FORM
6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of September
2023
Commission File Number: 001-32458
DIANA SHIPPING INC.
(Translation of registrant's name into English)
Pendelis 16, 175 64 Palaio Faliro, Athens, Greece
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-
F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): [ ].
Note
: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to
provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): [ ].
Note
: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a
report or other document that the registrant foreign private issuer must furnish and make public under the laws of
the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home
country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long
as the report or other document is not a press release, is not required to be and has not been distributed to the
registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K
submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this Report on Form 6-K as Exhibit 99.1 is the unaudited interim consolidated financial statements of
Diana Shipping Inc. (the "Company") as of and for the six months ended
June 30, 2023
.
The information contained in this Report on Form 6-K is hereby incorporated by reference into the Company's
registration statements on Form F-3 (File Nos. 333-256791 and 333-266999) that were filed with the U.S. Securities
and Exchange Commission and became effective on July 9, 2021 and September 16, 2022, respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
DIANA SHIPPING INC.
(registrant)
Dated: September 26, 2023
By:
/s/ Ioannis Zafirakis
Ioannis Zafirakis
Chief Financial Officer
3
Management's Discussion and Analysis Of
Financial Condition and Results Of Operations
The following management's discussion and analysis should be read in conjunction with our interim
unaudited consolidated financial statements and their notes attached hereto. This discussion contains
forward-looking statements that reflect our current views with respect to future events and financial
performance. Our actual results may differ materially from those anticipated in these forward-looking
statements. For additional information relating to our management's discussion and analysis of financial
condition and results of operation, please see our annual report on form 20-F for the year ended
December 31, 2022 filed with the with the SEC on March 27, 2023.
Our Operations
We charter our vessels, owned and bareboat chartered-in, to customers primarily pursuant to short-,
medium- and long-term time charters. Under our time charters, the charterer typically pays us a fixed
daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and
canal charges. We remain responsible for paying the chartered vessel's operating expenses, including
the cost of crewing, insuring, repairing, and maintaining the vessel, the costs of spares and consumable
stores, tonnage taxes and other miscellaneous expenses, and we also pay commissions to one or more
unaffiliated ship brokers and to in-house brokers associated with the charterer for the arrangement of the
relevant charter.
The following table presents certain information concerning the dry bulk carriers in our fleet, as of the
date of this report.
4
Fleet Employment (As of September 25, 2023)
VESSEL
SISTER
SHIPS*
GROSS RATE
(USD PER DAY)
COM**
CHARTERERS
DELIVERY DATE
TO
CHARTERERS***
REDELIVERY DATE TO
OWNERS****
NOTES
BUILT DWT
9 Ultramax Bulk Carriers
1
DSI Phoenix
A
13,250
5.00%
ASL Bulk Marine Limited
04/Nov/22
4/Mar/2024 - 4/May/2024
2017 60,456
2
DSI Pollux
A
17,000
5.00%
Delta Corp Shipping Pte.
Ltd.
27/Oct/22
27/Dec/2023 - 27/Feb/2024
2015 60,446
3
DSI Pyxis
A
17,100
4.75%
Cargill Ocean Transportation
Singapore Pte. Ltd.
16/Oct/22
28/Aug/2023
1
2018 60,362
14,250
5.00%
ASL Bulk Marine Limited
24/Sep/23
10/Oct/2024 - 10/Dec/2024
4
DSI Polaris
A
13,100
5.00%
ASL Bulk Marine Limited
12/Nov/22
12/May/2024 - 12/Jul/2024
2
2018 60,404
5
DSI Pegasus
A
14,000
5.00%
Reachy Shipping (SGP) Pte.
Ltd.
07/Dec/22
15/Jul/2024 - 15/Sep/2024
2015 60,508
6
DSI Aquarius
B
14,200
5.00%
Engelhart CTP Freight
(Switzerland) SA
01/Feb/23
10/Jan/2024 - 25/Mar/2024
2016 60,309
7
DSI Aquila
B
13,300
5.00%
Western Bulk Carriers AS
22/Nov/22
10/Oct/2023 - 15/Nov/2023
3
2015 60,309
8
DSI Altair
B
13,800
5.00%
Western Bulk Carriers AS
23/Jun/23
10/Aug/2024 - 10/Oct/2024
2016 60,309
9
DSI Andromeda
B
14,250
5.00%
Western Bulk Carriers AS
17/Nov/22
16/Oct/2023 - 16/Dec/2023
4, 5
2016 60,309
7 Panamax Bulk Carriers
10
ARTEMIS
10,000
5.00%
ASL Bulk Shipping Limited
17/Jun/23
4/Oct/2023 - 15/Oct/2023
3
2006 76,942
11
LETO
14,500
4.75%
Cargill International S.A.,
Geneva
29/Jan/23
1/Mar/2024 - 30/Apr/2024
2010 81,297
12
SELINA
C
12,000
4.75%
Cargill International S.A.,
Geneva
20/May/23
15/Sep/2024 - 15/Nov/2024
2010 75,700
13
MAERA
C
12,000
4.75%
Cargill International S.A.,
Geneva
16/Dec/22
28/Oct/2023 - 28/Dec/2023
2013 75,403
14
ISMENE
14,000
5.00%
ST Shipping and Transport
Pte. Ltd.
10/Jan/23
25/Aug/2023
6
2013 77,901
12,650
5.00%
Paralos Shipping Pte., Ltd.
13/Sep/23
15/Apr/2025 - 30/Jun/2025
15
CRYSTALIA
D
12,500
5.00%
Reachy Shipping (SGP) Pte.
Ltd.
08/Nov/22
06/Sep/23
2014 77,525
11,250
5.00%
06/Sep/23
20/Feb/2024 - 20/Apr/2024
16
ATALANDI
D
13,250
4.75%
Aquavita International S.A.
15/Feb/23
5/Mar/2024 - 5/May/2024
2014 77,529
6 Kamsarmax Bulk Carriers
17
MAIA
E
25,000
5.00%
Hyundai Glovis Co. Ltd.
24/May/22
23/Sep/2023
7
2009 82,193
13,500
5.00%
ST Shipping and Transport
Pte. Ltd.
23/Sep/23
15/Jun/2024 - 20/Aug/2024
18
MYRSINI
E
15,000
5.00%
Salanc Pte. Ltd.
22/Nov/22
20/Apr/2024 - 28/Jun/2024
2010 82,117
19
MEDUSA
E
14,250
5.00%
ASL Bulk Shipping Limited
14/May/23
10/Feb/2025 - 15/Apr/2025
2010 82,194
20
MYRTO
E
18,000
5.00%
Tata NYK Shipping Pte. Ltd.
03/Aug/22
15/Jul/23
2013 82,131
12,650
5.00%
Cobelfret S.A., Luxemburg
15/Jul/23
1/Nov/2024 - 15/Jan/2025
5
21
ASTARTE
15,000
5.00%
Reachy Shipping (SGP) Pte.
Ltd.
29/Apr/23
1/Aug/2024 - 1/Oct/2024
2013 81,513
22
LEONIDAS P. C.
17,000
4.75%
Cargill International S.A.,
Geneva
17/Mar/23
17/Feb/2024 - 17/Apr/2024
8
2011 82,165
5 Post-Panamax Bulk Carriers
23
ALCMENE
13,000
5.00%
SwissMarine Pte. Ltd.,
Singapore
02/Jan/23
10/Jan/2024 - 25/Mar/2024
2010 93,193
24
AMPHITRITE
F
14,250
5.00%
Cobelfret S.A., Luxemburg
09/Nov/22
1/Dec/2023 - 15/Feb/2024
2012 98,697
25
POLYMNIA
F
15,000
5.00%
Cobelfret S.A., Luxemburg
14/Jan/23
1/Apr/2024 - 31/May/2024
9
2012 98,704
26
ELECTRA
G
14,500
5.00%
Cobelfret S.A., Luxemburg
13/Apr/23
1/Jun/2024 - 1/Aug/2024
2013 87,150
27
PHAIDRA
G
12,250
4.75%
Aquavita International S.A.
09/May/23
1/Sep/2024 - 15/Nov/2024
2013 87,146
10 Capesize Bulk Carriers
28
SEMIRIO
H
19,700
5.00%
C Transport Maritime Ltd.,
Bermuda
15/Dec/21
18/Aug/23
2007 174,261
14,150
5.00%
Solebay Shipping Cape
Company Limited, Hong
Kong
18/Aug/23
20/Nov/2024 - 30/Jan/2025
29
BOSTON
H
17,000
5.00%
ST Shipping and Transport
Pte. Ltd.
06/May/23
15/Jul/2024 - 15/Oct/2024
2007 177,828
30
HOUSTON
H
13,000
5.00%
EGPN Bulk Carrier Co.,
Limited
21/Nov/22
1/Jul/2024 - 31/Aug/2024
2009 177,729
31
NEW YORK
H
16,000
5.00%
SwissMarine Pte. Ltd.,
Singapore
11/Jun/23
1/Oct/2024 - 7/Dec/2024
2010 177,773
32
SEATTLE
I
26,500
5.00%
Solebay Shipping Cape
Company Limited, Hong
Kong
02/Mar/22
28/Sep/2023 - 15/Oct/2023
3
2011 179,362
33
P. S. PALIOS
I
31,000
5.00%
Classic Maritime Inc.
