Diana Shipping (DSX) Q4 2008 earnings summary

Executive summary

• Record 2008 net income of $221.7M, up 65% YoY; revenue rose 77% to $337.4M, supported by fleet expansion and stronger charter rates.

• Fourth-quarter dividend payments were suspended as a strategic move to retain cash for operations, debt service and potential acquisitions.

Financial highlights

• Operating income was $225.8M vs. $137.9M in 2007; net income was $221.7M vs. $134.2M.

• Diluted EPS was $2.97 vs. $2.11; voyage and time charter revenue reached $337.4M vs. $190.5M.

• Operating cash flow rose to $261.2M from $149.0M; year-end cash was $62.0M vs. $16.7M.

• Vessel operating expenses increased 36% YoY to $39.9M; depreciation and amortization rose 77% to $43.3M.

Outlook and guidance

• 2009 revenue and earnings were expected to decline as vessels redelivered in late 2008 and early 2009 entered charters at substantially lower rates.

• Five vessels redelivered in December 2008 or January 2009 were fixed at rates below 2008 levels; further redeliveries were expected during 2009.

• Identifiable 2009 revenue was expected to materially exceed estimated expenses, supported by existing charters, though market conditions remained unsettled.