Diana Shipping Inc. (NYSE:DSX) Q3 2025 Earnings Call Transcript

Diana Shipping Inc. (NYSE:DSX) Q3 2025 Earnings Call Transcript November 20, 2025

Diana Shipping Inc. beats earnings expectations. Reported EPS is $0.05, expectations were $0.005.

Operator: Thank you for standing by. Ladies and gentlemen, welcome to the Diana Shipping Inc. Conference Call on the Third Quarter 2025 Financial Results. We are joined by the company’s Chief Executive Officer, Ms. Semiramis Paliou. At this time, all participants are in a listen-only mode, followed by a Q&A session. Please note that this conference is being recorded. We now turn the floor over to Ms. Semiramis Paliou. Please go ahead.

Semiramis Paliou: Good morning, ladies and gentlemen, and welcome to Diana Shipping Inc. Third Quarter 2025 Financial Results Conference Call. I’m Semiramis Paliou, the CEO of the company, and it’s my pleasure to present alongside our team, Mr. Anastasios C. Margaronis, Director and President, Mr. Ioannis G. Zafirakis, Director, Co-CFO, and Chief Strategy Officer, Mr. Dave Vander Linden, Director, and Ms. Maria Dede, Co-CFO. Before we begin, I’d like to remind everyone to review the forward-looking statement on Page four of the accompanying presentation. The dry bulk market posted a solid performance in Q3. Cake once again has performed especially towards the end of the quarter. Yet after a lackluster first half of the year, we finally saw some tailwinds in the Panamax Sector.

The main reason for this was the fact that China imported no soybeans from the U.S. in September, which marked the first time since November 2018 that shipments fell to zero. This impact was somewhat offset by the fact that South American shipments surged from a year earlier, therefore increasing sun miles and providing upward pressure on the Panamax sector. Overall, bulk carrier markets picked up after a softer half 2025 due to a record September for Chinese imports, reaching 200 million metric tons. Subsequently, Q3 achieved record Chinese imports of nearly 580 million metric tons. The quarter also saw continuing war-related activity in both the Red Sea and the Black Sea. This situation remains volatile, and avoidance of the area is likely to continue.

Because of the Capesize resilience and the improvement in the smaller sizes, we were able to secure several charters across all segments in the fleet at higher levels than previously and again at a considerable premium over the spot market. Turning to Slide five, let’s review our company’s snapshot as of today. Diana Shipping Inc., founded in 1972 and listed on the New York Stock Exchange since 2005, operates a fleet of 36 dry bulk vessels, one of which is mortgage-free. Our fleet has an average age of just under five years and a total deadweight capacity of approximately 4.1 million tons. We anticipate the delivery of two methanol dual-fuel newbuilding Kamsarmax dry bulk vessels at the end of 2027 and early 2028, respectively. Fleet utilization reached 99.5% for 2025, highlighting our effective vessel management strategy.

As of September, we employed nine individuals at sea and ashore. Financially, our net debt stands at 54% of market value, supported by $140 million in cash reserves as of quarter-end and total secured revenues of approximately €150 million as of November 12. Moving on to slide six, let’s go over the key highlights from the second quarter and recent developments. In June, continuing the renewal and modernization of our fleet, we announced the sale of motor vessel Selena for a purchase price of approximately $11.8 million before commissions. She was delivered to her new owners in July 2025. In September, we signed a term loan facility with the Bank of Greece, secured by five vessels, and drew down $55 million. In September, we released the company’s 2024 ESG report, highlighting our ESG strategy and commitment to sustainable practice.

You can find a copy of that on our website. As of September 29, 2025, we have acquired 14.9% of Genco Shipping and Trading Limited issued and outstanding common shares. As of November 12, 2025, we have secured $25.4 million of contracted revenues for 87% of the remaining ownership days of the year 2025 and have secured $118 million of contracted revenues for 50% of the ownership days of the year 2026. Finally, we are pleased to declare a quarterly cash dividend of $0.01 per common share with respect to 2025, totaling approximately $1.16 million.

Maria Dede: Slide seven summarizes our recent chartering activity.

