ATHENS - Diana Shipping Inc . (NYSE:DSX), a global shipping company specializing in dry bulk vessels, has announced a new time charter contract with Cargill Ocean Transportation for one of its Ultramax dry bulk vessels, the m/v DSI Pegasus. The charter, which is set to commence on Monday, will run until at least June 1, 2025, with the possibility of extending to August 1, 2025.
The gross charter rate for the DSI Pegasus is set at $15,250 per day, with a 4.75% commission deducted for third-party payments. This rate represents an increase from the vessel's current charter with Reachy Shipping (SGP) Pte. Ltd., which is at $14,000 per day, minus a 5.00% commission to third parties. The DSI Pegasus, a 60,508 dwt Ultramax dry bulk vessel built in 2015, is expected to generate approximately $4.09 million in gross revenue for the minimum scheduled period of the time charter.
Following the sale of the m/v Houston, Diana Shipping's fleet will consist of 38 dry bulk vessels, which include a variety of sizes from Newcastlemax to Ultramax. Additionally, the company anticipates the delivery of two methanol dual fuel new-building Kamsarmax dry bulk vessels in the second half of 2027 and the first half of 2028, respectively.
Diana Shipping's fleet currently has a combined carrying capacity of around 4.4 million dwt, with an average age of 11.07 years. The company's vessels primarily serve short to medium-term time charters, transporting a range of dry bulk cargoes such as iron ore, coal, grain, and other materials across global shipping routes.
The information provided is based on a press release statement, which also includes a cautionary note on forward-looking statements, reminding investors of the uncertainties inherent in such predictions. Diana Shipping has not provided any further details on the financial implications of the new charter beyond the expected revenue generation.
In other recent news, Diana Shipping Inc. has secured a new charter with Nippon Yusen Kabushiki Kaisha for its Capesize dry bulk vessel at a significant increase from the previous rate, projected to generate roughly $18.49 million in gross revenue. Concurrently, a time charter contract with Paralos Shipping Pte. Ltd. for the Kamsarmax dry bulk vessel is expected to generate approximately $4.58 million. These recent developments are part of the company's strategic approach to navigate the dynamic shipping industry.
Despite a 7% decrease in average time charter rates for Capesize vessels in the second quarter of 2024, Diana Shipping reported increases of 6% and 16% in Panamax and Supramax rates respectively, with fleet utilization peaking at an impressive 99.5%. The company also declared a quarterly cash dividend of $7.05 per share.
Looking ahead, Diana Shipping anticipates the delivery of two methanol dual-fuel new-building Kamsarmax dry bulk vessels in the second half of 2027 and the first half of 2028. The company remains focused on ESG initiatives, with secured revenue for a significant portion of its available ownership days in 2024 and 2025. This reflects Diana Shipping's commitment to financial health and shareholder value in the face of market shifts.
InvestingPro Insights
Diana Shipping Inc. (NYSE:DSX) has recently secured a new charter contract that promises to bolster its revenue stream. As investors look closely at the company's financial health and future prospects, certain data points and expert analysis from InvestingPro become particularly pertinent. The company's market capitalization stands at $287.52 million, reflecting the current market valuation of its equity. Moreover, Diana Shipping boasts a gross profit margin of 58.63% for the last twelve months as of Q2 2024, underscoring its ability to manage costs effectively and maintain profitability on its operations.
Investors seeking income-generating investments might find Diana Shipping's dividend yield of 12.35% particularly attractive, especially considering the company's commitment to returning value to shareholders. This aligns with one of the InvestingPro Tips highlighting the company's significant dividend payouts. Additionally, despite analysts expecting a sales decline in the current year, another InvestingPro Tip indicates that Diana Shipping is anticipated to remain profitable this year, which is a testament to its operational resilience.
While Diana Shipping is trading near its 52-week low, the company's P/E ratio of 25.26 suggests that investors are paying a premium for its earnings compared to the industry average. This could be indicative of the market's confidence in the company's future earnings potential. For those interested in further insights and tips, InvestingPro offers additional guidance on Diana Shipping, which can be found at InvestingPro, including a total of 7 tips that provide deeper analysis into the company's financials and market position.
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