Business Wire | Nov 16, 2020 06:45AM EST

Diamond S Shipping Inc. Reports Third Quarter 2020 Results

Nov. 16, 2020

GREENWICH, Conn.--(BUSINESS WIRE)--Nov. 16, 2020--Diamond S Shipping Inc. (NYSE: DSSI) ("Diamond S", or the "Company"), one of the largest publicly listed owners and operators of crude oil and product tankers, today announced results for the third quarter of 2020.

Highlights for the Third Quarter and Recent Events

-- Reported net loss attributable to Diamond S of $9.7 million, or net loss of $0.24 basic and diluted earnings per share, and Adjusted EBITDA (see Non-GAAP Measures section below) of $27.1 million.

-- Net debt at September 30, 2020 was $611.1 million, implying a net debt to asset value leverage ratio of 39% based on broker valuations as of June 2020. At quarter end, total free liquidity available to the Company above bank minimum cash requirements was $124.3 million.

-- Agreed to sell a 2009-built MR vessel, the Atlantic Mirage, which is expected to be delivered to the buyers in late Q4 2020. The sale of the vessel is expected to generate approximately $7 million in net proceeds before settlement of working capital.

Craig H. Stevenson Jr., President and CEO of Diamond S, commented: "In these challenging market conditions, we are focused on maintaining safe operations and generating the highest possible cash flow in the spot market. To that end, we are pleased with the performance of our new commercial manager, the Norient Product Pool, who absorbed 28 of our MR vessels during the third quarter and outperformed industry benchmarks. Another priority in this environment is ensuring liquidity and maintaining the strong position of our balance sheet. Our recent agreement to sell one of our MR vessels reinforces our view of the underlying value of our enterprise. We are selling a 2009-built MR tanker for $16.4 million. This asset sale is a tangible marker of the value of our fleet, which is well in excess of our current market capitalization. We will continue to prove out the inherent value of DSSI and, especially given the positive long term outlook for our market, we expect to see the disconnect between our intrinsic value and our share price diminish."

Third Quarter 2020 Results

Reported net loss attributable to Diamond S for the third quarter of 2020 was $9.7 million, or net loss of $0.24 basic and diluted earnings per share, compared to a net loss of $25.9 million, or $0.65 per basic and diluted share, for the third quarter of 2019, which included the impact of a loss on vessel sales of $18.3 million, or $0.46 per share. The decrease in net income for the third quarter of 2020 compared to the adjusted net income for the third quarter of 2019 is primarily related to weaker tanker market conditions.

The Company groups its business primarily by commodity transported and segments its fleet into a 16-vessel crude oil transportation fleet (the "Crude Fleet") and a 50-vessel refined petroleum product transportation fleet (the "Product Fleet"). The Crude Fleet consists of 15 Suezmax vessels and one Aframax vessel. The Product Fleet consists of 44 medium range ("MR2") vessels and 6 Handysize ("MR1") vessels.

Net revenues for the Company, which represents voyage revenues less voyage expenses, were $79.7 million for the third quarter of 2020 compared to $81.6 million for the third quarter of 2019. Net revenues from the Crude Fleet were $29.4 million in the third quarter of 2020 compared to $23.3 million for the third quarter of 2019. The increase in net revenues for the Crude Fleet were primarily due to a solid start to the quarter as a result of the carryover of strong rates from the first half of 2020. Net revenues from the Product Fleet were $50.3 million in the third quarter of 2020 compared to $58.3 million for the third quarter of 2019. The decrease in net revenues in the Product Fleet was principally driven by weaker market conditions. The weak market conditions were driven by demand destruction caused by the global pandemic, and the unwinding of the floating storage cycle, which effectively increased the supply of available ships.

Vessel expenses were $44.8 million for the third quarter of 2020 compared to $41.8 million for the third quarter of 2019. Vessel expenses, which include crew costs, insurance, repairs and maintenance, lubricants and spare parts, technical management fees and other miscellaneous expenses, increased by $3.0 million primarily due to additional expenses incurred for crew bonuses, increased costs of crew reliefs, testing, quarantine and logistics for delivery of services and materials to the vessels as a result of the global pandemic.

Depreciation and amortization expense was $29.1 million in the third quarter of 2020 compared to $28.8 million for the third quarter of 2019.

General and administrative expenses were $7.7 million in the third quarter of 2020 compared to $7.6 million for the third quarter of 2019.

