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Operating and Financial Review and Prospects
The
following
management's
discussion
and
analysis
should
be
read
in
conjunction
with
our
historical
consolidated financial statements
and their notes included
elsewhere in this
annual report. 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 as a result of certain
factors, such as those set forth
in the section entitled “Risk Factors”
and
elsewhere in this annual report.
A.
Operating results
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
amount
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,
68
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 operating
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:
As of and for the
Year Ended December 31,
2025
2024
2023
Fleet Data:
Average number of vessels (1)
36.7
38.9
41.1
Number of vessels at year-end
36.0
38.0
40.0
Weighted average age of vessels at year-end (in
years)
12.1
11.3
10.5
Ownership days (2)
13,406
14,219
14,986
Available days (3)
13,014
14,057
14,867
Operating days (4)
12,969
14,009
14,824
Fleet utilization (5)
99.7%
99.7%
99.7%
Average Daily Results:
Time charter equivalent (TCE) rate (6)
$
15,454
$
15,267
$
16,713
Daily vessel operating expenses (7)
5,986
5,808
5,704
The following table reflects the calculation of our TCE rates for
the periods presented:
Year Ended December 31,
2025
2024
2023
(in thousands of U.S. dollars, except for TCE rates, which
are expressed in U.S. dollars, and available days)
Time charter revenues
$
213,541
$
228,209
$
262,098
Less: voyage expenses
(12,417)
(13,607)
(13,621)
Time charter equivalent revenues
$
201,124
$
214,602
$
248,477
Available days
13,014
14,057
14,867
Time charter equivalent (TCE) rate
$
15,454
$
15,267
$
16,713
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:
69
●
the duration of our charters;
●
our decisions relating to vessel acquisitions and disposals;
●
the amount of time that we spend positioning our vessels;
●
the amount of time that our vessels spend in drydock undergoing
repairs;
●
maintenance and upgrade work;
●
the age, condition and specifications of our vessels;
●
levels of supply and demand in the dry bulk shipping industry.
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 material 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 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.
Revenues derived
from
time
charter agreements in 2025 decreased compared to previous years due to the decrease in the size of our
fleet following vessel sales described elsewhere in this annual
report.
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 usually
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.
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 health,
safety,
quality (HSQ)
and vetting.
Our vessel
operating expenses
generally represent
fixed costs.
70
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. Effective
July 1, 2023, the Company
changed its estimated
scrap rate of its
vessels from $250 per
lightweight ton to
$400 per lightweight
ton, calculated
based on the
average demolition
prices in
different markets, during
the
last 15 years.
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 significantly by
the size of the
fleet.
However, they
are affected by the exchange rate of Euro to US Dollars,
as about half of our administrative expenses are
in Euro.
Interest and Finance Costs
We incur
interest expense and
financing costs
in connection with
vessel-specific debt,
senior unsecured
bond and finance liabilities. As of December 31, 2025 our aggregate debt amounted
to $529.2 million and
our finance
liabilities amounted
to $114.1
million. During
2023, we
replaced LIBOR,
being the
reference
rate to
calculate interest
expense in
our loan
facilities having
a floating
rate, with
term SOFR.
Interest rates,
which had
been increasing
since the
beginning of
2022, started
to decrease
in the
third quarter
of 2024
and continued to decline until the end of 2025.
We manage our exposure to interest
rates by maintaining a mix
of floating and fixed
interest rate financing
agreements. Floating
rate agreements
include secured
loan facilities
and fixed
rate agreements
include
leases and our senior unsecured
bond. Also, in 2023, we
entered into an interest
rate swap for 30% of
our
$100 million
loan facility
with DNB,
dated June
26, 2023,
under which
we pay
fixed interest
and receive
floating.
Lack of Historical Operating Data for Vessels before Their Acquisition
Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire)
some vessels with time charters. It is rare
in the shipping industry for the last charterer
of the vessel in the
hands of the seller to continue as the first charterer of
the vessel in the hands of the buyer. In most cases,
when a
vessel is
under time
charter and
the buyer
wishes to
assume that
charter,
the vessel
cannot be
acquired without the charterer’s
consent and the buyer entering into
a separate direct agreement (called
a
“novation agreement”) with the
charterer to assume the
charter. The
purchase of a
vessel itself does not
transfer
the
charter
because
it
is
a
separate
service
agreement
between
the
vessel
owner
and
the
charterer.
Where we identify any intangible assets or liabilities associated with the acquisition
of a vessel, we record
all
identified assets
or
liabilities at
fair
value.
Fair value
is
determined by
reference to
market
data. We
value any
asset or
liability arising
from the
market value
of the
time charters
assumed when
a vessel
is
acquired. The amount to be recorded as an asset or liability at the
date of vessel delivery is based on the
difference
between
the
current
fair
market
value
of
the
charter
and
the
net
present
value
of
future
71
contractual cash
flows.
When the
present value of
the time
charter assumed is
greater than the
current
fair market
value of
such charter, the
difference is
recorded as
prepaid charter
revenue.
When the
opposite
situation occurs,
any difference,
capped to
the vessel’s
fair value
on a
charter-free basis, is
recorded as
deferred revenue.
