Q2 2020 Diana Shipping Inc Earnings Call
[music].
I shouldn't answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Ed Nebb Investor Relations for Diana shipping Inc. you may begin.
Thank you Jesse and thanks to all of you for joining us for the Diana shipping Inc.
Twentytwenty second quarter conference call. The members of the company's management team more with US today are Mr., Simon Polyols, Chairman and Chief Executive Officer, Ms. semi Romney's Polycom, Deputy Chief Executive Officer, and Chief operating Officer, Mr., Anastasios, Margaronis, President Mr. Jani suffer Rockies interim chief.
Financial Officer, Chief Strategy Officer, Treasurer, and Secretary Ms., Maria dating Chief Accounting Officer.
Before management begins their remarks, let me briefly remind you of the safe Harbor notice certain statements made during this conference call, which are not historical fact are forward looking statements under the private Securities Litigation Reform Act and such forward looking statements are based on assumptions expectations intentions and beliefs as to future events.
That may not prove to be accurate for a description of the risks uncertainties and other factors that may cause future results to differ from the forward looking statements. Please refer to the company's filings with the FCC and now it is my pleasure to turn the call over to Mr., Simon Polyols, Chairman and Chief Executive Officer.
Thank you Ed.
Good morning, Thanks for joining me yesterday to discuss the reserves. So then actually being quoted the second quarter 2020.
I am pleased to be addressing your today and I'm happy to book, So don't always very well.
I, especially want to say Oh the.
But as you are best wishes automated recovery.
During the quarter on nobody ever.
The company has continued to see a steady growth.
Through challenging market conditions.
And yes, it's in the Oh the.
On them.
To summarize the.
2022nd quarter, Diana shipping reported a net loss of $10.8 million dollar.
And then net loss attributable to common stockholders, Oh, when 2 million years donors second quarter, two sojourn 20.
Looking at 2.2 comedian impairment look.
[noise] dish compares for a net loss Oklahoma.
And then.
Abuse it almost.
2.7 million years go live in.
In the show going booked through 2009.
Time charter revenues were 41 million doing your children, who the second quarter 2020, compared with 55.
Your the others, who are the same period.
90.
The balance sheet remains strong we discuss cash equivalents.
And the restricted cash totaling 101.7, maybe two years Douglas June said these two sergeant Brian.
In addition, mom, we took advantage of financial market condition.
I wish that I've said on credit facility.
And it is each month.
We did he pitches and I'd get a good amount equal to eight new year's Douglas.
Oh, the ocean doing senior unsecured bond.
In June we signed as simply meant an agreement would be and be body, but.
Extend by 2.5 years do my truly do you.
In the existing say good no question. The these may 2002 into fuel.
In May we Shane at them long question do we see a b a number of bank for 52.885 million you as bullish.
You should enable us continue.
Two existing loans will be landed into one facility maturing in June 2000 for Nucor.
Well trained me, where do finance and no country to do with no do you have been well move to 5 million 848 years Douglas.
In this process, we extended the little has changed did these in March 2002 into do we saw no pursuant to extend the repayment by two more years on season must themselves into a new pool.
Finally, we continue to reduce lead management, we agreed to sell the 2007 be vessel audits Susa.
And I know you had said says party with delivery to the by his places by over we said to finish 2024 to seven but I use.
Oh 7.85 million or your dollars before commission.
I will move forward through and unchartered waters, who continue to be prudent management of our financial positions our fluid.
And when to maintain a focus on the new getting value to our shareholders with that I'll now turn the call over to our present station, but am I wrong.
Quarter perspective on interesting condition will then be followed by our interim Chief Financial Officer.
You said I was it started you Ocean Treasurer, and Secretary Yens, Iraqis, who will provide more detail by nine cents overview thing.
[noise] [noise]. Thank you Simon and welcome to all who are participating in this mid summer quarterly conference call of Diana shipping.
What aspect to the particularly important especially at a conference call as our chairman and CEO has recovered from his colleagues 19 illness and is once again, leading the Diana shipping Inc. management.
Yes.
The first half of this year of bulk carriers, it's interesting to note.
The wife installations of daily earnings during the first half.
