Diana Shipping (DSX) Q4 2007 earnings summary

Executive summary

• Record FY07 net income of $134.2M, revenue of $190.5M and EPS of $2.11; growth reflected fleet expansion, strong charter rates and a $21.5M vessel-sale gain.

• Fleet grew to 18 vessels at Dec. 31, 2007, from 15 a year earlier; four Capesize deliveries expanded carrying capacity and earnings potential.

• FY08 contracted gross revenue outlook of $281M–$292M covered 85%–89% of operating days, supporting management’s expectation of higher financial performance than FY07.

Financial highlights

• Voyage and time-charter revenue rose 64% YoY to $190.5M; operating income increased to $137.9M from $63.9M.

• Net income was $134.2M vs. $61.1M in FY06; basic and diluted EPS was $2.11 vs. $0.82.

• Net cash from operations rose to $149.0M from $82.4M; cash and equivalents ended FY07 at $16.7M.

• Adjusted for the $21.5M vessel-sale gain, reported operating income and net income also reflected strong underlying operating performance; G&A included a $1.7M employee/officer bonus and acquisition due-diligence costs.

Outlook and guidance

• FY08 contracted gross revenues of $281M–$292M represented fixed revenues for 85%–89% of operating days; FY07 gross revenues were $190M.

• Management expected continued dry-bulk cargo demand in 2008, with the second half potentially stronger than the first; supply growth, commodity-cycle weakness and shipbuilding investment were key caveats.

• Two 177,000-dwt Capesize newbuildings were expected for delivery in Q2 2010; each had a $60.2M contract price and long-term charter coverage was arranged for one vessel.