Diana Shipping Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
July 30, 2025

Key Takeaways

  • Positive Sentiment: Diana Shipping delivered a net income of $4.5 million in Q2 2025 and EPS of $0.30 versus a $2.8 million loss in Q2 2024, driven by lower finance costs and non-operating gains.
  • Negative Sentiment: The drybulk market saw average sector earnings down about 30% year-on-year in Q2 amid softer demand trends in key commodities.
  • Positive Sentiment: Through a disciplined chartering strategy, the company secured three time charters—Capesize, Panamax, and Ultramax—at premiums over spot during a contango market period.
  • Positive Sentiment: As of June 30, net debt stood at 46% of market value with $150 million in cash reserves, supporting liquidity and a declared $0.01 quarterly dividend per share.
  • Neutral Sentiment: Diana Shipping acquired a 7.72% stake in Genco Shipping & Trading as a medium- to long-term strategic investment, complementing its shareholder return options.
AI Generated. May Contain Errors.
Earnings Conference Call
Diana Shipping Q2 2025
00:00 / 00:00

There are 5 speakers on the call.

Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Diana Shipping Inc. Conference Call on the Second Quarter twenty twenty five Financial Results. We are joined by the company's Chief Executive Officer, Ms. Semiramis Payu. At this time, all participants are in a listen only mode.

Operator

There will be a presentation followed by a Q and A session. Please note that this conference is being recorded. We will now turn the floor over to Ms. Semiramis Payu. Please go ahead.

Speaker 1

Thank you. Good morning, ladies and gentlemen, and welcome to Diana Shipping Inc. Second quarter twenty twenty five financial results conference call. It's my pleasure to present alongside our esteemed team, Mr. Stacy Margaroni, Director and President Mr.

Speaker 1

Ioannis Zafirakis, Director, Co CFO and Chief Strategy Officer and Ms. Maria Deves, Co CFO. Before we begin, I'd like to remind everyone to review the forward looking statements on Page four of the accompanying presentation. The drybulk market posted a mixed performance in Q2. Capes once again outperformed the smaller segments as West African bauxite exports surged.

Speaker 1

Chinese iron ore demand held steady and Australian miners pushed hard into their fiscal year end. Cape fleet growth slowed to a crawl, slipping below 1.5% year on year as only six Newcastle MAXs and three standard Capes joined the fleet. A different story for the other sizes with fleet growth of 2.74.5% year on year for Panamax and geared bulkers respectively. Overall, bi carriers markets have been softer in the 2025 with average sector earnings down by about 30% year on year amid weaker demand trends in key commodities. U.

Speaker 1

S. Government policy remained in focus during the quarter after the Branded Liberation Day on April 2. Though generally, the direct impact of tariffs and counter tariffs on drybulk trade appear limited and aggregate demand trends in China are seemingly more significant for overall drybulk demand. The U. S.

Speaker 1

TR proposal cast a shadow early in the quarter, but towards late April, it became clear that the impact would be limited for drybulk trade. The quarter also saw escalation in the Middle East conflict at some point causing concern of a closure of the Strait Of Hormuz. This situation remains volatile and Red Sea rerouting is likely to continue. Despite these uncertainties, we were able to secure three charters since our last financial results conference call across all segments in the fleet, all with existing clients and most notably, we were able to take advantage of the quarter's period of contango in the Capesize segment by fixing those vessels at a considerable premium over the spot market. Turning to Slide five, let's review our company snapshot as of today.

Speaker 1

Diana Shipping Inc, founded in 1972 and listed on the New York Stock Exchange since 02/2005, operates a fleet of 36 drybulk vessels, six of which are mortgage free. Our fleet has an average age of eleven point seven years and a total deadweight capacity of approximately 4,100,000 tons. We anticipate the delivery of two methanol dual fuel new building Kamsarmax drybulk vessels at the 2027 and early twenty twenty eight respectively. Fleet utilization reached 99.5% for the 2025, highlighting our effective vessel management strategy. As of the June, we employed nine sixty eight individuals at sea and ashore.