Interest expense was $7.0 million in the third quarter of 2020 compared to $13.0 million for the third quarter of 2019. Interest expense decreased in the third quarter of 2020 due to a lower average debt balance as a result of debt repayments and a decrease in the effective interest rate. Total gross debt outstanding as of September 30, 2020 was $748.5 million, or 16% lower compared to September 30, 2019.

Other income, which consists primarily of interest income, was less than $0.1 million in the third quarter of 2020, compared to $0.5 million for the third quarter of 2019.

Liquidity

As of September 30, 2020, the Company had $120.3 million in cash and restricted cash and $60.0 million available under its revolving credit facility. Available liquidity as of September 30, 2020 was $124.3 million, net of $56.0 million in restricted cash and minimum cash required by debt covenants.

Outlook

Tanker market conditions are expected to remain under pressure during the fourth quarter of 2020, driven by weak demand for crude oil and refined products as a result of the global pandemic. The typical seasonal market strength is expected to be muted as oil inventories continue to draw from onshore storage and demand has not materially recovered. Tanker supply remains balanced based on pre-pandemic demand levels, and the number of vessels on order nearly matches the number of vessels that might be expected to be scrapped, based on the average useful life of a vessel.

As of November 12, 2020, approximately 58% of Crude Fleet revenue days operating in the spot market in the fourth quarter have been fixed at an average rate of approximately $6,800 per day. In the Product Fleet, 59% of revenue days operating in the spot market have been fixed at an average rate of approximately $9,000 per day in the fourth quarter of 2020. The Product Fleet includes a weighted average blend of MR2 vessels, fixed on 60% of revenue days at an average rate of $9,400 per day, and MR1 vessels, fixed on 53% of fourth quarter revenue days at an average rate of $6,000 per day.

Conference Call

The Company will hold a conference call on November 16, 2020 at 8:00 a.m. Eastern Time to discuss its results for the third quarter of 2020.

To access the call, participants should dial +1 866 211-4137 for domestic callers and +1 647 689-6723 for international callers. Participants are encouraged to dial in ten minutes prior to the call. Please enter passcode 6646328.

A live webcast of the conference call will be available from the Company's website at www.diamondsshipping.com.

An audio replay of the conference call will be available starting at 11 a.m. ET on Monday November 16, 2020 through Monday, November 23, 2020 by dialing in +1 800 585-8367 or +1 416 621-4642 and entering the passcode 6646328.

About Diamond S Shipping Inc.

Diamond S Shipping Inc. (NYSE: DSSI) owns and operates 66 vessels on the water, including 15 Suezmax vessels, one Aframax and 50 medium-range (MR) product tankers. Diamond S is one of the largest energy shipping companies providing seaborne transportation of crude oil, refined petroleum and other petroleum products. The Company is headquartered in Greenwich, CT. More information about Diamond S can be found at www.diamondsshipping.com.

Disclosure Regarding Forward-Looking Statements

Matters discussed in this press release may constitute forward?looking statements including statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. Some of the factors that could cause our actual results or conditions to differ materially include unforeseen liabilities; future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the Company's operations; risks relating to the integration of assets or operations of entities that it has or may in the future acquire and the possibility that the anticipated synergies and other benefits of such acquisitions may not be realized within expected timeframes or at all; the failure of counterparties to fully perform their contracts with the Company; the strength of world economies and currencies; the duration and impact of the COVID-19 (coronavirus) outbreak; general market conditions, including fluctuations in charter rates and vessel values; changes in demand for tanker vessel capacity; changes in the Company's operating expenses, including bunker prices; drydocking and insurance costs; the market for the Company's vessels; availability of financing and refinancing; charter counterparty performance; ability to obtain financing and comply with covenants in such financing arrangements; changes in governmental rules and regulations or actions taken by regulatory authorities; potential liability from pending or future litigation; general domestic and international political conditions; potential disruption of shipping routes due to accidents or political events; vessels breakdowns and instances of off?hires; and other factors. Please see the Company's filings with the SEC for a more complete discussion of certain of these and other risks and uncertainties. The Company undertakes no obligation, and specifically declines any obligation, except as required by law, to publicly update or revise any forward?looking statements, whether as a result of new information, future events or otherwise.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

as of September 30, 2020 and December 31, 2019

(In Thousands, except for share and per share data)

(Unaudited)

September 30, December 31, 2020 2019

Assets

Current assets:

