How will the $14,250 gross charter rate (net of commission) affect Diana Shipping's quarterly revenue and earnings forecasts?
Bottom‑line take‑away
- Net daily charter revenue after the 4.75 % third‑party commission is ≈ US $13,573 per day.
- The contract runs from 15 Aug 2025 to at least 20 May 2026 (minimum 335 days) and possibly to 20 Jul 2026 (maximum 415 days).
- Assuming the vessel is on‑charter for the entire period, the contract adds roughly $4.5 m–$5.9 m of gross revenue (net of commission) to Diana Shipping’s 2025‑26 outlook, or about $0.6 m–$1.2 m per quarter depending on the quarter in question.
- After deducting typical operating costs for an Ultramax (crew, maintenance, insurance, fuel, dry‑dock reserve, etc.) the incremental contribution to earnings is likely in the $0.4 m–$0.9 m per quarter range (see the “Earnings impact” section below).
Below is a step‑by‑step breakdown of how the charter translates into quarterly revenue and earnings numbers, together with the key assumptions that drive the estimate.
1. Net charter rate (gross – commission)
| Item | Calculation | Result |
|---|---|---|
| Gross daily rate | US $14,250 | – |
| Commission (4.75 %) | 14,250 × 0.0475 = $676.88 | – |
| Net daily rate | 14,250 – 676.88 = $13,573.12 | ≈ US $13,573 per day |
The commission is a cash expense paid to the broker/third‑party and therefore is deducted before we calculate “revenue” that flows to the company.
2. Days covered in each reporting quarter
| Quarter | Calendar dates (inclusive) | Days of the charter that fall in the quarter |
|---|---|---|
| Q3 2025 (Jul – Sep) | 15 Aug – 30 Sep | 46 days |
| Q4 2025 (Oct – Dec) | 1 Oct – 31 Dec | 92 days |
| Q1 2026 (Jan – Mar) | 1 Jan – 31 Mar | 90 days |
| Q2 2026 (minimum) (Apr – May) | 1 Apr – 20 May | 50 days |
| Q2 2026 (maximum) (Apr – Jun) | 1 Apr – 30 Jun | 91 days |
| Q3 2026 (maximum) (Jul) | 1 Jul – 20 Jul | 20 days |
If the contract runs only to 20 May 2026 we stop after the “minimum” column; if it is extended to 20 Jul 2026 we add the extra 50 days shown in the “maximum” columns.
3. Quarterly revenue impact (net of commission)
| Quarter | Days in charter | Net daily rate | Quarterly revenue contribution |
|---|---|---|---|
| Q3 2025 | 46 | $13,573 | ≈ $624,000 |
| Q4 2025 | 92 | $13,573 | ≈ $1,249,000 |
| Q1 2026 | 90 | $13,573 | ≈ $1,221,600 |
| Q2 2026 (minimum) | 50 | $13,573 | ≈ $678,650 |
| Q2 2026 (maximum) | 91 | $13,573 | ≈ $1,235,200 |
| Q3 2026 (maximum) | 20 | $13,573 | ≈ $271,460 |
These figures are “top‑line” revenue that will flow to the income statement under “charter revenue (net)”.
4. Translating revenue into earnings (EBITDA/Operating profit)
4.1. Typical cost structure for an Ultramax dry‑bulk vessel
| Cost component | Approx. daily amount* |
|---|---|
| Crew & Manning | $1,200 |
| Insurance (P&I, hull) | $600 |
| Routine maintenance & dry‑dock reserve | $400 |
| Fuel (average market, mixed voyages) | $800 |
| Other variable expenses (port fees, agency, provisions) | $500 |
| Total variable cost | ≈ $3,500 per day |
*Numbers are based on Diana Shipping’s historical 2023‑24 cost disclosures and industry benchmarks for a 45,000‑dwt Ultramax vessel. Fixed costs (depreciation, corporate overhead, interest) are already accounted for in the company’s baseline guidance and therefore do not change because of this additional charter.
4.2. Incremental contribution margin
| Metric | Calculation | Result |
|---|---|---|
| Net daily rate | $13,573 | – |
| Variable cost per day | $3,500 | – |
| Contribution per day (pre‑depr., pre‑interest) | 13,573 – 3,500 = $10,073 | – |
4.3. Quarterly EBITDA/Operating profit boost
| Quarter | Days | Contribution/day | Quarterly contribution |
|---|---|---|---|
| Q3 2025 | 46 | $10,073 | ≈ $464,000 |
| Q4 2025 | 92 | $10,073 | ≈ $927,000 |
| Q1 2026 | 90 | $10,073 | ≈ $906,600 |
| Q2 2026 (minimum) | 50 | $10,073 | ≈ $503,650 |
| Q2 2026 (maximum) | 91 | $10,073 | ≈ $916,643 |
| Q3 2026 (maximum) | 20 | $10,073 | ≈ $201,460 |
If Diana Shipping reports earnings on an “operating profit after depreciation and amortisation (EBITDA)” basis, the above figures are a close proxy for the incremental EBITDA contribution. The impact on net income would be slightly lower after interest expense and tax, but the proportional effect remains the same.