According to Gibson she broke the Capesize both pick a five P.T. raised on June 30.
Was.
30857 U.S. dollar.
Which was up from $3369 on May 29.
The BTI.
Started the year up 976 and closed on Friday 24th of July.
1317.
The Baltic Cape Index, There was a 1646 on January seconds, and close last Friday on a 2008 before.
The Baltic Panamax index and moved from 1003 at the beginning of the year 1198 last Friday.
Looking at the macroeconomic now development. According to figures issued by the I met recently.
Over the GDP growth is expected to drop by about 4.9% this year.
Growth of 5.4% is expected to returning 2021, assuming only that the corporate 19 pandemic will be reasonably contain by then European GDP growth is expected to drop a 10.2% this year and decreased by 6% in 2021.
Chinese GDP growth is expected to increase by 1% in Twentytwenty and by 8.2% next year.
The actions for the United States are that a GDP growth will be minus 8% is here and class four and a half a cent in twentytwenty one.
Turning to supply and demand according to Clarksons seaborne dry bulk trade is projected to decline by about 4.1% in pound mine in Twentytwenty. If this materializes this would be a steeper drop than what was seen in 2009 following the financial crime.
On the supply side across the fleet growth is predicted to come in at the modest 2.4% this year, which under normal circumstances would be very easy to manage the rate of fleet growth.
Looking after the demand for costs further on in the short presentation. The near term challenges facing I'd be bulk carrier market, we become apparent.
Still on the supply side, the slower operating speeds and the impact of a shift so taking time out of service for scrap at a perfect fit in well absorbed some supply, but they're not expected to be sufficient to provide significant market support.
Twentytwenty, one clarksons predicts that the bulk carrier fleet will increase by only 1.3%.
The Cape Fleet of 100000 drop dead weight.
I will increase by 2% this year and 0.7% in Twentytwenty, one why the Panamax fleet for cost that we increased by 3.6% this year and by 2.4% in Twentytwenty Wow.
According to Banchero Costa about 89, Capes and vitiello seeds are expected to be delivered in twentytwenty after taking into consideration the possible slip it used to prevailing circumstances caused by the pandemic any first five months of Twentytwenty about 21, such vessels with scrap.
In the first five months of this year. They were 25 net additions to the fleet representing about 6.14 million deadweight in this sector of the bulk carrier fleet.
For the whole year Twentytwenty, the Cape and we LLC fleet is expected to grow by 4%.
Thanks for Twentytwenty, one growth is expected to be 3%.
Fleet growth it could be even slower in 2021, according to Clarksons platou.
Giving support to dry bulk or anything.
In the first five months of Twentytwenty back there of course the report at about eight cents units were ordered which were all newcastlemax.
In this size range, 4% of the trading fleet is over 20 years old was 9% is between 15 and 19 years old. All these ships are potential scrapping candidates can report earnings environment.
After Panamaxes and post Panamaxes by here of course, they expect a 150 units to be delivered the this years totaling 12.5 million deadweight after accounting for sleep.
On the demand side second half year with according to Clarkson see more positive market trends on the back of improving Brazilian or supply encouraging economic growth in China and other seasonal factors. Nevertheless, we should always keep in mind.
But the dry bulk market remains exposed to impact from severe global economic recession. This year.
Initial projections for Twentytwenty, one suggest a rebound in dry bulk I might trade growth of about five in the hopper set with fleet growth just 1.3%.
Turning to the Newbuilding order book.
According to Clarksons as of July this year, there were eight 686 bulk carriers on order with a total of 66.9 million deadweight.
This represents 7.4% of the total fleet.
Within these figures Arctic rather than 53.
And larger vessels of 34.5 million deadweight, representing 9.7% of the existing fleet.
Also included a 195 Panamax and post Panamax vessel.
Of 16.2 million deadweight, presenting 7.2% of the existing please.
Most.
We'd be delivered the during this year and in 2021.
From Twentytwenty to onboard the order book is very light with only 5.3 million deadweight of Capes, and one and a half million deadweight of Panamax and post panamaxes scheduled for delivery as of today.