Cash and cash equivalents $ 114,335 $ 83,609

Due from charterers - Net of provision fordoubtful accounts of $2,037 and $1,415, 56,948 80,691 respectively

Inventories 20,518 32,071

Prepaid expenses and other current assets 14,611 13,179

Total current assets 206,412 209,550



Noncurrent assets:

Vessels - Net of accumulated depreciation of 1,799,835 1,865,738 $631,438 and $553,483, respectively

Other property - Net of accumulated depreciation 433 642 of $813 and $584, respectively

Deferred drydocking costs - Net of accumulated 34,016 37,256 amortization of $24,406 and $17,975, respectively

Restricted cash 6,014 5,610

Advances to Norient pool 8,001 -

Time charter contracts acquired - Net ofaccumulated amortization of $4,290 and $2,296, 2,809 5,004 respectively

Other noncurrent assets 2,593 4,582

Total noncurrent assets 1,853,701 1,918,832

Total $ 2,060,113 $ 2,128,382



Liabilities and Equity

Current liabilities:

Current portion of long-term debt $ 134,389 $ 134,389

Accounts payable and accrued expenses 35,336 44,062

Deferred charter hire revenue 3,245 1,934

Derivative liability 557 -

Total current liabilities 173,527 180,385



Long-term debt - Net of deferred financing costs 600,703 744,055 of $13,426 and $15,866, respectively

Derivative liability 620 -

Total liabilities 774,850 924,440





Equity:

Common stock, par value $0.001; 100,000,000shares authorized; issued and outstanding 40 40 39,924,892 and 39,890,699 shares at September 30,2020 and December 31, 2019, respectively

Treasury stock - at cost; 137,289 shares at (1,418 ) - September 30, 2020

Additional paid-in capital 1,240,521 1,237,658

Accumulated other comprehensive loss (1,177 ) -

Retained earnings (accumulated deficit) 12,525 (68,567 )

Total Diamond S Shipping Inc. equity 1,250,491 1,169,131

Noncontrolling interests 34,772 34,811

Total equity 1,285,263 1,203,942

Total $ 2,060,113 $ 2,128,382

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

for the Three and Nine Months Ended September 30, 2020 and 2019

(In Thousands, except for share and per share data)

(Unaudited)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

Revenue:

Voyage revenue

$

69,098

$

120,954

$

419,169

$

348,747

Time charter revenue

20,408

20,572

63,296

44,730

Pool revenue

23,091

-

23,410

-

Total revenue

112,597

141,526

505,875

393,477

Operating expenses:

Voyage expenses

32,896

59,968

156,926

167,441

Vessel expenses

44,758

41,799

128,032

108,976

Depreciation and amortization expense

29,067

28,763

86,598

79,962

Loss on sale of vessels

-

18,344

-

18,344

General and administrative expenses

7,685

7,566

23,294

21,174

Total operating expenses

114,406

156,440

394,850

395,897

Operating income

(1,809

)

(14,914

)

111,025

(2,420

)

Other (expense) income:

Interest expense

(7,019

)

(13,021

)

(28,106

)

(35,813

)

Other income

3

492

339

1,393

Total other expense - Net

(7,016

)

(12,529

)

(27,767

)

(34,420

)

Net (loss) income

(8,825

)

(27,443

)

83,258

(36,840

)

Less: Net income (loss) attributable to noncontrolling interest (1)

839

(1,548

)

2,166

(1,416

)

Net (loss) income attributable to Diamond S Shipping Inc.

$

(9,664

)

$

(25,895

)

$

81,092

$

(35,424

)

Net (loss) earnings per share - basic

$

(0.24

)

$

(0.65

)

$

2.03

$

(0.99

)

Net (loss) earnings per share - diluted

$

(0.24

)

$

(0.65

)

$

2.02

$

(0.99

)

Weighted average common shares outstanding - basic

39,918,427

39,890,698

39,879,976

35,835,477

Weighted average common shares outstanding - diluted

39,918,427

39,890,698

40,106,157

35,835,477

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

for the Three and Nine Months Ended September 30, 2020 and 2019

(In Thousands, except for share and per share data)

(Unaudited)

For the Three Months Ended For the Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Revenue:

Voyage revenue $ 69,098 $ 120,954 $ 419,169 $ 348,747

Time charter 20,408 20,572 63,296 44,730 revenue

Pool revenue 23,091 - 23,410 -

Total revenue 112,597 141,526 505,875 393,477



Operating expenses:

