Declares Cash Dividend of $0.95 Per Share
for the Third Quarter and Suspends Future Dividends to Position
the Company for Market Opportunities
Board of Directors Authorizes Share Repurchase Program
ATHENS, Greece, Nov. 12, 2008 (GLOBE NEWSWIRE) -- Diana Shipping Inc. (NYSE:DSX), a global shipping company specializing in the transportation of dry bulk cargoes, today reported net income of $57.6 million for the third quarter of 2008. This compared to net income of $50.4 million reported in the third quarter of 2007.
Voyage and time charter revenues were $87.4 million for the third quarter of 2008, compared to $49.1 million for the same period of 2007, due to an increase in prevailing time charter rates and the increase in operating days due to the enlargement of the Company's fleet.
Net income for the nine months ended September 30, 2008 amounted to $167.5 million, compared to net income of $97.8 million for the same period of 2007. Voyage and time charter revenues were $253.1 million for the first nine months of 2008, compared to $131.6 million for the same period of 2007.
Dividend Declaration and Change in Future Dividend Policy
The Company has declared a cash dividend on its common stock of $0.95 per share, based on its results of operations during the third quarter ended September 30, 2008. The cash dividend will be payable on or about December 11, 2008 to shareholders of record as of November 26, 2008. The Company has 75.1 million shares of common stock outstanding.
In order to position the Company to take advantage of market opportunities, the Board of Directors has decided to suspend the Company's future dividend payments after the dividend distribution noted above. The Board believes this decision will enhance the Company's financial flexibility, by permitting cash flow that would have been devoted to dividends to be used for opportunities that may arise in the current marketplace.
Initiation of Stock Buyback Plan
The Company has further announced that the Board of Directors has authorized a share buyback program for up to US $100 million of the Company's common shares during the period ending December 31, 2009.
Chairman and Chief Executive Officer's Comments
Simeon Palios, Chairman and CEO of Diana Shipping, said: "Our consistent strategy at Diana Shipping has been to maximize returns to shareholders taking into account the highly cyclical nature of the dry bulk shipping industry. We have delivered on our strategy. Since we went public in 2005, Diana Shipping Inc. has produced a total annualized rate of return to shareholders of more than 27%. This performance compares very favorably to that of the other drybulk shares, as well as to that of the S&P 500 over the same period. We produced this return during a period of high vessel prices and high charter rates by employing low debt levels and a full dividend payout policy to create a modern fleet.
"We believe we are now entering a period of low charter rates and vessel prices which creates different opportunities to help us produce maximum returns. A suspension of our dividend will enable us to apply our cash flow to these opportunities when we believe we can create long-term value for shareholders.
"Low markets create opportunities. In 1999, we ordered the construction of the Nirefs and three other Panamax vessels currently in our fleet for a contract price of $20 million each, using 75% debt financing. While past performance is not indicative of future results, as you can imagine, our results from the Nirefs and its sister ships have been very good. While we are paying our full dividend for the third quarter, we are suspending future dividends during this period of changed, but enhanced opportunity.
"Our Company has one of the lowest debt levels in the drybulk shipping industry. By enhancing our liquidity resources while maintaining our relatively low level of debt, we are preparing ourselves to take advantage of investment opportunities, which will present themselves during this downturn. We have accepted slightly lower rates in order to do business with creditworthy charterers. We have a young fleet ready to meet a change in the market as the downturn ends. In addition, we believe that the present credit crunch will create new market opportunities as there are fewer buyers and lower vessel prices, but also fewer new ships delivered from the shipyards due to financing constraints.
"When market conditions and opportunities change, with our low debt level and by enhancing our liquidity, we will then have the flexibility to support more debt and reinstate our dividend. Management and Board members own over 19% of the shares of Diana and we care about shareholder value."
