Greetings and welcome to the Diana Shipping Incorporated 2020 First Quarter Conference Call. At this time, all participants are in a listen-only mode. A 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. Thank you, sir. Please go ahead.

Thank you, Donna, and thanks to all of you for joining us for the Diana Shipping Inc. 2020 first quarter conference call. The members of the management team who are with us today include: Ms. Semiramis Paliou, Acting Chief Executive Officer and Chief Operating Officer; Mr. Anastasios Margaronis, President; Mr. Ioannis Zafirakis, Interim Chief Financial Officer, Chief Strategy Officer, Treasurer and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before management begins, let me briefly summarize the Safe Harbor notice. Certain statements made during this call, which are not historical fact are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act. And such forward-looking statements are based on assumptions, expectations, projections, or 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 results to differ from the forward-looking statements, please refer to the company’s filings with the SEC. And with that, let me turn the call over to Ms. Paliou.

Thank you, Ed. Good morning and thank you for joining us today to discuss the results of Diana Shipping, Inc. for the first quarter of 2020. I am addressing you today in my capacity as Acting Chief Executive Officer. I also bring greetings from our Chairman and CEO, Simeon Palios. He asked me to tell you that he looks forward to joining us on future calls. As individuals, businesses and governments around the world continue to deal with the challenges of the pandemic. The near-term outlook for the dry bulk shipping sector is uncertain. What is certain, however, is that Diana Shipping Inc. has successfully navigated previous difficult economic cycles. We are confident in our strategies and our ability to emerge from this period as a strong shareholder-focused company. To summarize the results of the 2020 first quarter, the company’s financial performance primarily reflected lower time charter revenues and impairment loss on vessel values, a loss from the sale of a vessel and higher expenses related to the economic impact of the COVID-19 pandemic. Nonetheless, we continued our strategic approach managing our fleet, announcing an agreement to sell an older vessel. And we have once again returned capital to our shareholders in the form of a self-tender offer early in the quarter and share repurchases under our share repurchase plan. With respect to our financial results for the first quarter of 2020, Diana Shipping reported a net loss of US$102.8 million and a net loss attributed to common stockholders of US$104.3 million, including a US$93.1 million impairment loss. This compares to net income of US$3.0 million and net income attributed to common stockholders of US$1.5 million in the first quarter of 2019, including a US$4.8 million impairment loss. Loss per share for the first quarter of 2020 was US$1.21 compared…

Thank you, Semiramis, and welcome to all who have made the effort to participate in this conference call in spite of the prevailing difficulties created by the current pandemic. The dry bulk market started the year with rather promising prospects. Unfortunately, the rapid expansion of COVID-19 has certainly created havoc in commerce and the dry bulk trade was no exception. The Baltic Dry Index, which started the year at 976, closed yesterday at 398. The Baltic Panamax Index stood at 1,003 on January 3 and closed yesterday at 628. The Baltic Cape Index was at 1646 at the beginning of the year and closed on May 13, at minus 17. We will look at these 2 types of vessels, the Panamax’s and Cape’s, and their current as well as prospective earnings later on in this short presentation. Starting as usual with some macroeconomic developments, it’s worth noting that the IMF has cut its 2020 global GDP growth figures down to minus 3% contraction for the year versus 3.3% growth in its latest set of forecasts. In 2021, growth is expected to rebound to 5.8%, which is 2.4% higher than it previously predicted. Unfortunately, according always to the IMF, this rebound will not bring global output quite back to its pre-COVID-19 level. According to the IMF, GDP growth in the Eurozone during the first quarter was a negative 3.8% quarter-on-quarter. For this year as a whole Europe is expected to contract by around 7.5%. In the United States, second quarter contraction is expected to be 10%. For the year, the IMF expects the U.S. economy to contract by as much as 6.1%. About 3 weeks ago, China reported that it’s GDP declined by 6.8% year-on-year during the first quarter of this year marking the first official quarterly contraction in almost half…

