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Diana Containerships Inc. (DCIXV) Message Board

  • got_the_facts got_the_facts Jul 1, 2013 2:17 PM Flag

    Earnings 29 July - 0.30 div on the way


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    • 0.20 to 0.25 is more likely.

      Just a rough guess on my part based on the decrease in the number of ships the company will have had operating at a profit during the second quarter, compared to the first.

      The last div of .30 was based on results from Jan 1 to Mar 31. During that time, DCIX still had nine ships operating on their original above-market charter rates.

      Looking at the 2nd quarter, the Malacca, Madrid and Merlion (now all scrapped) will each have contributed about a month and half of profitability to the fleet, and the Hanjin Malta is added on an inflated charter. The Centaurus will have contributed only a couple of weeks of profitable charter. Effectively, count about 7 1/2 ships-worth operating under the profitable charters.

      My very crude calculation is ... if you 30 cents dividend off of nine ships, that's about 3.3 cents per ship. If we now have 7.5 ships operating at a profit, then 3.3 x 7.5 = 24.75 cents dividend. But I think it's safer to err on the conservative side and expect a 20 cent dividend.

      The problem for the share price is that the dividend outlook after that most likely gets worse, not better. For 3q, no contribution at all from the Malacca, Madrid, and Merlion. I think they'll have an 8-ship fleet (assuming no new additions) but two of those ships operating unprofitably, so effectively only 6 ships contributing to cash flow and dividend.

      After that, the next recharters are the Sardonyx and Spinel in January, 2014. Assuming their recharters are either barely breakeven or at an operating loss, that would mean a fleet of 4 ships operating at a profit in 2014.

      My bet here is that the next dividend will still be tempting enough to drive the share price up towards five, maybe a bit beyond. If so, then I'll take profits.

      good luck.

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