Diana Shipping is keeping its purse strings tight during these uncertain times, having returned to loss amid hefty impairments.
The Semiramis Paliou-led owner of 41 bulkers on Thursday reported a $104m loss for the first quarter that included a $93.1m impairment charge on nine vessels.
That compared to a $1.53m profit during the same period of last year that accounted for a $4.8m impairment hit.
Diana Shipping posted an adjusted loss per share of $0.13 that excluded the write-downs, missing analyst consensus by $0.08 and falling well below the $0.07 earnings per share reached a year ago.
Interim chief financial officer Ioannis Zafarakis put a positive spin on the impairment hit nonetheless.
"Impairment is not a bad thing," he said. "It gives a clearer picture to everyone."
Revenue fell 27% from a year ago to $43.8m amid lower charter rates and a fleet diminished by sale of the 164,200-dwt Norfolk (built 2002) in February and six other vessels in 2019.
"We have the position that we are in uncharted territory and we should not be investing lots of money on anything," Zafirakis said during an earnings call on Thursday.
Diana Shipping in late February sold the Norfolk for $8.75m after an initial deal fell through but may put only some, if any, of that cash toward share repurchases.
'A broken chain'
It may still try to sell the 73,700-dwt panamax Calipso (built 2005) after failing in February to sell it for $7.25m, but its top priority is staying prudent while riding out the Covid-19 overhang.
"Too many parts of the chain have been broken, so I don't think anyone should be talking about a speedy recovery," Zafirakis said.
He said the pandemic has crippled the entire global economy, so it will take a while for the world to come back from this downturn with or without fiscal stimulus packages.
"I don't think anyone should take that scenario as the most probable," Zafirakis said.
Diana Shipping is somewhat protected from the "terrible" dry bulk spot market with charter coverage on most of its fleet through at least mid-2020, Stifel analyst Ben Nolan said.
He still expected Diana Shipping shares to trend downward Thursday morning, given the weak quarter and heavy write-downs. But they actually gained 4.3% to $1.46.
The dry bulk market continued its downward slide Thursday, with the Baltic Dry Index falling five points to 393 points on Thursday.
The Baltic's capesize index fell further into negative territory, slipping 17 clicks to minus 48, while panamax declined 14 points to 614.
