Q4 2023 Diana Shipping Inc Earnings Call
Operator: www.circlelineartschool.com Hello and welcome to the Diana Shipping, Inc. 2023 fourth quarter and year-end conference call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad.
Hello, and welcome to the Diana Shipping, Inc, 2023, fourth quarter and year end conference call and webcast. If anyone wants to require operator assistance. Please press star zero on your telephone keypad, a question and answer session will follow the formal presentation.
Operator: A question and answer session will follow the formal presentation. You may be placed into question Q at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ed Nebb, Investor Relations, for Diana Shipping. Please go ahead, Ed.
He placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to turn the call over to Ed that Investor Relations for Diana shipping. Please go ahead Ed.
Ed Nebb: Thank you, Kevin, and thanks to everyone who is joining us today for the Diana Shipping 2023 fourth quarter and full year conference call. With us today from management are Samira Mies-Pagliu, Chief Executive Officer, and she will introduce the other members of the team. And so, without further ado, I will turn the call over to Ms. Polly. Thank you, Ed.
Thank you, Kevin and thanks to everyone, who is joining us today for the Diana Shipping, Inc, 2023, fourth quarter and full year conference call.
With us today from management are Semiramis, Paula <unk>, Chief Executive Officer, and she will introduce the other members of the management team and so without further Ado I will turn the call over to Ms. Paula <unk>.
Thank you Ed and.
Semira Mispalio: Good morning, ladies and gentlemen, and welcome to Diana Shipping, Inc.'s fourth quarter and end of year 2023 financial results conference call. As Ed said, I'm Semira Mispalio, the CEO of the company, and it's my pleasure to present alongside our esteemed team, Mr. Stacy Margaronis, who's the Director and President, Mr. Ioannis Zafirakis, Director, CFO, and Before we begin, I'd like to remind everyone to review the forward-looking statement on page 4 of the accompanying presentation, please. So, despite market conditions being mixed during the last quarter of 2023 and in early 2024, our disciplined chartering strategy has allowed us to continue generating positive free cash flows. Within February, we witnessed market sentiment improving significantly, and as a result, current market conditions are more robust. On this background, we announce a cash dividend for the fourth quarter of 2023 of 7.5 cents. Per se.
Good morning, ladies and gentlemen, and welcome to Diana Shipping, Inc. Fourth quarter and end of year 2023 financial results Conference call and as Ed said I'm. The CEO of the company and it's my pleasure to present alongside our theme that team Mr. Stacy matter that only who's a director and president.
Mr. Kneeland, Linzess Iraqis directors C F O and Chief strategy Officer, Mr. Lift studies, so far today from director.
Before we begin I'd like to remind everyone to review the forward looking statement on page four of the accompanying presentation. Please.
Okay.
Yeah.
So despite market conditions being mix during the last quarter of 2023 and in early 2024.
Disciplined chartering strategy has allowed us to continue generating positive free cash flows.
We then February we have witnessed the market sentiment improving significantly and as a result of current market conditions are more robust.
And this background, we announced a cash dividend for the fourth quarter of 2023 of seven five cents.
Okay.
Oh sure sorry.
Semira Mispalio: Turning to slide 5, I will review with you the company's snapshot as of today. Our fleet comprises 41 vessels in the water with a total dead weight of approximately 4.5 million tons. Our fleet utilization has remained consistently high, reaching 99.7% for the fiscal year 2023, attributed to our prudent and efficient management of our vessels. Additionally, as of the end of the fourth quarter, we employed 1,018 people at sea and ashore.
Turning to slide five I will review with you the company's snapshot as of today.
Our fleet comprises 41 vessels in the water with a total deadweight of approximately $4 5 million ton.
Our fleet utilization has remained consistently high reaching 99, 7% for the fiscal year 2023 attributed to a prudent and efficient management of our vessels.
Additionally, as of the end of the fourth quarter, we employed 1018 people at sea and shore.
Semira Mispalio: Moving on to slide six, let's go over the key highlights from the third quarter and recent developments. We recently executed the contract for the acquisition of two 81,000 deadweight methanol dual-fuel new-building Camp Thermax dry bulk vessels built at Shunesi Group for a purchase price of 46 million EGP. These vessels are expected to be delivered to the company in the second half of 2027 and the first half of 2028 respectively. The investment of 92 million U.S. dollars just mentioned was showcased at the Business and Philanthropy Climate Forum during COP28 in Dubai. This presentation highlighted our commitment to reducing the environmental impact of our fleet, demonstrating our dedication to sustainable practices and initiatives. We take our role as an industry leader very seriously, continually striving to enhance our fleet and operations for the benefit of our stakeholders and the environment.
