DryShips & Subsidiary Ocean Rig Report Rough & Smooth Q4 2013

MarineLink.com February 19, 2014

Image courtesy of Ocean Rig

Greek-based drybulk & tankship owners DryShips and subsidiary offshore deepwater drilling service provider Ocean Rig announce unaudited financial and operating results for the fourth quarter, year ended 31, December 2013.

DryShips
Fourth Quarter 2013 Financial Highlights
For the fourth quarter of 2013, the Company reported a net loss of $24.4 million, or $0.06 basic and diluted loss per share. The Company reported Adjusted EBITDA of $163.7 million for the fourth quarter of 2013, as compared to $109.5 million for the fourth quarter of 2012.

Year Ended December 31, 2013 Financial Highlights
Included in the year ended December 31, 2013 results are:
- Losses on the sale of four newbuilding drybulk vessels, of $76.8 million, or $0.20 per share.
- Non-cash write-offs and breakage costs associated with the full repayment of Ocean Rig's $800.0 million secured term loan agreement and the two $495.0 million senior secured credit facilities totaling $61.1million or $0.16 per share.

Excluding the above items, the Company would have reported a net loss of $110.0 million, or $0.28 per share.

George Economou, Chairman and Chief Executive Officer of the Company, commented: “We are very excited about the prospects of the shipping markets. Following a period of oversupply the recent volatility in the tanker and drybulk sectors is a clear sign of a balanced supply-demand picture. Asset prices are rising which is a strong indication of current market sentiment. We are optimistic and expect a sustainable recovery in 2014 and beyond.

Ocean Rig
Ocean Rig reported adjusted EBITDA of $163.8 million for the fourth quarter of 2013, as compared to $75.4 million for the fourth quarter of 2012.

George Economou commented: “Turning to the offshore side, Ocean Rig continues to execute on its business plan by posting yet another quarter of good operating performance. Ocean Rig’s modern fleet, strong balance sheet and solid backlog of $5.4 billion, provides it with a solid foundation to implement the previously announced value creation initiatives.”

“Recently there has been some softness in the market as a result of several drilling units coming off- contract and certain newbuildings without contracts scheduled for delivery in 2014. We believe that these market conditions will not last for long and will not be as deep as current market consensus expectations due to the overall obsolescence of the offshore drilling fleet. Rates for premium UDW units, such as ours, remain firm and we expect upcoming contract announcements will provide a clear price point for premium units."

He concluded with regard to Ocean Rig: “With our fleet fully contracted in 2014 and 72% contracted in 2015, and with attractive free cashflow generation capacity, we are in the enviable position to focus on implementing our announced value creation initiatives for our shareholders.”