Diana Shipping Q2 net income declines 18% to US$27.7M as time charter revenues slip 6% to US$64.6M on reduced rates, increase in off-hire days

ATHENS, Greece , August 4, 2011 (press release) – Diana Shipping Inc. (NYSE:DSX - News), a global shipping company specializing in the transportation of dry bulk cargoes, today reported net income of $27.7 million for the second quarter of 2011, compared to net income of $33.9 million reported in the second quarter of 2010.

Time charter revenues were $64.6 million for the second quarter of 2011, compared to $68.7 million for the same period of 2010, mainly due to reduced average time charter rates and increase in off hire days. The decrease in time charter revenues was partly offset by revenues derived from the increase in ownership days resulting from the addition to the Company's fleet of the vessel Alcmene in November 2010.

Net income to Diana Shipping Inc. for the six months ended June 30, 2011 amounted to $60.8 million, compared to net income of $62.7 million for the same period of 2010. Time charter revenues were $134.1 million for the six months ended June 30, 2011, compared to $130.9 million for 2010.

 
Fleet Employment Profile (As of August 1, 2011)
Currently Diana's fleet is employed as follows:
 
 
Vessel              



BUILT DWT



Sister Ships*
Gross
Rate
(USD Per
Day)



Com**



Charterer

Delivery
Date to
Charterer

Redelivery
Date to
Owners***



Notes
Panamax Vessels
CORONIS C $24,000 5.00% Siba Ships Asia Pte. Ltd. 6-Apr-10 6-Mar-12 - 21-Jun-12  
2006 74,381              
ERATO C $20,500 5.00% C Transport Panamax Ltd., Isle of Man 4-Mar-10 4-Dec-11 - 4-Mar-12 1
2004 74,444              
ARETHUSA B $13,250 5.00% Cargill International S.A., Geneva 8-Jul-11 24-May-12 - 23-Aug-12  
2007 73,593              
NAIAS B $19,750 5.00% J. Aron & Company, New York 24-Sep-10 24-Aug-12 - 24-Oct-12 2
2006 73,546              
CLIO B $25,000 5.00% Daelim Corporation, Seoul 8-May-10 8-Apr-12 - 8-Jun-12  
2005 73,691              
CALIPSO B $23,000 5.00% Cargill International S.A., Geneva 4-Sep-10 20-Jul-11 3
2005 73,691   $13,750     20-Jul-11 23-Sep-11 - 28-Oct-11  
PROTEFS B $59,000 5.00% Hanjin Shipping Co. Ltd., Seoul 18-Sep-08 10-Aug-11 4,5
2004 73,630   $11,750 4,75% Cargill International S.A., Geneva 10-Aug-11 10-Jul-12 - 10-Oct-12  
THETIS B $13,750 5.00% Cargill International S.A., Geneva 23-Feb-11 23-Jan-12 - 23-Apr-12  
2004 73,583              
DIONE A $20,500 5.00% Louis Dreyfus Commodities S.A., Geneva 26-Sep-10 26-Jul-12 - 26-Nov-12  
2001 75,172              
DANAE A $12,000 5.00% Augustea Oceanbulk Maritime Limitada, Madeira 7-Apr-09 18-Apr-11 6
2001 75,106   $15,600 5.00% Hyundai Merchant Marine Co., Ltd., Seoul, South Korea 18-Apr-11 18-Mar-13 - 18-May-13  
OCEANIS A $19,750 5.00% China National Chartering Co. Ltd. (Sinochart), Beijing 17-Sep-10 17-Aug-12 - 1-Nov-12 7
2001 75,211              
TRITON A $19,500 4.75% Resource Marine Pte., Ltd, Singapore 11-Dec-10 11-Nov-13 - 11-Feb-14 8,9
2001 75,336              
ALCYON A $34,500 4.75% Cargill International S.A., Geneva 21-Feb-08 21-Nov-12 - 21-Feb-13 10
2001 75,247              
NIREFS A $21,000 5.00% Louis Dreyfus Commodities Suisse S.A. 12-Feb-10 28-Dec-11 - 27-Mar-12  
2001 75,311              
MELITE   $16,500 5.00% Cargill International S.A., Geneva 1-Feb-11 1-Jan-13 - 1-Mar-13  
2004 76,436              
 
Post-Panamax Vessels
ALCMENE   $20,250 5.00% Cargill International S.A., Geneva 20-Nov-10 5-Oct-12 - 4-Jan-13  
2010 93,193              
 
