Greetings, and welcome to the Diana Shipping Inc., 2010 First Quarter Conference Call. (Operator Instructions) As a remainder, this conference is been recorded. It is now my pleasure to introduce your host Edward Nebb, Investor Relations Advisor for Diana Shipping. Thank you Mr. Nebb, you may begin.

Thanks very much Claudia. Welcome everyone to the Diana Shipping, Inc 2010 First Quarter Conference Call. The members of the Diana Shipping management team who are with us today include Mr. Simeon Palios, Chairman and Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Executive Vice President and Secretary; and Ms. Maria Dede, Chief Accounting Officer. Before management begins their remarks, let me briefly summarize the Safe Harbor notice, which you can see in its entirety in the news release we issued earlier today. Certain statements made during this conference call, which are not statements of historical fact are forward-looking statements and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions, expectations, projections, intentions, and beliefs as to future events that may not prove to be accurate. For description of the risks, uncertainties, and other factors that may cause future results to differ materially from what is expressed or forecasted in our forward-looking statements, please refer to the company's filings with the Securities and Exchange Commission. And with that, let me turn the call over to Mr. Simeon Palios, Chairman and Chief Executive Officer of Diana Shipping, Inc.

Thank you. Good morning and thank you for joining us today. We are pleased that the results of Diana Shipping for the first quarter of 2010 continued to reflect our profitable performance. The sound management of our fleet and the strength on our balance sheet. We have also made steady progress in implementing our strategy to build shareholder value through investments in our fleet. In this regard, the following developments during the first quarter are particularly note worthy. In early March we took delivery of the newly built motor vessel New York and Capesize dry bulk carrier that has been chartered to Nippon Yusen Kaisha for a minimum 58 month to a maximum 62 month period at a gross rate of $48,000 per day. We announced conference in April for the construction of two Newcastlemax dry bulk carriers, so of approximately 206,000 dead weight each for a contract price of $59 million per vessel. We expect to take delivery of these vessels during the first half of 2012. These events followed our earlier announcement in January, 2010 for the delivery of a Panamax dry bulk carrier motor vessel Melite. This vessel was purchased at a price of $35.1 million. As a result we have increased the size of the fleet to 22 vessels, last the two new biddings on order. This clearly reflects our strategy or seeking to take advantage of market opportunities to expand our fleet in a disciplined and cost effective manner. As we have noticed in the past and depending on prevailing market conditions, we plan to continue this process over the next 20 months in order to build our capacity to generate consistent revenue and drive increasing shareholders value. Now, I would like to point out some of the highlights of our first quarter performance. Then…

Thank you Simon and welcome to all who have joined us today in our latest quarterly conference call. The first quarter of this year started off with uncertainty for large bulk area earnings who developed in a volatile manner and lower but nevertheless on a very positive note. The Baltic dry index started the quarter at 3140 and finished at 2998. The bulk area Cape index began the year at 4197 and at the end of March to the 3425 while the Baltic Panamax Index went from 3823 to 3674 during the same period. Cape earnings have moved significantly higher, proof of the market's ability to absorb the continuous and un-relentless slab of new buildings. The Panamax equivalent have shown more resilience faced with a somewhat more modest new building delivery schedule and the Baltic Panamax Index has moved about 20% higher since early April. Looking at the macro economic picture, the world economy has shown clear signs of emerging from the most brutal and deep recession since the 1930 with gross domestic product growth in both developed and developing economies steadily improving. The IMF is forecasting world economic expansion of 4.2% during 2010 which is the fastest pace of growth in 2007. U.S forecast for 2010 gross domestic product growth stands at 3.1%, which many economies consider very conservative. U.S. manufacturing expanded in April at the charter based in June 2004 with the supply management tax index rising in April to 60.4 from 59.6 in March. China's gross domestic product is estimated to grow by about 10% this year while for Brazil, India and Russia, these estimates stand at 6.3%, 7.7% and 4.5% respectively. The only large economic block lagging behind in GDP growth term is the Euros were growth for 2010 is estimated at an anemic 1.1%. These…

