BANGALORE, July 30 (Reuters) - Drybulk shipping company DryShips Inc (DRYS.O) reported better-than-expected quarterly earnings, helped by a recent rise in spot charter rates and increased contribution from its offshore drilling segment, sending its shares up as much as 6 percent in trading after the bell.
Charter rates for drybulk ships which ferry commodities such as iron ore, coal, and grains have been rebounding from their lows over the last few months.
Dayrates for capesize ships -- the largest type of drybulk ships -- averaged about $40,000 a day for the second quarter, double the first-quarter average of about $20,000.
"The last several months the dry bulk freight markets have recovered to healthy levels led by strong growth in China," Chief Executive George Economou said in a statement.
"We are also beginning to see signs of improvement from other regions, with steel mills in Europe, Japan and elsewhere restarting idle capacity," he added.
But drybulk shipping companies -- hit by the crash in charter rates from the highs of last year -- continue to be cautious and have been looking at increasing the long-term contract coverage for their shipping fleet and reduce their spot market exposure.
DryShips said it now has about 87 percent of its shipdays in 2009 and 2010 fixed.
The company also noted that it now has $1.6 billion in fixed EBITDA from its drybulk and offshore units over the next 2.5 years.
"During the quarter they've moved 11 Panamax vessels that had been on the spot market over to two-year fixtures," analyst Scott Burk of Oppenheimer & Co said over the phone.
Panamax vessels are the largest ships that can pass through the Panama Canal.
Burk estimates that each of the 11 vessels have been fixed at charter rates of about $15,000 to $18,000 per day by DryShips. "That's what boosted their EBITDA coverage to $1.6 billion," Burk added.
For the second quarter of 2009, the company reported a net profit of $52.8 million, or 24 cents a share, compared with $299.8 million, or $6.95 a share, last year.
Excluding items, the drybulk shippers' earnings for the latest quarter was 25 cents a share. Analysts, on average, had expected earnings of 23 cents a share, according to Reuters Estimates.
Total revenue fell 30 percent to $210.5 million, hurt by the crash in charter rates from last year. Analysts had forecast revenue of $202.9 million.
Analyst Burk said that the only negative was the company did not have any updates on getting contracts for its two new drill ships.
"Other than that looks like things are just par for the course," he said.
Shares of the company closed at $6.72 Thursday on the Nasdaq. They were trading up at $6.95 in after hours trade. (Editing by Jarshad Kakkrakandy)
