Q4 2020 Diana Shipping Inc Earnings Call
[music].
The last couple of months Green.
Greetings and welcome to the Diana Shipping Inc, 2024th quarter Conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the <unk>.
Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
And it is now my pleasure to introduce I'd heard that and Investor relations. Thank you you may begin.
Thank you Daryl and thanks to all of you for joining us for the Diana Shipping, Inc, fourth quarter and year end cash.
Conference call. The members of the management team who are with US today include Mr. Simon <unk>, Chairman and Chief Executive Officer, Ms semi Rami as part of your Deputy Chief Executive Officer, and Chief Operating Officer, Mr. Anastasia Smug of bonus President Mr. UNICEF of Rochus interim Chief Financial Officer Chief of strategy.
Conference because of our Treasurer, and Secretary and MS. Maria Day Day, Chief Accounting Officer.
Before management begins their remarks, let me just briefly remind you of the safe Harbor notice that certain statements during the call which are not historical fact are forward looking statements under the provisions of the private.
The obvious litigation Reform Act and such forward looking statements are based on assumptions expectations projections and beliefs as to future events that may or 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.
Secured securities and Exchange Commission.
And now with that out of the way. It is my pleasure to turn the call over to Mr. Simon Polyol, Chairman and Chief Executive Officer.
Thank you Ed.
Good morning, and thank you for joining us for day to discuss the results of Diana Shipping Inc. For the fourth quarter.
And full year 2020.
The majority of the past year, how do we know.
No.
And two well.
One of us has been and the economic.
Dislocation caused by the COVID-19 pandemic.
No.
And as we look forward.
Star Wars growth.
And 21 week and hoped that the producing.
And the ability of vaccines and the eventual return to more stable less volatile.
Volatile market conditions.
In any event, we will continue to pursue well established strategies to maintain the company's financial strength.
Manage our fleet in the prudent manner and focus on enhancing shareholder value.
Before I summarize our.
Financial results.
And to comment on today's announcement regarding several senior management and the appointments.
And by our board of directors.
The <unk>, who will be effective as of March 1st 2020.
Sure.
And the.
The intended to provide for an orderly succession and to ensure the continued challenged strategy management of the company.
Yeah.
The leadership appointments are as follows.
Yes.
And we had a miss Baidu has been appointed Chief Executive Officer of having previously served as Chief operating officer and.
Deputy Chief Executive of.
And my position as chairman of the board of directors the remains unchanged.
I will share in.
In the past should the non executive chairman and when the Chief Executive of Chevron is assumed by Mrs. Baidu.
We've said on their side of huge amount of our own and continue to share and he's got and capacity.
And good day and.
<unk> share of the company.
Position she has held since 2005.
Mr. <unk> has been appointed Chief Financial Officer.
On a permanent and base.
You had share wins, the drawn on the interim basis and.
Total ready 2020.
He also will remain the two set of the Duke share that is out of it.
And secretary of the.
Company.
We've said in the failures, but three phone has joined the company and has been appointed.
To the board.
Revenue of two of operating auction.
Michelle per battery <unk> highly qualified and having more traditionally share.
The chief Executive of share co founder and director of Quintana Shipping limited and.
And previously as the Chief financial <unk> share and Ed.
Direct.
<unk> share of Excel Maritime cut is limited.
I am deeply grateful for the opportunity to serve as the company's chairman and CEO sheesh each of sub tishman and I'm delighted to continue as non executive chairman and going forward.
Correct.
And orderly and shameless saturation and approved by our board will.
We will ensure that we have both.
Continuing of senior leadership of new perspectives, as we maintain the strategic vision and Xiaomi and the management of the company and for the future.
Chuck.
And our incoming CEO Michel <unk> mirror image Baidu has strongest experience and the shipping industry and has share our company well in the range over the possibilities for more than the UK.
Great great confidence and the strength and capability of the entire Diana shipping Inc.
Game and their ability to lead the company into the future.
With respect to our financial results Diana shipping reported the net loss of share.
Labor Force.
The $1 million and net loss attributed to common stockholders of eight $9 million for the fourth quarter of 2020.
Including a $1 $9 million impairment loss.
This compares to the net.
Oh of $14 million and net loss attributed to common stockholders of $15 $4 million reported in the fourth quarter of 2019, including a $6 $5 million of impairment loss.
And three points.
Low <unk> million dollar.
The loss on sales of wishes.
For the full year 2020 of the net loss was $134 $2 million and net loss attributed to common stockholders was $140 million.