Semiramis Paliou: From July 1, 2025, until November 12, 2025, we have secured time charters for 14 vessels. Six Ultramax vessels at an average daily rate of $13,800 for an average of 333 days.

Maria Dede: For Panamax, Kamsarmax, and post-

Semiramis Paliou: vessels at an average daily rate of $12,900 for an average of 331 days. And for Capes and Newcastle MAX vessels, at an average of $24,500 for an average of 380 days. Slide eight highlights our disciplined chartering strategy. We focus on staggered medium to long-term charters to avoid clustered maturities, ensuring earnings visibility and resilience against market downturns. This disciplined chartering strategy has secured €149 million in contracted revenues, resulting in an average time charter rate of $16,200 per day with an average contract duration of one year and 1.17 years. For the rest of 2025, only 13% of days remain unfixed. Now, I’ll pass the floor to our Co-CFO, Maria Dede, for a more detailed financial analysis.

Thanks, Semiramis. Good morning and welcome to our call. I will begin with an overview of our financial performance for the third quarter and the nine-month period ended September 30, 2025, followed by a discussion of our capital structure, breakeven analysis, and dividend. We start with the financial highlights for 2025. Time charter revenues were $51.9 million, slightly lower than €57.5 million in the same quarter last year. This decline reflects the sale of two vessels earlier this year and one vessel in September 2024. Adjusted EBITDA was $20.3 million compared to $23.7 million in the third quarter last year, consistent with the smaller fleet. Net income, however, nearly doubled to $7.2 million from $3.7 million in 2024. This was driven by lower expenses and the €10.6 million gain from the valuation of our investment in Genco, partly offset by a loss in Ocean.

Diluted earnings per common share were €0.05, up from zero point in 2024. On the balance sheet, cash decreased to €133.9 million as of September 30, 2025, from $207.2 million as of December 31, 2024. This reduction reflects cash deployed in strategic investments during this nine-month period, including €103.5 million paid for the acquisition of 14.93% ownership interest in Genco, €23 million invested in share repurchases of our common stock, and $12 million invested in Greenwood and Ecogast, two of our equity method investments.

Maria Dede: To strengthen liquidity, we sold two of our older vessels in the

Semiramis Paliou: fleet, generating approximately $23 million and drew down €55 million under a new loan facility with National Bank Greece. By optimizing capital through vessel sales and the new loans, we strengthened liquidity while fine-tuning our fleet for efficiency. As a result, long-term debt increased slightly to €651.1 million as of September 30, 2025, from $637.5 million at year-end 2024. Operationally, this quarter was smooth with no surprises and with results reflecting the smaller phase. During the quarter, we operated an average of 36.2 vessels compared to 38.7 vessels in the same quarter last year following the sale of Houston in September 2024, Armenia in March, and Celina in July 2025. This reduction affected ownership available and operating days.

Time charter equivalent averaged $15,178 a day, a 1% decrease compared to $15,103 per day in the third quarter last year due to softer charter rates. Fleet utilization remained strong at 99.4%. Special operating expense for the quarter decreased by 6% to $20 million compared to $21.2 million in the third quarter last year due to the smaller fleet size. On a per-share basis, daily operating expenses rose 1% to $6,014 compared to $5,906.04 last year, mainly due to higher crew costs. For the nine months ended September 30, 2025, Time Charter revenues dropped by 6% to $161.5 million from $171.1 million for the same period last year. Net income fell to €14.7 million compared to €3 million in the same period last year, an increase driven by non-operating gains compared to losses in the same period last year, and the absence of debt extinguishment losses seen in 2024.

Time charter equivalent improved to $15,173 per day compared to $15,162 per day in the same period last year. Debt utilization remained high at 99.5%. Daily operating expenses for the nine-month period rose slightly to $5,941 compared to $5,910 for the same period last year, again due to higher crew costs. The average rate of our fleet is approximately twelve years. The next slide, you can see our debt structure and amortization schedule. We have maintained a disciplined approach to leverage. Our debt structure includes both fixed and variable rate instruments with projected loan balances declining steadily through 2032. Our $175 million senior unsecured bonds and other loan maturities coming due in ’29 and beyond will be addressed well in advance to ensure liquidity stability and minimize refinancing rates.

