Diana Shipping inc.

and welcome to the Diana Shipping second quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ed Nebb, Investor Relations for Diana Shipping. Thank you. You may begin.

Thank you, Jesse, and thanks to all of you for joining us for the Diana Shipping, Inc. 2020 Second Quarter Conference Call. The members of the company's management team who are with us today are Mr. Simon Palios, Chairman and Chief Executive Officer, Ms. Sammy Ramis Palio, Deputy Chief Executive Officer and Chief Operating Officer, Mr. Anastasios Margaronis, President, Mr. Yanis Zafirakis, Interim Chief Financial Officer, Chief Strategy Officer, Treasurer and Secretary, and Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me briefly remind you of the Safe Harbor Notice. Certain statements made during this conference call, which are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act, and such forward-looking statements are based on assumptions, expectations, intentions, and beliefs as to future events that may not prove to be accurate. For a description of the risks, uncertainties, and other factors that may cause future results to differ from the forward-looking statements, please refer to the company's filings with the SEC. And now it is my pleasure to turn the call over to Mr. Simon Palios, Chairman and Chief Executive Officer.

Thank you, Ed. Good morning and thank you for joining us today to discuss the results of Diana Shipping Inc. for the second quarter of 2020. I am pleased to be addressing you today and I am happy to report that I feel very well. I especially want to thank all of you who expressed your best wishes for my recovery from the coronavirus. The company has continued to steer a steady course through challenging market conditions and the uncertainty of the pandemic. To summarize the 2020 second quarter, Diana Shipping Inc. reported a net loss of 10.8 million U.S. dollars, and a net loss attributed to common stockholders of $2.2 million for the second quarter of 2020, including a $2.6 million impairment loss. This compares to a net loss of $1.2 million and net loss attributed to common stockholders of $2.7 million in the second quarter of 2019. Time charter revenues were $41 million for the second quarter of 2020, compared with $55 million for the same period of 2019. The balance sheet remains strong with cash and cash equivalents and restricted cash totaling $101.7 million at June 30, 2020. In recent months, we took advantage of financial market conditions to restructure several credit facilities. Earlier this month, we repurchased an aggregate amount equal to $8 million of the outstanding senior unsecured bonds. In June, we signed a supplemental agreement with PNP Paribas to extend by 2.5 years the maturity and existing secure loan facility until May 2024. In May, we signed a term loan facility with ABN Amro Bank for 52.885 million US dollars This enables us to continue two existing loans with the lender into one facility, maturing in June 2024. Also in May, we refinanced a loan facility with Nordea Bank for $55,848,000. In this process, we extended the loan facility until March 2022, with an option to extend the repayment by two more years until March 2024. Finally, continuing our activity fleet management, we agreed to sell the 2007-built vessel Arethusa to an unaffiliated third party with delivery to the buyers dated by August 31, 2020, for a sale price of $7.85 million before commission. As we move forward through uncharted waters, we will continue the prudent management of our financial position and our fleet, and we'll maintain our focus on delivering value to our shareholders. With that, I will now turn the call over to our President, Stacey Margaronis, For a perspective on industry conditions, we will then be followed by our interim chief financial officer, chief strategy officer, treasurer and secretary, Yann Zafirakis, who will provide a more detailed financial overview. Thank you.

