Diana Shipping Inc. Announces Time Charter Contract For m/v DSI Polaris With Stone Shipping

Rhea-AI Summary

Diana Shipping Inc. (NYSE: DSX) has announced a new time charter contract for its Ultramax dry bulk vessel, m/v DSI Polaris, with Stone Shipping The contract offers a gross charter rate of US$15,400 per day, minus a 5% commission, for a period until minimum June 1, 2025, up to maximum August 15, 2025. This new charter, which began retroactively on July 20, 2024, is expected to generate approximately US$4.76 million in gross revenue for the minimum scheduled period.

The company's fleet will consist of 38 dry bulk vessels after the sale of m/v Houston, with a combined carrying capacity of about 4.4 million dwt and an average age of 10.97 years. Diana Shipping Inc. is also anticipating the delivery of two methanol dual fuel new-building Kamsarmax vessels by 2028.

Positive

• New time charter contract for m/v DSI Polaris at a higher rate of US$15,400 per day
• Expected gross revenue of US$4.76 million for the minimum charter period
• Fleet modernization with upcoming delivery of two methanol dual fuel Kamsarmax vessels

Negative

• Reduction in fleet size from 39 to 38 vessels after the sale of m/v Houston

Maritime Industry Analyst

As a Maritime Industry Analyst, I find this news moderately impactful for Diana Shipping Inc. (NYSE: DSX). The company has secured a new time charter contract for its Ultramax vessel, m/v DSI Polaris, at a higher rate than its previous charter. This development is positive for several reasons:

• The new gross charter rate of $15,400 per day represents an increase of 17.6% from the previous rate of $13,100 per day.
• The contract duration, extending until at least June 1, 2025, provides stable income visibility for nearly a year.
• The anticipated gross revenue of approximately $4.76 million for the minimum scheduled period bolsters the company's financial outlook.

However, it's essential to consider this in the broader context of Diana Shipping's fleet. With 38 vessels post the sale of m/v Houston, this single charter, while positive, has a impact on the overall fleet performance. The company's strategic moves, including the upcoming delivery of two methanol dual fuel Kamsarmax vessels, suggest a forward-looking approach to fleet modernization and potential environmental regulations.

For investors, this news indicates Diana Shipping's ability to secure favorable contracts in the current market conditions. The higher rate could be a sign of strengthening demand in the Ultramax segment. However, it's important to monitor broader market trends and the performance of the entire fleet to gauge the company's overall trajectory.

Financial Analyst

From a financial perspective, this charter agreement for m/v DSI Polaris presents a positive development for Diana Shipping Inc. Here's why:

• The 17.6% increase in the daily charter rate translates to an additional $2,300 per day in gross revenue.
• Assuming the minimum contract period of 316 days (July 20, 2024, to June 1, 2025), this rate increase alone could generate an extra $726,800 in gross revenue compared to the previous charter.
• The total anticipated gross revenue of $4.76 million for the minimum period represents a significant contribution to the company's top line.

However, it's important to contextualize this within Diana Shipping's broader financial picture. With a fleet of 38 vessels post the sale of m/v Houston, this single charter's impact on overall financials is Investors should consider the following:

• The company's ability to secure higher rates may indicate improving market conditions, which could potentially benefit the rest of the fleet.
• The stable income from this long-term charter contributes to predictable cash flows, which is favorable for financial planning and potential dividend considerations.
• The upcoming addition of two methanol dual fuel vessels suggests capital expenditures that need to be balanced against charter revenues.

While this news is positive, it's important for investors to await the company's next earnings report to gauge the full financial impact of this and other recent developments on Diana Shipping's overall performance.

ATHENS, Greece, July 24, 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 entered into a time charter contract with Stone Shipping Ltd, for one of its Ultramax dry bulk vessels, the m/v DSI Polaris. The gross charter rate is US$15,400 per day, minus a 5.00% commission paid to third parties, for a period until minimum June 1, 2025 up to maximum August 15, 2025. The charter commenced retroactively as of July 20, 2024. The m/v DSI Polaris was chartered, as previously announced, to ASL Bulk Marine Limited, at a gross charter rate of US$13,100 per day, minus a 5.00% commission paid to third parties.

The “DSI Polaris” is a 60,404 dwt Ultramax dry bulk vessel built in 2018.

The employment of “DSI Polaris” is anticipated to generate approximately US$4.76 million of gross revenue for the minimum scheduled period of the time charter.

Upon completion of the previously announced sale of m/v Houston, Diana Shipping Inc.’s fleet will consist of 38 dry bulk vessels: 4 Newcastlemax, 8 Capesize, 5 Post-Panamax, 6 Kamsarmax, 6 Panamax and 9 Ultramax. The Company also expects to take delivery of two methanol dual fuel new-building Kamsarmax dry bulk vessels by the second half of 2027 and the first half of 2028, respectively. As of today, the combined carrying capacity of the Company’s fleet including the m/v Houston and excluding the two vessels not yet delivered, is approximately 4.4 million dwt with a weighted average age of 10.97 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 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

What is the new charter rate for Diana Shipping's m/v DSI Polaris?

The new gross charter rate for m/v DSI Polaris is US$15,400 per day, minus a 5% commission paid to third parties.

When does the new charter contract for DSX's m/v DSI Polaris begin and end?

The charter commenced retroactively on July 20, 2024, and will last until minimum June 1, 2025, up to maximum August 15, 2025.

How much gross revenue is the m/v DSI Polaris charter expected to generate for Diana Shipping (DSX)?

The employment of m/v DSI Polaris is anticipated to generate approximately US$4.76 million of gross revenue for the minimum scheduled period of the time charter.

What will be the size of Diana Shipping's (DSX) fleet after the sale of m/v Houston?

After the sale of m/v Houston, Diana Shipping Inc.'s fleet will consist of 38 dry bulk vessels.