SOURCE: Paragon Financial Limited

Paragon Financial Limited

September 13, 2011 08:16 ET

Baltic Dry Index Points to Higher Revenues for DryShips and Genco

The Paragon Report Provides Equity Research on DryShips & Genco Shipping

NEW YORK, NY--(Marketwire - Sep 13, 2011) - The Paragon Report examines investing opportunities in the Shipping Industry and provides equity research on DryShips, Inc. (NASDAQ: DRYS) and Genco Shipping & Trading Ltd. (NYSE: GNK). Access to the full company reports can be found at:

The traditional indicator of the shipping industry's health and real time assessment of demand for global raw materials, the Baltic Dry Index (BDI), recently hit a one-year high, up more than 60 percent from its February low. Although the BDI is not an index of profitability for shippers, it does reflect increased revenue for those shippers focused on the spot market. According to Reuters, the rally has been driven by firmer coal and iron exports from Australia to China had boosted the capesize market.

While demand for raw materials may be on the upswing, an oversupply of ships has hindered rates from recovering. The Baltic Exchange said that Rents for the world's 1,237 capesize ships, comprising 40 percent of the dry-bulk fleet, declined 43 percent in the past 12 months, as growth exceeds supply. The capesize fleet is forecast to grow by 14 percent in 2011 and outpace demand until 2014, capping any rates recovery, according to a report from Bank of America Merrill Lynch.

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Genco's voyage revenues decreased 6.5% to $98.5 million for the three months ended June 30, 2011 versus $105.3 million for the three months ended June 30, 2010, mainly due to lower charter rates achieved by the majority of vessels partially offset by the increase in the size of its fleet and consolidated revenues from Baltic Trading Limited.

Dryships' drybulk fleet principally carries a variety of drybulk commodities, including major bulk items, such as coal, iron ore, and grains, and minor bulk items, such as bauxite, phosphate, fertilizers and steel products. The company reported $0.04 earnings per share for the second quarter, missing the Thomson Reuters consensus estimate of $0.17 by $0.13. The company's quarterly revenue was down .1% on a year-over-year basis.

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