Greetings and welcome to the Diana Shipping 2014 Fourth Quarter and Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Ed. Nebb, Investor Relations Advisor. Thank you sir, you may begin.

Thanks very much and greetings to all. Welcome to the Diana Shipping Inc. 2014 fourth quarter and year-end conference call. The members of the Diana Shipping management team who are with us today are Mr. Simeon Palios, Chairman and Chief Executive Officer; Mr. Anastasios Margaronis, President; Mr. Andreas Michalopoulos, Chief Financial Officer; Mr. Ioannis Zafirakis, Chief Operating Officer and Secretary. Before management begins their remarks, let me remind you of the Safe Harbor notice which is attached to today’s news release. Certain statements made during the conference call, which are not statements of historical fact, are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act. The forward-looking statements are based on assumptions, expectations, intentions and beliefs as to future events that may or may not prove to be accurate. For a description of the risks, uncertainties and other factors that may cause future results to differ materially from the forward-looking statements, please refer to the Company's filings with the Securities and Exchange Commission. And now with that, let me turn the call over to Mr. Simeon Palios, Chairman and Chief Executive Officer.

Thank you Ed. Good morning and thank you for joining us today to discuss the results of Diana Shipping Inc. for the fourth quarter and full year 2014. The year was highlighted by the continued deployment of our strong financial resources to invest in the expansion of our fleet as opportunities permitted. In addition we continue to work to enhance shareholder value through share repurchases. To review our financial results the company’s recorded a net loss of $6.2 million and a net loss available to common stockholders of $7.7 million for the fourth quarter of 2014. The comparable net loss and net loss available to common stockholders for the fourth quarter of 2013 amounted to US$9.6 million. For the full year 2014, the company recorded a net loss of US$10.3 million and a net loss variable to common stockholders of US$15.3 million. This compared with a net loss and net loss available to common stockholders of 21.2 million for 2013. Our time charter revenues were $46.1 million for the 2014 fourth quarter, up from $39.5 million a year ago. Time charter revenues were US$175.6 million for the full year 2014 compared with $164 million in 2013. The increases over the year ago period were mainly due to the expansion of our fleet partly offset by decreased time charter rates. Diana Shipping continued to maintain our fourth quarters balance sheet reflecting cash and cash equivalents of nearly US$219 million. Long-term debt including recurrent portion was US$486 million compared to stockholders equity of approximately US$1.3 billion. We deployed a portion of our capital to enhance shareholder value by repurchasing and retiring approximately 2.85 million shares during the second half of 2014 at an aggregate cost of approximately $25.3 million. As a result the company issued and outstanding shares as of December 31,…

Thank you Simon and good morning. There is no doubt at the last quarter of 2014 brought a great disappointment to owners and huge movements in earnings of all bulk carriers unfortunately on the downside. A year ago capesize vessel time charter rates stood at around $40,000 a day and hopes were high for 2014. As we say prices at the time approach US$60 million. As we all know by now 2014 ended in a disastrous way despite seaborne Chinese iron ore import increasing by about 100 million tons. The Baltic dry index started the year at 2,113 and stood at 771 on the first trading day of 2015. As regard the Panamax index it started 2014 at 1,780 and ended the year at 827 while the capesize index started at 3,733 and stood at 456 on the first trading day of 2015. Just to update on these indices, the Baltic dry index closed March 3rd at 553, the capesize index at 490 and the Panamax index at 564. As has been pointed out recently by the Korean shipping messenger in the early part of this year the Baltic dry index slumps with lowest point in 29 years hit by a shipping glove, falling commodity prices and declining import demand from China. We agree with these analysts and the most important factor in the Baltic dry indices decline is industry wide over capacity. Let's turn to macro-economic considerations, a couple of weeks ago the IMS downgraded world growth estimates for 2015 from 3.8% to 3.5% and for 2016 from 4% to 3.7%. China the world's largest iron ore consumer expanded 7.4% last year, the slowest pace since 1990 according to the statics bureau. The Chinese government will announce its 2015 growth target in March this year. According to most brokers…

