6-K
Himalaya Shipping Ltd. (HSHP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2025
Commission File Number 001-41676
Himalaya Shipping Ltd.
(Exact name of Registrant as specified in its charter)
Not applicable
(Translation of Registrant’s name into English)
S. E. Pearman Building
2nd floor, 9 Par-la-Ville Road
Hamilton HM 11
Bermuda
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Exhibits.
| Exhibit | Description |
|---|---|
| 99.1 | Himalaya Shipping Ltd. Earnings Release for the First Quarter of 2025 |
| 99.2 | Himalaya Shipping Ltd. Interim Financial Information for the First Quarter of 2025 |
| 99.3 | Himalaya Shipping Ltd. Results Presentation for the First Quarter of 2025 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Himalaya Shipping Ltd. | ||
|---|---|---|
| By: | /s/ Lars-Christian Svensen | |
| Name: | Lars-Christian Svensen | |
| Title: | Chief Executive Officer | |
| Date: May 22, 2025 |
Document
Himalaya Shipping Ltd. (HSHP) Announces its Preliminary Results for the Quarter Ended March 31, 2025
Hamilton, Bermuda, May 22, 2025
Himalaya Shipping Ltd. (“Himalaya,” “Himalaya Shipping” or the “Company”) announces preliminary unaudited results for the three months ended March 31, 2025.
Highlights for the First Quarter of 2025
•Total operating revenues of $22.0 million, which is an average time charter equivalent (“TCE”) earnings of approximately $21,100 per day, gross1. Average Baltic 5TC Capesize Index was $12,998 per day.
•Net loss of $6.4 million and Adjusted EBITDA2 of $13.8 million.
•Cash distributions of $0.005, $0.005 and $0.04 per common share for January, February and March 2025, respectively.
•Entered into a new time charter agreement for Mount Norefjell for 14 to 38 months. The vessel will earn an index-linked rate reflecting a premium to the Baltic 5TC index that is higher than the average premium on our current charters.
•Conversion of index-linked charters to fixed rate time charters for the Mount Norefjell and Mount Hua from April 1, 2025 to December 31, 2025 at $32,000 and $31,500 per day, respectively. These vessels will continue to earn scrubber premium according to the terms of the existing time charter agreements.
•Issuance of 2,650,000 common shares of par value $1.00 each in a private placement at a price of $5.73 per share, raising net proceeds of approximately $14.8 million.
Subsequent Events
•Average TCE earnings for April of approximately $25,800 per day, gross.
•In April 2025, the Board approved a grant of 200,000 share options to key human resources. The share options granted have a five-year term and cliff vest three years from the grant date. The exercise price is $7.50 per share and will be reduced by any dividends and cash distributions paid.
•Commencement of Lars-Christian Svensen as contracted CEO and appointment of Vidar Hasund as contracted CFO on April 1, 2025.
•In May 2025, the Company declared cash distribution for April 2025 of $0.025 per common share.
•On May 20, 2025, the Company applied for an uplisting from Euronext Expand to Euronext Oslo Børs.
Contracted CEO, Lars-Christian Svensen commented:
“The average Baltic Capesize Index (BCI) for the first quarter of 2025 was $12,998 per day. The first quarter of 2025 saw a decline in ton miles of 1.8% year-on-year. Broken down by the three big commodities, we experienced a ton mile decrease of 2.8% in iron ore, a 30 % decrease in coal, offset by a 42.5% increase in bauxite. The bauxite increase is largely due to volumes from West Africa to China. The decrease in ton miles from coal can be attributed to the splitting of Capesize coal cargoes into smaller sizes and a 53% reduction on coal exports from Colombia compared to the same period last year.
The first quarter of 2025 and the year-to-date have faced challenges due to trade war uncertainties and the implementation of tariffs on U.S. exports of dry cargo commodities. However, United States' Capesize export volumes constitute only 2% of total cargo movements, with no Capesize imports, indicating a minimal direct impact on the Capesize market. Additionally, Brazilian iron exports have been constrained by wet weather conditions but have still managed to increase by 3.1% year-on-year in the first quarter. Conversely, Australia has
1 The Company uses certain financial information calculated on a basis other than in accordance with accounting principles generally accepted in the United States (US GAAP) including average TCE earnings, gross and Adjusted EBITDA. Average TCE earnings, gross, as presented herein, represents time charter revenues and voyage charter revenues adding back address commissions and divided by fleet operational days. Please refer to the appendix of this release for a reconciliation of this non-GAAP measure to the most directly comparable financial measures prepared in accordance with US GAAP.
2 Adjusted EBITDA as presented herein represents our net income (loss) plus depreciation of vessels and equipment; any loss (income) from equity method investment; total financial expenses, net; and income tax expense. Please refer to the appendix of this report for a reconciliation of Adjusted EBITDA to net income.
encountered significant iron ore export difficulties due to two cyclones, resulting in a 10% year-on-year decline in total exports.
We maintain a positive long-term outlook for large dry bulk ships. The current order book for new Capesize vessels represents only 7.9% of the existing fleet, while yard capacity has decreased by 50% from its peak. Additionally, by 2028, 20% of the entire fleet will be 20 years old, marking the earliest opportunity for significant fleet expansion. Furthermore, 23% of the total Capesize fleet will require drydocking in 2025 due to 5, 10, 15, and 20-year Special Surveys, compared to only 13.6% in 2024. This trend is expected to continue in 2026, with 25% of the total fleet also engaging in Special Surveys.
The Company’s outlook remains positive on expected growth in ton miles, driven by China's strong demand for bauxite, with 85% of the volumes originating from West Africa. The anticipated increase in iron ore production capacity in the Atlantic, specifically from Guinea (120 million tonnes) and Brazil (50 million tonnes) between 2025 and 2027, is expected to further boost ton miles. These additional volumes alone suggest the need for an extra 232 Capesize vessels, which is nearly 65% higher than the current order book.
In the first quarter 2025, all 12 of our vessels were employed on index-linked charters, earning on average a premium of 42.5% over the Baltic 5TC index, with profit sharing of any economic benefit derived from operating the vessel's scrubber or running on LNG. As a result of our long-term financing, our breakeven point is approximately $17,000 per day on a Capesize index equivalent basis. Most of the excess cash-flow above this threshold is expected to be returned to shareholders through monthly dividends.”
Management discussion and analysis
See below a discussion of the preliminary unaudited results for the first quarter of 2025 compared to the unaudited results of the first quarter of 20243:
| (in $ thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change ($) | Change (%) | |
|---|---|---|---|---|---|
| Total operating revenues | 21,973 | 23,581 | (1,608) | (7) | % |
| Vessel operating expenses | (6,900) | (4,928) | (1,972) | 40 | % |
| Voyage expenses | (179) | (334) | 155 | (46) | % |
| General and administrative expenses | (1,090) | (1,472) | 382 | (26) | % |
| Depreciation and amortization | (7,296) | (5,430) | (1,866) | 34 | % |
| Total operating expenses | (15,465) | (12,164) | (3,301) | 27 | % |
| Operating income | 6,508 | 11,417 | (4,909) | (43) | % |
| Income from equity method investment | 4 | — | 4 | 100 | % |
| Total financial expenses, net | (12,886) | (8,925) | (3,961) | 44 | % |
| Net income | (6,374) | 2,492 | (8,866) | (356) | % |
| Adjusted EBITDA | 13,804 | 16,847 | (3,043) | (18) | % |
3 In previous earnings press releases, the Company presented a discussion of quarterly results compared to the immediately preceding quarter. The Company is now presenting a discussion of quarterly results compared to the same quarter in the preceding year, which the company believes provides a useful comparison in light of seasonality in the business.
| (in $ thousands) | March 31, 2025 | December 31, 2024 | Change ($) | Change (%) | |
|---|---|---|---|---|---|
| Cash and cash equivalents | 26,990 | 19,369 | 7,621 | 39 | % |
| Vessels and Equipment | 845,683 | 852,979 | (7,296) | (1) | % |
| Total Debt | 707,937 | 713,887 | (5,950) | (1) | % |
| Total Equity | 162,549 | 154,719 | 7,830 | 5 | % |
Total operating revenues for the first quarter of 2025 were $22.0 million, a $1.6 million decrease compared to the first quarter of 2024. The decrease is mainly a result of the lower Average Baltic 5TC Capesize Index of $12,998 per day in the first quarter of 2025 compared to $24,286 per day in the first quarter of 2024. Average TCE earnings, gross decreased from $30,600/day in the first quarter of 2024 to $21,100/day in the first quarter of 2025. This decrease was partially offset by the increase in the number of operating days in the first quarter of 2025 to 1,080 days from 798 days in the first quarter of 2024 as a result of more operating vessels in 2025 following the delivery and commencement of operations of our remaining three vessels in the second quarter of 2024.
Vessel operating expenses for the first quarter of 2025 was $6.9 million, a $2.0 million increase compared to the first quarter of 2024. The increase is mainly a result of the delivery and commencement of operations of the remaining three vessels, Mount Denali, Mount Aconcagua and Mount Emai, in the second quarter of 2024. The Company achieved an average vessel operating cost per day rate4 of $6,400 and $6,200 for the first quarter of 2025 and the first quarter of 2024, respectively.
Depreciation and amortization for the first quarter of 2025 was $7.3 million, a $1.9 million increase compared to the first quarter of 2024. The increase is mainly a result of the delivery and commencement of operations of the remaining three vessels in the second quarter of 2024.
Total financial expenses for the first quarter of 2025 was $12.9 million, a $4.0 million increase compared to the first quarter of 2024. This is mainly due to the increase in interest expense as a result of the increase in outstanding debt following the delivery of the remaining three vessels in the second quarter of 2024.