Moving on to slide six let's go over the key highlights from the third quarter and recent developments.
We recently executed a contract for the acquisition of 281000 deadweight methanol dual fuel new building <unk> dry bulk vessels built at Tennessee group for a purchase price of 46 million each.
These vessels are expected to be delivered to the company in the second half of 2027, and the first half of 2028, respectively.
Investment of 92 million U S. Dollars, just mentioned was showcased at the business and philanthropy climate Forum during clubs 28 in Dubai.
This presentation highlighted our commitment to reducing the environmental impact of our fleet, demonstrating our dedication to sustainable practices and initiatives.
We take our we take our role as an industry leader.
Very seriously continually striving to enhance our fleet and operations for the benefit of our stakeholders and the environment.
Semira Mispalio: In addition, our joint venture entity, Windward Offshore, has increased its investment from two to four high-spec commissioning service operation vessels, CSOVs, to be built at Vard Yard as a result of exercising its options to construct two additional vessels. Our continued participation in this venture is another reflection of our commitment to a greener and more sustainable shipping industry. These investments underscore our dedication to sustainable shipping and position us to meet the evolving demands of our industry while reducing our carbon footprint. Furthermore, as part of the renewal and modernization of our fleet, two vessels have been sold to unaffiliated third parties. Motovessel Artemis at a net sale price of approximately 13 million U.S. dollars, and Motor Vessel Houston for approximately 23.3 million U.S. dollars.
In addition, our joint venture entity Wynwood offshore has increased its investment from two to four high spec commissioning service operation vessels C. S movies to rebuild as far as the yard as a result result of exercising its option to construct two additional vessels.
Our continued participation in this venture is another reflection of our commitment to a greener and more sustainable shipping industry.
These investments underscore our dedication to sustainable shipping and positions us to meet the evolving demands of our industry why did reducing our carbon footprint.
Furthermore, continuing the renewal and modernization of our fleet two vessels have been sold to an affiliated third parties.
Most of the vessels are can meet at a net sale price of approximately 13 million U S dollars and motor vessel Houston for approximately $23 3 million U S dollars.
Semira Mispalio: Before the end of the year, the company released its fourth ESG report for 2022, a copy of which can be found on our website. On November 20, 2023, we announced the pro rata distribution of warrants to holders of the company's common stock, of which, as of February 16, 2024, 1,940,736 were exercised. The warrant distribution provided us with an opportunity to potentially raise equity in a non-dilutive manner for our existing shareholders. As of February 19, 2024, the company has secured revenue for 62% of the remaining ownership days of the year 2024, amounting to approximately US$123.3 million in contracted revenues. Additionally, the company has secured approximately US$31 million of contracted revenues for the year 2025, representing 12% of the available ownership days for the entire year.
Before the end of the year. The company released its fourth ESG report for 2022, a copy of which can be found on our website.
On November 22023, we announced a pro rata distribution of warrants to holders of the company's common stock of which as of February 16th 2024, 1 million 940736 were exercised.
The warrant distributions provided us with an opportunity to potentially raise equity in a non dilutive manner for our existing existing shareholders.
As of February 19, 2024, the company has.
Revenue for 62% of the remaining ownership days of the year 2024 amounting to approximately $123 3 million U S dollars.
Contracted revenues.
Additionally, the company has secured approximately $31 million of contracted revenue for the year 2025, representing 12% of the available ownership days for the entire year.
Semira Mispalio: Yanis will provide a more detailed analysis of our cash flow generation potential based on the current market environment. As mentioned earlier, we are pleased to declare a quarterly cash dividend of 7.5 cents per common share, totaling approximately 8.7 million US dollars. Finally, we are pleased to announce that our company was honored with the prestigious Dry Cargo Company of the Year Award at the 2023 Lloyds List Greek Shipping Awards. This recognition is a testament to the hard work, dedication, and excellence of our team.
Yeah, and it will provide a more detailed analysis of our cash flow generation potential based on the current market environment.
As mentioned earlier, we are pleased to declare a quarterly cash dividend of.
Seven five cents per common share totaling approximately $8 7 million U S dollars.
Finally, we are pleased to announce that our company was honored with the prestigious dry cargo company of the year Award at the 2023 Lloyd slips Greek shipping awards. This.
This recognition is a testament to the hard work dedication and excellence of our team.
Semira Mispalio: Moving on to slide 7, let's review a summary of our recent chartering activities. We have continued to implement our discipline strategy by securing profitable time charters for eight vessels since our last earnings presentation in November 2023. To provide some detail,
Moving on to slide seven let's review a summary of our recent chartering activity we.
