Greetings and welcome to the Diana Shipping Third Quarter 2016 Earnings 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, Mr. Ed Nebb, Investor Relations Advisor for Diana Shipping. Thank you, Mr. Nebb, you may begin.

Thank you Michelle and thanks to all of you for joining us today for the Diana Shipping third quarter 2016 conference call. Members of the management team who are with us today include Mr. Simeon Palios, Chairman and Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Chief Operating Officer and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me remind you of the Safe Harbor notice. Certain statements made during this conference call which are not historical facts are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act. Such forward-looking statements are based on assumptions, expectations, projections, 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 materially from the forward-looking statements, please refer to the Company's filings with the SEC. And now with that let me turn the call over to Mr. Simeon Palios, Chairman and Chief Executive Officer.

Thank you, Edward. Good morning and thank you for joining us today to discuss the results of Diana Shipping, Inc. for the third quarter of 2016. During the third quarter of 2016 the dry bulk trade continued to face extremely challenging market conditions. In this environment, we remain sharply focused on reinforcing our financial strength, to ride out the current conditions, and position the Company for the long term. To review our financial results, as we reported on November 17th, the Company incurred a net loss of $78.3 million and a net loss attributed to common stockholders of $79.8 million for the third quarter of 2016. Of this amount $50 million relates to loss and impairment of our investment in Diana Container Ships, Inc. This compares to a net loss of $17.4 million and a net loss attributed to common stockholders of $18.8 million for the third quarter 2016. Time charter revenues were $27.1 million for the third quarter of 2016 compared to $38.9 million for the same quarter of 2015. The decrease in time charter revenues was due to decreased average time charter rates for our vessels during the quarter which was partially offset by revenues derived from the increase in ownership days resulting from the enlargement of our fleet. Apparently our fixed revenue days are 95% for 2016 and 12% for 2017. Turning now to our balance sheet, cash and cash equivalents were more than $131 million at September 30, 2016 including compensating cash balance and shareholders' equity was approximately $1.1 billion. As we have reported the company concluded without agreement its previously announced discussion with these lenders with respect to certain proposed amendments of these outstanding loan facilities which were subject to the agreement of the company’s lenders on similar terms. The company also terminated its engagement…

Thank you Simeon and good morning to all the participants of this third quarter conference call of Diana Shipping Inc. Since earlier this year when we saw the lowest rates in the bulk carrier industry that we have seen from the early 1980s. The markets have improved especially for the Capesize bulkers. At the beginning of the third quarter the Baltic Dry Index was 677 and yet to be closed at 1,184. The Baltic Cape Index had started at 1,030 and closed yesterday at a significantly higher level of 2,260. The Baltic Panamax index started the quarter at 691 and closed at 1,400. Macroeconomic developments now, the recent election in the United States has seen Donald Trump elected to the Presidency of the largest economy in the world. Some of the policies he has been advocating prior to his election are implemented. There are fears that the new era of protectionism will see global trade as a share of world GDP fall. Several trade agreements that have so far been criticized by the President elect. If his criticism will lead to actions then the effects on world trade would be profound. The IMS related projections for global economic growth stands at 3.1% in 2016 and 3.4% in 2017. These projections are weaker than previous forecasts for the same period due to lower than expected growth in our bulk economies which for 2016 has come down to 1.5% from 1.8%. J.P. Morgan's measure of worldwide PMIs stood at 52 in October due to the kind of readings since October 2014. This has been retained by solid increases in output and new orders. In the United States the October headline PMI was 53.4 which represented a marked improvement to September's 51.5 figure and was the best reading so far this year. According…

Thank you, Stasios and good morning. I am pleased to be discussing today with you Diana's operational results for the third quarter and nine months ended September 30, 2016. Third quarter of 2016 net loss attributed to stockholders amounted to $78.3 million and $79.8 million respectively of which 50 million was due to loss from equity method investments. Loss per common share was $0.99. Time charter revenues decreased to $27.1 million compared to $38.9 million for the third quarter of 2015 and the decrease was due to the decrease of the time charter rates that we achieved for our vessels during the quarter. And was partially offset by revenues derived from the addition to our fleet of the vessels New Orleans and Seattle delivered in November 2016, Selina and Ismene delivered in March 2016 and Maia delivered in June 2016. Ownership days was 4,232 for the third quarter 2016 compared to 3,772 for the same quarter of 2015. Fleet utilization was 99.4% compared to 91.9% for the same quarter of 2015. And the daily time charter equivalent rate was $5,914 compared to $9,688 for the same quarter of 2015. Voyage expenses were $2.1 million for the quarter compared to $3.1 million for the same quarter of 2015. The decrease in voyage expenses was mainly due to decreased commissions deriving from decreased revenue and decreased loss from bunkers amounted to $0.5 million compared to $1.1 million in the same quarter of last year. Vessel operating expenses amounted to $21.2 million compared to $21.6 million for the third quarter of 2015 and decreased by 2% despite the 12% increase in ownership days resulting from the enlargement of the fleet. The decrease was a result of the company's efforts to minimize costs without comprising the vessels operations and safety and obtained reductions in…

[Operator Instructions]. Our first question comes from the line of Amit Mehrotra with Deutsche Bank. Please proceed with your question.

