Himalaya Shipping Q1 2026 Earnings Report

Himalaya Shipping EPS Results

• Actual EPS: $0.11
• Consensus EPS: $0.13
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

Himalaya Shipping Revenue Results

• Actual Revenue: $34.90 million
• Expected Revenue: $33.30 million
• Beat/Miss: Beat by +$1.61 million
• YoY Revenue Growth: N/A

Himalaya Shipping Announcement Details

• Quarter: Q1 2026
• Date: 5/15/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, May 21, 2026
• Conference Call Time: 9:00AM ET

Himalaya Shipping (NYSE:HSHP) provides dry bulk shipping services worldwide. The company operates a fleet of vessels. It serves major commodity trading, commodity and energy transition, and multi-modal transport companies. Himalaya Shipping Ltd. was incorporated in 2021 and is based in Hamilton, Bermuda.

Himalaya Shipping Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Himalaya Shipping reported a Q1 2026 net profit of $5 million and EBITDA of $24.5 million, a notable improvement from a loss in the same quarter last year. Revenue rose to $33.6 million as time charter equivalent earnings increased to $32,300 per day.
• Positive Sentiment: The company secured new index-linked time charters for Mount Ita, Mount Matterhorn, and Mount Emei at significant premiums to the Baltic Capesize Index, extending visibility and supporting future earnings. Management also said April 2026 TCE was about $41,600 per day.
• Positive Sentiment: Himalaya declared $0.18 per share in cash distributions for Q1 and has now delivered 28 consecutive monthly dividends. Management emphasized its low breakeven, saying cash breakeven versus the Baltic Capesize Index is about $17,300 per day.
• Neutral Sentiment: The company’s market view remains very constructive, with management calling the current environment the best start to the Capesize/Newcastlemax market since 2010. They pointed to strong Guinea bauxite exports, Simandou ramp-up, and a structurally tight Atlantic basin as key tailwinds.
• Positive Sentiment: Supply conditions also look favorable, with a 14% order book and an aging fleet, while mandatory dry-dock/special survey activity is expected to remove additional capacity in 2026. Management estimated this could create about 1.7% extra off-hire for the total Capesize fleet.

Presentation

[Operator]

Welcome to Himalaya Shipping Q1 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. Afterwards, there will be a question-and-answer session. I'll 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 Q1 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.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We reported a net profit of $5 million and an EBITDA of $24.5 million. The Time Charter Equivalent earnings for the quarter was approximately $32,300 per day. We entered into new index time charter agreements for both the Mount Ita and the Mount Matterhorn for a period of 11 months to 14 months and 12 months to 14 months, respectively, at significant premiums to the prevailing indices.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Cash distributions for the quarter totaled $0.18. The company also entered into contract to acquire an additional 4,200 shares in 2020 Bulkers Management AS from 2020 Bulkers Ltd. for NOK 1.1 million, which will be effective on April 1st, 2026, increasing our total ownership from 40% to 54%.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

In subsequent events, we achieved Time Charter Equivalent earnings for April 2026 of about $41,600 per day, and we declared a cash distribution of $0.15 for the same month. We also entered into a new Time Charter Agreement for the Mount Emei for a period of 12 months to 14 months at an index-linked rate, also at 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 reports a net profit of $5 million, and earnings per share of $0.11 for Q1 2026, compared to a net loss of $6.4 million and loss per share of $0.14 for Q1 2025. Operating profit was $17.2 million and EBITDA was $24.5 million for the quarter, compared to operating profit of $6.5 million and EBITDA of $13.8 million for the same period last year. Operating revenues were $33.6 million for Q1 2026, compared to $22 million for the same quarter in 2025.

[Vidar Hasund, CFO at Himalaya Shipping]

The increase in revenues is due to higher Time Charter Equivalent earnings achieved, which is up from $21,100 in Q1 2025 to $32,300 in Q1 2026. Vessel operating expenses were $7.4 million in Q1 2026, compared to $6.9 million in Q1 2025. The increase is primarily due to higher costs for crew spares, service fees and insurance costs.