We have continued to implement our disciplined strategy for.
By securing profitable time charters for eight vessels since our last earnings presentation in November 2023 to.
To provide some detail.
Semira Mispalio: We have charted three Ultramax vessels with a weighted average daily rate of $13,950 U.S. dollars per day for a remaining average period of 401 days. Additionally, three Panamax, Campsamax, and Post-Panamax vessels have been chartered at a weighted average daily rate of US$15,631 per day for a remaining average period of 365 days, and two Cape Side Newcastle MAX vessels have been charted with a weighted average daily rate of $21,043 per day and a remaining average period of 486 days. Slide 8 illustrates our commitment to strategically charter our vessels in a staggered manner. Our emphasis is on securing positive free cash flows through our disciplined employment strategy and positioning ourselves in a balanced way to participate in the market efficiently. I will now pass the floor to Yanis to provide a more detailed analysis of our financials. Thank you, Samira Mishra.
We have chartered three ultra Max vessels with a weighted average daily rate of 13950.
<unk> 50 U S dollar to stay for a remaining average spirit a 401 days.
Additionally, three panamax come from ex post Panamax vessels have been chartered at a weighted average daily rate of $15631 per day for our remaining average spirit of 365 days.
And two Capesize New castle Max vessels have been chartered with a weighted average daily rate of 21043 U S dollars per day, and a remaining average period of 486 days.
Slide eight illustrates our commitment to strategically charter our vessels in a staggered manner.
Emphasis is on securing positive free cash flow through our disciplined employment strategy and positioning ourselves in a balanced way to participate in the market efficiency.
I will now pass the floor to Janice to provide a more detailed analysis of our financials.
Thank you.
Slide number nine.
Yanis: Slide number nine clearly shows the two main points. The one has to do with market conditions deteriorating compared to for the fourth quarter of 2023 compared to 2022. And you can see that, on the revenue side, being 60 million compared to 75 million in... 2022 for the same quarter, but the other point that you can see here is that we have managed to increase our cash position at the end of the year to 161 million dollars, point something, compared to 143.9, and also we have managed to decrease our long-term and finance liability, which was net of deferred financing to 642.8 million compared to 66 Now if we move to the next slide.
Clearly shows the two main points that one has to do with the market conditions deteriorating.
Compared to for the set for the fourth quarter of 2023 compared to 2022 and you can see that.
On the revenue side being 60 million compared to 75 million.
2022 for the same quarter.
But.
The other point that you can see here is that.
We have managed to increase our cash position in.
At the end of the year.
Two $161 million point, something compared to 143 49.
And also we have managed to decrease our long term financial liabilities.
That's net of deferred financing for $642 8 million compared to <unk> 63 and four.
Regardless of the market conditions.
If we move to the next slide.
Yanis: You can see the slide basically on the time charter equivalent, or time charter rate, for the three months ended... December 31st, the fact that our time charter equivalent has been 15,162 compared to 21,100 in the same quarter of the previous year. Again, this is mainly due to market conditions deteriorating. If we move to the next slide... What is worth mentioning is that they improved the utilization rate to 99.7% compared to 98.9% in the same quarter in 2000 and in the same year, 2022, and also the fact that the time charter equivalent for the year was 16,000.7 compared to 22.7. The Daily Vessel Operating Expenses have slightly increased to 5,700 compared to 5,574.
You can see this slide basically on the time charter equivalent time charter rate for the three months ended.
Sympathy first the fact that our time charter equivalent has been 15162 compared to two one to 1005.
Congress.
In the same quarter previous year again, this is mainly due to the market.
Conditions deteriorating.
Yeah.
If we move to the next slide.
Uh huh.
What is worth mentioning is that they improve the utilization rate to 99, 7% compared to 98 nine.
In the same quarter in 2000.
In the same year 2022.
And also the fact that the time charter equivalent for the year has been 16007 compared to 22 point Kevin.
In the previous year.
Daily vessel operating expenses increased slightly to 5700 <unk> compared to 5507 before what is worth mentioning also that we have managed to keep our weighted average eight to 10.5 years, although a year has passed from 10.
Yanis: What is worth mentioning also is that we have managed to keep our weighted average age to 10.5 years, although a year has passed from 10.2. Going to the income statement, I think you can clearly see that we made 6 cents in the last quarter of 2023, compared to 27 cents in the previous three years' same quarter. Of course, the main reason behind that has to do with different market conditions. If we go to the year-end income statement, Again, you can see clearly here that we made 44 cents on a dilutive basis on earnings per common share on a daily basis, 0.42 compared to 1.36 in the previous year. The same reasoning behind that, as explained earlier. On the balance sheet, again, we think that the cash and cash equivalents, restricted cash, and time deposits of $161 million compared to $143, shows our prudent way of balancing our balance sheet. The total debt stood at $642 million, as we said, and the net debt in that situation was approximately $488 million, which we consider to be very healthy.