Capesize Vessels
NORFOLK   $74,750 3.75% Corus UK Limited 12-Feb-08 12-Jan-13 - 12-Mar-13  
2002 164,218              
ALIKI   $26,500 5.00% Minmetals Logistics Group Co. Ltd., Beijing 1-Mar-11 1-Feb-16 1-Apr-16  
2005 180,235              
SALT LAKE CITY   $55,800 5.00% Refined Success Limited 28-Sep-07 28-Aug-12 - 28-Oct-12  
2005 171,810              
SIDERIS GS D $30,500 5.00% BHP Billiton Marketing AG 16-Oct-10 16-Feb-13 - 16-Jun-13  
2006 174,186              
SEMIRIO D $31,000 5.00% BHP Billiton Marketing AG 15-Jun-09 13-May-11 11
2007 174,261   $17,350 5.00% Cargill International S.A., Geneva 30-May-11 15-Mar-13 - 14-Aug-13  
BOSTON D $52,000 5.00% BHP Billiton Marketing AG 13-Nov-07 28-Sep-11 - 28-Dec-11  
2007 177,828              
HOUSTON D $55,000 4.75% Shagang Shipping Co. 3-Nov-09 3-Oct-14 - 3-Jan-15 12
2009 177,729              
NEW YORK D $48,000 3.75% Nippon Yusen Kaisha, Tokyo (NYK) 3-Mar-10 3-Jan-15 - 3-May-15  
2010 177,773              
 
Vessels Under Construction
LOS ANGELES E N/A N/A N/A N/A N/A 13,14
2012 206,000              
PHILADELPHIA E N/A N/A N/A N/A N/A 13,15
2012 206,000              
               
* Each dry bulk carrier is a "sister ship", or closely similar, to other dry bulk carriers that have the same letter.
** Total commission percentage paid to third parties.
*** Charterers' optional period to redeliver the vessel to owners. Charterers have the right to add the off hire days, if any, and therefore the optional period may be extended.
 
1 Vessel off-hire for drydocking.
2 Vessel off-hire for drydocking from April 29, 2011 to May 17, 2011.
3 Period extended for one (1) or two (2) laden legs in charterers' option at US$ 13,750 per day.
4 Hanjin Shipping Co. Ltd., has agreed to compensate the Owners for the difference between the new rate and the previous rate for the period from the expected date of August 10, 2011 to August 18, 2011.
5 Based on latest information received from charterers.
6 Augustea Oceanbulk Maritime Limitada, Madeira is a guaranteed nominee of Augustea Atlantica Srl, Naples.
7 Vessel off-hire for drydocking from June 5, 2011 to June 23, 2011.
8 Vessel off-hire for repairs from June 6, 2011 to July 1, 2011.
9 Resource Marine Pte., Ltd, Singapore is a guaranteed nominee of Macquarie Bank Limited.
10 Vessel off-hire for drydocking from May 18, 2011 to June 1, 2011.
11 Vessel off-hire for drydocking from May 13, 2011 to May 30, 2011.
12 Shagang Shipping Co. is a guaranteed nominee of the Jiangsu Shagang Shipping Group Co.
13 Year of delivery and dwt are based on shipbuilding contracts.
14 This newbuilding is also referred to as Hull H1234.
15 This newbuilding is also referred to as Hull H1235.
         
Summary of Selected Financial & Other Data        
  For the three months ended June 30, For the six months ended June 30,
  2011 2010 2011 2010
  (unaudited) (unaudited) (unaudited) (unaudited)
INCOME STATEMENT DATA (in thousands of US Dollars):        
Time charter revenues $64,615 $68,681 $134,051 $130,865
Voyage expenses 2,657 3,133 5,561 5,543
Vessel operating expenses 14,073 12,030 26,442 24,541
Net income attributed to Diana Shipping Inc. 27,676 33,851 60,813 62,657
FLEET DATA        
Average number of vessels 23.0 22.0 23.2 21.5
Number of vessels 23.0 23.0 23.0 23.0
Weighted average age of vessels (in years)* 5.9 5.0 5.9 5.0
Ownership days 2,093 2,003 4,199 3,897
Available days 2,025 1,980 4,131 3,849
Operating days 1,997 1,974 4,098 3,838
Fleet utilization 98.6% 99.7% 99.2% 99.7%
AVERAGE DAILY RESULTS        
Time charter equivalent (TCE) rate (1) $30,597 $33,105 $31,104 $32,560
Daily vessel operating expenses (2) $6,724 $6,006 $6,297 $6,297
         
* Excluding the container vessel Sagitta for 2010        
________

(1) Time charter equivalent rates, or TCE rates, are defined as our time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts.

