Newcastlemax owner Himalaya Shipping has reported a profitable second quarter, during which it took delivery of its final three bulkers from China’s New Times Shipbuilding.
It has also extended two converted fixed-rate vessel charters by an extra month at a lower rate during July.
Contracted CEO Herman Billung said: “All of our 12 ships have been successfully delivered from New Times Shipyard and are now generating revenue.
“Out of our 12 vessels, 10 are exposed to the spot market, earning on average a premium of 42.25% to the Baltic 5TC ([Baltic Capesize Index]) index.”
Oslo-listed Himalaya reported a net profit before tax of $6.9m for the period, up from $1.1m a year ago, before it had an operational fleet.
Himalaya, which counts Tor Olav Troim as its backer and major shareholder, declared dividends of 5 cents for June and 6 cents for July.
Billung said the company has a limited need for capital investments and expects to return its free cash to shareholders going forward.
He said there may be further upside to Himalaya’s monthly dividend payments “if our positive market outlook materialises”.
Revenue grew to $31.2m from $6.7m year on year during the second quarter on the back of the bigger operational fleet.
The Himalaya fleet earned a gross average time-charter equivalent rate of around $34,600 per day during the three months.
The Baltic Capesize Index averaged $23,482 per day, based on a 180,000-dwt vessel. Newcastlemaxes typically earn just over a 40% premium on top of this.
“This represents the second strongest first half we have witnessed in a decade, only behind 2021, and reflects a well-balanced market and a solid fundamental for an upward cycle that potentially could last for years to come,” Billung said of the capesize market.
The 208,500-dwt Mount Blanc and Mount Neblina (both built 2023) spent an extra month on fixed-rate employment during July.
Earlier this year, their previously index-linked contracts were converted to fixed rates between 1 May and 30 June, during which they earned an average of $37,275 per day, plus scrubber premiums.
This was extended to include the month of July at an average of $35,000 per day, plus scrubber premiums.
Two other vessels — the 210,000-dwt newcastlemaxes Mount Norefjell and Mount Etna (both built 2023) — will be on fixed-rate employment for the rest of this year.
The Mount Norefjell is earning $30,000 per day and Mount Etna is bringing in $40,810 daily, plus cost savings generated by their scrubbers.
The rest of the fleet is fixed on index-linked contracts.
Billung is set to retire next year and will be succeeded by Lars-Christian Svensen, who will also be CEO of Troim-backed newcastlemax owner 2020 Bulkers.
He will join both companies as chief commercial officer on 1 September.
Analyst reaction
Himalaya’s results were roughly in line with analyst estimates.
DNB Bank analysts noted “marginal deviations to consensus estimates, considering the company took delivery of its last newbuildings during the quarter”.
Adjusted net income of $6.9m was 12% below the consensus.
TCE revenue came in 1% below consensus estimates, while its $24m in adjusted Ebitda came in 1% above the consensus.
DNB Bank’s shipping equities research team said the results warranted a “neutral” share-price reaction as much had already been announced.
By noon in Oslo on Friday, Himalaya’s shares were up by just 0.25% since the market opened and were trading at NOK 81.30.