Voyage 32,896 59,968 156,926 167,441 expenses

Vessel 44,758 41,799 128,032 108,976 expenses

Depreciationand 29,067 28,763 86,598 79,962 amortizationexpense

Loss on sale - 18,344 - 18,344 of vessels

General andadministrative 7,685 7,566 23,294 21,174 expenses

Totaloperating 114,406 156,440 394,850 395,897 expenses

Operating (1,809 ) (14,914 ) 111,025 (2,420 )income

Other(expense) income:

Interest (7,019 ) (13,021 ) (28,106 ) (35,813 )expense

Other income 3 492 339 1,393

Total other (7,016 ) (12,529 ) (27,767 ) (34,420 )expense - Net

Net (loss) (8,825 ) (27,443 ) 83,258 (36,840 )income

Less: Netincome (loss)attributable 839 (1,548 ) 2,166 (1,416 )tononcontrollinginterest ^(1)

Net (loss)incomeattributable $ (9,664 ) $ (25,895 ) $ 81,092 $ (35,424 )to Diamond SShipping Inc.



Net (loss)earnings per $ (0.24 ) $ (0.65 ) $ 2.03 $ (0.99 )share - basic

Net (loss)earnings per $ (0.24 ) $ (0.65 ) $ 2.02 $ (0.99 )share -diluted



Weightedaverage commonshares 39,918,427 39,890,698 39,879,976 35,835,477 outstanding -basic

Weightedaverage commonshares 39,918,427 39,890,698 40,106,157 35,835,477 outstanding -diluted

(1)The Company is a 51% owner in NT Suez Holdco LLC ("NT Suez"), a joint venture that owns two Suezmax vessels. The Company also performs commercial, technical and administrative services for this joint venture.

The Company is a 51% owner in NT Suez Holdco LLC ("NT Suez"), a joint(1) venture that owns two Suezmax vessels. The Company also performs commercial, technical and administrative services for this joint venture.

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

for the Nine Months Ended September 30, 2020 and 2019

(In Thousands)

(Unaudited)

For the Nine Months Ended September 30,

2020

2019

Cash flows from Operating Activities:

Net income (loss)

$

83,258

$

(36,840

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense

86,598

79,962

Loss on sale of vessels

-

18,344

Amortization of deferred financing costs

2,663

3,106

Amortization of time charter hire contracts acquired

2,194

1,632

Amortization of the realized gain from recouponing swaps

-

(2,045

)

Stock-based compensation expense

3,607

2,162

Changes in assets and liabilities

20,692

(11,723

)

Payments for drydocking

(5,120

)

(12,685

)

Net cash provided by operating activities

193,892

41,913

Cash flows from Investing Activities:

Acquisition costs, net of cash acquired of $16,568

-

(292,683

)

Transaction costs

-

(18,930

)

Proceeds from sale of vessels

-

31,800

Payments for vessel additions and other property

(11,958

)

(11,238

)

Net cash used in investing activities

(11,958

)

(291,051

)

Cash flows from Financing Activities:

Borrowings on long-term debt

-

300,000

Principal payments on long-term debt

(100,792

)

(86,604

)

Borrowings on revolving credit facilities

-

61,000

Repayments on revolving credit facilities

(45,000

)

(26,323

)

NT Suez Holdco LLC distribution

(2,205

)

-

Shares repurchased

(1,418

)

-

Cash paid to net settle employee withholding taxes on equity awards

(745

)

-

Proceeds from partners' contributions in subsidiaries

-

980

Payments for deferred financing costs

(644

)

(6,970

)

Net cash (used in) provided by financing activities

(150,804

)

242,083

Net increase (decrease) in cash, cash equivalents and restricted cash

31,130

(7,055

)

Cash, cash equivalents and restricted cash - Beginning of period

89,219

88,158

Cash, cash equivalents and restricted cash - End of period

$

120,349

$

81,103

Supplemental disclosures:

Cash paid for interest

$

26,480

$

35,206

Common stock issued to CPLP

$

-

$

236,848

Unpaid transaction costs in Accounts payable and accrued expenses at the end of the period

$

-

$

154

Unpaid vessel additions in Accounts payable and accrued expenses at the end of the period

$

1,326

$

4,604

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

for the Nine Months Ended September 30, 2020 and 2019

(In Thousands)

(Unaudited)

