Greetings, and welcome to Diana Shipping 2017 Second Quarter 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. I would now like to turn the conference over to Ed Nebb, Investor Relations Advisor. Thank you. You may begin.

Thanks, Brenda, and thanks to all of you for joining us for the Diana Shipping second quarter conference call. Members of the company’s management team 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, Chief Operating Officer and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before management begins, let me briefly 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, and beliefs as to future events that may or may not prove to be accurate. And for a description of those risks and uncertainties, please refer to the company’s filings with the SEC. And now without further ado, let me turn the call over to Mr. Simeon Palios, Chairman and CEO.

Thank you, Ed. Good morning and thank you for joining us today to discuss the results of Diana Shipping, Inc. for the second quarter of 2017. The recent quarter was distinguished by several key events, including a common stock offering for the additional three vessels to our fleet. To review our financial results, Diana Shipping, Inc. recorded a net loss of $23.8 million and a net loss attributed to common stockholders of $25.3 million for the second quarter of 2017. This compares to a net loss of $31.3 million and net loss attributed to common stockholders of $32.7 million for the second quarter of 2016. Our time charter revenues were $37.8 million for the second quarter of 2017. This was an increase from $28.3 million for the same period of 2016, due to increased average time charter rates for our vessels and increased ownership days resulting from the enlargement of our fleet. Diana Shipping, Inc. continued to maintain a strong balance sheet. Cash, cash equivalents and restricted cash were $67.8 million at June 30, 2017. Long-term debt, including the current quarter, was $637.7 million compared to stockholder's equity of nearly $1.1 billion. We completed under recent public offering of $80.5 million of our common stock on April 26, 2017. Reflecting our confidence in the future of the company, entities associated with certain Diana Shipping, Inc. executive officers and directors including myself purchased 5.5 million shares in the offering. The company has continued to seek opportunities to expand its fleet and employ substantially all the net proceeds of the offering to fund the acquisition costs of three additional dry bulk vessels. The vessels purchased including two 2013 built Post-Panamax dry bulk vessels, the motor vessel Electra and the motor vessel Phaidra and one 2013 built Kamsarmax dry bulk vessel, the motor vessel Astarte; all of which were delivered in May 2017. Including these recent acquisitions, our fleet now consists of 51 dry bulk vessels. We continue to manage the fleet in a prudent manner that promotes a balance of time charter maturities and produces a predictable revenue stream. Currently, our fixed revenue days based on the earlier delivery date are 84% for 2017 and 19% for 2018. Moving forward, we are confident that our current strategy will leave the company well positioned for a more promising phase on the dry bulk side. With that, I will now turn the call over to our President, Anastasios Margaronis, for a perspective on the industry conditions. He will then be followed by our Chief Financial Officer, Andreas Michalopoulos, who will provide a more detailed financial overview. Thank you.

Thank you, Simeon. Good morning to all the participants on this second quarter conference call of Diana Shipping, Inc. During the second quarter of this year, the bulk carrier industry has shown some clear signs of trying to attain the much awaited balanced state between demand and supply. We start as usual by looking at the main indices. By the beginning of the second quarter, the Baltic Dry Index stood at 1,282 while yesterday closed at 980. The Baltic Cape Index on April 3 was 2,518 and closed yesterday at 1,221. The Baltic Panamax Index moved from 1,379 to 1,225 during the same period. In the meantime, these three indices registered their highest values of the year thus far in March and April with the BDI hitting 1,338 on March 29, the Baltic Cape Index reaching 2,765 on March 28 and the Baltic Panamax Index coming off a high of 1,621 on April 18 this year. According to Gibson Shipbrokers, during the second quarter of this year, there was a ripple of optimism across freight and raw materials market following a commitment by the Chinese leadership that China will achieve its target of 6.5% gross domestic product growth in 2017. This, however, was countered in the actual physical markets by news of a proposed ban of coal imports to second-tier Chinese ports which placed a dampener on expectations of future coal shipment volumes. We’ll see what effect this has had on coal shipments later on in this report. Starting with macroeconomic developments now. The IMS has cut its growth forecast for the U.S. economy for 2017 from 2.3% to 2.1% citing the possible effect of uncertainty associated with White House policies. The U.S. Commerce Department reported that the economy grew at an annualized pace of 1.4% in the first quarter…

