Greetings and welcome to the Diana Shipping Inc First Quarter 2013 Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) 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, Mr. Nebb, you may begin.

Thank you Kevin and welcome all to the Diana Shipping Inc 2013 first quarter conference call. The members of the Diana Shipping management who are with us today are Mr. Simeon Palios, Chairman and Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Executive Vice President and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me briefly summarize the Safe Harbor notice. Certain statements made during this conference call, which are not statements of historical facts, are forward-looking statements pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act. Forward-looking statements are based on assumptions, expectations, projections, 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 what is expressed in the forward-looking statements, please refer to the company’s filings with the Securities and Exchange Commission. And with that, let me turn the call over to Mr. Simeon Palios, Chairman and Chief Executive Officer.

Thank you, Ed. Good morning and thank you for joining us today. I’m pleased to report to you on the performance of Diana Shipping Inc for the first quarter of 2013. During the first quarter of 2013, we continue the strategic expansion and diversification of our fleet while also maintaining our traditional prudent approach to chartering. Since the beginning of this year, we have taken delivery of 2 Kamsarmax vessels, the motor vessel Myrto and the motor vessel Maia. We also acquire the motor vessel Baltimore, a Capesize vessel that is scheduled for delivery by the end of this month. In addition, yesterday, we announced the signing of ship build contracts for two new Kamsarmax dry bulk carriers which we expect to take delivery during the second quarter of 2016. Including the New-Building vessels on order and the recent secondhand acquisition currently scheduled for delivery. Our fleet consists of 37 dry bulk carriers. It is an increasingly diverse fleet including Newcastlemax, Capesize, Post-Panamaxes, Ice Class Panamax, Kamsarmax and Panamax vessels. We continue to manage our fleet in a responsible manner that promotes a balance of time charter maturities producing a predictable revenue stream. Currently, our fixed-revenue days stands at 94% for 2013. The majority of our vessels are chartered to periods ranging from 2014 through 2016. In keeping with our practice of maintaining high quality relationship, our recent charterer agreements have involved such leading charterers as EDF and NYK, Morgan Stanley, Minmetals, Cargil, Glencore, Rio Tinto, ADM, RWE and others. In another recent development, we announced yesterday that Diana Shipping has agreed to loan up to US$50 million to Diana Container Ships, our former wholly owned subsidiary of which we currently own approximately 10.4% of the issued and outstanding common shares. The loan may be used Diana Container Ships to…

Thank you Simeon and once again welcome to those who have joined us in this quarterly conference call. The first quarter of year this did showed some encouraging signs as regards the earnings of bulk carriers. This can be seen from the Baltic indices which moved generally higher. On 2nd January, the Baltic Dry Index stood at 698 and yesterday closed at 830. The Baltic Cape Index started the year at 1237 and closed at 1321 on May 21. The Baltic Panamax Index started the quarter at 685 and closed the equity at 899. International Monetary Funds projected global growth will be 3.3% in 2013 and down with the revision from their previous estimates. For 2014, the IMF predicts that the world's economies will grow by 4%. According to the World Trade Organization, the world economy continues to run at two speeds, for the OECD countries struggling to avoid production, while China and other Asian countries continuing to grow at healthy rates compared to other regions although at slower rates than previously witnessed. According to Clarkson’s Asia’s growth has recently slowed with China in particular experiencing some relatively difficult months and Indian growth grinding to a halt. Fortunately, though, seaborne trade has behaved better than the world’s economy. Dry bulk trade is expanding at a healthy 4% per annum in line with long-term trends, driven primarily by iron ore and thermal coal transportation demand. However, Clarkson’s believes and we agree with this view that the dry bulk market continues to look vulnerable with almost a 100 million deadweight tons of deliveries expected in 2013 and demolition running at a much lower level of around 24 million deadweight tons per annum. So in 2013, supply growth will continue to forge ahead of demand. In the United States, real GDP increased at…