Hello, good morning to everyone. Very pleased to be discussing today with you, Diana’s operational results for the 3 months ended, March 31, 2020. From my new position as an interim CFO of this company, I think I’m getting very old for this, but never mind. So during this quarter, we recorded a net loss attributed to common stockholders of US$104.3 million or US$1.21 per common share. However, these results included the US$93.1 million of impairment loss from vessel values, which is equal to US$1.8 loss per share, which means that per share loss adjusted for impairment was – if I can say only US$0.13 per share. As you are aware, during 2019, we sold 6 of our vessels and another 1 in the first quarter of 2012, which, of course, decrease the ownership days this quarter to 3,801 compared to 4,320 for the same quarter of 2019. Of course, we had less ownership days together with deteriorate the market conditions led to lower revenues of $43.8 million compared to the $60.3 million in the first quarter of 2019. Another reason for the decrease, the revenues was fleet utilization which was 96.4% compared to 99.7% for the same quarter of 2019. And you can understand that this is mainly due to COVID-19 related issues. The daily time charter equivalent rate that we achieved during the specific quarter was $11,377 compared to $13,453 for the same quarter of 2019. In addition to the above, we had an increase in voyage expenses were $3.7 million for the quarter compared to $2.8 million for the same quarter of 2019. And that increase in voyage expenses was due to loss from bunkers that they amounted that – amounting to $1.3 million compared to $0.4 million gain that we had the same period last year. During the first quarter, our vessel operating expenses amounted to $21.3 million, compared to $22.4 million. Although this total number of operating expenses was lower than the previous year’s quarter. Daily operating expenses were a bit higher at $5,608 compared to $5,175 for the same quarter of 2019. Our general and administrative expenses were increased to $9.5 million compared to $7.5 million for the same quarter last year, resulting from the resignation of 2 Board Members, whose shares had to be vested in the first quarter of 2020. The good news for this quarter was the interest and finance costs, which amounted to $6.4 million compared to $7.7 million in the same quarter of 2019. This decrease was attributable to the decreased interest – due to the decreased interest rates, and of course, decreased average debt compared to the same quarter of 2019. We thank you for your attention. And, now we are pleased to respond to your questions and we will turn the call to the operator, who will instruct you as to the procedure for asking questions.

Thank you. The floor is now open for questions. [Operator Instructions] Our first question is coming from Omar Nokta of Clarksons. Please go ahead.

Thank you. Hello, everyone. And hi, Semiramis, it’s good to speak to you and looking forward to speaking again with Mr. Palios.

Thank you, Omar.

Yeah, so just wanted to – you’ve obviously, you and the team, you’ve given us a sobering overview of the dry bulk market and the broader economic backdrop. The write-down on the ships today, it’s not a surprise, given the extreme weakness that we’ve been seeing in charter rates and the pressure on ship values. And apologies, if you already addressed this in your opening remarks, but want to just get a sense of how many of the 41 ships you own does that impairment apply to? And was it vessel-class-specific? Was it age? Just some color on that would be helpful. Thank you.

Hi, Omar. This is Ioannis. We’ve had 9 of our vessels that we’ve had to take impairment and I cannot say that it is class-specific. We had some Capesizes and some Panamaxes that we did that. You understand that the environment is different. You know how the test is done. You have to take assumptions as regards future revenues, together with increased values – with increased operating expenses, you come up with a number that force you to take impairment and bring the value of the vessel closer to the actual value of the ship rather than the book value. Impairment is not a bad thing. It gives a clearer picture I think to everyone. And from the moment we have to take it, we take it.

Yeah. And I think I know the answer, but any minimum net worth, covenant thresholds that have been used as a result?

No.

No.

The answer is no.

Yeah, good to hear, and…

And don’t forget also that most of the terms in the loans refer to actual values rather than book, but there are some on book, but they are higher than the market values.

Yeah. And, Ioannis, as Interim CFO, according to the 20-F, looks like debt repayments are pretty manageable for this year. I think it was around maybe $48 million, $50 million, if I recall. And maturities in next year were maybe about $140 million or repayments are $140 million. As you think about refinancing and looking at the capital structure of those, the $48 million call it for this year, the $140 million for next year, how much of these payments did you see being able to defer just by virtue of refinancing balloon payments?