Speaker 1

Financially, our net debt stands at 46% of market value, supported by $150,000,000 in cash reserves as of quarter end and total secured revenues of approximately $117,000,000 as of July 2020. Moving on to Slide six, let's go over the key highlights from the second quarter and recent developments. In April, we celebrated the company's twenty year anniversary of listing on the New York Stock Exchange with a closing day ceremony and hosted an Investor Day in New York. The investor presentation is available on the company's website for your referral. In June, continuing the renewal and modernization of our fleet, we announced the sale of motor vessel Selena for a purchase price of approximately $11,800,000 before commissions.

Speaker 1

She was delivered to her new owners in July as of July 22, we have also secured million dollars of contracted revenues for 69 of the remaining ownership days of the year 2025 and have secured $50,000,000 of contracted revenues for 20% of the ownership days of the year 2026. Finally, we are pleased to declare a quarterly cash dividend of $01 per common share with respect to the 2025, totaling approximately 1,160,000.00 Slide seven summarizes our recent chartering activity. Since our last earnings presentation, we have secured time charters for three vessels. One Ultramax vessel at a daily rate of 12,250 for three eighty five days, one Panamax vessel at a daily rate of $10,100 for an average of three seventy two days, and one Newcastle MAX vessel at $25,000 for four forty two days. Slide eight highlights our disciplined chartering strategy.

Speaker 1

We focus on staggered medium to long term charters to avoid clustered maturities, ensuring earnings visibility and resilience against market downturns. Now, I'll pass the floor to Maria for a more detailed financial analysis. Good morning. Moving to Slide nine, financial highlights. The 2025 marked another profitable quarter for Guyana.

Speaker 1

Time charter revenues for the second quarter were $54,700,000 compared $56,000,000 for the same quarter last year. This 2% decrease was a result of the decrease in the size of the fleet rather than the market as the average time charter equivalent rate that our vessels were fixed at us during the quarter was higher than the average time charter equivalent rate of the same quarter last year. Despite the above, net income for the 2025 improved significantly to $4,500,000 compared to a net loss of $2,800,000 for the 2024. This turnaround was largely driven by decreased interest and finance costs, resulting from a combination of reduced average debt levels and a decline in the weighted average interest rate. Additionally, net income for the quarter was also affected by non operating unrealized gains compared to non operating losses recorded in the 2024, both related to fair values adjustments on our investment in Sample and the warrants.

Speaker 1

As a result, earnings per common share diluted was $0.3 in the 2025 compared to a loss per share diluted of $04 in the 2024. On the balance sheet side, our cash, cash equivalents, restricted cash and time deposits as of 06/30/2025 decreased to $149,600,000 compared to $207,200,000 as of 12/31/2024. During the six months ended 06/30/2025, the company generated positive operating cash flows of $25,800,000 which was utilized to service debt obligations. In addition, available cash was strategically deployed across a range of investing and financing activities. More specifically, during the six months ended 06/30/2025, we invested approximately $23,000,000 to repurchase shares of our common stock in a tender offer reinforcing our commitment to shareholder value.

Speaker 1

During the second quarter, we initiated a position at Genco Shipping and Trading Limited, a publicly listed company and as of 06/30/2025, our investment was at 24,800,000.0 Following that date, we continue to gradually increase our stake and on 07/17/2025, we filed a Schedule 13D disclosing a 7.72% ownership interest. This strategic move reflects our confidence in Zeko's long term value and is aligned with our broader investment objectives. Finally, during the six months ended 06/30/2025, as part of our capital commitments to our equity method investees, we invested $12,000,000 in Windward Offshore, an offshore wind vessel company building four CSOB vessels and in Ecogast Holdings, a company building two seven thousand five hundred cubic meters LPG vessels with delivery in 2027. Long term debt and finance liabilities net of deferred financing costs decreased to $610,200,000 as of 06/30/2025 compared to 6 and $37,500,000 as of 12/31/2024. This represents a reduction of approximately 4%, reflecting the steady debt amortization over the period as illustrated on Slide 12.

