ATHENS, GREECE, August 9, 2006 – Diana Shipping Inc. (NYSE: DSX), a global shipping transportation company specializing in dry bulk cargoes, today reported net income of $13.2 million for the second quarter of 2006, compared to net income of $20.1 million reported in the second quarter of 2005.

The results for the 2006 second quarter also include a non-recurring preferential deemed dividend in the amount of $20.3 million, relating to the purchase of Diana Shipping Services S.A., the fleet management company that Diana Shipping Inc. acquired on April 1, 2006. Taking into account this amount, the Company recorded a net loss available to common stockholders for the second quarter of 2006 of $7.1 million. The accounting treatment of the acquisition of the fleet manager was first described in the Company’s initial public offering prospectus.

Voyage and time charter revenues were $26.1 million for the second quarter of 2006, compared to $29.4 million for the same period of 2005, due to a decrease in prevailing time charter rates offset by an increase in the number of vessels in the Company’s fleet. Voyage and time charter revenues and net income reported for the second quarter of 2006 have been reduced by $0.8 million, reflecting the non-cash amortization of the prepaid time charter revenue of the vessel Thetis to apply for the entire duration of the time charter contract.

Net income for the six months ended June 30, 2006, amounted to $24.9 million compared to net income of $34.7 million for the same period of 2005. Net income available to common stockholders during the period was $4.6 million. Voyage and time charter revenues were $50.3 million for the first six months of 2006, compared to $53.3 million for the same period of 2005. Voyage and time charter revenues and net income reported for the six months ended June 30, 2006 have been reduced by $1.6 million, reflecting the non-cash amortization of the prepaid time charter revenue of the vessel Thetis to apply for the entire duration of the time charter contract.

“We are pleased to announce that we have increased earnings per share, prior to the preferential deemed dividend, to US$0.28 from US$0.26 as compared with the first quarter, an increase of 7.7%. Our business strategy and successful chartering policy have resulted in our being able to increase our dividend for the second quarter of 2006 to 35.5 cents per share, more than we paid for the first quarter of 2006. Since our Company became public, we have declared US$95.8 million in dividends for our shareholders,” said Simeon Palios, Chairman and Chief Executive Officer of Diana Shipping Inc.

Mr. Palios also cited the Company’s low debt, high dividend payout policy and prudent chartering strategy. He noted, “The time charter contracts we entered into for four of our vessels earlier this year, which adjust their earnings based on the daily average time charter rates on four established routes, together with the vessels whose employment contracts are due for renewal in 2006, should enable our Company to take advantage of favorable freight market conditions going forward.”

Dividend declaration

The Company has declared a cash dividend on its common stock of $0.355 per share, based on the Company’s results from operations during the second quarter ended June 30, 2006. The cash dividend will be payable on or about August 31, 2006 to shareholders of record as of August 18, 2006. The Company has 53.05 million shares of common stock outstanding.