11/Jun/22
15/Apr/2024 - 30/Jun/2024
2013 179,134
34
G. P. ZAFIRAKIS
J
17,000
5.00%
Solebay Shipping Cape
Company Limited, Hong
Kong
12/Jan/23
15/Jun/2024 - 15/Aug/2024
2014 179,492
35
SANTA BARBARA
J
21,250
5.00%
Smart Gain Shipping Co.,
Limited
07/May/23
10/Oct/2024 - 10/Dec/2024
10
2015 179,426
36
NEW ORLEANS
32,000
5.00%
Engelhart CTP Freight
(Switzerland) SA
25/Mar/22
20/Nov/2023 - 31/Jan/2024
10
2015 180,960
37
FLORIDA
25,900
5.00%
Bunge S.A., Geneva
29/Mar/22
29/Jan/2027 - 29/May/2027
5
2022 182,063
4 Newcastlemax Bulk Carriers
38
LOS ANGELES
K
17,700
5.00%
Nippon Yusen Kabushiki
Kaisha, Tokyo
15/Jan/23
20/May/2024 - 5/Aug/2024
2012 206,104
39
PHILADELPHIA
K
26,000
5.00%
C Transport Maritime Ltd.,
Bermuda
12/Apr/22
1/Feb/2024 - 15/Apr/2024
2012 206,040
40
SAN FRANCISCO
L
22,000
5.00%
SwissMarine Pte. Ltd.,
Singapore
18/Feb/23
5/Jan/2025 - 5/Mar/2025
2017 208,006
41
NEWPORT NEWS
L
28,000
5.00%
Koch Shipping Pte. Ltd.,
Singapore
16/Dec/21
01/Jul/23
2017 208,021
23,500
5.00%
01/Jul/23
20/Sep/23
20,000
5.00%
Nippon Yusen Kabushiki
Kaisha, Tokyo
20/Sep/23
10/Mar/2025 - 10/Jun/2025
* Each dry bulk carrier is a “sister ship”, or closely similar, to other dry bulk carriers that have the same letter.
** Total commission percentage 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.
6
**** 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.
1Vessel on scheduled drydocking from August 28, 2023 to September 24, 2023.
2Vessel on scheduled drydocking from June 18, 2023 to July 5, 2023.
3Based on latest information.
4The fixture includes the option for redelivery of vessel east of Suez against a gross ballast bonus of US$250,000.
5Bareboat chartered-in for a period of ten years.
6Vessel on scheduled drydocking from August 25, 2023 to September 13, 2023.
7Vessel off hire for 3.93 days.
8Vessel off hire for 6.83 days.
9The charter rate was US$10,000 per day for the first 30 days of the charter period.
10Bareboat chartered-in for a period of eight years.
7
Factors Affecting Our Results of Operations
We believe that our results of operations are affected by the following factors:
(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant
period, as measured by the sum of the number of days each vessel was a part of our fleet during the
period divided by the number of calendar days in the period.
(2) Ownership days are the aggregate number of days in a period during which each vessel in our
fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and
affect both the amount of revenues and the amount of expenses that we record during a period.
(3) Available days are the number of our ownership days less the aggregate number of days that our
vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special
surveys and the aggregate amount of time that we spend positioning our vessels for such events. The
shipping industry uses available days to measure the number of days in a period during which vessels
should be capable of generating revenues.
(4) Operating days are the number of available days in a period less the aggregate number of days
that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping
industry uses operating days to measure the aggregate number of days in a period during which vessels
actually generate revenues.
(5) We calculate fleet utilization by dividing the number of our operating days during a period by the
number of our available days during the period. The shipping industry uses fleet utilization to measure a
company's efficiency in finding suitable employment for its vessels and minimizing the number of days
that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel
upgrades, special surveys or vessel positioning for such events.
(6) Time charter equivalent rates, or TCE rates, are defined as our time charter revenues 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 rate is a non-GAAP measure, and management believes it is useful to
investors because it 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.
(7) Daily vessel operating expenses, which include crew wages and related costs, the cost of
insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores,
tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses
by ownership days for the relevant period.
The following table reflects such factors for the periods indicated:
8
For the six months ended June 30,
2023
2022
Ownership days
7,468
6,202
Available days
7,407
5,974
Operating days
7,377
5,919
Fleet utilization
99.6%
99.1%
Time charter equivalent (TCE) rate
$
17,910
$
23,400
The following table reflects the calculation of our TCE rates for the periods presented:
For the six months ended June 30,
2023
2022
in thousands of US Dollars, except for days and
TCE rates
Time charter revenues
$
140,021
$
140,456
less: Voyage expenses
(7,364)
(663)
Time charter equivalent revenues
132,657
139,793
Available days
7,407
5,974
Time charter equivalent (TCE) rate
$
17,910
$
23,400
Time Charter Revenues
Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which
our vessels operate and the amount of daily charter hire rates that our vessels earn under charters,
which, in turn, are affected by a number of factors, including:
●
●
●
●
●
●
●
Vessels operating on time charters for a certain period of time provide more predictable cash flows over
that period of time but can yield lower profit margins than vessels operating in the spot charter market
during periods characterized by favorable market conditions. Vessels operating in the spot charter market
generate revenues that are less predictable but may enable their owners to capture increased profit
margins during periods of improvements in charter rates although their owners would be exposed to the
risk of declining charter rates, which may have a materially adverse impact on financial performance. As
we employ vessels on period charters, future spot charter rates may be higher or lower than the rates at
9
which we have employed our vessels on period charters. Our time charter agreements subject us to
counterparty risk. In depressed market conditions, charterers may seek to renegotiate the terms of their
existing charter parties or avoid their obligations under those contracts. Should a counterparty fail to
honor their obligations under agreements with us, we could sustain significant losses which could have a
material adverse effect on our business, financial condition, results of operations and cash flows.
Voyage Expenses
We incur voyage expenses that mainly include commissions because all of our vessels are employed
under time charters that require the charterer to bear voyage expenses such as bunkers (fuel oil), port
and canal charges. Although the charterer bears the cost of bunkers, we also have bunker gain or loss
deriving from the price differences of bunkers. When a vessel is delivered to a charterer, bunkers are
purchased by the charterer and sold back to us on the redelivery of the vessel. Bunker gain, or loss,
results when a vessel is redelivered by her charterer and delivered to the next charterer at different
bunker prices, or quantities.
We currently pay commissions ranging from 4.75% to 5.00% of the total daily charter hire rate of each
charter to unaffiliated ship brokers, in-house brokers associated with the charterers, depending on the
number of brokers involved with arranging the charter. In addition, we pay a commission to DWM and to
DSS for those vessels for which they provide commercial management services. The commissions paid
to DSS are eliminated from our consolidated financial statements as intercompany transactions. The
effect of bunker prices cannot be determined, as a gain or loss from bunkers results mainly from the
difference in the value of bunkers paid by the Company when the vessel is redelivered to the Company
from the charterer under the vessel’s previous time charter agreement and the value of bunkers sold by
the Company when the vessel is delivered to a new charterer.
Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses
relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes,
environmental plan costs and HSQ and vetting. Our vessel operating expenses generally represent fixed
costs.
Vessel Depreciation
The cost of our vessels is depreciated on a straight-line basis over the estimated useful life of each
vessel. Depreciation is based on the cost of the vessel less its estimated salvage value. We estimate the
useful life of our dry bulk vessels to be 25 years from the date of initial delivery from the shipyard, which
we believe is common in the dry bulk shipping industry. Furthermore, we estimate the salvage values of
our vessels based on historical average prices of the cost of the light-weight ton of vessels being
scrapped.
General and Administrative Expenses
We incur general and administrative expenses which include our onshore related expenses such as
payroll expenses of employees, executive officers, directors and consultants, compensation cost of
restricted stock awarded to senior management and non-executive directors, traveling, promotional and
other expenses of the public company, such as legal and professional expenses and other general
expenses. General and administrative expenses are not affected by the size of the fleet. However, they
are affected by the exchange rate of the Euro to US Dollars, as about half of our administrative expenses
are in Euro.
10
Interest and Finance Costs
We incur interest expenses and financing costs in connection with vessel-specific debt, senior unsecured
bond and finance liabilities. As of June 30, 2023 total long-term debt amounted to $542.9 million and
finance liabilities amounted to $137.9 million. While our bond and finance liabilities have a fixed interest
rate, the loan agreements with our banks have a floating rate based on LIBOR or term SOFR plus a
margin.
Inflation
Since 2022 there have been significant global inflationary pressures which have affected our operating
and drydocking costs.
Results of Operations
Six months ended June 30, 2023, compared to the six months ended June 30, 2022
Time charter revenues.
the six months ended June 30, 2023, compared to $140.5 million for the same period of 2022. The
decrease in time charter revenues was due to the decreased average time charter rate of $17,910 per
vessel per day that the Company achieved for its vessels in the six months ended June 30, 2023,
compared to $23,400 in the same period of 2022, representing an 23% decrease. This decrease, which
was due to the weakened market conditions, was offset by increased revenues due to increased
operating days in the six months ended June 30, 2023, compared to the same period last year, resulting
from the increase in the size of the fleet compared to the same period last year. Operating days for the
six months ended June 30, 2023, were 7,377 compared to 5,919 for the same period of 2022.
Voyage expenses.
ended June 30, 2023, as compared to $0.7 in the six months ended June 30, 2022. This increase was
due to a gain on bunkers amounting to $0.1 million compared to a gain of $6.6 million in the same period
of 2022. The gain on bunkers was mainly due to the difference in the price of bunkers paid by the
Company to the charterers on the redelivery of the vessels from the charterers under the previous charter
party agreements and the price of bunkers paid by charterers to the Company on the delivery of the
same vessels to their charterers under new charter party agreements.
Vessel operating expenses.
