Himalaya Shipping Q3 2026 Earnings Results & Report

Himalaya Shipping EPS Results

• Actual EPS: $0.71
• Consensus EPS: $0.7120
• Beat/Miss: Missed by -$0.0020
• One Year Ago EPS: N/A
• EPS Beat Rate: 2 of last 5 quarters

Himalaya Shipping Revenue Results

• Actual Revenue: $62.60 million
• Expected Revenue: $61.51 million
• Beat/Miss: Beat by +$1.09 million
• YoY Revenue Growth: N/A

Himalaya Shipping (NYSE:HSHP) is a dry bulk shipping company incorporated in Bermuda. It owns and operates Newcastlemax vessels, large bulk carriers designed to transport commodities such as iron ore, coal and grain.

The company’s fleet is equipped with dual-fuel engines that can run on liquefied natural gas as well as conventional marine fuel. Its vessels serve international bulk shipping routes, carrying cargo between major commodity-producing and consuming regions.

Himalaya Shipping began building its fleet in the early 2020s and became a publicly traded company in 2023. Its chief executive officer is Herman Billung.

Himalaya Shipping Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q3 results improved substantially year over year: net profit rose to $33.3 million from $9.5 million, EBITDA to $52.7 million from $29.3 million, and TCE earnings to approximately $58,400 per day from $35,600.
• Positive Sentiment: The company declared $0.75 per share in Q3 cash distributions and a further $0.20 dividend for October. Management said eight of its 12 vessels are exposed to the spot market, while recent fixed-rate and index-linked charters provide a mix of earnings visibility and market exposure.
• Positive Sentiment: Management pointed to strong Capesize demand drivers, including record seasonal Chinese seaborne iron ore imports, growing Guinean bauxite and iron ore exports, and longer trade routes. It also cited an aging fleet, an 18% orderbook, and expected dry-dock demand as constraints on vessel supply, though these are management’s market assessments.
• Negative Sentiment: Quarter-end cash and equivalents were $39.7 million against approximately $681 million of sale-leaseback financing. The balance declined from the prior quarter through scheduled repayments, but the debt remains a significant financing obligation.

Presentation

[Operator]

Welcome to Himalaya Shipping's Q3 2026 financial results presentation. Today's call is being recorded. If you have any objections, please disconnect at this time. For the first part of this call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. To ask a question, please press five star on your telephone keypad. I will now turn the call over to CEO Lars-Christian Svensen. Please begin.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you, operator. Welcome to the Q3 2026 conference call for Himalaya Shipping. My name is Lars-Christian Svensen, and I will be joined here today by our CFO, Vidar Hasund. Before we start the presentation, I would like to remind you that we will be discussing matters that are forward-looking. These assumptions reflect the company's current views regarding future events and are subject to risks and uncertainties. Actual results may differ materially from those anticipated. I will now continue with the highlights of the quarter. We reported a net profit of $33.3 million and an EBITDA of $52.7 million. The time charter equivalent earnings for the quarter was approximately $58,400 per day. One new index-linked charter was concluded for the Mount Aconcagua for a period of 16 to 18 months at significant premium to the Baltic Capesize Index.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We also converted four of our vessels from index-linked to fixed rate in the quarter. Two vessels from August 1st until December 31st, 2026, at $51,200 per day, and two vessels from September 1st, 2026 until March 31st, 2027, at $53,000 per day. Cash distributions for the quarter totaled $0.75. In subsequent events, we achieved a time charter equivalent earnings for October 2026 of about $50,900 per day, and we declared a dividend of $0.20 for the month. We also entered into new time charter agreements for another two vessels for a minimum period of October 1st, 2027, with a three-year evergreen structure thereafter at an index-linked rate, these ones as well, reflecting a significant premium to the Baltic Capesize Index. With that, I will now pass the word to Vidar.

