Himalaya Shipping (HSHP) Q4 2023 earnings summary

Executive summary

• Q4 operating revenue was $18.3M, net income $4.6M and EBITDA $13.4M; average gross TCE was $34,400/day.

• All 12 vessels had employment secured after three remaining vessels were contracted on 24-month index-linked charters at rates described as a significant premium to the Baltic 5TC index.

• Nine vessels were operating after three newbuildings were delivered in January 2024; the remaining three were scheduled for delivery in 2024.

Financial highlights

• Q4 revenue rose 79% QoQ to $18.321M, reflecting more operating days and higher TCE; operating days increased to 552 from 476 and average TCE to $34,400/day from $22,300/day.

• Q4 operating profit was $9.844M, net income $4.606M and diluted EPS $0.11; EBITDA was $13.424M.

• FY2023 revenue was $36.736M, operating profit $14.626M, net income $1.514M and diluted EPS $0.04.

• Q4 net cash from operations was $8.407M; investing outflow was $28.916M and financing inflow was $33.274M.

Outlook and guidance

• Management expected a recovering day-rate environment, citing strong Q4 and early-2024 markets, a low Capesize order book and an aging fleet; seasonal volatility remains expected.

• Three remaining newbuildings were scheduled for delivery in May and June 2024; the program was progressing slightly ahead of schedule.

• Management planned to use floating-to-fixed charter conversions to limit downside in weaker periods.