Speaker 1

Going to the next slide, we present the financial and other data that influenced our revenues time charter equivalent rate and daily operating expenses rate for the periods in review. In the 2025, the average number of vessels was 37 compared to 39 in the 2024. This reduction reflects the sale of motor vessel at MINI early in March as well as the sale of one additional vessel in the 2024. This reduction impacted ownership days, available days and operating days, which are key inputs in calculating time charter equivalent, daily OpEx and fleet utilization. Our time charter equivalent, which is defined as our revenues less voyage expenses divided by the available days was 15,004 and $92 compared to 15,106 in the 2024.

Speaker 1

This increase of 3% reflects the stronger charter rate secured during the quarter compared to the same quarter last year. This improvement is a direct result of our consistent and disciplined chartering strategy, which allowed us to secure favorable employment for our vessels even in a challenging market environment. Fleet utilization decreased to 99.5% compared to 99.9% in the same quarter last year, as a result of increase of higher days incurred in the 2025 compared to the same quarter of 2024. Vessel operating expenses for the quarter decreased by 6% to $20,000,000 compared to twenty one point three million dollars in the 2024 due to the decrease in the size of the fleet. On a per day basis, the daily operating expenses in the 2025 also decreased by 1% to $5,944 compared to $5,993 in the 2024.

Speaker 1

This was a result of our ongoing efforts to manage cost effectively

Operator

Ladies and gentlemen, please standby for technical difficulties. Ladies and gentlemen, please standby. Please standby. Ladies and gentlemen, please stand by. Ladies and gentlemen, thank you for standing by.

Operator

We do have the speakers reconnected. Okay, you are free to begin.

Speaker 1

Okay. On 10, we present the financial and other data that influenced our revenues, time charter equivalent rate and daily operating expenses rate for the periods in review. In the 2025, the average number of vessels was 37 compared to 39 in the 2024. This reduction reflects the sale of motor vessel at MINI early in March, as well as the sale of one additional vessel in the 2024. This reduction impacted ownership days, available days and operating days, which are key inputs in calculating time charter equivalent, daily OpEx and fleet utilization.

Speaker 1

Our time charter equivalent, which is defined as our revenues less voyage expenses divided by the available days, was 15,492 compared to 15,106 in the 2024. This increase of 3% reflects the stronger charter rate secured during the quarter compared to the same quarter last year. This improvement is a direct result of our consistent and disciplined chartering strategy, which allowed us to secure favorable employment for our vessels even in a challenging market environment. Fleet utilization decreased to 99.5% compared to 99.9% in the same quarter last year as a result of increase of higher days incurred in the 2025 compared to the same quarter of 2024. Vessel operating expense for the quarter decreased by 6% to $20,000,000 compared to $21,300,000 in the 2024 due to the decrease in the size of the fleet.

Speaker 1

On a per day basis, the daily operating expenses in the 2025 also decreased by 1% to 5,944 compared to 5,993 in the 2024. This was a result of our ongoing efforts to manage cost effectively without compromising the quality of our fleet and our operations. Going to Slide 11, similar to the previous one, presents key operating metrics for the six months ended 06/30/2025. Net income for the six months ended 06/30/2025 was 7,500,000.0 compared to a net loss of $700,000 for the same period last year. The average number of vessels in the 2025 was 37.4 compared to 39.4 for the same period in 2024, reflecting the impact of vessel sales.

Speaker 1

Despite the smaller fleet size, our time charter equivalent for the 2025 improved to 15,615, up 4% from 15,078 in the 2024. Fleet utilization for the six months ended 06/30/2025 remained high at 99.5% consistent with the same period last year. Vessel operating expense for the six months ended 06/30/2025 totaled $40,000,000 down from $42,100,000 in the same period of 2024, primarily due to the smaller fleet. However, daily operating expense for the 2025 rose slightly to 5,905 from 5,883 in the 2024, mainly due to higher crew related costs. The average rate of our fleet was eleven point seven years.

Speaker 1

Going to the next slide. This slide shows the company's debt amortization profile and debt balances through to full repayment in 02/1932, which remains unchanged since the previous quarter. The company has a mix of fixed and variable rate instruments. The fixed rate instruments include an unsecured bond of $175,000,000 at a fixed rate coupon for sale and leaseback agreements at very favorable fixed rate and an interest rate swap under which we received term soft and paid fixed. The variable rate instruments consist of secured term loan agreements with four banking institutions.