(2) Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period.

Conference Call and Webcast Information

Diana Shipping Inc. will conduct a conference call and simultaneous Internet webcast to review these results at 9:00 A.M. (Eastern Time) on Thursday, August 4, 2011.

Investors may access the webcast by visiting the Company's website at www.dianashippinginc.com, and clicking on the webcast link. The conference call also may be accessed by telephone by dialing 1-877-407-8291 (for U.S.-based callers) or 1-201-689-8345 (for international callers), and asking the operator for the Diana Shipping Inc. conference call.

A replay of the webcast will be available soon after the completion of the call and will be accessible on www.dianashippinginc.com. A telephone replay will be available by dialing 1-877-660-6853 (for U.S.-based callers) or 1-201-612-7415 (for international callers), and providing the Account number 362 and Replay ID number 375450.

About the Company

Diana Shipping Inc. (NYSE:DSX - News) is a global provider of shipping transportation services. The Company specializes in transporting dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.

Cautionary Statement Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk shipping capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

     
DIANA SHIPPING INC.
FINANCIAL TABLES
Expressed in thousands of U.S. Dollars, except share and per share data
         
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF INCOME
         
  For the three months ended
June 30,
For the six months ended
June 30,
  2011 2010 2011 2010
         
REVENUES:        
Time charter revenues $ 64,615 $ 68,681 $ 134,051 $ 130,865
Other revenues 279 -- 401 --
         
EXPENSES:        
Voyage expenses 2,657 3,133 5,561 5,543
Vessel operating expenses 14,073 12,030 26,442 24,541
Depreciation and amortization of deferred charges 13,567 12,875 27,064 25,011
General and administrative expenses 6,204 6,799 12,750 11,865
Foreign currency gains (206) (473) (198) (637)
Operating income 28,599 34,317 62,833 64,542
         
OTHER INCOME / (EXPENSES):        
Interest and finance costs (1,176) (1,230) (2,458) (2,263)
Interest income 226 232 439 481
Loss from derivative instruments (490) (347) (575) (982)
Income from investment in Diana Containerships Inc. 517 -- 572 --
Total other expenses, net (923) (1,345) (2,022) (2,764)
         
Net Income $27,676 $32,972 $60,811 $61,778
         
Loss assumed by non-controlling interests -- 879 2 879
         
Net income attributed to Diana Shipping Inc. 27,676 33,851 60,813 62,657
         
Earnings per common share, basic and diluted $0.34 $ 0.42 $ 0.75 $ 0.78
         
Weighted average number of common shares, basic 81,089,440 80,665,391 81,027,892 80,648,160
         
Weighted average number of common shares, diluted 81,123,577 80,756,231 81,049,777 80,733,623
     
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEET DATA    
(in thousands of US Dollars)    
     
  June 30, 2011 December 31, 2010
ASSETS    

   
Cash and cash equivalents $375,613 $345,414
Other current assets 11,712 9,235
Advances for vessels under construction and acquisitions and other vessel costs 50,704 35,280
Vessels' net book value 1,043,228 1,160,850
Other fixed assets, net 21,758 21,842
Investments 29,807 --
Other non-current assets 11,294 12,768
Total assets $1,544,116 $1,585,389

   
LIABILITIES AND STOCKHOLDERS' EQUITY    

   
Current liabilities, including current portion of long-term debt $31,038 $32,510
Long-term debt, net of current portion 349,557 376,303
Other non-current liabilities 4,218 6,646
Total stockholders' equity 1,159,303 1,169,930
Total liabilities and stockholders' equity $1,544,116 $1,585,389
         
OTHER FINANCIAL DATA        
  For the three months ended
June 30,
For the six months ended
June 30,
  2011 2010 2011 2010
  (unaudited) (unaudited) (unaudited) (unaudited)
Net Cash provided by Operating Activities $ 38,901 $ 46,395 $ 81,065 $ 83,612
Net Cash used in Investing Activities (35,116) (79,695) (47,556) (148,279)
Net Cash (used in) / provided by Financing Activities (1,497) 33,794 (3,310) 80,419

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