Diana Shipping (DSX) Q4 2010 earnings summary

Executive summary

• FY10 net income attributable to shareholders was $128.8m vs. $121.5m in 2009; time-charter revenue rose to $275.4m as fleet capacity expanded.

• Record year-end cash of $345.4m and stockholders’ equity of $1.17bn supported continued fleet growth, while dry-bulk market conditions remained weak.

• Three dry-bulk vessels joined the fleet in 2010; two Newcastlemax newbuildings were contracted for delivery in 2012.

Financial highlights

• Time-charter revenue was $275.4m in 2010, up from $239.3m in 2009; fleet growth and containership consolidation more than offset a 2% decline in average charter rates.

• Operating income was $133.6m vs. $124.3m; net income was $127.9m, while $128.8m was attributable to shareholders after a $0.9m loss assumed by non-controlling interests.

• Basic and diluted EPS were $1.60 and $1.59, respectively, compared with $1.55 for both measures in 2009.

• Operating cash flow increased to $178.3m from $151.9m; investing cash outflow was $252.3m, including vessel purchases, construction advances and office property acquisition.

Outlook and guidance

• 2011 revenue was expected to decline due to the containership deconsolidation and lower average market charter rates.

• 2011 vessel operating, depreciation and G&A expenses were expected to decrease following containership deconsolidation; insurance-market developments could increase operating costs.

• Five vessels had charters scheduled to expire within six months of the report; new charters were expected, with rates subject to market conditions.

• Strategy remained focused on balanced short- and long-term charters, cost-effective fleet expansion and conservative balance-sheet management.