Himalaya Shipping Ltd. (HSHP) - Results for the second quarter and first half of 2023

Hamilton, Bermuda, August 8, 2023

Himalaya Shipping Limited (“Himalaya”, “Himalaya Shipping” or the “Company”) announces preliminary unaudited results for the six months ended June 30, 2023.

Highlights for the First Half of 2023

• Completed Initial Public Offering (“IPO”) in the U.S. in April 2023, raising net equity proceeds of $44.9 million including the partial exercise of the over-allotment option.
• Successful delivery and commencement of operations of four of the twelve 210,000 dwt Newcastlemax dual fuel newbuildings ordered from New Times Shipyard, generating total operating revenues of $8.2 million, which is an average time charter equivalent (“TCE”) earnings of approximately $25,700 per day, gross. 
• Cash and cash equivalents of $24.2 million at the end of the first half of 2023.
• EBITDA of $4.2 million for the six months ended June 30, 2023.
• Amendment to the sale leaseback agreements in February 2023 with AVIC International Leasing Co. (“AVIC”) for the first four newbuildings to finance 90% of the cost to install the exhaust gas cleaning systems (EGCS) or “scrubbers” or $2.2 million for each vessel. 
• Final installments for the first four delivered vessels were financed by sale leaseback facilities provided by AVIC totaling $200.0 million.
• Installment payments on five of our newbuilding vessels totaling $48.0 million financed by pre-delivery financing with CCB Financial Leasing Company Limited (“CCBFL”) and Jiangsu Financial Leasing Co. Ltd. (“Jiangsu”).
• Secured time charter agreements for two vessels for 22 to 26 months' time charter, plus an option exercisable by the counterparty for a further 11 to 13 months between January and July 2024. Both vessels will earn an index-linked rate, reflecting a significant premium to the Baltic 5TC index (BCI).   

Subsequent events

• In July 2023, Mount Matterhorn was successfully delivered and commenced its 32-to-38 month index-linked time charter.
• In July 2023, the charterers of  “Mount Norefjell” and “Mount Matterhorn” decided to bunker LNG on these vessels. The LNG bunker operations were completed successfully. 

Contracted CEO, Herman Billung commented:

“The first half of 2023 has been transformational for Himalaya Shipping. From starting with an idea, to already having five ships in operations and being listed on the New York Stock Exchange (NYSE), we have achieved the first stepping stone in what is going to be many exciting years ahead. 

We strongly believe that we have the right ships, at the right time. The order book for Capesize vessels is below 5%, a 25-year low. Most yards don’t have capacity to build large dry bulk ships before well into 2027, and the prices quoted are above $86 million for similar ships to ours. In addition, the aging fleet coupled with the new environmental regulations coming, means we should have improved utilization for the coming years. Further, we have the right ships. Our dual fueled Newcastlemaxes have demonstrated their attractiveness to charterers, and consequently have been fixed at the highest premium to Capesize index rates we know about. The ships can reduce CO2 emissions by more than 40% when running on LNG and are prepared to meet as well as benefit from, more environmental regulations coming into force. With natural gas prices decreasing, being able to fuel our ships with LNG can give further economic benefit to Himalaya. We have the right financing with 7-years fixed rate interest rates, giving the Company an attractive cash break-even. Finally, the strategy we are following, with no plans for further investments in ships, means that most of the cash generated after debt service will be distributed to shareholder through monthly dividends. We think this is the right approach in a cyclical industry.”