Diana Shipping Inc. Price & Performance (DSX)

Good morning, ladies and gentlemen, and welcome to Diana Shipping Inc.

Fourth Quarter and End of the Year twenty twenty four Financial Results conference call. It's a pleasure to address you today alongside our esteemed Chief Financial Officer. Before we begin, I kindly remind you to review the forward looking on Page four of the accompanying investor presentation. The Q4 twenty twenty four performance It has been another record year for drybulk volumes through 2024, and earnings have averaged well over that seen in 2023. But this was a year of two halves in terms of rates. With a very strong first six months followed by somewhat softer conditions through the back end of the year. Trade disruptions played a key part in boosting ton mile demand especially as Panama Canal transit [indiscernible] were cut due to drought conditions leading to rerouting. This was further exacerbated by Houthi attacks on ships in the Gulf Of Aden which subsequently led to a 40% reduction in bunker transit and even more rerouting. Towards the end of twenty twenty four, shipment volumes remained high but fleet efficiency gains began to weigh on Capesize and Panama earnings. Meanwhile, the near normalization of the Panama Canal and more basin down trade kept limits on ton mile growth.

Having said that, the forward curve has remained in steep contour [indiscernible] and we have managed to charter our vessels for periods at significant premiums over those Turning to Slide five. Let's review our company's snapshot as of today. Diana Shipping Inc. Founded in 1972 and listed on the New York Stock Exchange since 02/2005, operates a fleet of 38 drybulk vessels seven of which are mortgage free. Our fleet has an average age of 11.4 years and a total deadweight capacity of approximately 4,200,000 tons. We anticipate the delivery of two methanol fuel newbuildings Campsarmax drive out vessels at the end of 2027 and early twenty twenty eight, respectively. Fleet utilization reached 99.7% for the fiscal year 2024 highlighting our effective debt management strategy. As of the end of the fourth quarter, we employed nine eighty one individuals and sea and the shore. Financially, our net debt stands at 40% of market value. It's a million dollars in cash reserves and total secured revenues of approximately $155,000,000 as of February 19. On Slide six, we outline the key developments from the fourth quarter through February. In October, we signed a term loan facility with Danish Ship Finance secured by seven vessels drawing US80.2 million dollars to refinance the existing term loan facility.

This refinancing released two previously financed In October, we successfully completed the approval and publication of the company's prospectus for the bond listing on the Oslo Exchange. In November, we completed a $25,000,000 tap issue under our expanding senior bond due July 2029 issued at 102% of par value with a fixed coupon of 8.75%. In November, we released our 2023 ESG report. The fifth in a row, underscoring our ESG strategy and commitment to sustainability. In December, we repurchased 11,442,645 common shares at the price of $2 per share. As of February 19, we have raised US25.6 million dollars through the exercise of 6.397 hundred and 9 warrants under our ongoing warrant program. With the potential to raise an additional $65,000,000 under the full scope of the program. As of February 19, we have secured revenues for 63% of the remaining ownership days of 2025 amounting to approximately $125,000,000 10% of available ownership dates in 2026. Amounting to approximately $30,000,000 Maria will provide further details on our cash flow generation In Fayettebury, we announced the sale of Motivexhall Arc Mini a purchase of approximately US11.9 million dollars before commissions She is expected to be delivered to her new owners Latest by 03/07/2025.

For the fourth quarter, we have we are pleased to declare a quarterly cash dividend of $0.01 per common share totaling approximately US1.1 million dollars On Slide seven, summarizing our recent chartering activity, Since our last earnings presentation, we have secured favorable time charters for nine vessels. At a weighted average daily rate of 12,950 to for two twenty eight days Seven Panamax, Campamax And Post Panamax vessels at a weighted average daily rate of 11,200 and and $60 for US250. Two days and four Capesize vessels at a weighted average daily rate of US18312 dollars for two sixty four days. [indiscernible] Slide eight highlights our disciplined chartering strategy We focus on staggered medium to long term charters avoid clustered maturities. And ensuring earnings visibility and resilience against market downturns. Now I'll pass the floor to Maria for a more detailed financial analysis. Going to Slide nine, on the financial highlights for the fourth quarter of twenty twenty Our revenues stood at $57,100,000 compared to $6,000,000 in the same quarter of last year, a decrease of about 5%. Our adjusted EBITDA was $25,900,000 compared to $27,100,000 in the fourth quarter of twenty twenty three decrease of $1,200,000 Regarding our net income, this increased compared to the same quarter of last year to €9,700,000 from $9,400,000 in 2023 an increase that is mainly attributable to decreased interest expense as a result of a combination of decreased average debt and decreased interest rates, an increased gain from non operating activities in the fourth quarter of twenty twenty four compared to the same quarter in 2023.