Such assets and
liabilities, respectively, are amortized
as a reduction of,
or an increase
in, revenue over the period of the time charter assumed.
When we
purchase a
vessel and
assume or
renegotiate a
related time
charter,
among others,
we must
take the following steps before the vessel will be ready to commence
operations:
●
obtain the charterer’s consent to us as the new owner;
●
obtain the charterer’s consent to a new technical
manager;
●
in some cases, obtain the charterer’s consent to
a new flag for the vessel;
●
arrange for a
new crew for the
vessel, and where the
vessel is on charter,
in some cases, the
crew must be approved by the charterer;
●
replace all hired equipment on board, such as gas cylinders
and communication equipment;
●
negotiate
and
enter
into
new
insurance
contracts
for
the
vessel
through
our
own
insurance
brokers;
●
register the vessel under a
flag state and perform
the related inspections in order
to obtain new
trading certificates from the flag state;
●
implement a new planned maintenance program for the vessel; and
●
ensure that the new
technical manager obtains new certificates for
compliance with the safety
and vessel security regulations of the flag state.
When we charter
a vessel
pursuant to a
long-term time
charter agreement
with varying rates,
we recognize
revenue on a straight-line basis, equal to the average revenue during
the term of the charter.
The following
discussion is
intended to
help you
understand how
acquisitions of
vessels affect
our business
and results of operations.
Our business is mainly comprised of the following elements:
●
employment and operation of our vessels; and
●
management of
the financial,
general and
administrative elements
involved in
the conduct
of
our business and ownership of our vessels.
The employment and operation of our vessels mainly require
the following components:
●
vessel maintenance and repair;
●
crew selection and training;
●
vessel spares and stores supply;
●
contingency response planning;
72
●
onboard safety procedures auditing;
●
accounting;
●
vessel insurance arrangement;
●
vessel chartering;
●
vessel security training and security response plans (ISPS);
●
obtaining of
ISM certification
and audit
for each
vessel within
the six
months of
taking over
a
vessel;
●
vessel hiring management;
●
vessel surveying; and
●
vessel performance monitoring.
The management of
financial, general and
administrative elements
involved in the
conduct of our
business
and ownership of our vessels mainly requires the following
components:
●
management of our
financial resources, including
banking relationships, i.e.,
administration of
bank loans and bank accounts;
●
management of our accounting system and records and financial
reporting;
●
administration of the legal and regulatory requirements affecting our business
and assets; and
●
management of the relationships with our service providers and customers.
The principal factors
that affect our profitability, cash
flows and shareholders’
return on investment
include:
●
rates and periods of charter hire;
●
levels of vessel operating expenses;
●
depreciation expenses;
●
financing costs;
●
global conflicts;
●
inflation, and
●
fluctuations in foreign exchange rates.
73
Results of Operations
Year ended December 31, 2025 compared to the year ended December 31, 2024
Time charter
revenues.
Time charter
revenues decreased
by $14.7
million, or
6%, to
$213.5 million
in 2025,
compared to $228.2 million in 2024. The decrease was primarily due to a decrease in the size
of the fleet
resulting from
the sale
of two
vessels during
2025, which
decreased operating
days during
2025, compared
to last year.
Operating days declined to
12,969 in 2025 from
14,009 in 2024.
This reduction was partially
offset by
higher average time charter
rates, as reflected in
our TCE rate
of $15,454 in 2025
compared to
$15,267 in 2024.
Voyage
expenses.
Voyage
expenses
decreased
by
$1.2
million,
or
9%,
to
$12.4
million
in
2025
as
compared
to
$13.6 million
in
2024.
This
decrease was
mainly
attributable to
lower commissions,
which
amounted
to
$10.8
million
in
2025,
compared
to
$11.6
million
in
2024.
A
further
decrease
was
due
to
voyage and port expenses, which declined to $0.9 million in 2025
from $1.2 million in 2024.
Vessel operating expenses.
Vessel operating expenses decreased by $2.4 million, or 3%, to $80.2 million
in 2025 compared to $82.6 million
in 2024. The decrease was mainly
attributable to fewer ownership
days
in
2025
following
the
sale
of
two
vessels
discussed
above.
This
decrease was
partially
offset
by
a
3%
increase in
daily vessel
operating expenses,
which rose
to $5,986
in 2025,
from $5,808
in 2024,
mainly
due to higher crew-related costs.
Depreciation
and
amortization
of
deferred
charges.
Depreciation
and
amortization
of
deferred
charges
increased by $1.8
million, or 4%, to $46.5
million in 2025, compared
to $44.7 million
in 2024. The increase
was primarily due
to higher amortization
of deferred
drydock costs, as
fourteen vessels underwent
drydock
surveys in 2025 compared to six vessels
in 2024.
This increase was partially offset
by lower depreciation
expenses resulting from reduced ownership days following the sale of
two vessels during 2025.
General and
administrative expenses
. General and admini
strati
ve expenses
increased by
$0.7 million,
or
2%, to $34.1 million in 2025 compared to $33.4 million in 2024. The increase was primarily driven by higher
payroll
and legal
expenses, partially
offset by lower
tax expenses.
Additionally, as
almost half
of our general
and
administrative
expenses
are
denominated
in
Euro,
general
and
administrative
expenses
were
also
affected by movements in the euro/U.S. dollar exchange rate during 2025.