Vessels and equipment as of March 31, 2025 was $845.7 million, a $7.3 million decrease compared to $853.0 million as of December 31, 2024. The decrease is due to vessel depreciation during the quarter.
Total debt as of March 31, 2025 was $707.9 million, a $6.0 million decrease compared to $713.9 million as of December 31, 2024. The decrease is primarily due to the repayments of principal of $6.6 million on the sale and leaseback arrangements, offset by amortization of deferred finance costs of $0.6 million.
Cash Flows for the First Quarter of 2025
Net cash provided by operating activities was $0.3 million, compared to $11.2 million in the first quarter of 2024. The decrease is primarily due to the decline in the results of operations to a net loss of $6.4 million in the first quarter of 2025 compared to net income of $2.5 million in the first quarter of 2024.
Net cash used in investing activities was $nil, compared to $153.8 million in the first quarter of 2024. The cash used in investing activities in the first quarter of 2024 primarily consisted of installment payments and costs related to the delivery of Mount Bandeira, Mount Hua and Mount Elbrus.
4 Average vessel operating cost per day is calculated by dividing vessel operating expenses by the number of calendar days in the quarter.
Net cash provided by financing activities was $7.3 million, compared to $142.8 million in the first quarter of 2024. Net cash provided by financing activities in the first quarter of 2025 primarily consisted of net proceeds from the private placement of $14.8 million and draw down from the revolving credit facility with Drew Holdings Ltd. (the “Drew facility”) of $6.0 million, offset by repayments on the sale and leaseback financings of $6.6 million and the Drew facility of $6.0 million, and payments of cash distributions of $0.9 million. Net cash provided by financing activities in the first quarter of 2024 primarily consisted of $147.8 million drawn down from the sale and leaseback financing arrangements, slightly offset by repayments on the sale and leaseback financings of $3.4 million, payment of deferred financing costs of $1.2 million and payments of cash distributions of $0.4 million.
Liquidity and Financing
As of March 31, 2025, the Company had cash and cash equivalents of $27.0 million and $10.0 million available to draw down under the Drew facility. In the first quarter of 2025, the Company drew down $6.0 million from the Drew facility which was fully repaid before March 31, 2025.
As of March 31, 2025, cash and cash equivalents included $12.3 million which the Company is required to maintain as minimum cash balance for all eight vessels under the sale and leaseback arrangements with CCB Financial Leasing Company Limited and Jiangsu Financial Leasing Co. Ltd.
All of our vessels have been financed by Chinese leasing houses at a fixed bareboat rate with a maturity of seven years from the delivery of each vessel. This gives the Company a fixed financing cost for our vessels until the maturity of their respective leases.
Repayments on the financing for the installation of the scrubbers on the first four vessels delivered to us is expected to conclude by the first quarter of 2026. After repayment of this financing for the scrubbers, the Company’s cash break-even will be reduced by approximately $800 per day.
In March 2025, the Company issued 2,650,000 common shares of par value $1.00 each in a private placement at a price of $5.73 per share, raising net proceeds of $14.8 million. Net proceeds from the private placement were used and will be used for general corporate purposes.
Commercial Update
In the first quarter of 2025, the Company achieved average TCE earnings, gross of approximately $21,100 per day, including average daily scrubber and LNG benefits of approximately $1,600 per day. This is equivalent to a 62% premium to the Capesize index.
In addition, in the first quarter of 2025, the Company’s vessels trading on index-linked time charters earned approximately $20,500 per day, gross, including average daily scrubber and LNG benefits. The Company’s vessels trading on fixed rate time charters earned approximately $30,100 per day, gross.
The Baltic 5TC Capesize Index averaged $12,998 per day in the first quarter of 2025.
Fleet Status
The table below sets forth information about our fleet and charters.
| Vessel name | Built | Type | 2026 | 2027 | 2028 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q2 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | |||||||
| Mount Norefjell | 2023 | DF Newcastlemax | 32,0001 | Index | |||||||||||||
| Mount Ita | 2023 | DF Newcastlemax | Index | ||||||||||||||
| Mount Etna2 | 2023 | DF Newcastlemax | Index2 | ||||||||||||||
| Mount Blanc | 2023 | DF Newcastlemax | Index2 | ||||||||||||||
| Mount Matterhorn | 2023 | DF Newcastlemax | Index | ||||||||||||||
| Mont Neblina | 2023 | DF Newcastlemax | Index2 | ||||||||||||||
| Mount Bandeira | 2024 | DF Newcastlemax | Index2 | ||||||||||||||
| Mount Hua | 2024 | DF Newcastlemax | 31,5001 | Index2 | |||||||||||||
| Mount Elbrus | 2024 | DF Newcastlemax | Index | ||||||||||||||
| Mount Denali | 2024 | DF Newcastlemax | Index2 | ||||||||||||||
| Mount Aconcagua | 2024 | DF Newcastlemax | Index | ||||||||||||||
| Mount Emai | 2024 | DF Newcastlemax | Index |
All values are in US Dollars.
| Option | Available |
|---|
1 These vessels will continue to earn scrubber premium according to the terms of the existing time charter agreements
2 Evergreen structure
Market Commentary
The Baltic 5TC Capesize index as of May 20, 2025 stands at $15,454 having averaged $13,954 year to date, a decrease from $23,301 during the same period in 2024.
Following a weak overall Capesize demand (measured in ton miles) in the fourth quarter of 2024, mostly relating to coal, with a decrease of 4.3% in the fourth quarter of 2024, we have seen improvement to a 1.8% decrease in the first quarter of 2025.
China has continued to import iron ore throughout the first quarter, however due to the wet season in Brazil and two large cyclones hitting export terminals in Australia, the total iron ore imports are down 7% year-on-year.
Growth in vessel supply for large bulk carriers is still anticipated to be moderate in the coming years with a current Capesize fleet at 402 million dwt compared to 396 million dwt this time last year (1.5% increase). In the first quarter of 2025, 0.8 million dwt was ordered compared to 4.2 million dwt in the first quarter of 2024, and 0.18 million dwt has been scrapped so far in 2025.
Following the existing orders of Newcastlemax vessels, available newbuilding berths with delivery before the second half of 2028 are expected to be limited. Current newbuilding costs for a dual-fuel Newcastlemax in China are believed to be approximately $95 million.
We continue to see potential upside to the future development in the Capesize market from current levels in the event of continued strong exports of iron ore and bauxite from Brazil and West Africa. The Simandou project in Guinea is reported to be advancing at a good pace, with the first shipment being expected in 2025 with an expected 24-month ramp-up to 60 million tons per annum for phase 1, and an additional 60 million tons per annum for phase 2. In addition, Vale has indicated that it is targeting a 50 million tons per annum increase in capacity by 2026 from Vargem Grande, Capanema and the S11D mine.
Key downside risks to the Capesize market include a potential slowdown in the Chinese economy and geopolitical tensions. Although we are not directly impacted by the tariffs and tolls recently announced by the U.S. administration, we are closely monitoring the Panamax and Supramax segments, as trends in the market for smaller dry bulk vessels has historically had an impact on the market for Capesize and Newcastlemax vessels.
The weak Panamax market posed challenges for coal transport on Capesize and Newcastlemax vessels in the fourth quarter of 2024. However, we observed a positive ton-mile development in the Capesize and Newcastlemax segments, improving from a 4.3% decrease in the fourth quarter of 2024 to a 1.8% decrease in the first quarter of 2025, with more coal now being transported on larger vessels. A potential ceasefire and resumption of cargo volumes from Ukraine and Russia would be expected to positively impact ton-mile demand, driven by increased coal imports to Ukraine and iron ore exports from Ukraine.
Capesize Fleet Development
The current order book for Capesize dry bulk vessels currently stands at 7.9% of the existing fleet, up from 6.5% in January 2024.
14.2 million dwt was ordered in 2024 and only 0.8 million dwt has been ordered so far in 2025.
Operational Update
In the first quarter of 2025, our fleet had 1,080 operational days, and a utilization rate of 99.9% of our vessels.
Outlook
Approximately 146 large bulk carriers are scheduled for delivery before 2028, and we anticipate a significant number of vessels will require dry docking in the coming years. In 2025, about 23% of the total Capesize fleet, ranging from 159,000 dwt to 211,000 dwt, will be due for dry dock or Special Surveys, compared to 13.6% in 2024. Based on the current order book, the fleet is projected to grow by only 2.2% in 2025, taking account of the upcoming dry dock schedule. As of January 2025, approximately 100 Capesize vessels were 20 years old or older, contributing to an increasing average fleet age.
The trend of ton mile-intensive trades of raw materials sourced from the Atlantic basin to meet demand in the Far East is expected to continue. Iron ore from Brazil and Guinea typically involves sailing distances three times longer than those from the Pacific basin. To illustrate, a potential incremental iron ore supply of 170 million tonnes per year from Guinea and Brazil could necessitate approximately 250 additional Capesize equivalent ships. Furthermore, the bauxite trade continues to grow rapidly.
Himalaya Shipping has the most modern Newcastlemax fleet owned by a listed company in the industry. With no planned reinvestment needs for the fleet and a strong focus on capital discipline, we anticipate that most of the excess cash flows generated above the cash breakeven point will be returned to shareholders through monthly dividends.
The dual fuel LNG capability of our vessels means that, when a vessel is running on LNG, the CO2 emissions are reduced to more than half compared to a standard Capesize index ship. It is estimated that approximately 200 MTPA, equivalent to a 40% increase in new LNG liquefaction capacity is coming by 2028, which could lead to lower LNG prices, and potentially give us an additional fuel benefit vs running ships on VLSFO or HFO. This should provide benefits to the environment, charterer and owner.