As expected ordering of all types of bulk carrier vessels went down during the first half of this year quite dramatically for Capes order was down 63% year on year and for Panamaxes and post panamaxes by about 87%.
No doubt this bodes well for supply 18 months or down the road from now.
That's what asset prices. According to Clarksons are both Newbuilding and second hand prices have been going down this year Capesize and Panamax newbuilding prices have come down by about 7% 10, and 15 year old vessels have seen their prices dropped by even more.
Turning to the main commodities and starting with iron ore.
Yeah, I don't know seaborne trade is expected to remain steady at about 1.45 billion metric tons. This year why for next year Clarksons forecast growth of 1% an increase of around 20 million tons for the year compared to 20 twin.
Any imports are expected to grow by 3% to 4% and reach a 1 billion 086 million tons. This year, while imports from all other importing nations are expected to drop by a total of 10%.
These projections assume that Chinese demand will be sufficient to absorbed by about 40 million tons, possibly more of cargos redirected from other destinations.
If these projections materialize, China could the once again.
Exceed the iron ore trade from the worst impact of call with 19.
Total steel output in China between January in May This year came to 411 million times, which was 1.7% up compared to the same period in 2019.
It is worth, noting though that that bremer points out despite the production being strong in June there has been a small uptick in Chinese iron ore inventory falling a sustained the drawdown that began at the end of the first quarter.
It would therefore be argue that iron ore imports have finally caught up with demand from steel MIM and shipments are being used to replenish stocks.
As for coking coal according to Clarksons total coking coal exports are anticipated to drop 10% this year and increased by 8% in Twentytwenty, one and reached 264 million Tom.
Obviously these projections are very much dependent on how the global economy will recover from the coverage that 19 a pandemic.
On thermal coal Clarksons predict a total exports are from a co to dropped by 7% this year and increased by 4% in 2021 to reach 983 million Tom.
These figures are reflected in the Indonesian coal exports.
Well this year exports separately Dick to drop by 7%, mainly due to the drop in demand from India.
Coal stockpiles at the important.
During handout ports were down in July by 14% compared to the same time last year and the three major coastal coal plants in China had 8 million tons less coal stocks away compared to this time last year.
This translates to about 6% year on year. So from the point of view of stocks. There is room for increased shipment to China. According to Banchero Costa total thermal coal and lignite imports to China between January and May Twentytwenty, whatever the 33.7 million down.
This was 36.8% higher than during the same period in 2019.
Turning to grain imports.
Shipments of grain products during twentytwenty grain season are expected to increase by 4% this year and by further 3% in 2021.
If these increases materialize and total grain imports will reach 508 million pounds next year. According to Clarksons, assuming the U.S, China trade relations remain constructive Chinese soybean imports this year could be on track to reach 95.1 million, Tom which was a record last seen in.
2017.
However, recent deterioration in the years, China diplomatic relation is not very encouraging.
Looking at the minor bulk trade, we mentioned the clarksons projections on seaborne trade or whatever agricultural products minerals as well as products like the men, so petcoke fertilizers and sulfur because large fluctuations in their demand influence the panamax trade.
I have three is one of the parts of the dry bulk trade most exposed to the economic fall out of the covered 19 pandemic.
Clarksons predicts that the straight would shrink 7% this year and expand by 8% in Twentytwenty one.
The short comment on scrubbers.
According to Clarksons as of early June this year that were about 30 vessels were about 4.3 million deadweight for half a percent of fleet capacity undergoing retrofit work compared to 116 vessels. During the same thing at the start of the year.
The reasons for this decline I'm not entirely clear however, it could be argue that the drop was due to yard closes and survey delays because of the effects of the pandemic.
Alternatively might be the K that we are reaching the tail end of this retrofits exercise as price differential come down between high and low sulfur Hugh owners are reassessing their decisions as to whether or not to go ahead with plans to fit scrubbers to their vessels.
It's price differentials has been hovering between 60 and $70 per tons of recently and there is no. Good reasons for this to increase in the near future unless bunker prices increased significantly.
For a modern a large bulker cape or Newcastlemax.
Consuming about 36 tonnes per day.
And the spending an average of about 250 days per year and see the saving assuming the owner receives on the sendero will be about the.