Thank you, Simon, and welcome to all who are participating in this Midsummer Quarterly Conference Call of Diana Shipping. For us, this is a particularly important and special conference call as our Chairman and CEO has recovered from his COVID-19 illness and is once again leading the Diana Shipping Inc. management. Looking at the earnings of the first half of this year of bulk carriers, it's interesting to note the wide oscillations of daily earnings during the first half. According to Gibson Shipbrokers, the Cape-sized Baltic 5TC rate on June 30th was $30,857, which was up from $3,369 on May 29th. The BDI started the year at $976 and closed on Friday the 24th of July at $1,317. The Baltic Cape Index was at 1,646 on January 2nd and closed last Friday at 2,084. The Baltic Panamax Index moved from 1,003 at the beginning of the year to 1,198 last Friday. Looking at macroeconomic now developments, according to figures issued by the IMF recently, global GDP growth is expected to drop by about 4.9% this year. Growth of 5.4% is expected to return in 2021, assuming always that the COVID-19 pandemic will be reasonably contained by then. European GDP growth is expected to drop 10.2% this year and increase by 6% in 2021. Chinese GDP growth is expected to increase by 1% in 2020 and by 8.2% next year. Projections for the United States are that GDP growth will be minus 8% this year and plus 4.5% in 2021. Turning to supply and demand, according to Clarkson, seaborne dry bulk trade is projected to decline by about 4.1% in tonne miles in 2020. If this materializes, this will be a steeper drop than what was seen in 2009 following the financial crisis. On the supply side, bulk of fleet growth is projected to come in at a modest 2.4% this year, which under normal circumstances would be a very easy to manage rate of fleet growth. Looking at the demand forecast further on in this short presentation, the near-term challenges facing the bulk carrier market will become apparent. Still on the supply side, the slower operating speeds and the impacts of ships taking time out of service for scrubber retrofitting will absorb some supply, but are not expected to be sufficient to provide significant market support. For 2021, Clarksons predict that the bulk carrier fleet will increase by only 1.3%. The Cape fleet of 100,000 plus dead weight will increase by 2% this year, and 0.7% in 2021, while the Panamax fleet is forecasted to increase by 3.6% this year and by 2.4% in 2021. According to Banquero Costa, about 89 CAPEs and VLOCs are expected to be delivered in 2020 after taking into consideration the possible slippage due to prevailing circumstances caused by the pandemic. In the first five months of 2020, about 21 such vessels were scrapped, So in the first five months of this year, there were 25 net additions to the fleet, representing about 6.14 million dead weight in this sector of the bulk carrier fleet. For the whole year 2020, the CAPE and VLOC fleet is expected to grow by 4%, while for 2021, growth is expected to be 3%. Fleet growth could be even slower in 2021, according to Clarkson's plateau, giving support to dry bulk earnings. In the first five months of 2020, Banquero Costa reported about eight such units were ordered, which were all new capital magazines. In this size range, 4% of the trading fleet is over 20 years old, while 9% is between 15 and 19 years old. All these ships are potential scrapping candidates in a poor earnings environment. After Panamaxes and post-Panamaxes, Banqueiro Costa expects 150 units to be delivered this year, totaling 12.5 million deadweight after accounting for slippage. On the demand side, the second half of this year would, according to Clarkson, see more positive market trends on the back of improving Brazilian ore supply, encouraging economic growth in China and other seasonal factors. Nevertheless, we should always keep in mind that the dry bulk market remains exposed to impacts from severe global economic recession this year. Initial projections for 2021 suggest a rebound in dry bulk time-mile trade growth of about 5.5%, with fleet growth of just 1.3%. Turning to the new building order book, according to Clarkson, as of July this year, there were 686 bulk carriers on order, with a total of 66.9 million deadweight. This represents 7.4% of the total fleet. Within these figures are 153 case and larger vessels of 34.5 million dead weight, representing 9.7% of the existing fleet. Also included are 195 Panamax and post-Panamax vessels of 16.2 million dead weight, representing 7.2% of the existing fleet. Most of these ships will be delivered during this year and in 2021. From 2022 onwards, the order book is very light, with only 5.3 million deadweight of capes and 1.5 million deadweight of Panamaxes and post-Panamaxes scheduled for delivery as of today. As expected, ordering of all types of Valkyria vessels went down during the first half of this year, quite dramatically. For capes, orders were down 63% year-on-year, and for Panamaxes and post-Panamaxes by about 87%. No doubt it bodes well for supply 18 months down the road from now. As for asset prices, according to Clarkson, the both new building and secondhand prices have been going down this year. Cape size and Panamax new building prices have come down by about 7%. 10 and 15 year old vessels have seen their prices drop by even more. Turning to the main commodities and starting with iron ore, The iron ore seaborne trade is expected to remain steady at about 1.45 billion metric tons this year, while for next year, Claxton's forecast growth of 1%, an increase of around 20 million tons for the year compared to 2020. Chinese imports are expected to grow by 3% to 4% and reach 1.086 billion tons. million tons this year, while imports from all other importing nations are expected to drop by a total of 10% this year. These projections assume that Chinese demand will be sufficient to absorb about 40 million tons, possibly more, of cargoes redirected from other destinations. If these projections materialize, China could once again shield the iron ore trade from the worst impact of COVID-19. Total steel output in China between January and May this year came to 411 million tons, which was 1.7% up compared to the same period in 2019. It is worth noting, though, that as Bremer points out, despite steel production being strong in June, there has been a small uptick in Chinese iron ore inventories following a sustained drawdown that began at the end of the first quarter. It could therefore be argued that iron ore imports have finally caught up with demand from steel mills and shipments are being used to replenish stocks. As for coking coal, according to Clarkson, total coking coal exports are anticipated to drop 10% this year and increase by 8% in 2021 and reach 264 million tonnes. Obviously, these projections are very much dependent on how the global economy will recover from the COVID-19 pandemic. On thermal coal, Clarksons predict total exports of thermal coal to drop by 7% this year and increase by 4% in 2021 to reach 983 million tonnes. These figures are reflected in the Indonesian coal