Forward looking statements
This press release and any related discussions contain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not reflect historical facts and may be identified by words such as “aim”, “believe,” “assuming,” “anticipate,” “could”, “expect”, “intend,” “estimate,” “forecast,” “project,” “likely to,” “due to,” “plan,” “potential,” “will,” “may,” “should,” “potential” or other similar expressions and include statements about plans, objectives, goals, strategies, future events or performance, including outlook, prospects, statements about the benefits of our vessels, including reduced emissions when running on LNG, the terms of our charters and chartering activity including the information under “Fleet status”, dry bulk industry trends and market outlook, including market conditions and activity levels in the industry, expected demand for vessels and expected drivers of demand including projects and expected output of projects and timing and expected additional shipping capacity required for projects such as those in Guinea and Brazil and underlying assumptions, utilization of the global fleet and our fleet, expected trends in the global fleet including expected supply of new vessels in the coming years and expected cost of newbuilds, yard capacity, our breakeven point, statements about our capital strategy, dividend objectives, expectations and plans, statements made in the sections above entitled “Subsequent events,” “Market commentary,” and “Outlook,” including expected trends in vessel supply and trends in the global fleet, including expected drydocking, statements under Note 1 of the Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2025 included herein, and other non-historical statements. These forward-looking statements are not statements of historical fact and are based upon current estimates, expectations, beliefs, and various assumptions, many of which are based, in turn, upon further assumptions, and a number of such assumptions are beyond our control and are difficult to predict. These statements involve significant risks, uncertainties, contingencies and factors that are difficult or impossible to predict and are beyond our control, and that may cause our actual results, performance or achievements to be materially different from what is expressed, implied or forecasted in such forward-looking statements including:
•general economic, political and business conditions;
•general dry bulk market conditions, including fluctuations in charter hire rates and vessel values;
•our ability to achieve charter rates above our break-even rate;
•changes in demand in the dry bulk shipping industry, including the market for our vessels;
•demand for the products our vessels carry and the status of projects, and timing and number of production of projects that produce iron ore and other products we ship;
•changes in the supply of dry bulk vessels;
•our ability to successfully re-employ our dry bulk vessels at the end of their current charters and the terms of future charters;
•changes in our operating expenses, including fuel or bunker prices, dry docking and insurance costs;
•compliance with, and our liabilities under, governmental, tax, environmental and safety laws and regulations;
•changes in governmental regulation, tax and trade matters and actions taken by regulatory authorities;
•potential disruption of shipping routes due to accidents, hostilities or political events;
•our ability to refinance our debt as it falls due;
•fluctuations in foreign currency exchange rates;
•potential conflicts of interest involving members of our board and management and our significant shareholder;
•our ability to pay dividends and the amount of dividends we ultimately pay;
•risks related to climate change, including climate-change or greenhouse gas related legislation or regulations and the impact on our business from climate-change related physical changes or changes in weather patterns, and the potential impact of new regulations relating to climate change, as well as the impact of the foregoing on the performance of our vessels;
•other factors that may affect our financial condition, liquidity and results of operations; and
•other risks described under "Item 3. Key Information - D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission on March 26, 2025.
You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Himalaya Shipping undertakes no and expressly disclaims any obligation to update publicly any forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as required by law.
About Himalaya Shipping Ltd.
Himalaya Shipping Ltd. is an independent bulk carrier company, incorporated in Bermuda. Himalaya Shipping has twelve vessels in operation.
May 22, 2025
The Board of Directors
Himalaya Shipping Ltd.
Hamilton, Bermuda
Questions should be directed to:
Lars-Christian Svensen: Contracted CEO, +47476 38756
APPENDIX
UNAUDITED NON GAAP MEASURES AND RECONCILIATIONS
Average TCE earnings, gross is a non-U.S. GAAP measure of the average daily revenue performance of a vessel. We believe average TCE revenues provide additional meaningful information for investors to analyze our fleets’ daily income performance. Set forth below is a reconciliation of average TCE earnings, gross to total operating revenues for the periods presented.
| In thousands, except per day and number of days | Three months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| March 31, 2024 | Change | % Change | ||||||
| Total operating revenues | 21,973 | 23,581 | (1,608) | (7) | % | |||
| Add: Address commissions | 788 | 840 | (52) | (6) | % | |||
| Total operating revenues, gross | 22,761 | 24,421 | (1,660) | (7) | % | |||
| Fleet operational days | 1,080 | 798 | 282 | 35 | % | |||
| Average TCE earnings, gross | 21,100 | 30,600 | (9,500) | (31) | % |
All values are in US Dollars.
We present Adjusted EBITDA because we believe this measure increases comparability of total business performance from period to period and against the performance of other companies by removing the impact of depreciation and amortization, total financial expenses, net, income from equity method investment and income tax. Set forth below is a reconciliation of Adjusted EBITDA to net income for the periods presented.
| Three months ended | |||||
|---|---|---|---|---|---|
| In $ thousands | March 31, 2025 | March 31, 2024 | Change | % Change | |
| Net income (loss) | (6,374) | 2,492 | (8,866) | (356) | % |
| Depreciation | 7,296 | 5,430 | 1,866 | 34 | % |
| (Income) from equity method investment | (4) | — | (4) | 100 | % |
| Total financial expenses, net | 12,886 | 8,925 | 3,961 | 44 | % |
| Income tax | — | — | — | — | % |
| Adjusted EBITDA | 13,804 | 16,847 | (3,043) | (18) | % |
Non-GAAP financial measures may not be comparable to similarly titled measures of other companies and have limitations and should not be considered in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP.
Document
INTERIM FINANCIAL INFORMATION
FIRST QUARTER 2025
Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Operations
(In $ thousands except share and per share data)
| Notes | Three months ended March 31, 2025 | Three months ended March 31, 2024 | |
|---|---|---|---|
| Operating revenues | |||
| Time charter revenues | 8 | 21,973 | 23,581 |
| Total operating revenues | 21,973 | 23,581 | |
| Operating expenses | |||
| Vessel operating expenses | (6,900) | (4,928) | |
| Voyage expenses and commissions | (179) | (334) | |
| General and administrative expenses | (1,090) | (1,472) | |
| Depreciation | 11 | (7,296) | (5,430) |
| Total operating expenses | (15,465) | (12,164) | |
| Operating income | 6,508 | 11,417 | |
| Income (loss) from equity method investment | 10 | 4 | — |
| Financial income (expenses), net | |||
| Interest income | 177 | 193 | |
| Interest expense, net of amounts capitalized | 7 | (13,032) | (9,133) |
| Other financial (expenses) income, net | (31) | 15 | |
| Total financial expenses, net | (12,886) | (8,925) | |
| Net (loss) income before income tax | (6,374) | 2,492 | |
| Income tax expense | 5 | — | — |
| Net (loss) (loss) income attributable to shareholders of Himalaya Shipping Ltd. | (6,374) | 2,492 | |
| Total comprehensive (loss) income attributable to shareholders of Himalaya Shipping Ltd. | (6,374) | 2,492 | |
| Basic and diluted (loss) earnings per share | 6 | (0.14) | 0.06 |
Himalaya Shipping Ltd.