$585000 parameter.
Assuming the cost of the scrubber and we lost earnings benefited our in the region of greener half million for such a ship. It is easy to see that it'll take about six years for the owner to receive his money back from this investment.
This calculation does not include possibly profit from any bunker hedging contracts.
However, nor does it include the technical problems and owner May encounter over that period. The fact that it is highly unlikely that a charter will give the entire fuel savings to the owner and most importantly, a.
After six years, a ship will carry piece of machinery, which in all likelihood we'd be technically and commercially obsolete and aside from zero residual value.
By extrapolation, we can easily understand but in the case of a scrubber being treated in a smaller ships such as the panamax of Kamsarmax bulker consuming only about 25 tons per day scrubber would make a the money invested in buying and putting it in about eight years as long as such low cost differential prevail.
Okay.
Okay.
Clarksons the time charter daily earnings differential for Kate between a scrubber fit chip and one without stood at around 1950 per day in late June for Panamaxes, a difference in earnings was about $900 per day.
Turning to scrapping.
Panamax and post Panamax size range, 9% of the trade is over 20 years old and 12% is between 15 and 19 years old.
Not surprisingly the classic Panamaxes in the size range are by far the older ships in the SEC.
Profitably is over 15 years old.
According to Braemar 36, Cape exited the trading fleet during the first half of the year, bringing fleet growth of the sector. So far this year to only 1.5% most of these vessels going for scrap were converted for carriers. There were also 19 standard capes, which were scrapped during the same period.
According to Clarksons during the entire year Twentytwenty about 33.4 million deadweight worth of bulk carrier capacity might be scrapped.
In 2019, not more than 20 million deadweight headed for the scrap yards.
Finally, the outlook.
According to Commodore research the current strengthen the capesize market could be reverse if countries like Brazil, and India face even larger problems due to the pandemic, resulting for example in the disruption of mining operations in Brazil.
Commodore research are bullish on the entire dry bulk carrier market and particularly the case at least for the rest of the year and early next year.
The stress that the greatest risks. This bullish scenario is what we have been stressing all along which is the development of the Corona virus pandemic, the United States, Brazil, and India remain the nations in the largest number of new daily Corona virus. Kate This will have to change if we are optimistic scenario about the bulk market is too.
Period line.
Therefore, while forecasting shipping rate has always been difficult the prevailing circumstances make it nearing possibly.
Without the Corbett 19 resurgence the bulk carrier markets will steadily increase through the rest of the year and into next year supported by strong iron ore and grain shipments.
Supported also come longer term from the greatly reduced ordering which we have been witnessing over the last few quarters and which is expected to continue into 2021.
Sentiment will as usual place important role here the greater the pessimism in the market is stronger and longer the recovery will be if optimism suddenly return then the recovery. We are hoping for we've come but will not last longer than the timing stakes for the fresh batch of new buildings to hit the quarter.
So the data management team will take advantage of these conditions by continuing to sell older Thomas and applying the proceeds to one buyback company shares which are trading at the substantial discount to end avi be reducing debt or see keeping the cash in reserve.
To face a possible period of we earn.
When rates to cover ship values will go up with earnings together with share price.
Then we will have to shift gear and consider again dividend and prudent equity raising.
I'll now pass the call over to our CFO exactly right.
We'll provide us with the financial highlights of the second quarter and first half of this year. Thank you.
Good morning, everyone Im pleased to be discussing today with you the wall now, but also model results for the second quarter of for the six months and that 2000 and a 30.
For 2020.
During this during that quarter, we recorded a net loss attributable to common stockholders of $12.2 million.
For 14 cents per share.
The which includes 2.6 million impairment loss.
As you know in 2019, we sold six of our vessels.
And another one in the first quarter of 2020.
That's how the as an effect that decrease during the operating days.
Well this quarter.
As it was only 3731 compared to 4179 for the same quarter in 2019.
Last ownership days together with the deteriorating market conditions has led to lower revenues I $41 million compared to $55 million point 55.4 to be exactly.
In the second quarter for 2019.
As regards the Voyeurs expenses.
