DryShips says looking to reduce, prolong capex program
(Reuters) - Drybulk shipper DryShips Inc (DRYS.O), which reported a quarterly loss, said the shipping market is "severely depressed," and that it is looking to reduce and prolong its capital expenditure program amid a funding crunch.
Shares of DryShips, considered to be a bellwether stock for the industry, fell nearly 8 percent in extended trade. They closed at $2.08 on Wednesday on the Nasdaq.
"The optimization of our drybulk and tanker newbuilding programs is our top priority right now and we are in discussions with the shipyards in this respect to reduce and prolong our capex program," Chief Executive George Economou said in a statement.
The company planned to build eleven drybulk vessels and 7 tankers, it said in a regulatory filing in March.
The worsening situation in Europe has led to a number of banks that lend to shipping companies exiting the sector after a series of restructurings and payment defaults.
"Both tanker and drybulk spot charter rates have been at historic low levels -- well below cash breakeven rate -- for some time," Economou said.
The time charter equivalent -- average daily revenue performance of a vessel on a per voyage basis -- more than halved to $12,727, from $26,732 a year earlier.
Debt-laden Overseas Shipholding Group Inc OSG.N, the world's No. 2 independent tanker operator by fleet size, filed for bankruptcy protection earlier on Wednesday as questions about its financial statements shut it out of credit markets.
DryShips contract coverage is very low, with 33 percent of calendar days for 2013 and 22 percent for 2014.
SAILS TO LOSS
The Greece-based company reported a net loss of $51.3 million, or 13 cents per share, in the third quarter, compared with a profit of $25.0 million, or 7 cents per share, a year earlier. Excluding certain items, loss was 9 cents per share.
Revenue rose 8 percent to $343.6 million helped by a 26 percent jump in revenue at its drilling unit, Ocean Rig UDW Inc OCRG.NFF.
Analysts on average had expected DryShips to post a loss of 2 cents per share on revenue of $331.52 million, according to Thomson Reuters I/B/E/S.
(Reporting By Thyagaraju Adinarayan and Vishal Krishnan Menon in Bangalore; Editing by Sriraj Kalluvila)