Himalaya Shipping (HSHP) Q2 2024 earnings summary

Executive summary

• Achieved total operating revenues of $31.2 million in Q2 2024, with net income of $6.9 million and adjusted EBITDA of $24.0 million, driven by the delivery of three new Newcastlemax dual fuel vessels, completing a 12-vessel fleet now fully operational.

• Declared and paid monthly cash distributions, increasing from $0.03 to $0.06 per share from March to July 2024.

• Converted index-linked charters to fixed charters for Mount Neblina and Mount Blanc at attractive rates, with 10 of 12 vessels exposed to the spot market, earning a 42.25% premium to the Baltic Cape index.

Financial highlights

• Q2 2024 operating revenues rose 32% sequentially to $31.2 million, driven by three new vessel deliveries.

• Adjusted EBITDA increased by $7.2 million to $24.0 million, and net income rose to $6.9 million from $2.5 million in Q1 2024.

• Average TCE, gross, was $34,600/day in Q2 2024, up from $30,600/day in Q1 2024.

• Basic and diluted EPS was $0.16 in Q2 2024, up from a loss of $0.03 in Q2 2023.

• Cash and cash equivalents stood at $21.9 million as of June 30, 2024.

Outlook and guidance

• Management expects continued strong cash flow and regular monthly distributions, with potential upside if positive market trends persist.

• Strong seasonality expected ahead, with Q4 historically ~25% better than July rates due to higher exports.

• Market fundamentals supported by growing tonne-mile demand and limited new vessel supply.

• Less than 120 large bulk carriers due for delivery before 2028; over 52% of the Capesize fleet will be older than 15 years by 2027.

• Demand growth expected to be moderate, but longer sailing distances and new iron ore supply from Guinea and Brazil could drive incremental demand.