Speaker 1

We have a fixed annual debt amortization of $47,100,000 without any maturities or balloons until 2029 when the bond becomes due. This steady amortization provides good visibility of our debt service costs, allows better management of the company's liquidity, strengthens our balance sheet and reduces the company's credit risk. Going to the next slide, as of 06/30/2025, our breakeven rate stood at $16,409 per day. As of 07/22/2025, we have secured 69% of the ownership days for the remainder of the year with expected revenues of $66,100,000 at an average time charter rate of $16,280 per day. Looking ahead to 2026, we have already fixed 20% of the ownership base and expect to generate 49,900,000.0 of revenues at an average time charter rate of $18,897 per day.

Speaker 1

In addition to our contracted revenues, we have estimated potential revenues for the unfixed days of 2025 and 2026 using the SFA rates presented in this slide. Based on these assumptions, for the remainder of 2025, we could generate $90,500,000 total revenues at an average time charter rate of $15,415 per day. And for 2026, potential revenues could reach $2.00 $2,000,000 at an average time charter rate of $15,376 per day. While these projected revenues may fall short on fully covering our breakeven rate in the near term, we remain confident in the company's ability to navigate market cycles. Our strong balance sheet and predictable cash flow position us well even in the event of prolonged market softness.

Speaker 1

This slide number 14 highlights our dividend distribution since the 2021 through which we have consistently rewarded our shareholders with quarterly payouts in both cash and shares. In line with this policy, we have declared a dividend of $01 per share, bringing our cumulative dividend paid since 2021 to $2.68 per common share. I will now hand over to Stacy Mararones who will provide an overview of the drybulk market.

Speaker 2

Thank you, Maria and welcome to those who have joined us in this quarterly earnings call of Dana Shipping Inc. Starting with the market update, in order to avoid repetition and for the sake of keeping this presentation as brief as reasonably possible, we will refrain from repeating matters which we presented in our last quarterly presentation and which have not changed significantly over the last two months. The two tragic incidents involving the sinking of two ships in the Red Sea with loss of life have not changed the trading patterns of bulk carriers through the area. Core risk insurance premium have gone up but that is another matter altogether. According to Clarkson during the 2025 average bulk carrier earnings of US10750 dollars per day were down 30% year on year amid weaker demand trends in key commodities though earnings have picked up in June and so far in July due to a rise in shipments.

Speaker 2

As of July 28, the twelve month time charter rate for Capes stood at around $20,250 per day for a scrubber fitted ship. The equivalent rate for a Kamsarmax stood at US12500 dollars per day and for an Ultramax at $13,100 per day. All these rates are up from the beginning of the year. The spot market increased by significantly more with the Baltic Cape Index moving from twelve sixty one to 3,774, while the Baltic Panamax Index from 1,000 to seventeen ninety eight over the same period. During this period according to Commodore Research robust South American grain shipments and strong Indonesian coal cargo exports have been helpful for maintaining rates for Panamaxes and Ultramaxes.

Speaker 2

The overall market outlook for this year is for softer earnings than 2024 due to fleet growth estimated at around 3% with dry bulk demand in ton miles softening by about 0.4%. The main trade supporting the market particularly the larger sizes are the ever rising shipments of bauxite from Guinea as well as rising iron ore shipments from Brazil. Looking out into 2026, there is potential according to Clarksons for bulk carrier markets to see another year of softer earnings with the fleet projected to grow by 3.2% year on year and dry bulk demand expected to increase in ton miles by 0.4% compared to this year. However, different outcomes are possible among the different size ranges influenced by the global energy transition, global macroeconomic trends, demand implications of the Simandou project ramp up and U. S.

Speaker 2

Tariff policy. On the tariffs front, The U. S. And China have finally agreed on a framework to keep bilateral tariffs at the levels agreed in May. China will apply 10% headline tariff on all U.

