Diamond S Shipping Inc. (DSSI) exceeds Q4 EPS in 16c, revenues beat
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Diamond S Shipping Inc. (NYSE: DSSI) reported Q4 EPS of ($ 0.71), which is $ 0.16 better than analysts’ estimate of ($ 0.87). Revenue for the quarter was $ 90.04 million from the consensus estimate of $ 74.23 million.
Fourth Quarter Highlights and Recent Events
- Reported net loss attributable to Diamond S of $ 57.8 million, or net loss of $ 1.45 in basic and diluted earnings per share, and Adjusted EBITDA (see Non-GAAP Measures section below) of 8 , 0 million dollars. The reported net loss includes a loss on ship sales, related to the sale of the Aias and the Amoureux, and a canceled sewage treatment plant, which in total amounted to $ 29.6 million . Excluding the loss on ship sales and the cost of the canceled scrubber project, the net loss was $ 28.2 million, or $ 0.71 per share.
- Agreed to sell two Suezmax vessels, the Aias and the Amoureux, which were delivered to buyers in January and February 2021 respectively. The sale of the vessels generated net proceeds of approximately $ 20 million before working capital settlement.
- Net debt as of December 31, 2020 was $ 594.4 million, implying a net debt to asset value leverage ratio of approximately 44% based on broker ratings as of December 2020. At At the end of the quarter, the total cash available to the Company above the bank’s minimum cash requirements was $ 108.1 million.
Craig H. Stevenson Jr., President and CEO of Diamond S, said, “While short-term market conditions are likely to remain challenging, positive long-term market dynamics remain unchanged. In fact, permanent shutdowns of some refineries will lead to increased demand for tankers for product tankers once conditions normalize. Overall demand for tankers is expected to increase gradually during 2021 and possibly return to pre-pandemic levels next year as product demand recovers and inventory levels normalize. Diamond S will be well positioned to create value for our shareholders as the recovery continues. Our recent sale of two Suezmax vessels highlights the disconnect between the tangible market value of our fleet and our current market capitalization. These sales also strengthen our strong liquidity position, reduce our interest costs and are consistent with our historical approach to prudent management of our balance sheet. “
We expect the oil market to remain under pressure for the remainder of the first half of 2021. Demand for crude oil and refined products, while recovering from the lows of the second quarter of 2020, is expected to average 96 million barrels. per day, or 4 million barrels per day below pre-pandemic levels in 2021, according to OPEC. In the near term, however, the supply of tankers appears to be greater than current demand levels as improvements in consumption are offset by drawdowns from inventory.
We believe in the long term fundamentals of the oil industry. The supply of tankers remains balanced based on pre-pandemic demand levels, and the number of ships on order almost matches the number of ships that could be scrapped, based on the average useful life of a ship. We expect conditions to normalize and then gradually improve over the next 12-18 months.
As of March 5, 2021, approximately 81% of the revenue days of the crude fleet operating in the spot market in the first quarter were pegged at an average rate of approximately $ 9,200 per day. In the product fleet, 83% of revenue days operating in the spot market were fixed at an average rate of approximately $ 8,800 per day in the first quarter of 2021. The product fleet comprises a weighted average mix of vessels MR2, set at 85% of earnings days at an average rate of $ 9,100 per day, and MR1 ships, set on 72% of first quarter earnings days at an average rate of $ 6,700 per day.
We continue to monitor the effects of the COVID-19 virus on our business. The shipping industry is not only affected by the reduction in economic activity caused by the global pandemic, but our direct operations face travel restrictions and health protocols that differ in each port where we are. are called upon to provide our services or to maintain the condition of our vessels. Our crews are at the forefront of these challenges with additional health procedures for boarding and extending their contract time on board the ship to ensure safe relief for the next crew. While the Company has faced increased costs in order to support the safe transition of our crews and logistics for the delivery of services and materials to ships, we remain committed to ensuring our crews are in good health. health and safety during the operation of our vessels and the transition to and from our vessels.
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