Fleet Employment Profile (As of November 10, 2008) Currently Diana's fleet is employed as follows:
Sister Year Employ- Charter
Name ships(1) Built DWT ment(2) Expiration(3)
---------------------------------------------------------------------
Nirefs A 2001 75,311 $60,500 Feb 3, 2010 -
Apr 3, 2010
Alcyon A 2001 75,247 $34,500 Nov 21, 2012 -
Feb 21, 2013
Triton A 2001 75,336 $24,400 Oct 17, 2009 -
Jan 17, 2010(4)
Oceanis A 2001 75,211 $40,000 Jul 29, 2009 -
Oct 29, 2009
Dione A 2001 75,172 $82,000 Jan 7, 2009 -
Mar 7, 2009
Danae A 2001 75,106 $29,400 Feb 18, 2009 -
May 18, 2009
Protefs B 2004 73,630 $59,000 Aug 18, 2011 -
Nov 18, 2011
Calipso B 2005 73,691 $55,000 Jan 15, 2009 -
Mar 15, 2009
Clio B 2005 73,691 $27,000 Jan 27, 2009 -
Mar 27, 2009
Thetis B 2004 73,583 $61,000 Jan 6, 2009 -
Feb 5, 2009
Naias B 2006 73,546 $34,000 Aug 24, 2009 -
Oct 24, 2009
Erato C 2004 74,444 $80,300 Jan 1, 2009 -
Mar 1, 2009
Coronis C 2006 74,381 $27,500 Jan 18, 2009 -
Apr 9, 2009
Sideris GS D 2006 174,186 $43,000 Nov 30, 2008
$39,000 Nov 30, 2009
$36,000 Oct 15, 2010 -
Jan 15, 2011(5)
Aliki -- 2005 180,235 $52,000 May 1, 2009
$45,000 Mar 1, 2011 -
Jun 1, 2011(5)
Semirio D 2007 174,261 $51,000 Jun 15, 2009
$31,000 Apr 30, 2011 -
Jul 30, 2011(5)
Boston D 2007 177,828 $52,000 Sep 28, 2011 -
Dec 28, 2011(6)
Salt Lake --
City 2005 171,810 $55,800 Aug 28, 2012 -
Oct 28, 2012
Norfolk -- 2002 164,218 $74,750 Jan 12, 2013 -
Mar 12, 2013
New York
(7,8,9) D 2010 177,000 $48,000 Feb 28, 2015 -
Jun 30, 2015
Los Angeles
(7,8,9) D 2010 177,000 -- --
---------
Total: 2,364,887
(1) Each vessel is a sister ship of the other vessels that have the
same letter.
(2) Gross time charter rate per day.
(3) Charterers' optional period to redeliver the vessel to us.
Charterers have the right to add the off-hire days, if any, and
therefore the optional period may be extended.
(4) The charterer has the option to employ the vessel for a further
11-13 month period at a daily rate based on the average rate of
four pre-determined time charter routes as published by the
Baltic Exchange. The optional period, if exercised, must be
declared on or before the end of the 30th month of employment and
can only commence at the end of the 36th month.
(5) The charterer has the option to employ the vessel for a further
11-13 month period. The optional period, if exercised, must be
declared on or before the end of the 42nd month of employment and
can only commence at the end of the 48th month, at the daily time
charter rate of $48,500.
(6) The charterer has the option to employ the vessel for a further
11-13 month period. The optional period, if exercised, must be
declared on or before the end of the 42nd month of employment and
can only commence at the end of the 48th month, at the daily time
charter rate of $52,000.
(7) Expected to be delivered to us in the second quarter of 2010.
(8) The time charter rate of $48,000 per day is based on the latest
possible date of delivery to the charterer (see also Note 9).
(9) The Company has the option to deliver either New York or Los
Angeles to the charterer. The gross rate will vary as follows:
US$50,000 per day for delivery between October 1, 2009 and
January 31, 2010 or US$48,000 per day for delivery between
February 1, 2010 and April 30, 2010.
Summary of Selected Financial & Other Data
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
INCOME STATEMENT DATA
(in thousands of US
Dollars):
Voyage and time
charter revenues $ 87,408 $ 49,086 $ 253,052 $ 131,591
Voyage expenses 3,528 2,348 10,168 6,028
Vessel operating
expenses 10,908 7,397 29,980 20,826
Net income 57,591 50,384 167,539 97,847
FLEET DATA
Average number of
vessels 19.0 16.1 18.9 15.6
Number of vessels 19.0 16.0 19.0 16.0
Weighted average age
of fleet (in years) 4.0 3.7 4.0 3.3
Ownership days 1,748 1,477 5,165 4,271
Available days 1,740 1,477 5,157 4,271
Operating days 1,739 1,476 5,151 4,240
Fleet utilization 99.9% 99.9% 99.9% 99.3%
AVERAGE DAILY RESULTS
Time charter
equivalent (TCE)
rate (1) $ 48,207 $ 31,644 $ 47,098 $ 29,399
Daily vessel
operating
expenses(2) $ 6,240 $ 5,008 $ 5,804 $ 4,876
-------------
(1) Time charter equivalent rates, or TCE rates, are
defined as our voyage and time charter revenues less voyage
expenses during a period divided by the number of our
available days during the period, which is consistent with
industry standards. Voyage expenses include port charges,
bunker (fuel) expenses, canal charges and commissions. TCE is
a non-GAAP measure. TCE rate is a standard shipping industry
performance measure used primarily to compare daily earnings
generated by vessels on time charters with daily earnings
generated by vessels on voyage charters, because charter hire
rates for vessels on voyage charters are generally not
expressed in per day amounts while charter hire rates for
vessels on time charters are generally expressed in such
amounts.