Thank you (inaudible) and good morning. I’m pleased to be discussing today with you Diana’s operational results for the first quarter of 2013. Net loss amounted to $3.2 million and the loss per share was $0.04 as a result of a $3.3 million loss from Diana Containerships Inc. without which the results for the first quarter of 2013 would be a profit of tonnage (inaudible) while the loss per share would be zero. Time charter revenue decreased to $42.6 million compared to $67.6 million in 2012. The decrease is attributable to decreased average time charter rate that we achieved through our vessels during the quarter compared with the same quarter of 2012. This decrease was partly offset by revenue derived from six vessel delivered in 2012 from mid January to November and two vessels – the motor vessel Myrto and the motor vessel Maia delivered in January and February 2013 respectively. Ownership days were 2806 for (inaudible) 2013 compared to 2313 in the same period of 2012. Fleet utilization was 98.8% compared to 99.8% in the same quarter of 2012. The daily time charter equivalent rate was $14,398, compared to $24,276 in the same quarter of 2012. Other revenues for the first quarter of 2013 amounted to $0.4 million and consist of revenues derived from the management and administrative agreements between Diana Shipping services S.A., Diana Containerships Inc. until they were terminated on March 1st, 2013. Voyage expenses were $2.2 million for the quarter. Vessel operating expenses amounted to $18 million, compared to $14.7 million in 2012. The increase was due to the enlargement of the fleet, with six vessels during 2012 and two vessels during the quarter of 2013. On average, the increase in operating expenses was mainly due to increasing crew cost and taxes and was partly offset…

Thank you. We’ll now be conducting a question-and-answer session. (Operator Instructions) Our first question today is coming from Justin Yagerman from Deutsche Bank. Please proceed with your question. Justin Yagerman – Deutsche Bank Equity Research: Good morning guys.

Hi, Justin. Justin Yagerman – Deutsche Bank Equity Research: Hi, I noticed that in vessels under construction you guys now have two new Newcastlemaxes that you’re building. Were those auctions? And what was the strike on those auctions? And I guess it confirms that you likely the class of vessel in and of itself because you’ve been operating them for about a year. Can you tell us a little bit about how you came into that decision to buy the ships?

Well, Justin we are very happy with what we have already and we have put a lot of effort to increase little bit the efficiency of the new buildings. And we think that the price is very lucrative. We bought the vessels of $48,700. We have an installment of 15%. The first payment is 15%, which is $7,305,000 million. And the second payment will be not before 18 months, before the delivery of the ship. So you can understand that is a very, very good option for us too. What you mentioned is good because we are operating the sister ships and we are very happy with them. Justin Yagerman – Deutsche Bank Equity Research: What yard are they on order at?

Pardon. Justin Yagerman – Deutsche Bank Equity Research: What is the yard?

It is Jiangnan Shipyard Group, Jiangnan. Justin Yagerman – Deutsche Bank Equity Research: Okay. Yes, in China. And then you guys had made some quick comments in the prepared remarks about your dividend, and that the idea that you would consider to reinstate it at a point in time, where you were generating more cash flow on your vessels. Is there a threshold that you guys think about? Or is this more of a discretionary determination in terms of how you think about putting the dividend back into place?

Justin this is Ioannis. We are still generating cash flow and we will intend to keep doing that. The dividend is going to start – is going to be reinstated, when we will feel that we are at the upper part of the cycle moving toward the next peak. At this moment as Stacey explained thoroughly earlier, we feel that we are at the lower part of the cycle, and we still have some room to go and stay at this part. So dividend is going to be reinstated when we go to the upper part of the shipping cycle.

Justin I want to mention to you that we have not seen the lower part of the cycle as yet. We have not seen the period neither on the Panamaxes nor on the Capes of the running experience or [new shape], they still above the running experience or [new shape] for at least for the one or even two year period. So we have not seen the bottom of the cycle yet. There is still some room to go. Justin Yagerman – Deutsche Bank Equity Research: Okay, all right. Hey, thanks for the time guys. Appreciate it.

Thanks Justin.

Thank you. Our next call today is coming from (inaudible) from Morgan Stanley. Please proceed with your question.

Good morning gentlemen. Thank you for that update. So I have one more question regarding the Newcastlemaxes as well. We had already talked about why you ordered it, but I was wondering why that the review date is so late. Why it is pushback all the way to 2016.

Hi, (inaudible). This is Ioannis again. For us, as we have explained in the past, every vessel that we buy, among other things is an option to be used in a better market. So the longer the option duration is, the better the option is for everyone as you know. So a part that we have chosen 2016, it doesn’t mean that we expect the market to improve by that time. It may improve earlier than this or later than this. What we like is the three years ahead of us to have the option to do whatever we want with that order.

Okay.

As you might have seen in market changes and is picking up after a year. You can very easily sell the vessel at a profit and you have only vessel $7.7 million $305,000. So the return we’ll see much, much higher than. So you are not thinking that the market will change in April 2016, which will be reverse delivery of Kamsarmax. It could be one year or two years earlier and you still have the option of reselling the contract.

Okay. That makes sense. And so, most market systems agree that demand will outpace supply in 2015, if not earlier. Do you agree with this view and what you think of potentially [derail] such a recovery, particularly on the demand side and more specifically with trade and iron ore or coal.

