HSHP

• Fleet and ESG Performance:

  • Himalaya Shipping operates a fleet of 12 modern dual-fuel LNG Newcastle MAX bulk carriers, which rank in the top 1% of emission ratings for large bulk carriers.
  • The fleet has delivered consistent shareholder returns, with 31 consecutive months of dividends, totaling 59 cents per share for Q2 2026.
  • The company's all-in cash break-even is equivalent to $17,500 per day on the Baltic Cape Size Index, meaning the company generates profit when the index is above this level.

• Commercial Strategy and Recent Operational Updates:

  • The company's preferred strategy is to charter most vessels on index-linked contracts, which allows capturing upside during market upswings while retaining flexibility to convert to fixed-rate contracts when value is identified on the forward FFA curve.
  • Currently, 10 out of 12 vessels retain spot market exposure to capture projected strong performance in H2 2026.
  • Over the last three years, the fleet has traded at an average 48% premium to the Baltic Cape size index and a 25% premium to peer vessels, driven by extra cargo capacity and industry-leading speed and fuel efficiency design.
  • In Q2 2026, the company secured a new 12-14 month index time charter for the Mount Emaj at a significant premium to prevailing market rates, converted four vessels from index to fixed-rate contracts for June at an average of $56,500 per day, and declared Q2 cash distributions of 59 cents per share.
  • Post-quarter, the company achieved July 2026 average daily time charter equivalent earnings of $51,200, declared a 22 cent per share July cash distribution, secured a new 16-18 month index-linked time charter for the Mount Aconcagua at a significant premium to the Baltic Cape size index, and converted two additional vessels to fixed-rate contracts from August 1 to December 31 at an average of $51,200 per day.

• Market Fundamentals:

  • Q1 2026 posted the strongest Cape Size/Newcastle MAX market in 10 years, and Q2 2026 delivered the best Q2 performance in 16 years, driven by record seasonally adjusted iron ore exports and growing demand from Guinea's bauxite and iron ore shipments.
  • Year-over-year ton-mile demand for Cape Size/Newcastle MAX vessels increased 4.9% in Q2: Guinea bauxite volumes contributed a 7.7% YoY increase, global iron ore trade contributed 2%, and returning coal demand contributed 15% YoY growth amid the current geopolitical landscape.
  • Brazilian iron ore exports rose 4% YoY and Australian exports rose 5% YoY in Q2, supported by fewer weather disruptions and strong Chinese demand. Chinese seaborne iron ore imports hit an all-time Q2 record, and domestic Chinese iron ore inventory is below its 12-year average, with continued preference for high-grade imported ore from Brazil and Guinea over lower-grade domestic production.
  • Guinea continues to set new bauxite export records in 2026, with bauxite now accounting for 18% of total cargo shipped on Cape Size/Newcastle MAX vessels, supporting sustained structural ton-mile demand growth. The Simandou iron ore mine (which commenced production in November 2025) is ramping up exports, with projected 15-20 million tons of exports in its first full year of operation, tightening supply in the Atlantic Basin. Planned capacity increases from Vale are expected to further boost ton-mile demand in the region.
  • Supply-side dynamics are highly favorable: the Cape Size order book-to-fleet ratio is 16%, the lowest and most attractive among large shipping segments, as shipyards prioritize building higher-margin tankers, LNG carriers, container ships and car carriers over dry bulk vessels. Around 46% of the existing Cape Size fleet was built between 2009 and 2015, with 26% of the fleet set to be over 20 years old by 2030, creating imminent age-related supply pressure.
  • In 2026, approximately 24% of the total Cape Size/Newcastle Max fleet will require mandatory special dry dock surveys, creating an estimated 1.7% of additional fleet offline this year, before accounting for congestion and waiting delays. Only 30% of 2026 scheduled dry docks have been completed as of Q2 end, meaning 70% will take place in H2 2026, which will further tighten market supply.

• Management expects continued strong dry bulk market performance in the second half of 2026, supported by ongoing supply tightness from underbuilding, aging fleets, and upcoming dry dock outages.
• Management forecasts that quarterly market performance will be more balanced than historical patterns, with Q1 2027 expected to see upward price movement driven by growing volumes from Simandou and ongoing bauxite demand growth. At the time of the call, management believes it is too early to lock in fixed-rate coverage for Q1 2027 and prefers to retain spot exposure to capture potential upside.
• At current Baltic Cape Size Index levels of ~$40,000 per day, the company expects to deliver an 18% shareholder yield based on the current share price; at $60,000 per day, the expected yield rises to ~34%; at $100,000 per day, the expected yield approaches 65%.
• Management believes current asset prices for dry bulk vessels are flat at high levels, and expects asset prices to rise if H2 2026 freight rates perform in line with the company's projections.

Himalaya Shipping operates a single core segment of dry bulk shipping with a fleet of 12 modern dual fuel LNG Newcastle MAX bulk carriers. For Q2 2026, the segment reported total operating revenues of $53.7 million (up 79.6% year-over-year from $29.9 million in Q2 2025), operating profit of $36.7 million (up from $13.6 million YoY), EBITDA of $44 million (up 110.5% YoY from $20.9 million), net profit of $24.6 million (up from $1.1 million YoY), and earnings per share of 52 cents (up from 2 cents YoY). Average daily time charter equivalent earnings reached $50,600, up from $28,400 in Q2 2025. Vessel operating expenses were flat YoY at $7.1 million, with an average OPEX of $6,500 per vessel per day. Cash flow from operations was $34.2 million, up from $8.3 million YoY.

• All forward-looking projections for market performance and earnings are subject to risks and uncertainties, and actual results may differ materially from anticipated outcomes.
• Dry bulk freight markets are historically volatile, and market conditions can shift quickly, requiring the company to adjust its positioning rapidly.
• A projected large volume of dry dock surveys in H2 2026 could lead to congestion and extended waiting times, resulting in more offline capacity than the company's current 1.7% base estimate. While this tightens the overall market, it could also create operational disruptions for the company's own fleet if it faces delays for scheduled surveys.
• While current order book levels are low, order books for dry bulk vessels can increase quickly if shipyards shift capacity back to dry bulk, which would create future supply growth.
• Geopolitical shifts could alter current coal trade dynamics that are currently supporting ton-mile demand growth.

Q: Analyst Ivan Kolskål asked management to share its outlook for Q1 2027, noting potential upside from growing Simandou volumes, recovering coal trade, and possible favorable El Niño impacts on Brazilian shipments. He also asked at what point management would consider locking in fixed-rate coverage for Q1 2027, after the company locked in coverage for H2 2026. / A: Management noted Q1 2027 market conditions are expected to be more balanced than historical seasonal patterns, due to growing sustained volumes from Simandou and bauxite. At the time of the call, 2027 forward rates are around $29,500 overall, with Q1 trading at $25,500, and the spread between Q1 and full year is not attractive enough to lock in coverage. Management expects Q1 2027 rates to move up over time, believes H2 2026 has more upside to capture, and judges it too early to lock in fixed coverage for Q1 2027 right now.

Q: Kolskål followed up asking about the current vessel asset market, noting that while spot freight rates are very strong, there have been very few sales transactions and broker valuations have remained flat. He asked why transaction activity is low and where management expects the next transaction price to land relative to current valuations. / A: Management responded that current asset prices are already flat at very high levels, and do not expect asset prices to decline anytime soon. For asset prices to move higher from current levels, freight rates will need to rise further from the current ~$40,000 per day level. Management stated it would not be surprised to see asset prices increase if H2 2026 performs as expected.