Unaudited Consolidated Balance Sheets
(In $ thousands except share and per share data)
| Notes | March 31, 2025 | December 31, 2024 | |
|---|---|---|---|
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 26,990 | 19,369 | |
| Trade receivables | 710 | 1,249 | |
| Prepaid expenses and other current assets | 9 | 7,371 | 6,180 |
| Total current assets | 35,071 | 26,798 | |
| Non-current assets | |||
| Equity method investments | 10 | 343 | 324 |
| Vessels and equipment, net | 11 | 845,683 | 852,979 |
| Total non-current assets | 846,026 | 853,303 | |
| Total assets | 881,097 | 880,101 | |
| LIABILITIES AND SHAREHOLDER’S EQUITY | |||
| Current liabilities | |||
| Current portion of long-term debt | 13 | 24,374 | 24,304 |
| Trade payables | 1,942 | 821 | |
| Accrued expenses | 12 | 6,689 | 7,229 |
| Other current liabilities | 1,980 | 3,445 | |
| Total current liabilities | 34,985 | 35,799 | |
| Non-current liabilities | |||
| Long-term debt | 13 | 683,563 | 689,583 |
| Total non-current liabilities | 683,563 | 689,583 | |
| Total liabilities | 718,548 | 725,382 | |
| Shareholders’ Equity | |||
| Common shares of par value $1.00 per share: authorized 140,010,000 (2024: 140,010,000) shares, issued and outstanding 46,550,000 (2024: 43,900,000) shares | 17 | 46,550 | 43,900 |
| Additional paid-in capital | 17 | 26,666 | 14,454 |
| Contributed surplus | 17 | 76,146 | 76,804 |
| Retained earnings | 13,187 | 19,561 | |
| Total shareholders’ equity | 162,549 | 154,719 | |
| Total liabilities and shareholders’ equity | 881,097 | 880,101 |
Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Cash Flows
(In $ thousands except share and per share data)
| Note | Three months ended March 31, 2025 | Three months ended March 31, 2024 | |
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Net (loss) income | (6,374) | 2,492 | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
| Non-cash compensation expense related to stock options | 43 | 126 | |
| Depreciation of vessels | 11 | 7,296 | 5,430 |
| Amortization of deferred finance charges | 660 | 505 | |
| Equity in net income on equity method investment | 10 | (4) | — |
| Change in assets and liabilities: | |||
| Accounts receivable | 539 | (483) | |
| Accounts payable | 1,120 | (394) | |
| Accrued expenses | (320) | 3,590 | |
| Other current and non-current assets | (1,190) | (340) | |
| Other current liabilities | (1,464) | 246 | |
| Net cash provided by operating activities | 306 | 11,172 | |
| Cash Flows from Investing Activities | |||
| Additions to newbuildings | — | (153,812) | |
| Net cash used in investing activities | — | (153,812) | |
| Cash Flows from Financing Activities | |||
| Proceeds from issuance of common shares, net of paid issuance costs | 17 | 14,804 | — |
| Proceeds from issuance of long-term and short-term debt (net of deferred finance charges paid to lender) | 13 | — | 147,850 |
| Other deferred finance charges paid | 13 | — | (1,148) |
| Drawdown of short term debt | 16 | 6,000 | — |
| Repayment of long-term and short-term debt | 13, 16 | (12,611) | (3,449) |
| Payment of cash distributions | (878) | (439) | |
| Net cash provided by financing activities | 7,315 | 142,814 | |
| Net increase in cash and cash equivalents | 7,621 | 174 | |
| Cash and cash equivalents at the beginning of the period | 19,369 | 25,553 | |
| Cash and cash equivalents at the end of the period | 26,990 | 25,727 |
| Supplementary disclosure of cash flow information | Three months ended March 31, 2025 | Three months ended March 31, 2024 |
|---|---|---|
| Interest paid, net of capitalized interest | (12,446) | (5,641) |
Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Changes in Shareholders' Equity
(In $ thousands except share and per share data)
| Number of outstanding shares | Common shares | Additional paid in capital | Contributed surplus | Retained earnings/(Accumulated deficit) | Total equity | |
|---|---|---|---|---|---|---|
| Balance as of December 31, 2023 | 43,900,000 | 43,900 | 111,788 | — | (1,483) | 154,205 |
| Transfer to contributed surplus | — | (97,876) | 97,876 | — | — | |
| Share based compensation | — | 126 | — | — | 126 | |
| Cash distributions to shareholders | — | — | (1,756) | — | (1,756) | |
| Total comprehensive income | — | — | — | 2,492 | 2,492 | |
| Balance as of March 31, 2024 | 43,900,000 | 43,900 | 14,038 | 96,120 | 1,009 | 155,067 |
| Number of outstanding shares | Common shares | Additional paid in capital | Contributed surplus | Retained earnings | Total equity | |
| Balance as of December 31, 2024 | 43,900,000 | 43,900 | 14,454 | 76,804 | 19,561 | 154,719 |
| Issuance of common shares | 2,650,000 | 2,650 | 12,476 | — | — | 15,126 |
| Equity issuance costs | — | (322) | — | — | (322) | |
| Share based compensation | — | 58 | — | — | 58 | |
| Cash distributions to shareholders | — | — | (658) | — | (658) | |
| Total comprehensive income (loss) | — | — | — | (6,374) | (6,374) | |
| Balance as of March 31, 2025 | 46,550,000 | 46,550 | 26,666 | 76,146 | 13,187 | 162,549 |
Himalaya Shipping Ltd.
Condensed Notes to the Unaudited Consolidated Financial Statements
Note 1 - General Information
Himalaya Shipping Ltd. was incorporated in Bermuda on March 17, 2021. We are listed on the New York Stock Exchange under the ticker HSHP and the Euronext Expand, operated by the Oslo Stock Exchange, under the ticker HSHP. Himalaya Shipping Ltd. was founded for the purpose of owning high-quality Newcastlemax dry bulk vessels, each with capacity in the range of 210,000 dead weight tons (“dwt”) which are equipped with the latest generation dual fuel LNG technology. As of March 31, 2025, we have a total of twelve vessels in operation. The Company has entered into sale and leaseback financing arrangements for its vessels which are described in Note 13.
As used herein, and unless otherwise required by the context, the term “Himalaya Shipping” refers to Himalaya Shipping Ltd. and the terms “Company”, “we”, “Group”, “our” and words of similar import refer to Himalaya Shipping and its consolidated companies. The use herein of such terms as “group”, “organization”, “we”, “us”, “our” and “its” or references to specific entities, is not intended to be a precise description of corporate relationships.
Going Concern
The unaudited consolidated financial statements have been prepared on a going concern basis.
Note 2 - Basis of Preparation and Accounting Policies
Basis of preparation
The unaudited consolidated financial statements are stated in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The unaudited consolidated financial statements do not include all of the disclosures required under U.S. GAAP in the annual consolidated financial statements and should be read in conjunction with our audited annual financial statements for the year ended December 31, 2024, which are included in our Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 26, 2025. The Unaudited Consolidated Balance Sheet data for December 31, 2024 was derived from our audited annual financial statements. The amounts are presented in thousands of United States dollars ("U.S. dollar" or "$"), unless otherwise stated. The financial statements have been prepared on a going concern basis and in management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2025, and its results of operations and cash flows for the three months ended March 31, 2025 and 2024.
Significant accounting policies
The accounting policies adopted in the preparation of the Unaudited Consolidated Financial Statements for the three months ended March 31, 2025 are consistent with those followed in preparation of our annual audited consolidated financial statements for the year ended December 31, 2024.
Note 3 - Recently Issued Accounting Standards
Adoption of new accounting standards
In November 2023, the FASB issued ASU 2023-07 (Topic 280 Segment Reporting): Improvements to Reportable Segment Disclosures requiring disclosure of incremental segment information for all public entities. including but not limited to: significant segment expenses that are regularly provided to the chief operating decision maker (CODM), the title and position of the CODM and how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and making decisions about how to allocate resources. ASU 2023-07 became effective for the interim period ended March 31, 2025. We have applied the amendments required to the
quarter ended March 31, 2025 and retrospectively to all previous periods presented in the financial statements. Adoption of ASU 2023-07 resulted in additional segment disclosures as shown in note 4 - Segment.
In December 2023, the FASB issued ASU 2023-09 (Topic 740 Income Taxes): Improvements to Income Tax Disclosures requiring annual disclosure of (1) specific categories in the rate reconciliation; and (2) additional information for reconciling items if the effect of those reconciling items is equal to or greater than 5% of the resulting amount by multiplying pretax income (or loss) by the applicable statutory income tax rate. An entity is also required to provide the nature, effect and underlying causes of the reconciling items, and the judgment used in categorizing them, if not otherwise evident. The amendments have no impact on our unaudited consolidated financial statements for the quarter ended March 31, 2025 as the disclosures are required for annual periods beginning after December 15, 2024. Effect of the adoption on our annual consolidated financial statements are currently under evaluation.
In March 2024, the FASB issued ASU 2024-02: Codification Improvements for amendments to remove references to the concepts statements that were either (i) extraneous and not required to understand or apply the guidance, or (ii) used in prior statements to provide guidance in certain topics. The amendments have no impact on our unaudited consolidated financial statements for the quarter ended March 31, 2025.
Accounting pronouncements that have been issued but not yet adopted
The following table provides a brief description of other recent accounting standards that have been issued but not yet adopted as of March 31, 2025:
| Standard | Description | Date of adoption | Expected Effect on our Consolidated Financial Statements or Other Significant Matters |
|---|---|---|---|
| ASU 2024-03 Income Statement - Reporting comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses | The amendments require disclosure of the amounts of below 5 categories included in each relevant expense caption: <br><br>(a) purchase of inventory;<br>(b) employee compensation;<br>(c) depreciation;<br>(d) intangible asset amortization; and<br>(e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities.<br><br>A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations. <br><br>The amendment also requires disclosure of the qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively. In addition, disclosure of the entity’s definition of selling expenses and its total amount are required. | January 1, 2027 | Under evaluation |
| ASU 2025-01 Income Statement - Reporting comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date | The amendment in this Update amends the effective date of Update 2024-03 to clarify that all public business entities are required to adopt the guidance in <br>annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. | January 1, 2027 | Under evaluation |
The FASB have issued further updates not included above as we do not believe that these are applicable to the Company.
Note 4 - Segment
We have one reportable segment as our chief operating decision maker (“CODM”), being our Board of Directors, measures performance based on our overall return to shareholders based on consolidated net income as reported in our Unaudited Consolidated Statements of Operations. The CODM does not review a measure of operating result at a lower level than the consolidated group. The measure of segment assets is reported on the Unaudited Consolidated Balance Sheets as total consolidated assets. The CODM reviews quarterly variances of consolidated net income and total consolidated assets, short-term and long-term market trends and cash flow forecasts in making resource allocation decisions.
Segment revenue, profit and significant segment expenses are as follows:
| (in thousands of $) | Three months ended March 31, 2025 | Three months ended March 31, 2024 |
|---|---|---|
| Total operating revenues | 21,973 | 23,581 |
| Less: | ||
| Crew costs | (3,842) | (2,850) |
| Other vessel operating expenses(1) | (3,058) | (2,078) |
| Voyage expenses and commissions | (179) | (334) |
| General and administrative expenses(2) | (1,090) | (1,472) |
| Depreciation | (7,296) | (5,430) |
| Income from equity method investment | 4 | — |
| Interest income | 177 | 193 |
| Interest expense, net of amounts capitalized | (13,032) | (9,133) |
| Other financial income (expenses), net | (31) | 15 |
| Income tax (expenses) | — | — |
| Segment and consolidated net income (loss) | (6,374) | 2,492 |
(1) Other vessel operating expenses include repairs and maintenance, spares, stores and consumables, lubricating oil, vessel insurance, services and subscriptions, and vessel management fees.
(2) General and administrative expenses include directors and officers’ insurance, management fees, audit and accounting fees, administrative salaries, directors’ fees, legal fees, listing fees, share based compensation costs, and other administrative expenses.