Thank you Stacy and good morning. I am pleased to be discussing today with you Diana's operational results for the three months ended March 31st 2010. First quarter 2010 net income for the first quarter amounted to $28.8 million and the EPS of Diana Shipping amounted to $0.36. Voyage and charter revenues decreased to $62.2 million, compared to $62.7 million in 2009. The decrease is attributable to reduced average hire rates and increased hire days during the quarter which however was partially offset by increased revenues due to the addition in our fleet of the vessels Houston, Melite and New York in October 2009, in January and March 2010 respectively. Ownership days were 1894 for the first quarter of 2010 compared to 1710 in the same period of 2009. This utilization was 99.7% in the first quarter of 2010 and 98% in 2009. The daily ton charter equivalent rate for the first quarter of 2010 was $31,982 compared to $34,898 for 2009. Voyage expenses were $2.4 million for the quarter. Operating expenses amounted to $12.5 million and increased by 33%. The increase is attributable to the 11% increase in ownership days resulting from the delivery of the vessels Houston, Melite and New York and increasing crew costs, store, spares and repair. Daily operating expenses were $6,606 for the first quarter of 2010 compared to 500 plus $121 in 2009 representing a 20% increase. Depreciation and amortization of deferred charges amounted to $12.1 million for the first quarter of 2010. General and administrative expenses increased by $1 million or 24% for the first quarter of 2010 to $5.1 million compared to $4.1 million in 2009. The increase was mainly attributable to increase in salaries and compensation cost on the restricted stocks and the executive fees and was hardly affected by decrease in legal fees. Interest and finance costs increased by $0.2 million to $1 million for the quarter, compared $0.8 million in 2009. This increase was attributable to increased average debt during the first quarter of 2010 compared to 2009. Thank you for your attention, we would now be pleased to respond to your questions and I will return the call over to the operator who will instruct to you as to the procedure for asking questions.

(Operator Instructions) Our first question is coming from John Chappell with JPMorgan. Please state your question. John Chappell – JPMorgan: Good afternoon guys. One follow-up question on the supply side that you laid out, as this European situation continues to develop and given that the European banks are the major lenders to most of the shipping community. Do you see any impact from call the euro contingents having any impact on lending and the ability for ship owners to take delivery of the ships that they have ordered?

The question I think has an answer which depends very much on how the European Central Bank and the European governments are going to tackle European government debt which as we know is held in the tune of about $2 trillion in the books of several large European banks. If that number is correct and we assume that such the fourth grade is going to take place as to shape the whole system, then we have to assume that ship lending is going to be affected. Realistically however and looking at the track record of the European Central Bank to-date we -- I find it hard to see at the scenario where all this government debt which is held in the balance sheets of the European banks is allowed to default at least to a large percent or they take a large haircut on this debt which they hold. Maybe they will take a small haircut on government debt of countries like Greece and Portugal, possibly Italy or Spain but nothing that is going to shake the financial status of these banks. This happens and develops as I just described, I don't think that it will make any difference for ship lending because ship lending for the ships that are going to be delivered during 2010 and 2011 is at levels which all the markets have developed are not very far from the second hand prices. Therefore the banks provided they have available funds, they will advance for these loans to be finance the acquisitions to take place and deliveries therefore to materialize. In short, I don't think that the future is all grim because of the problems that we hear but this however the European and the Central Bank through this control of the situation, there is panic and there are large sales write-offs of government debt then I will have to agree with your fears that many ships will not be able to be delivered because of lack of financing by the European banks. John Chappell – JPMorgan: Okay thanks very much for your insight. Question on Diana and you're near term use of capital and the strength to your balance sheet. I think the share buybacks have been reauthorized, how are you looking at your share price today versus your net acted value and how do you view the return of the share buyback today versus what you can get even in the second hand market or in the new building market?

Hi Jonathan this is Ioannis. As you know that we have never commented on our price compared to our NAV. We do not do this calculation ourselves here. So, we cannot comment on that, however the reason why we have reauthorized this plan had to do with the volatility of the markets especially in the capital market but in addition to that the shipping markets. We want to be there to support the stock in case needed. That is very, very simple, as regard to our investments, our CEO stated in the press release that the preference that we have is to buy assets, i.e. vessels instead of buying back our stock. But we have a $100 million on the side to do that if required. You understand that Diana Shipping Inc, by buying back this stock is like buying our vessels back. John Chappell – JPMorgan: Right. Okay. I understood and just two quick follow up sir Andreas, in the operating expenses for the first quarter was it higher than our forecast. Was there some timing issues with purchases, business stores or supplies there or that type of run rate you should use going forward and then also on the new builds for the Newcastlemax's. Are there any significant payments in 2010, down payments for those ships?