Vessel operating expenses increased by $8.0 million, or 23%, to $42.8
million in the six months ended June 30, 2023, compared to $34.8 million in the six months ended June
30, 2022. The increase in operating expenses is mainly attributable to the increase in ownership days in
the six months ended June 30, 2023 by 1,266 days, which was due to the increase in the size of the fleet.
In addition, total daily operating expenses were $5,726 in the six months ended June 30, 2023,
compared to $5,615 in the six months ended June 30, 2022, representing a 2% increase.
Depreciation and amortization of deferred charges.
increased by $6.2 million, or 30%, to $26.7 million in the six months ended June 30, 2023, compared to
$20.5 million in the six months ended June 30, 2022. This fluctuation was attributed to the increased
depreciation due to the increase in the size of the fleet. This was partly offset by decreased amortization of
deferred cost, due to the decreased number of vessels that underwent scheduled drydock and special
surveys in the first half of 2023 compared to the same period in 2022.
11
General and administrative expenses
. General and administrative expenses increased by $0.8 million, or
5%, to $15.7 million in the six months ended June 30, 2023, compared to $14.9 million in the six months
ended June 30, 2022. The increase was mainly due to the increased payroll costs and travelling expenses.
This increase was partially offset by the decreased compensation cost of restricted stock resulting from the
accelerated vesting of restricted shares of a board member who resigned in May 2022 and the
compensation cost of these shares was recorded on the date of his resignation.
Management fees to related party.
months ended June 30, 2023, compared to $0.2 million in the six months ended June 30, 2022. The
increase is attributable to the increased average number of vessels managed by DWM.
Interest expense and finance costs.
million in the six months ended June 30, 2023, compared to $11.2 million in the six months ended June
30, 2022. The increase was primarily attributable to increased average interest rates compared to the six
months ended June 30, 2022, increased outstanding debt and finance liabilities, amounted to $542.9 and
$137.9 in six months ended June 30, 2023 as compared to $410.2 and $49.1 million, as of June 30,
2022, respectively. This increase was partly offset due to the repurchase of $5.9 million of our bond
during the six months ended June 30, 2023.
Interest and other income
. Interest and other income increased by $3.1 million, or 517%, to $3.7 million in
the six months ended June 30, 2023, compared to $0.6 million in the six months ended June 30, 2022.
The increase is mainly attributable to increased deposit rates. A further increase was due to dividend
income amounting to $0.6 million for the first half of 2023 as compared to $0.4 million for the same period
in 2022, which is attributed to dividend derived from Series D preferred shares acquired from the sale of
vessel Melia to OceanPal.
Gain on sale of vessels
. Gain on sale of vessels amounted to $5.0 million in the six months ended June
30, 2023, which is attributed to the sale of vessels Aliki and Melia during the first quarter of 2023. There
was no disposal of vessels during the same period in 2022.
Gain on deconsolidation of subsidiary.
Gain on deconsolidation of subsidiary amounted to $0.8 million in
the six months ended June 30, 2023, which derived from the deconsolidation of a wholly owned
subsidiary of our Company, named Bergen Ultra LP, on April 28, 2023.
Gain on dividend distribution. Gain on dividend distribution amounted to $0.8
million for the six months
ended June 30, 2023, attributed to the gain that resulted from the distribution of the investment in Series
D preferred shares from the sale of vessel Melia to the Company’s common stockholders, being the
difference between the fair value and the carrying value of the investment.
Gain on equity method investment.
Gain on equity investment amounted to $0.2 million in the six months
ended June 30, 2023, compared to $0.8 million in the six months ended June 30, 2022, which is attributed
due to the decreased gain from the investment in DWM. This decrease was partially offset due to the gain
from the investment in Bergen Ultra.
Loss on extinguishment of debt
. Loss on extinguishment of debt amounted to $0.7 million in the six months
ended June 30, 2023, which is attributable to the loss derived from the refinancing of our existing debt.
B. Liquidity and Capital Resources
We finance our capital requirements with cash flow from operations, equity contributions from
shareholders, long-term bank debt and senior unsecured bond. Our main uses of funds have been
12
capital expenditures for the acquisition and construction of new vessels, expenditures incurred in
connection with ensuring that our vessels comply with international and regulatory standards,
repayments of bank loans and repurchase of our common stock.
As of June 30, 2023, and December 31, 2022, working capital, which is current assets minus current
liabilities, including the current portion of long-term debt, amounted to $92.8 million and $9.0 million,
respectively.
Cash and cash equivalents, including restricted cash, was $143.6 million on June 30, 2023, and $97.4
million on December 31, 2022. Restricted cash consists of the minimum liquidity requirements under our
loan facilities. As of June 30, 2023, and December 31, 2022, restricted cash, current and non-current,
amounted to $20.5 million and $21.0 million, respectively. We consider highly liquid investments such as
time deposits and certificates of deposit with an original maturity of around three months or less to be
cash equivalents. Cash and cash equivalents are primarily held in U.S. dollars.
Net Cash Provided by Operating Activities
Net cash provided by operating activities decreased by $28.2 million, or 35%. In 2023, net cash provided
by operating activities was $52.6 million compared to net cash provided by operating activities of
$80.8 million in the six months ended June 30, 2022. This decrease in cash from operating activities was
mainly due to increased operating expenses and voyage expenses, both mainly attributed to the increase
of the fleet. In addition, a further decrease is attributed to the increased net interest paid which derives
from the increased outstanding debt and finance liabilities and the increased average interest rates.
Net Cash Provided by/(Used in) Investing Activities
Net cash provided by investing activities was $5.9 million for the six months ended June 30, 2023, which
consists of $29.1 million paid for vessel acquisitions and improvements due to new regulations; $18.6
million of proceeds from the sale of vessels Aliki and Melia during the first quarter of 2023; $25.2 million
proceeds from convertible loan with limited partnership; $0.5 million paid to acquire property and other
assets; $0.8 million cash divested from deconsolidation and $7.5 million placed on time deposits with
maturities of over three months.
Net cash used in investing activities was $18.8 million for the six months ended June 30, 2022, which
consists of $22.7 million paid for vessel acquisitions and improvements due to new regulations; $4.4
million of proceeds advanced from a related party for the sale of Baltimore delivered to the related party
in September 2022; and $0.4 million used to acquire property and equipment.
Net Cash Used in Financing Activities
Net cash used in financing activities was $12.2 million for the six months ended June 30, 2023, which
consists of $57.7 million net proceeds relating to the refinance of our loans; $0.1 million paid for issuance
of common stock; $49.4 million of indebtedness that we repaid; $2.9 million and $15.9 million of
dividends paid on our Series B Preferred Stock and common stock, respectively; and $1.6 million paid for
finance costs, associated with the refinancing of our loans.
Net cash used in financing activities was $58.5 million for the six months ended June 30, 2022, which
consists of $2.2 million net proceeds relating to the sale and leaseback transaction of Florida; $5.0 million
proceeds from issuance of common stock, net of expenses; $22.5 million of indebtedness that we repaid;
$2.9 million and $38.8 million of dividends paid on our Series B Preferred Stock and common stock,
13
respectively; $0.9 million paid for repurchase of common stock; and $0.5 million of finance costs paid in
relation to the sale and leaseback transaction of Florida.
F-1
Page
DIANA SHIPPING INC.
INDEX TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022 ......
F-2
Unaudited Consolidated Statements of Income for the six months ended June 30, 2023 and
2022 ................................ ................................ ................................ ................................ .....
F-3
Unaudited Consolidated Statements of Comprehensive income for the six months ended
June 30, 2023 and 2022 ................................ ................................ ................................ .........
F-3
Unaudited Consolidated Statements of Stockholders' Equity for the six months ended June
30, 2023 and 2022 ................................................................ ................................ .................
F-4
Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2023
and 2022 ................................ ................................ ................................ ................................
F-5
Notes to Unaudited Interim Consolidated Financial Statements ................................ .............
F-7
F-2
DIANA SHIPPING INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2023 (unaudited) and December 31, 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
June 30, 2023
December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents
$
123,117
$
76,428
Time deposits
54,000
46,500
Accounts receivable, trade
3,294
6,126
Due from related parties (Note 2(c) and (e))
181
216
Inventories
4,640
4,545
Prepaid expenses and other assets
9,582
6,749
Total Current Assets
194,814
140,564
Fixed Assets:
Advances for vessel acquisitions (Note 3)
-
24,123
Vessels, net (Note 3)
935,664
949,616
Property and equipment, net (Note 4)
22,948
22,963
Total fixed assets
958,612
996,702
Other Noncurrent Assets
Restricted cash, non-current (Note 5)
20,500
21,000
Equity method investments (Note 2(c) and (e))
5,269
506
Investments in related party (Note 2(d))
7,744
7,744
Other non-current assets
510
101
Deferred costs
16,434
16,302
Total Non-current Assets
50,457
45,653
Total Assets
$
1,203,883
$
1,182,919
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt, net of deferred financing costs (Note 5)
$
49,428
$
91,495
Current portion of finance liabilities, net of deferred financing costs (Note 6)
9,020
8,802
Accounts payable
10,282
11,242
Due to related parties (Note 2(a))
195
136
Accrued liabilities
11,383
12,134
Deferred revenue
5,780
7,758
Dividends payable
15,965
-
Total Current Liabilities
102,053
131,567
Non-current Liabilities
Long-term debt, net of current portion and deferred financing costs (Note 5)
485,895
431,016
Finance liabilities, net of current portion and deferred financing costs (Note 6)
127,591
132,129
Other non-current liabilities
956
879
Total Noncurrent Liabilities
614,442
564,024
Commitments and contingencies (Note 7)
-
-
Stockholders' Equity
Preferred stock (Note 8)
26
26
Common stock, $
0.01
200,000,000
106,437,232
102,653,619
December 31, 2022, respectively (Note 8)
1,065
1,027
Additional paid in capital
1,073,536
1,061,015
Accumulated other comprehensive income
253
253
Accumulated deficit
(587,492)
(574,993)
Total Stockholders' Equity
487,388
487,328
$
1,203,883
$
1,182,919
The accompanying notes are an integral part of these consolidated financial statements.
