Diana Shipping Inc. Announces Direct Continuation of Time Charter Contract for m/v Amphitrite
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Insights
The extension of the time charter contract for Diana Shipping's Post-Panamax vessel represents a strategic move in the dry bulk shipping market. This sector is known for its volatility, influenced by factors such as global demand for commodities, geopolitical tensions and fuel prices. The fixed daily charter rate provides a predictable revenue stream, which can be particularly advantageous in a market where rates can fluctuate significantly. It's important to note that the two-tiered pricing structure, with a higher rate after the initial thirty days, may indicate expectations of a strengthened market or a premium for longer-term use.
Analyzing the impact on Diana Shipping's financials, the gross revenue generation of approximately $4.46 million for the minimum charter period is a solid addition to their income statement. However, one must consider the operational costs and the 5% commission to third parties which will reduce the net income. The company's fleet size and composition, along with the average fleet age, suggest a competitive position in the industry, potentially offering economies of scale and operational efficiency.
The announcement by Diana Shipping Inc. regarding the charter extension is a positive indicator for investors. The assured revenue until at least November 2024 provides some visibility into the company's future earnings, which is beneficial for forecasting and valuation purposes. The gross charter rate being set above current market average indicates the company's ability to negotiate favorable terms, possibly due to the quality and efficiency of their fleet. Investors should monitor the dry bulk index as a proxy for the sector's performance and Diana Shipping's potential earnings.
From a financial perspective, the additional revenue stream should be reflected in the company's EBITDA, improving their debt-to-EBITDA ratio, a critical metric for investors. The company's stock performance may react positively to this news, as it suggests operational stability and potential for sustained dividends. However, the broader market conditions and investor sentiment towards the shipping sector will also play a significant role in the stock's performance.
The extension of the time charter for the 'Amphitrite' falls within the broader context of maritime economics, where long-term charters can be seen as hedges against market volatility. By locking in a rate for a significant period, Diana Shipping mitigates the risk of a downturn in spot market prices. The economic implications of such a deal extend beyond the company to the industry, as it may influence the average time charter rates and the availability of vessels on the spot market.
In a longer-term economic view, the stability provided by such contracts can support the company's investment in fleet maintenance and renewal, contributing to the overall health of the maritime shipping infrastructure. It's also indicative of the demand for dry bulk shipping, which is closely tied to economic growth, particularly in developing countries that rely on these vessels for the import and export of commodities.
ATHENS, Greece, Jan. 09, 2024 (GLOBE NEWSWIRE) -- Diana Shipping Inc. (NYSE: DSX), (the “Company”), a global shipping company specializing in the ownership and bareboat charter-in of dry bulk vessels, today announced that, through a separate wholly-owned subsidiary, it has extended the time charter contract with Cobelfret S.A., Luxembourg, for one of its Post-Panamax dry bulk vessels, the m/v Amphitrite. The gross charter rate is US
The “Amphitrite” is a 98,697 dwt Post-Panamax dry bulk vessel built in 2012.
The employment extension of “Amphitrite” is anticipated to generate approximately US
Diana Shipping Inc.’s fleet currently consists of 40 dry bulk vessels: 4 Newcastlemax, 9 Capesize, 5 Post-Panamax, 6 Kamsarmax, 7 Panamax and 9 Ultramax. As of today, the combined carrying capacity of the Company’s fleet is approximately 4.5 million dwt with a weighted average age of 10.55 years. A table describing the current Diana Shipping Inc. fleet can be found on the Company’s website, www.dianashippinginc.com. Information contained on the Company’s website does not constitute a part of this press release.
About the Company
Diana Shipping Inc. is a global provider of shipping transportation services through its ownership and bareboat charter-in of dry bulk vessels. The Company’s vessels are employed primarily on short to medium-term time charters and transport a range of 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, Company management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include the continuing impacts of the COVID-19 pandemic; 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 the Company’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Company’s 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, including risks associated with the continuing conflict between Russia and Ukraine and related sanctions, potential disruption of shipping routes due to accidents or political events, including the escalation of the conflict in the Middle East, vessel breakdowns and instances of off-hires and other factors. Please see the Company’s filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
FAQ
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