Newcastlemax owner Himalaya Shipping had a profitable end to 2023, a year in which it took delivery of its first vessels and completed its IPO on the New York Stock Exchange.
The shipowner has declared its first ever dividend, $0.01 per share for January.
The firm, which has a dual listing in Oslo, recorded a net profit of $4.6m for the final quarter, up from a $516,000 loss a year earlier.
This means annual profit for 2023 totalled $1.5m. This is Himalaya’s first year in the black after having booked a $2m loss in 2022 when it did not yet have an operational fleet.
Chief executive Herman Billung said: “We currently have nine vessels sailing, with the remaining three vessels expected to be delivered shortly.
“With this, the company has developed into a fully operating company, offering one of the most modern and fuel-efficient fleets in the dry bulk industry.
“All vessels have been employed by reputable counterparties, with the index-linked charters earning on average a premium of 42.25% to the Baltic 5TC index.
“We believe this is one of the highest premiums in the industry, showing the attractiveness of our fleet.”
Billung reiterated that Himalaya’s strategy is to remain disciplined with its capital and to return most of its net cash to shareholders.
“Our simple structure, low G&A [general and administrative] costs and the right financing should position the company to deliver solid returns,” he said.
The shipowner secured two-year time charter deals for its final three dual-fuel newcastlemaxes during the last quarter of 2023, meaning the fleet will be fully employed when the vessels are delivered in May and June this year.
The company said the newbuilding programme at China’s New Times Shipyard is running slightly ahead of schedule.
The live fleet earned average gross time charter equivalent earnings of around $34,400 per day during the fourth quarter — a 22% premium over what the Baltic Capesize Index averaged during the period.
Most of the fleet will be fixed on index-linked time charters from the second quarter. Five ships are on fixed-rate contracts during the seasonally weak first quarter.
The company completed a private placement of new shares in December, in which it raised around $17m in net equity proceeds.
It also completed sale-and-leaseback deals for three vessels with Jiangsu Financial Leasing and CCB Financial Leasing, totalling $98.6m and $49.3m respectively.
Himalaya is backed by Norwegian investor Tor Olav Troim, whose investment vehicle Drew Holdings holds 29.86% of the company’s shares.
Drew and its parent company, Magni Partners, have provided shareholder loans to Himalaya.
Below estimates
Himalaya’s reported figures came in below estimates, but analysts said there were few surprises and the outlook still looks positive.
The shipping equities team at DNB said a neutral share price reaction was warranted.
The fact that Himalaya’s results are sensitive to the timing of newbuilding deliveries means the market will probably look past the miss, the bank said.
“The company belies the strong rate environment in Q4 and [year to date] gives reasons to believe in a recovering day-rate environment going forward,” the DNB team said in a note on Thursday.
“Even in a moderate demand growth scenario, management retains a constructive market outlook for the coming years. The company will continue to mitigate seasonal weaknesses and volatility by conversions from floating to fixed rates to limit the downside.”
Fearnley Securities expect dividends to continue flowing “at increasing pace” as more ships hit the water.
The investment bank expects yields of 12%-17% this year and next year.
“Overall, a solid report, though limited surprises given monthly updates,” Fearnleys said on Thursday.
Himalaya’s shares were trading at NOK 75.40 in Oslo at 10:30am, down by 2.3% since the market opened.