F-3
DIANA SHIPPING INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30, 2023 and 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
2023
2022
REVENUES:
Time charter revenues
$
140,021
$
140,456
OPERATING EXPENSES
Voyage expenses
7,364
663
Vessel operating expenses
42,763
34,822
Depreciation and amortization of deferred charges
26,661
20,457
General and administrative expenses
15,695
14,947
Management fees to related party (Note 2(c))
647
228
Gain on sale of vessels (Note 3)
(4,995)
-
Insurance recoveries
-
(1,789)
Other operating income
(189)
(341)
Operating income, total
$
52,075
$
71,469
OTHER INCOME / (EXPENSES):
Interest expense and finance costs (Note 9)
(23,845)
(11,209)
Interest and other income
3,746
622
Loss on extinguishment of debt
(748)
-
Gain on deconsolidation of subsidiary (Note 2(e))
844
-
Gain on dividend distribution (Note 2(d))
761
-
Gain from equity method investments (Note 2(c) and (e))
244
767
Total other expenses, net
$
(18,998)
$
(9,820)
Net income
$
33,077
$
61,649
Dividends on series B preferred shares (Notes 8(b) and 10)
(2,884)
(2,884)
Net income attributable to common stockholders
$
30,193
$
58,765
Earnings per common share, basic
$
0.31
$
0.76
Earnings per common share, diluted
$
0.30
$
0.73
Weighted average number of common shares outstanding, basic
10)
98,489,613
77,343,851
Weighted average number of common shares outstanding, diluted
10)
99,762,411
80,308,679
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
DIANA SHIPPING INC.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the six months ended June 30, 2023 and 2022
(Expressed in thousands of U.S. Dollars)
2023
2022
Net income
$
33,077
$
61,649
Other comprehensive income - Defined benefit plan
-
1
Comprehensive income
$
33,077
$
61,650
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-4
DIANA SHIPPING INC.
UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY
For the six months ended June 30, 2023 and 2022
(Expressed in thousands of U.S. Dollars – except for share and per share data)
Preferred Stock
Series B
Preferred Stock
Series C
Preferred Stock
Series D
Common Stock
# of
Shares
Par
Value
# of
Shares
Par
Value
# of
Shares
Par
Value
# of Shares
Par
Value
Additional
Paid-in
Capital
Other
Comprehensive
Income
Accumulated
Deficit
Total Equity
BALANCE, December
31, 2021
2,600,000
26
10,675
-
400
-
84,672,258
847
982,537
71
(590,286)
393,195
Net Income
-
-
-
-
-
-
-
-
-
-
61,649
61,649
Issuance of Common
Stock
-
-
-
-
-
-
820,000
8
4,972
-
-
4,980
Issuance of Restricted
Stock and
Compensation Cost
-
-
-
-
-
-
1,470,000
15
4,916
-
-
4,931
Shares Repurchased
-
-
-
-
-
-
(191,055)
(2)
(926)
-
-
(928)
Dividends on Common
Stock
-
-
-
-
-
-
-
-
-
-
(38,839)
(38,839)
Dividends on Preferred
Stock
-
-
-
-
-
-
-
-
-
-
(2,884)
(2,884)
Other Comprehensive
Income
-
-
-
-
-
-
-
-
-
1
-
1
BALANCE, June 30,
2022
2,600,000
$
26
10,675
$
-
400
$
-
86,771,203
$
868
$
991,499
$
72
$
(570,360)
$
422,105
BALANCE, December
31, 2022
2,600,000
$
26
10,675
$
-
400
$
-
102,653,619
$
1,027
$
1,061,015
$
253
$
(574,993)
$
487,328
Net Income
-
-
-
-
-
-
-
-
-
-
33,077
33,077
Issuance of Common
Stock (Note 8(e))
-
-
-
-
-
-
2,033,613
20
7,713
-
-
7,733
Issuance of Restricted
Stock and
Compensation Cost
(Note 8(h))
-
-
-
-
-
-
1,750,000
18
4,808
-
-
4,826
Dividends on Common
Stock (Note 8(f))
-
-
-
-
-
-
-
-
-
-
(31,931)
(31,931)
Dividends on Preferred
Stock (Note 8(b))
-
-
-
-
-
-
-
-
-
-
(2,884)
(2,884)
Dividends in Kind (Note
8(g))
-
-
-
-
-
-
-
-
-
-
(10,761)
(10,761)
BALANCE, June 30,
2023
2,600,000
$
26
10,675
$
-
400
$
-
106,437,232
$
1,065
$
1,073,536
$
253
$
(587,492)
$
487,388
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-5
DIANA SHIPPING INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2023 and 2022
(Expressed in thousands of U.S. Dollars)
2023
2022
Net income
$
33,077
$
61,649
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization of deferred charges
26,661
20,457
Amortization of debt issuance costs (Note 9)
1,293
1,104
Compensation cost on restricted stock (Note 8(h))
4,826
4,931
Provision for credit loss
-
133
Dividend income (Note 2(d))
-
(100)
Gain on sale of vessels (Notes 3)
(4,995)
-
Gain on dividend distribution (Note 2(d))
(761)
-
Loss on extinguishment of debt (Note 5)
748
-
Gain on deconsolidation of subsidiary (Note 2(e))
(844)
-
Gain from equity method investments (Note 2(c) and (e))
(244)
(767)
(Increase) / Decrease
Accounts receivable, trade
2,832
(3,067)
Due from related parties
35
854
Inventories
(95)
(121)
Prepaid expenses and other assets
(2,833)
(267)
Other non-current assets
(409)
(904)
Increase / (Decrease)
Accounts payable, trade and other
(960)
858
Due to related parties
59
193
Accrued liabilities
(987)
3,029
Deferred revenue
(1,978)
1,973
Other non-current liabilities
77
(50)
Drydock cost
(2,947)
(9,068)
Net Cash Provided by Operating Activities
$
52,555
$
80,837
Payments to acquire vessels and vessel improvements (Notes 3 and 2(e))
(29,125)
(22,733)
Proceeds from sale of vessels, net of expenses (Note 3)
18,603
-
Advances from related parties (Note 2(e))
-
4,400
Time deposits
(7,500)
-
Payments to acquire other assets (Note 2(e))
(216)
-
Cash divested from deconsolidation (Note 2(e))
(771)
-
Proceeds from convertible loan with limited partnership (Note 2(e))
25,189
-
Payments to acquire furniture and fixtures (Note 4)
(308)
(436)
Net Cash Provided By Investing Activities
$
5,872
$
(18,769)
Proceeds from issuance of long-term debt and finance liabilities (Notes 5 and 6)
57,696
2,218
Payments for issuance of common stock (Note 8(e))
(76)
4,980
Payments of dividends, preferred stock (Note 8(b))
(2,884)
(2,884)
Payments of dividends, common stock (Note 8(f))
(15,965)
(38,839)
Payments for repurchase of common stock (Note 8(e))
-
(928)
Payments of financing costs (Notes 5 and 6)
(1,656)
(513)
Repayments of long-term debt and finance liabilities (Notes 5 and 6)
(49,353)
(22,548)
Net Cash Used In Financing Activities
$
(12,238)
$
(58,514)
Cash, Cash Equivalents and Restricted Cash, Period Increase
46,189
3,554
Cash, Cash Equivalents and Restricted Cash, Beginning Balance
97,428
126,788
Cash, Cash Equivalents and Restricted Cash, Ending Balance
$
143,617
$
130,342
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED
CASH
Cash and cash equivalents
$
123,117
$
112,842
Restricted cash, current
-
500
Restricted cash, non-current
20,500
17,000
Cash, Cash Equivalents and Restricted Cash, Total
$
143,617
$
130,342
F-6
SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash acquisition of assets (Note 3)
$
7,809
$
47,558
Non-cash Finance Liability
-
47,782
Stock issued in noncash financing activities (Note 3)
7,809
-
Non-cash investments acquired (Notes 3 and 2(d))
10,000
-
Noncash dividend (Note 8(g))
10,761
-
Transfer to Investments
-
1,370
Interest paid
$
22,523
$
8,581
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-7
1. Basis of Presentation and General Information and Recent Accounting
Pronouncements
The accompanying unaudited interim consolidated financial statements include the accounts of Diana
Shipping Inc., or DSI and its wholly owned subsidiaries (collectively, the “Company”). DSI was formed on
March 8, 1999
2005, the Company’s articles of incorporation were amended. Under the amended articles of
incorporation, the Company was renamed Diana Shipping Inc. and was re-domiciled from the Republic of
Liberia to the Republic of the Marshall Islands.
The accompanying unaudited interim consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles, or U.S. GAAP, for interim financial
information. Accordingly, they do not include all the information and notes required by U.S. GAAP for
complete financial statements. These unaudited interim consolidated financial statements have been
prepared on the same basis and should be read in conjunction with the financial statements for the year
ended December 31, 2022 included in the Company’s Annual Report on Form 20-F filed with the
Securities and Exchange Commission on March 27, 2023 and, in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments considered necessary for a fair
presentation of the Company's financial position, results of operations and cash flows for the periods
presented. Operating results for the six months ended June 30, 2023, are not necessarily indicative of
the results that might be expected for the fiscal year ending December 31, 2023.
