Economou the optimist

DryShips reported a second-quarter loss Tuesday evening but the diversified Greek owner’s chief executive appears to be pleased with the results.
Economou serves as chief executive of DryShips and Nasdaq-quoted compatriot Ocean Rig.

Economou serves as chief executive of DryShips and Nasdaq-quoted compatriot Ocean Rig.

In the Nasdaq-quoted operator’s earnings report George Economou applauded the performance of his company’s tankers during the period.

"Our liquidity position has been positively impacted by the outperforming tanker markets, especially the suezmax and aframax segments which are performing above expectations for this time of the year,” the tycoon told investors.

Economou acknowledged that the dry-bulk segment suffered in the second but said he continues to believe the tides will turn in the months ahead.

“The drybulk carrier segment had a weak second quarter of 2014, but we believe that the pace of newbuilding deliveries is tapering off and when combined with continuing robust demand, will lead to a sustainable recovery in charter rates,” he continued.

Economou argued that his forecast is supported by rates tied to futures contracts and asset prices, which remained resilient during the period despite lacklustre earnings in the spot market.

“DryShips has predominantly spot market exposure and is therefore uniquely positioned to take full advantage of the expected recovery in charter rates,” he added before praising what was described as a “milestone” in the quest to refinance notes that mature in December.

Economou reminded investors that his company recently landed firm commitments of up to $520m from ABN Amro and Nordea Bank and said the pursuit of “various alternatives for the remainder of the balance” is well underway.

DryShips managed to narrow its loss in the second quarter. The operator generated a $5.6m deficit during the period, which marks a significant improvement when compared to the $18.2m worth of red ink racked up during the comparable stretch of 2013.

The deficit, which amounted to $0.01 in lost earnings per share, was not nearly as deep as Wall Street had expected. According to the consensus estimate published by Thompson Reuters the company beat analysts’ forecast by approximately five cents.

DryShips told investors that adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) for the three months to 30 June 2014 topped $220.5m. In the second-quarter of last year the Athens-based owner said adjusted Ebitda stood at $112.3m.

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