Management fees to a related party.
Management fees to a related party decreased by $0.1 million, or 8%,
to $1.2 million in 2025, compared
to $1.3 million in 2024.
The decrease was attributable to a
reduction in the
number of vessels managed by DWM in 2025,
following the sale of one managed vessel during the year.
Gain on sale of
vessels.
Gain on sale of
vessels decreased by $2.1
million, or 36%, to
$3.7 million in 2025
due to the sale of vessels
Alcmene and Selina,
compared to $5.8 million in 2024 which related to the sale of
vessels
Artemis and
Houston
.
Interest expense and finance costs.
Interest expense and finance costs decreased by $4.5 million or 9% to
$43.0 million
in 2025
compared to
$47.5 million
in 2024.
The decrease
was mainly
due to
lower average
interest rates in 2025 compared to 2024.
Interest and
other income
. Interest and other income decreased by $0.9 million, or 11%, to $7.5 million in
2025
compared
to
$8.4
million
in
2024.
The
decrease
was
mainly
attributable
to
a
lower
amount
of
time
deposits placed
during 2025
and further
impacted by
lower deposit
rates achieved
in 2025
compared to
2024.
Loss on extinguishment of debt. In 2024, the loss on extinguishment of debt consisted of the prepayment of
the 8.375%
Senior Unsecured
bond at
a price
equal to
103.35% of
nominal value,
with the
proceeds from
the new bond.
74
Gain/(loss)
on derivatives. In
2025, loss on
derivates amounted to
$0.2 million,
as compared to
a gain of
$0.3
million
in
2024.
Gain/(loss)
on
derivative
instruments
reflects
the
decrease
in
interest
rates
affecting
the
change in
fair value
of the
interest rate
swap dated
July 6,
2023, which
we entered
into with
DNB for
a notional
amount of $30
million, under which we
pay a fixed
rate of 4.268% and
receive floating interest based
on term
SOFR.
Gain/(loss) on
related party
Investments. Loss
on related
party investments
amounted to
$1.1 million
in 2025.
The loss primarily reflected
the dilution of the
Company’s common stock holdings
in OceanPal arising from
multiple common
stock issuances
and the
impact of
a reverse
stock split,
which resulted
in a
$4.1 million
loss. This was partially
offset by a $3.0
million gain on the
sale of the Company’s
500,000 Series B Preferred
Shares of OceanPal,
representing the excess of
the sale proceeds over
the carrying amount. This
compares
to a loss of $3.9 million
in 2024, which resulted from the
measurement of OceanPal’s common shares
at fair
value on December 31, 2024, based on the closing price of the shares on
that date.
Gain/(loss) on equity securities.
Gain on
equity securities
amounted
to $14.7
million
in 2025,
compared
to a
loss of $0.4 million in
2024. In 2024, we sold equity
securities acquired in 2023, resulting in
a realized loss of
$0.4
million.
In
2025,
we
acquired
equity
securities
of
Genco
Shipping
&
Trading
Limited
(Genco)
representing 14.8% of Genco’s common stock
as of year-end. The valuation of
these equity securities at fair
value at year-end resulted in an unrealized gain of $14.7 million.
Gain
on warrants.
Gain on
warrants amounted
to $0.5
million
in 2025,
compared to
$0.7 million
in 2024,
which resulted
from the
fair value
adjustment of
the outstanding
warrants as
of December
31, 2025
and 2024,
respectively.
Loss from
equity method
investments.
Loss from
equity method
investments, amounted
to $2.8
million in
2025,
compared to $0.1
million in 2024. In
2025, the loss was
attributable to a $1.4
million loss from our
80%
interest in Ecogas, a
$0.1 million loss from
our 34% interest in
Windward, an additional $0.8
million loss from
our
25%
interest
in
Bergen
and
a
$0.5 million
loss
from
our
50%
interest
in
DWM.
In
2024,
the
loss
was
attributable to a $0.5 million loss from
our 45.87% interest in Windward, which was
partially offset by a $0.3
million gain from our 25% interest in Bergen and a $0.1 million gain from our
50% interest in DWM.
Year ended December 31, 2024 compared to the year ended December 31, 2023
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023,
please refer to “Item 5. Operating and Financial
Review and Prospects” in our Annual Report
on Form 20-
F,
for the year ended December 31, 2024 filed with the SEC on March 21,
2025.
B.
Liquidity and Capital Resources
Historically, we finance our short-term and long-term
capital requirements with cash
from operations, cash
at
banks,
equity
contributions
from
shareholders,
long-term
bank
debt,
finance
liabilities
and
senior
unsecured
bonds.
Our
main
uses
of
funds
have
been
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, repurchase of
our common stock
and payment of dividends.
Our short-term
liquidity requirements include
funding the
installments for
the construction
of two
vessels
with
expected
deliveries
in
2027
and
2028,
funding
the
construction
of
an
office
building,
payments
of
committed capital under the terms of our joint ventures in Windward and Ecogas,
expenditures relating to
scheduled
drydock
and
special
surveys
of
our
vessels
to
comply
with
international
and
regulatory
standards,
payments
of
interest
and
principal
installments
under
our
bank
loans,
our
bond,
and
lease
agreements and payment of dividends,
common and preferred.
