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Diana Shipping Inc. Message Board

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  • mlpnewby59 mlpnewby59 Dec 17, 2005 4:10 PM Flag

    Re: Going below $8 unless BDI turns aro

    Diana has 4 out of 11 ships which will roll off charter in the next several weeks. The average rate on those ships is $16,500. Currently the spot TCE for Panamax ships is $18,032, fully $1,500 higher than what they have now! Also, DSX has the newest fleet of all the drybulkers, which I would think would be worth MORE than the average. The implication that Q1 dividend would be $.20 seems very skinny based on the current market.

    The other 3 ships that are rolling off charter are in early March, after 2/3 of the quarter is booked, again at rates aprox at the current market. Those ships are also some of the newest in the industry. Further, the Panamax new build, (whose purchase required the subsequent painful equity offering ) will be delivered adding to dividend accretion.

    So, if Diana was to have a fall off in it's divy, I would think it would be after Q1, not before. And that would happen only if rates fell precipitously between now and early march.
    And only if they chose not to lock up long charters on all the ships rolling over in the next two weeks, and the BDI crashed...unlikely.

    Remember, the Press Release last week stated the Q4 divy would be HIGHER than $.36. Q1 should be in that same range based on current Panamax rates.

    Once the new ship is delivered, and barring any long term charters, the fleet will be 40% time charter. I have to believe that DSX management will try to increase long term charters to the level of the other dry bulkers, knowing what the spot volatility can do to the stock price, and hence it's ability to raise future capital in the equity market.

    In any event, between now and then, management will conduct a Q4 conference call and we can hear for ourselves what the management envisions for the next dividend.

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