DryShips Q3 Financial Results
DryShips Inc. (NASDAQ: DRYS), a global provider of marine transportation services for drybulk cargoes and offshore oil deep water drilling, announced its unaudited financial and operating results for the third quarter and nine month period ended September 30, 2009.
George Economou, Chairman and Chief Executive Officer of the Company commented:
"We are pleased to report another quarter of profitable operating results for DryShips as both our drilling and drybulk units continued to perform at high utilization rates. We are particularly pleased with the high utilization rates achieved by the Eirik Raude, which is drilling off Ghana at the Jubilee field for Tullow Oil (TUWLF). The Leiv Eiriksson is expected to complete its assignment with Shell in the North Sea during October and commence mobilization for drilling operations in the Black Sea under a 3-year contract for Petrobras. Most economic indicators for the world economy seem to indicate the end of the recession and we are also seeing the signs of recovery from countries besides China and India. The stimulus plan implemented by the Chinese government earlier in the year has by no means played itself out, as the majority of this money went to infrastructure development which is medium to long term projects. While drybulk shipping demand is projected to remain strong for the coming years, the large orderbook remains a cause for concern, especially for 2010. Actual deliveries in the first nine months of 2009 were much smaller than were anticipated at the beginning of the year and offer some hope that cancellations and delays will alleviate the projected oversupply.
"Our drybulk fleet is now virtually fully fixed for the remainder of 2009 and 2010 and 77% fixed for 2011 at healthy levels and we are prepared to leverage the volatility in freight rates in the future through further vessel acquisitions. DryShips now has $1.44 billion in fixed EBITDA from its dry bulk and drilling units over the next 2.25 years and we are well positioned to take advantage of acquisition opportunities as they arise."
The company recorded a net profit of $35.6 million, or $0.12 basic and diluted profit per share for the three-month period ended September 30, 2009, as compared to a net profit of $180.0 million, or $4.13 basic and diluted earnings per share for the three-month period ended September 30, 2008. EBITDA, which is defined and reconciled later in this press release, was $104.8 million for the third quarter of 2009 as compared to $258.5 million for the same period in 2008.
Included in the third quarter results is a loss of $39.3 million or $0.15 per share associated with the valuation of the Company's interest rate swaps. Excluding this item, net income would amount to $74.9 million or $0.27 per share.
Basic earnings per share for the third quarter of 2009 include a non-cash accrual for the cumulative dividends on the Series A Convertible Preferred Stock, amounting to $4.0 million, which reduces the income available to common shareholders.
For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) decreased by $113.4 million to $114.8 million for the three-month period ended September 30, 2009, as compared to $228.2 million for the three-month period ended September 30, 2008. The decrease is attributable to the substantially lower freight market during the third quarter of 2009 as compared to the third quarter of 2008. For the offshore drilling segment, revenues from drilling contracts amounted to $107.6 million for the three-month period ended September 30, 2009 as compared to $88.1 for the same period in 2008.
Total vessel and rig operating expenses and total depreciation and amortization decreased to $56.2 million and $49.4 million, respectively, for the three-month period ended September 30, 2009 from $58.3 million and $50.4 million, respectively, for the three-month period ended September 30, 2008. Total general and administrative expenses decreased to $22.9 million from $27.8 million during the comparative periods.
Interest and finance costs net of interest income decreased to $16.3 million for the three-month period ended September 30, 2009, compared to $27.4 million for the three-month period ended September 30, 2008. This decrease is primarily attributable to decreased average interest rate levels during the three-month period ended September 30, 2009, as compared to the same period in 2008.