Cash including a.
$104 $4 million impairment loss, and one $1 million loss on sales of issuance.
This compares to a net loss of $10 $5 million and net loss attributed to common stockholders of 16.
$33 million for 2019, including a $14 million of impairment loss and $6 $2 million loss on sales of vessels.
The time charter revenues were $42 $7 million for the fourth.
The 2020 compared to 51 five.
$5 million for the same quarter in 2019.
This was mainly due to the decrease in ownership days, resulting from the sale of two vessels in 2020 and total showed due to decreased average.
The same charter rates that the company achieved 40 vessels during the quarter.
Time charter revenues were $169 $7 million for the full year 2000 volume compared with $227 million for 2019.
Of course.
Turning to the balance sheet cash cash equivalents and and restricted cash totaled $8 two point.
$9 million of December 31st 2012.
Long term debt was $423 million and cash decreased by.
The 54 $6 million since the end of 2019.
And reflecting our ongoing commitment to return value to shareholders.
In December 2020 of the company announced a self tender offer to.
The shop to six <unk>.
Media and shares of ratio suddenly and common stock the.
Tender offer was completed in February 2021 at a price of $2 five.
The dollars per share.
In connection with our activity.
Persimmon of the companies.
Fleet in the December 2020, we announced and.
And the agreement to Shen.
The 2001 built vessel look at niche with delivery to the buyers the dish.
By April of <unk> 2021.
The share price.
And of years, five seven and $5 million before commissions and.
In total, including the oceanic and.
We sold five vessels during 2020.
We will continue to maintain our fleet of modern efficient and vessels to meet the needs of the dry.
Managed bulk marketplace.
As we move forward in 2021, and we will continue to navigate the prevailing challenging missions, while the remaining sharply focused.
And preserving and building shareholder value.
With that I will now turn the corner.
Both of our pledged and stage Humira and use for a perspective on industry condition.
He will then be followed by our interim Chief Financial Officer.
Chief strategy Officer, Treasurer, and Secretary and Jeffrey Wright.
Who will provide a more detail.
Cologuard non shallower.
You.
Thank you Simon.
And welcome to all the participants to this latest quarterly conference call of Diana Shipping Inc.
During the last quarter of 2020, and the first few weeks of 2021.
The market has certainly given the.
All participants reasons to pay careful attention to current developments and make some exciting predictions about the short and medium term developments.
The Baltic Exchange Index started the year at 1374 and closed the last Friday February 19 at 1698.
The Baltic Cape Index moved down from 2008.
Two 1715 and.
And the Baltic Panamax index out of the year at 1364 and has moved up to 2000 and 332 as of last Friday.
Turning to macroeconomic developments. According to figures released the recently by the IMF Global GDP growth is expected to rise by five and 5%. This.
And this year and by a further four 2% and 2022 the.
This follows the shrinking of global GDP by an estimated three.
And half percentage in 2020.
We sincerely hope.
Optimistic forecast come to pass as the pandemic is continuing to affect economic activity. This year and will not allow our businesses to work at the pre pandemic pace for some quarters to come.
III and Chinese GDP is expected to grow by eight 1% this year and by five 6% in 2022 of these.
This growth forecast for low growth of just two 3% in 'twenty and 'twenty.
And the United States, the GDP off the shrinking by an estimated $3 four per cent last year.
And is expected to grow by five 1% this year and by a further two 5% and 2022.
Europe was the economic activity dropped by about four 6% last year is estimated to grow by three 9% in 2021 and by a further three 4% in 2020.
92.
Let's have a quick look at new building deliveries during the last year.
According to bank share of course, the 480 bulk carrier units of $48 6 million deadweight tons were delivered the last year.
This total included 25 VA low 684.
Capes.
Both totaling about 25 million deadweight and.
The 24 post Panamaxes and the 128 Panamaxes both of these categories totaling about $12 six 5 million deadweight.
These figures are to be compared with the new building order book, We mentioned later and this disc.
Cash and.
And look at the order book now as far as new building contracts signed in 2020 are concerned Clarksons report that the totaled.
About 13, and a half million deadweight.
Tons, which was down nearly 58% compared to the equivalent figure of 2019.
Clarksons also report.
That in December 2020, there were $38 8 million tons of Panamaxes and post Panamaxes on order representing about 6% of the trading fleet.
Of these 9 million deadweight are scheduled for delivery in 2021, and 4 million deadweight in 2022.