Thank you for that question. We are about to issue a press release tomorrow, talking about some of these facilities. So you know it very well, to know that we are proactive on that respect. And we will certainly be in a position to conclude something soon.

Okay, all right. Well, I look forward to that. And maybe just one more if you don’t mind. Just want to think about the cash, obviously, in a nice cash position, excluding restricted cash at $90 million. When we think about just the cash coming in, in the second quarter, I know the Norfolk you had sold for the $8.75 million, are those proceeds already in the balance sheet or is that coming in the second quarter?

No, they are already in the balance sheet, the proceeds.

Okay. All right, well, that’s it for me. Thank you.

Thank you, Omar.

[Operator Instructions] Our next question is coming from Randy Giveans of Jefferies. Please go ahead.

Howdy, Semiramis, Stacey and Ioannis? How’s it going?

Hi, Randy.

Hi, Randy.

Here we are, hopefully, yeah. Hey, hey, hopefully. Simeon’s doing better. And, Ioannis, congrats on the new role here.

Yeah, thank you very much.

All right, well, yeah. So, last quarter, we saw the sales of Calipso and Norfolk, both get canceled. The Norfolk has since been sold. But just trying to get a sense for your plans for the Calipso, maybe some of your older vessels in the near-term, are vessel sales even an option kind of in this environment? And would the proceeds be used for share buybacks or just further kind of debt delevering?

Again, you know us very well. Certainly, we have not given up the thought of [selling the older tonnage and the un-mortgaged] [ph] vessels. And this is something that we are considering. As regards the proceeds from that sale, you know very well that today as we speak, the main name of the game for ourselves is defense. And therefore, most probable scenario is that we will keep the money aside from the sales. However, having said that, we should not exclude the extreme situation where the values of our stock is – the value of our stock is very, very depressed and we may do some repurchases. Having said that, you understand that we have taken the position that we are in a very – we are in an uncharted territory. And we should not be investing large amounts of money on anything and be ready for in case the scenario is the worst one expected.

Sure. It’s understandable. Now, you mentioned kind of uncharted territory. Clearly, the first half of 2020 has been weak. But we’ve seen some weak periods before, the first half of 2016, even first half of last year with [the crude – damp there] [ph] and stuff. How does this year kind of compare to those periods? And do you expect a rebound in the coming months?

I know that [toddlers] [ph], they have found valid argument to try to persuade themselves and the others that the market may turn in the second half of 2020. But we are in the opinion that it is the first time that we see drop in the demand due to many of world economies having a problem. It’s not as if we have one or two economies that they are having a problem. We are talking about almost the entire world. Too many parts of the chain have been broken. And, therefore, I don’t think that anyone should be in a position to be talking about speedy recovery, because you understand that everything depends on too many countries. Now, I know that a lot of money are going to be spent as stimulus packages around the world. And certainly, it depends on what type of stimulus packages and where the money are going to be spent. And there is a good scenario where these money are spent in infrastructure and things that we carry raw materials for. But I don’t think that anyone should take that scenario as being the most probable.

Okay. And kind of with those sentiments, how are you kind of preparing for that, in terms of either short-term chartering, 3, 6, 9 months versus the longer term 12, 18, 24 months?

No, we keep our hedging strategy. And we secure some long-term and some short-term. What we don’t want to do is have a lot of vessels opening at the same time and not end up in a period where everything is really bad and have a lot of vessels opening. So you should be expecting the company to do the same thing that we were doing the last 15 years. And you have to understand that when you have a hedging strategy, you do not amend based on what’s happening around you. Otherwise it’s not a hedging strategy. We have too many safety valves and one safety valve is not to take the position that the market is going to be better after six months, and therefore, go short-term now. This is not what we’re going to do.

Yeah, that’s it. That’s it for me. Good chatting and we’ll talk soon. Take care.

Thank you, Randy.

Thank you. At this time, I would like to turn the floor back over to management for closing comments.

Thank you again for your interest in and support of Diana Shipping Inc. We look forward to speaking with you in the year [future] [ph] ahead. Thank you.

Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines at this time and have a wonderful day.