The consolidated balance sheet as of December 31, 2022, has been derived from the audited
consolidated financial statements as of that date, but does not include all information and footnotes
required by U.S. GAAP for complete financial statements.
The Company is engaged in the ocean transportation of dry bulk cargoes worldwide mainly through the
ownership and bareboat charter in of dry bulk carrier vessels. The Company operates its own fleet
through Diana Shipping Services S.A. (or “DSS”), a wholly owned subsidiary and through Diana
Wilhelmsen Management Limited, or DWM, a
50
% owned joint venture (Note 2(c)). The fees paid to DSS
are eliminated on consolidation.
Significant Accounting Policies and Recent Accounting Pronouncements:
A discussion of the Company’s significant accounting policies can be found in Note 2 to the Company’s
Consolidated Financial Statements included in the Annual Report on Form 20-F for the year ended
December 31, 2022. There have been no material changes to these policies in the six months ended
June 30, 2023, except for as discussed below:
Equity method investments
Under this method, the Company records such an investment at cost (or fair value if a consequence of
deconsolidation) and adjusts the carrying amount for its share of the earnings or losses of the entity
subsequent to the date of investment and reports the recognized earnings or losses in income.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-8
Accrued Interest Income
As of June 30, 2023 and December 31, 2022, accrued interest income amounted to $
1,546
591
,
respectively and is included in
Prepaid expenses and other assets
consolidated balance sheets.
2. Transactions with related parties
a) Altair Travel Agency S.A. (“Altair”):
agent, Altair, which is controlled by the Company’s Chairman of the Board. Travel expenses for the six
months ended June 30, 2023 and 2022 amounted to $
1,311
1,238
, respectively, and are mainly
included in fixed assets, vessel operating expenses and general and administrative expenses in the
accompanying unaudited interim consolidated financial statements. As of June 30, 2023 and December
31, 2022, an amount of $
195
136
, respectively, was due to Altair, included in due to related parties
in the accompanying interim consolidated balance sheets.
b) Steamship Shipbroking Enterprises Inc. or Steamship:
our Chairman of the Board, Mr. Simeon Palios until January 15, 2023 and our CEO Mrs. Semiramis
Paliou thereafter. Steamship provides brokerage services to DSI for a fixed monthly fee plus
commissions on the sale and purchase of vessels, pursuant to a Brokerage Services Agreement dated
February 22, 2023. For the six months ended June 30, 2023 and 2022, brokerage fees amounted to
$
1,950
1,654
, respectively, included in general and administrative expenses in the accompanying
unaudited interim consolidated statements of income. For the six months ended June 30, 2023 and 2022,
the Company also paid commissions on the sale and purchase of vessels which amounted to $
226
$
1,219
, respectively, included in the cost of vessels, or the gain on the sale of vessels. As of June 30,
2023 and December 31, 2022, there was
no
c) Diana Wilhelmsen Management Limited, or DWM:
Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management Holding AS, an
unaffiliated third party, each holding
50
% of DWM. The DWM office is in Athens, Greece. As of June 30,
2023 and December 31, 2022, the investment in DWM amounted to $
708
506
, respectively,
included in equity method investments in the accompanying interim consolidated balance sheets. For the
six months ended June 30, 2023 and 2022, the investment in DWM resulted in gain of $
202
767
,
respectively, and is included in gain from equity method investments in the accompanying unaudited
interim consolidated statements of income.
DWM provides commercial and technical management to
six
monthly fee and a percentage of the vessels’ gross revenues. Management fees for the six months
ended June 30, 2023 and 2022, amounted to $
647
228
, respectively, and are separately presented
as management fees to related party in the accompanying unaudited interim consolidated statements of
income. Also, for the six months ended June 30, 2023, management fees amounting to $
19
in vessels, net. Commissions during the six months ended June 30, 2023 and 2022, amounted to $
194
and $
83
2022, there was an amount of $
156
216
accompanying interim consolidated balance sheets.
d) OceanPal Inc., or OceanPal:
500,000
and
10,000
Series B preferred shares entitle the
holder to 2,000 votes on all matters submitted to vote of the stockholders of the Company, provided
however, that the total number of votes shall not exceed 34% of the total number of votes, provided
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-9
further, that the total number of votes entitled to vote, including common stock or any other voting
security, would not exceed 49% of the total number of votes.
or distribution rights.
Series C preferred shares do not have voting rights unless related to amendments of the Articles of
Incorporation that adversely alter the preference, powers or rights of the Series C Preferred Shares or to
issue Parity Stock or create or issue Senior Stock.
preference equal to the stated value of $
10,000
option commencing upon the first anniversary of the issue date, at a conversion price equal to the lesser
of $
6.5
Dividends on each share of Series C Preferred Shares are cumulative and accrue from the original issue
date at the rate of
8
% per annum. Dividends are payable in cash or, at OceanPal’s election, in kind.
On February 1, 2023, the Company, through a wholly owned subsidiary, entered into an agreement with
OceanPal to sell the vessel
Melia
14,000
, of which $
4,000
OceanPal on February 2, 2023, and $
10,000
13,157
D Cumulative Convertible Preferred Stock. The vessel was delivered to her new owners on February 8,
2023, and the Company received
13,157
Company initially measured its investment on Series D preferred shares at fair value on February 8,
2023, the issuance date, and elected to subsequently measure such investment in accordance with
paragraph ASC 321-10-35-2. The fair value of Series D Preferred Shares was determined through Level
2 inputs of the fair value hierarchy by taking into consideration a third-party valuation which was based on
the income approach, taking into account the present value of the future cash flows the Company
expects to receive from holding the equity instrument.
Series D preferred shares are convertible into common stock at the holder’s option, at a conversion price
equal to the 10-trading day trailing VWAP of OceanPal’s common shares, provided however that the
holder would not beneficially own greater than
49
% of OceanPal’s outstanding shares of common stock.
Series D preferred shares have no voting rights
; dividends are cumulative, accruing at the rate of
7
% per
annum, payable in cash or, at OceanPal’s election, in PIK shares (Series D Preferred shares issued to
the holder in lieu of cash dividends); and they have a liquidation preference equal $
1,000
On June 9, 2023, the Company distributed the OceanPal Series D Preferred Shares as a special
dividend to its shareholders of record on April 24, 2023. The Company accounted for the transaction as a
nonreciprocal transfer with its owners in accordance with ASC 845 and measured the fair value of the
preferred shares on the date of declaration at $
10,761
. The fair value of the Series D Preferred Shares
was determined through Level 2 inputs of the fair value hierarchy, by using the income approach, taking
into account the present value of the future cash flows, the holder of shares would expect to receive from
holding the equity instrument. This resulted in a gain of $
761
, being the difference between the fair value
and the carrying value of the investment and is separately presented as gain on dividend distribution in
the 2023 accompanying unaudited interim consolidated statement of income.
As of June 30, 2023 and December 31, 2022, the aggregate value of investments in OceanPal, for which
the Company applies the guidance for equity securities without readily determinable fair values,
amounted to $
7,744
7,744
, respectively, including dividends receivable amounting to $
168
periods, and are separately presented in investments in related parties in the accompanying interim
consolidated balance sheets. As of June 30, 2023 and December 31, 2022, the Company did not identify
any indications for impairment, or any observable prices change for identical or similar investments of the
same issuer and the investments continued to qualify to be measured at cost. For the six months ended
June 30, 2023 and 2022, dividend income from the Series C and Series D OceanPal preferred shares
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-10
(from the date of acquisition until their distribution to shareholders) amounted to $
567
400
,
respectively, included in interest and other income in the accompanying unaudited interim consolidated
statements of income.
e) Bergen Ultra LP, or Bergen:
AS, an unrelated third party, which was established for the purpose of acquiring, owning, chartering
and/or operating a vessel. Bergen was a wholly owned subsidiary of Diana, which on February 14, 2023,
signed a Memorandum of Agreement to acquire from an unaffiliated third-party the
Nord Potomac
, a
2016 Ultramax dry bulk vessel, for $
27,900
Bergen entered into a loan agreement with Nordea for a $
15,400
price of the vessel. On the same date, the Company entered into a corporate guarantee with Nordea to
secure Bergen’s obligations under the loan to decrease the borrowing cost of the partnership, in
exchange for a fee payable to Diana by Bergen. On April 28, 2023, the Company entered into (i) an
investment agreement with Ecobulk AS, under which Ecobulk AS acquired
75
% of the limited partnership
interests, for $
11,025
; (ii) an amended limited partnership agreement under which the Company acts as
the General Partner of the partnership through its wholly owned subsidiary Diana General Partner Inc.;
(iii) an administrative service agreement under which DSS provides administrative services to Bergen for
an annual fee of $
15
; (iv) a commission agreement under which the Company is paid a commission of
0.8
% per annum, on the outstanding balance of the loan, as compensation for the guarantee it provided
to Nordea and (v) a convertible loan agreement for $
27,900
which Bergen would have to repay all expenditures made by the Company for the acquisition of the
vessel. Pursuant to the convertible loan, on April 28, 2023, the Company received from Bergen $
25,189
in cash while an amount of $
3,675
25
%
of the total partnership interests.