0.2.
Yes.
Going to the income statement.
I think.
You can clearly see that we made a <unk> sense in this.
The last quarter of 2023 compared to 27.
In the previous year's same quarter.
Of course.
Main reason behind that that has to do with the different market conditions.
If we go to the <unk>.
And <unk>.
Income statement.
You can see clear here that we made 44 42 cents on a dilutive basis.
Yes, Sean.
First one on Staten Island.
On the basis of zero 42, compared to $1 36.
In the previous year.
And he is running behind as explained earlier.
On the balance sheet again, we are seeing though.
The cash and cash equivalents.
Stricter cash and time deposits to overcome the $61 million compared to 143.
It shows a prudent way of balancing our balance sheet.
The total debt stood at 642, as we said and then the net debt.
That situation is approximately $488 million.
Which we consider to be very happy.
Yanis: Moving to the next slide, the debt amortization profile. This is something that we have discussed in the past. You can clearly see that we have no maturities in 2024-2025 and we have the bond expiring in 2026, 119 million dollars worth of bonds. We think that we have managed the maturities very well, and that gives us the opportunity in the next two years to improve the next three, four, or five years our debt amortization profile. Together with the amortization profile, you can see on the next slide, the balance profile, and you can see that this is steadily going to be decreasing, and especially in the 2026 year, you can see that it's going to be very healthy in order to make us not worry at all about the... maturing of the bones at that time. If we talk about the break-even course, these are, at the moment, the free cash flow breakeven. We calculate it to be at 15,800, approximately.
Moving to the next slide the debt amortization profile. This is something that we have discussed in the past.
Can clearly see that we have no maturities in 2020 for 2025, and we have the bond.
Expiring in 2026.
$119 million worth of bonds.
So we think that we saw minus fairly well the maturity and that gives us. The next two years the opportunity to.
In Peru, the next three four or five years.
Our debt amortization profile.
And together with the amortization profile you can see the next slide the balanced profile and you can see that this is <unk>.
Steadily is going to be.
And especially in the 2026.
You can see that there is going to be very healthy in order to.
Make us north worry at all about the.
Maturing of the bonds at that time.
If we talk about the breakeven cost.
These are at the moment.
The free cash flow breakeven, we calculated to be at a 15800 approximately in the average daily time charter rate of the fixed revenues for 2024 days.
Stacy Margaronis: And the average daily time charter rate of the fixed revenues for 2024 is... 16,232, and that's for 62% of the day. In the year 2025, we are fixed at $19,105 per day for 12% of our fleet days. Where to slide the..., number 18. You can see in a different way that for the remaining of the year, if we use the FFH based on February 19, 2024, there is still some way that we can create, based on those rates, free cash flow of around $7 million for 2024 and, for 2025, $11 million. The market since February 19 has moved a lot in the last 2-3 days, and these numbers are a little bit on the conservative side, as we speak, since the market has moved. www.circlelineartschool.com. I think with that, I will pass the floor to... Stacy Margaronis for the market preview.
16232, and Thats, 462% of the days.
The year 2025, we are fix at 19800.
$5000 per day.
For the 12% of our fleet days.
Moving to slide.
Number 18.
You can see in a different way.
For the remaining of the year, if we use the <unk> zone based on February 19, 2024, there is still some way that we can create.
Based on those rates free cash flow of around $7 million for 2024 and for 2025 $11 million.
The market since 19.
February 19 has moved.
A lot the last two or three days and these numbers a little bit.
On the conservative side as we speak since the market has moved.
I think with that.
I'll pass the floor to Stacy.
Stacy amount her only for some.
Before the market review.
Stacy Margaronis: Thank you, Yanni, and from me also, a warm welcome to all the participants in Diana's first earnings call for 2024. On this slide, I'd like to mention that on our last conference call, we brought to your attention that geopolitical events continue to have an important influence on dry bulk earnings. According to Clarkson's Bulker, Suez Canal transits are running about 40% below those seen during the first half of December last year. This is partially the result of several owners, operators, including ourselves, avoiding the area due to the increased risks of attack and consequent risk to seafarers' lives.
Thank you Jeremy.
For me also.
Welcome to all the participants in Diana <unk> first earnings call for 2024.
On this slide I'd like to mention that.
From our last conference call, we have brought to your attention that geopolitical events continue to have an important influence on dry bulk earnings.