We've had $3.8 million for this quarter compared to 3 million the same quarter in 2019, and this was mainly due to a loss that we had oh from bankers.
It was $1.6 million compared to basically zero.
Some more.
The loss of six or 7000 last year.
The combination of decreased revenues and increased volumes expenses have resolved, but also to having a lower time charter equivalent rate.
ER, which was 10593 compared to 12700.
17 for the same quarter of 2019.
The fleet utilization rate space, it was more or less sufficient samos up in 2019 for the same period, 98.3% compared to 9.4%.
During the quarter, but we are discussing now our vessel operating expenses decreased.
Two 2.8 million compared to 22.9 million.
Basically we had them again, the lower number of vessels.
And because we're talking about lower number of vessels the daily operating expenses.
Increased to 5577 compared to 5478 for the same quarter of 2019 profession.
The interest and finance costs, we continue to have them decreased and a bad basically also because of the because interest rates.
Or the number now was $5.7 million compared to 7.8 million or the same periods in 2019.
Now for the six months ended June 32020, the net loss has reviewed it took almost all those amounted to $16.5 million or one point 35 per share.
And that includes of course, a big impairment loss of 495.7 million.
And also 1.1 million a loss from the sale of a vessel.
The time charter revenues for the first half of 2020 decreased to 84.7 million compared to another 15.7 million last year.
For the same outage on so that we explain but have the affected the quarter.
The time charter equivalent rate decreased to 10.98 to six compared to $13000 to zero 92 last year.
Them slipped a utilization for the crop of the yeah decreased to 97.3 per cent compared to 99% in 2019 and of course, you understand that this was mainly to increase and extend the delays.
Page to pause during the call with 19, a in the first quarter.
Of this year.
Vessel operating expenses amounted $4 million to $42.1 million compared to 45.3 in 2019 again, that's that reflects the decrease in ownership days.
And it also offset though by the increased operating expenses in all categories, except for the crew costs.
Daily operating expenses in 2020 were 5593 compared to 5003, how to end to end before four to nine to four to the year 2019, a representing a 5% increase.
For the top of the.
Interest and ER.
Finance costs amounted to $12 million compared to 15.5 million for half of the year.
No. Thank you for your attention we won't be pleased to respond to your questions.
Hi return now the call to the operator, who will instruct you asked to the procedure for asking questions.
Thank you, ladies and gentlemen, we will now be conducting the question and answer session.
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Our first question comes from the line of Randy Gibian's with Jefferies. Please proceed with your question.
Howdy sitting and welcome back how you're feeling.
Thank you very much I feel very well indeed, thank you.
Okay. That's good.
Okay great.
All right. So I guess first question you know two weeks ago, you repurchased $8 billion.
No.
Let's see the price of that and how much implants I got to spend on that purchase them back to kind of pursuit for class going forward.
Okay.
Can you can you repeat your question. Please maybe can you speak a little bit loud louder. Please.
Sure a few weeks ago, you repurchased $8 million up your unsecured notes.
Jerry.
What the price was and how much at all.
94 cents to the dollar.
Perfect Okay.
Additional repurchases abuse on.
None of the first piece of crude class going forward.
And it.
You see it that Paul just as an attractive opportunity for us.
We don't want now there's noise everyday and we are considering our defensive a way of stockpiling the situation today.
And the attraction that we show when we bought back the 8 million worth of said it was the big saving.
In interest costs and also the gain from buying the bonds there based shippers on ER.
Previously.
And I was issued so for us.
Ah, yes, you're right the one or that is the opportunity to buyback the bonds and of course, you cost would be at a discount if we want to do it.
Sure let me.
And then with that and I guess more so these recent financings and refinancings.
What is your new debt more for the fourth quarter 2020, or 2021 for the full year.
So if you look at.
What do we have done a we have change basically the loan maturities and.
Let me find.
[noise] over.
Yeah.
So or do you want to add per quarter.
Sure Yeah. They I agree okay, okay, Okay for Q3.
For Q3 2020.
We have basically I just subsequent event the bond purchase and the repayment of the I'd have to shop or low, but Ah going forward or Q4, Q1, Q4, 2002 and be Q1 2021 to two wet.
Shortly.
