Diana dives into the red

Greek bulker owner Diana Shipping dived to its first ever full year loss as a listed company as charter rates fell.
Diana: Ends the year on a low note.

Diana: Ends the year on a low note.

The New York-listed owner of 36 bulk carriers and five newbuildings, reported a net deficit of $9.6m for the three months to 31 December.

The result reversed a profit of $5m in the fourth quarter of 2012 as charter income fell by $10m to $39.5m despite an enlarged fleet.

Earnings per share of negative $0.12 was far worse than the $0.06 predicted by analysts polled by Bloomberg.

Diana posted a full year net loss of $21.2m in 2013 compared to net income of $54.6m for 2012.

Time charter revenue slumped by around 25% to $164m compared to $220.8m for the previous year.

Plunging rates

The outlook for the coming year appears challenging for Diana which operates all its vessels on time charters and has been renewing contracts at lower and lower rates since the downturn struck.

Jonathan Chappell of Evercore Partners recently initiated research coverage of the company and pointed out that much of its fleet is now employed at rates below $10,000 daily.

“With 89% of its operating days covered by time charters for 2014, and with 18 of these charters at rates that are below $10k/day it is very likely that DSX will post another loss in 2014,” he said in a note to clients.

“Moreover, there is little opportunity for Diana to benefit from any potential volatility in rates, as occurred in the past quarter, rendering its opportunity for relative [earnings per share] EPS outperformance as substantially low.”

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