According to Clarksons Bulker, Suez Canal transits are running about 40% below those seen during the first half of December last year.
This is partially the result of several owners operators, including ourselves avoiding the area due to the increased risks of attack and consequent risk or.
Two seafarers lives.
Stacy Margaronis: This decrease in Suez Canal transit is estimated to have increased the dry bulk rate average haul length by around 1%. The Clabson-based case forecast, assuming one-quarter of disruption, factors in a 0.3% dry bulk tonne-mile demand up-list for the full year 2024. This comes at the same time as Panama Canal restrictions due to draft limitations in Lake Gatun, where water levels are at critically low levels of less than 25 meters.
This decrease in Suez Canal Transits is estimated to have increased the dry bulk rates average haul length by around 1% the.
The Clarksons base case forecast, assuming one quarter of disruption.
To obtain a 3% dry bulk ton mile demand uplift for the full year 2024.
This comes at the same time as the Panama Canal restrictions due to draft limitations in Lake Gatun, where water levels are critically low levels of less than 25 meters.
Stacy Margaronis: This is another factor already driving some trade towards longer alternative routes. Turning to the time charter rates now that we are witnessing, Cape Side's 12-month employment hire rates stand at around $26,500 per day basis specific delivery, with the most recent peak being $30,000 per day seen in March 2022. Today the 12-month rate of campshire maxes is 18,250 per day, and it was around 29,500 at the end of March 2020.
This is another factor already driving some trade towards longer alternative routes.
Turning to the time charter rates now that we are witnessing capesize 12 months employment higher rates stand at around $26500 per day basis specific delivery with the most recent peak being 30000 per day seen in March 2022.
Todays 12 months ratio capture Max's These 18250 per day and it goes around 29500 at the end of March 2022 four.
Stacy Margaronis: For Ultramaxxis, the 12-month time charter hire rate is $17,000 per day, and the last peak was again 29,250 per day in March 2022. These rates are well above those reported three months ago in our last earnings call. Turning to macroeconomic considerations now, the IMF GDP growth forecast for 2024 provides a reasonably optimistic picture of the future, where GDP is expected to grow by 3.1% this year and by 3.2% in 2025. China is projected to grow by 4.6% this year and by 4.1% next. India is expected to grow by 6.5% both this year and in 2025. The U.S. might grow by 2.1% in 2024 and 1.7% in 2025. The usual anemic growth figures are forecasted for the Eurozone, with 0.9% growth for this year and 1.75% in 2025.
For Follicular Max's the 12 month time charter hire rate is 17000 per day and the last peak was again 29 to <unk> 50 per day in March 2022. These rates are well above those reported three months ago in our last earnings call.
Turning to macroeconomic considerations now the IMF GDP growth forecast for 2024.
Provide a reasonably optimistic picture of the future.
The GDP is expected to grow by three 1% this year and by three 2% in 2025.
China is projected to grow by four 6% this year and by four 1% next.
India is expected to grow by six 5% both this year and in 2025.
The U S might grow by two 1% in 2024 and one 7% in 2025.
The usual anemic growth figures are forecasted for the euro area with 9% growth for this year and 175% in 2025.
Stacy Margaronis: On another positive note, industrial production has returned to growth in several major economies, apart from Japan, and even the Eurozone is finally seeing positive monthly growth in industrial production. According to Clarkson's current projections, bulk carrier demand growth of about 1.6% in 2024 may fall short of expected net fleet growth of 2.3% this year, despite a modest new building delivery schedule and the potential for increased demolition due to regulations and the aging fleet. However, a few other factors have the potential to support race.
On another positive note industrial production has returned to growth in several major economies apart from Japan that is.
And even the Euro area is finally seeing positive monthly growth in industrial production.
On the supply and demand balance now.
According to Clarksons current projections suggest that bulk carrier demand growth of about one 6% in 2024 May fall short of expected net fleet growth of two 3%. This year, despite the modest new building delivery schedule.
And potential for increased demolition due to regulations and the aging fleet.
However, if you other factors have the potential to support rate.
Stacy Margaronis: These were also mentioned in our last conference call and remain so today. They are the slower speeds and EST retrofit time for environmentally sound technology. At the same time, a strong demand-supply ratio in 2023 means that there is very little surplus tonnage, and 2024 starts from a stronger base. Looking out into 2025, dry bulk trade is forecast to grow by a modest 1.6% in ton miles, but the fleet is expected to grow by just 1% next year. So overall Clutch and Sea bulk carrier supply is supported, with the order book steady at just under 9% of the existing fleet, and the net fleet growth projected to slow from 3% in 2023 to around 1% in 2025. On the next slide, we look at demand.