Thank you, Stacey and good morning. I am pleased to be discussing today with you Diana’s operational results for the fourth quarter and year ended December 31, 2014. For the fourth quarter of 2014, net loss amounted to $6.2 million, net loss available to common stockholders amounted to $7.7 million and the loss per share was $0.10. Time charter revenues increased to $46.1 million, compared to $39.5 million in the fourth quarter of 2013. The increase was attributable to the revenues derived from the vessels Myrsini delivered in October 2013, the P.S. Palios delivered in December, 2013, Crystalia delivered in February 2014, Atalandi delivered in May 2014 and G.P Zafirakis delivered in August 2014. This increase was partially offset by decreased revenues due to the decrease in average time charter rate that we achieved through our vessels during the quarter, compared with the same quarter of 2013. Ownership days were 3,588 for the fourth quarter of 2014, compared to 3,241 in the same period of 2013. Fleet utilization was 99.2% compared to 99.5% in the same quarter of 2013, and the daily time charter equivalent was $12,090 compared to $11,694 in the same quarter of 2013. Voyage expenses $3.5 million for the quarter. Vessel operating expenses amounted to $22.3 million, compared to $19.9 million in the fourth quarter of 2013, an increase by 12%. The increase was attributable to the 11% increase in ownership days, resulting from the enlargement of the fleet. Daily operating expenses also increased mainly due to increased repair and maintenance costs taxes and environmental costs and was partly offset by decreased crew costs. Daily operating expenses was $6,225 for the fourth quarter of 2014 compared to $6,155 in the same quarter of 2013 representing an increase of 1%. Depreciation and amortization of deferred charges amounted to…

[Operator Instructions]. Our first question comes from the line of Amit Mehrotra with Deutsche Bank. Please proceed with your question.

So you all have been bearish on the dry bulk market for some time now. And you've been absolutely right but with the shift and sentiment and sort of the decline in asset values I would imagine that you are incrementally less negative and I'm just trying to understand you'll get a better understanding of that maybe a way to ask you sort of on a scale of one to ten, one being no change to your bearish outlook and ten being that you think there is now sufficient negative sentiment for dry bulk to recover. Where are you thinking on that scale? And what levels of scrapping or lay ups do you think you would need to see to further impact that changing view.

Amit this is Ioannis Zafirakis speaking. We are to put it blindly at number one, we have no change whatsoever in our bearish view about the market. We have not seen the scrapping and the laying up of vessels that we want to see before will start going up this scale. The psychology as regard to market turning positive should turn little bit more to the less and less optimistic. But not at the pessimistic level. We won't achieve that before and some other things as we have explained in the past, before we start going up in the scale of your question.

Maybe I can just follow up on that given that view does that change the way you Diana Shipping thinks about capital allocation say for the next 12 to 18 months. Maybe you fear even more cash into share buybacks or the container business instead of using it to buy new dry bulk vessels. Is there any change that we can expect given that view of the sort of one on that scale?

So theoretically speaking no because as you know we are more on a shed way of doing things. Having said the psychologically there is an element where by having the view that we have we are not very quick in our decisions to buy a vessel, we are not offering the price that we should have had offered to buy vessels that we have inspected. But the answer to your question is that we should not change the base of our base repurchases and the staggering manner of our purchases and shows from the one hand the survival of the company even in a prolonged down market. But at the same time we are sitting over good average in our purchases rather than pin pointing the absolute bottom.

Last question with respect to your available days for the first quarter and for the full year. Can you just provide us how many days are locked in and at what rate versus the TCE rates achieved in 4Q of little over 12,000?

Of course this is easy for anyone to see from our Web site. But we have fix coverage for 2015 at the moment is around 66%. With an average daily time charter of $12.3000 per day.

Our next question comes from the line of Gregory Lewis with Credit Suisse. Please proceed with your question.

Stacy or I guess Ioannis, could you talk a little bit about the dynamic that we've seen here to date I mean you characterized that is miserable. But when I look capesize vessels and Panamax vessels pretty much every day this year it looks like they're not even covering their daily operating expenses. I guess I'll just be interested in how you view the sustainability of rates that low before we eventually see not necessarily a stacking response but I have a handful of vessels and I'm just going idle them, because I'm actually losing money at running at these rates. Just to be curious on sort of the thought process around that?

This is a very good question and it has to do for with fact of how long ship owners they can keep burning cash. The five plus the interest rates at the moment as we speak are at the very-very low level shelves a lot and we all know that vessel, when the vessel is losing money it is a big liability and especially in a high interest environment. The history says that ship owners they try to sustain, they try to burn some cash before they take the decision to lay up the vessel or to put the vessels idle. And we’re still in that phase where the pockets of the ship owners are such that they can sustain the fact that with their losing money. And that’s one another reason why we are not very optimistic about the near future, but there will be a point where they will believe to that and they will say enough is enough, I am not covering my variable cost, let me lay up the vessel or try to sell it or even scrap it.

