Diana Shipping Inc.

Greetings, and welcome to the Diana Shipping, Incorporated 2024 fourth quarter conference call and webcast. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Edward Neb of Investor Relations. Thank you. You may begin.

Thank you, Daryl, and thanks to everyone who is joining us today for the Diana Shipping, Inc. 2024 fourth quarter and year-end conference call. With us today, leading the management team is Sameeramit Pallu, Chief Executive Officer, who will introduce the other members of the management team. And so without further delay, I will turn the call over to Ms. Pallu.

Thank you, Ed. Good morning, ladies and gentlemen, and welcome to Diana Shipping, Inc. fourth quarter and end of the year 2024 financial results conference call. It's a pleasure to address you today alongside our esteemed team, Mr. Stacey Margaroni, Director and President, Mr. Ioannis Athirakis, Director, Co-Chief Financial Officer and Chief Strategy Officer, Mr. Laceris Papatriffon, Director, and Ms. Maria Dede, Co-Chief Financial Officer. Before we begin, I kindly remind you to review the forward-looking statements on page four of the accompanying investor presentation. The Q4 2024 performance. It has been another record year for dry bulk volumes through 2024, and earnings have averaged well over that seen in 2023. But it was a year of two halves in terms of rates, with a very strong first six months followed by somewhat softer conditions through the back end of the year. Trade disruption played a key part in boosting ton-mile demand, especially as Panama Canal transit slots were cut due to drought conditions, leading to rerouting. This was further exacerbated by Huthi attacks on ships in the Gulf of Aden, which have been subsequently led to a 40% reduction in bulk of transit and even more rerouting. Towards the end of 2024, shipment volumes remained high, but fleet efficiency gains began to weigh on Cape size and Panama's earnings. Meanwhile, the near normalization of the Panama Canal and more basin-bound trade kept limits on ton-mile growth. Having said that, the forward curve has remained in steep contangle for all sizes, and we have managed to charter our vessels for periods at significant premiums over the spot market. Journey 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 38 dry-bulk vessels, seven of which are mortgage-free. Our fleet has an average age of 11.4 years and a total deadweight capacity of approximately 4.2 million tons. We anticipate the delivery of two -dual-fuel new building Camp Sarmat dry-bulk vessels at the end of 2027 and early 2028, respectively. Fleet utilization reached .7% for the fiscal year 2024, highlighting our effective vessel management strategy. As of the end of the fourth quarter, we employed 981 individuals at sea and ashore. Financially, our net debt stands at 40% of market value, supported by $207 million in cash reserves and total secured revenues of approximately $155 million as of February 19th. On slide six, we outlined the key developments from the fourth quarter through February. In October, we signed a term loan facility with Danish Ship Finance, secured by seven vessels, drawing $80.2 million to refinance the existing term loan facility. This refinancing released two previously financed vessels. In October, we successfully completed the approval and publication of the company's prospectus for the bond listing on the Oslo Exchange. In November, we completed a $25 million US dollar tap issue under our outstanding senior unsecured bond due July 2029, issued at 102% of par value with a sixth coupon in July. The total of $25 million of $8.75. In November, we released our 2023 ESG report, the fifth in a row, underscoring our ESG strategy and commitment to sustainability. In December, we repurchased ,442,645 common shares at the price of $2 per share. As of February 19th, we have raised $25.6 million US dollars through the exercise of ,394,709 warrants under our ongoing warrants program, with the potential to raise an additional $65 million US dollars under the full scope of the program. As of February 19th, we have secured revenues for 63% of the remaining ownership days of February 19th, 2025, amounting to approximately $125 million US dollars, and 10% of available ownership days in 2026, amounting to approximately $30 million US dollars. Maria will provide further details on our cash flow generation potential. In February, we announced the sale of Motovetel Alcmene for a purchase price of approximately $11.9 million US dollars before commission. She is expected to be delivered to her new owners latest by March 7th, 2025. For the fourth quarter, we are pleased to declare a quarterly cash dividend of one cent per common share, totaling approximately $1.1 million US dollars. On slide 7, summarizing our recent chartering activity, since our last earnings presentation, we have secured favorable time charters for nine vessels, two ultramax vessels at a weighted average daily rate of $12,952 US dollars for 228 days, seven PanaMax, Camtamax and post-PanaMax vessels at a weighted average daily rate of $11,260 US dollars for 252 days, and four Cape Tide vessels at a weighted average daily rate of $18,312 US dollars for 264 days. Slide 8 highlights our discipline chartering strategy. We focus on standard medium to long term charters to avoid clustered maturities, ensuring earning visibility and resilience against market downturns. Now I'll pass the floor to Maria for a more detailed financial analysis.