Upon the provisions of the amended partnership agreement, the general partner irrevocably delegated
the authority to Bergen’s board of directors to have the power to oversee and direct the operations,
management and policies of Bergen. The Company evaluated its variable interests in Bergen under ASC
810 and concluded that Bergen is a VIE and that the Company does not individually have the power to
direct the activities of the VIE that most significantly affect the partnership’s performance. From April 28,
2023 the Company no longer retains the power to control the board of directors. As of the same date,
Bergen has been considered as an affiliate entity and not as a controlled subsidiary of the Company. The
Company accounted for the deconsolidation of Bergen in accordance with ASC 610 and the retained
noncontrolling interest of
25
% was accounted for under the equity method due to the Company’s
significant influence over Bergen.
On the date of deconsolidation, the Company measured the fair value of the retained noncontrolling
interest at $
4,519
the fair value of its
25
% interest in accordance with ASC 610, took into consideration the fair value of the
distinct assets and liabilities of Bergen on the date of the deconsolidation. This resulted in a gain on
deconsolidation amounting to $
844
, separately presented in the accompanying 2023 unaudited interim
consolidated statement of income, being the difference between the fair value of the retained
noncontrolling interest plus the carrying value the liabilities assumed by Bergen and the carrying value of
the assets derecognized.
For the six months ended June 30, 2023, the investment in Bergen resulted in a gain of $
42
included in gain from equity method investments in the 2023 accompanying unaudited interim
consolidated statement of income. As of June 30, 2023, the investment in Bergen amounted to $
4,561
and is included in equity method investments in the accompanying 2023 consolidated balance sheet.
Also, for the six months ended June 30, 2023, income from management fees from Bergen amounted to
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-
11
$
3
, included in time charter revenues and income from the commission paid on the loan guarantee
amounted to $
22
, included in interest and other income in the 2023 accompanying unaudited interim
consolidated statement of income. As of June 30, 2023, there was an amount of $
25
included in due from related parties in the 2023 accompanying consolidated balance sheet.
3. Advances for vessel acquisitions and Vessels, net
Vessel Acquisitions
On January 30, 2023, the Company took delivery of one Ultramax dry bulk vessel for $
23,955
and
2,033,613
August 10, 2022. On the date of delivery, the Company issued
2,033,613
at $
0.01
7,809
, based on the closing price of the Company’s
stock on the date of delivery, determined through Level 1 account hierarchy. As of December 31, 2022,
the Company had paid an amount of $
24,123
the purchase price for the acquisition of this vessel and additional predelivery expenses. This amount
was transferred to Vessels, net on the vessel’s delivery to the Company.
On February 14, 2023, the Company signed a Memorandum of Agreement to acquire from an unaffiliated
third-party an Ultramax dry bulk vessel for a purchase price of $
27,900
. On April 28, 2023, the vessel’s
ship owning company was deconsolidated from the Company’s financial statements due to the
Company’s loss of control described in note 2(e) and the net book value of the vessel amounting to
$
27,908
Vessel Disposals
On January 23, 2023, the Company, through a wholly owned subsidiary, entered into an agreement with
an unrelated third party to sell the vessel
Aliki
15,080
. The vessel was delivered to her new owners
on February 8, 2023. Additionally, on February 1, 2023, the Company, through a wholly owned
subsidiary, entered into an agreement with OceanPal, a related party company, to sell the vessel
Melia
for $
14,000
, of which $
4,000
10,000
13,157
Shares (Note 2(d)). On the date of the agreements, the vessels, having an aggregate carrying value of
$
23,198
405
value which was the lower of their carrying value and fair value (sale price) less costs to sell.
Both vessels were delivered to their new owners on February 8, 2023. The sale of the vessels resulted in
gain amounting to $
4,995
, separately presented as gain on sale of vessels in the accompanying 2023
unaudited interim consolidated statement of income.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-12
The amount reflected in Vessels, net in the accompanying consolidated balance sheets is analyzed as
follows:
Vessel Cost
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2022
$
1,141,128
$
(191,512)
$
949,616
- Additions for vessel acquisitions and improvements
61,088
-
61,088
- Vessel disposals
(39,393)
16,195
(23,198)
- Vessel disposal due to deconsolidation of subsidiary (Note
2(e))
(27,908)
-
(27,908)
- Depreciation for the period
-
(23,934)
(23,934)
Balance, June 30, 2023
$
1,134,915
$
(199,251)
$
935,664
Additions for vessel improvements mainly relate to the implementation of ballast water treatment and
other works necessary for the vessels to comply with new regulations and be able to navigate to
additional ports.
4. Property and Equipment, net
The Company owns the land and building of its principal corporate offices in Athens, Greece.
Additionally, DSS owns, together with a related party company, another plot of land in the nearby area,
acquired for office use. On July 6, 2023, DSS purchased from the related party its share in the plot and
became its sole owner (Note 12). Other assets consist of office furniture and equipment, computer
software and hardware and vehicles. The amount reflected in “Property and equipment, net” is analyzed
as follows:
Property and
Equipment
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2022
$
28,936
$
(5,973)
$
22,963
- Additions in property and equipment
308
-
308
- Depreciation for the period
-
(323)
(323)
Balance, June 30, 2023
$
29,244
$
(6,296)
$
22,948
5. Long-term debt
The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as
follows:
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-13
June 30, 2023
December 31, 2022
Senior unsecured bond
119,100
125,000
Secured long-term debt
423,749
405,120
Total long-term debt
$
542,849
$
530,120
Less: Deferred financing costs
(7,526)
(7,609)
Long-term debt, net of deferred financing costs
$
535,323
$
522,511
Less: Current long-term debt, net of deferred financing costs,
current
(49,428)
(91,495)
Long-term debt, excluding current maturities
$
485,895
$
431,016
Senior Unsecured Bond
:
On
June 22, 2021
, the Company issued a $
125,000
bond ranks ahead of subordinated capital and ranks the same with all other senior unsecured obligations
of the Company other than obligations which are mandatorily preferred by law. Entities affiliated with
executive officers and directors of the Company purchased an aggregate of $
21,000
the bond. The bond bears interest at a US Dollar fixed-rate coupon of
8.375
% and is payable semi-
annually in arrears in June and December of each year. The bond is callable in whole or in part in June
2024 at a price equal to
103.35
% of nominal value; between June 2025 to December 2025 at a price
equal to
101.675
% of nominal value and after December 2025 at a price equal to
100
% of nominal value.
On June 29, 2023, the Company repurchased $
5,900
5,851
. In this
respect, the Company recognized an amount of $
159
difference between the reacquisition price of $
5,851
extinguished of $
5,900
208
. The bond includes financial and other
covenants and is trading at Oslo Stock Exchange under the ticker symbol “DIASH02”.
Secured Term Loans:
Under the secured term loans outstanding as of June 30, 2023,
33
mortgaged with first preferred or priority ship mortgages, having an aggregate carrying value of
$
714,222
. Additional securities required by the banks include first priority assignment of all earnings,
insurances, first assignment of time charter contracts that exceed a certain period, pledge over the
shares of the borrowers, manager’s undertaking and subordination and requisition compensation and
either a corporate guarantee by DSI (the “Guarantor”) or a guarantee by the ship owning companies
(where applicable), financial covenants, as well as operating account assignments. The lenders may also
require additional security in the future in the event the borrowers breach certain covenants under the
loan agreements. The secured term loans generally include restrictions as to changes in management
and ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull
cover ratio and minimum liquidity per vessel owned by the borrowers, or the Guarantor, maintained in the
bank accounts of the borrowers, or the Guarantor.
As of June 30, 2023 and December 31, 2022, minimum cash deposits required to be maintained at all
times under the Company’s loan facilities, amounted to $
20,500
21,000
, respectively and are
included in “Restricted cash, non-current” in the accompanying consolidated balance
sheets. Furthermore, the secured term loans contain cross default provisions and additionally the
Company is not permitted to pay any dividends following the occurrence of an event of default.
As of June 30, 2023, the Company had the following agreements with banks, either as a borrower or as a
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-14
guarantor, to guarantee the loans of its subsidiaries:
BNP Paribas (“BNP”):
53,500
agreement, to finance part of the acquisition cost of the
G. P. Zafirakis
P. S. Palios
maturing on
November 30, 2021
. The agreement was refinanced on June 29, 2020, to extend the maturity to
May 19,
2024
. The loan was repayable in equal semi-annual instalments of approximately $
1,574
$
23,596
margin of
2.5
%.
On July 16, 2018, the Company drew down $
75,000
loan was repayable in consecutive quarterly instalments of $
1,562.5
43,750
payable together with the last instalment on
July 17, 2023
. The loan bore interest at LIBOR plus a margin
of
2.3
%.
In April 2023, both loans were refinanced through a new loan facility with Danish Ship Finance and the
outstanding balance of both loans, amounting to $
75,193
a loss on debt extinguishment amounting to $
107
.
Nordea Bank AB, London Branch (“Nordea”):
93,080
under a secured loan agreement, maturing on
March 19, 2021
. The loan agreement was amended on
May 7, 2020, and supplemented on July 29, 2021, with an additional borrowing of $
460
. In July 2022 and
in February 2023, the Company prepaid an amount of $
4,786
8,134
, respectively, following the sale
of vessels. On June 20, 2023, the Company entered into a new loan agreement with Nordea to refinance
the outstanding balance of the existing loan amounting to $
20,934
. On June 27, 2023, the Company
drew down $
22,500
20,934
extinguishment amounting to $
220
. The new loan is repayable in
twenty
quarterly
$
1,125
2.25
%. The loan matures on
June 27, 2028
.