At the same time, there were $23 9 million deadweight of capes, including VA low season order.
Which was the equivalent of about six 6% of the current trading fleet of the.
The $15 9 million deadweight are expected to be delivered in 2021 and $7 2 million.
And in 2022.
The above statistics, coupled with the overall bulk carrier order book, which is not higher than 6% bode well for the supply trends of the industry at least for the next 12 to 18 months.
The above mentioned the order book to.
And to existing fleet ratio.
<unk> has dropped to the lowest level since 2002.
One of the reasons why new building orders of low is not only the uncertainty of future demand the sky.
It's always been there, but the uncertainty over the appropriate fuel for the large marine engines of the future.
We agree with Howe Robinson.
And the dilemma surrounding the future of fuel for ship propulsion dwarf the.
Comparatively simple to scrap or not describe decisions of a couple of years ago shipping Green agenda has been firmly established since the <unk> decided to include shipping and it's the target.
<unk> to reduce cotwo emissions by 40% by 2030.
The fact that relatively few of the currently proposed solutions appear suitable and all the economic for retrofits.
It might create the new building boom across the board sometime this decade for.
Furthermore.
The combination of mandated regulations and feasible technologies. When these eventually become available could have of severe effect on the resale prices, particularly of young traditionally power of the vessels.
According to Howe Robinson, whatever green fuels eventually emerge as winners.
They will most likely be more expensive and existing ones and consequently fuel efficient ships, including those that have when the assisted technologies are likely to enjoy significant freight premia.
There is broad agreement that LNG is probably the only fuel currently available in sufficient quantities to.
To achieve emission cuts in the near term of about 20% to 25% the.
This coupled with the problem of methane ratchet Jews, which needs to be overcome.
<unk> LNG, just a bridge towards future compliance propulsion and fuels.
As the chairman of one of the bulk carrier owner remarked.
The quote do you actually build the bridge of wait to see what is on the other side of this bridge and growth.
And as few words encapsulate the dilemma of facing shipowners and ordering new building vessels of any kind of today.
And so until it is decided if the green fuel of the future will be ammonia.
Biofuels hydrogen atomic batteries or something else the decision to order on the large scale expensive new building units will be held back.
This can only be good news for the shipping market as the whole in the medium term.
Let's look at dry bulk.
The demand and supply now.
According to Clarksons. The total dry bulk trade remained effectively stagnant during 2020 at the 2000 9344.
Million ton mines expressed in tons of cargo seaborne dry bulk trade shrank by an estimated.
Two 1% in 2020.
The forecast is for volumes to rise by three 7% in 2021 and reached the 30.435 billion tons by the end of the year for 2022. The forecast is for the further two 6%.
The inquiry and projected the ton mile demand increase for this year must be set against the projected to 6% net increase in supply of tonnage in 2021, which should support some fundamental rebalancing and possibly lead rates higher from their present the levels.
Such a low level.
Level of net fleet increase has not been seen according to Howe Robinson for about 15 years.
Given the fact that this small increase follows a period of the relative balance between supply and demand and the sector. This cannot but bring some good news on earnings and asset values.
For 2022.
The dry bulk tonnage is projected to increase by only 1%.
And if this is indeed realized the market should be supported even further in the medium term as well considering the estimate the demand increase mentioned above of two 6%.
Lets look at steel now.
According to Howe Robinson and based on figures issued by the Chinese of Steel Association China's steel demand will increase slightly in 2021 compared to 2020 supported by stable macroeconomic policies.
Chinese steel production rose to a record one point of 5 billion tons in 2020.
And as the economies gradual reopening after the Corona virus induced lockdowns boosted demand.
And to comply with the government's desire to reduce our carbon emissions. It is likely the China will increase imports of primary steel products, especially billets.
The latter of zero slab.
Of steel that needs to be processed further.
The inputs of such of billets increased 500% and 2020 and.
And are likely to increase even further in 2021 and.
Such a trend if indeed prevails will reduce somewhat the.
Out of iron ore and to a certain degree of coking coal that China will.
Need for its steel mills going forward.
During last year imports of steel products into China increased by 64, 4%.
While exports fell by 16, 6%.
This trend is expected to prevail this year as well mainly due to the effects of the pandemic.
Iron ore according to Clarksons iron ore imports worldwide are expected to grow this year by 3% and reached 1.54 of 5 billion tons for.
For 2022 of the forecast is for a further 1% increase.
For this year Chinese imports are expected to keep growing as they did last.
