Dryships reports $1.4bn loss on Ocean Rig deconsolidation

The quarter's results also included an impairment charge of $83.9m on one of Dryship's bulkers. Excluding the impact of Ocean Rig, the impairment and a $45.8m settlement of receivables and new employment with a charterer, the company's result would have been a profit of $36.5m.

In a stark example of the differing fortunes of the tanker and drybulk markets, Dryships' tanker fleet, which averaged 10 vessels in the quarter, earned net voyage revenues of $39.2m, outperforming the $37.4m earned by its fleet of 39 dry bulk vessels.

Outside of the reporting period, Dryships agreed to settle the remaining $80m balance of a $120m exchangeable policy note with Ocean Rig for 17,777,778 shares in the rig owner. The deal leaves Dryships with around 40% ownership of Ocean Rig, which has since decided to suspend dividend payments.

Chairman and ceo George Economou commented: "Dryships second quarter results were burdened with one-off non-cash losses mainly associated with the de-consolidation of Ocean Rig. More recently, our stake in Ocean Rig has fallen even further as a result of the settlement of the $120m promissory note by means of shares of Ocean Rig.

"We are currently focused on the delivery of our tankers to their new owners. We have already delivered three suezmax tankers and two aframax tankers and we expect to deliver the remaining five tankers by the end of September 2015.

"Going forward, Dryships' cashflow will be driven solely by the conditions of the drybulk 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."