Can DryShips' Crude Tanker Segment Support the Company's Recovery? (Part 3 of 10)
Net income
For the fourth quarter of 2014, DryShips (DRYS) reported a net loss of $24 million or a $0.04 basic and diluted loss per share. Included in the fourth quarter 2014 results is an impairment charge on one dry bulk vessel, the Galveston, of $38.1 million or $0.06 per share.
Excluding this item, the company would have recorded a net income of $14.1 million, or $0.02 per share. This is driven by another quarter of high utilization from its drilling rig segment and a positive contribution to its bottom line from its tanker segment.
Except for Navios Maritime Partners (NMM), all the company’s peers—like Safe Bulkers(SB), Navios Maritime Holdings (NM), and Diana Shipping (DSX)—recorded net losses.
Expenses
The company’s operating expenses for total vessels, drilling rigs, and drillships increased to $225.4 million, and the company’s total depreciation and amortization rose to $116.3 million for the three-month period ended December 31, 2014. We can compare these results to $166.7 million and $96.5 million, respectively, for the three-month period ended December 31, 2013. Total general and administrative expenses decreased to $54.6 million in the fourth quarter of 2014 from $57.1 million during the corresponding period in 2013.
Adjusted EBITDA
DryShips reported adjusted EBITDA of $298.7 million for the fourth quarter of 2014, compared to $179.8 million for the fourth quarter of 2013. EBITDA is driven mostly by an increase in the average daily time charge equivalent levels of Aframax and Suezmax tankers, which are currently performing above expectations for this time of year. The PowerShares DB Oil Fund ETF (DBO) tracks the performance of crude oil.
In terms of dry bulk trends, DryShips’ average TCE (time charter equivalent) levels across all fleet types were unchanged from previous quarters. This result was mainly due to time charter coverage on the majority of the company’s Capesize fleet. Spot rates on its Panamax fleet stood at more or less historic lows.
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