exports, where this year exports are predicted dropped by 7%, mainly due to the drop in demand from India. Coal stockpiles at the important Qinghandao port were down in July by 14% compared to the same time last year, and the three major coastal coal plants in China had 8 million tons less coal stocked away compared to this time last year. This translates to about 6% year on year. So, from the point of view of stocks, there is room for increased shipment to China. According to Bankero Costa, total thermal coal and lignite imports to China between January and May 2020 were 133.7 million tons. This was 36.8% higher than during the same period in 2019. Turning to grain imports. Shipments of grain products during 2020 grain season are expected to increase by 4% this year and by further 3% in 2021 grain season. If these increases materialize, then total grain imports will reach 508 million tons next year. According to Clausen's, assuming the US-China trade relations remain constructive, Chinese soybean imports this year could be on track to reach 95.1 million tons which was a record last seen in 2017. However, recent deterioration in the U.S.-China diplomatic relations is not very encouraging. Looking at the minor bulk trade, we mentioned the Clarkson's projections on seaborne trade of other agricultural products, minerals, as well as products like cement, salt, pet coke, fertilizers, and sulfur. because large fluctuations in their demand influence the Panamax trade. Mineral bulk trade is one of the parts of the dry bulk trade most exposed to the economic fallout of the COVID-19 pandemic. Clarkson predicts that this trade would shrink 7% this year and expand by 8% in 2021. A short comment on scrubbers now. According to Clarkson, as of early June this year, there were about 30 vessels of about 4.3 million deadweight or half percent of fleet capacity undergoing retrofit work compared to 116 vessels doing the same thing at the start of the year. The reasons for this decline are not entirely clear, however. It could be argued that the drop was due to yard closures and survey delays because of the effects of the pandemic. Alternatively, it might be the case that we are reaching the tail end of this retrofit exercise as price differentials come down between high and low sulfur fuel. Owners are reassessing their decisions as to whether or not to go ahead with plans to fit scrubbers to their vessels. This price differential has been hovering between $60 and $70 per ton recently, and there is no good reason for this to increase in the near future unless bunker prices increase significantly. For a modern large balker, Cape or Newcastle max, consuming about 36 tons per day and spending an average of about 250 days per year at sea, the saving, assuming the owner receives 100% zero, will be about $585,000 per annum. Assuming the cost of the scrubber and the lost earnings to fit it are in the region of 3.5 million for such a ship, It is easy to see that it will take about six years for the owner to receive his money back from this investment. This calculation does not include possible profits from any bunker hedging contract. However, nor does it include the technical problems an owner may encounter over that period, the fact that it is highly unlikely that a charterer will give the entire huge savings to the owner, and most importantly, But after six years, the ship will carry a piece of machinery which in all likelihood will be technically and commercially obsolete, and not such of zero residual value. By extrapolation, we can easily understand that in the case of a scrubber being fitted in a smaller ship, such as a Panamax or a Kamsar Max Valkyr, consuming only about 25 tons per day, the scrubber would make the money invested in buying and fitting it in about eight years, as long as such low-cost differential prevailed. According to Clarkson, the time chart for daily earnings differential for a cake between a scrubber-fitted chip and one without stood at around 1,950 per day in late June. For Panamaxes, the difference in earnings was about $900 per day. Turning to scrapping, in the Panamax and Old Panamax size range, 9% of the trading fleet is over 20 years old, and 12% is between 15 and 19 years old. Not surprisingly, the classic Panamaxes in this size range are by far the oldest ships in the sector. About half the fleet is over 15 years old. According to Breymar, 36 capes exited the trading fleet during the first half of the year, bringing fleet growth of the sector so far this year to only 1.5%. Most of these vessels going for scrap were converted ore carriers. There were also 19 standard capes which were scrapped during the same period. According to Clarkson, during the entire year 2020, about 33.4 million deadweight worth of bulk carrier capacity might be scrapped. In 2019, not more than 20 million deadweight headed for the scrapyards. Finally, the outlook. According to Commodore research, The current strength in the Cape-sized market could be reversed if countries like Brazil and India face even larger problems due to the pandemic, resulting, for example, in the disruption of mining operations in Brazil. Commodore Research are bullish on the entire dry bulk carrier market, and particularly the Capes, at least for the rest of the year and early next year. They stress that the greatest risk to this bullish scenario is what we have been stressing all along, which is the development of the coronavirus pandemic. The United States, Brazil, and India remain the nations reporting the largest number of new daily coronavirus cases. This will have to change if the optimistic scenario about the bulk market is to materialize. Therefore, while forecasting shipping rates has always been difficult, the prevailing circumstances make it near impossible. Without the COVID-19 resurgence, the bulk carrier market should steadily increase through the rest of the year and into next year, supported by strong iron ore and grain shipment. Support should also come longer term from the greatly reduced ordering, which we have been witnessing over the last few quarters, and which is expected to continue into 2021. Sentiment will, as usual, play its important role here. The greater the pessimism in the market is stronger and longer the recovery will be. If optimism suddenly returns, then the recovery we are hoping for will come, but will not last longer than the time it takes for the fresh batch of new buildings to hit the water. So the Diana management team will take advantage of these conditions by continuing to sell older tummage and applying the process to, one, buy back company shares which are trading at a substantial discount to NAV, B, reducing debt, or C, keeping the cash in reserve to face a possible period of weak earnings. When rates recover, SHIFT values will go up with earnings together with share prices. Then we will have to shift gear and consider again dividends and prudent equity raising. I will now pass the call over to our CFO, Ioannou Zafiratis, who will provide us with the financial highlights of the second quarter and first half of this year. Thank you.