For the Nine Months Ended September 30,

2020 2019

Cash flows from Operating Activities:

Net income (loss) $ 83,258 $ (36,840 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization expense 86,598 79,962

Loss on sale of vessels - 18,344

Amortization of deferred financing costs 2,663 3,106

Amortization of time charter hire contracts 2,194 1,632 acquired

Amortization of the realized gain from recouponing - (2,045 )swaps

Stock-based compensation expense 3,607 2,162

Changes in assets and liabilities 20,692 (11,723 )

Payments for drydocking (5,120 ) (12,685 )

Net cash provided by operating activities 193,892 41,913



Cash flows from Investing Activities:

Acquisition costs, net of cash acquired of $16,568 - (292,683 )

Transaction costs - (18,930 )

Proceeds from sale of vessels - 31,800

Payments for vessel additions and other property (11,958 ) (11,238 )

Net cash used in investing activities (11,958 ) (291,051 )



Cash flows from Financing Activities:

Borrowings on long-term debt - 300,000

Principal payments on long-term debt (100,792 ) (86,604 )

Borrowings on revolving credit facilities - 61,000

Repayments on revolving credit facilities (45,000 ) (26,323 )

NT Suez Holdco LLC distribution (2,205 ) -

Shares repurchased (1,418 ) -

Cash paid to net settle employee withholding taxes (745 ) - on equity awards

Proceeds from partners' contributions in - 980 subsidiaries

Payments for deferred financing costs (644 ) (6,970 )

Net cash (used in) provided by financing (150,804 ) 242,083 activities

Net increase (decrease) in cash, cash equivalents 31,130 (7,055 )and restricted cash

Cash, cash equivalents and restricted cash - 89,219 88,158 Beginning of period

Cash, cash equivalents and restricted cash - End $ 120,349 $ 81,103 of period



Supplemental disclosures:

Cash paid for interest $ 26,480 $ 35,206

Common stock issued to CPLP $ - $ 236,848

Unpaid transaction costs in Accounts payable and $ - $ 154 accrued expenses at the end of the period

Unpaid vessel additions in Accounts payable and $ 1,326 $ 4,604 accrued expenses at the end of the period

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Crude & Product Operating Data

(Unaudited)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

Crude Fleet

Product Fleet(A)

Crude Fleet

Product Fleet(A)

Crude Fleet

Product Fleet(A)

Crude Fleet

Product Fleet(A)

Time Charter TCE per day(1)

$26,073

$14,407

$26,134

$14,409

$26,277

$14,369

$26,127

$14,510

Spot TCE per day(1),(2)

20,224

10,374

18,174

12,714

37,120

15,176

17,966

13,356

Total TCE per day(1),(2)

$21,386

$11,113

$18,938

$13,139

$34,988

$15,016

$18,439

$13,610

Vessel operating expenses per day(3)

$7,995

$7,191

$7,139

$6,503

$7,578

$6,755

$6,889

$6,537

Revenue days(4)

1,389

4,539

1,337

4,445

4,175

13,476

3,854

11,706

Operating days(4)

1,472

4,600

1,472

4,751

4,384

13,700

4,024

12,719

DIAMOND S SHIPPING INC. AND SUBSIDIARIES

Crude & Product Operating Data

(Unaudited)

For the Three Months Ended For the Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Crude Product Crude Product Crude Product Crude Product Fleet Fleet^ Fleet Fleet^ Fleet Fleet^ Fleet Fleet^ (A) (A) (A) (A)

TimeCharter $26,073 $14,407 $26,134 $14,409 $26,277 $14,369 $26,127 $14,510TCE perday^(1)

Spot TCEper day^ 20,224 10,374 18,174 12,714 37,120 15,176 17,966 13,356(1),(2)

Total TCEper day^ $21,386 $11,113 $18,938 $13,139 $34,988 $15,016 $18,439 $13,610(1),(2)

Vesseloperatingexpenses $7,995 $7,191 $7,139 $6,503 $7,578 $6,755 $6,889 $6,537per day^(3)

Revenue 1,389 4,539 1,337 4,445 4,175 13,476 3,854 11,706days^(4)

Operating 1,472 4,600 1,472 4,751 4,384 13,700 4,024 12,719days^(4)

(A) Product Fleet Operating Data

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

MR Fleet

Handy Fleet

MR Fleet

Handy Fleet

MR Fleet

Handy Fleet

MR Fleet

Handy Fleet

Time Charter TCE per day(1)

