Diamond S Shipping Inc. (NYSE:DSSI) Q2 2020 Earnings Conference Call - Final Transcript
Aug 13, 2020 • 08:00 am ET
Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Diamond S Shipping Second Quarter 2020 Conference Call. [Operator Instructions]
I would now like to turn the conference over to your speaker today, Craig Stevenson, Chief Executive Officer. Please go ahead.
Craig H. Stevenson
Good morning and welcome to Diamond S' second quarter 2020 earnings call. Thanks for dialing in this morning.
Before we begin the call, we'd like to draw your attention to our forward-looking statement disclaimer. We'll be making certain statements about the future events that may or may not happen in the manner which we describe. Please read page 2 in its entirety for a disclaimer about forward-looking statements.
Please turn to slide 4 for a review of our operating performance. In the second quarter of 2020, our spot crude fleet earned approximately $44,215 a day, while our spot product fleet earned approximately $19,000 a day, which includes our MR tankers earning $19,425 a day. All-in TCE, which includes spot and time charters, was $40,600 a day and $18,000 a day in our crude fleet and our product fleet respectively.
At Diamond S, we look at operating earnings of our fleet which we calculate as TCE less opex less G&A. We think it's important to highlight given the various ways these expenses get classified in our industry. The crude fleet generated $32,500 a day of operating earnings, while the product fleet, which includes our Handysize vessels, generated about $10,600 a day. Our reported net income was $45.7 million or basic EPS of $1.15 per share. EBITDA was approximately $84 million, and we repaid about $40 million in our revolving loans.
On the lower half of the slide, you can see spot earnings volatility during the year as well as spot rates for 2019 and the 10 year range. So far in the third quarter, we've booked approximately 59% of the spot revenue days at an average rate of $25,700 a day in the crude fleet and approximately 55% of the revenue days in our product fleet at approximately $11,000 a day.
The DSSI fleet is approximately 20% booked on time charters. The details of those time charters can be found in our Appendix.
On slide 5, the global pandemic has led to significant crude oil demand destruction. While the chart on the left shows OPEC's latest estimate of a 10% decline from 2019 to 2020, the market environment remains highly uncertain and actual decline may be higher than that.
The storage play which we talked about in the last quarter was short-lived than anticipated. Refinery capacity is still at 70% utilization. Global inventories which are estimated to be at an elevated 80 days of forward-demand is an additional headwind. In the short term, we expect to see some seasonal impacts to demand.
We continue to see restraint on the tanker supply side as the graph on the right-hand side of page 5 shows an order book at 20-year lows with little supply growth across all tanker types.