Thank you, Samia. Going to slide 9, on the financial highlights for the fourth quarter of 2024, our revenue stood at $57.1 million compared to $60 million in the same quarter of last year, a decrease of about 5%. Our adjusted debit down was $25.9 million compared to $27.1 million in the fourth quarter of 2023, a decrease of $1.2 million. Regarding our net income, this increased compared to the same quarter of last year to $9.7 million in 2023, an increase that is mainly attributable to decreased interest expense as a result of a combination of decreased average debt and decreased interest rates, and increased gain from non-operating activities in the fourth quarter of 2024 compared to the same quarter in 2023. Earnings per common share diluted, however, was $1.2 million compared to $0.02 in the fourth quarter of 2024 compared to $0.06 in the same quarter of 2023. The decrease in the diluted earnings per share was due to the increased average number of shares and also the adjustments of net income to calculate this number, including not only the preferred dividends paid to preferred shareholders, but also the gain on warrants which in the fourth quarter of 2024 was $5.5 million compared to only $1.6 million in the fourth quarter of 2023. On the balance sheet side, we ended the year with a cash of $207.2 million compared to $161.6 million as of December 31, 2023, comprised of cash and cash equivalents, time deposits maturing in periods above three months which are excluded from cash and cash equivalents, and restricted cash serving as compensating cash balance to secure our loan facilities. Long-term debt and finance liabilities net of deferred financing costs comprising of a mix of variable and fixed rate indebtedness which includes secured debt and unsecured bond and foresale and leaseback agreements was $637.5 million as of December 31, 2024 compared to $642.8 million as of December 31, 2023, a decrease of around 1%. At this point, we would like to remind you that during 2023 and 2024, we refinanced all our debt agreements and bonds to push back debt and bond maturities and also decrease loan margins. Going to slide 10, we talked about our revenues for the quarter earlier in the previous slide. Now mortgage expenses increased marginally compared to the same quarter last year due to increased loss on bankers compared to 2023. On the other hand, vessel operating expenses decreased in absolute numbers due to the sale of two vessels during the year but also due to savings achieved in the fourth quarter of 2024 which can be evident by the decrease of the daily operating expense achieved for the fourth quarter of 2024 being $5496 compared to $5745 in 2023. Our time starter equivalent for the fourth quarter was also increased to $15,589 compared to $15,162 in the fourth quarter of 2023. Flip utilization was the same for both comparative quarters at a strong rate of 99.7%. Going to the next slide, number 11, our revenues for the year were $228.2 million compared to $262.1 million last year, a decrease which was the outcome of decreased average rates achieved during the year and decreased average number of vessels. That being said, our time starter equivalent for 2024 was $15,267 compared to $16,713 in 2023. Net income was $12.7 million compared to $49.8 million in 2023, a decrease that was affected by decreased revenues and losses derived from the valuation of our investments compared to gains in 2023. Going to the next slide, number 12, you can see the outcome of our debt refinancing mentioned earlier through which we managed to have steady debt repayments until 2029 and a steadily amortized debt until 2032. Going to the next slide, as of December 31, 2024, our breakeven rate was $16,314 per day. As Emilio mentioned earlier, our contracted revenues for the remainder of 2025 were $124.8 million and for 2026, $30 million. Having calculated the revenues for the unfixed days of 2025 and 2026 at the FFA rates presented in this slide, we estimated that for 2025 we will be at or around breakeven. Going to the next slide, slide 14, we present to you our dividend payout since the third quarter of 2021 when we distributed our first cash dividend since 2008, which has rewarded our shareholders with quarterly distributions of both cash and shares consistent with this payout. We have declared another dividend of one cent per share, increasing our cumulative dividend pay since 2021 to $2.66 per common share. And with this, I will send the call to Stacey who will continue with the drive-back market over.