[Vidar Hasund, CFO at Himalaya Shipping]

The average OPEX per day was $6,800 compared to $6,400 per day during Q1 2025. G&A for the fourth quarter was $1.2 million compared to $1.1 million in Q1 2025. Interest expense were $12.4 million in Q1 2026, which is a $0.7 million decrease compared to the same period in 2025 due to a lower average loan principal outstanding in Q1 2026 as a result of loan repayments.

[Vidar Hasund, CFO at Himalaya Shipping]

Cash and cash equivalents were $24.5 million at the end of the quarter. Our minimum cash requirement under our sale leaseback financing is $12.3 million. Outstanding balance on the sale leaseback financing was approximately $694 million at the end of the first quarter, down from approximately $701 million at the end of 2025, reflecting scheduled repayments. Cash flow from operations was $9.8 million for the first quarter, compared to $0.3 million for the same period in 2025.

[Vidar Hasund, CFO at Himalaya Shipping]

Himalaya Shipping have declared total cash distributions to shareholders of $0.18 per share for the months of January, February and March 2026. That completes the financial section. 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 Newcastlemax with dual-fuel LNG is in the top 1% emission rating for large bulk carriers. The attractive financing, combined with a very clear capital allocation structure, has led to 28 monthly consecutive dividends.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

In Q1 2026, this amount to $0.18. Most of 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 $17,300 per day. i.e., every time you see the Baltic Capesize Index above $17,300, Himalaya Shipping is turning a profit. Our preferred commercial strategy is still to charter out the majority of our vessels 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 fixed rates with solid counterparts when we see value on the forward FFA curve. Currently, 11 out of our 12 ships are exposed to the spot market to capture what we believe will be a continued strong year ahead.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

To illustrate our fleet and commercial performance, you can see on this slide that since inception, the Himalaya vessels have traded to an average 48% premium to the Baltic Capesize Index and a 25% premium to peers. This is achieved by the extra cargo intake on our vessels and top-tier speed and consumption design on our fleet.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We always strive to have as many tools as possible to navigate this volatile market so that we can turn our position quickly from long to short or vice versa should we see a clear trend. Here you can see our dividend capacity based on various rate scenarios for a standard Capesize vessel. When the Baltic Capesize Index trades around today's levels, $40,000 a day, the company will yield about 18%.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

When we see moves to around the $50,000 per day range, we will produce a yield of around 28%. When we see $60,000 per day on the Baltic Capesize Index, Himalaya will yield close to 35% on the current share price. Now let's have a look at the market. We had the best start to the Capesize in Newcastlemax market this year since 2010.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Much of this can be credited to the large bauxite volumes exported from Guinea, slowdown in speed on the overall fleet, and global port waiting time has also increased. We believe that the structural ton-mile change in the Capesize Newcastlemax trades can drive this market further, as we will be discussing in the following slides. Ton-mile in Q1 for Capesize increased 4.3% year-over-year. We can yet again thank the increased bauxite volumes from Guinea, which contributed a 23% increase year-over-year and a 4.8% increase from global iron ore trades. Year-over-year iron ore exports from Brazil was down 1%. Australian iron ore volumes were up 4% in Q1. As discussed in the previous slide, we saw the global iron ore exports are continuing to increase.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Albeit a flat quarter compared to last year from Brazil, the Chinese seaborne iron ore imports are up, which again emphasized the Chinese hunger for high-grade iron ore, which can be found outside the country's borders. The Chinese imported iron ore inventories are down from the peak, and we keenly observed from the bottom right graph that inventories correlate well with the increased Chinese iron ore consumption over the last few years.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

As we have discussed in previous reports, the domestic Chinese Fe content is reported to be around 20%, but the imported volumes from Brazil and Guinea contains an Fe content of mid to high 60s. This has led to a slowdown in domestic Chinese production, and higher-grade iron ore from overseas still remains a preference. We have discussed the bauxite trade extensively in several quarterly presentations, and for good reason.