[Vidar Hasund, CFO at Himalaya Shipping]

Thank you, Lars-Christian. Himalaya Shipping reported a net profit of $33.3 million, or $0.71 per share for Q3 2026, compared with $9.5 million, or $0.21 per share for Q3 2025. Operating profit was $45.4 million, and EBITDA was $52.7 million, compared with $22 million and $29.3 million respectively in the same quarter last year. Operating revenues increased to $62.6 million from $37.9 million in Q3 2025. This was driven by higher daily time charter equivalent earnings, which rose from $35,600 to $58,400. Vessel operating expenses were $7.5 million, up $0.5 million from Q3 2025. The increase reflect the greater operational requirements for stores, spares, and consumables, as well as other cost increases. Average daily OPEX per vessel was $6,800. G&A expenses for the third quarter were $1.5 million, compared with $1.1 million in Q3 2025.

[Vidar Hasund, CFO at Himalaya Shipping]

The increase reflected the consolidation of Peak Maritime Management AS, formerly named 2020 Bulkers Management AS. Interest expense was $12.3 million in Q3 2026, down $0.5 million from the same period in 2025. The decrease reflected a lower average outstanding loan principal following loan repayments. Cash and cash equivalents were $39.7 million at quarter end. The minimum cash requirement under the sale leaseback financing is $12.3 million. The outstanding balance under this financing was approximately $681 million at the end of Q3, down from approximately $688 million at the end of Q2, reflecting scheduled repayments. Cash flow from operations was $43.8 million for Q3, compared with $18.3 million for the same period in 2025. Himalaya Shipping has declared total cash distributions to shareholders of $0.75 per share for July, August, and September 2026. That concludes the financial section.

[Vidar Hasund, CFO at Himalaya Shipping]

Back to you, Lars-Christian.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you, Vidar. Before I will guide you through our market section, here are some company updates. Our fleet of 12 modern Newcastlemaxes with dual-fuel LNG is at a top 1% emission rating for large bulk carriers. The attractive financing combined with a very clear capital allocation structure has led to 34 monthly consecutive cash distributions and dividends. In Q3 2026, this amounts to $0.75. Our fleet is fixed out on long-term index-linked contracts with conversion options, and the all-in cash breakeven equivalent to the Baltic Capesize Index is about $17,000 per day, i.e., every time you see the Baltic Capesize Index above $17,000, Himalaya Shipping is making money. Our preferred commercial strategy is still to charter our vessels out on index-linked charters.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

That allows us to capture the upside at each given market rise and also gives us good flexibility to convert to fixed rates with our solid counterparts when we see value on the forward FFA curve. Currently, eight of our 12 ships are exposed to the spot market to capture what we believe will be a continued strong market for the Newcastlemax segment going forward. To illustrate our fleet and commercial performance, we have the last three years traded at an average 47% premium to the Baltic Capesize Index and a 25% premium to our peers. This is achieved by the extra cargo intake on our vessels and top-tier speed and consumption design on our fleet. With the current structure, we are able to navigate this volatile market and able to turn our position quickly from long to short or vice versa, should we see a clear trend.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Here we can see our dividend capacity based on various rate scenarios for a standard Capesize vessel. When the Baltic Capesize Index trades around $40,000 per day, the company will yield about 18%. When we see moves to around $60,000 per day range, we will produce a yield of around 34%. When we see $100,000 per day on the Baltic Capesize Index, Himalaya will yield close to 65% on the current share price. Now let's move to the market section. We are currently experiencing historical heights in the Capesize and Newcastlemax market. So far to date, the Baltic Capesize Index has averaged about $33,500 per day. Iron ore imports to China are at an all-time high for the season, and the continued flows from Guinea with bauxite, and now also iron ore, has been key drivers to maintain momentum.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

