Greek dry bulk carrier Diana Shipping Q4 net income up to $54.2 million
Greek dry bulk carrier Diana Shipping Inc's increased quarterly profit met market expectations, helped by its chartering strategy that focusses on long-term charters, sending its shares up 8 percent.
Diana Shipping charters a majority of its vessels in the long-term charter market, thereby eliminating revenue volatality, as opposed to the short-term spot market, where rates fluctuate on a daily basis.
"We have focused on building relationships with high quality charterers at a time when the insolvency of some charterers has been a cause for concern," Chief Executive Simeon Palios said in a conference call.
Its charter counterparties are mainly end users like Cargill International, which hire the ships to move their own cargo, reducing risks associated with non-payment of hire rates.
Palios said the charter counterparties have not yet approached the company for contract renegotiations.
"When you look at Diana they have a very large number of their vessels contracted to Cargill, BHP Billiton and they are very high quality charterers," Jefferies & Co analyst Douglas Mavrinac said by phone.
For 2009, Diana has fixed revenue for a majority of available days, Palios said.
Mavrinac estimated the company's long-term charter contract coverage for 2009 to be between 85 percent to 90 percent.
Palios said the current market conditions provides an oppurtunity to pick up distressed assets but added that he was not interested in buying any of the publicly trading shipping companies.Diana has the least amount of debt compared with other publicly traded shipping companies in the United States.
Palios said as end of 2008, Diana had long-term debt of $238 million in its balance sheet, compared with total shareholders equity of $775.5 million.
Mavrinac said Diana's balance sheet provides the flexibility to go for acquistions.
"They could be looking at private companies or they could buy a vessel here or there," Mavrinac, who has a "buy" rating said.
Shares of the company were trading up 7 percent at $14.55 in noon trade on the New York Stock Exchange. They had earlier touched a day high of $15.13.
Net income for the fourth quarter was $54.2 million, or 72 cents a share, compared with net income of $36.4 million, or 49 cents a share, a year ago.
Voyage and time charter revenue rose 43 percent to $84.3 million.
Analysts, on an average, were expecting earnings of 72 cents a share, excluding items, on revenue of $82.4 million, according to Reuters Estimates.
Quarterly operating days increased 180 days to 1,711 days helped by an increase in the number of vessels to 19.
Quarterly time charter equivalent rate -- a measure of daily hire rate -- rose 25 percent to $45,824 per vessel per day.
Diana Shipping charters a majority of its vessels in the long-term charter market, thereby eliminating revenue volatality, as opposed to the short-term spot market, where rates fluctuate on a daily basis.
"We have focused on building relationships with high quality charterers at a time when the insolvency of some charterers has been a cause for concern," Chief Executive Simeon Palios said in a conference call.
Its charter counterparties are mainly end users like Cargill International, which hire the ships to move their own cargo, reducing risks associated with non-payment of hire rates.
Palios said the charter counterparties have not yet approached the company for contract renegotiations.
"When you look at Diana they have a very large number of their vessels contracted to Cargill, BHP Billiton and they are very high quality charterers," Jefferies & Co analyst Douglas Mavrinac said by phone.
For 2009, Diana has fixed revenue for a majority of available days, Palios said.
Mavrinac estimated the company's long-term charter contract coverage for 2009 to be between 85 percent to 90 percent.
Palios said the current market conditions provides an oppurtunity to pick up distressed assets but added that he was not interested in buying any of the publicly trading shipping companies.Diana has the least amount of debt compared with other publicly traded shipping companies in the United States.
Palios said as end of 2008, Diana had long-term debt of $238 million in its balance sheet, compared with total shareholders equity of $775.5 million.
Mavrinac said Diana's balance sheet provides the flexibility to go for acquistions.
"They could be looking at private companies or they could buy a vessel here or there," Mavrinac, who has a "buy" rating said.
Shares of the company were trading up 7 percent at $14.55 in noon trade on the New York Stock Exchange. They had earlier touched a day high of $15.13.
Net income for the fourth quarter was $54.2 million, or 72 cents a share, compared with net income of $36.4 million, or 49 cents a share, a year ago.
Voyage and time charter revenue rose 43 percent to $84.3 million.
Analysts, on an average, were expecting earnings of 72 cents a share, excluding items, on revenue of $82.4 million, according to Reuters Estimates.
Quarterly operating days increased 180 days to 1,711 days helped by an increase in the number of vessels to 19.
Quarterly time charter equivalent rate -- a measure of daily hire rate -- rose 25 percent to $45,824 per vessel per day.