Thank you, Stasi, and good morning. I’m pleased to be discussing today with you Diane's operational results for the second quarter and six months ended June 30, 2017. For the second quarter ended June 30, 2017, net loss and net loss attributed to common stockholders amounted to 23.8 million and 25.3 million, respectively. Loss per common share was $0.26. Time charter revenues increased to $37.8 million compared to $28.3 million in the second quarter of 2016. The increase was due to the increased average time charter rate that we achieved for our vessels during the quarter and revenues derived from the addition to our fleet of the vessels Maera delivered in May 2016, San Francisco and Newport News delivered in January 2017 and Astarte, Electra and Phaidra delivered in May 2017. Ownership days were 4,491 in the second quarter of 2017 compared to 4,147 in the same quarter of 2016. Fleet utilization was 97.8% compared to 99.4% for the same quarter of 2016. And the daily time charter equivalent rate was $8,173 compared to $6,003 for the same quarter of 2016. Voyage expenses were $2.1 million for the quarter compared to $3.6 million for the same quarter of 2016. The decrease in voyage expenses was mainly due to a gain on bunkers of $0.4 million in the quarter compared to a loss of $2 million in the same quarter last year. Vessel operating expenses amounted to $22.3 million compared to $21.9 million for the second quarter of 2016 and increased by 2%, mainly due to the 8% increase in ownership days resulting from the enlargement of the fleet. The increase was due to increased repairs and maintenance taxes and other operating expenses and was partly offset by decreased crew costs, insurances and environmental costs. Daily operating expenses were $4,971 for…

Thank you. [Operator Instructions]. Our first question comes from the line of Jon Chappell with Evercore. Please go ahead with your questions.

Thank you. Good afternoon, guys. Andreas, I want to start with the sources and uses of cash in the second quarter. Obviously, you had the equity raise and then the three-vessel acquisitions that closed in May. But the net cash used in investing activities, $108 million and the ships costs 67.8 million. Was the other 40 million associated with the loan to Diana Containerships or there another use of cash there?

No, that’s – the main part is associated with – actually the 40 – yes, it’s the 40 million for the loan to Diana Containerships, Inc. and we had a couple of drydocks as well. But apart from those, we had actually five vessels that went on the drydock. But the main part obviously is the 40 million that you’re referring to for Diana Containerships, Inc. loan.

Okay. So let me ask you two other quick detailed questions on the financial statements, then one more strategic one. First of all, what’s the – if you can remind us, what’s the debt amortization profile on a quarterly basis for the rest of this year and then for next year?

So basically for this year, it’s $57 million but it’s 12 months from now. So for the next 12 months, it’s $57 million. And for the 12 months after, so from July 1, 2018 to June 30, 2019, it’s $117.7 million.

Okay. Thank you. And then also just super quick, what’s the outstanding share count post the equity raise in any of the over-allotment that was completed?

So the outstanding share count is 106,135,017.

Great. Just one last strategic one either for Mr. Palios or Ioannis. I read yesterday that Diana Containerships by your own admission requires more capital and obviously you’ve provided more now with the 82.6 million in total loans there. To what extent will you continue to support that entity? Obviously, there is opportunities in the core business of dry bulk and you’ve already made some timely acquisitions there earlier this year. But it seems like there’s a lot of support to a company that has a $3 million market cap right now. So how much more support would you provide to Diana Containerships at a time where they really need some more capital?