Earnings per common share diluted, however, was $0.02 in the fourth quarter of twenty twenty four compared to $0.06 in the same quarter of 2023. The decrease in the diluted earnings per share was due to the increased average number of shares and also the adjustments of net income calculate this number including not only the preferred dividends paid to preferred shareholders, but also the gain on warrants, which in the February 2024 was $5,500,000 compared to only $1,600,000 in the fourth quarter of twenty twenty three. On the balance sheet side, we ended with the year with a cash of 207,200,000.0 compared to $161,600,000 as of 12/31/2023, comprised of cash and cash equivalents time deposits maturing in periods above three months which are excluded from CASM Casa secure our loan facilities. Long term debt and finance liabilities net of deferred financing costs comprising of a mix of variable and fixed rate indebtedness which includes secured debt and unsecured bond and for sale and lease $637,500,000 as of December 31, 2024 compared to $642,800,000 as of December 31, 2023 a decrease of around 1%. At this point, we would like to remind you that during 2023 and 2024, we refinanced all our debt agreements and bond to push back debt and bond maturities and also decrease loan Going to Slide 10.

We talked about our revenues for the quarter earlier in the previous slides. Now voyage expenses increased marginally compared to the same quarter last Yes. Due to increased loss on bankers compared to [indiscernible] On the other hand, vessel operating expense decreased in absolute numbers due to the sale of two vessels during the [indiscernible] But also due to savings achieved in the fourth quarter of twenty twenty twenty four can be evidenced by the decrease of the day operating expense achieved for the fourth quarter of twenty twenty being $5,496 compared to $5,745 in 2023. Our time charter equivalent for the fourth quarter was also increased to $15,589 compared to $15,162 in the fourth quarter of twenty twenty three. Fleet utilization was the same for both comparative quarters a strong rate of 99.7%. Going to the next slide, number 11, Our revenues for the year were $228,200,000 compared to $262,100,000 last year, a decrease which was the outcome of decreased average rates as during the year and decreased average number of vessels. That being said, our time charter equivalent to 2024 was $15,267 compared to $16,713 in 2023. Net income was $12,700,000 compared to $49,800,000 in 2023, a decrease that was affected by decreased revenues and non operating losses relating to the reversals of the bond, in 2024, and losses derived from the valuation of our investments compared to gains in 2023.

Going to the next slide, number 12, mentioned earlier through which we managed to have steady debt repayments until 2029 and a steady amortized steadily amortized debt until 02/1932. Going to the next slide. As of 12/31/2024, our breakeven rate was $16,314 per day As Amir mentioned earlier, our contracted revenues for the remainder of 2025 were $124,800,000 and for 2026, 30,000,000 Having calculated the revenues for the Amfix date of 2025 and 2026 at the FSA rates, in this slide we estimated that 2025, we will be at or around breakeven. Going to the next slide. Slide 14, we present to you our dividend payout since the third quarter of twenty twenty one when we distributed our free cash dividend since '28 which has rewarded our share holders with quarterly distributions of both cash and shares. Consistent with this payout, we have declared another dividend [indiscernible] increasing our cumulative dividend paid since 2021 to $2.66 performance And with this, I will send the call to Stacia who will continue with the drybulk market over Thank you, Maria. A furthermore welcome to the participants of this quarterly and annual earnings call of Diana Shipping Inc. A quick look at the markets.