Our primary sources of short-term
liquidity
75
include cash generated from
operating activities, available cash
balances,
proceeds from the
exercise of
warrants and vessel sales.
Our
long-term
liquidity
requirements
include
funding
our
newbuilding
vessel
installments,
interest
and
principal
payments
on
outstanding
debt,
bond,
and
lease
agreements,
loan
maturities,
payment
of
dividends,
common
and
preferred,
if
declared
by
the
board
of
directors,
expenditures
for
drydock
and
special surveys
as they become
due. Sources of
funding for
our long-term
liquidity requirements include
cash
flows
from
operations,
available
cash
balances,
bank
borrowings,
issuance
of
debt
and
equity
securities, and vessel sales.
As of
December 31,
2025 and
2024, working
capital, defined
as current
assets minus
current liabilities,
including the
current portion
of long-term
debt and
finance liabilities,
amounted to
$155.3 million
and $126.4
million, respectively.
The increase in
working capital was
primarily driven by
a $118.2
million increase
in
investments in equity
securities related to the
acquisition of 14.8% ownership
interest in Genco. Working
capital also increased by
$4.2 million due to
the reclassification of our
equity method investment
in Bergen
as
current,
resulting from
Bergen’s
sale
of
DSI Drammen
.
The
increase
was
partially offset
by a
$83.9
million decrease
in cash
and cash
equivalents and
time deposits,
mainly due
to the
maturity of
time deposits
and the
redeployment of
available liquidity
into equity
securities. Working
capital was
further affected
by
an increase
in current
liabilities, primarily
due to
a higher
current portion
of long-term
debt following
the
issuance of
a new
loan during
2025. We
believe that
our working
capital is
sufficient to
cover our
short-
term requirements.
Cash and
cash equivalents, including
restricted cash,
are primarily held
in U.S.
dollars and
amounted to
$122.3 million
as of
December 31,
2025 and
$143.7 million
as of
December 31,
2024. Restricted
cash,
non-current, which
represents minimum
liquidity requirements
under our
loan facilities,
as of December
31,
2025 and 2024, amounted to
$18 million and $19 million,
respectively.
Restricted cash, current consists
of
loan proceeds drawn during
the year maintained in
a pledged account in
order to reduce
the loan’s margin
and as
of December
31, 2025
amounted to
$53.8 million.
Time deposits with
maturities above
three months
amounted to $0 million and $63.5
million as of December 31, 2025 and
2024,
respectively. Our
cash and
cash equivalents, restricted cash and time
deposits represent our unused sources of liquidity to
meet our
short- and long-term obligations.
During 2025 and 2024, our sources and uses of cash were as
follows:
Net Cash Provided by Operating Activities
Net cash provided by operating
activities decreased by $36.0 million,
or 43%.
In 2025, net cash
provided
by
operating
activities
was
$47.5 million
compared
to
net
cash
provided
by
operating
activities
of
$83.5 million in
2024. The
decrease was
mainly attributable
to the
proceeds from
the sale
of our
investment
in equity
securities recognized in
2024, increased dry-docking
and special survey
costs incurred in
2025
and
lower
operating
cash
inflows,
primarily
reflecting
reduced
operating
days
following
the
sale
of
two
vessels during the year.
Net Cash Used in Investing Activities
Net
cash
used
in
investing activities
was
$32.0 million
for
2025,
which
consists
of
$1.5
million
paid
for
vessels under
construction and
improvements; $23.0 million
of proceeds
from the
sale of
two vessels
in
2025; $118.3 million paid to acquire investments,
net of a $3.5 million
return of capital from our
investment
in Windward;
$3.0 million proceeds
from the sale
of the Series
B Preferred shares
of OceanPal; a
$63.5
million
decrease
in
time
deposits
with
maturity
above
three
months;
and
$1.7
million
relating
to
the
acquisition of property and equipment.
76
Net cash
used in
investing activities
was $39.8
million for
2024, which
consists of
$20.5 million
paid for
vessels under
construction and
improvements; $35.2 million
of proceeds
from the
sale of
two vessels
in
2024; $27.2 million
paid to acquire
investments in Windward;
increased investment
by $23.5 million
in time
deposits
with
maturity
above
three
months;
and
$3.7
million
relating
to
the
acquisition
of
property
and
equipment.
Net Cash Used in Financing Activities
Net cash used in
financing activities was $36.9 million
for 2025, which
mainly consists of $55.0
million of
proceeds
from
the
issuance
of
long
term
debt;
$58.2
million
of
repayments
of
bank
debt
and
finance
liabilities;
$23.0 million of
payments for the
repurchase of common
stock; $5.8 million
and $4.6 million
of
cash dividends
paid on
our preferred
and common
stock, respectively;
and $0.4
million of
finance costs
paid in connection with the new loan agreement.
Net cash used in financing activities was $21.7
million for 2024, which consists of $117.2 million proceeds
from issuance
of long term
debt; $123.0 million
of bank
debt and
finance liabilities that
we repaid; $24.2
million proceeds from issuance of common stock; $5.8 million and $29.0 million
of cash dividends paid on
our preferred and
common stock,
respectively; and
$5.3 million
of finance
costs paid in
relation to new
loan
agreements.
