Diana Shipping Inc., a carrier of commodities including iron ore and coal, said fourth-quarter profit rose 17 percent as shipping rates from long-term charters gained and the company’s fleet expanded.
Net income increased to $32.3 million, or 40 cents a share, from $27.6 million, or 34 cents, a year earlier, the Athens-based company said today in a statement. Diana was expected to earn 40 cents a share, according to the average of six analyst estimates compiled by Bloomberg. Sales rose 24 percent to $73 million from $58.6 million.
Diana kept its entire fleet under long-term contracts to avoid volatility in spot, or one-voyage, rates. This strategy kept Diana from a decline in spot rates. The Baltic Dry Index, a measure of spot shipping rates in the dry-bulk market, was 30 percent lower in the quarter than the same period a year earlier, according to London-based Baltic Exchange.
“Diana is relatively insulated from what’s going on within the spot market because they have a fair amount of longer-term charter coverage,” said Michael Webber, senior analyst at Wells Fargo Securities LLC in New York. “They are certainly not a spot player.”
Diana fell 60 cents, or 4.8 percent, to $11.96 in New York Stock Exchange composite trading. The shares have advanced 3.3 percent this year.
“We view conditions in the dry bulk market for the year ahead as extremely challenging, particularly in terms of the supply demand in balance,” Chief Executive Officer Simeon P. Palios said today in a conference call.
Diana operated 25 vessels in the fourth quarter, up from 20 a year ago.
The Baltic Dry Index averaged 2,364 in the fourth quarter, down from 3,401 a year earlier.
Diana was paid an average charter rate of $31,602 per day in the quarter, up 1.9 percent from $31,003 a year earlier.