May 22 DryShips Inc, a drybulk shipper
and offshore contract driller, posted a sixth straight quarterly
loss and said it did not expect charter rates to improve this
Shares of DryShips, considered to be a bellwether stock for
the industry, fell as much as 7 percent in aftermarket trade.
Rates for dry bulk ships, which carry commodities such as
coal, ore and grains, have been on a relentless decline in the
last five years due to an oversupply of vessels and weak demand.
As a result, several shippers have been forced to
restructure their businesses and reduce capital spending.
"Even though there has been a recent spike in some drybulk
charter rates, we continue to be defensive about the short-term
prospects of the shipping markets," Chief Executive Officer
George Economou said.
"... We do not expect any positive sustainable development
in charter rates this year."
Analysts have said rates are expected to remain weak over
the next 12 months due to slowing growth in China, the world's
No. 1 consumer of coal and steel.
DryShips said it sold four vessels, which were under
construction in China, at a loss of $75.3 million, or 20 cents
per share, in the first quarter.
"We have now reduced our newbuilding program to six bulk
carriers, two of which are scheduled for delivery in 2013...and
four of which are scheduled for delivery in 2014, for which we
are considering our options," Economou said.
The company also said it was in discussions with its lenders
to lower debt service requirement.
The time charter equivalent rate -- average daily revenue of
a vessel per voyage -- in its drybulk business almost halved to
$11,396 in the quarter.
Net loss widened to $116.6 million, or 30 cents per share,
from $47.5 million, or 12 cents per share, a year earlier.
Excluding the sale of its vessels, the company reported a
loss of 10 cents per share, in line with analysts' average
estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 29 percent to $319.71 million.
The company's contract drilling unit, Ocean Rig UDW Inc
, however posted a first-quarter profit.
It reported net income of $6.4 million, or 5 cents per
share, compared with a loss of $46.3 million, or 35 cents per
share, a year earlier.
Ocean Rig, which owns and operates 10 offshore ultra
deepwater drilling units, secured a loan of $1.35 billion in
February to finance the construction costs of its newbuilding
DryShips shares were down 4 percent at $1.99 in post-market
trade, while Ocean Rig shares rose almost 3 percent to $17.70.