Diana Shipping (DSX) Q4 2009 earnings summary

Executive summary

• 2009 remained profitable despite severe dry-bulk market volatility: net income was $121.5m on revenue of $239.3m, down from $221.7m and $337.4m in 2008.

• Cash rose to $282.4m at year-end, while long-term debt was $281.5m and stockholders’ equity was $999.3m.

• Strategy emphasized disciplined fleet expansion, balanced charter durations, high-quality charterers and preserving financial flexibility.

Financial highlights

• Voyage and time charter revenue fell 29% to $239.3m; the decline reflected a 30% drop in average charter rates, partly offset by 1% more ownership days.

• Operating income was $124.3m versus $225.8m in 2008; net income was $121.5m versus $221.7m.

• Basic and diluted EPS were $1.55, compared with $2.97 in 2008.

• Operating cash flow was $151.9m, down from $261.2m; cash increased by $220.4m to $282.4m.

Outlook and guidance

• 2010 revenue was expected to increase as Houston and Melite added ownership days; seven vessels had charters due to expire within six months and were expected to be re-chartered.

• Growth plans called for gradual, selective vessel acquisitions over roughly 24 months, subject to technical and age standards and acceptable financing.

• Internally generated cash flow was expected to fund fleet operations and working capital; $50.2m remained available under the revolving facility for vessel acquisitions.

• Rates had recovered from late-2008/early-2009 lows, but there was no assurance future average charter rates would exceed or match prior-year levels.