Well indeed, see the reason that we went to this stock market in March 2005 was the elimination of the unknown, which is the frequency of this curve. We could not in the past or even in the future see when the market will come up or down, so we would like to eliminate that unknown, and that’s what we have done. And we were stick to it.

Okay, but you were talking about earlier that things might still get worse. So do still expect things to get worse until then? Or they get those some disruption? Or do you expect this recent rally in dry box to sort of continue and just to stay at the level where we are right now.

This is not a rally, because of the freight market. It is a rally because there is a lot of money in the system. But it is not driven by the fact that the market is changing to be better. It’s driven because there is a lot of money, and there is a lot of people who would like to cover. But at the same time, when I compel to buy shapes at a certain period of the time, because that’s how our principle from day one.

Yes. Okay great. Well that make sense, then I guess. That was it for me. Thank you so much.

Thank you.

Thank you. Our next question today is coming from Greg Lewis from Credit Suisse. Please proceed with your question. Greg Lewis – Credit Suisse: Yes, thank you and good afternoon.

Hi, Greg Greg Lewis – Credit Suisse: Hi, Stacey, when we think about the Newcastlemax, clearly eco ships are short of constantly in the press. And when we think about these vessels is there any fuel efficiency gains in these vessels? Being as they are delivered out into 2016 or are these short of standard design? I mean would you consider these vessels eco, and if they are not eco, why would you not opt to go that route?

We have a big question mark as to whether there will be much more economical the vessels which we already have, and especially if the shipbuilder involved has found a proper hull for. The devices which they are usually are not very efficient when you have a proper hull structure. If you have a bad hull structure then there a slight improvement, but it will remain to be seen on the water, not on the sales spread. So, we will be a little bit hesitated to see what will be the improvement and especially at lower speeds. It will be marginal. It will be somehow better, but not all that better. Greg Lewis – Credit Suisse: Okay, and then just so in other words I guess the Newcastlemaxes were ordered at the Shenzhen yard in China. If we think about ordering a similar Newcastlemax at sort of maybe one of the yards that's doing an eco vessel type design, roughly how much more would that vessel cost?

No, no. It is not a matter of Jiangnan building a non-economical vessel. I don't think other yards in Japan or in Korea will be building a better economical vessel and Jiangnan. Don’t forget that Jiangnan is the oldest shipyard in China. They have the experience building the Navy vessels for China and they go back more than 150 years. So I don’t think the Japanese or the Korea yards are older than Jiangnan. So I don’t consider Jiangnan as an inferior yard.

Greg, just to tell you very quickly in order not to, the vessels ordered are considered eco vessels, okay. Greg Lewis – Credit Suisse: Okay, perfect. And then just shifting gears a little bit, I mean you touched on in your prepared remarks, Stacey, about the congestion in South America and in Australia. I mean when we think about the market where it is today, I mean clearly rates are hovering, I guess for Supramaxes that they are a little bit above cash breakeven, (inaudible) rates. I mean when we think about congestion, if we were to seek and how much, I guess I would say how much rate increase are we seeing in the markets for some of the smaller vessels because congestion is in the system? And two things, one is, is there a roadmap, to alleviating this congestion over the next 2 to 3 to 4 years? And then, secondly, well, actually, not, I will just focus on that.

Now, if we look at the long-term plan that exists in order to eliminate congestion we have been talking about these over the last 20 or 25 years or so. Reality is that as soon as the plans are implemented new requirements come to the market, in order to alleviate the new incidents of congestions. So without wishing to be cynical, all we want to say is that we can see for the foreseeable future congestion in at least the Panamax plus sizes remaining more or less where they are now with changes for example in specific trade which will last a few weeks or months like what we’re seeing now in Brazil for soya beans. 100 ships is not an insignificant number of ships that we are sure is not here to stay we’re going to have improvements which are going to release, some of the ships which are waiting to load and into the market and that will affect the smaller bulk carrier market. But this is short to medium term effect of congestion. It’s not a long-term. The longer term is concerned, we feel that there will always be between 100 and 150 ships waiting to load or discharge in the major iron ore and coal loading and discharging ports around the world and no plans that we have seen is credible enough to convince us that these ships will eventually be released into the market. Justin Yagerman – Deutsche Bank: Okay guys. Thank you very much for time.

Okay guys. Thank you very much for time.

Welcome.