Good morning, everyone. I'm pleased to be discussing today with you the Diana operational results for the second quarter of the six months ended 2030 for 2020. During that quarter, we recorded a net loss attributed to common stockholders of $12.2 million, or 14 cents per share. which includes 2.6 million impairment loss. As you know, in 2019, we sold six of our vessels and another one in the first quarter of 2020. That has, as an effect, a decrease in the operating days for this quarter, as it was only 3,731 compared to 4,179 for the same quarter in 2019. Less ownership days together with the deteriorated market conditions has led to lower revenues, i.e. $41 million compared to $55 million, 55.4 to be exact, in the second quarter of 2019. As regards the voyage expenses, we had $3.8 million for this quarter compared to 3 million the same quarter in 2019. And this was mainly due to a loss that we had from bankers. That was $1.6 million compared to basically zero, some more loss of 67,000 last year. That combination of decreased revenues and increased voyage expenses has resulted also to having a lower time charter equivalent rate, which was 10,593 compared to 12,717 for the same quarter of 2019. The fleet utilization rate, it was more or less the same as in 2019 for the same period. 98.3% compared to 9.4%. During the quarter that we are discussing now, our vessels operating expenses decreased to 2.8 million compared to 22.9 million. Basically, we had, again, the lower number of vessels. And because we are talking about lower number of vessels, the daily operating expenses increased to $5,577 compared to $5,478 for the same quarter of 2019 per vessel. The interest and finance costs, we continue to have them decreased, and basically also because of the decreased interest rates, the number now was $5.7 million compared to $7.8 million for the same period in 2019. Now, for the six-month end of June 30, 2020, the net loss attributed to common stockholders amounted to $116.5 million, or $1.35 per share. And that includes, of course, a big impairment loss of $95.7 million. and also 1.1 million loss from the sale of a vessel. The time charter revenues for the first half of 2020 decreased to 84.7 million compared to 115.7 million last year for the same reasons that we explained that had affected the quarter. The time charter equivalent rate decreased to 10.986 compared to $13,092 last year. The fleet utilization for the half of the year decreased to 97.3% compared to 99% in 2019. And of course, you understand that this was mainly to increase and extend the delays during the COVID-19 in the first quarter of this year. Vessel operating expenses amounted to $42.1 million compared to $45.3 million in 2019. Again, that reflects the decrease in ownership days, and it was offset, though, by the increased operating expenses in all categories except the crew costs. Daily operating expenses in 2020 were $5,593 compared to $5,324 for the year 2019, representing a 5% increase for the half of the year. Interest and... Finance costs amounted to $12 million compared to $15.5 million for half of the year. Now, thank you for your attention. We would be pleased to respond to your questions. I return now the call to the operator who will instruct you as to the procedure for asking questions.

