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DryShips to draw on revolver Sept. 30; future cash flow outlook stable
By Lisa Kerner
Charlotte, N.C., Aug. 31 - DryShips Inc.'s net loss of $114.1 million for the second quarter ended June 30 included infrequently occurring and non-cash items totaling $131.5 million, chief financial officer Ziad Nakhieh said Wednesday during the company's earnings conference call.
The items included impairment losses of $87 million from the sale of four vessels and the net gain from the total loss of one vessel, incremental costs totaling $8.6 million associated with the Leiv Eiriksson survey and losses of $35.9 million incurred on interest rate swaps.
Earnings for the quarter were negatively impacted by new drilling operations. The company estimated it would have had additional operating income of $35 million if all drilling units were operational during the quarter.
Interest and finance costs, net of interest income, amounted to $33.3 million for the three-month period ended June 30, compared with $13.3 million for the three-month period ended June 30, 2010.
Looking ahead, DryShips expects to complete the acquisition of OceanFreight Inc. in November and will draw the balance of its $495 million credit facility on Sept. 30 when it takes delivery of Ocean Rig Mykonos.
Total revenue for next two and a half years of an estimated $620 million will provide stable cash flow, said Nakhieh.
With no need for major capital expenditures until 2013, DryShips is poised to take advantage of the potential industry recovery in 2013 and beyond, Nakhieh said.
DryShips is based in Athens and provides marine transportation services for drybulk cargoes and off-shore contract drilling oil services.
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