The first part of your question, as they were two events that happened during the first quarter that gave these operating expenses, the first event is the delivery of Melite and New York and this has initial supply for those vessels which typically dissolve the operating expenses. The second event is the dry dock of Nirefs and Calipso which as you know with U.S. GAAP you basically OpEx your dry dock costs or the big majority of it. So, that's also the explanation for the slightly higher operating expense. Now going forward we have this quarter, the second quarter we have performed the dry dock of motor vessel Aliki, which is a Capesize and as well as motor vessel Clio. So, obviously there you should see the operating expenses at around the same level as you have been during the first quarter. Together with that there is a program of fuel tank operation between heavy fuel oil and low sulfur oil which is a regulation that we'll follow obviously and therefore there is a cost associated to that. So your second quarter modeling would use the same operating expenses as you did for the -- as happened in the first quarter, so around 6,500 on average per day. Now concerning the second part of your question and the new Newcastlemax vessels we have paid the contract signing installment which was $14,000,500 per vessel and that's it for this year. The next is steel cutting which typically happens between eight months and 12 months before the delivery of the vessels. So we don't foresee anything else for 2010.

Our next question is from Justin Yagerman with Deutsche Bank. Justin Yagerman – Deutsche Bank: I wanted to get an update on fleet employment because even Stacy's outlook on the margins and it's somewhat uncertain I guess and given all the different cross [variance] we've got. I don't blame you. I wanted to get a sense for how you're thinking about the vessels that you have open in the seven months or so. How far in advance can you charter those vessels? How far would you be thinking about chartering those vessels given the uncertainty in the market and then what kind of employment are you currently going to be looking for, for those vessels.

Well Justin, I think you know very well that we have a very, very strong balance sheet. So we can be the masters of our own destiny. So we don't have to charter anything well ahead. Now for the Panamax's you have to be as close to the delivery as possible but for the case it could be another two months further away. But I think the color we have of the month gives us enough ability to try and get the benefit of the market closer to the date of delivery of the vessel to the customer. So I think we can place as we have done the last year or so. Justin Yagerman – Deutsche Bank: I don't want to put words in your mouth but should I take from that that you think that there is a near term firming potential in the market or how should I be thinking about that? If I think about where rates are today, they are relatively strong and if you have uncertainty on a go forward basis, that I guess is the crux of my question is would you be more apt to lock up now if you had the opportunity to?

Well, I think that as I told you before, the balance sheet is strong enough and it gives us enough cushion to be able to come closer to the deliveries of the vessels from the present charters to us. Thus try and get the full benefit of the charter provided at the time. The next open vessel Panamax is going to be September time, thereabout and the next opinion of the case most likely will be again October. So those two vessels are the next to focus on. Of course we can charter both of them today but the rates which we're going to achieve are not going to be best rates. So I think we can play a little bit coming closer to the deliveries of those [six] to us.

And if I may add something. This is Ioannis. I've said in the past many times that having the strategy that we do with portfolio approach for chartering, this is exactly what Mr. Palios means taking the benefit of the market and regardless of the outcome we can have a very good average for vessels by having a vessel to fix every month or so. And the reason why we may fix ahead one of the case, because it's easier, that's one reason. The second may be because we don't have another vessel to fix at that time. We want to get the benefit of the entire market and a good average. We try to avoid taking this difficult decision and position whether the market is going to go up or down. We are happy with the average. Justin Yagerman – Deutsche Bank: And maybe you could comment a bit, your last couple of orders have been new bills and then you've got this buy back that you've reauthorized. How do you feel about the vessel values of ships on the water currently and maybe if you could put that in context with what you think the time charter market is currently during right now and how much liquidity is in those various charters out there?

As we have stated in the past, we have initiated an investment program which is going to last for 24 months that started at the end of the previous year, beginning of this year. We are going to be consistent in buying vessels in a staggered manner. We have proven that with a basis of motor vessel Melite, the order of the two new buildings. We should expect Diana to buy another vessel or two in the months to come and then so on and so forth we are going to continue for the next 24 months. Again this has to do with our plan to get a very good average as regard to the prices of our assets that we're going to purchase. The thing is that there are vessels around to be brought. We are constantly looking but as we have said also in the past we are not prepared to spend a big portion of our dry bulk, the liquidity that we have in one shot. The charter rates at the moment are rather healthy I would say. What you buy is what you get, meaning that if you buy a vessel today, a charter of that that you can have justifies the price at least for the next year and we are fortunate to have this catalogue. On the other hand these are some of the goals, the other way we will be buying assets cheaply because they will not be so good for those assets we can afford to do so based on our strategy. Justin Yagerman – Deutsche Bank Securities: Andreas, can you kick on it, I know most of what you guys do is are denominated but where in your P&L you potentially have your own exposure that may either benefit or potentially hurt you guys.

Hi Justin, we mainly have euro exposure, actually in our administrative expenses, in G&A we have found 60% of euro exposure actually and we also have euro exposure in part of our crew wages as well as stores and spare parts. So, that's where you could either benefit or not from the euro dollar fluctuations.