Last year, despite potentially slower steel production growth and the partial reversal of the shift away from scrap use seen last year.
I don't know of demand by other countries around the world as anticipated according to Clarksons to grow by about 11% this year after.
The posting significant drops in 2020.
For example, European imports of Iron ore in 2020, that's excluding the United Kingdom were down 25, 2% year on year at 72 million tonnes.
As for coking coal Clarksons report that.
And that the coking coal trade is estimated to have declined by 9% to around the 247 million tons last year as the COVID-19 pandemic had the major impact on steel mill rates, so utilization in several key regions.
The coal imports by the 27 EU.
New members dropped 32 three per cent in 2020, compared to 2019, and total EMEA and $68 7 million tonnes. According to a definitive the vessel tracking data.
This year of coking coal trade is expected to increase by 6% compared to.
Last year and by a further 5% in 2022.
U S and Canadian export volumes are expected to increase by around 12%. This year always according to Clarksons.
On thermal coal now Clarksons report the global seaborne steam coal trade is estimated to have.
Declined by 10% to around 920 million tons last year, primarily due to the effects of the COVID-19 pandemic.
While this trade the remains under pressure a partial rebound of about four percentage projected for 2021 has the world overcomes the worst impact of the pandemic.
And make Chinese steam coal imports are expected to fall by 3% this year.
The volumes are highly sensitive to government policies and major uncertainty remains.
Projected the increase of imports by countries like India, Indonesia, and the Southeast Asian region will.
Make up for the lower imports by China worth, noting the China did not import any coal from Australia and December 2020, and the ban on coal imports from the country remains in force.
Those lost cargoes are now sort of and places like Russia, South Africa and Indonesia.
Small volumes of transported also overland from Mongolia.
Take a look at the grain trade now according to Clarksons. The global seaborne grain trade is initially projected to grow by around 2% and the 2021 grain season, following a 6% increase seen in the previous grain season.
The slowdown will according to clarksons be connected to a much slower projected growth in the soybean trade after last year's strong 10% increase.
This performance was underpinned by a U S soybean exports, which according to the definitive vessel tracking data increased by 36% year on.
And at 61 4 million tons.
During 2020, China imported the total of $94 7 million tons of soybeans, which was 33% higher than in 2019.
For the <unk> 'twenty 'twenty, one 'twenty two grain season overall volumes I would.
And year to grow by a further three per cent and reached 532 million tons.
A quick look at the minor bulk trades the mark.
Minor bulk trades, which have gradually grow and and have come to represent about 2 billion tons of cargo shipped per year worldwide are estimated to grow by 4%.
And I expect this year and by another 3% in 2022.
Several of cargoes falling under this broad category, such as the pet Coke bauxite cement copper concentrates soy meal and other.
Those are shipped more and more and panamax vessels.
The scent scrapping now according to Howe Robinson, and the 124 bulk carrier vessels of $15 9 million deadweight were sold for scrap in 2020.
Last year, so about 11 3 million tons of capes being sold for scrap and only 900000 deadweight, whereas the of Panamaxes.
And look at 2021, and estimated $5 6 million deadweight worth of Capes are expected to head for the scrap yards and about $1 9 million deadweight worth of Panamax and these.
And these numbers will obviously fluctuate depending on the state of the freight market this year.
Looking briefly at the age profile.
The bulk carrier fleet Clarksons report that at the beginning of the year about 21% of the total Panamax fleet. We're over 15 years old while only 9%, though the Capesize fleet fell into the age category.
Only 2% of Capes and the water are over 20 years.
So let's try in the form and outlook for the industry. After all of the statistics that we have been talking about this.
Is that the statistics seem to indicate that after a long wait the stars affecting the fortunes of the dry bulk trades of finally, becoming aligned with the.
The sticks and the future of Este.
The low reported above even if they materialize by the only 75% or so.
I cannot help but bring about a long awaited the recovery in the dry bulk earnings.
The duration of such a good market will depend on among other things firstly the ship owners sentiment about the market secondly.
Estimates of the availability or lack thereof of credit.
Thirdly, the pricing of new buildings, and fourthly charterers perception about the future trends and this industry.
Therefore, we mostly agree with the view expressed by Commodore research the dry bulk of prospects remain positive at least for the near term.
China's coal import prospects for example remain encouraging while coal stockpiles of China's six major coastal power plants have been on the free fall and recently stood at just 12 million tons of these.
