Diana Containerships reports 2Q loss

diana-containerships

Diana Containerships, a global shipping company specializing in the ownership of containerships, reported a net loss of $8.0 million for the second quarter of 2016, compared to a net income of $0.9 million for the respective period of 2015.

Time charter revenues, net of prepaid charter revenue amortization, were $8.0 million for the second quarter of 2016, compared to $17.3 million for the same period of 2015, mainly due to reduced employment opportunities and time charter rates which has resulted in fewer revenue generating days, partly offset by an increase in ownership days resulting from the enlargement of our fleet.

Net loss for the six months ended June 30, 2016 amounted to $13.8 million, compared to net income of $0.4 million for the same period of 2015. Time charter revenues, net of prepaid charter revenue amortization, for the six months ended June 30, 2016, amounted to $19.8 million, compared to $31.2 million for the same period of 2015.

Suspension of Cash Dividend

The Company’s board of directors has determined that, based on the current container vessel charter market, it will suspend the quarterly cash dividend on its common shares effective with the quarter ended June 30, 2016.  While the Company’s historical annual cash dividend since the second quarter of 2014 has amounted to  $0.01 per common share (or $0.08 per common share adjusted to give effect to the 1 for 8 reverse stock split that became effective on June 9, 2016), the decision to suspend the dividend reflects the board’s determination that it is in the best long term interest of the Company and its shareholders to aggressively preserve liquidity to manage current market conditions and be in a position to benefit from an eventual sector recovery.

