Diana Containerships' CEO Discusses Q3 2012 Results - Earnings Call Transcript
November 19, 2012 1:23 PM ET
Diana Containerships Inc. (DCIX)
Q3 2012 Earnings Call
November 19, 2012 9:00 am ET
Symeon Palios – Chairman, Chief Executive Officer
Anastasios Margaronis – President
Andreas Michalopoulos – Chief Financial Officer
Edward Nebb – Investor Relations
Ross Briggs – Wells Fargo
Ken Hoexter – Bank of America Merrill Lynch
Natasha Boyden – Global Hunter
Urs Dur – Clarkson Capital Markets
Kevin Sterling – BB&T Capital Markets
Tim Frond (ph) – Sidoti & Co.
Greetings and welcome to the Diana Containership Incorporated Third Quarter 2012 conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Mr. Edward Nebb, investor relations advisor for Diana Containerships. Thank you, sir. You may begin.
Thank you very much, Dan, and thanks to all of you for joining us for the Diana Containerships Incorporated 2012 Third Quarter conference call. Members of the company’s management team who are with us today include Mr. Symeon Palios, Chairman and Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Chief Operating Officer and Secretary, and Ms. Maria Dede, Chief Accounting Officer.
Before management begins their remarks, let me briefly summarize the Safe Harbor notice which is attached to today’s news release. Certain statements made during the conference call which are not statements of historical fact are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act. Such forward-looking statements are based on assumptions, expectations, projections, intentions and beliefs as to future events that may or may not prove accurate. For a description of the risks, uncertainties and other factors that may cause future results to differ materially from the forward-looking statements, please refer to the company’s filings with the Securities and Exchange Commission.
And with that, let me turn the call over to Mr. Symeon Palios, Chairman and Chief Executive Officer.
Thank you, Ed. Good morning and thank you for joining us. It is my pleasure to report to you on the performance of Diana Containerships Inc. for the third quarter and nine months ended September 30, 2012. Our results during the recent quarter continue to reflect our activities to expand and improve the management of our fleet in order to deliver growing revenues and profitability for the benefit of our shareholders.
Let me review our financial performance during the period. Time charter revenues were $14.6 million U.S. in the 2012 third quarter. This is an increase of 51% compared to $9.7 million U.S. for the third quarter of 2011. The increase reflects the sustained growth of our fleet as we owned nine vessels in the most recent period, up from five vessels a year ago. Net income was $1.6 million U.S. for the 2012 third quarter. This compares with net earnings of $2.7 million U.S. for the same period a year ago.
We have continued to focus on maintaining a strong balance sheet to ensure that we have the financial capacity to support a sound growing business. At September 30, 2012, Diana Containerships had shareholders equity of $247.9 million U.S. In comparison, long-term debt was a manageable $92.7 million U.S. (inaudible) principal balance outstanding. The company remains firmly committed to delivering value for our shareholders through our dividend policy. Today we announced that the Board of Directors has again declared a dividend of $0.30 per share payable on or around December 18, 2012 to all shareholders of record as of December 4, 2012. Given the successful execution of our strategy to expand our fleet and therefore to grow our cash flow generation capacity, it is our intention assuming the continued performance of our current time charters and no unanticipated extraordinary expenses to maintain for the foreseeable future the current quarterly dividend level of $0.30 per share.
We are continuing our fleet expansion efforts as the current market provides opportunities to acquire productive assets at attractive prices. Today we announced the delivery of the vessel, APL Garnet, a 1995-built Panamax container vessel of approximately 4,750 TEU capacity. The vessel is chartered for a period of 34 months plus or minus 30 days at charterer’s option at the rate of $7,000 U.S. per day, and it is expected to generate approximately $26.7 million U.S. of revenue for the minimum agreed period of the charter. This purchase at an attractive price of $30 million U.S. demonstrates our ability to quickly deploy the capital raised through our July public offering in a manner that will enhance shareholder value and support our dividend policy.
Including the APL Garnet, the Diana Containerships fleet now consists of 10 Panamax container vessels. Our ships have been chartered to some of the industry’s leading container lines. Overall, the fleet is time chartered for 100% of the days in 2012 and approximately 95% of the days in 2013, providing a stable revenue stream. The contracted gross revenue of the fleet is approximately $106.5 million U.S.
In conclusion, the ongoing expansion and sound management of our fleet has enabled Diana Containerships to produce increasing revenues and solid earnings for the third quarter of 2012. We also have maintained a strong balance sheet with a prudent level of debt and the resources to support our continued growth. As we move forward, we remain committed to pursuing strategies that will build on our operational and financial strengths to deliver increasing shareholder value.
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