Thank you. Ladies and gentlemen, we will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Randy Givians with Jefferies. Please proceed with your question.

Howdy, Simeon. Welcome back. How are you feeling?

Thank you very much. I feel very well indeed. Thank you. All right. For sure.

Glad to hear it. All right, so I guess first question, you know, a few weeks ago, you repurchased $8 million of the unsecured notes. What was the price of that, and how much in cash, I guess, did you spend on that purchase, and is that the kind of first piece of cash going forward?

Can you repeat your question, please? Can you speak a little bit louder, please? Yes.

Sure. A few weeks ago, you repurchased $8 million of your unsecured notes. Yes, yes. So I'm curious what the price was and how much in cash.

94 cents to the dollar.

94 cents. Okay. And are additional repurchases of these unsecured notes kind of the first use of free cash going forward?

Yes. You see, that poses as an attractive opportunity for us. We don't want to overdo it. Every day we are considering our defensive way of tackling the situation today. And the attraction that we saw when we bought back the 8 million worth of share, it was the big saving in interest costs and also the gain from buying shares the bond a bit cheaper than previously, than it was issued. So for us, yes, you are right. There is the opportunity to buy back the bond. Of course, it has to be at a discount if we want to do it.

Sure. And then, you know, with that, and I guess more so the recent financings and refinancings, What is your new debt amount for the fourth quarter 2020 or 2021 for the full year?

So if you look at what we have done, we have changed basically the loan maturities. And let me find... Hold on. Sure. So... Do you want a per quarter? Yes, if you have, that's great. Okay, okay, okay. For Q3 2020, we have basically, as a subsequent event, the bond purchase and the repayment of the Arethusa loan. But going forward, Q4, Q1, Q4 2020, Q1 2021, Q2, sorry, okay. Let me, installments, hold on. Yes. Q4 2020, Q1 2021, Q2 2021, Q3 2021, zero loan repayment. And even for the 15-month period going forward, we have zero repayment. We have, of course, the installments that we need to pay, amounting for a 12-month period at around $40 million, including another 9.273 for Q3 2020. We have done a very good job there. Yes, for sure.

Two more quick questions. One on the delivery. That delivery is happening. I need to work on my screen here. The delivery is happening this summer. What are you doing with those proceeds in addition to the debt retainment, kind of the additional proceeds? And any other plans for additional vessel sales this summer? How is that kind of secondhand S&P market trending now that we saw a pretty strong move in rates over the last month and a half?

Okay. Again, Yannis speaking here. Yep. The proceeds from Arethusa is not going to be a lot of money. Most of it is going to the repayment of the existing debts. but the option to sell more vessels is still there. And as Stacy said in his remarks, selling vessels, probably the use of proceeds is going to be either keeping the money or reducing mainly the bond or buying back our stock in case we find this as an attractive opportunity based on the... the pricing of our shares. I know that you see the market that has picked up and we saw some good rates, but we don't want to get excited about that. We still think that a company like ours that respects 100% the money of our shareholders needs to be on a defensive stage rather than anything else.

Yep. No, that's fair. And then I guess one quick modeling question on the expense side. It looks like G&A fell pretty materially from the first quarter to the second quarter. However, depreciation actually increased from 1Q to 2Q. So can you discuss those two line items and what's a good run rate to use going forward? Sure.

As you have seen, we had increased dry docking expenses, and that has led to dry dock increased depreciation number as a result of dry dock amortization. We spent money on the vessels, and that has created a greater book value for the vessels that need to be depreciated. We are talking about a... Sure, sure.

And then on the GNA side?

On the GNA side, it is true that we are trying to reduce our GNAs, but mainly, as you saw, the GNAs were really a large number previous quarter. It had to do with compensation on two of the of the directors that they left the company, they had to get their vested, their unvested shares, and that's why you show the big number.

Got it. Okay, so the current level is a good run rate. Is that fair? Sorry, come again? So the current level...

The current level is going to be, yes, the current level is the one that you should be expecting.

All right, well, that's enough time for me, so thanks so much. Okay.

Thank you. Thank you. Our next question comes from the line of Omar Nocta with Clarkson's Plateau. Please proceed with your question.

Hi, thank you. Good afternoon, guys, and also, Simon, nice to have you back.

Thank you. Thank you very much indeed. Thank you.

Yeah. You know, I wanted to just follow up a couple of items, maybe just the first thing. Stacey on the call mentioned the potential of selling ships in the future with the proceeds being used for, you know, A, buying back stock, you know, B, paying down debt, and C, keeping in reserve. Is that an order of preference or is that just a listing of the options?

No. No. That's just listing. Let me put it in the right order. Keeping the money, buying back debt, and buying back stock after.

