Boston, MA 05/27/2014 (wallstreetpr) – DryShips Inc. (NASDAQ:DRYS) announced its first quarter operational and financial results ended March 31, 2014 and reported lower net loss of $34.6 million.
Strong backlogs and new contacts drive earnings
Total revenues for the period were $457.5 million versus $319.7 million in 1Q2013. The significant increase in revenue was due to increase in voyage (+32%) and drilling (+46%) revenue. The increasing larger fleets during the period increased the drybulk carrier’s net voyage revenues to $45.3 million (1Q2013: $36.9 million) and the tanker’s net voyage revenues to $22.3 million (1Q2013: $10.8 million).
On the other end, the revenues from the drilling contracts increased by 46% year over year to $360.8 million (1Q2013: $246.4 million) due to the increased contribution of the Ocean Rig Skyros and the Ocean Rig Athena.
Accordingly, the operating expenses also increased during the period, however, the increased revenue from voyage and drilling contracts drove the adjusted EBITDA to $201.2 million from $112 million in 1Q2013. Thus, it improved the adjusted EBITDA margin to 44% compared to 35% prior year period. But, higher interest payment and higher loss from interest rate swap compressed DryShips Inc. (NASDAQ:DRYS)’s net earnings. Adjusted net loss during the period was $15.2 million or $0.04 per share.
Strong financing support positive cash flow
DryShips generated lower cash of $35.4 million in 1Q2014 compared to $106.3 million from its operating activities due to higher change in working capital. The decline was partly offset by the increasing adjusted EBITDA. The Company continues to invest in new rigs and renovate the existing one to improve its production capacity.
DryShips’ capital structure is well diversified with debt and equity to fund the ongoing operations. As of March 31, 2014, DryShips has total debt of $6.1 billion, shareholder’s equity of $3.8 billion and $887.6 million of cash that represents net debt to capitalization of 52.6%.
Conclusion
DryShips Inc. (NASDAQ:DRYS) will benefit from new long-term contracts with solid backlog contracts, larger modern fleets and strong capital structure to support its operation.