On September 30, 2022, the Company entered into a $
200
acquisition price of
9
197,236
for each vessel on their delivery to the Company, but prepaid $
21,937
sale and leaseback transaction. The loan is repayable in equal
quarterly
amount of $
3,719
, and a balloon of $
100,912
October 11,
2027
. The loan bears interest at term SOFR plus a margin of
2.25
%.
ABN AMRO Bank N.V., or ABN:
the amount of $
52,885
consecutive
quarterly
800
9,000
the last instalment on
June 28, 2024
. The tranche bore interest at LIBOR plus a margin of
2.25
%.
Tranche B was repayable in equal consecutive
quarterly
994
$
13,391
June 28, 2024
, and bore interest at LIBOR plus a
margin of
2.4
%.
On May 20, 2021, the Company, drew down $
91,000
with ABN AMRO Bank N.V, dated May 14, 2021, which was used to refinance existing loans. In August
2022, the Company prepaid $
30,791
loan was repayable in
quarterly
1,980
13,553
last instalment, on
May 20, 2026
. The loan bore interest at LIBOR plus a margin of
2.15
% per annum,
which could be adjusted annually by maximum
10
performance under certain sustainability KPIs.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-15
On June 26, 2023, the Company prepaid in full both loans amounting to $
68,678
, which were refinanced
under a new loan agreement with DNB Bank ASA and the Company recorded a loss on debt
extinguishment amounting to $
237
.
Export-Import Bank of China:
57,240
loan agreement, which is repayable in equal
quarterly
954
, each, until its maturity on
January 4, 2032
2.3
% (Note 12).
DNB Bank ASA or DNB:
19,000
agreement, which is repayable in consecutive
quarterly
477.3
9,454
payable together with the last instalment on
March 14, 2024
. The loan bore interest at LIBOR plus a
margin of
2.4
%. On March 14, 2023, the outstanding balance of the loan amounting to $
11,841
prepaid in full and the Company recorded a loss on debt extinguishment amounting to $
25
.
On June 26, 2023, the Company entered into a $
100,000
2023, to refinance the outstanding balance of the ABN loans mentioned above and for working capital
purposes. The loan is repayable in
26
quarterly
3,846
and bears term SOFR plus a margin of
2.2
%, subject to sustainability margin adjustment. Additionally,
the loan is subject to a margin reset, according to which the borrowers and the lenders will enter into
discussions to agree on a new margin. Unless the parties agree on a new margin, the loan will be
mandatorily repayable on June 27, 2027. As part of the loan agreement, on July 6, 2023, the Company
entered into an interest rate swap with DNB for a notional amount of $
30,000
, being
30
% of the loan
amount and quarterly amortization of $
1,154
. Under the interest rate swap, the Company pays a fixed
rate of
4.268
% and receives floating under term SOFR, has a trade date on June 27, 2023, and
termination date on December 27, 2029, and also has a mandatory break on June 27, 2027, the margin
reset date of the loan, according to which the swap will be terminated if the loan is prepaid.
Danish Ship Finance A/S or Danish:
Danish, for $
100,000
and BNP, mentioned above and working capital. On April 18 and 19, 2023, the Company drew down
$
100,000
twenty
quarterly
3,301
balloon of $
33,972
April 19, 2028
, and bears interest at term
SOFR plus a margin of
2.2
%.
As of June 30, 2023 and December 31, 2022, the Company was in compliance with all of its loan
covenants.
As of June 30, 2023, the maturities of the Company’s bond and debt facilities throughout their term, are
shown in the table below and do not include the related debt issuance costs.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-16
Period
Principal Repayment
Year 1
$
51,783
Year 2
51,783
Year 3
170,883
Year 4
51,783
Year 5
179,229
Year 6 and thereafter
37,388
Total
$
542,849
6. Finance Liabilities
The amount of finance liabilities shown in the accompanying consolidated balance sheet is analyzed as
follows:
June 30, 2023
December 31, 2022
Finance liabilities
137,934
142,370
Less: Deferred financing costs
(1,323)
(1,439)
Finance liabilities, net of deferred financing costs
$
136,611
$
140,931
Less: Current finance liabilities, net of deferred financing costs,
current
(9,020)
(8,802)
Finance liabilities, excluding current maturities
$
127,591
$
132,129
On March 29, 2022, the Company sold
Florida
50,000
back the vessel under a bareboat agreement, for a period of
ten years
, under which the Company pays
hire, monthly in advance. Under the bareboat charter, the Company has the option to repurchase the
vessel after the end of the third year of the charter period, or each year thereafter, until the termination of
the lease, at specific prices, subject to irrevocable and written notice to the owner. If not repurchased
earlier, the Company has the obligation to repurchase the vessel for $
16,350
, on the expiration of the
lease on the tenth year.
On August 17, 2022, the Company entered into
two
Japanese third parties for
New Orleans
Santa Barbara,
for an aggregate amount of $
66,400
. The
vessels were delivered to their buyers on September 8, 2022 and September 12, 2022, respectively and
the Company chartered in both vessels under bareboat charter parties for a period of
eight years
, each,
and has purchase options beginning at the end of the third year of each vessel's bareboat charter period,
or each year thereafter, until the termination of the lease, at specific prices, subject to irrevocable and
written notice to the owner. If not repurchased earlier, the Company has the obligation to repurchase the
vessels for $
13,000
, each, on the expiration of each lease on the eighth year.
On December 6, 2022, the Company sold
DSI Andromeda
29,850
3) and leased back the vessel under a bareboat agreement, for a period of
ten years
, under which the
Company pays hire, monthly in advance. Under the bareboat charter, the Company has the option to
repurchase the vessel after the end of the third year of the charter period, or each year thereafter, until
the termination of the lease, at specific prices, subject to irrevocable and written notice to the owner. If
not repurchased earlier, the Company has the obligation to repurchase the vessel for $
8,050
, on the
expiration of the lease on the tenth year.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-17
Under the bareboat charter parties, the Company is responsible for the operation and maintenance of the
vessels and the owner of the vessels shall not retain any control, possession, or command of the vessel
during the charter period.
The Company determined that, under ACS 842-40 Sale and Leaseback Transactions, the transactions
are failed sales and consequently the assets were not derecognized from the financial statements and
the proceeds from the sale of the vessels were accounted for as financial liabilities. As of June 30, 2023,
the weighted average remaining lease term of the above lease agreements was
8.20
average interest rate was
4.83
%.
As of June 30, 2023, and throughout the term of the leases, the Company has annual finance liabilities
as shown in the table below:
Period
Principal Repayment
Year 1
$
9,244
Year 2
9,606
Year 3
10,012
Year 4
10,438
Year 5
10,916
Year 6 and thereafter
87,718
Total
$
137,934
7. Commitments and Contingencies
a)
liability, arise in the ordinary course of the shipping business. In addition, losses may arise from
disputes with charterers, agents, insurance and other claims with suppliers relating to the operations
of the Company’s vessels. The Company accrues for the cost of environmental and other liabilities
when management becomes aware that a liability is probable and is able to reasonably estimate the
probable exposure. The Company’s vessels are covered for pollution in the amount of $
1
vessel per incident, by the P&I Association in which the Company’s vessels are entered.
b)
counterparties, the Company has purchase obligations to repurchase the vessels
Florida, Santa
Barbara, New Orleans
and
upon expiration of their lease contracts, as described in
Note 6.
c)
Company guarantees the performance by Bergen of all of its obligations under the loan until the
maturity of the loan on March 30, 2028 (Note 2(e)). The Company considers the likelihood of having
to make any payments under the guarantee to be remote, as the loan is also secured by an account
pledge by Bergen, first preferred mortgage on the vessel, a first priority general assignment of the
earnings, insurances and requisition compensation of the vessel, a charter party assignment, a
partnership interests security deed, and a manager’s undertaking. Accordingly, as of June 30, 2023,
the Company did not record a provision for losses under the guarantee of Bergen’s loan amounting to
$
15,400
d)
agreements, considered operating leases. The minimum contractual gross charter revenue expected
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-18
to be generated from fixed and non
-cancelable time charter contracts existing as of June 30, 2023
and until their expiration was as follows:
Period
Amount
Year 1
$
159,042
Year 2
23,584
Year 3
9,454
Year 4
5,491
$
197,571
8. Capital Stock and Changes in Capital Accounts
a) Preferred stock
:
preferred stock consists of
25,000,000
0.01
1,000,000
5,000,000
designated as Series B Preferred Shares,
10,675
and
400
2022, the Company had
zero
b) Series B Preferred Stock:
2,600,000
0.01
25.00
per share and with liquidation preference at $
25.00
Holders of Series B Preferred Shares have
no voting rights other than the ability, subject to certain exceptions, to elect one director if dividends for
six quarterly dividend periods (whether or not consecutive) are in arrears and certain other limited
protective voting rights.
shares with respect to dividends, distributions and payments upon liquidation and are subordinated to all
of the existing and future indebtedness.
Dividends on the Series B Preferred Shares are cumulative from the date of original issue and are
payable on the 15th day of January, April, July and October of each year at the dividend rate of
8.875
%
per annum, or $
2.21875
dividends on Series B Preferred Shares amounted to $
2,884
2,884
, respectively. Since February
14, 2019, the Company may redeem, in whole or in part, the Series B Preferred Shares at a redemption
price of $
25.00
date of redemption, whether or not declared.
c) Series C Preferred Stock
: As of June 30, 2023, and December 31, 2022, the Company had
10,675
0.01
owned by an affiliate of its Chief Executive Officer, Mrs. Semiramis Paliou.