[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 volumes 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 20% of the total cargo transported on Capes and Newcastlemaxes.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

This plays directly into the structural ton-mile story that we see unfolding at the moment. The Simandou mine is now up and running, and the first iron ore volumes from this mine commenced in November 2025. Target remains at 120 million tons of exported high-grade iron ore per annum to the market.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

As you can observe from the right graph, export volumes have caught momentum over the last few weeks, which indicates that the mine to vessel logistics are improving and further growth can be expected. We're also monitoring closely the capacity increase from Vale, which can add further strength to an already export-focused Atlantic basin to boost ton-mile further.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We have seen from other segments that order books can increase quickly. However, in Capesize and Newcastlemax, this has been a slow-moving operation. We keenly observe a 14% order book of the total existing Capesize fleet. Active shipyards are down 60% from the peak of 2008, making it challenging to build any fleet capacity that could distort the favorable supply dynamics over the next few years.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

As a 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. In addition to the low order book, the current Capesize and Newcastlemax fleet is aging fast.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Around 46% of the total fleet was built between 2009 and 2015. That means that close to 30% of the fleet will be over 20 years of age in 2030. As it looks now, we have visibility on the supply for the next two years, making it difficult to add any meaningful large dry bulk capacity in time to deal with the rapidly aging fleet. We continue to see a significant increase in dry docks due to mandatory special surveys required on merchant vessels every five years.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

12% of the entire Capesize fleet was delivered in 2011 and will have to undergo 15-year special surveys in 2026. There will be five and 10-year special surveys as well, meaning around 24% of the total Capesize and Newcastlemax fleet will be competing for dry dock space this year. We estimate a total of 1.7% additional off-hire on the total fleet due to dry docks alone in 2026, not factoring in potential congestion and waiting time. Thank you. 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 Eirik Kolskår from Clarksons Securities. Please go ahead. Your line will now be unmuted.

[Eirik Kolskår, Analyst at Clarksons Securities]

Thank you. My first question is towards the market outlook.

[Eirik Kolskår, Analyst at Clarksons Securities]

We do sound more optimistic than the broader market. Earlier today you reported calling this the start of a supercycle. Looking at the FFA curve and consensus, they are assuming lower rates than your view implies. Where do you think the market is getting it wrong? What do you see as the main drivers that take rates higher from where it is today?

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Hi there. Well, if you look at the current FFA curve, then specifically Q3 and Q4, that has remained fairly stable over the last few months. At the same time, we've seen the tightness in Atlantic, which has also been a big contributor to the current high levels that we have. I don't think we've seen that fully priced yet in the forward curve.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Based on the volumes that we see, especially encouraging to see that the Simandou volumes are coming upstream and the very strong bauxite volumes we're seeing in Q1. Also, the structurally short Atlantic that we have now compared to three, four years ago, where we had more backhaul business from the Pacific into the Atlantic, which we don't really see much of anymore.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

This structurally short Atlantic with more volumes coming on from Atlantic and out Pacific, we think that will have a positive effect on the future market as well. Which is naturally reflected in the fact that we have 11 out of our 12 ships in the spot market.

[Eirik Kolskår, Analyst at Clarksons Securities]

Yeah. Given that market outlook, you also have a share now that is trading well above the NAV today based on current broker values, which also gives you currency for potential acquisitions. Given your outlook and your stock as a potential currency, is fleet expansion something that you are considering?

[Lars-Christian Svensen, CEO at Himalaya Shipping]

We are always trying to make a creative business for the shareholders and also to try and grow the company. One of the reasons why we trade above our NAV, we have a very simple and transparent model. The investors know what they're buying. We have solid counterparts, and also we have a low G&A. I think it's a combination of many things. We're always going to be on the lookout to make the company more interesting for our shareholders.

[Eirik Kolskår, Analyst at Clarksons Securities]

Thank you. That's all from me.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you.

[Operator]

Let me just remind you that if you do wish to ask a question, please press five star on your telephone keypad. It appears that we do not have any further questions at this time, so I'll hand it back to the speakers. Please go ahead.

[Lars-Christian Svensen, CEO at Himalaya Shipping]

Thank you very much for listening in, and we look forward to speak to you again the next quarter. Thank you very much.

[Vidar Hasund, CFO at Himalaya Shipping]

Thank you.

Participants

Executives

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

Analysts

• Eirik KolskÃ¥r, Analyst at Clarksons Securities