Ocean Rig Buries DryShips

Athens-based DryShips Inc. recorded USD 1.44 billion net loss for the quarter ended June 30, 2015, largely due to one-off non-cash USD 1.35 billion loss associated with the deconsolidation of its offshore deepwater drilling subsidiary – Ocean Rig.

The net loss was further deepened by USD 83.9 million impairment charge on one drybulk vessel, and other non-cash losses related to the previously announced settlement of receivables and new employment entered into with one of the company’s charterers, amounting to USD 45.8 million.

The company reported Adjusted EBITDA of USD 243.4 million for the second quarter of 2015, as compared to USD 248.8 million for the second quarter of 2014.

”Dryships second quarter results were burdened with one-off non-cash losses mainly associated with the deconsolidation of Ocean Rig. More recently, our stake in Ocean Rig has fallen even further as a result of the settlement of the USD 120 million promissory note by means of shares of Ocean Rig. Following the consummation of the transaction, Dryships will continue to remain the largest single shareholder in Ocean Rig with an approximately 40% direct ownership,” George Economou, Chairman and Chief Executive Officer of DryShips, said.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) amounted to USD 37.4 million for the three-month period ended June 30, 2015, as compared to USD 41.7 million for the three-month period ended June 30, 2014. For the tanker segment, net voyage revenues amounted to USD 39.2 million for the three-month period ended June 30, 2015, as compared to USD 14.2 million for the same period in 2014. For the offshore drilling segment, revenues from drilling contracts decreased by USD 117.7 million to USD 323.7 million for the three-month period ended June 30, 2015, as compared to USD 441.4 million for the three-month period ended June 30, 2014.

The Time Charter Equivalent, or TCE, rate for the company’s drybulk fleet was USD 10,813 per day per vessel in the three month period ended June 30, 2015, as compared to USD 12,064 per day per vessel in the corresponding period of 2014. The TCE rate for the tanker fleet was USD 43,221 per day per vessel in the three month period ended June 30, 2015 which is a significant improvement compared to the USD 15,650 per day per vessel TCE rate in the corresponding period of 2014.

”Going forward, Dryships’ cashflow will be driven solely by the conditions of the dry bulk market, given also the recent dividend suspension announced by Ocean Rig. We believe that the recent improvement in the drybulk market, while helpful, does not significantly change our outlook for a challenging environment in the next 18 months, and we remain prepared for the uncertainty ahead,” Economou said.

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