The stockpiles are enough to meet the only 15 days of demand, which is an extremely low.
Low level as electricity production of this winter has been setting new record highs.
All other commodities are also expected to move and increased volumes, while supply appears to be well under control.
These features of the market coupled with the lack of serious imbalances, creating surplus tonnage during.
The last couple of years.
Make us as a company reasonably optimistic about the future of our industry.
As has been the case up to now the Diana <unk> management team will use market developments the strengthened even further its balance sheet lower the average age of our fleet initially at least through vessel sales.
Which we have been doing for the last few quarters. Eventually we will also be reinstating along the way the dividend to our shareholders.
Our business strategy, we will continue to be conservative and at the same time of opportunistic and our track record is there to prove the beneficial result of such policies implemented.
System fleet and with full transparency.
I'd like now to pass the call to our CFO and as of Iraqis, who will provide us with the financial highlights of Q4 2020 and annual results for the whole year. Thank you.
Thank.
And you are stuffing.
Good morning, everyone I'm pleased to be discussing today with you the Diana sort of bearish and all our results for the quarter and year ended December 31st 2020.
During the quarter, we recorded the net loss has reviewed the two our common share.
The stockholders of $8 $9 million that's a.
Zero point than the dollar per share.
And of course lots of includes an impediment of impairment of $1 $9 million impairment loss.
In 2020 as you are aware, we sold to vest.
So as the B.
Trees are the.
Ownership days for the quarter to 3006 out of it and made the compared to 3009 father of 15.
Are the same quarter in 2019.
You are probably aware that we.
And as of December 31st we have also agreed to sell three more vessels of which the.
Two were delivered to the new owners in January of 2021.
And there is one still the remaining two.
Held for sales.
The other than less ownership days.
And together with the deteriorating market conditions during the quarter led to lower revenue sort of.
Total ing of $42 7 million compared to $51 5 million and the fourth quarter of 2019.
We there.
Increases in the voyage expenses.
The.
Were $3 million compared to four four and $5 million for the same quarter in 2019.
And this is mainly because of decreased commission of sand.
The decreased loss from the.
Yes.
The decrease in the revenues that we talked earlier resulted in the increase in the daily time charter equivalent rate, which was $10 nine.
For thousands of dollars compared to 12 volume the two.
12000.
And bank of 64.
For the same quarter of 2019.
We had less off hire days and that quarter and the utilization and improved.
The 99, 6% compared to 96, 9%.
And at the same quarter last year.
There was a decrease to the operating expenses, which was $22 $4 million compared to 23, four and $4 million last year.
And of course of issue as a result of the sale of the vessels.
Although the total number of.
Operating expenses was lower than the previous year's quarter.
Daily operating expenses were more or less the same day stood at six zero 89 per day compared to $5 96 nine.
For the same quarter of 2019.
All we have achieved the.
And there is on the use because there wasn't of increasing the crew expenses and insurances.
And the operating expenses are the.
And were partly offset by the decrease the spares and repairs.
The general and the Minister.
<unk> expenses decreased to $7 million compared to seven eight for the same quarter last year.
And this is because of decreased payroll costs, including compensation costs on the restricted stocks.
The good thing is that we had the <unk>.
The risk and finance costs.
Sure.
The industry continuing to the Canadians and in this quarter.
And due to the decrease of interest rate and decreased average debt.
It was four $6 million and that quarter compared to six seven.
In Q4 2000.
And the team.
And.
Towards that of course with the repurchase of the bonds of the $8 million worth of bonds.
For the year ended December 31, 2020, the net loss attributed to common stockholders attributed to a 140.
The $9 or one six <unk> per share and again. This includes the big impairment loss of $104 4 million.
And one point and $1 million loss on the sale of a vessel.
And.
Although as you can understand the.
Other revenues decreased also two of $169 $7 million compared to $227 million for.
For the same periods and the previous year.
And the regions has been already explained.
And similarly, the daily daily time charter equivalent rate decreased to $10 nine.
The times than 10000 of 910.
Per day compared to $12 796 last year.
The fleet utilization for the year decreased to $97 nine compared to $98 six in 2019.
No.
And that was related to COVID-19 issues and.
Increase the dry docking days.
The vessel operating expenses amounted to $85 8 million compared to $9 6 million for 2019.
The decrease.
<unk> expenses was due to the decrease and ownership days and was offset by increased expenses and insurance of spares repairs and operations and taxes.
Daily operating expenses in 2020 were $5 75007 hundred 50 compared to 5500.