These were mentioned also in our last conference call and remains so today.
Slower speeds and ESP retrofit time for environmentally sound technology.
At the same time as strong demand supply ratio in 2023 means that there is very little surplus tonnage and 2024 starts from a stronger base.
Looking out into 2025 dry bulk trade is forecast to grow by a modest one 6% in ton miles, but the fleet is expected to grow by just 1% next year.
So overall clarksons see bulk carrier supply supported with the order book steady at just under 9% of the existing fleet and the net fleet growth projected to slow from 3% in 2023 to around 1% in 2025.
On the next slide we look at demand.
Stacy Margaronis: Starting with steel, according to World Steel, on a global basis, steel production has gone up over the last 12 months by 1.2% to 1.85 billion tons. According to Komodo Research, the last seven months have seen steel production outside China increase by 15.8 million tons year on year. Prior to June last year, steel production outside of China was falling on a year-on-year basis for 15 straight months.
Starting with steel according to world steel on a global basis. The production has gone up over the last 12 months by one 2% to 185 billion tons.
According to Commodore research the last seven months have seen steel production outside China increased by $15 8 million tonnes year on year.
Prior to June last year steel production outside of China was falling on a year on year basis for 15 straight months.
Stacy Margaronis: In China, most recently, steel production increased by 8% on a year-on-year basis. However, seaborne iron ore trade is projected to decline marginally in 2024. In 2025, the iron ore trade is projected to remain steady at around 1.5 billion tonnes as global blast furnace steel production comes under increasing pressure from green alternatives while peak Chinese steel demand will remain sensitive to government policy. Seaborne coking coal trade is expected to increase by about 3% in 2024 and by about 1% in 2025, as coking coal demand in some key importing regions comes under pressure amid the transition to greener modes of steel production. Seaborne thermal coal trade is expected to contract by 2% this year and contract by a further 1% in 2025 and fall to about 1 billion tons by the end of next year. However, thermal coal placed in the wider global energy mix is likely, according to Clarkson, to come under pressure from expanding renewable energy capacity.
In China, most recently steel production increased by 8% on a year on year basis.
Seaborne iron ore trade is projected to decline marginally in 2024 and 2025, the iron ore trade is projected to remain steady at around one 5 billion tons as global blast furnace steel production comes under increasing pressure from green alternatives while.
Peak Chinese steel demand will remain sensitive to government policy.
Seaborne coking coal trade is expected to increase by about 3% in 2024 and by about 1% in 2025 as coking coal demand in some key importing region comes under pressure amidst transition to greener modes of steel production.
Seaborne thermal coal trade is expected to contract by 2% this year and contract by a further 1% in 2025 and fall to about 1 billion tons by the end of next year.
Thermal coal it's placed in the wider global energy mix is likely according to clarksons to come under pressure from expanding renewable energy capacity.
Stacy Margaronis: The huge increase in Chinese imports seen in 2023, about 54%, went to replace port and power plant inventory. This, according to Clutchers, is unlikely to be repeated in 2024, while at the same time, improved hydrogeneration and any improvement in domestic coal production could curb coal imports even further. However, as Braemar points out, China's and India's coal imports sometimes overshadow dramatic changes in coal imports seen in other countries
The huge increase in Chinese imports seen in 2023 about 54% went to replace port and power plant inventory. This according to Clarksons is unlikely to be repeated in 2024, while at the same time improved hydro generation and any improvement in domestic coal production with <unk>.
<unk> coal imports even further.
However, it is braemar point out the Chinas and Indias coal imports, sometimes overshadow dramatic changes in coal imports in other countries.
Stacy Margaronis: Examples are Vietnam, Malaysia, and Thailand, where imports of coal jumped dramatically last year and are not expected to ease much this year due to growth factors in those countries affecting demand for prompt and reliable power generation. Grain exports are expected to grow by 2% in 2024, with a potential increase in U.S. exports by about 7% compared to last year. For 2025, exports are expected to grow even more and reach 5% growth compared to 2024 and reach 557 million tons. The minor bulk trade, after ending 2023 on a firm note, is expected by clusters to grow by 3% in 2024, supported by potential macroeconomic improvements. In 2025, MANABAR III is expected to increase by a further 3% and reach 2.25 billion tons. On slide 24, we look at the supply side. Looking at the age profile for the bulk carrier fleet, about 21% of the Handimax fleet by dead weight is 15 years or older. 25% of the Panamax fleet by dead weight fall into that category, and only 15% of the Cape Scythe fleet is older than 15 years.