(2) Daily vessel operating expenses, which include crew
wages and related costs, the cost of insurance, expenses
relating to repairs and maintenance, the costs of spares and
consumable stores, tonnage taxes and other miscellaneous
expenses, are calculated by dividing vessel operating
expenses by ownership days for the relevant period.
Conference Call and Webcast Information
Diana Shipping Inc. will conduct a conference call and simultaneous Internet webcast to review these results at 9:00 A.M. (Eastern Standard Time) on Wednesday, November 12, 2008.
Investors may access the webcast by visiting the Company's website at www.dianashippinginc.com and clicking on the webcast link. The webcast also is accessible at www.viavid.net by clicking on the Diana Shipping link under "Events." The conference call also may be accessed by telephone by dialing 1-800-762-8779 (for U.S.-based callers) or 1-480-629-9041 (for international callers).
A replay of the webcast will be available soon after the completion of the call and will be accessible on both www.dianashippinginc.com and www.viavid.net. A telephone replay will be available by dialing 1-800-406-7325 (for U.S.-based callers) or 1-303-590-3030 (for international callers); callers must use the PIN number 3934891.
About the Company
Diana Shipping Inc. is a global provider of shipping transportation services. The Company specializes in transporting dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk shipping capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
DIANA SHIPPING INC.
FINANCIAL TABLES
Expressed in thousands of U.S. Dollars, except share and
per share data
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES:
Voyage and time
charter revenues $ 87,408 $ 49,086 $ 253,052 $ 131,591
EXPENSES:
Voyage expenses 3,528 2,348 10,168 6,028
Vessel operating
expenses 10,908 7,397 29,980 20,826
Depreciation and
amortization of
deferred charges 11,034 6,625 32,243 16,848
General and
administrative
expenses 3,267 2,221 10,725 6,636
Gain on vessel sale -- (21,504) -- (21,504)
Foreign currency
losses (gains) (248) (41) (354) (158)
---------- ---------- ---------- ----------
Operating income 58,919 52,040 170,290 102,915
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSES):
Interest and finance
costs (1,384) (1,867) (4,400) (5,767)
Interest Income 56 211 704 699
Insurance settlement
for vessel un-
repaired damages -- -- 945 --
---------- ---------- ---------- ----------
Total other income
(expenses), net (1,328) (1,656) (2,751) (5,068)
---------- ---------- ---------- ----------
Net Income $ 57,591 $ 50,384 $ 167,539 $ 97,847
========== ========== ========== ==========
Less: Dividends paid
on restricted stock (69) -- (178) --
---------- ---------- ---------- ----------
Net income available
to common
shareholders $ 57,522 $ 50,384 $ 167,361 $ 97,847
========== ========== ========== ==========
Earnings/(losses) per
common share, basic
and diluted $ 0.77 $ 0.78 $ 2.25 $ 1.63
========== ========== ========== ==========
Weighted average number
of common shares,
basic 74,375,000 64,184,783 74,375,000 60,168,040
========== ========== ========== ==========
Weighted average number
of common shares,
diluted 74,377,885 64,184,783 74,377,694 60,168,040
========== ========== ========== ==========
BALANCE SHEET DATA
September December
30, 31,
2008 2007
---------- ----------
ASSETS (unaudited)
------
Cash and cash equivalents 4,761 16,726
Other current assets 4,214 4,788
Advances for vessels under construction and
acquisitions and other vessel costs 26,947 53,104
Vessels' net book value 971,347 867,632
Other fixed assets, net 864 956
Other non-current assets 840 1,136
---------- ----------
Total assets 1,008,973 944,342
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities 19,789 20,964
Long-term debt 172,595 98,819
Deferred revenue, non current portion 23,616 23,965
Other non-current liabilities 1,195 1,120
Total stockholders' equity 791,778 799,474
---------- ----------
Total liabilities and stockholders' equity 1,008,973 944,342
========== ==========
OTHER FINANCIAL DATA
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Net cash from
operating activities $ 67,266 $ 37,748 $ 198,127 $ 98,397
Net cash from /
(used in) investing
activities (260) 78,374 (108,389) (152,965)
Net cash from /
(used in) financing
activities (84,950) 62,677 (101,703) 230,479