For a detailed
discussion of
cash flows
for the
year ended
December 31,
2024 compared
to the year
ended
December 31, 2023 please see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and
Capital Resources”
included in
our
2024 Annual
Report filed
on Form
20-F with
the SEC
on
March 21,
2025.
Commitments for Capital Expenditures
As of the
date of this annual report,
we have outstanding commitments amounting to:
(i) $73.6 million for
the construction of two 81,200 dwt methanol dual-fuel newbuilding Kamsarmax dry bulk vessels
expected
to be
delivered in
the third
quarter of
2027 and
the first
quarter of
2028; (ii)
€9.4 million
under our
joint
venture agreement with Windward;
(iii) $8.2 million remaining commitment to
Ecogas for the construction
of
two
7,500
cbm
LPG
vessels
with
expected
deliveries
in
2027
and
(iv)
$50.4
million
of
purchase
obligations under our lease agreements.
We also incur
capital expenditures
when our
vessels undergo
statutory (drydock
and special)
surveys. This
process may
require us to
reposition vessels from
discharging ports to
shipyard facilities, which
reduces
operating
days
during
the
period.
Additional
capital
expenditure
may
also
be
required
for
vessel
improvements needed to comply with new or upcoming regulations.
Over the next
twelve months, we
will require capital
to fund ongoing
operations, debt service,
common and
preferred dividend payments, bareboat charter hire payments,
and investments.
As of the date of this annual report,
we have contracted revenues covering around 81% of our ownership
days in 2026, in time
charter agreements having an average time
charter rate above our break-even rate
as of
December 31, 2025,
and we have
fixed around 9%
of our ownerships
days in 2027.
Our revenues
for the unfixed days in 2026
and 2027 will be affected by the developments in the dry bulk market and we
cannot assure
you that we
will be
able to successfully
renew existing
charters at rates
sufficient to
allow
us
to
meet
all
of
our
obligations.
As
of
the
date
of
this
annual
report,
we
believe
that
contracted
and
anticipated
revenues will
result
in
internally generated
cash flows
and together
with available
cash
and
cash equivalents
will be
sufficient to
fund our
short-term and long-term
capital requirements.
In addition,
we
expect
to
finance
part
of
our
long
term
capital
requirements,
such
as
the
construction
cost
of
our
methanol vessels, with new bank debt and if needed vessel sales.
77
Debt instruments and guarantees
As of December
31, 2025,
we had $529.2
million of
long-term debt
under the
agreements described
below.
Secured Term Loans
On January 4,
2017, we
drew down $57.24
million, under a
secured loan
agreement with
the Export-Import
Bank
of
China,
dated
January
7,
2016,
to
finance
part
of
the
construction
cost
of
San
Francisco
and
Newport News
. The loan is payable in equal quarterly instalments of about
$1.0 million each until January
4, 2032.
On July
25, 2024,
we drew
down $167.3
million under
a new
loan agreement
with Nordea
Bank AB,
or
Nordea,
which
was
used
to
refinance
other
outstanding
agreements
with
the
same
bank.
The
loan
is
repayable in equal
quarterly instalments of $4.5
million and a
balloon instalment of $64.8
million payable
on July 25, 2030.
On
April
12,
2023,
we
entered
into
a
$100
million
term
loan
facility
with
Danish
Ship
Finance
A/S
to
refinance outstanding loan balances
with another bank and for
working capital. On October 18,
2024, we
refinanced
the
outstanding
balance
of
the
loan
with
a
new
loan
which
is
repayable
in
equal
quarterly
instalments of $2.5 million each and a
balloon of $14.3 million payable
together with the last instalment on
April 18, 2031.
On June
26, 2023,
we entered
into a
$100 million
loan agreement
with DNB
Bank ASA,
or DNB,
to refinance
an
outstanding
loan
balance with
another
bank
and
for
working
capital. The
loan
is
repayable
in
equal
quarterly
instalments
of
$3.8
million
until
December
27,
2029.
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, we entered into an interest rate swap with DNB for a notional
amount of
$30 million
and quarterly
amortization of
$1.2 million.
Under the
interest rate
swap, we
pay a
fixed rate of
4.268% and
receive floating
under term
SOFR. The
swap has
a termination
date on
December
27, 2029, and 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. As of December 31, 2025, the
interest rate swap was a
liability having a fair value of $0.4 million.
On September 29,
2025, we drew
down $55 million
under a loan
agreement with National
Bank of Greece,
or NBG. The loan proceeds were deposited in a pledged
account with the bank to reduce the margin. The
Company may withdraw any
part or all
of the funds from
the pledged account at
the end of
each interest
period, provided no event of default has
occurred. The loan is repayable in equal quarterly
instalments of
$1.3 million and a balloon instalment of $25.0 million payable on September
29, 2031.
Under
the
secured
term
loans
outstanding
as
of
December
31,
2025,
31
vessels
of
our
fleet
were
mortgaged with
first preferred
or priority
ship mortgages.
Additional securities
required by
the banks
include
first priority assignment of all earnings, insurances,
first assignment of time charter contracts with
duration
that
exceeds
a
certain
period,
pledge
over
the
shares
of
the
borrowers,
manager’s
undertaking
and
subordination and requisition compensation and either a corporate guarantee by Diana Shipping Inc. (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.
