Diana Shipping(DSX) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Time charter revenues decreased by approximately $5 million from Q3 2023 to Q3 2024, from$ 62.1 million to $57.5 million [19] - Net income for Q3 2024 was$ 3.7 million, compared to $7.4 million in Q3 2023 [19] - Cash and cash equivalents, time deposits, and restricted cash increased to$ 186.8 million as of September 30, 2024, up from $161 million at the end of 2023 [19] - Long-term debt decreased from$ 642.8 million to $627 million [19] - Net debt stands at 37% of market value, supported by$ 186.8 million in cash reserves and $135.3 million in secured revenues as of November 19 [10] Business Line Data and Key Metrics - Fleet utilization reached 99.7% in the first nine months of 2024 [10] - Secured revenue for 78% of remaining ownership days in 2024, amounting to approximately$ 22.1 million, and 38% of available ownership days in 2025, amounting to approximately $95.8 million [15] - Time charter equivalent rate dropped to$ 15,333 in Q3 2024, compared to $15,800 in Q3 2023 [20] - Operating expenses increased to$ 5,964 per day in Q3 2024, up from $5,621 in Q3 2023 [21] Market Data and Key Metrics - Capesize vessels maintained relative strength, averaging higher returns than in the previous quarter, while smaller segments weakened significantly [8] - Red Sea disruption increased bulk carrier ton-mile demand by about 1.2%, with Swiss Canal transits down 40% compared to the second half of 2023 [24] - Chinese economy struggles with property sector drag, but imports remain steady, leading to a buildup of commodity inventories [25] - IMF forecasts global economic growth of 3.2% in 2024 and 3.3% in 2025, with weaker outlooks for China, Latin America, and the EU [26] Company Strategy and Industry Competition - Focus on staggered medium-term to long-term charters to avoid clustered maturities, ensuring earnings visibility and resilience against market downturns [17] - Ongoing fleet modernization efforts, including the delivery of two methanol dual-fuel newbuilding Kamsarmax dry bulk vessels by 2027 and 2028 [9] - ESG initiatives include promoting eco-friendly technologies, transparent emission data sharing, and partnerships to advance sustainability goals [38] Management Commentary on Operating Environment and Future Outlook - Geopolitical developments, particularly in the Red Sea, have significantly impacted the shipping industry [24] - Chinese government stimulus measures are expected to support the economy, despite challenges in the property sector [25] - Clarksons projects a slight easing of bulk carrier earnings in 2025, with ton-mile demand growth of 1.3% versus supply growth of 3% [35] - Positive factors for 2025 include import growth into India and Southeast Asia, a strong Brazilian soybean season, and increased congestion [34] Other Important Information - Declared a quarterly cash dividend of$ 0.01 per common share, totaling approximately $1.3 million [15] - Issued$ 150 million senior unsecured bonds with a fixed coupon of 8.75%, maturing in July 2029 [11] - Raised $25.5 million through the exercise of 6,381,900 warrants, with potential to raise an additional$ 64.9 million [14] Q&A Session Summary Question: Update on minority investment in CSOVs and expected delivery timeline - Total commitment is EUR50 million, with EUR33 million already paid and the remaining EUR15 million expected soon [44] - First vessel delivery expected by September 2025, with subsequent deliveries every three months [44] - Preference for long-term employment contracts, though none have been secured yet [44] Question: Capital allocation priorities and potential share repurchase - Company maintains a disciplined approach to fleet renewal, deleveraging, and shareholder returns [45] - Share repurchases may occur at the appropriate time, depending on market conditions [45] - Balance sheet is prepared to support these actions when deemed necessary [45]