Okay.
Let me.
Yeah.
So who knows.
Hello.
Yes, Eric Q4, 2020, Q1, two how you're going to do on Q2, 2020, 123 in 2021 zero loan repayments and or even fall.
The the 15 months period going forward, we have zero repayment.
We have of course installments, but we need to pay amounting for a 12 month period.
Yeah, I thought around $40 million, including the a another 9.273 for Q3 2020.
We have done a very good job there.
Yep Yep crusher.
A quick questions one on the.
I will oh.
Oh, you know how era.
Delivery does that deliveries happening or need to work on it.
Acoustics.
Deliveries happening this summer what do you don't want those proceeds in addition to the deck recall next kind of be additional proceeds and any other plans for additional vessel sales. This summer how is that kind of secondhand S&P market trending now that we saw pretty strong moves in rates over the last month and Uh huh.
Okay again, we've gotten speaking here yep. They they proceeds from I'd have to show. The there is not going to be a lot of my name, but most of it is going to the repayment of the existing debt, but the auction to sell more vessels is still there and that Stacy said in his remarks.
Selling vessels are probably the use of proceeds is gonna be either keeping that money.
Oh, reducing or mainly the bonds or buying back our store in case, we find these as an attractive opportunity based on the.
Yeah, good EM, the man or pricing of our shares.
And Chris why don't I know that you see the market, but has picked up and wish all shambles right spot that we don't want to get excited about that we still.
Things that a company like college, that's up respects, how that much and the money off all shareholders.
Needs to be on a defensive or stage that rather than anything else.
Yep, well, that's Oh I guess, one quick modeling question on the expense side, it looks like Gnh fell pretty materially from the first quarter to the second quarter. However, depreciation actually increased from one Q2 Q. So can you discuss those two line items and what's that.
Good run rate to use going forward.
Okay.
Well I am I did you have seen we yeah, we had.
Increased Ah Drydocking expenses and that has led to dry dock or increased depreciation number as a result of dry dock amortization, we spent money on the vessels and that has created the greater book value.
For the ventures that needs to be depreciated.
Okay.
We are talking bilateral what are.
Installation.
Sure sure.
[noise] scrubbers.
Now the GE and eyesight.
Well, the DNA side and it is through but we are trying to reduce our g. a nice but the mainly as you show. The gnh were really large number of previous quarter, we've had to do with as their compensation.
On two of them all the way directors that they left the company they had to to get there.
Bested the their Unvested says and that's why you show the big number.
Got it okay. So the current level, it's a good run rate.
Well.
That there.
So they come again.
So the current level.
It's a because I really want to be you guys got 11 is the one that you should be expecting.
Oh, that's enough time for me so thanks, so much.
Okay.
Thank you.
Thank you. Our next question comes from the line of Omar Nokta, what Clarksons Platou. Please proceed with your question.
Hi, Thank you good afternoon, guys and the also Simon nice to have feedback.
Thank you thanks very much indeed, thank you.
Yeah, Yeah, I wanted to just follow up a couple of items, maybe just the first thing.
Stacy on the call mentioned the potential of selling ships in the future with the proceeds being used for a buying back stock or be paying down debt you see keeping reserves.
Is that an order of preference or was that just a listing that they options.
No there that's just listing.
They like the Lake let me put it in that I thought the.
Keeping their money buying bought that and buying back stock crop though.
Okay, So reverse order.
Yes.
Okay, and then you know.
Following up on right Randy was asking on the debt repayment schedule clearly between DPN p., the even emerald and or day allowance you guys have you pushed out a lot of maturities and so just wanted to make sure I had the numbers right. You know in addition to the bonds that were repaid the 8 million plus the era to suppress seats if we exclude.
Those basically it's between nine and 10 million a quarter of amortization over the next 12 to 15 month.
Yeah that is exactly right. So we're talking about a.
10.8 to 9.2 10.8, yes.
Okay and then for.
I guess for 2021 as a whole I don't want to get started get too much into the numbers, but we I think we came into this year with basically $140 million do something along those lines for 2021 as we look at it now basically we've gone from 140 to just basically 40 is that kind of.
A lot on 57.
