend of $7.05 per common share.
• Recent chartering activity: Secured profitable time charters for 8 vessels, including 1 Ultramax at $15,400 per day for 316 days, 6 Panamax and post-Panamax at weighted average $15,455 per day for 259 days, and 1 Newcastlemax at $28,700 per day for 438 days.

In the second quarter, the average Baltic time charter rates for Capesize vessels fell around 7%, while Panamax rates increased by 6% and Supramax rates arose by 16%. Financially, the company's net debt stands at 38% of market value with $140 million in cash reserves and total secured revenues of approximately US$145 million. The company has secured revenue for 74% of the remaining ownership days of 2024, amounting to approximately US$76.8 million and approximately US$68.9 million for 2025, covering 26% of the available ownership date.

• After a strong first quarter, the second quarter remained resilient. The end of Q2 and start of Q3 are somewhat muted but sentiment remains strong as shown by recent fixtures.
• Secured revenue for 74% of 2024 remaining ownership days amounting to ~$76.8 million and ~$68.9 million for 2025, covering 26% of available ownership date.
• Based on FFA rates as of July 26, 2024, there is room to have profit in 2024 and cashflow in 2024 and 2025.

• Geopolitical developments have a profound effect on the dry bulk carrier market.
• Panama Canal bulker transits might start increasing in the second half of the year, somewhat reducing ton-mile demand.
• Potential onset of a strong La Niña event later this year could bring weather disruptions in key exporters.
• Environmental policies will influence earnings as 25% of the bulk carrier fleet capacity is estimated to have been rated D or E for CII last year.
• Most of the bulkers delivered between 2009 and 2011 will soon have to pass their third special survey and comply with latest environmental restrictions, with several possibly being sold for scrap depending on market conditions.