In the next slide, we compare our free cash flow breakeven to EBIT against estimated revenues for the remainder of 2025 and 2026. As of September 30, 2025, our cash flow breakeven rate stood at $16,800 per day. For the remainder of 2025, potential revenues include the estimated revenues for the unfixed days based on FSAA could reach $29.1 million at an estimated average time charter rate of $18,900 per day. For 2026, potential revenues could reach $224.7 million at an average time charter rate of $17,102 per day. While projected revenues for 2025 may not recover breakeven, the outlook for 2026 looks positive, supporting a return to cash flow profitability. This slide highlights dividend distributions. Since 2021, the company has consistently delivered quarterly dividends in both cash and shares.

In line with this policy, we declared a dividend of 1% or $0.01 per share for 2025, bringing cumulative dividends spent since 2021 to $2.69 per common share. In summary, despite a small fleet, we delivered strong profitability, optimized our capital structure, and maintained high operational efficiency. Our liquidity actions and proactive debt management provide resilience and flexibility for future opportunities. I will now hand over to Anastasios C. Margaronis, who will provide an overview of the dry bulk market.

Operator: Thank you, Maria, and welcome to the participants of this latest

Anastasios C. Margaronis: quarterly earnings call of Diana Shipping Inc. Starting with the geopolitical and trade development in bulk shipments. The bulk carrier market has weathered well the continuous announcements of new tariffs as well as several changes in the U.S. tariff regime with its trading partners. As of November 18, the twelve-month time charter rate for a typical case without scrubbers stood at around $24,000 a day. The equivalent rate for the Kamsarmax was $15,600 per day. For the Ultramax, about $15,900 per day. All these rates were up on the levels we saw at the beginning of the year and from three months ago. On November 19, the BCI was $2,300.0636 and the Baltic Panamax Index at $18.95. In the meantime, the five PC route weighted time charter average for Capes stood at $30,154 per day, while the Panamax five TC route averaged rates stood at $17,057 per day.

As a result, sentiment remains high and some newbuilding orders are already appearing across the size sector, most of them for ships with deliveries from 2028 onwards. As mentioned by Clarkson, the recently announced U.S.-China trade war truce includes the U.S. pledge to reduce tariffs on imports from China from 30% to 20%. The resumption of China’s purchases of U.S. soybeans, the rollback of China’s export restrictions on rare earth, and most notably the suspension for a year of the introduction of the USDR sport fees and the reciprocal port fees for some U.S.-linked vessels entering China. According to Comodo Research, the purchase of U.S. soybeans by China represents a supporting factor for midsized bulkers for the rest of the year and into 2026.

Exports to China will be much stronger over the next few months, and this will be a very helpful tailwind for the dry bulk carrier market. This is according to Clarksons, even though China had earlier this year sourced soybeans for purchase to replace U.S. produce from Brazil, which involved a longer lading voyage than from the U.S. Lower volumes, though, were shipped, can be partly explained by the fact that China has been relying on the drawing down of elevated domestic stocks. In the next slide, we look at the macroeconomic development and consideration. Economies around the world are showing signs of relatively steady growth going forward. Latest growth forecasts provided by the IMF and the OECD predict growth in Chinese GDP at around 4.8% this year and 4.2% in 2026.

The equivalent figures for India are 6.6% and 6.2%. For the U.S., 2% for this year and 2.1% for 2026. For the Euro area, 1.2% this year and about the same for next year. For the world, the figure stands at 3.2% for this year and 3.1% in 2026. Let’s look at the main commodities now that are being shipped in bulk. Global steel production, according to Braemar, is down by 1.2% year to date at 1,373 million metric tons. This has been having its effect on demand for metallurgical coal and iron ore. Chinese steel product exports are increasing strongly by over 5% year on year so far, which could help partially explain the continued demand by China for iron ore. Braemar reports that it is heavy engineering and ambitious investment in energy and industrial parks driven by AI that will probably support steady demand in China going forward as opposed to traditional construction demand on real estate and infrastructure projects.