Thank you, Maria, and a further warm welcome to the participants of this quarterly and annual earnings call of the Anna Shipping Inc. A quick look at the market and an update on it. The drive-back market has become increasingly volatile and the erratic paper market helps to increase this instability. As evidence of this trend, we cite the highs and lows of the drive-back market over the last 12 months or so. The Bollock Dry Index hit a high of 2,419 in March last year and at the end of January of this year stood at only 715. 12-month time-charter rates for capes reached a high of $35,000 a day in March 24 for a scrubber fitted ship and in January of last year had dropped to $18,000 per day. For camsha maxes, the high was $21,000 per day in March of last year and the low was reached in December of last year of $11,250 per day. For ultramaxes, the figures were $19,500 per day in February 2024, dropping to $12,500 per day in December of last year. For the time being, Arrow Shipping and Energy have identified a sharp drop during the second half of 2024 in grain shipments as well as coal shipments. As these trades account for nearly 80% of Anamax shipments, it is no surprise that earnings dropped so much over the last two quarters. At least grain shipments are expected to increase over the next few quarters while the future trend of coal shipments is much less certain. Looking now at macroeconomic development, market performance depends very much on world GDP growth and on the positive side, it is encouraging to note that a record small number of countries are expected to be in recession in 2025 and 2026. The latest projections for growth of the major world economies provided by the IMF are shown in this slide. China's growth this year is expected to come in at around 4.6%. For the US, the projections are .7% for this year and .1% in 2026, while for Europe, the projections are 1% for this year and .4% in 2026. World growth is anticipated to grow by .3% both this year and next. The major bright spot remains India with anticipated growth being forecast at .5% for the next two years. According to Optima Shipping Services, a looser monetary policy in China is expected to provide support to the dry bulk trade later this year, particularly in commodities tied to domestic infrastructure and industrial demand. A brief look at commodities now. Steel output in China has dropped so far by 1% year on year. Global steel production is projected to have dropped by .7% in 2024 as compared to 2023 to 1.835 billion tons. The largest increases were seen in Vietnam, Brazil, India and Turkey, while largest production drops during last year were seen in Mexico, Russia and South Korea. Grain shipments are expected to grow by about 2% during 2025 grain season after showing good performance of 3% in 2024. Shipments in 2026 are expected to grow by 3% even though much will depend on the war in Ukraine. Clarksons expect thermal coal shipments to drop by 2% this year to 1.027 billion tons and by a further 2% in 2026. However, eventually demand might grow as China and other emerging economies in the Asia Pacific region still depend heavily on coal for power supply for which demand is increasing rapidly. Iron ore shipments, which are expected by analysts to remain steady this year and drop by 1% in 2026, are being disrupted by cyclones affecting major loading ports in Australia such as Port Hedland, Dampier and Port Walker where congestion now is beginning to build up. Demand growth in the minor bulk trade will be the main positive factor in 2025 and are anticipated to increase by 3% to 2.3 billion tons. Increased shipments of bauxite and aluminum will remain in the cornerstone of the minor bulk trade supporting global economic recovery and the energy transition in 2025 and beyond. The share of capes in the bauxite trade has increased to just over 20% of total shipments. Total bauxite shipments in 2024 are estimated by Clarksons to come in at 162.4 million tons which will represent 15% year on year increase. Turning to demand, now analysts expect global demand for dry bulk shipping to grow by about 1% this year with supply anticipated to increase by about 3% year on year leading to an overall softer fundamental balance in the sector. However, several factors such as slower speed, greater off-hire time due to special surveys and fitting energy saving improvement could help reduce this discrepancy. Looking ahead to 2026, bulk carrier earnings are anticipated to be modest with fleet growth expected to be approximately .6% and demand expected to increase around 1% in ton mile. So in 2026, a decrease in fleet growth is expected mostly attributed to an increase in demolition to about 14 million deadweight tons and limited new building delivery. 2026 might be a year of slightly better bulk carrier earnings than in 2025 but it is far too early to make any focus. Moving to the next slide covering fleet development, the new building or the book is about 109.3 million deadweight or .6% of the existing fleet. Panamaxes, Kamsher maxes in particular are the most broadly ordered size at 36.6 million deadweight on order representing nearly 14% of the existing fleet. As Clarkson's point out, the fueling transition remained in focus in 2024 with a record volume of alternative fuel capable tonnage contracted about 62 million deadweight or around 50% of the total. However, the alternative fuel readiness of this tonnage differs greatly from ship to ship, most being prepared with minimum present cost to receive some sort of alternative fuel down the road at which time much larger outlays will be required for the necessary modification. According to statistics prepared by Braymar, the Cape Side fleet is expected