The Series C Preferred Stock
votes with the common shares of the Company, and each share entitles the holder thereof to 1,000 votes
on all matters submitted to a vote of the shareholders of the Company.
no dividend or liquidation rights and cannot be transferred without the consent of the Company except to
the holder’s affiliates and immediate family members.
d) Series D Preferred Stock
: As of June 30, 2023, and December 31, 2022, the Company had
400
shares of Series D Preferred Stock, issued and outstanding, with par value $
0.01
affiliate of its Chief Executive Officer, Mrs. Semiramis Paliou. The Series D Preferred Stock is not
redeemable and has
no
The Series D Preferred Stock vote with the
common shares of the Company, and each share of the Series D Preferred Stock entitles the holder
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-19
thereof to up to 100,000 votes, on all matters submitted to a vote of the shareholders of the Company,
subject to a maximum number of votes eligible to be cast by such holder derived from the Series D
Preferred Shares and any other voting security of the Company held by the holder to be equal to
the lesser of (i) 36% of the total number of votes entitled to vote on any matter put to shareholders of the
Company and (ii) the sum of the holder’s aggregate voting power derived from securities other than the
Series D Preferred Stock and 15% of the total number of votes entitled to be cast on matters put to
shareholders of the Company.
immediate family members and to affiliated persons or entities.
e) Issuance of Common Shares:
On January 30, 2023, the Company issued
2,033,613
shares, at $
3.84
, to Sea Trade upon exercise by Sea Trade of a warrant it held for the acquisition of a
vessel (Note 3). The Company did
no
t receive any proceeds from the exercise of the warrants by Sea
Trade and the exercise price of the shares issued was included in the price of the vessels acquired.
f) Dividend on Common Stock:
On March 20, 2023, the Company paid a dividend on its common
stock of $
0.15
15,965
, to its shareholders of record as of March 13, 2023. On May 26,
2023, the Company declared a dividend on its common stock of $
0.15
15,965
, payable on
July 10, 2023 in shares of common stock or, upon the election of common shareholders, in cash, to all
shareholders of record as of June 12, 2023 (Note 12).
g) Dividend in Kind:
On June 9, 2023, the Company distributed the Company’s investment in the
Series D Preferred Shares of OceanPal in the form of a stock dividend amounting to $
10,761
, or $
0.10
per share, to its shareholders of record as of April 24, 2023 (Notes 2(d) and 3).
h) Incentive Plan:
On February 22, 2023, the Company’s Board of Directors approved the award of
1,750,000
pursuant to the Company’s Equity Incentive Plan, as annual bonus. The restricted shares have a vesting
period of three years and their fair value amounted to $
7,945
. As of June 30, 2023,
13,444,759
remained reserved for issuance according to the Company’s incentive plan.
Restricted stock during the six months ended June 30, 2023 and 2022 is analyzed as follows:
Number of Shares
Weighted Average
Grant Date Price
Outstanding at December 31, 2021
9,514,649
$
2.83
Granted
1,470,000
4.15
Vested
(3,118,060)
2.84
Outstanding at June 30, 2022
7,866,589
$
3.06
Outstanding at December 31, 2022
7,866,589
$
3.07
Granted
1,750,000
4.54
Vested
(2,822,753)
3.05
Outstanding at June 30, 2023
6,793,836
$
3.45
The fair value of the restricted shares has been determined with reference to the closing price of the
Company’s stock on the date such awards were approved by the Company’s board of directors. The
aggregate compensation cost is recognized ratably in the consolidated statement of income over the
respective vesting periods. During the six months ended June 30, 2023 and 2022, compensation cost
amounted to $
4,826
4,931
, respectively, and is included in “General and administrative expenses”
presented in the accompanying unaudited interim consolidated statements of income.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-20
As of June 30, 2023 and December 31, 2022, the total unrecognized cost relating to restricted share
awards was $
19,992
16,873
, respectively. As of June 30, 2023, the weighted-average period over
which the total compensation cost related to non-vested awards not yet recognized is expected to be
recognized is
2.33
9. Interest and Finance Costs
The amounts in the accompanying consolidated statements of income are analyzed as follows:
For the six months ended June 30,
2023
2022
Interest expense, debt
$
18,929
$
9,410
Finance liabilities interest expense
3,420
580
Amortization of debt and finance liabilities issuance costs
1,293
1,104
Loan and other expenses
203
115
Interest expense and finance costs
$
23,845
$
11,209
10. Earnings per Share
All common shares issued (including the restricted shares issued under the Company’s incentive plans)
are the Company’s common stock and have equal rights to vote and participate in dividends. The
calculation of basic earnings per share does not treat the non-vested shares (not considered participating
securities) as outstanding until the time/service-based vesting restriction has lapsed. Incremental shares
are the number of shares assumed issued under the treasury stock method weighted for the periods the
non-vested shares were outstanding. During the six months ended June 30, 2023 and 2022, there were
1,272,798
2,964,828
earnings per share calculation.
Profit attributable to common equity holders is adjusted by the amount of dividends on Series B Preferred
Stock as follows:
For the six months ended June 30,
2023
2022
Net income
$
33,077
$
61,649
Dividends on series B preferred shares
(2,884)
(2,884)
Net income attributable to common stockholders
$
30,193
$
58,765
Weighted average number of common shares, basic
98,489,613
77,343,851
Incremental shares
1,272,798
2,964,828
Weighted average number of common shares, diluted
99,762,411
80,308,679
Earnings/(loss) per share, basic
$
0.31
$
0.76
Earnings/(loss) per share, diluted
$
0.30
$
0.73
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-21
11. Financial Instruments and Fair Value Disclosures
Interest rate risk and concentration of credit risk
Financial instruments, which potentially subject the Company to significant concentrations of credit risk,
consist principally of cash and trade accounts receivable. The ability and willingness of each of the
Company’s counterparties to perform their obligations under a contract depend upon a number of factors
that are beyond the Company’s control and may include, among other things, general economic
conditions, the state of the capital markets, the condition of the shipping industry and charter hire
rates. The Company’s credit risk with financial institutions is limited as it has temporary cash investments,
consisting mostly of deposits, placed with various qualified financial institutions and performs periodic
evaluations of the relative credit standing of those financial institutions. The Company limits its credit risk
with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition
and by receiving payments of hire in advance. The Company, generally, does not require collateral for its
accounts receivable and does not have any agreements to mitigate credit risk.
During the six months ended June 30, 2023 and 2022, charterers that individually accounted for
10
% or
more of the Company’s time charter revenues were as follows:
For the six months ended June 30,
Charterer
2023
2022
Cargill International SA
16%
18%
Koch Shipping PTE LTD. Singapore
*
15%
*Less than 10%
The Company is exposed to interest rate fluctuations associated with its variable rate borrowings. On
July 6, 2023, the company entered into an interest rate swap with DNB (Notes 5 and 12) to manage part
of such exposure.
Fair value of assets and liabilities
The carrying values of financial assets reflected in the accompanying consolidated balance sheet
approximate their respective fair values due to the short-term nature of these financial instruments. The
fair value of long-term bank loans with variable interest rates approximates the recorded values,
generally due to their variable interest rates.
Fair value measurements disclosed
As of June 30, 2023, the Bond having a fixed interest rate and a carrying value of $
119,100
a fair value of $
117,760
FASB guidance for Fair Value Measurements.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-22
Other Fair value measurements
Description (in thousands of US Dollars)
December 31, 2022
Quoted Prices in
Active Markets
(Level 1)
Non-recurring fair value measurements
Long-lived assets held for use (1)
$
67,909
$
67,909
Total non-recurring fair value
measurements
67,909
67,909
June 30, 2023
Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Non-recurring fair value measurements
Equity method investments (2)
$
4,519
$
$
4,519
Long-lived assets held for use (3)
7,809
7,809
Total non-recurring fair value
measurements
$
12,328
$
7,809
$
4,519
(1)
During the fourth quarter of 2022, the Company took delivery of
eight
agreement with Sea Trade, acquired for the purchase price of $
263,719
, of which $
195,810
paid in cash and $
67,909
of the common shares issued to Sea Trade was determined based on the closing price of the
Company’s shares on the date of delivery of each vessel, which was also the date of issuance of
such shares.
(2) On April 28, 2023, the Company estimated that the fair value of its
25
% interest in Bergen was
$
4,519
, determined through the Level 2 inputs of the fair value hierarchy, as defined in FASB
guidance for Fair Value Measurements, and recorded a gain of $
844
, being the difference
between the fair value of the retained noncontrolling interest plus the carrying value the liabilities
assumed by Bergen and the carrying value of the assets derecognized (Note 2(e)).
(3)
Sea Trade, acquired for the purchase price of $
31,764
23,955
$
7,809
shares issued to Sea Trade was determined based on the closing price of the Company’s shares
on the date of delivery of each vessel, which was also the date of issuance of such shares.
12. Subsequent Events
a)
related party with which they jointly owned a plot of land, the share owned by the related party for
€
1.1
1,208
b)
: On July 10, 2023, the Company paid $
12,424
shareholders who elected to receive cash and issued
965,044
distributed to its shareholders who elected to receive shares, as payment for the dividend
declared on May 26, 2023 (Note 8(f). On August 1, 2023, the Company declared a dividend of
$
0.15
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)
F-23
O
n September 8, 2023, the Company paid $
13,041
receive cash and distributed
831,672
elected to receive shares, as payment for the dividend declared.
c)
On July 17, 2023, the Company paid a quarterly dividend
on its series B preferred stock, amounting to $
0.5546875
1,442
, to its stockholders
of record as of July 14, 2023.
d)
On July 19, 2023, the Company entered into a refinancing agreement with
Export-Import Bank of China for the purpose of replacing LIBOR with term SOFR.