Speaker 2

S. Goods while existing tariffs on U. S. Energy and grain remain outside the scope of this agreement. The U.

Speaker 2

S. Will continue to apply 30% tariffs on all Chinese goods on top of the already existing tariffs in place from France first term. Apart from China, The U. S. Has agreed trade terms with The UK, Vietnam and Japan.

Speaker 2

Terms of trade with other nations will be announced on August 1. Obviously negotiations will follow with the countries involved. Looking at macroeconomic developments and bulk commodity shipments, the IMF has not changed their global GDP growth estimates with world GDP estimated to grow 2.8% this year and around 3% in 2026. Projected growth rates for individual areas and large economies around the globe have not changed since our last report. Looking at steel, the most recent data available to Commodore Research shows that crude steel output at large and medium sized mills throughout China is down year on year by about 2%.

Speaker 2

According to Braemar, crude steel production during the first four months of 2025 by all top producers worldwide came to 623,500,000 tons, a drop of 0.1% year on year. The expectations of most analysts are that this small percentage reduction will be reflected in the annual figures for 2025 at around 1,850,000,000 tons. On iron ore, seaborne iron ore shipments are expected to be slightly weaker this year and steady in 2026 at 1,572,000,000 tons. China iron ore imports are expected to fall by 3% year on year during 2025. Grain cargoes, global grain exports are expected according to Comodo Research to total seven and twenty point five million tons in the twenty twenty five-twenty twenty six grain season.

Speaker 2

If realized this would represent an increase of 3% from the current twenty twenty four-twenty twenty five seasons volumes. According to Clarkson, there appears to be a shift of corn shipments from The U. S. Gulf to the East Coast Of South America. This will result in longer trips by significant margin with the obvious beneficial effect on ton mile demand.

Speaker 2

As regards coal is concerned, now coal coking and steam coal shipments are both expected to steadily drop this year and next with the reduction ranging from 1% to 7% per year over twenty twenty five and twenty twenty six depending on the type of coal shipped. Coal imports in China could be boosted by softer steam coal prices going forward which have been under steady pressure. Still on the demand side according to Clarkson, strong Chinese appetite for bauxite has been the main driver of Guinea bauxite export growth with 110,000,000 tons shipped representing about 70% of China's seaborne bauxite imports last year. In the first half of this year, Capesize bulk carriers spent an estimated 15% of their latent time carrying Guinean bauxite. This was just seven percent three years ago.

Speaker 2

Looking at fleet development, the bulk carrier order book stands at about $113,200,000 deadweight representing 10.8% of the trading fleet with Capes at 8.9%, Panamaxes at 14% and Ultramax Supramax is at 11.4%. This is manageable tonnage as regard supply provided demand grows steadily and ships are scrapped at the normal pace. But this would be the case only in an ideal world. There are about $36,900,000 deadweight of Valkyries which will be delivered this year as a whole and next year deliveries are expected to reach $43,000,000 deadweight. According to Braemar, the net increase of the Capesize fleet in 2025 will be about $5,000,000 deadweight and a further $9,000,000 in 2026.

Speaker 2

For Panamaxes, the increase for this year is expected to be $7,000,000 deadweight and for 2026 11,000,000. On Supramaxes and Ultramaxes the net fleet increase maybe 10,000,000 this year and the same next year. As an indicator, we note that the bulk carrier fleet has increased by about 1.3% during the first five months of 2025. This year so far new building orders for dry bulk carriers have dropped by about 73% compared to this time in 2024. Turning to demolitions, with market conditions and sentiment being the main determining factors in scrapping decisions, is worth noting that there are about five forty eight standard case built between 2009 and 2012 and over 700 Panamaxes built before 2010.

Speaker 2

About 28% of the Handymax fleet is over fifteen years old with 28% of Panamaxes falling into this age bracket and 23% of Capes. All these ships are obvious scrapping candidates in a weak market coupled with some pessimism as regards market prospects. Clarksons predicted that during 2025 only 4,700,000 deadweight of bulkers will be scrapped. The estimate for next year is about 8,900,000 deadweight. Looking at asset prices, according to Clarksons new building resale prices have eased since our last earnings call.