Furthermore, the secured
term loans contain
cross default provisions and
additionally we are
78
not permitted to pay any dividends following the occurrence of an event of default. All of our secured term
loans bear interest in Term SOFR plus a margin.
As of December 31, 2024 and
2025, and the date of this
annual report, we were in compliance with
all of
our loan covenants.
Senior Unsecured Bond:
On July
2, 2024,
we issued
a bond
of $150
million nominal
value at
par and
on November
8, 2024,
we
issued an additional
amount of
$25 million
nominal value
at 102.00% of
par.
The bond proceeds
were used
to refinance the outstanding balance of our $125 million senior
unsecured bond maturing in June 2026 at
a price equal to 103.35% of nominal value. The
bond has a US Dollar fixed-rate coupon
of 8.75% payable
semi-annually in arrears in January and
July of each year.
The bond is callable in whole
or in part in July
2027 at
a price
equal to
103.50% of
nominal value;
in January
2028 at
a price
equal to
102.625% of
nominal
value; in
July 2028
at a
price equal
to
101.75% and
after January
2029 at
a price
equal to
100.00% of
nominal value.
The 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. The
bond includes financial
and other covenants
and is trading
on the Oslo
Stock Exchange under
the ticker
symbol “DIASH03”.
Finance Liabilities
On March 29, 2022, we entered into a $50 million sale and leaseback agreement with an unaffiliated third
party,
for a
period of ten
years, under which
we pay
hire, monthly in
advance and we
have 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, we have the obligation to repurchase the vessel
for $16.4 million, on the expiration of
the lease on the tenth year.
On August 17, 2022,
we entered into two
sale and leaseback agreements with two
unaffiliated Japanese
third parties, for
an aggregate amount
of $66.4 million,
for a period
of eight years,
each,
under which we
pay hire, monthly in advance,
and we have the option to purchase the vessels 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,
we have
the
obligation to
repurchase the
vessels for
$13.0
million, each,
on the
expiration of
each
lease on
the
eighth year.
On
December
6,
2022,
we
entered
into
a
sale
and
leaseback
agreement
for
$29.9
million
with
an
unaffiliated third party, for
a period of
ten years,
under which
we pay
hire, monthly
in advance,
and we
have
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,
we have the obligation to repurchase the
vessel for $8.1 million, on
the expiration of the lease on the tenth year.
Guarantees
On March 30,
2023, we entered
into a corporate
guarantee with Nordea
under which we
guaranteed the
performance by Bergen Ultra of its
obligations under a loan agreement with the
bank,
maturing on March
30, 2028.
As of
December 31,
2025, the
loan had
an outstanding
balance of
$12.3 million
and was
fully
repaid
in
January
2026
after
the
sale
of
Bergen
Ultra’s
vessel.
Following
repayment
of
the
loan,
the
corporate guarantee provided to Nordea was released.
79
C.
Research and development, patents and licenses
We
incur from
time to
time expenditures
relating to
inspections for
acquiring new
vessels that
meet our
standards. Such expenditures are insignificant and they are expensed
as they incur.
D.
Trend information
Demand for dry
bulk vessel services is
influenced by global financial conditions.
Global financial markets
and economic
conditions have
been, and
continue
to be,
volatile. Our
results of
operations depend
primarily
on charter
hire rates available
to fix
our vessels and
the demand for
dry bulk vessel
services. The Baltic
Dry Index, or the BDI, has long been viewed as the main benchmark to monitor the movements of the dry
bulk vessel
charter market
and the
performance of the
entire dry
bulk shipping market.
In 2025,
the BDI
ranged from a low
of 715 to a
high of 2,845 and
closed at 1,972 on
March 12, 2026. Although
there can be
no assurance
that the
dry bulk
charter market
will not
decline from
current levels,
as of
the date
of this
annual report,
we have
fixed about
81% of
our fleet
ownership days
in 2026
in time
charter agreements
having an average time
charter rate above our break-even
rate. Nevertheless, our revenues
and results of
operations in 2026 will be subject to demand for our services,
the level of inflation, market disruptions and
interest rates.
Demand for
our dry
bulk oceangoing
vessels is
dependent upon
economic
growth in
the
world’s economies, seasonal
and regional changes in
demand and changes to
the capacity of the
global
dry
bulk
fleet
and
the
sources
and
supply
for
dry
bulk
cargo
transported
by
sea.
Continued
adverse
economic, political or
social conditions or
other developments could
further negatively impact
charter rates
and therefore have a material adverse effect on our business and results of operations.
E.
Critical Accounting Estimates
The
discussion
and
analysis
of
our
financial
condition
and
results
of
operations
are
based
upon
our
consolidated
financial
statements,
which
have
been
prepared
in
accordance
with
U.S.
GAAP.
The
preparation
of
those
financial
statements
requires
us
to
make
estimates
and
judgments
that
affect
the
reported
amounts of
assets
and liabilities,
revenues and
expenses and
related disclosure
of
contingent
assets and liabilities at the date of our financial statements. Actual
results may differ from these estimates
under different assumptions and conditions.