Thank you, our next question coming from Chris Combe from JPMorgan. Please proceed with your question. Nishant Mani – J.P. Morgan Securities LLC: Hey, good morning guys. This is actually Nish Mani on for Chris. Thank you so much for the presentation and for answering our questions. Just wanted to follow up on a point you guys had made earlier about secondhand acquisitions and the kind of the market heating up as you see it, such as seeing up to 10 buyers per vessel. I just want to get your thoughts on timing and structure and how active you have been in the space and investigating vessel opportunities as opposed to contracting out for 2016 deliveries on newbuilds?

We do both we are very actively looking to purchase vessels. We are expecting a vessel every five days or so. As we have explained in the past we are here to keep buying vessels in a staggered manner, either ordering or secondhand or resale and we will continue doing that for the next two years. Nishant Mani – J.P. Morgan Securities LLC: Okay, and that makes sense. I mean just given your comments on you think the bottom hasn't really been reached yet and you see maybe perhaps up to 18 months longer of prolonged low-end rates, is this an indication when you order newbuilds that you think the secondhand market may currently be overvalued?

If you start making such type of judgment you are taking a position that the market is going to have a specific value after a while something that nobody really knows, what we’re saying is that the market may have some blips, moving upwards or downwards. But the general trend should be the one explained earlier that demand and supply patterns are such that we do not see a light out of the tunnel, at the end of the tunnel before at least for the next year or so. So, on the other hand, you can never be certain about anything and this is why we are in the fortunate position that we can average down our purchases. So that basically we cannot be wrong. Nishant Mani – J.P. Morgan Securities LLC: Okay. I know that makes complete sense. Switching over to the balance sheet for one second, you guys have mentioned that credit is difficult to come by for many operators, but for operators like yourselves who have a stronger balance sheet that really isn't the case. In looking at potential secondhand acquisitions as well as the two new Newcastlemaxes, what kind of leverage and debt opportunities are you looking at to finance these with, despite having a significant cash position?

Our strategy has not changed towards that and we are looking at every acquisition to have around 50% leverage and so now we try to group a bit the acquisitions, meaning that we tried to have two vessels or so to reach out to banks in order not to overwhelm us with paperwork and legal fees, but the strategy remains the same 50% on every acquisition, be it secondhand or newbuilds. Nishant Mani – J.P. Morgan Securities LLC: Got it, very clear and then just really quickly going back to kind of the chartering market, you have a couple of handful of vessels coming due this summer and into the fall. Just wanted to get your thoughts and how you see kind of Q4 shaping up relative to perhaps some summer weakness. Do you think there could be some at least incremental upside coming into Q4 ahead of stocking? Or do you see kind of generally flattish rates for the rest of year?

Well, we will take whatever is on the offering, the first vessel which is happening is August from now. So we will take the best around that short of time. Nishant Mani – J.P. Morgan Securities LLC: Got it.

Yeah if we are own then we have other one coming after 1.5 months. Nishant Mani – J.P. Morgan Securities LLC: Okay.

So, okay.

Very true. Great, thank you so much for your time, guys. Really appreciate the help.

You are welcome. Thank you.

Thank you, our next question is coming from Brandon Oglenski from Barclays. Please proceed with your question. Keith Mori – Barclays Capital Equity Research: Good afternoon this is Keith Mori filling in for Brandon. Just wanted to touch a little bit – we've seen a lot of equity gains this year in the dry bulk space, and just wanted kind of get your view on what you believe is kind of driving a lot of that positive sentiment at least year-to-date?

It is our opinion as Diana Shipping Inc. that basically we cannot justify we optimize that exist in the market usually the capital markets the time to be a head of the actual parts by six months or three quarter. However we feel that the signs are such that that’s an optimism in the capital markets is not justified by the demand and supply factors in our industry. We do not share that optimism. Keith Mori – Barclays Capital Equity Research: Okay, that’s helpful. So I guess going back, I just wanted to touch one on of Stacey's comments earlier around scrapping and 20-plus, the shrinkage fleet around that 20-plus age. What do you guys kind of see as the top one or two catalysts over the next 12 months that can kind of soak up some of that excess supply as scrappage kind of comes down here?