Examples of our Vietnam, Malaysia, and Thailand, where imports of coal jumped dramatically last year and are not expected to ease much. This year due to growth factors in those countries affecting demand for prompt and reliable power generation.
Grain exports are expected to grow by 2% in 2024 with a potential increase of U S exports by about 7% compared to last year.
For 2025 experts had expected it to grow even more and reached 5% growth compared to 2024 and reached $557 million.
The minor bulk trade after ending 2023 on a firm note that expected by Clarksons to grow by 3% in 2024 supported by potential macroeconomic improvements.
In 2025 minor bulk trade.
Is expected to increase by a further 3% and reached 225 billion tons.
On slide 24, we look at the supply side.
At the age profile for the bulk carrier fleet above 21% of the handy Max fleet by deadweight is 15 years or older.
5% of the Panamax fleet by deadweight fall into that category and only 15% of the Capesize fleet are older than 15 years.
Stacy Margaronis: Scrapping into 2023 came to about 5.4 million dead animals. This year, if earnings continue to improve, they might fall back to the level seen in 2022 of about 4.3 million pounds. Turning to Asset Values, According to Clarkson's, their bulker second-hand price index increased by 11% in 2023, on the back of another year of active bulker sale and purchase markets. The three-month trend of 10-year-old cake prices is up 17%; that's around $37.5 million. And for country maxes, the equivalent increase is 12%, up to $26 million. Ultramax prices have also increased by about 17% to $25 million over the same period.
Scrapping into 2023 came to about $5 4 million deadweight.
This year if earnings continue to improve they might fall back to the levels seen in 2022 of about $4 3 million tons.
Turning to asset values.
According to Clarksons, the Bulker second hand price index increased by 11% in 2023 on the back of another year of active bulker sale and purchase market.
The three month trend of 10 year old Cape prices is up 17% at around $57 5 million.
And for <unk>, the equivalent increase 12% up to 26 million U S dollars.
Remax practice have also increased by about 17% to $25 million over the same period.
Stacy Margaronis: The bulk area new building price index was up by 6% year-on-year amid competition for yard space across all vessel sectors and continuously increasing labour costs. Looking briefly at the overall picture, According to Clarkson, the Panamax order book stood at the end of 2023 at 29.8 million deadweight, equivalent to about 11.7% of the existing fleet. For cake, the equivalent numbers are 22.5 million deadweight and 5.7% of the existing fleet. For the handi-maxes, the order book stands at 22 million deadweight, which is about 9.3 million percent, I beg your pardon, of the trading fleet. Overall, there are about 85.8 million deadweight tons of bulkers on order, representing about 8.5% of the trading volume. Final slide, 22.
The bulk carrier New building price index was up by 6% year on year amid competition for yard space across all vessel sectors and continuously increasing labor costs.
Looking briefly at the order book.
According to Clarksons the Panamax order books stood at the end of 2023 at $29 8 million deadweight equivalent to about 11, 7% of the existing fleet.
For Capes, the equivalent numbers R 22, and a half million deadweight and five 7% of the existing fleet.
For the hand, the Max's.
Order book stands at 22 million deadweight, which is about $9 3 million better sense I beg your pardon of the trading fleet.
Overall, there are about $85 8 million deadweight worth of bulk was on order representing about 8.5% of the trading fleet.
Finally on slide 22 the hour.
Stacy Margaronis: The Outlook for a Ring, Commodore Research remains bullish for the overall dry bulk market, which is continuing to enjoy historically strong rates for this time of the year. This has led to a jump in period activity as the FFA market supports the hedging of such contracts by time chart. A positive factor in the dry bulk market, according to Komodo research, is that the Indian economy is doing so well and coal imports are increasing while hydropower output in that country remains in a phase of contraction. Dry bulk carrier demand should be supported this year by China purchasing large volumes of dry bulk commodities that benefit from any weakness in global commodity prices. This strong import appetite was seen last year, and Commodore Research sees no reason for this to be reversed in 2024. Finally, even though predictions vary depending on the assumptions made, Gloxans predict that compliance with emissions regulations, such as EEXI and CII, could reduce available bulk supply by between 1.5% and 2% per annum out to 2025 due to slower speeds and ESG retrofit times.
Look for our industry.
Commodore research remained bullish for the overall dry bulk market. The dry bulk market is continuing to enjoy historically strong rates for this time of the year.
This has led to a jump in period activity as the FFA market support the hedging of such contracts by time charters.
A positive factor in the dry bulk market. According to Commodore research is that the Indian economy is doing so well and coal imports are increasing while hydropower output in the country remains in a phase of contract.
Dry bulk carrier demand should be supported this year by China purchasing large volumes of dry bulk commodities.
