Diana Shipping (DSX) Q4 2013 earnings summary

Executive summary

• 2013 remained a challenging year amid weak dry-bulk charter rates and vessel oversupply; fleet expansion and financing actions positioned the business for a potential market recovery.

• Net loss was $21.2 million versus net income of $54.6 million in 2012; time-charter revenue fell 26% as average charter rates declined 39%.

Financial highlights

• Time-charter revenue was $164.0 million, down from $220.8 million in 2012; additional vessel days partly offset lower rates.

• Operating loss was $8.7 million versus operating income of $63.1 million in 2012; net loss was $21.2 million and loss per share was $0.26.

• Operating cash flow declined 44% to $67.4 million; investing cash outflow was $245.2 million, and financing cash outflow was $28.2 million.

• Cash and equivalents were $240.6 million at year-end, versus $446.6 million; total assets were $1.70 billion and stockholders’ equity was $1.25 billion.

Outlook and guidance

• 2014 revenue was expected to remain at current levels or increase with fleet enlargement, assuming charter rates remained at current levels.

• 2014 operating expenses, depreciation and interest costs were expected to rise with fleet growth; operating costs were also expected to reflect enhanced environmental compliance.

• Fixed revenue days covered 70% of 2014 and 20% of 2015; management pursued balanced charter maturities and predictable revenue.

• Internally generated cash flow was expected to fund fleet operations and working capital, while vessel construction could be funded with operating cash, debt or equity.