Well I don't 57 Camilo.
That's a good go back.
[laughter] outlet was good work I mean in three months time right into last call.
Thank you, okay, well I'll leave it there I appreciate it thank you.
And the main idea behind that why I mentioned that we have done a very good joke here is because we didn't degrees or our cash position because you would have just to repay door because we see everything out we have managed to improve these position materially without spending.
Or any money.
Thank you as a reminder, ladies and gentlemen, if he would like to ask a question at this time. Please press star one on our telephone keypad. Our next question comes from the line of Ben Nolan with Stifel. Please proceed with your question.
Good morning, or afternoon, I I think that's a refinancing is.
The questions here and that sort of ore mine life as well, obviously just had a good job.
Getting the refinancing Don and and I'm sure having.
The cash on the balance sheet that you do really enables that was curious if maybe you could talk through.
The state of Oh.
Well, certainly obviously your company's ability to be able to do that but the market in general.
Has there been any change and or the way the banks are approaching or or making capital available or or refinancing available given kind of doubt uncertainty that we see.
I can say that the basket, we talk to I have seen no change in the way that are looking at things.
And well I would say show price when we approached them in order to implement a.
ER.
Our strategy as regards the refinancing they they pass the their first reaction is but why do you want to do that all are you prepared to pay 50.
Basis points more in order to do that didn't have stuff and they didn't understand so for me that shows that they do not water you a lot about or what's happening.
Yeah.
Well.
Again, I'm I'm sure having as much cash on the balance you did hear do sort of a puts you in a lot [laughter] at a much better position have those conversations that many of the other people in orbit. That's sort of is leaves. The next question I mean, obviously, even for you guys.
We are generating $5 million of cash flow. This particular quarter, hopefully will be better going forward, but you have contracted cash flows you have a lot of debt or a lot of castle balance sheet aren't too levered non.
Not all companies are most companies I would think are probably not in that somewhat position or if the market doesn't get better can you, maybe prognosticators sort of how things should shake out and is this ultimately just sort of preserving cash, which as you think there might be an opportunity to buy assets more cheaply.
And.
You understand that if we have a us it's being to better than what it is today it would be probably because of deteriorating market conditions, so having even deteriorated market condition. Our defensive play still has to be there and.
I don't I don't see this scenario, where the market that deterioration we are spending at all we are making our balance sheet the war.
Oh than what it is today no. This is not this or not it was that a.
The scenario that we see happening is eventually the market picking up and Diana shipping Inc. makes a lot of money on the previously invested money in the cycle in the years 2014 till 2018 that.
Purchases.
Okay I got your [noise].
No that's helpful.
But.
Irrespective of sort of your capital deployment, and where you're spending money I mean.
HM.
Given the fact that you are shake taking a more defensive stance is this sort of Oh do you think that there's a little given chances things could get.
Substantively worse in the industry.
Mission as we have said publicly many times.
We are talking about any event that has a softer.
The entire war, we're talking about most of the economy shows the war if not all of them.
Having big big issues getting their GDP growth. So this is it kind of event that should make everyone awardee about or what is going to happen in the future as regards the demand for cutting goes by sea at certainly I know that.
You are talking to other companies that are having a lot of wishful thinking and they're saying, yes, but when a happy having stimulus packages that are going to make a this demand the better than what it is today all not as low as someone may expect but having said that this is actually an ideal.
But we would welcome but is not for us the most probable should not.
Of course, the good thing about what is happening together two days that.
Supply has been kept in very low numbers and of course this will help.
Having said all of these things what we are saying here is that they all their reaction in what is happening he's going to leave the market, where there's going to go. So if people are really scared about the future then I'll, we would take me positions us to the market there may be better.
But at the moment that keeping a neutral position or neutral to positive and Ah we don't like that.
Okay.
Right now I I'm I'm on the same pages you just.
I'm curious, where how you're thinking about things. So appreciate the color.
Thank you Ben Thank you.
Thank you. It appears we have no additional questions at this time, so I'd like to pass the floor back over to management for any concluding remarks.
Thank you again for you I didn't get Ocean shop, both of Diana shipping, we do call will speak with you future. Thank you.
Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.