And 10.
For the year 2019.
There was an increase for the year and the general and administrative expenses, which was of $32 8 million compared to $28 6 million for 2009.
<unk> 19, but this is.
And is an excellent and the ordinary increase because of the accelerated vesting of the restricted shares of board members of which was due to the company's the restructuring in 2020.
And the complete separation from perform of shipping Inc.
The interest and the <unk>.
Finance cost.
The decrease to $21 5 million compared to $29 4 million last year.
As we explained earlier.
We would like to thank you for your attention and we will of course be pleased to respond to your questions and now I will turn the call to the operator of all of these factors.
Cash flow the procedure.
And for asking questions.
And.
Thank you we will now be conducting a question and answer session. If you would.
Like to ask a question. Please press star one on your telephone keypad.
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For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys, one moment. Please while we poll for your questions.
Our first question.
<unk> come from the line of Randy <unk> with Jefferies. Please proceed with your questions.
How the team Diana Yeah, congrats to all on the promotions and new physicians.
Thank you.
And also.
So you've done a great job, obviously with the asset sales the.
The tender offers chartering strategy your stocks more than doubled right and the last few months. So congrats on all of that.
And now that your share price is.
Closer to NAV, if not above NAV and the market outlook is fairly attractive what are your plans for your fleet in terms of ongoing sales maybe.
Some acquisitions or.
Further share repurchases.
No.
You correctly pointed out of this as Ganesh.
And Andrew.
And what actually funded.
Pointed out that the it is very important to see where we are in the cycle and where we.
Based on our and Navy.
So you should not be expecting.
To pay any dividend.
We are trading below and a V in the for the market conditions are not such that we can.
Make sure that the dividend is going on and be sustainable for the short to medium.
Medium term.
Now as regards for the change so vessels.
And of course, if we can combine these with the buying back some of our share at the discount to NAV.
We will consider or if we can combine need the we buying back some of our expenses.
Debt buying.
And new vessels of the moment these are.
The last option that we have.
And I want to finish out again.
But we have minus and even in the.
The last 15 years to always have body shops, and and so ahead of US to act accordingly, and this is.
And the main characteristic of Diana shipping Inc. That we have always of lots of options on how to react.
Listening to other companies.
They don't have as many options so.
Be set and that we will choose whatever is most appropriate for our shareholders.
Sure.
Okay and then.
In terms of the just the market looking at Panamax is now currently still outperforming Cape sizes. Obviously, the forward curve is showing that inflection coming soon where Cape sizes outperform Panamaxes do you have a preference for one size of the vessels over.
And then also can you describe maybe the situation and how that will drive that inflection of Cape sizes, outperforming panas and the coming months.
As we have said many times in the past and the medium to long term, we do not see.
We.
The other should be expecting that the one type of vessel should.
Along with the other and the more or less everything is included in the price of the asset. So the fact that you have before the short term cash.
Kind of.
Keeping the efficiency or the one that.
Type outperforming the other is something that we have seen in the past and we don't consider that to be as the new norm or something that is going to continue certainly you're correct and your assumption, but I think what has happened and the panamax sector.
And has to do more with.
With the sentiment and as regards of the Chinese new year, you know the sentiment is very important and if we overdo it with that and if we are afraid for example, and what he is going to happen and the Chinese new year regarding fixed solution demand and.
And then you have the results.
Of the things that you show happening.
Two weeks ago, the week ago, and the Panamax sector. So fundamentals are going to prevail and at the end of the day I think you were gonna see of Universal move of.
The rates upwards as the states, who said earlier.
Sector in the short to medium term, having said that.
We think that we are very well invested to that the respect and to take advantage of this happening and we will not try and to make some more by doing.
Moving today as we speak.
<unk> buying.
And so on and so forth. We think we are very well invested and.
And the if the market moves upwards, we are going to be there and take advantage of that we have a lot of vessels to fix and the few in the months to come and we are there to take.
The advantage of the situation.
Sure.
Good deal and Thats. It for me keep up the great growth. Thank you.
And welcome.
Thank you. Our next question is coming from the line of Omar and Doctor with Clarksons Plateau Securities. Please proceed with your question.
Yes, hi, Thank you and also congratulations on the management succession.
And also.
And let's terrace, joining as well.
The other.
Wanted to maybe just touch on kind of the laptop and some from Randy.
And that's been obviously of longtime coming but it's notable to hear you speak of fairly positively here on the on the outlook.