Well basically we have to look at earnings which is the prime criteria. If they drop on 12 months for example, employment period towards operating expenses that will dampen the existing enthusiasm and change the views of owners of all the tonnage as we’ve got the possibility of scrapping them. Now, the most of them take the view that it’s worth passing the fourth or fifth survey and continue tracing them. If the market weaken and sentiments become weaker than we feel that there will be a large increase in the number of ships going for scrap. But we should always keep in mind what we mentioned earlier about the age profile of the large bulk carrier fleets, especially on the Capesize vessels. For us to see a significant increase in the number of Capesize vessels going for scrap, we have to see a even more pronounced drop in the earnings in order to make people even more pessimistic and convince them that they should scrap ships which are between 15 and 20 years old, not just 20 years old plus. And that will take, of course, some weakness in the market to accomplish. On the Panamax sector and Kamsarmaxes where we have about 11% of overage now, there are candidates there. But we should keep in mind there lot as many as, we will possibly have light to have. So you see that the pool is smaller and, therefore, the owners have to be pretty generally pessimistic in order to get a significant number of ships heading for the scrap yard. Keith Mori – Barclays Capital Equity Research: That was very good color. I appreciate that. I will pass it on from here. Thank you guys for the time.

You’ve welcome.

Thank you. Your next question is coming from Kevin Sterling from BB&T Capital Markets. Please proceed with your question. Kevin Sterling – BB&T Capital Markets: Thank you, operator. Good afternoon gentlemen.

Hi, Kevin.

Hi, Kevin. Keith Mori – Barclays Capital Equity Research: Andreas, let me just kind of start with you, just a little housekeeping question. When I look at your G&A for the quarter as $5.5 million during the quarter it’s about $500,000 below the prior quarter and below your two-year average of about $6.2 million. How should we think about a run rate going forward? Should we use of the something similar what we saw this quarter?

I think it is fair that you something similar that you use this quarter. We’ve always said that more that we increase the fleet the more our G&A per vessels decrease. Now we also have a decrease in the G&A in general. So I think you should use that rate or slightly higher for the next quarters, and you should be safe. Keith Mori – Barclays Capital Equity Research: Got you. All right. Thank you Andreas, and just kind of I want to chat a little bit about your loan to Diana Containerships. I know we talked about that yesterday on the Diana Containerships call. But as I think about it from a Diana Shipping perspective, the $50 million loan to DCIX and think about your cash balance and your growth. From a Diana Shipping perspective that an indication that maybe you see more opportunity in the containership market right now versus the dry bulk market? I know you kind of indicated earlier that you don’t think we’re quite at the bottom for the dry bulk market. So how should we think about the loan to DCIX versus maybe buying additional dry bulk tonnage?

How you should look at it is as a deposit somewhere earning 5% plus another 125% per year as backend fee, which gives back more than $3 million per year as a returns, which covers a lot of the expenses so for example for the management company. If it was a matter of our thinking that containers is a better opportunity then dry bulk maybe that would have been in a form an equity investment in containership company, but referring to it as a loan you can also look at it as a deposit somewhere earning 5% less. What we would like to say to our shareholder is that this money are still ours, earning a very good return instead of being in a bank earning almost nothing. And there going to be with us of the right time in the cycle again. If we were to have a press release yesterday saying that we have placed $50 million in the back account earning 5% for the next four years. I think that everyone would have taken that better. Keith Mori – Barclays Capital Equity Research: Okay, so (inaudible) go ahead.

Okay, now just wanted to ask quickly that you should never forget that the Board of (inaudible) look at the direct reward ratio of this loan that I will call it an investment, and if you think about it carefully, you will see what I mean, how favorable this is for the company compared to anything else that have been done with that $50 million over the next four years.

And in addition to that there is the enhancing of the 10.4% that we still have as Diana Shipping, Inc. as an investment in Diana Containerships, Inc., with the prospects of bringing that to zero eventually when the value is going to be created for Diana Containerships, Inc. Keith Mori – Barclays Capital Equity Research: Okay, so I think if I hear you correctly, just to sum it up. You’ve guys have got such a big cash balance, you see this as an investment of that cash, if you will, to earn a greater return than which you could by putting it in a bank, because interest rates around the world are still low. Is that a term of fair way to look at it?

Not as an investment as a deposit. Keith Mori – Barclays Capital Equity Research: Okay. All right, thank you for your time this morning. I really appreciate it.

You’re welcome. Thank you.

Thank you. Our next question is coming from Urs Dur from Clarkson Capital Markets. Please proceed with your question. Urs Dur – Clarkson Capital Markets: Good morning. Actually my question was just asked in regard to the loan, and I think you explained it very well. The one other question I had just reconfirming of the loss associated with the right down at Diana Containerships. How much is non-cash? Is it full $3.3 million?

Yes $3.3 million. Urs Dur – Clarkson Capital Markets: Perfect that all of that is non-cash, great. Thank you very much.

You’re welcome.

Thank you. We have reached the end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.

Thank you again for your interest in and support of Diana Shipping. We look forward to speaking with you in the months ahead. Thank you.

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time. And have a wonderful day. We thank you for your participation today.