Himalaya Shipping (HSHP) Q2 2024 earnings summary

Executive summary

• Delivered final three 210,000 dwt Newcastlemax dual fuel newbuildings in Q2 2024, completing a 12-vessel fleet now fully operational.

• Achieved total operating revenues of $31.2M and net income of $6.9M in Q2 2024, with adjusted EBITDA of $24.0M.

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

• 10 of 12 vessels exposed to the spot market, earning a 42.25% premium to the Baltic 5TC Capesize Index.

Financial highlights

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

• Net income increased 175% sequentially to $6.9M; adjusted EBITDA up 42% to $24.0M.

• Operating income grew 53% to $17.5M compared to 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 $21.9M 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.

• 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.