I understand the the <unk>.
You've got the fleet that you can fix and Theres No rush right now to go out and buy assets.
The and and.
Thinking about deploying the fleet I know generally you are basically sensor existence as far as I can remember you don't do spot trading everything is generally on time charter and in the past.
And as pointed out you've tended to have one two or three year time charters, but more recently they have generally been around that 12 month range I would say any changes do you see happening to how the fleets deployed going forward from here or do you expect to put more ships on longer term contract any color you can give on that would be would be great.
Okay.
You do have a well not this debt we have a kind of short term of the hedging period of hours, we still have of hedging period, having said that we cannot space of completely steel and not try to take advantage of the short term event and therefore this is why you see us having a lot of vessels opening during.
The.
And next quarter and the quarter to come in the.
The last quarter of 2020.
So the only thing that I can say is that the we have shortened the period of hedging but.
At the moment.
And so I would say close to a year where in the.
During and better market. These are closer to two years and and and fantastic market is close to three years and.
And so yes.
We have taken some steps towards the market moving up and.
Having said that we will not put all of our eggs.
And the basket as you know and this is.
And the opposite of Luke.
The maximum of risk that we are willing to take of the moment I E a year of hedging.
Okay. That's helpful.
Thanks, Jonathan and then maybe just on that.
And one of them.
When it is time to deploy capital on vessels and thinking about the larger ships you operate both of the new castle of Max's and the Capes.
What would you prefer when it's time to spend money and and.
On the new larger vessel.
And especially with the strategy of sticking with time charters and there are clear preference.
Point and your discussions with the with customers on whether they prefer to put the new castle Max or of Cape on charter.
People are having preferences, but you are not paying the same price of each.
And what each preference Omar and therefore theoretically in and then of PC and market.
Everything.
Included in the price of the asset that Youre buying.
We are not talking here the trauma has been inside the information and he knows that the one type of vessel is better than the other and the market has not taking care of that sure theoretically speaking the true.
And not be someone.
Line two.
It should be and should not try and explain why the one is better than the other because we're not paying the same price.
If we were to be asked what is our preference we can say to you that we like the the larger size of the vessels not because we're seeing that the diseases.
More profitable.
Some of this.
But we think it's a more volatile business and for our model and the way we try to create value for our shareholders. The.
The bigger the vessel.
The more favorable EPS, we're seeing for our model to create value.
Okay, that's pretty clear thank you and maybe just one final one and then I'll turn it over just the comment on the dividend I joined the call a little late and I heard states and comments about.
Bringing back the dividend and just wanted to make sure I heard correctly do have you officially decided to bring back of the dividend or is that.
No no no.
This is <unk>.
Which we think he said may be or is that the.
Time will come and where we will introduce.
We didn't say that we are going and we will introduce all we have taken the decision to that effect as I said earlier, we have to see market conditions for being such that the the dividend is sustainable.
And we have to see.
And.
And also.
The the.
And the stock price being above and in order to introduce a dividend because you know that if you are trading below NAV.
The use of of your money may be better to buy back the stock.
Rather than pay a dividend.
Yes, if I can adequately.
And the Magic word.
The venture.
And what we.
We see here or are we hope.
Developing something that we saw.
Several years ago coming up in other words the stock trading at.
The significant premium and earnings going up the.
The ingredients to be there for the situations that Jan and described to develop and.
And the allow us to pay dividend, but we don't know when and this will happen eventually.
All of it out you'll remember.
And eventually.
And I got it now yes, I appreciate you, making that very clear and eventually.
Alright.
Yes.
Okay.
Thank you our next questions come from the line of Greg Lewis with <unk>. Please proceed with your questions.
Hi.
Thank you and good afternoon everybody.
Hi, Greg.
Alright.
Yeah, I guess my first question is around.
Realizing that debt.
The Diana has not directly impacted on the smaller vessels.
But that being said strength and the Superman.
<unk> market finds.
Finds a way to spill into the Panamax market and vice versa. So.
It's an interesting time and the market in the.
It seems like the the.
The Super Max market is really driving.
The strength and rates as opposed to typically the capes.
Just kind of curious.
Curious.
Yeah.
And.
And if youre seeing anything how that's happening and kind of any thoughts around that and.
That would be helpful.
I think Stacy.
And as the elaborate on his analysis, but I think.
I think the most important element to what you have seen the recently you've had to do with the sentiment Craig.
And the how people were thinking about the beginning of the year I think most of them. The we're really careful and day.