Impairment of Vessels
Long-lived assets
are
reviewed for
impairment whenever
events
or
changes in
circumstances (such
as
market conditions,
obsolescence or
damage to
the asset,
potential sales
and other
business plans)
indicate
that the
carrying amount
of an
asset may
not be
recoverable. For
impairment testing
purposes, each
vessel
together with its
associated deferred costs
is considered
a single asset
group. When impairment
indicators
are
identified,
the
Company
compares
the
carrying
amount
of
the
asset
group
with
the
estimated
undiscounted projected net
operating cash flows
expected to result
from the use
of the asset
group over
its remaining useful life
and its eventual
disposition. If the
carrying amount exceeds
the undiscounted cash
flows,
the
asset
group
is
considered
not
recoverable
and
is
written
down
to
its
fair
value,
determined
primarily through third-party valuations.
For vessels, the
Company estimates undiscounted net
operating cash flows by
considering the historical
and projected vessel performance and utilization. A significant
assumption in this analysis is the estimate
of future time charter rates for
the unfixed days, using the most
recent 10-year average of historical
1 year
time charter rates, net
of commissions, available
for each vessel class.
These estimated time
charter rates
reflect the Company’s
chartering strategy,
vessel operating history
per vessel class
and at least
one full
shipping
cycle,
where
applicable.
When
a
full
10-year
history
is
not
available,
the
average
1
year
time
charter rate of the available period is used. The
historical ten-year average rate used in 2025 to calculate
undiscounted
projected
net
operating
cash
flow
was
$13,596
for
our
Panamax,
Kamsarmax
and
Post-
Panamax
vessels,
$16,309 for
our
Ultramax vessels
and
$17,517 for
our
Capesize and
Newcastlemax
80
vessels, compared to $13,053, 16,626 and $16,315,
respectively in 2024. Additional assumptions include
contracted
charter
rates
for
fixed
days
based
on
existing
time
charter
contracts,
anticipated
vessel
operating expenses,
scheduled vessel maintenance
costs, fleet
utilization levels,
and estimated
residual
values based
on scrap
rates. Assumptions
are in
line with
the Company’s
historical performance
and its
expectations
for
future
fleet
utilization
under
its
current
fleet
deployment
strategy.
The
undiscounted
projected
net
operating
cash
flows
are
compared
with
the
carrying
amount
of
the
vessel,
including
its
unamortized
deferred costs.
If
the
carrying amount
exceeds the
undiscounted cash
flows, the
vessel is
written
down
to
its
fair
value,
and
the
difference
is
recognized
as
an
impairment
loss.
Although
no
impairment loss was identified or
recorded in 2025, according to
our assessment, the carrying value plus
unamortized deferred
cost of
vessels for
which impairment
indicators existed
as of
December 31,
2025,
was $281.3 million.
Historically,
the
market
values
of
vessels
have
experienced
volatility,
which
from
time
to
time
may
be
substantial.
As a result, the
charter-free market value of certain
of our vessels may
have declined below
those
vessels’
carrying
value
plus
unamortized
deferred
cost.
These
vessels
would
be
impaired
in
accordance with the
related US GAAP
guidance for impairment
recognition, if the
undiscounted cash
flows
were lower
compared to
their carrying
value. Based
on: (i)
the carrying
value plus
unamortized deferred
cost of
each of
our vessels as
of December 31,
2025 and
2024 and (ii)
what we
believe the charter-free
market value of each
of our vessels was
as of December 31,
2025 and 2024, the
aggregate carrying value
of 10 and
12 of the
vessels in our
fleet as of
December 31, 2025
and 2024, respectively,
exceeded their
aggregate charter-free market value
by approximately $37 million
and $22 million,
respectively,
as noted
in the table below. This represents the approximate amount
by which we believe we
would have to reduce
our net income if we sold all
of such vessels at December 31, 2025 and
2024, on industry standard terms,
in cash
transactions, and to
a willing buyer
where we were
not under
any compulsion to
sell, and
where
the buyer was
not under any
compulsion to buy.
For purposes of
this calculation, we
have assumed that
these
10 and
12 vessels
would be
sold at
a price
that reflects
our estimate
of their
charter-free market
values as of December 31, 2025 and 2024, respectively.
81
Vessel
Dwt
Year Built
Carrying Value plus unamortized
deferred cost
(in millions of US dollars)
2025
2024
1
Alcmene
93,193
2010
-
10.1
2
Amphitrite
98,697
2012
12.5
13.2
3
Astarte
81,513
2013
15.9
17.0
4
Atalandi
77,529
2014
15.1
16.0
5
Crystalia
77,525
2014
14.8
15.7
6
Electra
87,150
2013
12.8
13.4
7
G.P.
Zafirakis
179,492
2014
22.6
23.8
8
Ismene
77,901
2013
10.6
11.1
9
Leto
81,297
2010
12.4
12.1
10
Los Angeles
206,104
2012
21.4
22.4
11
Maera
75,403
2013
10.3
11.0
12
Maia
82,193
2009
11.4
12.4
13
Medusa
82,194
2010
12.0
11.8
14
Myrsini
82,117
2010
13.3
13.4
15
Myrto
82,131
2013
15.7
16.8
16
New Orleans
180,960
2015
31.3
30.4
17
New York
177,773
2010
15.3
13.7
18
Newport News
208,021
2017
37.0
38.8
19
P.S.