Another to what Ioannis said, you have to understand that there is a differential between rates on this spot market and there is a differential rate for the 12 or the two year period. Now by having this differential in rates the first on the spot is around for the capes around $4,000 to $5,000 daily as opposed to two years for a good vessel at around $11,000 to $12,000 daily. So the $12,000 is well above the running expenses of the vessel admittedly for a two year period we’re committing the same, but anyway is about the running expenses of the vessel, the pure running expenses of the vessel.

Our next question comes from the line of Fotis Giannakoulis with Morgan Stanley. Please proceed with your question.

You have always been very vocal about the weakness of the market and obviously the market has performed exactly as you have said, without trying to ask you to forecast the future. Can you give us your experience -- share with us your experience about how long usually this market, this weak market lasts? We’re right now below operating expenses as you’ve mentioned although the one year rates they’re slightly above but the spot market is well below operating expenses. Based on your past experience and your judgment how long do you think that the situation can continue?

I think on these subjects Fotis we have been talking quite substantially for a very long time. But the criteria is that when the potential buyer lose interest in buying ships and he’s happier to have less ships and more ships, then you have a psychological effect that things are taking place in a such manner that the indifferent equilibrium comes to place, because the appetite is not there, the prices are going down. The vessels have definitely to lay up and things are moving to the proper direction in putting the market in a different phase all together. And this up to now it has not been some for example our ships today capes that they have been inspected by almost 10 people. There is still appetite admittedly at lower levels but the appetite is still there and psychologically that appetite has to go away.

Fotis the things that we have been saying is that the deeper the downturn the quicker the recovery is going to be. If we are hovering around this levels and always we’re considering that to be the lower part of the cycle and that we’re at the lower level, then that will take much longer compared to a scenario where we truly have a blood bath as I keep saying and we have a hiccup even on the demand side for example. And the steeper that downturn the quicker the recovery is going to be, but do not expect from our side to give you a forecast for the market, we never say that we know what the market is going to do after six months from today. What we keep saying is that stop trying to forecast, look at the fundamentals, look at the events that have happened and see whether we have seen any events towards the right direction and if you look carefully that you will notice that we have not seen any event taking place towards the right direction.

Yes I understand that and my question had to do mostly over the fact that even in this bleak market environment with your negative outlook where we have seen that after the financial crisis you have bought approximately 20 vessels. And obviously the prices are very attractive versus the historical and they can give you a very young fleet when the market recovers. But my question has to do with fact that as the market continues to be weak and as you also continue to acquire more vessels; your acquisition capacity is declining. And can you give us an estimate of how much more capacity do you estimate that you have given the pace of your acquisitions, can you keep buying one vessel a month that you are targeting for one, two years -- what is this duration that this purchasing power can last if the market stays long and how likely do you think that it is the market will stay longer than this capacity will remain?

As we have said in the past our first priority is to ensure the survival of the company for as long as possible. At the same time we want to keep buying vessels in this lower part of the cycle because we strongly feel that we should shed this type of investment. And we have -- as we kept saying in the past we're talking about one vessel every two months and we tell we will try to spend let's say something like in the vicinity of $15 million every two months. And at the same time we will make sure that our cash flow, our loans et cetera are going to be serviced in such a manner that we will buy some more vessels for the next year at least. And then from then onwards we can survive a bad environment for another two to three years. This is our target.

So the target is to buy six more vessels during 2015 over the next 12 months and then wait to see five more vessels?

Five more vessels and spend something in the vicinity of $70 million from our own equity.

And one more technical question about your debt financing Andreas I think that you have one balloon that is coming due this quarter in March. Are you going to refinance that or are you going to repay that in cash?

We are going to ultimately refinance that balloon. We're at the moment finalizing on this refinance. For technical reasons we might not be ready on the 10th of March when this is to be repaid, so we will use our cash to repay and then refinance it swiftly after. And because it's part of an overall as Ioannis said that let's say we're looking at our loans at the vessels that are unencumbered at the moment to see what we can do with them. We are also going to leverage the new acquisitions like Santa Barbara which we acquired at the beginning of the year. So all that is part of that package together with motor vessel in [New York] that rightly so you said that is coming due in a few days.