And an update on it. The drybulk market has become increasingly volatile to increase this instability. As evidence of this trend, we cite the highs and lows of the drybulk market over the last twelve months or so. The Baltic Dry Index hit a higher 2,419 in March. And at the January stood at only seven fifteen. Twelve month time charter rates for Capes reached a high of $35,000 a day in March 24 for a scrubber. And in January, have dropped to $18,000 per day. For Khamzah Mazes, the high was $21,000 per day in March of last year and the low was reached in December of last year of 11,250 For Ultramaxes, the figures were $19,500 per day in fed twenty twenty four, dropping to 12,500 per day in December of last year. For the time being Arrow Shipping and Energy have identified a sharp drop during the second half of twenty twenty four in grain shipments as well as coal shipments. As these trades account for nearly 80% of Panamax shipments, it is no surprise that earnings dropped so much over the last two quarters. At least grain shipments are expected to increase over the next few quarters, while while the future trend of coal shipments is much less certain.

Looking now at macroeconomic developments, market performance depends very much on world GDP growth, On the positive side, it is encouraging to note that a record small number of countries are expected to be in recession. 2025 and 2020 The latest projections for growth of the major world economies provided by the IMF are in this China's growth this year is expected to come in at around 4.6%. For The U. S, the projections are 2.7% for this year and 2.1% in 2026. Fourth growth is anticipated to grow by 3.3% both this year and next. The major bright spot remains India with anticipated growth being forecasted 6.5% the next two years. According to Optima Shipping Services, a looser monetary policy in China is expected to provide support to the drybulk trade later this year particularly in commodities tied to domestic infrastructure and industrial demand. A brief look at commodities now. Steel output in China has dropped so far in by 1% year on year. Global steel production is projected to have dropped by 0.7% in 2024 as compared to 2023 to 1,835,000,000 tons. The largest increases we're seeing in Vietnam, Brazil, India and Turkey. While largest production drops during last year were seen in Mexico, Russia and South Korea, Grain shipments are expected to grow by about 2% during 2025 grain season after showing good performance 3% in 2024.

Shipments in 2026 are expected to grow by 3% even though much will depend Classens expect thermal coal shipments to drop by 2% this year to 1,027,000,000 tonne and by a further 2% in 2020 However, eventually, demand might grow as China and other emerging economies in the Asia Pacific region still depends heavily on coal for power supply for which demand is increasing rapidly. Iron ore shipments, which are expected by analysts to remain steady this year, and drop by 1% in 2026 are being disrupted by cyclones affecting major loading ports in Australia. Such as Port Headland, Ampere and Port Walker. Where congestion now is beginning to build up. Demand growth in the major bulk in the minor bulk sorry? Will be the main positive factor in 2025 and are anticipated to increase by 3% to 2,300,000,000 tons.

Increased shipments of bauxite and aluminum will remain the cornerstone of the Miner Bulk.

Great. And the energy transition in twenty twenty five and beyond. [indiscernible] The share of Capes in the bauxite trade has increased to just over 20% of total shipments. Total bauxite shipments in 2024 estimated by Clarksons to come in at 162,400,000 tonnes will represent 15% year on year Turning to demand. Now analysts expect global demand for dry bulk shipping to grow about 1% this year with supply anticipated to increase by about 3% year on year leading to an overall softer fundamental balance in the However, several factors such as slower speed, greater of higher time due to special surveys, and fitting energy saving improvements could help reduce this Looking ahead to 2026, bulkhead earnings are anticipated to be and demand expected to increase around 1% in ton miles. So in 2026, a decrease in fleet growth is mostly attributed to an increase in demolition to about 14,000,000 deadweight tons and limited newbuilding delivery. 2026 might be a year of slightly better bulk added earnings than in 2025, but it is far too early to make any forecast. Moving to the next slide covering fleet development. The new building order book is about 109,300,000 deadweight or 10.6% of the existing fleet.

Panamaxes Camshamaxes in particular are the most broadly ordered size at 36,600,000 deadweight on order representing nearly 14% of the existing fleet. As Klassen pointed out, the fueling transition remained in focus in 2024 with a record volume of alternative fuel capable tonnage contracted, about 62,000,000 deadweight or around 50% of the total. However, the alternative fuel readiness of this tonnage differs greatly from ship to ship. Most being prepared with minimum present cost to receive some sort of alternative fuel down the road at which time much larger outlays will be required for the necessary modification. According to statistics prepared by Braemar, the 5,000,000 tonnes this year and by about 6,000,000 deadweight tons in 2026. For Kamshermaxes and Panamaxes, the figures are 9,000,000 for this year and in 2026. The Ultramaxes are expected to grow in coverage by 10,000,000 deadweight in $20.20. €25,000,000 and by $7,000,000 in 2026. All figures given above our net COVX Talking of deletions, demolitions are expected by Clarksons to reach 9,200,000 deadweight this year. And about 14.7 next year. Since age is one of the factors affecting the decision to scrap that together with sentiment and the state of the rephrase market, of course, It is worth noting that according to Klutson's 24% of Handymax Supermileage is over 15 years old.

