Diana Shipping 2Q16 Earnings Call Notes

Simeon Palios

We are in talks with banks about repayment schedules

“We are currently proactively and we are active before a problem arise, if it does, to come with an agreement with the banks as regards possible using on the repayment schedule. If we do not manage to come to an agreement, we have to continue business as usual. And at this stage of the cycle we are considering cheap assets, cheaply purchased vessels at the bottom of the cycle, as good as cash or even better.”

We are considering a 40-80m investment within the next 4 months,/strong>

“So there is some truth in what you have said because we are ready to buy vessels, certainly not spend the entire cash position that you see, which is substantial, but an investment within the next four months, equal to $40 million-$80 million is certainly something that we are considering seriously.”

Anastasios Margaronis

Slight improvement in dry bulk carriers’ earnings prospects

“The second quarter has seen a slight improvement in the earnings of bulk carriers across the board. The Baltic exchange industries reflect quite accurately this development. At the beginning of the second quarter the Baltic Dry Index stood at 450, and on 30 June it was at 660. The Baltic Cape Index started at 345 and closed at 996, while the Baltic Panamax Index similarly recovered from 535 to 662.”

22m dwt sold for scrap in industry

“Demolition now — the first half of this year saw record numbers of ships heading for the scrapyard. According to Clarksons, 36 ships of 11.1 million deadweight of Capes were scrapped during this period, also 88 Panamaxes or 6.3 million deadweight headed for the scrapyard during the same period. A total of 22.2 million deadweight of bulk carriers were sold for scrap during the first six months of this year, which was 35% more than the first six months of 2015.”

Iron ore trade expected to be up 2% this year

“According to Clarksons seaborne iron ore trade is expected to increase to 1.391 million tons, which would be 2% higher than in 2015. An increase in construction activity in China has supported a firm recovery in the country’s steel production in recent months. According to Clarksons it has helped support higher iron ore imports by China. This increase is expected to outweigh declines of imports into other countries.”

Analysts predict an improvement in bulk carrier earnings, but not sustainable recovery

“on balance, analysts predict an improvement in bulk carrier earnings during the rest of this year but do not foresee a sustainable recovery until the circle of tonnage created by the uncontrolled speculative ordering of bulkers during the last three years or so are absorbed through scrapping and higher demand.”

Ioannis Zafirakis

Raising equity is out of the question. We still have plenty of time ahead before we have real problems

Certainly raising equity is out of the question, especially proactively. That’s why I keep talking about the proactive part of the story. We still have plenty of cash aside and we still, by adding our models and you are adding yours, you can see that we have a nice time ahead of us before we have a real problem, where we can discuss with the banks again.

There are unencumbered assets that could be sold before raising assets even at a higher price than paid

” before the raising of equity you can sell the unencumbered assets…Even at a higher price than what you have paid today.”