Our next question comes from the line of Jon Chappell with Evercore. Please proceed with your questions.

Quickly on the share buyback. I mean given your view on the market I think your view on asset prices given your rate outlook I would have to think it as Ioannis said, you're still one, so you think that the market is going to continue to be weak. So if your stock right now is trading roughly at NAV maybe little bit of a discounted current asset prices but if you are expecting asset prices to drop still very meaningfully, is that a good use of capital buying back your stock and what could be perceived as a big premium to where you think asset values will ultimately end up once you want to retain more cash for the ultimate bottom purchasing?

Jon if you think about it this is exactly the same question as Fotis's question. For us buying back our shares is either buying back our shares or buying a vessel. In the headway of looking at our acquisitions as I explained earlier instead of buying a vessel every two months we could spend this $50 million buying back our shares either we're trading below net asset value in a similar manner without purchasing a vessel. You should consider the repurchasing of our shares as an investment at this part of the cycle. So it goes together with our vessel acquisitions, so from the moment we said we will keep the same pace and we will make sure that we will be buying even at this part of the cycle and having the outlook that we have then you shouldn’t worry about the share repurchases if we are to do any except if you are worrying with the fact that we are buying steel vessels without and not waiting to see the absolute bottom of the market.

And then just one follow up. When you are ready to making more substantial move and you think that things are closer to the bottom and maybe pick up the pace a little bit. I'm just curious about your ultimate financing goals at the prior peak you had been able to take on significantly more debt than you're sitting with today. Could you finance up to 60 plus percent of the acquisitions or the banks there for that type of lending in this environment?

Yes at the moment they are there for that type of leverage and we intend to explore that to the maximum.

Don't forget that Mr. Margaronis also talked about 75% ultimate level in dropping price environment. So it is very probable that the way that prices are going that we will end up being finance as the 75% level that we said.

Our next question comes from the line of Magnus Fyhr with GMP Securities. Please proceed with your question.

Most of my questions have been answered. But just as a follow up on the asset purchases any preference you mentioned 70 million in equity 60% financing buying five ships. Do you see any better opportunities -- better opportunities in the bigger class vessels or do you find basic on a case by case basis.

I think it's a matter of case by case, and I think that the resale is a very good target provided you can purchase them at reasonable prices. But there will be a number of resale and we are focusing more than second hand tonnage although, the second hand should be very young still we prefer the vessels which are coming straight from the ship yards. So that’s where we're focusing more. As regard to the size of the vessels as we have said in the past we strongly feel that market prevails as regard the prices. So for us if that vessel technically is something that we like and operationally wise we do not differentiate between a Panamax from a very big capesize vessel to because we are not paying the same price. We don’t have a preference, let me put it like this.

Our next question comes from the line of Sal Vitale with Sterne, Agee. Please proceed with your question.

Most of my questions have been answered. Just wanted to make a comment Ioannis I think I agree with what you said earlier about the state of the market in terms of psychology that there may be less optimism but there is not yet the degree of pessimism that we need for recovery. I guess following up on that comment as you saw recently this week there was a pretty significant order for additional new buildings by private equity back firm. How do we think about what's your opinion of what needs to happen? How about things need to get or maybe how long things need to stay at this level for the optimism to decline even further, any thoughts there would be helpful.

What you said at the beginning and what we said previously about having a real pessimism in the market is something that we should look for. What you describe about the new order that recently happen from a private fund is exactly their own ingredient for the market to turn positive soon. There is still a hidden optimism in a lot of places. What we need to see is this private money erratically going out of the market even some of the very big companies having problems meeting their CapEx's that being all over the news and then people start thinking twice before they spend money on the fifth special survey of the vessel even before. And we still have for example in our case yourself we have analyst wanting to ask questions. The next time that we will have less and less analyst really interested about the dry bulk sector it would be a very good point for the market to start for us to start thinking positively.

He has mentioned towards the end of my little presentation, I mean it is exactly what Ioannis described which is wrong with the market. These private equity funds have to lose interest in the bulk carrier market because the funds that they can make available and put forward for increasing their investment in shipping have more and more damaging effect the lower the asset value goes because more ships can be bought for a certain specific amount of an investment, then their investments go into hundreds of millions or billions rather than few million dollars apiece. So we had a problem there, and as long as there are many private equity funds willing to invest and take an interest in dry bulk shipping, the markets will unfortunately remain at relatively unprofitable levels.