Fleet Employment Profile (As of July 26, 2016)
Diana Containerships Inc.’s fleet is employed as follows:
Vessel Sister
Ships*
Gross Rate (USD
Per Day)
Com** Charterers Delivery Date to
Charterers***
Redelivery Date to
Owners****
Notes
BUILT  TEU
7 Panamax Container Vessels
SAGITTA
A $ 5,850 3.50 % CMA CGM 27-Jan-16 16-Aug-16 – 27-Jan-17 1
2010  3,426
CENTAURUS
A $ 10,875 5.00 % Maersk Line A/S 2-Oct-15 2-Sep-16 – 2-Apr-17 2
2010  3,426
YM LOS ANGELES
B $ 21,000 US$350
per day
Yang Ming (UK)
Ltd.
9-Apr-15 19-Oct-16 – 19-Feb-17 3
2006  4,923
YM NEW JERSEY
B $ 21,000 US$350
per day
Yang Ming (UK)
Ltd.
22-Apr-15 24-Sep-16 – 24-Jan-17 3
2006  4,923
PAMINA
(ex Santa Pamina) $ 15,325 4.00 % Zim Integrated
Shipping Services
Ltd
21-May-15 22-Mar-16 4
2005  5,042
DOMINGO
(ex Cap Domingo) C $ 6,150 3.50 % CMA CGM 11-Apr-16 26-Sep-16 – 11-Apr-17
2001  3,739
CAP DOUKATO
(ex Cap San Raphael) C $ 6,250 3.75 % Rudolf A. Oetker
KG
23-Jan-16 21-Aug-16 – 23-Jan-17 1,5
2002  3,739
6 Post – Panamax Container Vessels
PUELO MSC-
Mediterranean
Shipping Co. S.A.,
Geneva
D $ 6,500 3.75 % 17-May-16 17-Apr-17 – 17-Jun-17 6
2006  6,541          
PUCON
D $ 17,000 3.75 % Hapag-Lloyd AG 20-Aug-15 1-Jun-16 4,7,8,9
2006  6,541
MARCH $ 6,200 5.00 % Maersk Line A/S 6-Jan-16 26-Mar-16 10
(ex YM March) E
2004  5,576 $ 6,075 5.00 % SeaGo Line A/S 3-Jul-16 3-Feb-17 – 3-Jul-17 11
GREAT
(ex YM Great) E $ 6,000 5.00 % Maersk Line A/S 15-Feb-16 18-May-16 4,12
2004  5,576
HAMBURG $ 14,000 0.00 % MSC-
Mediterranean
Shipping Co. S.A.,
Geneva
16-Nov-15 27-Jan-16
F
2009  6,494 $ 6,350 5.00 % Maersk Line A/S 31-May-16 24-Aug-16 – 31-Jan-17 1
ROTTERDAM
$ 6,000 5.00 % 2-Feb-16 27-Apr-16 13
F Maersk Line A/S
2008  6,494 $ 6,200 5.00 % 27-Apr-16 27-Oct-16 – 11-Jun-17 14
* Each container vessel is a “sister ship”, or closely similar, to other container vessels that have the same letter.
** Total commission paid to third parties.
*** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of the vessel to the Company.
**** Range of redelivery dates, with the actual date of redelivery being at the Charterers’ option, but subject to the terms, conditions, and exceptions of the particular charterparty.
1 Based on latest information.
2 In September 2015, the Company agreed to extend as from October 2, 2015 the previous charter party with Maersk Line A/S for a period of minimum 11 months to maximum 18 months at a gross charter rate of US$10,875 per day.
3 For financial reporting purposes, an asset is recognized upon the delivery of the vessel which represents the difference between the current fair market value of the charter and the net present value of future contractual cash flows. This asset is amortized over the period of the time charter agreement and is set off against the corresponding revenues during the same period.
4 Currently without an active charterparty.
5 In January 2016, the Company agreed to extend as from January 23, 2016 the previous charter party with Rudolf A. Oetker KG for a period of minimum 3 months to maximum 12 months at a gross charter rate of US$6,250 per day.
6 The charterer has the option to further employ the vessel for a twelve (12) month period, at a gross charter rate of US$8,600 per day starting twelve (12) months after delivery of the vessel to the charterer. After that period the charterer has the option to employ the vessel for a further twelve (12) month period, at a  gross charter rate of US$20,000 starting twenty-four (24) months after delivery of the vessel to the charterer. Charterer has the option to employ the vessel for plus or minus thirty (30) days on final declaration.  All gross charter rates include a 3.75% commission paid to third parties. Options must be declared by the charterer not later than nine (9) months for the first option and twenty (20) months for the second option after the delivery of the vessel to the charterer.
7 The charterers paid the owners a compensation for the early redelivery of the vessel equal to the amount of US$6,000 per day for the period between August 20, 2015 and up to March 20, 2016.
8 Charterers changed to Norasia Container Lines Limited, as per Novation Agreement signed in September 2014 with a retroactive effect from July 1, 2014. As per same Novation Agreement, with effect from April 28, 2015, charterers have changed to Hapag-Lloyd AG.
9 In July 2015, the Company agreed to extend as from August 20, 2015 (00:01) the previous charter party with Hapag-Lloyd AG for a period of up to minimum May 10, 2016 to maximum July 20, 2016 at a gross charter rate of US$17,000 per day.
10 In December 2015, the Company agreed to extend as from January 6, 2016 the previous charter party with Maersk Line A/S for a period of minimum 2 months to maximum 10 months at a gross charter rate of US$6,200 per day.
11 The charter rate commenced 10 days after the delivery of the vessel to the charterers.
12 In January 2016, the Company agreed to extend as from February 15, 2016 the previous charter party with Maersk Line A/S for a period of minimum 2 months to maximum 12 months at a gross charter rate of US$6,000 per day.
13 Vessel was off-hire for scheduled maintenance from April 15, 2016 to April 27, 2016.
14 In March 2016, the Company agreed to extend as from April 27, 2016 (00:01) the previous charter party with Maersk Line A/S for a period of minimum 6 months to about 13 months at a gross charter rate of US$6,200 per day.
Summary of Selected Financial & Other Data
    For the three months ended June 30,   For the six months ended June 30,
    2016   2015    2016   2015 
  (unaudited) (unaudited) (unaudited) (unaudited)
STATEMENT OF OPERATIONS DATA (in thousands of US Dollars):
  Time charter revenues, net of prepaid charter revenue amortization $ 7,999 $ 17,337 $ 19,764 $ 31,218
  Voyage expenses 926 411 1,951 616
  Vessel operating expenses 7,888 9,663 16,778 17,994
  Net income / (loss) (8,011 ) 891 (13,777 ) 388
FLEET DATA
Average number of vessels 13.0 12.7 13.4 11.8
Number of vessels 13.0 13.0 13.0 13.0
Ownership days 1,183 1,153 2,434 2,143
Available days 1,183 1,129 2,389 2,078
Operating days 797 1,114 1,751 2,059
Fleet utilization 67.4 % 98.7 % 73.3 % 99.1 %
AVERAGE DAILY RESULTS
Time charter equivalent (TCE) rate (1) $ 5,979 $ 14,992 $ 7,456 $ 14,727
Daily vessel operating expenses (2) $ 6,668 $ 8,381 $ 6,893 $ 8,397

_____________________

(1) Time charter equivalent rates, or TCE rates, are defined as our time charter revenues, net, less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards.  Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions.  TCE is a non-GAAP measure.  TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts.

(2) Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, lubricant costs, tonnage taxes, regulatory fees, environmental costs and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period.

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