Thank you, good afternoon everybody. The first question was just around the breakdown of the discussions with the lenders. It seemed, I joined the call a little bit late so I apologize if you already addressed it but it seemed like the discussions were pretty encouraging, you have the biggest lender on board, just trying to get a little bit color around this if you could offer any in terms [Technical Difficulty] that caused it or maybe the strategy of the negotiations, any color you could provide would be very helpful thanks?

Hi, this is Ioannis speaking. Let me start by saying that we initiated the coal story proactively and we took the decision to stop the discussions. The reason why the discussion were stopped it was because we were not getting anywhere although we had a good reference point. At the end of the day we couldn’t arrive into a meaningful result for everyone. So the same way we initiated as I said, the same way we stopped the discussions.

Okay, I guess the natural follow-up question to that is last quarter you talked about an equity offering from being off the table proactively. I just wanted an update on your thoughts on that given the breakdown of the negotiations about a potential equity offering obviously and what your ability is to sort of withstand given the cash balance?

We are reading the same stories, we are reading your opinions, etc. And all of the analysts, you have your models and you can clearly see that our cash position is such that we have the power to sustain even worse charter rate scenario to date easily till we first -- up to second quarter of 2018 before we have a cash flow problem. In the scenario where you run the numbers with existing charter rates then you go even after third quarter of 2018. So why should we be talking about an equity offering or some analyst talk about an equity offering. I thought that we all agree that predicting what the market is going to do after a quarter is dangerous, let alone after a year and a half from today. Because this is clearly what we are talking about. Suddenly someone is in a position to talk about an equity offering which is -- maybe necessary after a one year and a half from today. What type of liquidity problem Diana has? If you can explain you are not sharing that view because we read what you were saying but that is they claim that we have a liquidity issue, but when…

Allow me to just ask maybe some specific questions around the numbers then. I think based on our math it looks like the company is all in breakeven OPEX, debt service, and debt amortization is in that $12,500 per day level, is that a correct figure by your estimate as well?

Yes, it is Amit.

Okay and so you have I think a good amount of re-chartering that are coming up over the next three to four months if I am correct and so would you expect the company in a quite strong market which is great but would you expect the company’s average TCE to be at or above that $12,500 level or somewhere in the neighborhood of that next year?

No, you have to take into account the fact that we have approximately another $5,500 per vessel if we use our current cash position. So any rate in the vicinity of an average of $8,000 it gives us the opportunity to end up well after the beginning of 2018 without having a cash problem. Let alone the fact that today as we speak you can fix a Capesize vessel at $11,200 for a year on a time charter basis with an 8 lakh charter and a Panamax at $8,000.

I agree, Andreas let me ask you a couple of questions specifically just lastly from me. I think the debt amortization team is next year at 46 million and I know that we can communicate, I don’t know on a per day basis but sometimes those payments can be lumpy and then you've also got some new building payments I think in the first quarter of next year or in the vicinity of that. Can you just break that down for us in terms of the lumpiness of cash cost next year both as it relates to debt amortization and the new building payments please?

We talk about the new building payments first. Actually the CAPEX for new buildings is $68.4 million remaining. So as you probably know, the equity on that is not going to be very substantial because we have a loan with China Export Import Bank and this loan is going to -- is at 70% of the market value of the vessel at the time of delivery. So by making your mark you will see how much CAPEX we will need to come up with for that. And if we take the loan repayments and if we start with -- I’ll give you rough numbers but I think that’s what you are looking for, if we start with the first quarter of 2017 in the hint of $11 million, then second quarter it goes to $12 million, third quarter south of $12 million, and fourth quarter $15.5 million. So this is the way it is about to come up, debt repayments -- amortization repayments.

Right, okay that’s helpful. One last quick one from me if I could, is on the loan to value last quarter I think we talked about sort of an 80% LTV range but encouragingly asset values have improved a little bit more on the sort of the newer vessels profiles and the older vessels, just trying to get a better understanding of you’re still looking your LTV in that 80% range plus or minus or if it moved actually down a little bit over the last three or four months? Thanks.

Now if you are referring it depends what not that you are looking for. If you are referring to the debt to asset number, it is around 80%. But if based on -– valuation but I think it's safe to say that you are somewhere there. And going back to your first question of course everybody realize that what you have after was about the principle repayment, etc. The amortization of debt is included in the $12,500 number that you talked about breakeven cash flow. Meaning, in order to make myself clear that we have substantial amount of cash to sustain this black environment till the middle of 2018, after having paid all principle and all interest payments that we have. And also on top of that we have one unencumbered vessel Myrto [ph] which has a value today of $24 million.