And then just a quick follow-up, Stacey earlier you’ve mentioned several forecast I think you’ve mentioned that 7.5% is currently the Clarkson's forecast for Chinese iron ore imports at 7.5% increase for 2015, so is you personal opinion that we’ll see a number somewhere closer to the mid-single digits and what’s your view on this?

Yes, I mean the estimates vary from 6% to 7.5%, the thing is that the number is high that 1 percentage point is a lot of cargo, but the problem unfortunately is not that as we mentioned earlier, the problem is the ships that are going to be available to carry that cargo whether a 6% or 7% increase compared to 2014. And that’s what bothers us at this stage of the development in the markets. We have to have strong demand for sure but we need supply to go down that’s imperative. If the supply of ships keep coming the way they have been coming up to now and will be coming this year and next regardless of what that Chinese do, the only thing that they will manage by increasing their import is to make low rates, less low let us say and avoid having even lower rates, but that’s all we’re going to see if that develops. It’s not going to be a turning point for the market.

Our next question comes from the line of Ben Nolan with Stifel. Please proceed with your question.

I have just a few sort of modeling I suppose clarification. I was hoping if you could maybe say how much or what you’re CapEx your current CapEx profile is for 2015 and 2016 and then also the debt amortization profile and I know as Palios mentioned that there is maturity coming up, but or how much should I think about modeling in terms of annual debt repayment then also what’s the CapEx profile?

I think the debt repayment you will see in a few days in our 20-F and the best thing is to refer to that because that will take a lot of our time now to go through our debt especially due to the fact that we have diversified portfolio bank. In terms of capital expenditure as you know we have only three vessels on order therefore those three vessels until the end of -- we only put a 15% down payment until the end of 2014. In the first quarter of '15 we had only the steel cutting of the first Newcastlemaxes for 15% down payment $7,305,000. And during the rest of the year we will have steel cutting for the two other vessels that’s for both Newcastlemax remaining and the Kamsarmax DY 6,006 which would be a down payment of 15% for each of them. And then you will get also during this year mainly towards the later part of the year the [Keeling] for the three vessels. So now in terms of [Keeling] and CapEx for the Newcastlemax the payment will be 10% of the purchase price and for the Kamsarmax it will be 5% the payments for the [Keeling] and then all other CapEx for this year the rest will come '16 when we get the delivery of the vessels.

And as it relates to those vessels and maybe it relates to the broader market, given your outlook for the space have you considered all or felt out the yards with respect to maybe delaying the delivery of those vessels and do you expect there to be much push from ship owners to and maybe could talk to the success of ship owners and postponing delivery of new vessels?

I don’t think we’re in the -- with only three vessels on order and considering two things, one the purchase price of those vessels and two the number of those vessels that are only three we don't foresee to delay those vessels on our side, but we feel that some other owners might be actively looking in delaying those vessels especially the ones that we'll not be able to secure finance for in many orders that they have but that's for them to answering not so much for us.

Part of what Andreas said, and as for sure that the two Newcastlemaxes which we have on order will be first on the list to be chartered because of highly economical consumption there and the same holds true for the Kamsarmax. So we are not having a problem in delaying the ships as long as they are put in a slot where we don't have any other Newcastlemax to charter at the time neither Kamsarmax, so that's the governing factor. So we're going to proceed as per schedule and we are also already discussing leverage on those.

My last question relates to the share repurchase program. Just curious how much is left available under your repurchase program and whether or not you have done any so far in -- any addition in 2015 thus far?

Thus far we have done 0.4 million shares in 2015, we have stopped around the end of January 2015 that's $2.7 million. So in total we've done out of a $100 million, we have done $27.9 million, so we have plenty remaining but what is most important is what Ioannis said at the beginning of this call regarding share repurchase. Is that we trigger the share repurchase only because we can't find a vessel available during particular time span when we're looking for a vessel either because it's not technically correct or because we have not been able secure a vessel. So we only use it for that purpose but I hope we have answered it.

The 70 million remaining is certainly a number that we do not intend to use within this year.

We have reached the end of the question-and-answer session. I would now like to turn the floor back over to management for closing comments.