So for iron ore, Clarksons predict a slight increase of about 1% per annum in total imports at 1,621 million tonnes for 2026. The C1-two iron ore project in Guinea has exports starting this month, and volumes are expected to build up from this year to ’28. Long haul exports to China should support pan mild demand. However, Clarksons reminds us that uncertainty remains around how the iron ore market will absorb the new volume.

Operator: Going forward.

Anastasios C. Margaronis: For coal, we have coking coal shipments which are expected to remain more or less flat in 2026 and 2027, with support coming mainly from Indian demand as domestic coking coal reserves deplete and feed production keeps increasing. Thermal coal shipments are expected to go down by between 31% in 2026 and 2027, respectively. Coal imports to China have continued to go down about 10% so far this year, with demand being partially satisfied by imports from Mongolia and produce from domestic mines. Indian imports are projected to drop by 6% in 2025 due to increased domestic production. In the medium term, demand will pick up as new thermal energy capacity outpaces domestic mining output. For grain exports, according to 2% in 2025, and by about the same in 2026 to reach 566 million.

Brazilian grain exports and increased soybean exports from the U.S. should keep supporting this trend hopefully well into 2027. As regards the minor bulk trade, according to Clarksons, these trades are expected to grow by about 4% this year and by a further 2% year on year in 2026 at €2,400 million every sum. Approximately similar growth rates are expected for 2027 depending on key macroeconomic trends and geopolitical tension.

Maria Dede: Bauxite, cement,

Anastasios C. Margaronis: seed products, and forest products are expected to be the main commodities shipped in large volumes going forward. Turning to the next slide. On talent supply. According to Clarksons, the bulk carrier fleet is forecast to grow by 3.1% this year and by 3.4% in 2026. For Capes, the projected tonnage increase is only 1.4% in 2025 and 2.2% in 2026. For Panamaxes, the fleet projected increase is 3.5% this year and 4.6% in 2026. According to Braemar, the bulk carrier fleet order book stands at 106.2 million deadweight tons, which represents 10.9% of the existing fleet. This total is made up of €37.8 million deadweight of Capes, which is about 9.3% of the fleet, 38.2 million deadweight of Panamax Kamsarmaxes, about 14.1% of the fleet, and €28.4 million deadweight in Handymaxes, which are about 11.2% of the fleet.

For Capes, the order book is certainly manageable going forward, and so it is for Handymax. The Panamax fleet, where the order book is higher, includes, however, 467 ships based from 2005 and earlier. On the recycling side, according to Clarkson, the recycling market has been dominated for most of the year by low activity and cautious sentiment. Softening steel prices, particularly in India, have dampened the appetite for tonnage by major scrap buyers. The average price for a handysize bulkhead offered for demolition has dropped to around $400 per lifetime display. The forecast for dry bulk carrier demolition sales this year is about 4.6 million deadweight tons, for 5.3 million in 2026, and about $7 million in 2027 when various regulations and aging of large sections of the bulk carrier fleet take their toll.

The average age of dry bulk demolition candidates has gone up from 25.2 years in 2015 to 29.3 years in ’25. Turning to asset prices now. As Heartland Shipping Services pointed out, the combination of less ordering this year and more potential output at yards may have implied a crash in new building prices. This has not occurred. New building prices have softened during the last quarter by just 1%, and by between 34% year on year across the tariff with eight new buildings being voted at around $73 million. Capesize Max is at around $36.25 million, and Ultramax is for 2020 delivery at around $33.5 million. Secondhand bulk prices have crept up during the last quarter. The price of refinery has moved up by about 4% to $65 million, and Newcastle MAX at around $72 million, and Capesize MAXs of the same vintage have also gone up by 4% to €33 million, while Ultramax prices have increased to $32 million.

Finally, let’s look at the outlook for our industry. According to Clarkson, 2025 should prove to be a slightly softer year for bulk carrier earnings than 2024, with the fleet projected to grow by 3% and demand by not much more than 1%. But Clarksons also point out that dry bulk trends have firmed in recent months amid a rebound in the coal trade and strong iron ore, bauxite, and grain export volume. In a nutshell, dry bulk demand trends have firmed in recent months. Looking out to 2026, Clarkson’s sees a base case outlook of another moderate year for bulk carrier earnings, possibly like 2025. Dry bulk trade is currently projected to grow by about 2% in ton miles, slightly below fleet growth of about 3%. Markets could be balanced with support from special surveys and falling vessel speed.