$14,372

$14,686

$15,149

$12,164

$14,612

$13,073

$15,137

$12,231

Spot TCE per day(1),(2)

11,023

5,797

12,943

9,947

15,626

11,639

13,508

10,941

Total TCE per day(1),(2)

$11,643

$7,279

$13,415

$11,100

$15,433

$12,009

$13,818

$11,595

Vessel operating expenses per day(3)

$7,174

$7,317

$6,502

$6,935

$6,728

$6,954

$6,517

$7,155

Revenue days(4)

3,987

552

3,915

530

11,836

1,640

10,610

1,095

Operating days(4)

4,048

552

4,199

552

12,056

1,644

11,597

1,122

(A)Product For the Three Months Ended For the Nine Months EndedFleet September 30, September 30,OperatingData

2020 2019 2020 2019

MR Handy MR Handy MR Handy MR Handy Fleet Fleet Fleet Fleet Fleet Fleet Fleet Fleet

TimeCharter $14,372 $14,686 $15,149 $12,164 $14,612 $13,073 $15,137 $12,231TCE perday^(1)

Spot TCEper day^ 11,023 5,797 12,943 9,947 15,626 11,639 13,508 10,941(1),(2)

Total TCEper day^ $11,643 $7,279 $13,415 $11,100 $15,433 $12,009 $13,818 $11,595(1),(2)

Vesseloperatingexpenses $7,174 $7,317 $6,502 $6,935 $6,728 $6,954 $6,517 $7,155per day^(3)

Revenue 3,987 552 3,915 530 11,836 1,640 10,610 1,095days^(4)

Operating 4,048 552 4,199 552 12,056 1,644 11,597 1,122days^(4)

(1)

Time charter equivalent ("TCE") revenue represents voyage revenues, which commence at the time a vessel departs its last discharge port and end at the time the discharge of cargo at the next discharge port is complete, less voyage expenses incurred over such time. TCE rates are a non-GAAP measure, generally used in the shipping industry, used to compare revenue generated from voyage charters to revenue generated from time charters. TCE rates assist the Company's management in making decisions regarding the deployment and use of its vessels and in evaluating the financial performance of vessels under commercial management. See Non-GAAP Measures below.

(2)

Revenues are derived on a discharge-to-discharge basis less voyage expenses which primarily consist of fuel costs and port charges incurred over the same period. Voyage revenues, as presented in the income statement, are reported under a load-to-discharge basis under U.S. GAAP. A reconciliation is provided in the Non-GAAP Measures section of the press release.

(3)

The vessel operating expenses primarily consist of crew wages and associated costs, insurance premiums, lubricants and spare parts, technical management fees and repair and maintenance costs and excludes nonrecurring items.

(4)

Operating days include the calendar days in the period of owned vessels. Revenue days represent operating days less technical off-hire and drydocking.

Non-GAAP Measures

To supplement the Company's financial information presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"), management uses certain "non-GAAP financial measures" as such term is defined in Regulation G promulgated by the Securities and Exchange Commission (the "SEC"). Generally, a non-GAAP financial measure is a numerical measure of a company's operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to the Company's financial condition and results of operations, and therefore a more complete understanding of factors affecting its business than GAAP measures alone.

TCE revenue, TCE per day, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance ("Adjusted EBITDA") are non-GAAP financial measures that are presented in this press release and that the Company believes provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP. Please see below for reconciliations of TCE revenue, TCE per day, EBITDA and Adjusted EBITDA.

Reconciliation of Voyage Revenue to TCE per Day

Time charter equivalent ("TCE") revenue represents voyage revenues, which commence at the time a vessel departs its last discharge port and end at the time the discharge of cargo at the next discharge port is complete, less voyage expenses incurred over such time. TCE rates are a non-GAAP(1) measure, generally used in the shipping industry, used to compare revenue generated from voyage charters to revenue generated from time charters. TCE rates assist the Company's management in making decisions regarding the deployment and use of its vessels and in evaluating the financial performance of vessels under commercial management. See Non-GAAP Measures below.

Revenues are derived on a discharge-to-discharge basis less voyage expenses which primarily consist of fuel costs and port charges incurred(2) over the same period. Voyage revenues, as presented in the income statement, are reported under a load-to-discharge basis under U.S. GAAP. A reconciliation is provided in the Non-GAAP Measures section of the press release.