Hi. This is Ioannis speaking. Let me explain something, Jonathan, here because basically we are not supporting Diana Containerships as Diana Shipping, Inc. What we have recently done is we have provided with the loan in order to secure the $42.5 million that it was loaned to Diana Containerships by Diana Shipping, Inc. previously and they were completely unsecured. And also because of the ability of Diana Containerships to buy back the $129 million for five years [ph] with only $85 million, basically the 40 million extra that we placed there gave us the opportunity to get back the 42.5 million that they were in a very difficult situation. To put it differently, Diana Containerships before that deal had a big negative net asset value the way we have calculated it, which means that there was no clear probability of Diana Shipping, Inc. getting back the $42.5 million. By doing what we have done, now we are in a position where we can get back this 42.5 together with the 40. The question that you may have and everybody else may have is, are you putting more money at risk in order to get back the remaining 42.5? And the answer to that question is that there is not a big risk for the 40 if you consider the thought that the 35 of the affiliate parties together with the 40 of Diana, the $75 million were covered with $85 million scrap value of the value of the vessels of Diana Containerships. So basically, by doing that we have managed to increase the probability and normally of Diana Shipping, Inc. getting back the 42.5 needless to say together with the 40. We have not supported Diana Containerships as such. And if you look at that equity participation in Diana Containerships, it’s very, very, very, very small. And we have showed most of it basically.

Okay. I do understand that explanation and I appreciate that, Ioannis. But the one thing that’s a little bit unclear though is that is a cash outflow, as my first question to Andreas pointed out, and now your cash balance is much lower than what would have been indicated post your equity raise. So I’m just curious at this opportune time if we layer in Stasi’s views on the market when maybe you think you should be buying more assets, is that 40 million being used to its best ability right now.

Basically, we have taken the decision that for us it is more important today to secure the $42.5 million rather than make much more acquisitions simply because we have made enough, as we have clearly said in the past. We consider ourselves to be very, very, very, very well positioned already for the market to pick up.

Jon, bear in mind that Diana Shipping, Inc. has reached the critical months for a specific segment. So although we’re looking for more tonnage, we believe that we have all the ammunition to be placed properly in the market as a dry cargo operator.

I understand. Okay. Thank you, Simeon. Thanks, Andreas. Thanks, Ioannis.

Thank you, Jon.

[Operator Instructions]. Our next question comes from the line of Fotis Giannakoulis with Morgan Stanley. Please go ahead with your questions.

Yes. Hi, gentlemen. Thank you. Simeon, I want to ask you about how do you view the market, there are some reports that they talk about an improvement in the last few days. There is a situation of higher coal prices in China and short as of coal [ph]. Have you seen any improvement in the coal trade and overall in the market recently?

Well, I think that the – Fotis, the beauty of Diana Shipping, Inc. is the fact that we haven’t eliminated a norm which is impossible to find the actual number. And the fact that we are flooded in the New York Stock Exchange has provided that ability not to be 100% dependent on how the market is going to move. Of course, we have to be aware of what is happening. But it’s very difficult to predict which way it will go. Obviously, the market has shown some signs of improvement because the amount of tonnage which is coming from the yard on the dry side is much less, no more ordering. And don’t forget that the demand for – or rather the supply of cargos today in actual terms are greater than what they were in 2009. Maybe we have not seen the accumulated increase in the cargos but still the cargos are more than what they were in 2009. So I think we’re coming closer to a recovery.

Thank you, Simeon. I want to ask about the inventories both for coal and for iron ore. How important indicator is for the trade and the demand for ships? We see that the iron ore inventory being very high at this level. I don’t know if we should put any importance on this inventory. On the other hand, the coal inventories in China are at very low levels. Is this something that – any conclusion that we can draw from this data?

