Diana Shipping (DSX) Q4 2011 earnings summary

Executive summary

• Profitable in 2011 despite weak dry-bulk markets; strategy emphasized stable charter revenue, a strong balance sheet and selective fleet expansion.

• Net income attributable was $107.5 million versus $128.8 million in 2010; time-charter revenue fell as average hire rates declined and containership results were deconsolidated.

Financial highlights

• Time-charter revenue was $255.7 million, down 7% YoY; operating income was $110.9 million versus $133.6 million in 2010.

• Net income attributable was $107.5 million versus $128.8 million; basic and diluted EPS were both $1.33, compared with $1.60 and $1.59, respectively, in 2010.

• Net cash from operations was $154.2 million, down from $178.3 million; cash and equivalents rose to $416.7 million from $345.4 million at year-end 2010.

• Voyage expenses fell to $10.6 million; vessel operating expenses rose to $55.4 million, while depreciation and deferred-charge amortization increased to $55.3 million.

Outlook and guidance

• 2012 revenue was expected to decline further if charter rates remained at then-current levels, despite fleet growth; vessel operating and depreciation costs were expected to rise with the fleet.

• Fixed revenue days stood at 89% for 2012; 24 vessels were on long-term charters of 13–62 months, supporting revenue visibility amid rate volatility.

• Six vessels had charters expiring within six months; nine charter expirations were scheduled during 2012, requiring re-employment in a weak market.

• Planned investment included two 76,000-dwt Ice Class Panamax newbuildings for Q4 2013 and a Panamax acquisition expected in April 2012.