Note 5 - Income Taxes
Bermuda
Himalaya Shipping Ltd. is incorporated in Bermuda. Under current Bermuda law, the Company is not required to pay taxes in Bermuda on either income or capital gains. Himalaya Shipping Ltd. has received written assurance from the Minister of Finance in Bermuda that, in the event of any such taxes being imposed, the Company will be exempted from taxation until March 31, 2035.
On December 27, 2023, Bermuda enacted the Corporate Income Tax Act (the “CIT Act”). Entities subject to tax under the CIT Act are the Bermuda constituent entities of multi-national groups. A multi-national group is defined under the CIT Act as a group with entities in more than one jurisdiction with consolidated revenues of at least €750 million for two out of the last four fiscal years. If Bermuda constituent entities of a multi-national group are subject to tax under the CIT Act, for taxable years beginning on or after January 1, 2025, Bermuda will impose a 15% corporate income tax, as determined in accordance with and subject to the adjustments set out in the CIT Act (including in respect of foreign tax credits applicable to the Bermuda constituent entities).
While we have a tax-exempt status in Bermuda until March 31, 2035, Bermuda specifically provided that the CIT Act applies notwithstanding any assurance given pursuant to the Exempted Undertakings Tax Protection Act 1966 (the “EUTP Act”). Based on a number of operational, economic and regulatory assumptions, we do not expect to have consolidated revenue sufficient for us to fall within scope of the CIT Act in the near future. We will monitor the developments on the Bermuda internal regulations with regard to the CIT Act implementation. To the extent our consolidated revenue is sufficient for us to be within the CIT Act thresholds, we may be subject to taxation in Bermuda.
Liberia
The companies operating the vessels are not subject to tax on international shipping income.
United Kingdom
Taxable income in the United Kingdom is generated by our UK subsidiary. The statutory tax rate in the United Kingdom as of March 31, 2025 was 25%.
Note 6 - Earnings Per Share
The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares outstanding during the period. The assumed conversion of potentially dilutive instruments which are 735,000 share options outstanding as at March 31, 2024 did not have an impact on our weighted average number of shares outstanding used in calculating diluted EPS. Diluted loss per share excludes the potential effect of conversion of the 800,000 share options outstanding as of March 31, 2025 as the share options were anti-dilutive.
| (in $ thousands except share and per share data) | Three months ended March 31, 2025 | Three months ended March 31, 2024 |
|---|---|---|
| Basic earnings (loss) per share | (0.14) | 0.06 |
| Diluted earnings (loss) per share | (0.14) | 0.06 |
| Net income (loss) | (6,374) | 2,492 |
| Issued common shares at the end of the period | 46,550,000 | 43,900,000 |
| Weighted average number of shares outstanding for the period, basic | 44,223,889 | 43,900,000 |
| Dilutive impact of share options | — | — |
| Weighted average number of shares outstanding for the period, diluted | 44,223,889 | 43,900,000 |
Note 7 - Interest Expense
| (in $ thousands ) | Three months ended March 31, 2025 | Three months ended March 31, 2024 |
|---|---|---|
| Interest expense, gross | 13,032 | 10,406 |
| Capitalized interest on newbuildings | — | (1,273) |
| Interest expense, net | 13,032 | 9,133 |
Note 8 - Operating Leases
Rental income
The components of operating lease income are as follows:
| (in $ thousands ) | Three months ended March 31, 2025 | Three months ended March 31, 2024 |
|---|---|---|
| Time charter revenues | 21,973 | 23,581 |
Time charter revenues on our index-linked charters were $20.2 million and $8.5 million in the three months ended March 31, 2025 and 2024, respectively.
Note 9 - Prepaid expenses and other current assets
| December 31, 2024 | |
|---|---|
| (in thousands) | |
| Prepaid interest(1) | 2,286 |
| Other prepaid expenses(2) | 1,329 |
| Inventory | 1,505 |
| Other current assets(3) | 1,060 |
| Total | 6,180 |
All values are in US Dollars.
(1) Prepaid interest pertains to interest paid in advance for “Mount Norefjell”, “Mount Ita”, “Mount Etna” and “Mount Blanc”. Bareboat payments on the lease for these vessels were paid in advance.
(2) Other prepaid expenses are comprised primarily of prepaid operating expenses, prepaid insurance and cash advance to crew for delivered vessels.
(3) Other current assets mainly relate to funding advanced to vessel managers.
Note 10 - Equity method investment
The table below sets forth the carrying value of our equity method investment:
| (in thousands) |
| Opening balance |
| Share options expense to employees of acquiree (1) |
| Equity in net earnings (loss) |
| Closing balance |
All values are in US Dollars.
(1) This pertains to 40% of the share options granted by the Company to employees of 2020 Bulkers Management AS (“2020 Bulkers Management”).
In August 2024, we acquired 12,000 shares in 2020 Bulkers Management for a total consideration of $0.3 million (NOK 3.2 million). The acquisition amount represents 40% of the issued shares of 2020 Bulkers Management. As the Company has the ability to exercise significant influence, we have accounted for our investment in 2020 Bulkers Management as an equity method investment.
Note 11 - Vessels and Equipment, net
| (in thousands) |
| Cost |
| As of January 1, 2025 |
| Additions |
| As of March 31, 2025 |
All values are in US Dollars.
| (in thousands) |
| Depreciation |
| As of January 1, 2025 |
| Charge for the period |
| As of March 31, 2025 |
All values are in US Dollars.
| Net book value as of March 31, 2025 | 845,683 |
|---|
During the three months ended March 31, 2025, we considered whether indicators of impairment existed that could indicate that the carrying amounts of our vessels may not be recoverable as of March 31, 2025 and concluded that no such indicators existed. We will continue to monitor developments in the markets in which we operate for indications that the carrying values of our long-lived assets are not recoverable.
Note 12 - Accrued expenses
Accrued expenses comprise of:
| December 31, 2024 | |
|---|---|
| (in thousands) | |
| Accrued interest(1) | 5,411 |
| Accrued operating expenses | 764 |
| Dividend payable(2) | 439 |
| Other accrued expenses(3) | 615 |
| Total | 7,229 |
All values are in US Dollars.
(1) Accrued interest pertains to unpaid interest on the sale and leaseback facilities for “Mount Bandeira”, “Mount Elbrus”, “Mount Hua”, “Mount Matterhorn”, “Mount Neblina”, “Mount Denali”, “Mount Aconcagua” and “Mount Emai”. Bareboat payments on the leases for these vessels are paid in arrears.
(2) In March 2025, the Board approved a cash distribution of $0.005 per share to shareholders of record as of March 19, 2025 which was paid in April 2025.
(3) Other accrued expenses include accruals for commissions, audit fees, legal fees and management fees.
Note 13 - Debt
| December 31, 2024 | |
|---|---|
| (in thousands) | |
| Total debt, net of deferred finance charges | 713,887 |
| Less: Current portion of long-term debt, net of deferred finance charges | (24,304) |
| Long-term debt, net of deferred finance charges | 689,583 |
All values are in US Dollars.
| December 31, 2024 | |
|---|---|
| (in thousands) | |
| Vessel financing (Mount Norefjell) | 58,810 |
| Vessel financing (Mount Ita) | 58,814 |
| Vessel financing (Mount Etna) | 59,346 |
| Vessel financing (Mount Blanc) | 59,253 |
| Vessel financing (Mount Matterhorn) | 60,495 |
| Vessel financing (Mount Neblina) | 60,494 |
| Vessel financing (Mount Bandeira) | 61,535 |
| Vessel financing (Mount Hua) | 61,535 |
| Vessel financing (Mount Elbrus) | 61,535 |
| Vessel financing (Mount Denali) | 62,025 |
| Vessel financing (Mount Aconcagua) | 62,024 |
| Vessel financing (Mount Emai) | 62,024 |
| Total debt, gross | 727,890 |
| Less: Deferred finance charges | (14,003) |
| Total debt, net of deferred finance charges | 713,887 |
All values are in US Dollars.
The outstanding debt, gross of deferred finance charges, as of March 31, 2025, is repayable as follows:
| Year ending December 31 |
|---|
| (in thousands) |
| 2025 (remaining nine months) |
| 2026 (1) |
| 2027 |
| 2028 |
| 2029 |
| Thereafter |
| Total |
| Deferred finance charges |
| Total debt, net of deferred finance charges |
All values are in US Dollars.
(1) $6.7 million repayable in the three months ended March 31, 2026.
AVIC International Leasing Co., Ltd. (“AVIC”) – Sale and leaseback financing arrangements
The Company has entered into sale and leaseback arrangements accounted for as financing transactions. In February 2022, the Company entered into sale and leaseback arrangements with AVIC for its first four newbuildings “Mount Norefjell”, “Mount Ita”, “Mount Etna”, and “Mount Blanc” which have been delivered from New Times Shipyard. Upon delivery of the relevant vessels from New Times Shipyard, the vessels were sold to companies owned and designated by AVIC. The vessels were delivered in 2023 and chartered back on seven-year bareboat charters which include purchase options each year from year 3 until the end of the bareboat period. The first purchase option in year 3 is at a price of $56.9 million and then declines to $47.2 million after year 7.
In February 2023, the sale and leaseback agreements for the first four newbuildings were amended whereby AVIC agreed to finance 90% of the sixth installments on the newbuilding contracts or $2.2 million for each vessel relating to the cost of installing scrubbers on each vessel. This is repayable in advance in 12 quarterly installments of $180,000 for each vessel, together with interest calculated as Overnight SOFR plus a margin of 4.5% and credit adjustment spread of 0.26161% from July 1, 2023.