The structural ton mile change in the Capesize and Newcastlemax trades over the last few years has proven capable of lifting the market floor to a new level. Ton mile in Q3 for Capesize and Newcastlemax increased 1.6% year-over-year. The bauxite volumes from Guinea contributed a 26.6% upswing year-over-year and continues to be an integral part of the ton mile structural increase for the large bulk segment. Looking at pure export data year-over-year, Q3 iron ore exports from Brazil was down 6%, and the Australian iron ore exports had an increase of 2% in the same period. The Brazilian export reduction has been neutralized by the rapid increase of Guinean iron ore exports, which we will discuss in more detail later in the presentation. The global iron ore exports are continuing to increase.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

To put this in perspective, the Chinese seaborne iron ore imports hit record heights for the quarter, as you can see on the top right graph. This again emphasizes the Chinese hunger for high-grade iron ore, which can only be found outside the country's borders. In addition, the Chinese imported iron ore inventories are down from the peak and now below the 12-month average in the same period. As we have discussed in previous reports, the domestic Chinese iron ore content is reported to be around 15%, but the imported volumes from Brazil and Guinea contains an iron ore content of mid to high 60s. This has led to a slowdown in domestic Chinese production, and higher grade iron ore from overseas still remain a preference. For those of us that love rocks, bauxite must surely be the favorite.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

After a record bauxite output from Guinea in 2025, new export records have been registered so far in 2026, which you can see from the left graph. In conjunction with the increasing volume departing the country, you can also see that the bauxite is taking over more market share from the other commodities and is now responsible for 17% of the total cargo transported on Capes and Newcastlemaxes. This plays directly into the structural ton mile story that we see unfolding and that we believe will be a driver for years to come. The Simandou mine, which we have discussed extensively in many quarterly reports, has picked up the pace rapidly after the summer. The mine is scheduled to export 25 million tons by the end of the year.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

60 million metric tons is expected in 2027, 90 million in 2028, and target exports remains at 120 million tons of high-grade iron ore per annum to the market within 2030. In conclusion, another fronthaul leg has been established from the Atlantic for the Capes and Newcastlemax trade, contributing to longer distances for an already stretched and aging fleet. We have seen from other segments that order books can increase quickly. However, in Capesize and Newcastlemax, this has been a slower moving operation. We currently observe an 18% order book of the total existing Capesize fleet. The active shipyards are still preferring to build tankers, LNG carriers, container, and car carriers to maximize profit margins. The availability for Newcastlemax new buildings at a reputable shipyard is now achievable in 2029 at the earliest.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

As comparison to other shipping segments, you can see from the right graph that the Capesize order book to fleet ratio is still the most compelling in the large shipping space. We also continue to see a significant increase in dry docks due to mandatory special surveys required on merchant vessels every five years. 12% of the entire Capesize fleet was delivered in 2011 and will have to undergo a 15-year special survey in 2027. There will be five and 10-year special surveys as well, meaning around 20% of the total Capesize and Newcastlemax fleet will be competing for dry dock space in 2027. In addition to the low order book and the dry dock scenario looming, the current Capesize and Newcastlemax fleet is aging fast. Around 46% of the total fleet was built between 2009 and 2015.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

That means that 25% of the fleet will be over 20 years of age in 2030. As of now, we have visibility on the supply for the next three years, making it difficult to add any meaningful large dry bulk capacity in time to deal with the rapidly aging fleet and the additional strong vessel demand from the market. Thank you very much, and I will now pass the word back to the operator and welcome any questions you might have.

[Operator]

Thank you. If you do wish to ask a question, please press five star on your telephone keypad. To withdraw your question, you may do so by pressing five star again. We will have a brief pause while questions are being registered. The first question is from the line of Climent Molins from Value Investor's Edge. Please go ahead. Your line will now be unmuted.

[Climent Molins, Analyst at Value Investor's Edge]

Hi, good afternoon, and thank you for taking my questions. We have seen iron ore prices decline in recent months. As Simandou continues to ramp up, available volumes are likely to increase further. You talked about Chinese domestic iron ore production coming under pressure given its lower grade. Do you expect this trend to continue going forward, or are we approaching a level where the government may be incentivized to maintain production due to strategic considerations?