Your next question is coming from Gregory Lewis with Credit Suisse. Please state your question. Gregory Lewis – Credit Suisse: I am not sure who I should direct this question to but regarding the containership joint venture, at this point it looks like containership rates have sort of stabilized and looks like we are beginning to see upward movements in pricing of assets, how should I think about Diana position itself in the containership over the next six months.

As we have already announced our $50 million investment represent an interest approximately 60% of the common sale Diana Containership Inc, this company was created to invest in containers over the next 12 to 18 months. Diana Shipping Services has entered into an administrative agreement with the new company and this is expected to enter into vessel management agreements with every vessel purchase by the new company. We are very excited to participate in that segment of the shipping industry and we strongly feel that this is the medium to long term will prove to be a value investment for our shareholders. Been a private transaction does not allow us to give any further information. Gregory Lewis – Credit Suisse: Okay in terms of what you are seeing with asset prices, are asset prices sort of have stabilized in here in the containership state and is it deferring by vessel size?

Well I think that we have to live with what I said before but let me try and reply to your question. Yes there is a marked difference between the 1700 TEU vessels up to 3000. From 3000 onwards I think the vessel values and the range are much better.

Our next question is coming from Scott Burk with Oppenheimer. Please state your question. Scott Burk – Oppenheimer: I guess just to follow-up, I guess one on the broader economy we have seen a huge downsize in the equity market for last few weeks in contrast that cape rates have been and it's telling a different story. What do you attribute to the near term movements and rates, is that mostly congestion story or is it a change in pattern and are you starting to see new changes based on the weakness in the broader economy.

Hi Scott, this is Stacey. We haven't seen any negative at least changes due to an economic development and we haven't seen anything positive yet which we can attribute with certainty to economic performance around the globe. What we know is that the Chinese growth story is underpinning the demand for iron ore and coal and both steam coal and coking coal. And as I mentioned earlier on the disturbances that we have in Brazil is due to weather phenomenon there during spring time and now the shipments are being restored, so we have more shipments from further way to places like Brazil. So, this is one of the factors which are underpinning the Capesize demand for Capesize vessels. Also, we have the queues which don't seem to want to go away of ships and we have nearly 160 ships now Capesize vessels which is quite a lot of tonnage been tied up in queues waiting to load or discharge. So, what we are seeing here is that there is a steady stream of new buildings joining the fleet, there are practically no scrapings of Capesize vessel. But these vessels seem to be going away or at least artificially been deleted from the supply side of the equation due to congestion. So for the time being that's the only reasonable explanation we can see long haul shipments been restored, new buildings been balanced out by increased congestion and therefore on a utilization basis we see ships which are available for charter and transportation of goods to be more or less steady rather than been than blow up in numbers. Now this cannot go on forever as you can imagine and as I mentioned briefly a little presentation is that when queues start becoming shorter and the ship is been released on to the market. Greater the queues, the greater the number of ships which are going to join the supply side of the equation, so we have to be vary here and expect quite a lot of volatility in the large bulk carrier freight rate market. Scott Burk – Oppenheimer: Okay and actually I wanted to follow-up on something you said during the presentation as well you said talk about the transportation side, on top on the quarterly system, they have gone to a situation where it become like the iron ore miners are announcing for transportation cost. Could you clarify that and it seems like that would have a negative implication on day rate upside as well if you have a more concentrated charter pool.

So now, when the calculation of the CIF price of each ton of iron ore is taking place, the factor is like the distance, the quality of the product and a few other things which are very, lets call them commodity related and specific, taken into account and they set the price for each quarter. So we don't have this general contract price that we have which was supposed to hold for a year and then the spot market going alongside it, very often with huge differentials. We're going to have a more, lets call it market friendly and sensitive pricing system which all in all we feel is going to help smooth these sharp increases and decreases of demand for the transportation of this commodity over the next few quarters. We have to see how it works but we are quite confident it's going to work better than the old annual contract pricing system. Scott Burk – Oppenheimer: Okay, and then I wanted to also ask, it's been interesting to see where you have made investments so far. So, you've had the one second investment and the two new builds. As you compare the two options there what looks more attractive now and new build prices starting to come back up a little bit but still obviously much cheaper than second hand. Which way would you favor it currently?

I think both at the right price. And as Ioannis said before, I think you have to keep a discipline on the buying time of these vessels. I think the discipline in buying the proper space or time is much better than whether it's going to be a Panamax or a Cape. Both are useful vessels to have.

Gentlemen, it appears we have no further questions at this time. I'll now turn the floor back over to management for any closing comments.

Well thank you again for your interest in and support of Diana Shipping. We remain confident in our plans to deliver increasing shareholder value and we look forward to speaking with you next quarter. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time and we thank you for your participation.