The Capesize market is expected to outperform the smaller segment. Looking further ahead, projections are much less reliable, even though the supply-demand numbers for 2027 are similar to those in 2026. Factors such as Chinese demand trends, the impact of environmental policy, Red Sea danger zone development, and demolition trends will continue to influence the supply-demand balance going forward. During the last slide, Slide 18, we can have a quick look at factors which are, according to analysts, going to affect the market on the positive and the negative side. On the positive side, we have strong South American grain exports and increased soybean exports from the U.S. to China, we have a gradual resolution of reciprocal tariffs between the U.S. and its trading partners, Red Sea rerouting expected to continue for the rest of the year and well into 2026, strong steel product exports by China, and the commencement of iron ore shipments from Simandou in Guinea.

On the negative side, though, we have worldwide lower steel production at Southside India, bulk carrier fleet growth outpacing demand for both this year and next, let’s all indicate sector. Increase in wind, nuclear, and solar power production, particularly in China, anticipated long-term reduction in coal imports by China, positive failure in trade talks between the U.S. and the trading partners leading to higher tariffs and trade disruption. On this note, I will pass the call to our CEO, Semiramis Paliou, for some important takeaway points from this earnings call. Thank you.

Semiramis Paliou: Thank you, Anastasios. And before concluding today’s presentation, I’d like to highlight our ongoing ESG initiatives Diana Shipping Inc. is committed to promoting eco-friendly technologies and modernizing our fleet, transparently sharing emission data to ensure accountability, building on partnerships and collaborations to advance our sustainability goals, and developing an equitable, diverse, and inclusive program while continuously investing in our people. In summary, moving on to slide 20, Diana Shipping Inc. stands on a strong foundation built on over years of industry experience and twenty years on the New York Stock Exchange. It is a seasoned management team adept at addressing industry challenges, has a strong shareholder relationship and a disciplined strategic approach, a solid balance sheet with a strong cash position and a countercyclical mindset, and an ongoing fleet modernization effort, a focus on rewarding our shareholders when possible, and a strong ESG strategy.

With that, thank you for joining us today. We now look forward to addressing your questions during the Q&A session.

Q&A Session

Operator: We will now begin the question and answer session. Then one if you’re using a speakerphone. The first question comes from Christopher Barth with Arctic Securities. Please go ahead.

Christopher Barth: Hello, good afternoon, and thank you for the presentation. How should we think about your quite significant stake in Genco now? Is there any

Ioannis G. Zafirakis: sort of dialogue with the Board? You previously mentioned that the holding is of strategic character, but I mean, they tightened the poison pill with the 15% threshold now. So sort of how does that impact your thoughts on sort of further dialogue here? And if you are just sort of opting for a passive stake, would you consider a Board seat?

Ioannis G. Zafirakis: Hi, Christopher. This is Ioannis Zafirakis speaking. As we have said in the past, our position in Genco has strategic value. Nevertheless, we are observing at the moment, and we are examining our various options on

Ioannis G. Zafirakis: what we’ll do

Maria Dede: and how to do it.

Ioannis G. Zafirakis: We are not in contact with the current management of Genco. And we are observing the development.

Christopher Barth: Thank you very much, Ioannis. And just a second question for me, if that’s okay. Can you just comment a bit around the recent development in Ocean Tau? Do you still have a holding there? And what’s the percent if that’s the case?

Ioannis G. Zafirakis: Diana Shipping Inc.’s interest in Ocean Farm is very minimal after the latest raising of equity that they did, the one before the sovereign one. And it is certainly not material at this stage. So there is nothing to comment.

Christopher Barth: Okay. Thank you very much. That’s it from me.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Ms. Semiramis Paliou for any closing remarks.

Semiramis Paliou: Thank you for joining us for Diana’s third quarter 2025 financial results. We look forward to presenting to you again in the next quarter.

Maria Dede: Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.