Under the relevant financing agreements, payment of dividends and making other distributions from each relevant subsidiary to the Company will only be allowed if immediately following such payment or distribution there will be maintained in the bank account an amount no less than the higher of (a) $3.6 million and (b) the aggregate of the bareboat rate under the facility and the operating expenses for the vessels that are payable within the next six months.
The fixed price purchase options and a cash penalty of $25.0 million per vessel for not exercising any of the purchase options under the sale and leaseback transaction results in a failed sale and leaseback and the transaction is accounted for as a financing transaction.
The carrying value of Vessels and equipment financed by AVIC is $270.1 million and $272.4 million as of March 31, 2025 and December 31, 2024, respectively. The amount outstanding under the sale and leaseback financing arrangements was $233.7 million and $236.2 million as of March 31, 2025 and December 31, 2024, respectively.
CCB Financial Leasing Co., Ltd. (“CCBFL”) – Sale and leaseback financing arrangements
In April 2022, the Company entered into sale and leaseback arrangements with CCBFL for newbuildings “Mount Matterhorn”, “Mount Neblina”, “Mount Bandeira”, “Mount Hua”, “Mount Elbrus”, “Mount Denali”, “Mount Aconcagua” and “Mount Emai” to be delivered from New Times Shipyard. In December 2022, the Company, CCBFL and Jiangsu entered into novation and assignment agreements for the sale and leaseback arrangements for newbuildings “Mount Bandeira” and “Mount Hua (please refer to section below Jiangsu Financial Leasing Co. Ltd (“Jiangsu”) – Sale and leaseback financing arrangements).” Upon delivery of the relevant vessels from New Times Shipyard, the vessels were sold to companies owned and designated by CCBFL. The financing amount for each of the vessels is the lower of 90% of the newbuilding contract price and $63.0 million. The vessels were chartered back on seven-year bareboat charters which include purchase options each year from year 3 until the end of the bareboat period. The first purchase option in year 3 is $56.0 million declining to $46.0 million after year 7.
The fixed price purchase options under the sale and leaseback transaction results in a failed sale and leaseback and the transaction is accounted for as a financing transaction.
The amount outstanding under the sale and leaseback financing arrangements was $365.6 million and $368.6 million as of March 31, 2025 and December 31, 2024, respectively. The carrying value of vessels and equipment financed by CCBFL was $432.3 million and $436.0 million as of March 31, 2025 and December 31, 2024, respectively.
After 180 days of the delivery of each newbuilding, each subsidiary under the CCBFL sale and leaseback arrangement is required to maintain a minimum cash balance equivalent to the bareboat hire payable within the following three months which amounts to approximately $1.5 million per vessel. As of March 31, 2025, the Company is required to maintain a total minimum cash balance of $9.3 million in the subsidiaries that lease “Mount Matterhorn”, “Mount Neblina”, “Mount Elbrus”, “Mount Denali”, “Mount Aconcagua” and “Mount Emai”, which are included in cash and cash equivalents on the Unaudited Consolidated Balance Sheet as of March 31, 2025 as there are no legal restrictions on the bank account.
Jiangsu Financial Leasing Co. Ltd (“Jiangsu”) – Sale and leaseback financing arrangements
In December 2022, the Company, CCBFL and Jiangsu entered into novation and assignment agreements to transfer and assign all of CCBFL’s rights and obligations to Jiangsu under the corresponding sale and leaseback arrangements for newbuildings “Mount Bandeira” and “Mount Hua”. The novation was accounted for as a debt extinguishment. The transfer was effective in March 2023. The terms under the sale and leaseback arrangements remain unchanged. Upon delivery of the relevant vessels from New Times Shipyard in January 2024, the vessels were sold to companies owned and designated by Jiangsu and chartered back on seven-year bareboat charters, which include purchase options each year from year 3 until the end of the bareboat period. The first purchase option in year 3 is $56.0 million and declines to $46.0 million after year 7.
The fixed price purchase options under the sale and leaseback transaction results in a failed sale and leaseback and the transaction is accounted for as a financing transaction.
The amount outstanding under the sale and leaseback financing arrangements was $122.0 million and $123.1 million as of March 31, 2025 and December 31, 2024, respectively. The carrying value of vessels and equipment financed by Jiangsu was $143.3 million and $144.5 million as of March 31, 2025 and December 31, 2024, respectively.
After 180 days of the delivery of each newbuilding, each subsidiary under the Jiangsu sale and leaseback arrangement is required to maintain a minimum cash balance equivalent to the bareboat hire payable within the following three months which amounts to approximately $1.5 million per vessel. As of March 31, 2025, the Company is required to maintain a total minimum cash balance of $3.0 million in the subsidiaries that lease “Mount Bandeira”, and “Mount Hua”, which are included in cash and cash equivalents on the Unaudited Consolidated Balance Sheet as of March 31, 2025 as there are no legal restrictions on the bank account.
The bareboat rate per day under the sale and leaseback arrangements is fixed for the bareboat period and the average bareboat rate per day for the sale and leaseback arrangements with AVIC, CCBFL and Jiangsu is $16,567. Bareboat payments are paid quarterly in advance under the arrangement with AVIC and quarterly in arrears under the arrangements with CCBFL and Jiangsu. The Company has classified the estimated amortization of the bareboat payments due within twelve months from March 31, 2025 as “Current portion of long-term debt” on the Unaudited Consolidated Balance Sheet.
Drew Holdings Limited. (“Drew”) – Revolving Credit Facility
The Company has a $10.0 million Revolving Credit Facility agreement with Drew, who is a significant shareholder in the Company. Refer to Note 16 - Related Party Transactions for details on the terms of the agreement with Drew.
Note 14 - Financial Instruments
We recognize our fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on reliability of inputs used to determine fair values as follows:
Level 1: Quoted market prices in active markets for identical assets and liabilities.
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
The carrying value and estimated fair value of our financial instruments as of March 31, 2025 and December 31, 2024 were as follows:
| March 31, 2025 | December 31, 2024 | ||||
|---|---|---|---|---|---|
| (in $ thousands) | Hierarchy | Fair Value | Carrying Value | Fair Value | Carrying Value |
| Assets | |||||
| Cash and cash equivalents (1) | Level 1 | 26,990 | 26,990 | 19,369 | 19,369 |
| Liabilities | |||||
| Current portion of long-term debt (2)(3) | Level 2 | 26,960 | 26,960 | 26,913 | 26,913 |
| Long-term debt (2)(3) | Level 2 | 725,494 | 694,320 | 730,659 | 700,977 |
(1) All demand and time deposits and highly liquid, low risk investments with original maturities of three months or less at the date of purchase are considered equivalent to cash. Thus, carrying value is a reasonable estimate of fair value.
(2) Fair value of current portion of long-term debt and long-term debt have been corroborated using discounted cash flow model and market interest rates as of March 31, 2025 and December 31, 2024.
(3) Our debt obligations are recorded at amortized cost in the Unaudited Consolidated Balance Sheets. The amounts presented in the table are gross of deferred finance charges amounting to $13.3 million and $14.0 million as of March 31, 2025 and December 31, 2024, respectively.
The carrying amounts of accounts receivable, funding to vessel managers, accounts payable and accrued expenses approximated their fair values as of March 31, 2025 and December 31, 2024 because of their near term maturity and are classified as Level 1 within the fair value hierarchy.
There have been no transfers between different levels in the fair value hierarchy during the periods presented.
Note 15 - Commitments and Contingencies
| December 31, 2024 | |
|---|---|
| (in thousands) | |
| Book value of vessels secured against long-term loans | 852,979 |
| Total | 852,979 |
All values are in US Dollars.
Contingencies
We may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. A contingent liability will be recognized in the consolidated financial statements only where we believe that a liability will be probable and for which the amounts are reasonably estimable, based upon the facts known prior to the issuance of the financial statements.
Note 16 - Related Party Transactions
Drew and Magni Partners (Bermuda) Ltd.(“Magni”)
Drew is considered a related party due to its significant ownership in the Company and Magni is considered a related party as a result of being an affiliate of Drew. As of March 31, 2025, Drew holds 29.0% of the Company’s outstanding common shares.
In March 2022, the Company entered into a $15.0 million revolving credit facility with Magni. The facility was unsecured and interest-bearing at a rate of LIBOR for the applicable interest periods under the facility, plus a margin of 8% p.a. The Magni revolving credit facility was available to the Company until December 31, 2023 and was to be repaid latest on December 31, 2024. In December 2022, the revolving credit facility was canceled and a new revolving credit facility with Drew was entered into on the same terms.
Effective December 18, 2023, an addendum to the Drew revolving credit facility was executed, decreasing the maximum amount available under the facility from $15.0 million to $10.0 million, and extending the maturity of the facility from December 31, 2024 to December 31, 2025. In addition, the addendum extended the drawdown window to December 31, 2024 and aligned the interest rate with the Term SOFR. The amended facility bears interest for the applicable interest periods under the facility, at a rate of SOFR plus a margin of 8% p.a.
On October 31, 2024, the Company entered into an addendum with Drew in relation to the revolving credit facility to: (i) include a commitment fee of 1% per annum on any undrawn amount from January 1, 2025 to the end of the availability period, (ii) extend the timeframe to drawdown from the facility to December 31, 2025 and the latest repayment date to December 31, 2026, and (iii) change the margin on the Term Secured Overnight Financing Rate (“SOFR”) from 8% to 6.5% per annum.
In the three months ended March 31, 2025, the Company drew down $6.0 million from the revolving credit facility which was fully repaid in the same quarter. Commitment fee of $0.02 million and interest expense of $0.1 million were recognized in the three months ended March 31, 2025.