Speaker 2

Eight new buildings are now at around $73,500,000 with Camshermax new building prices trading at $36,500,000 Ultramax newbuilding prices stand at around $33,500,000 These are year on year price drops of around 3.5% on average. Secondhand prices for 10 year old Capes have held firm at around $46,500,000 reflecting the market's recent strength, while Kamsarmaxes of the same vintage have eased slightly to $24,500,000 Meanwhile ten year old Ultramaxes have been changing hands at around $22,000,000 showing a downward three month trend of three percent. Let's wrap it all up by looking at positive and the negative factors impacting drybulk shipping. Analysts quoted in this presentation cite several factors which they expect will influence the short and medium term future of the bulk carrier market. We summarize the most important ones in the next slide.

Speaker 2

On the positive side, we have robust South American grain exports even though they have dropped sharply over the last few weeks. Next strong Indonesian coal shipments, gradual resolution of reciprocal trade tariffs between The U. S. And the rest of the world, Red Sea rerouting expected to continue for the rest of the year, lifting of sanctions against Syria and the cessation of the mini war with Israel backed militia leading to the reconstruction of Syria. The commencement later this year of iron ore shipments from Simandou in Guinea.

Speaker 2

On the negative side, we have worldwide lower steel production outside India, bulk carrier fleet growth outpacing demand growth for twenty twenty five-twenty twenty six less so in The Cape sector increase in wind, nuclear and solar power production particularly in China anticipated long term reduction in coal imports by China, possible failure in trade talks between The U. S. And their trading partners except for China, Vietnam, Japan and The UK mentioned earlier leading to high tariffs and trade disruption. On this note, I will pass the call to our CEO, Semira Misbahieu to present some important takeaway points from this earnings call.

Speaker 1

Thank you, Stacy. So before concluding today's presentation, I'd like to highlight our ongoing ESG commitment to promoting eco friendly technologies and modernizing our fleet, transparently sharing emission data to ensure accountability, building on partnerships and collaborations to advance our sustainability goals and developing an equity, diversity and inclusion program while continuously investing in our people. In summary, Diana Shipping Inc. Stands on a strong foundation built on over fifty years of industry experience and twenty years on the New York Stock Exchange, a seasoned management team adapt to addressing industry challenges, strong stakeholder relationships and a disciplined strategic approach, a solid balance sheet with a strong cash position and a countercyclical mindset, ongoing fleet modernization efforts, a focus on rewarding our shareholders when possible and the robust ESG strategy. So thank you for joining us today.

Speaker 1

We look forward to addressing your questions during the Q and A session.

Operator

Thank you. We will now be conducting a question and answer session. Our first questions come from the line of Lars Ayd with Arctic Securities. Please proceed with your questions.

Speaker 3

Hello and good afternoon. I have a couple of questions regarding the recently acquired GaintoState. I hope you could shed some light on that. So firstly, how long perspective do you have on the Genco transaction? And secondly, Genco traded at lower discount to NAV than yourself.

Speaker 3

Why not buy back shares instead? Thank you.

Speaker 4

Hi, Lance. This is Janis. Let us explain the reason behind the purchase of the Genco shares. Needless to say that Genco is a very well run drybulk company, which was trading immediately at a discount to NAV less than ours. Said that, is an additional value to this purchase, which has to do with the strategic positioning of Diana Shipping as a major shareholder in that company.

Speaker 4

So in addition to that, if you may, you can also say that they have a kind of a different chartering strategy that we can benefit from and stuff like this, which is a dividend paying company. So all in all, for us, we have considered that to be a better option than buying our stock at discount now without excluding the possibility of us buying back our stock in the future. And for us, it's a medium to long term investment.

Speaker 3

Okay. Thank you all for your answer.

Operator

Great. Thank you. We have reached the end of our question and answer session. I would now like to hand the call back over to management for any closing comments.

Speaker 1

Well, thank you for joining us at Diana Shipping second quarter twenty twenty five financial results. We look forward to presenting to you again in the next quarter. Have a good day. Thank you.

Operator

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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