Okay, that’s all I had guys. Thank you so much for taking my questions.

Thanks Amit, have a nice day.

Thank you. Our next question comes from the line Ben Friedman with Morgan Stanley. Please proceed with your questions.

Hi guys, actually my questions were answered, they were primarily centered around the remaining CAPEX thanks?

You’re welcome.

Thank you. [Operator Instructions]. Our next question comes from the line of John Gandolfo with Clarksons Platou Securities. Please proceed with your question.

Hi guys, thanks for taking my question. Going off Amit's previous question on the negotiations, I believe last caller commented that should negotiations fail Diana would continue with business as usual which included potential fixed asset acquisitions, is this still how you are looking to proceed going forward?

The model that we used earlier describing our ability to sustain in that environment for till the middle of 2018 did not include any further acquisitions. However, depending on the charter these has assumptions above the charter rates that we estimate to receive in 2017 which possibly is having a low side but if the market showed signs of improvement we may consider investing $20 million let's say for one or two vessels. Don’t forget that this acquisition is not burning any cash because if you buy a vessel full equity for example today, you don’t burn any cash with the existing time charter rates. But the cash flow position described earlier does not include any further acquisitions.

Okay, got it. Thank you, that’s all from me guys.

Thanks. Bye.

Thank you, there are no further questions at this time. I'd like to turn the call back over to management for closing remarks. I am sorry we do have one more question. From Jonathan Chappell with Evercore. Please proceed with your question.

Hi, good afternoon guys, thanks for getting in late. To be honest I was obviously one of the guys you were talking about with the liquidities so I just want to walk through the numbers if it is okay? So one last one for Andreas first, fourth quarter debt amortization I think in the last call you’d mentioned there was I think another $18 million or so in the fourth quarter of this year?

No, its 11.1 million debt amortization for the fourth quarter.

Okay, so you ended the third quarter with 108 million, over the next five quarters then you have about 62 million?

Yeah, 108 -- sorry Jonathan, end of the third quarter it was 131.282 million because you are forgetting the restricted cash. Oh, it’s not restricted actually, its compensating cash balance of 23 million. So its 108 plus 23 131.382, yes.

Okay 131 and then you have 50 million debt amortization next year, the 11 million this year, and then 58.4 million CAPEX but you are saying you are going to get the financing of what maybe 50 million?

46.

So that’s 57.6 million and then what is the minimum liquidity covenant per ship is that 700,000 or 800,0000?

500,000, not for every ship but yes.

Alright, so the restricted cash or the compensating cash I guess is the key there as well as the ability then to get all the…?

No, no this is only $24 million. This is the value of -- versus Seattle. No, no this is nothing.

But if we took that 24 million off where we were left with and we’d be down to like 32 million and then you would be getting up against that buffer?

Certainly at the end of 2017, yes. In a year [multiple speakers].

And that we have to take into account what time charter rates are we going to be using. I now model, we are using very considerable -- I think you are using better charter rates then we do what average do you have for 2017 as a Capesize vessel charter rate.

For capes, I am using 8500.

Okay, this is what we are using as well. You are using the FFA.

While I am using my own estimates, it just happened to match at the FFA curve? Then the other thing we mention was the operating cash burn because you burnt by our estimates their teams 18.6 for the first three quarters that’s about 6 million per quarter. So we just sort of and we have the charter rates improving but say 20 million to 25 million of operating cash for next year as well. Its close so let's, so let's just…

It is close to the end of 2017 it's close to the beginning of 2018 and second quarter of 2018 yes, it is close.

Okay, so then I guess the final question then not and thank you for all the clarity on the numbers is what are the next steps and I apologize if you said this earlier because I did jump on late but with the negotiations stopped is it just kind of hope for a better market environment or is there some type of proactive move in 2017 whether it is with the banks or another way to show up the financials before you get to that close level in 2018?

The termination of discussions, it is because we are considering one year and a half as time that maybe sufficient not to need to raise equity for the company. And as regards the reason why we are resisting in issuing equity today is because it is not necessary and because we do not want to dilute the existing shareholders but certainly another thing that it should be clear to everyone is that -- the main shareholder is going to participate in any equity offering if it happens after a year from today or a year and a half. And he is not -- we are not resisting in diluting the shareholders and Mr. Palios. We are resisting in diluting the shareholders because even if it was to be an equity offering today Mr. Palios was going to participate.

Understand, okay thank you for the clarity and I appreciate your honest answer Andreas.

Thanks Jon.

Thank you. I would now like to turn the call back over to management for closing remarks.

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.