Diana Shipping experienced turbulence during 2024 amid depressed earnings and dividend cuts. Strategic plays to strengthen the financial posture, however, are positives for Diana Shipping. In a move in this direction, the company just announced a time charter contract for m/v Maera with China Resource Chartering Limited.
Diana Shipping Inc. is a global transportation shipping company specializing in dry bulk vessels, owning and operating vessels, with a base operation in Athens, Greece. A quality standard is observed within the company concerning vessel management, with modern fleets, which include a number of dry bulk carriers.
A wide aerial view of an industrial port facility with stacked cargo containers.
The company currently owns a fleet of nearly 39 dry bulk vessels ranging from Newcastlemax, Capesize, Post-Panamax, Kamsarmax, and Panamax, to Ultramax ships. Diana Shipping provides transportation for dry bulk cargoes including coal, grain, and iron ore through time charters as well as bareboat charters. Revenue is generated mostly through the chartering of its vessels to third parties under long-term contracts.
The clients of Diana Shipping include diversified character groups such as large shipping companies, commodity traders, and industrial firms seeking bulk transportation services. These range from industries to agricultural fields, mining activities, or energy sources utilizing raw materials transported by sea. A key focus for Diana Shipping to keep up with increasing dry-bulk shipping demands across the globe is its concern regarding sustainability and efficiency in operations.
Diana Shipping has had a rough 2024, with TCE rates falling and operating expenses rising. Revenues for 3Q24 fell to $57.5 million, and net income fell 62% year-over-year to $2.27 million. The company reduced its dividend to $0.01 per share, down from $0.075 in 2Q24, which was an annoyance to investors.
But Diana hasn’t been idle. The company has been restructuring debt, with maturity extended out to 2029. In addition, the issuing of new bonds and exercises of warrants have improved cash liquidity and left it with an amount of $186.8 million in cash reserves and a much lighter debt burden.
The new charter deal is expected to begin today and go on till at least Sep 20, 2025. This should add $2.31 million of revenue to the company’s top line at the very least.
Although there are short-term challenges, Diana is building for long-term benefits. The company has strengthened its capital structure with the issuance of $150 million bonds and launching its 2029 bonds on Euronext Oslo Børs. On the other hand, solid growth in minor bulk trade and potential projects in Guinea and Brazil from major market players such as Rio Tinto and Vale will fuel the demand for dry bulk shipping.
That forms the basis for our bullish call: although a dividend cut is painful, an improved balance sheet from Diana and tailwinds in global trade make this a good long-term play. With macro trends working for it, Diana Shipping is well-positioned to grow and gives investors reasons to remain optimistic, even with recent setbacks.
Diana Shipping is not on our latest list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held DSX at the end of the third quarter which was 9 in the previous quarter. While we acknowledge the potential of DSX as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as DSX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