Benefit from any weakness in global commodity prices.
This strong imports appetite were seen last year and Commodore research see no reason for this to be reversed in 2024.
Finally, even though predictions vary depending on the assumptions made clarksons predicted compliance with emissions regulations, such as E Si and C. III.
Could reduce available buckets supplied by between one and a half and 2% per annum out to 2025 through slower speeds and TASC retrofitting time.
Semira Mispalio: Classrooms remind us, though, that uncertainties on the demand side remain, with Chinese dry bulk demand growth facing challenges from the property sector and sensitivity to the Chinese government's steel and energy policies. Diana's business strategy and chartering policy remain steady, and this chartering policy will allow us to take advantage of any upcoming increase in bulk carrier earnings, while at the same time, the strength of the company's balance sheet remains the top priority, as has always been the case. I will now pass the call to our CEO, Semiram Ispailou, for a summary of the company's priorities and future goals. Thank you. Thank you, Stacey. Before we open the call up to questions and answers, I would like to summarize the key points from today's presentation. Firstly, our dedication is to generating and securing positive free cash flows. Through prudent and active management of our balance sheet, we aim to capitalize on the opportunities presented. Secondly, we are proactive in renewing and modernizing our fleet, enhancing our ecological footprint through greener investments, aligning with our sustainability and environmental responsibilities.
Clarksons reminds us, though that uncertainties on the demand side remain with Chinese dry bulk demand growth facing challenges from the property sector and the sensitivity to the Chinese government's steam and energy policies.
Diana business strategy and chartering policy remains steady and this chartering policy will allow us to take advantage of any upcoming increase in bulk carrier earnings while at the same time the strength of the company's balance sheet remains the top priority has always been the case.
I will now pass the call to our CEO semiramis value for summary of the company's priorities and future goals.
Thank you Stacy before we open the call up to questions and answer session I would like to summarize the key points from today's presentation.
Firstly, our dedication is on generating in securing positive free cash flows.
Through prudent and active management of our balance sheet, we aim to capitalize on the opportunities presented.
Secondly, we are proactive in renewing and modernizing our fleet enhances our ecological footprint and greener investments aligning with our sustainability and environmental responsibility.
Semira Mispalio: Thirdly, our dedication persists in adhering to a strategy that offers stability in a cyclical business while striving to maximize long-term shareholder value. Thank you very much. I will now turn the call back to our operator for the Q&A session.
Thirdly, our dedication persists in adhering to the strategy that offers stability in a cyclical business, while striving to maximize long term shareholder value.
Thank you very much we can now I will turn the call back to our operator for the Q&A session.
Operator: We'll now be conducting a question and answer session. If you'd like to be placed into question Q, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question Q; you may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one on your telephone wants the MS-STAR1 to be placed into question. The confirmation tone will indicate your line is in the question. You may press star two if you'd like to remove your question from the question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing any star key. And that's star number one to be placed into question. One moment, please, while we poll for questions. As a reminder, that's star number one to be placed into question.
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Operator: Please stand by while we compile your question. www.circlelineartschool.com. Our first question today is coming from Christopher Sky from R6 Securities. Your line is now live. Hello, congrats on another good quarter. I was just wondering if you could comment on... On the balance sheet, investment in expertise was 20.7 million as of year-end, and Isak related to this, either offshore during the venture or not? Yeah, www.circlelineartschool.com. This is an investment that we have. However, we do not have to disclose the details of that investment. It's not material enough that we need to do a filing, so fortunately, we cannot disclose it.
Yeah.
Okay.
Okay.
Okay.
Okay.
Please standby, while we compile your question queue.
Yeah.
Okay.
Sure.
Okay.
Yeah.
Our first question today is coming from Christopher <unk> from <unk> Securities. Your line is now live.
Okay.
Hello.
Good quarter.
Hum.
I was just wondering with you.
Some.
On the balance sheet.
Investments in equity Securities.
7 million.
Yeah.
Is that related to this.
Offshore joint venture or yes, okay.
Okay.
Yes.
And this is an investment that we have we do not have to disclose.
The details of that investment.
Okay.
It's not material enough that we need to do a filing.
So unfortunately, we cannot disclose.
Semira Mispalio: Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments. www.circlelineartschool.com. Thank you very much for joining us today and I look forward to seeing you at our next earnings call. Thank you very much. Thank you, that does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Thank you we reached end of our question and answer session I would like to turn the floor back over to management for any further or closing comments.
Yeah.
Okay.
Thank you very much for joining us today and look forward to seeing you at our next earnings call. Thank you very much.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time it up a wonderful day, we thank you for your participation today.