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Hi there. Thank you for your question. We believe this is a structural change with the Simandou mine. The Chinese government, along with the consortium, has spent significant amount of time and money developing this project, and I would say over 90% of the current volumes are going to China. So we look at this as a long-term project, and naturally, if something has to give at the current climate, even with iron ore prices around $90 per ton, it still makes good sense for China to import the volumes from Simandou. Also remember, we are at the point now where we have fairly high fuel prices. If you just look at the freight part, example from Brazil to China, CFR, the freight amounts to between 35% and 40% compared to last year, where it was closer to 20%.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We think also with the, if we see any peace in the Middle East, or a bit more normal markets to trade in with lower fuel prices, this will also boost the appetite for more seaborne iron ore volumes into China.

[Climent Molins, Analyst at Value Investor's Edge]

Makes sense. That is helpful color. This is maybe a longer term question, but I wanted to ask about your financing. When you secured those sale leasebacks, pricing was simply excellent. But as you look at the LTV based on current valuations, is there maybe any appetite to refinance your existing indebtedness over the coming year or two years?

[Vidar Hasund, CFO at Himalaya Shipping]

I think we are at a current LTV of, based on broker values, 57%. And we are paying a fixed bareboat rate under those financing, which implies a fixed rate of, yeah, just below 7%. I think we've seen interest rates increasing a bit the last couple of months. It's probably come down a bit now again. I think we see margins going a bit lower, but I think the profile we have under those sale leaseback arrangements is very good. So I think if you would refinance, you wouldn't get typically as good profile. It would be age adjusted. So, I think we are evaluating that on a running basis, but I think the financing we have today is very good, and we are happy with that.

[Climent Molins, Analyst at Value Investor's Edge]

No argument there. Thank you. I'll turn it over.

[Vidar Hasund, CFO at Himalaya Shipping]

Thank you.

[Operator]

The next question is from the line of David Latinas from Norske Bank. Please go ahead. Your line will now be unmuted.

[David Latinas, Analyst at Norske Bank]

Hi. Hi, guys. Thanks for taking my questions. I'm just looking into Q1. Are you comfortable staying mostly spot into Q1, or do you expect to cover some more of your fleet on what's still historically a pretty decent day rate?

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Hi there. Thank you for your question. In Q1, we will have two of our 12 vessels covered at well over $50,000 per day. With the current Q1 trading at above $30,000 per day today, it's still running. It's still something that we're considering every single day. We're quite happy with the spot exposure that we have now, and we don't see any immediate need to take more cover. But obviously, if we see some value on the forward curve, we're not a stranger to execute on that as we see fit. But it's more about identifying the peaks and the short-term peaks in this market than to just take cash off the table simply because it's good money. Hopefully, we're able to execute on that in the shareholders' favor, and we will keep on focusing on that going into Q1 and also next year.

[David Latinas, Analyst at Norske Bank]

Yeah, makes sense. How much of an impact do you think the current strong El Niño could have on the Q1 normal seasonality?

[Lars-Christian Svensen, CEO at Himalaya Shipping]

I think for the larger sizes, it's looking very promising. If Brazil has a drier spell than what they're used to, that will obviously bode well for the iron ore exports. Coming into Q1, now that we have the bauxite volumes, which is the high season there, plus also Simandou volumes coming on stream rapidly fast, I think Q1 can continue to surprise us on the upside, especially if the weather is dry.

[David Latinas, Analyst at Norske Bank]

Okay. Thank you. I will return to you.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you.

[Operator]

Let me just remind you that if you do have a question, please press five star on your telephone keypad. It does not appear as if we have any further questions, so I will hand back to the speakers.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you very much, everyone, for dialing in, and we will speak to you again the next quarter. Thank you.

[Vidar Hasund, CFO at Himalaya Shipping]

Thank you.

Participants

Executives

• Lars-Christian Svensen, CEO
• Vidar Hasund, CFO

Analysts

• Climent Molins, Analyst at Value Investor's Edge
• David Latinas, Analyst at Norske Bank