to grow by about 5 million tons this year and by about 6 million deadweight tons in 2026. For Kamsher maxes and Panamaxes, the figures are 9 million for this year and 14 in 2026. The Ultramaxes are expected to grow in tonnage by 10 million deadweight in 2025 and by 7 million in 2026. All figures given above are nets of expected deletions from the fleet. Talking of deletions, demolitions are expected by Clarkson's to reach 9.2 million deadweight this year and about 14.7 next year. Since age is one of the factors affecting the decision to scrap vessels together with sentiment and the state of the freight market of course, it is worth noting that according to Clarkson's 24% of Handimax Superamax tonnage is over 15 years old as well as 26% of Panamaxes and 17% of Cape. Congestion has been gradually dropping since 2021 that's boosting the supply of available tonnage. BIMCO expected to stabilize around current level although extreme weather conditions like that that we are facing now in Australia in the iron ore loading port could increase congestion at least temporarily. As regards asset values, new building prices have for the time being defined the trends of the freight market and remain firm across the size ranges. Capes have increased by 10% year on year at 74.5 million with Camsher Maxes at 37 million showing a .5% year on year increase. Similar increases are seen for Handimax. According to BIMCO, over the next two years second hand prices are expected to weaken together with freight rate. After peaking in July of last year they gradually returned to their early 2024 level. As an example in January a 5 year old balker would sell on average about 88% of the price of a new building. This downward trend is expected to continue over the next few quarters. Finally turning to the market outlook, overall major dry balker commodity shipments are expected to either remain steady or drop somewhat from level seen in 2024. The minor dry balk trade representing about 2.35 billion tons of shipments will play the most significant role in determining the future course of the dry balk market over the next two years or so. Modest supply growth will help in maintaining a balance between supply and demand. Nevertheless 2025 is projected to be a softer year than 2024 mainly due to a moderation in the rate of growth in demand. A major unknown factor is the effects on the dry balk market of possible tariffs on China, Mexico, Canada and other countries exports to the US by the new US administration which might disrupt primarily grain and minor balk trade. According to BIMCO rising tariffs present a considerable downside risk in the fight against inflation and to global economic growth in the near to medium term. An increase in tariffs could lead to a rise in consumer prices keeping interest rates high for a longer period than would have otherwise been the case. High interest rates could also affect supply chains which would certainly be bad for shipping in general. So the last slide provides a short summary of positive and negative influences for the dry balk market as presented by various analysts. To cite a few we continued on the positive side we have continued import growth into China and Southeast Asia. The record small number of countries expected to be in recession during this year and next. Gradually increase in congestion, looser monetary policies in China leading to potential recovery in Chinese property and infrastructure market and the commencement later this year of iron ore shipments from the Simandu in Guinea. On the negative side we have worldwide lower iron ore consumption. Protectionist measures with high tariffs leading to trade wars, balk area fleet growth outpacing demand growth except for the Cape sector, easing tensions in the Middle East with increased Red Sea transit, weather related disruptions of exports in the Australian iron ore trade, large increases in hydro power output in India and China and finally Panama Canal drought related problem resolution. On this note I will pass the call to our CEO Semiram Espaglio to provide the most important financial highlights for the last year and fourth quarter as well as some take away points from this earnings call.

Thank you Stacey. So before we conclude today's presentation I would like to highlight our ongoing ESG initiatives. So Diana Shipping is committed to promoting eco-friendly technologies and modernizing our fleet, transparently sharing emission data to ensure accountability. Diana is committed to building on partnerships and collaborations to advance our sustainability goals and is also developing an equity diversity and inclusion program while continuously investing in our people. On slide 20 in summary Diana Shipping stands on a strong foundation built on over 50 years of industry experience and 20 years on the New York Stock Exchange, a seasoned management team, adept to addressing industry challenges, strong stakeholder relationships and a disciplined strategy and approach, a solid balance sheet with a strong cash position and a counter cyclical mindset, ongoing fleet modernization efforts, a focus on rewarding our shareholders when possible and a robust ESG strategy. Thank you for joining us today. We now look forward to addressing your questions during the Q&A session.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for your questions. I'm not showing any questions at this time. I'd like to hand the call back over to management for any closing comments.

Thank you very much for joining us for Diana's fourth quarter and end of year financial results. I look forward to talking to you again in the next quarter. Thank you very much.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.