On the coal side – Fotis, hi. This is Stasi. There is some signs for optimism because they have been going down on coal reserves for a few years now – quarters I should say, not years. But last year in particular with the slowdown in imports, there was an even more strong drawdown on coal reserves. Now what works against this of course is the Chinese government desire to try and reduce the amount of power produced from coal-fired power stations, but this is a long-term view and we don’t feel it’s going to affect the demand for coal imports over the next few quarters or even years. So on coal, we see more of a direct link between low stockpiles and the higher demand. On iron ore, as you correctly pointed out, stockpiles are not a very reliable guide because it seems that the traders are buying iron ore depending on price. And they don’t seem to be looking very closely to the amount of stockpiles they have provided of course they have somewhere to put it, which we assume they do. So the reason why Commodore Research are bullish about the last part of this year and its demand for Capesize vessels doesn’t base itself on lower stockpiles of iron ore but on the commercial side of the purchase of this commodity as they themselves admit. They’re saying that prices are going to be so compellingly cheap that people are going to buy and then try to figure out what they’re going to do with it.

Fotis, this is Ioannis speaking. For the last 10 years, we have exactly the same discussion about iron ore inventories, et cetera. What we can say though that for the last six years now that it is the first time that we have reached the famous balancing situation between supply and demand. We think that we are in balance as regards to supply and demand. And it is the first time after so many years that we can certainly say that if we are correct with our assumptions about inventories and what that means for the demand and we put that in the equation together with supply and we come up with something as an incremental positive change or negative, it will have an effect on the charter rates. Because we kept saying to everybody the previous quarters that it is irrelevant if your calculation about demand is going to be higher than supply, it would be irrelevant for the charter rate because we had a very big discrepancy between demand and supply. But now that we are in balance, certainly assuming that we are correct in our estimations about demand and supply, it will be shown on the charter rate. And this is something that everyone should be looking for. So let’s say that you analysts or ourselves or the others, we come up with a positive change as it regards demand and supply for the year to come being demand higher than – they increase the demand higher than they increase in supply, then we are positive that this will have a positive effect on the charter rate. And this is what we are expecting, because this is what we calculate ourselves. We calculate demand to – increase in demand to be bigger than the increase in supply. And this is why we have a positive view for the next 12 months.

Thank you, Ioannis. One more question about the commodity demand worldwide. We focus too much on China in this sector, but I want to ask about what happens in the rest of the world? Economists are talking about global synchronize cavalry [ph] that started earlier this year. How do you view the Atlantic basin and other parts of the world outside of China in terms of chartering activity?

Fotis, I think if we look back and consider what the world economy was doing and where we had pockets of disruption in international trade, we are in one of the best situations now on an overall basis than we have been for many years. There have always been in the past certain areas of the world where trade was being disruptive for some reason or another, which prevented us from having an unqualified view especially as regards demand for world trade. Here, we have some pretty predictable forces at work. A slight slowdown in the rate of growth in the United States counterbalanced by at long-last an increased rate of growth in Europe. At the same time, we have Japan which is fluctuating between growth and [indiscernible] but we feel that analysts are right in saying that eventually economic activity will pick up there as well. And then we have the developing economies in Asia that I mentioned also in the report, which are steadily picking up trade. Now, the effect of this on a net basis we feel and maybe we are wrong, but we agree with the analysts that do feel this way, it’s going to be positive for world growth. So all we have to do is restrain ourselves from ordering too much tonnage and increasing the supply of ships, because there will be trade there both in the container that is trade and in the bulk trade to keep busy the tonnage that is offered to carry these commodities. And the carriage is going to be done more and more renewal with these time charter rates. We have of course places like Africa and South America that has been having their problem because of their own issues; Africa political and in South American continent commodity pricing. But even there, commodity price stabilization is going to help give some more positive visibility on the trade that is going to affect mainly the North, South trade in the containership market but also the bulk carrier rate. So overall, I think what’s happening in the world is marginally but rather clearly positive now for seaborne trade.