Okay, yeah, so reverse order. Yes. Okay. And then, you know, following up on what Randy was asking on the debt repayment schedule, clearly between the BNP, the Avian Amro, the Nordea loans, you guys have You pushed out a lot of maturities. And so just wanted to make sure I had the numbers right. You know, in addition to the bonds that were repaid, the 8 million plus the Erethusa proceeds, if we exclude those, basically it's between 9 and 10 million a quarter of amortization over the next 12 to 15 months.

That is exactly right. We are talking about 10.8 to 9.2, 10.8, yes.

Okay. And then for, I guess for 2021 as a whole, I don't want to get, sorry to get too much into the numbers, but I think we came into this year with basically $140 million due, something along those lines for 2021. And as we look at it now, basically we've gone from 140 to just basically 40. Is that kind of the- To around 57, to around 57 million.

That's a good job, eh?

That was good work. I mean, in three months' time, right? It's the last call. Thank you. Okay, well, I'll leave it there.

I appreciate it. Thank you. And the main idea behind that, why I mentioned that we have done a very good job here, is because we didn't decrease our cash position because you could have just repaid or because we see everything around. We have managed to improve this position materially without spending any money.

Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question at this time, please press star 1 on our telephone keypad. Our next question comes from the line of Ben Nolan with Stifel. Please proceed with your question.

Good morning or afternoon. I think that refinancing is – of the questions here, and that's sort of where mine lies as well. Obviously, you said good job getting the refinancing done, and I'm sure having the cash on the balance sheet that you do really enables that. I was curious if maybe you could talk through the state of, well, certainly, obviously, your company's ability to be able to do that, but the market in general. Has there been any change in the way that banks are approaching or making capital available or refinancing available, given kind of the uncertainty that we see?

I can say that the banks that we talked to, I have seen no change in the way they're looking at things. And they were, I would say, surprised when we approached them in order to implement our strategy as regards to refinancing. Their first reaction is, but why do you want to do that? Or are you prepared to pay 50 basis points more in order to do that? And they didn't understand. So for me, that shows that they do not worry a lot about what's happening.

Yeah. Well, again, I'm sure having as much cash on the balance sheet as you do sort of puts you in a much better position to have those conversations than many of the other people in the world. But that sort of leads to the next question. I mean, obviously, even for you guys, generating $5 million of cash flow this particular quarter, hopefully it will be better going forward. But you have contracted cash flows. You have a lot of debt or a lot of cash on the balance sheet aren't too levered. not all companies or most companies, I would think, are probably not in that similar position. If the market doesn't get better, can you maybe prognosticate as to sort of how things could shake out? And is this ultimately just sort of preserving cash because you think there might be an opportunity to buy assets more cheaply?

you understand that if we have assets being cheaper than what it is today, it would be probably because of deteriorating market conditions. So having even deteriorated market conditions, our defensive play still has to be there. And I don't see the scenario where the market deteriorates and we are spending or we are making our balance sheet worse or than what it is today. No, this is not a scenario that... The scenario that we see happening is eventually the market picking up and Diana Shipping Inc. makes a lot of money on the previously invested money in the cycle in the years 2014 till 2018 purchases.

Okay, I got you. Now that's helpful. But irrespective of sort of your capital deployment and where you're spending money, I mean, given the fact that you are taking a more defensive stance, is this sort of a, do you think that there's a legitimate chance that things could get substantively worse in the industry?

Listen, as we have said publicly many times, we are talking about an event that has shattered the entire world. We are talking about most of the economies of the world, if not all of them, having big issues in their GDP growth. So this is a kind of event that should make everyone worry about what is going to happen in the future as regards the demand for carrying goods by sea. Certainly, I know that you are talking to other companies that are having a lot of wishful thinking and they're saying, yes, but we're going to be having stimulus packages that are going to make this demand better than what it is today or not as low as someone may expect. But having said that, this is a scenario that we will welcome, but it's not for us the most probable scenario. Of course, The good thing about what is happening today is that supply has been kept in very low numbers, and of course this will help. Having said all of these things, what we are saying here is that the overreaction in what is happening is going to lead the market where it's going to go. So if people are really scared about the future, then we would take the position that the market may be better. But at the moment, they are keeping a neutral position or neutral to positive. And we don't like that.

Right. Now, I'm on the same page as you, just curious how you were thinking about things. So I appreciate the color.

Thank you, Ben. Thank you.

Thank you. It appears we have no additional questions at this time, so I'd like to pass the floor back over to management for any concluding remarks.

Thank you again for your interest in support of Diana Shipping, Inc. We look forward to speak with you in the future. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.