The vessel operating expenses primarily consist of crew wages and(3) associated costs, insurance premiums, lubricants and spare parts, technical management fees and repair and maintenance costs and excludes nonrecurring items.

Operating days include the calendar days in the period of owned vessels.(4) Revenue days represent operating days less technical off-hire and drydocking.

Non-GAAP Measures

To supplement the Company's financial information presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"), management uses certain "non-GAAP financial measures" as such term is defined in Regulation G promulgated by the Securities and Exchange Commission (the "SEC"). Generally, a non-GAAP financial measure is a numerical measure of a company's operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to the Company's financial condition and results of operations, and therefore a more complete understanding of factors affecting its business than GAAP measures alone.

TCE revenue, TCE per day, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance ("Adjusted EBITDA") are non-GAAP financial measures that are presented in this press release and that the Company believes provide investors with a means of evaluating and understanding how the Company's management evaluates the Company's operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor superior to financial measures prepared in accordance with GAAP. Please see below for reconciliations of TCE revenue, TCE per day, EBITDA and Adjusted EBITDA.

Reconciliation of Voyage Revenue to TCE per Day

(in thousands of U.S.dollars, except fleet For the Three Months Ended September 30, For the Nine Months Ended September 30,data)

2020 2019 2020 2019

Crude Product Crude Product Crude Product Crude Product Fleet Fleet Fleet Fleet Fleet Fleet Fleet Fleet



Voyage revenue $42,293 $70,304 $46,222 $95,304 $202,795 $303,080 $133,105 $260,372

Voyage expense (12,891) (20,005) (22,919) (37,049) (55,900) (101,026) (64,383) (103,058)

Amortization of timecharter contracts 581 96 581 179 1,743 452 1,181 449acquired

Off-hire bunkers in 212 33 408 622 493 334 619 1,278voyage expenses

Commercial management - 1,024 - - - 1,033 - -pool fees

Load-to-discharge/ (492) (1,014) 1,037 (648) (3,054) (1,509) 536 295Discharge-to-discharge

Revenue from sold - 1 - (5) - (10) - (25)vessels

TCE Revenue $29,703 $50,439 $25,329 $58,403 $146,077 $202,354 $71,058 $159,310

Operating days 1,472 4,600 1,472 4,751 4,384 13,700 4,024 12,719

Off-hire/Dry Docking 83 61 135 306 209 224 170 1,014days

Revenue days 1,389 4,539 1,337 4,445 4,175 13,476 3,854 11,706

TCE per day $21,386 $11,113 $18,938 $13,139 $34,988 $15,016 $18,439 $13,610

Reconciliation of Net Income/(Loss) to EBITDA and Adjusted EBITDA

EBITDA represents net income (loss) before interest expense, income taxes and depreciation and amortization expense. Adjusted EBITDA consists of EBITDA adjusted for the impact of certain items that we do not consider indicative of our ongoing operating performance. EBITDA and Adjusted EBITDA are presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA and Adjusted EBITDA do not represent, and should not be considered a substitute for, net income (loss) or cash flows from operations determined in accordance with GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results reported under GAAP. Some limitations are:

* EBITDA and Adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; * EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and * EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt.

While EBITDA and Adjusted EBITDA are frequently used by companies as a measure of operating results and performance, neither of those items as prepared by the Company is necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The following table reconciles net income/(loss), as reflected in the consolidated statements of operations, to EBITDA and Adjusted EBITDA:

(in thousands of U.S. dollars) For the Three Months For the Nine Months Ended September 30, Ended September 30,

2020 2019 2020 2019



Net income (loss) $(8,825) $(27,443) $83,258 $(36,840)

Total other expense, net 7,016 12,529 27,767 34,420

Operating income (1,809) (14,914) 111,025 (2,420)

Depreciation and amortization 29,067 28,763 86,598 79,962

Noncontrolling interest (1,644) 631 (4,781) (1,395)

EBITDA $25,614 $14,480 $192,842 $76,147

Fair value of TC amortization 676 760 2,194 1,632

Nonrecurring corporate expenses 846 387 846 2,057

Gain/Loss on Sale of Assets - 18,344 - 18,344

Adjusted EBITDA $27,136 $33,971 $195,882 $98,180

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CONTACT: Investor Relations Inquiries: Robert Brinberg Tel: +1-212-517-0810 E-mail: IR@diamondsshipping.com