Thank you very much, Simeon. That’s very helpful. One last question about the supply and the discipline that you encourage your fellowship owners to show. Resale prices have moved above newbuilding prices for the first time after many years. I was wondering how disciplined do you think that the other companies are going to aim to be if all this discussion that we heard in the first quarter about potential orders, whether there is a risk of materializing? And also if you can comment about the new laws of regulations, if this is going to have any impact on the supply of tonnage? There are some people where they are talking about slowing down the fleet. On the other hand, there is a cost associated that they might or might not be able to pass to the customers. If you can give us your views on these two issues.

This is Ioannis speaking again, Fotis. First of all, the discipline by the owners is not going to be shown simply because the owners are thinking about the future, et cetera. It has to been seen together with the psychology as regards the future. The reason why we have no newbuilding orders is because the psychology is not so optimistic as we speak, and this is a good thing, and it should stay like that. We should be skeptical about the future of the rates, the future of the market. And from the moment we are skeptical, then the forces are going to work towards the right direction. And then people will think that this is not going to be sustainable. The market will keep moving up. And then suddenly, everyone will think that this is going to be sustainable and the market is going to get destroyed after a while. What I’m trying to say is that the fact that we see no newbuilding orders in big numbers as we speak today, it has to do with the psychology which is neither here or there about the future of the market. Now as regards the low – the values expenses that they’re going to be necessary for the ship-owners, again everything is calculated in the supply and demand numbers that we have been talking about. And don’t forget that if the rate environment is high, people will pay whatever they have to pay in order to keep their vessels running since they’re going to be profitable. We cannot keep using cost arguments in favor of the market picking up, because it is a secular way of thinking and you cannot have both at the same time. We will either have a market improving and people will pay whatever they have to pay in order to keep their vessels running, or we will have a market going down and people not being able to pay for these type of things, well, they’re going to scrap the vessels. And at the end of the day, the market is going to pick up again.

Thank you very much, Ioannis. Thank you all for your answers.

You’re welcome.

Our next question comes from the line of Gregory Lewis with Credit Suisse. Please go ahead with your questions.

Hi. Thank you. Good afternoon, gentlemen.

Hi, Greg.

Hi, Greg.

Hi, Greg.

So you have mentioned that the fleet is where you kind of want it to be in terms of size. But just given that, could you talk a little bit about what you’re seeing in the sale and purchase market for secondhand vessels? Clearly, asset prices have shot up pretty aggressively this year from where they were at the end of last year. Are you starting to see signs of owners looking to sell vessels or is this still where there’s a scarcity of tonnage out there for secondhand acquisitions?

There are ships available for potential purchases. And where I can comment is that you have less – take yesterday, less people are willing to buy ships at today’s prices. And that is a sign that the owners are very skeptical and they understand what is happening in the market and they are not rushing to order newbuildings or to buy re-sales or to be buy for that matter secondhand ships. But that eventually may come if the market goes up further. I don’t know whether I have answered your question.

No, that was actually pretty good, insightful. Thank you. And then just one follow up for me. As I kind of go back and look at the initial core fleet of Panamax vessels, at this point there is more than a handful of vessels that are in that – I guess in lot of that 16-year-old range. Are we at a point in this cycle where it could make sense to start to sell some of these assets, or is it still maybe too early in how you’re viewing this potential up cycle to want to start to sell some of the older non-core tonnage at this point?

We have the feeling that the market is not there yet to start selling the older ships. But of course we have it in mind, yes. But our fleet is quite good in general and the average age is below the eight years. So I think it’s pretty good. But we have in mind eventually when the market shows some increase to start selling the older tonnage.

Greg, I have to remind you that these vessels were vessels with such a useful life ahead of them in order to dissolve [ph] in a good market again. And they will see a good market before they get sold.

Don’t forget that most of these ships which we have in our position we have built ourselves and they’re our own supervision. And we are happy with the quality of the ships we have.

Okay, guys, that’s perfect. Thank you very much for the time.

Thanks, Greg.

Thank you, Greg.

Thank you. We have no further questions at this time. I’d like to turn the floor back to management for any closing comments.

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

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.