As well as 26% of Panamax's and 17% Okay. Congestion has been gradually dropping since 2020 that's boosting the supply of available tonnage. BIMCO expected to stabilize around current level Although extreme weather conditions like that that we are facing now in Australian in the iron ore loading port. Could increase congestion at least temporarily. As regards asset values, newbuilding prices are for the time being defined the trend of the freight market. And remain firm across the size range. Capes have increased by 10% year on year at 74,500,000 with cash taxes at $37,000,000 showing a 3.5% year on year increase increases are seen for Handyman. According to Bimco, Bimco over the next two years secondhand prices are expected to weaken together with freight rates. After peaking in July of last year, they gradually returned to the early twenty twenty four level. An example, in January, a five year old bulker would sell on average about 88% of the price of a new building. This downward trend is expected to continue over the next few quarters. Finally, turning to the market outlook. Overall, major dry bulk commodity shipments are expected to either remain steady or drop somewhere from level seen in 2020 In dry bulk trade representing about 2,350,000,000 tons of shipments, which play the most significant role in determining the future course of the drybulk market over the next Modest supply growth will help in maintaining a balance between supply and demand.

Nevertheless, 2025 is projected to be a softer year than 2024, mainly due to a moderation the rate of growth in demand. A major unknown factor is the effect on the drybulk market of possible tariffs from China, Mexico, Canada and other countries' exports The U. S. By the U. S. Administration, which might disrupt primarily grain and mine of bulk trade. According to BIMCO, rising tariffs present a considerable downside risk in the fight against inflation and to global economic growth in the near to medium term. An increase in tariffs could lead to a rise in consumer prices High interest rates could also affect supply chain, which would certainly be bad for shipping in general. So the last slide provides a Short summary of positive and negative influences for the dry bulk market as presented by various analysts. To cite a few, we continued on the positive side have continued import growth into China and Southeast Asia, The record small number of countries expected to be in recession during this year and next gradual increase in congestion, looser municipality policy in China leading to potential recovery in Chinese property and infrastructure markets and the commencement later this year of iron ore shipments from the Cement 2.

Gulf in Guinea. On the negative side, we have worldwide lower iron ore consumption, we have protectionist measures with high tariffs leading to trade wars bulk carrier fleet growth outpacing demand growth except for the Cape sector, easing tensions in The Middle East with increased Red Sea transit weather related disruptions of exports in the Australian iron ore, Great. Large increases in hydropower Output in India and China and finally Panama Canal drought related problem resolution. On this note, I will pass the call our CEO, Sevira Mxpaoglu to provide the most important financial highlights for the last year and fourth quarter as well as some takeaway points from this earnings call. [indiscernible] So before we conclude today's presentation, I'd like to highlight our ongoing ESG [indiscernible] So Diana Shipping is committed to promoting eco friendly technologies and modernizing our fleet. Transparency sharing emission data to ensure accountability. Verona is committed to building on partnerships and collaboration. To advance our sustainability goals. And is also developing an equity diverse and inclusion program while continuously investing in our people. On Slide 20, in summary, Diana Shipping stands on a strong foundation built on over fifty years of industry and twenty years on the New York Stock Exchange, a seasoned management team adept to addressing industry challenges, strong stakeholder relationships and a disciplined 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 their robust ESG strategy.

Thank you for joining us today. We now look forward to addressing your questions during the Q and A session.

I'm not showing any questions at this time. I'd like to hand the call back over to management for any closing comments.

Thank you very much for joining us. For Diana's fourth quarter and end of year financial results. Conference call. I look forward to talking to you again in the next quarter.

Thank you. This does conclude today's teleconference. Enjoy the rest of your day.