The rash to fix vessels.
And.
The.
The market was a bit better the unexpected as regards the demand the.
Some of them.
Seasonal issues with the demand.
And therefore, the market was caught without the lot of vessels being available for charter and this is how we tap into fee.
And.
And.
At the end of the day medium to long term everything has to do with fundamentals and how many vessels, we have and the water.
And what's the demand for cutting goods by sea.
Okay, Great and then just as I think about it I mean.
Clearly the company.
Based on your prepared remarks, we're looking at renewing our fleet. This is something that's been going on for a while now.
I guess I'm just kind of curious.
Realizing that.
Diana is you know.
And I don't know, if youre, an aggressive seller, but but.
Clearly you have some older ships and the fleet Youre thinking about.
Selling into the market.
What is the.
And we can kind of see the the state of the of the of the modern tonnage market has there been any pickups and and the available and interest and buying some of.
Of these older vessels and your fleet just kind of curious.
As we look out over the next six months to 12 months, just given the current upturn and rates.
The phone been ringing a little bit more from from potential buyers of some of those vessels.
That is.
That is the 100% correct.
And the interest.
On buying our older tonnage is much higher than what it used to be.
20 days ago, or 30 days ago.
And people are.
Reacting to the higher rates, but the show recently and they have for us to buy all of the donors where the OLED.
All of the tone seems to be having the better.
The return.
And.
But I don't know about the risk reward ratio return for shipping.
Well don't forget the sale and purchase market.
Is lagging the freight market.
Or vice versa, you need the same thing for the share repurchase market to come in line.
The gray market.
Sure and unfortunately, the lost the.
Three months the market has been very volatile and we have.
Of note.
Reach the steady state.
Therefore the.
Wow.
And the shaking hands and bushes of note.
Come on.
Two of short of line with the framework.
Okay.
Okay perfect. Thank you very much everybody and it's good to be back.
Youre welcome.
Thank you. Our next question is coming from the line of Tucker long with Stifel. Please proceed with your question.
Hi, This is the Tucker of long on for Ben Nolan and thanks for taking my questions.
With the recent developments and strength that we've seen in the dry bulk space has there been.
And increase the appetite.
From the charters for longer duration contracts.
Actively.
Hedging out of Marin.
Yes.
But.
And I don't think that the season indicate the.
I know that people are trying to use that as an indicator of what the charter is seeing.
And the market the Kid and this is why they may want to charter the vessels for longer period of today as we speak but.
The.
And this is not entirely correct because.
And you have the ffa's, where they dictate the number.
More or less of the such of charter rate of two years or three years and this has always been the case.
And you don't have the charterers.
It is pressuring you were saying I'm the only one thing to fix the vessel for two years and they say to you.
And due to year tier one and we can do one year.
So although although I think the question should be for the from the better the asked the openness to see whether they.
Have any interest because the range that we're going to get the it's more of less no.
And I don't know probably of confused view, but.
Looking at the chart that is asking is not the right thing to do recently because charter is the usually there to accommodate any type.
Type of request.
As regards period at a different number.
Yeah that makes sense.
So my second question and I know you guys mentioned youre not looking to buy ships right now, but in the event that that changes how do you guys think about your purchasing power to buy.
The ships or I guess effectively how much dry powder would you guys have.
The two acquired vessels.
I think.
It all depends on how comfortable we are feeling without the cost that we have.
Right.
And you can see that.
Our cash position is very strong and.
Question is how much we want to leave aside and this is going to be.
The influenced by what type of.
The contracts and the revenues we will have.
And I assume.
And at the same time, we have the and mortgage vessels.
Is that if the ought to be sold are they can buy more if we wish to do so although we said that we're not interested.
And I think if we were at another company with a different risk profile.
And our buying power of the powder, we have been.
Ah.
Around two.
<unk> hundred millions of dollars.
Yeah.
Okay, Great Ecmo flow.
That's 400 of millions of dollars in Europe.
Vessels more or less.
Okay, great. Thank you that's it for me.
Sure.
As a reminder, if you would like to ask the question. Please press star one on your telephone keypad.
Yeah.
And there are no further questions at this time I would like to hand the call.
Call back over to management for any closing comments.
Thank you again for your interest in and support of Diana Shipping Inc.
And we look forward to speaking with you in the coming year.
Yes.
Yeah.
Thank you for your participation and this does conclude today's teleconference. You may disconnect. Your lines, if that's the time.
Have a great day.