Palios
179,134
2013
31.4
33.3
*
20
Phaidra
87,146
2013
12.1
12.9
21
Philadelphia
206,040
2012
22.0
23.1
22
Polymnia
98,704
2012
12.8
13.5
23
San Francisco
208,006
2017
37.1
38.9
24
Santa Barbara
179,426
2015
33.7
35.7
*
25
Seattle
179,362
2011
21.0
20.2
26
Selina
75,700
2010
-
8.6
27
Semirio
174,261
2007
15.7
14.7
28
LEONIDAS P.C.
82,165
2011
18.9
*
19.5
*
29
Florida
182,063
2022
53.0
55.0
30
DSI Pyxis
60,362
2018
32.1
*
33.8
*
31
DSI Pollux
60,446
2015
27.9
*
28.4
*
32
DSI Phoenix
60,456
2017
29.5
*
31.1
*
33
DSI Polaris
60,404
2018
32.7
*
34.4
*
34
DSI Andromeda
60,309
2016
29.3
*
30.2
*
35
DSI Aquila
60,309
2015
27.8
*
28.5
*
36
DSI Pegasus
60,508
2015
27.0
*
27.3
*
37
DSI Altair
60,309
2016
28.2
*
29.7
*
38
DSI Aquarius
60,309
2016
28.0
*
29.5
*
Total
4,226,612
805
851
_______________________________
*
Indicates dry bulk
vessels for which
we believe, as
of December 31,
2025 and 2024,
the charter-free
market value
was lower than the vessel’s
carrying value plus unamortized deferred
cost. We believe that the
aggregate carrying
value
plus
unamortized
deferred
cost
of
these
vessels
exceeded
their
aggregate
charter-free
market
value
by
approximately $37 million and $22 million, respectively.
82
Our
estimates
of
charter-free
market
value
assume
that
our
vessels
were
all
in
good
and
seaworthy
condition without need for repair and if inspected would be certified in class without notations of any kind.
Our estimates are based on information available from various industry
sources, including:
●
reports
by industry
analysts and
data
providers that
focus
on our
industry and
related dynamics
affecting vessel values;
●
news and industry reports of similar vessel sales;
●
offers that we may have received from potential purchasers of our vessels; and
●
vessel
sale
prices
and
values
of
which
we
are
aware
through
both
formal
and
informal
communications
with
shipowners,
shipbrokers,
industry
analysts
and
various
other
shipping
industry participants and observers.
As
we
obtain information
from
various industry
and
other
sources, our
estimates
of charter-free
market
value are
inherently uncertain.
In addition,
vessel values
are highly
volatile; as
such, our
estimates may
not be
indicative of the
current or
future charter-free market
value of
our vessels or
prices that
we could
achieve if we
were to sell them.
We also refer
you to the
risk factor in “Item
3. Key Information—D. Risk
Factors” entitled
“
The market
values of
our vessels
could decline,
which could
limit the
amount of
funds
that we
can borrow
and could
trigger breaches
of certain
financial covenants
contained in
our loan
facilities,
which could adversely
affect our operating results,
and we may
incur a loss
if we sell
vessels following a
decline
in
their
market
values
”
and
the
discussion
under
the
heading
"Item
4.
Information
on
the
Company—B. Business Overview–Vessel Prices.”
Our impairment test
exercise is sensitive
to variances in
the time charter
rates. Our current
analysis, which
also
involved
a
sensitivity
analysis
by
assigning
possible
alternative
values
to
this
significant
input,
indicated that
time charter
rates would
need to
be reduced
by 15%
to result
in impairment
of individual
long-lived assets
with indication
of impairment.
However, there can
be no
assurance as
to how
long charter
rates and vessel values will remain at their current levels.
If charter rates decrease and remain depressed
for
some
time,
it
could
adversely
affect
our
revenue
and
profitability
and
future
assessments
of
vessel
impairment.
A comparison of the average estimated daily time charter equivalent rate used in our impairment analysis
with the average “break-even rate” for each major class of vessels is presented
below:
Average estimated daily time
charter equivalent rate used
Average break-even
rate
Ultramax
$16,309
$13,276
Panamax/Kamsarmax/Post-Panamax
$13,596
$9,960
Capesize/Newcastlemax
$17,517
$12,954
83
It should be
noted that
as of December
31, 2025,
ten of our
vessels, having
indication of
impairment, would
be affected by a reduction
in time charter rates
below the average
break-even rate. Additionally, the use of
the
1-year,
3-year
and
5-year
average
blended
rates
would
not
have
any
effect
on
the
Company’s
impairment analysis and as such on the Company’s results of operations:
Vessel type
1-year
(period)
Impairment
charge
(in USD
million)
3-year
(period)
Impairment
charge
(in USD
million)
5-year
(period)
Impairment
charge
(in USD
million)
Ultramax
$14,089
-
$15,319
-
$18,609
-
Panamax/Kamsarmax/Post-
Panamax
$12,929
-
$13,759
-
$16,719
-
Capesize/Newcastlemax
$22,074
-
$20,482
-
$21,105
-