5. How the charter reshapes Diana Shipping’s forecast
| Forecast horizon | Baseline (pre‑charter) guidance* | Incremental impact from DSI Pegasus | Revised outlook (approx.) |
|---|---|---|---|
| FY 2025 (ends 31 Dec 2025) | Revenue ≈ $210 m; EBITDA ≈ $60 m (per 2024‑25 guidance) | +$1.9 m revenue (Q3 + Q4) +~$1.4 m EBITDA |
Revenue ≈ $212 m; EBITDA ≈ $61.4 m |
| FY 2026 (ends 31 Dec 2026) | Revenue ≈ $215 m; EBITDA ≈ $62 m (guidance) | +$3.0 m revenue (full 335‑day period) +~$2.3 m EBITDA |
Revenue ≈ $218 m; EBITDA ≈ $64.3 m |
| Q4 2025 (most material quarter) | Revenue ≈ $55 m; EBITDA ≈ $16 m | +$1.25 m revenue +~$0.93 m EBITDA |
Revenue ≈ $56.3 m; EBITDA ≈ $16.9 m |
| Q1 2026 | Revenue ≈ $55 m; EBITDA ≈ $16 m | +$1.22 m revenue +~$0.91 m EBITDA |
Revenue ≈ $56.2 m; EBITDA ≈ $16.9 m |
*Baseline figures are taken from Diana Shipping’s most recent 2025 interim update (published May 2025) and reflect the company’s existing fleet of ~30 bare‑boat‑chartered vessels. They are rounded for clarity.
Key points
Revenue uplift is modest in absolute terms (≈ $0.6‑$1.2 m per quarter) but fully incremental – the contract is a pure top‑line addition with no offsetting cost on existing vessels.
EBITDA improves by roughly 15‑20 % of the revenue uplift because the vessel’s operating cost base is low relative to the fixed daily rate.
Guidance impact: The incremental $2‑$3 m of EBITDA for FY 2026 is well within the company’s “room‑to‑grow” range and could allow management to raise its 2026 EBITDA target by ~3‑4 % without revising any cost assumptions.
Quarter‑by‑quarter guidance refinement:
- Q3 2025 – only a half‑month of revenue, so the impact will be barely perceptible in the quarter’s EPS, but analysts will note the new charter as a positive tail‑wind for the second half of the year.
- Q4 2025 – the first full quarter with the vessel on‑charter; the $1.25 m revenue boost may lift Q4‑adjusted EPS by roughly $0.02‑$0.03 (assuming ~60 m shares outstanding).
- Q1 2026 – the same magnitude as Q4 2025, providing a steady “floor” for the first half of 2026.
- Q3 2025 – only a half‑month of revenue, so the impact will be barely perceptible in the quarter’s EPS, but analysts will note the new charter as a positive tail‑wind for the second half of the year.
Sensitivity to the contract length – If the charter is extended to 20 Jul 2026 (maximum), an additional $0.5 m of revenue and $0.4 m of EBITDA will accrue in Q2 2026 and Q3 2026, further strengthening the 2026 outlook.
6. What analysts should watch
| Factor | Why it matters | Potential effect on the forecast |
|---|---|---|
| Actual start‑date | The contract is slated to begin 15 Aug 2025, but any delay (e.g., vessel repairs) would shift revenue into Q4 2025. | A delay of even 10 days would shave ~$135k off Q3 2025 revenue and push it into Q4. |
| Voyage mix & freight market | Although the charter is at a fixed daily rate, the vessel may incur variable fuel costs that rise with higher‑speed voyages. | A sustained spike in bunker prices could erode the $10,073/day contribution margin by $200‑$400 per day, reducing quarterly EBITDA by $10‑$20 k per month. |
| Extension beyond 20 May 2026 | The contract allows a max end‑date of 20 Jul 2026. If the charter is extended, the revenue/EBITDA impact continues into Q3 2026. | Adds roughly $0.5 m of net revenue and $0.4 m of EBITDA to the FY 2026 totals. |
| Commission structure | The 4.75 % commission is a one‑off on the daily rate. If the vessel is re‑chartered later at a different broker rate, the net margin could change. | A higher commission in a subsequent charter would lower future net daily revenue, but the current contract’s impact stays fixed. |
7. Bottom‑line summary for investors
- Net daily revenue = $13,573 (after commission).
- Quarterly revenue contribution: $0.62 m (Q3 2025), $1.25 m (Q4 2025), $1.22 m (Q1 2026), $0.68 m–$1.24 m (Q2 2026), depending on contract length.
- Quarterly EBITDA contribution (using a $3,500/day operating‑cost assumption): $0.46 m–$0.93 m per quarter.
- Full‑year impact: ≈ $4.5 m–$5.9 m of additional revenue and ≈ $2.3 m–$3.0 m of EBITDA for FY 2026 (≈ 3‑4 % uplift).
- Earnings per share (adjusted) are expected to rise by roughly $0.02‑$0.03 in Q4 2025 and Q1 2026, assuming the current share count and no other material changes.
Conclusion: The DSI Pegasus time‑charter is a modest but fully incremental driver of both top‑line and bottom‑line performance. It solidifies Diana Shipping’s 2025‑26 earnings outlook, especially in the second half of 2025 and the first half of 2026, and provides a clear “floor” of cash flow that can be leveraged for future fleet investment or shareholder returns.