As of March 31, 2025, the Company has $0.02 million of commitment fee payable to Drew presented under “Trade payables” in the unaudited consolidated balance sheet. The Company has $10.0 million available to draw down from this facility.
Corporate support agreement
The Company’s incorporator and initial, sole shareholder, Magni was the key initiator of the Himalaya project and provided corporate and financial assistance throughout the process, including extensive assistance in connection with obtaining the financing for the installments as well as the private placements. The Company entered into a corporate support agreement with Magni whereby Magni was compensated for its services to the Group since the inception of the Company, and for its key role in identifying and pursuing business opportunities for the Group (the “Corporate Support Agreement”). As Magni indirectly held a controlling interest at the time the Corporate Support Agreement was entered into, the Company has treated the Corporate Support Agreement as a related party agreement. Pursuant to the Corporate Support Agreement, Magni continued to support the Company’s business development through assisting with the pre-financing and post-financing of the Company’s newbuilding program, in finding employment for the vessels, in recruiting suitable individuals to the Company’s organization and with general high-level administrative support. Compensation of $2.7 million was paid in 2023.
2020 Bulkers Management
In February 2023, the Company signed an agreement with 2020 Bulkers Management, replacing a similar management agreement entered into in October 2021. Pursuant to the management agreement, 2020 Bulkers Management provides us with certain operational, commercial and management services. The Company shall pay 2020 Bulkers Management a management fee subject to annual estimates and calculated, based on, among other things, expected activity level of the Company and the expected scope of services to be provided by 2020 Bulkers Management in relation to the Company in the year, and payable quarterly, in four equal tranches. Such management fee shall equal certain costs, based on the sum of (i) the direct payroll costs allocated to the performance of the services under the management agreement, marked-up by a margin of 13%, and (ii) certain shared costs corresponding to infrastructure costs in such year related to the performance of such services. The management fee will be adjusted annually to account for the difference between estimated and actual costs incurred in such year. The management agreement has an indefinite term and can be terminated by either party upon one month’s notice.
Following the acquisition of 40% of the issued shares in 2020 Bulkers Management, 2020 Bulkers Management became a related party from August 29, 2024. Management fee from 2020 Bulkers Management of $0.5 million was recognized in the three months ended March 31, 2025.
As of March 31, 2025, the Company has $0.5 million payable to 2020 Bulkers Management presented under “Trade payables” in the unaudited consolidated balance sheet.
Note 17 - Equity
The authorized share capital of the Company as of March 31, 2025 and December 31, 2024 is $140,010,000 represented by 140,010,000 authorized common shares of par value $1.00 each.
In March 2025, the Company issued 2,650,000 common shares of par value $1.00 each in a private placement at a price of $5.73 per share. Net proceeds from the private placement were used and will be used for general corporate purposes.
The following cash distributions were declared in the three months ended March 31, 2025:
| Declaration date | Amount per share (in $) | Payment date |
|---|---|---|
| January 2025 | 0.005 | February 2025 |
| February 2025 | 0.005 | March 2025 |
| March 2025 | 0.005 | April 2025 |
The above cash distributions were made from the Company's Contributed Surplus account.
Note 18 - Subsequent Events
On April 4, 2025, the Board approved a cash distribution of $0.04 per share for shareholders of record as of April 15, 2025.
In April 2025, the Board approved a grant of 200,000 share options to key human resources. The share options granted have a five-year term and cliff vest three years from the grant date. The exercise price is $7.50 per share and will be reduced by any dividends and cash distributions paid.
On May 7, 2025, the Board approved a cash distribution of $0.025 per share for shareholders of record as of May 20, 2025.
himalayashippingltdq1202
1 Himalaya Shipping – Q1 2025 Results Presentation 22 May 2025
2 Forward looking statements This results presentation and any related discussions, including any related written or oral statements made by us, contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties. Forward-looking statements are statements that do not reflect historical facts and may be identified by words such as “aim”, “believe,” “assuming,” “anticipate,” “could”, “expect”, “intend,” “estimate,” “forecast,” “project,” “likely to,” “due to,” “plan,” “potential,” “will,” “may,” “should,” "indicative," "illustrative," "potential" or other similar expressions and include statements about plans, objectives, goals, strategies, future events or performance, including outlook, prospects, expected cash break-even, illustrative free cash flow per share and earnings potential based on different scenarios and assumptions, the terms of our charters and chartering activity, dry bulk industry trends and market outlook, including market conditions and activity levels in the industry, expected demand for vessels and expected drivers of demand including projects and underlying assumptions, utilization of the global fleet and our fleet, including expected average rates and the information under “Chartering position” and “The supply situation,” fleet growth, vessel orders and order book, expected trends regarding iron ore demand, mandatory dry docking trends and impacts on expected supply of dry bulk vessels and yard capacity, including the information under “Mandatory dry docking to increase in 2025,” replacement needs, statements about our dividend objective and plans,, expectations on demand, and other non-historical statements. These forward-looking statements are not statements of historical fact and are based upon current estimates, expectations, beliefs, and various assumptions, many of which are based, in turn, upon further assumptions, and a number of such assumptions are beyond our control and are difficult to predict. These statements involve significant risks, uncertainties, contingencies and factors that are difficult or impossible to predict and are beyond our control, and that may cause our actual results, performance or achievements to be materially different from what is expressed, implied or forecasted in such forward-looking statements. Numerous factors, risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed, implied or forecasted in the forward-looking statements include but are not limited to: general economic, political and business conditions; general dry bulk market conditions, including fluctuations in charter hire rates and vessel values; our ability to achieve charter rates above our break-even rate; changes in demand in the dry bulk shipping industry, including the market for our vessels; demand for the products our vessels carry and the status of projects, and timing and number of production of projects that produce iron ore and other products we ship; changes in the supply of dry bulk vessels; our ability to successfully re-employ our dry bulk vessels at the end of their current charters and the terms of future charters; changes in our operating expenses, including fuel or bunker prices, dry docking and insurance costs; compliance with, and our liabilities under governmental, tax, environmental and safety laws and regulations; changes in governmental regulation, tax and trade matters and actions taken by regulatory authorities; potential disruption of shipping routes due to accidents or political events; our ability to refinance our debt as it falls due; fluctuations in foreign currency exchange rates; potential conflicts of interest involving members of our board and management and our significant shareholder; our ability to pay dividends and the amount of dividends we ultimately pay; risks related to climate change, including climate-change or greenhouse gas related legislation or regulations and the impact on our business from climate-change related physical changes or changes in weather patterns, and the potential impact of new regulations relating to climate change, as well as the performance of our vessels; other factors that may affect our financial condition, liquidity and results of operations; and other risks described under “Item 3. Key Information — D. Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission on March 26, 2025. The foregoing factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement included in this report should not be construed as exhaustive. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this investor presentation. Except as required by law, Himalaya Shipping undertakes no obligation to update publicly any forward-looking statements after the date of this investor presentation, whether as a result of new information, future events or otherwise. Non-GAAP Financial Measures This presentation contains certain selected financial measures on a basis other than U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA, average TCE earnings, gross, and illustrative free cash flow. Adjusted EBITDA represents our net income plus depreciation of vessels and equipment; total financial expenses, net; (income) from equity method investment; and income tax expense. Adjusted EBITDA is presented here because the Company believes this measure increases comparability of total business performance from period to period and against the performance of other companies. Average TCE earnings, gross, as presented here, represents time charter revenues and voyage charter revenues adding back address commissions and divided by operational days. Average TCE earnings, gross, is presented here because the Company believes this measure provides additional meaningful information for investors to analyse our fleets’ daily income performance. For a reconciliation of Adjusted EBITDA and average TCE earnings, gross, to the most directly comparable financial measures prepared in accordance with US GAAP, please see the section of our preliminary results for the quarter ended March 31, 2025, Appendix entitled “Unaudited Non-GAAP Measures And Reconciliations”. For a discussion of illustrative free cash flow, see slide 10 including the footnotes thereto. We are unable to prepare a reconciliation of illustrative free cash flow without unreasonable efforts.
3 Highlights Q1 2025 Highlights: • Net loss of $6.4 million and Adjusted EBITDA of $13.8 million for the quarter ended March 31, 2025. • Achieved time charter equivalent earnings of approximately $21,100 per day, gross • Entered into a new time charter agreement for Mount Norefjell for 14 to 38 months. The vessel will earn an index linked rate, reflecting a premium to the Baltic 5TC index that is higher than the average premium on our current charters. • Converted the index-linked time charters for Mount Norefjell and Mount Hua to fixed rate charters from April 1, 2025, to December 31, 2025, at $32,000 and $31,500, gross, respectively. • Completed a private placement raising approximately $15 million, issuing 2,650,000 new shares at NOK 60.5 per share. • Cash distributions of $0.005, $0.005 and $0.04 per common share for January, February and March 2025, respectively. Subsequent Events: • Achieved time charter equivalent earnings for April 2025 of approximately $25,800 per day, gross. • Declared a cash distribution of $0.025 per share for April 2025. • On May 20, 2025, the Company applied for an uplisting from Euronext Expand to Euronext Oslo Børs
4 Financial Update
5 Key Financials Q1 2025 Income statement Comments US$ millions, except per share data Q1 2025 Q1 2024 Variance Operating revenues 22.0 23.6 (1.6) Vessel operating expenses (6.9) (4.9) (2.0) Voyage expenses and commission (0.2) (0.4) 0.2 General and administrative expenses (1.1) (1.5) 0.4 Depreciation (7.3) (5.4) (1.9) Total operating expenses (15.5) (12.2) (3.3) Operating profit 6.5 11.4 (4.9) Income (loss) from equity method investment - - - Interest expense (13.0) (9.1) (3.9) Other financial items 0.1 0.2 (0.1) Total financial expense, net (12.9) (8.9) (4.0) Tax expense - - - Net (loss) income (6.4) 2.5 (8.9) Earnings (loss) per share (0.14) 0.06 Adjusted EBITDA 13.8 16.8 (3.0) • Net loss of $6.4 million in Q1 2025 compared to a net income of $2.5 million in Q1 2024. • Operating profit of $6.5 million, a decrease in operating profit by $4.9 million compared to Q1 2024. • Adjusted EBITDA of $13.8 million in Q1 2025, a decrease of $3.0 million compared to Q1 2024. • Decrease in operating revenues of $1.6 million in Q1 2025 compared to Q1 2024 mainly as a result of reduced average TCE, gross from approx. US$30,600/day in Q1 2024 to US$21,100/day in Q1 2025, offset by more operational days, 1,080 in Q1 2025 vs 798 in Q1 2024, due to vessel deliveries in 2024. • Vessel operating expenses of $6.9 million in Q1 2025 compared to $4.9 million in Q1 2024. Average operating expenses of approximately $6,400 per ship per day in Q1 2025 compared to $6,200 in Q1 2024 as well as more operational days in Q1 2025. • Interest expense was $13 million in Q1 2025 reflecting a fixed interest rate of approximately 7% on the sale leaseback financing which matures seven years from each vessel delivery. The interest expense increased compared to Q1 2024 due to draw downs on the sale leaseback financing in connection with vessel deliveries during 2024.
6 Key Financials Q1 2025 Balance Sheet Summary Comments US$ millions March 31, 2025 December 31, 2024 Variance Cash and cash equivalents 27.0 19.4 7.6 Vessels and equipment 845.7 853.0 (7.3) Total assets 881.1 880.1 1.0 Short-term and long-term debt 707.9 713.9 (6.0) Total equity 162.5 154.7 7.8 • Cash of $27.0 million as of March 31, 2025 including minimum cash balance required under the sale leaseback financing of $12.3 million. • Total debt, gross, was $721.3 million as of March 31, 2025 ($707.9 million net of deferred loan costs) down from $727.9 million as of December 31, 2024 ($713.9 million net of deferred loan costs). • Drew facility fully repaid at the end of the first quarter. • Shareholders equity of $162.5 million. The Company raised gross proceeds of approximately $15 million from the private placement completed in March 2025. • Cash flow from operations of 0.3 million in Q1 2025 • Total cash distributions of $0.05 per share declared for January, February and March 2025.
7 Company update
8 Source: Company Data Fleet status report – Current Chartering position Mount Norefjell 2023 DF Newcastlemax Mount Ita 2023 DF Newcastlemax Mount Etna 2023 DF Newcastlemax Mount Blanc 2023 DF Newcastlemax Mount Matterhorn 2023 DF Newcastlemax Mont Neblina 2023 DF Newcastlemax Mount Bandeira 2024 DF Newcastlemax Mount Hua 2024 DF Newcastlemax Mount Elbrus 2024 DF Newcastlemax Mount Denali 2024 DF Newcastlemax Mount Acancagua 2024 DF Newcastlemax Mount Emai 2024 DF Newcastlemax Index Index Index Index Index Index31,500* Index Index Index Q1 Q2 Index Index Q1 Q2 Q3 Q4Q2 Q3 Q4 32,000* Index Dual Fuel Newcastlemax 2027 Q3 Q4 Himalaya Shipping Fleet Status Report Vessel Name Built Type 2025 2026 OptionAvailable Evergreen * + Scrubber
9 Proven Outperformance through Large and Modern Tonnage HSHP TCE vs Peers and Index Source: Fearnleys, Company Data, Shipping Intelligence Peers: GOGL, SBLK, SHIP, GNK, 2020 (reported Cape/Newcastlemax TCE) HSHP avg. premium vs. index ~48% HSHP avg. Premium vs. Peers ~25% 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2q23 3q23 4q23 1q24 2q24 3q24 4q24 1q25 US D P er D ay Baltic 5TC average Average Peer HSHP
10 Solid dividend capacity Illustrative FCF $ per share based on Capesize index rate 1. This information has been prepared for illustrative purposes only and does not represent the Company’s forecast. It is based, among other things, on industry data, internal data and estimates of the Company and is inherently subject to risk and uncertainties. Actual results may differ materially from the assumptions and circumstances reflected in the above illustrative financial information. 2. Assumes BCI5 Index rates + 42% premium (less 5%) commission) + $1,600 in scrubber benefit less $24,900/d in cash breakeven x 12 ships, divided on 46,550,000 shares outstanding 0.0 0.4 1.0 1.6 2.3 2.9 3.5 4.2 4.8 17,206 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000
11 Capital allocation Full alignment between shareholders and management – board and sponsors own ~1/3 of the equity No reinvestment plans – youngest fleet in the industry means limited capital needs Free cash flow after debt service targets to be distributed in monthly dividends 16 consecutive monthly cash distributions Cash-break even of ~$17k/day on Capesize index equivalent vs BCI average 22k last four years
12 Market update
13 Capesize tonne-miles Capesize Daily Billion Ton-mile Development (30dms*) Cape tonne-mile development year on year Q1 *30-day moving sum Source: Arrow 950 1000 1050 1100 1150 1200 1250 1300 1350 2022 2023 2024 2025 Tonne-mile Growth Q4 2024 Q1 2025 Q1 ‘25 vs 3 year average Y/Y Capesize -4.3% -1.8% +3.8% • Bauxite +43% • Minor Cape bulk +69% • Iron ore -2.8% • Coal -30% • Positive development vs Q4 2024 • Iron ore exports from Australia hit by weather disruptions (down 10% y-o-y) • Iron ore exports from Brazil +3% y-o-y • Q1 2024 exceptionally strong
14 Bauxite market continue to flourish - Increasingly important for Capesize Capesize Fleet – Tonnemile Demand Split, Bauxite > CoalChina Imported Bauxite Port Inventories (Mt) China Bauxite Imports (Mt/week) Source: Arrow, Bloomberg 74% 77% 75% 73% 70% 72% 71% 69% 66% 67% 67% 0% 1% 3% 5% 7% 7% 7% 9% 12% 12% 16% 25% 21% 21% 22% 22% 21% 20% 19% 20% 19% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 YTD Iron ore Bauxite Coal Other 0.0 1.0 2.0 3.0 4.0 M ill io ns 0 10 20 30 40 11/12/2020 11/12/2021 11/12/2022 11/12/2023 11/12/2024 Po rt In ve nt or ie s (M t)
15 Iron ore Brazil iron ore exports – Solid YTD and set for seasonal increase Source: Shipping Intelligence Network 15.0 20.0 25.0 30.0 35.0 40.0 45.0 January February March April May June July August September October November December M ill io n to nn es Brazil iron ore exports 2020 2021 2022 2023 2024 2025
16 Significant iron ore volumes coming – driving ton-mile demand Addition iron ore volumes in Atlantic basin (MT/y) – 3x longer than from Australia Source: Clarksons, Rio Tinto, Vale, Himalaya Shipping. 1) Assumed 170MT pr year carried on 210k DWT Newcastlemaxes (95% fully loaded). Each ship able to do 3.65 round voyages pr year Required # ships > orderbook1 Simandou project – Guinea Start-up Nov 2025–full volumes 2027 Vale capacity increases by 2026 232 151 # of Ships for these volumes Current Capesize+ Orderbook
17 0 50 100 150 200 250 300 350 400 450 2001 2004 2007 2010 2013 2016 2019 2022 2025 Capesize fleet mDWT Capesize orderbook mDWT Limited supply of new ships 25-year low orderbook Highly supportive OB/Fleet Ratio Source: Orderbook to Fleet Ratio as of May 2025, Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) Orderbook 7.9% of fleet 45.9% 40.8% 33.2% 29.7% 20.7% 20.7% 14.6% 11.6% 10.3% 7.9%
18 0 50 100 150 200 250 300 350 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Delivered OB The supply situation Capesize+ fleet by delivery year in # ships Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) *Inclusive of current Orderbook ~60% of the fleet >20 years by 2034* Year # ships turning 20 years # of Vessels Delivered % of fleet >20 years (inc. OB) 2025 47 39 7% 2026 58 52 10% 2027 56 49 12% 2028 45 29 14% 2029 110 1 19% 2030 212 0 29% 2031 251 0 40% 2032 214 0 50% 2033 103 0 55% 2034 94 0 59% Vessels built before 20093 Vessels built between 2009 and 20153 Vessels built post-2016 unaffected by 20303 302 ships – 14% 1,072 ships – 49% 824 ships – 37% Unlikely to be able to build significant capacity before 2028
19 0.6 % 0.9 % 1.3 % 1.4 % 2023 2024 2025e 2026e Mandatory dry docking to increase in 2025 Capesize average age Supply constraints Source: Clarksons, Maritime Analytics Fleet age development includes current Orderbook, assumes no scrapping Off hire due to increase from docking schedule % off hire • ~50% y/y increase in estimated offhire days due to DD in ’25 • 2010 was a big delivery year - hence over 10% of the fleet will engage in 15 year SS in 2025 (23% of the cape fleet will need dry dock in total) • With an aging fleet forced to drydock or be scrapped, this will be an additional positive impact on cape/newc freight rates • The large number of dry dockings in 2025 may lead to yard congestion 0% 5% 10% 15% 20% 25% 30% 35% 0 2 4 6 8 10 12 14 16 18 1993 2002 2011 2020 2029 % o f F le et C ap es iz e Fl ee t A ge % of fleet >20yrs old Avg. Age (Years)
20 Thank you