Star Bulk Carriers (SBLK) 17 May 232023 Q1 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the First Quarter 2023 Financial Results.

We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Simos Spyrou and Mr. Officers; Financial Co-Chief Begleris, Mr. Christos Operating Nicos Mrs. and Rescos, Chief Officer; Company. Officer Charis Strategy the Plakantonaki, Chief of

At participants a time, this be Instructions] this all must conference a There listen-only I today. presentation will is mode. being followed you by advise question-and-answer recorded [Operator are session. that in a

to pass speakers of for ahead, today, I will one go now Mr. sir. the floor your Spyrou, please

our Star operator. to Bulk Spyrou, quarter Officer call to Carriers, welcome I Simos Co-Chief first Thank I'm financial of you, our like and would you the results conference regarding Financial for XXXX. of

I ask presentation. slide begin, number we take Before on the our of kindly a read moment to X statement to Harbor Safe you

quarter, of presentation, sheet, go fundamentals In we ESG an before opening the rate quarter interest on through of for will our results, the on industry our operations, management, front and an vessel first and benefit balance views questions. then during latest bunker overview today's our update risk the cost up evolution the

us highlights. X summary quarter turn first the our of presentation for XXXX a Let slide of to number now

For to the share adjusted EBITDA million at of first income reported $X.XX net $XX or $XX $XX of million with for adjusted Net income earnings. the the quarter. the per Company following. quarter Adjusted million amounted was XXXX,

of first as share or declared payable $X.XX, per XXXX. per quarter the dividend on For June our we existing policy, the dividend about XX,

million share of the outstanding are plan shares $X Directors Board have still share XXX,XXX dividend $XX.XX bought authorized at aggregate we to XX, of and Since During repurchase an and which new program back million. May under previous the XXXX, billion. $XX of distributions over cost quarter, up buybacks $X.X repurchase a XXXX, was this canceled million. On share our of

the of see for per figures vessel right our the top will you daily page, quarter. the On

$XX,XXX was rate equivalent charter vessel. at per per time day Our

TCE Therefore, amounted less is around per cash vessel. Our $X,XXX expenses per OpEx net per $X,XXX. per combined daily G&A G&A to vessel day our day OpEx and and

high-specification, Looking towards scrubber fleet renewal, fitted eco we have seven agreed vessels. charter latest generation, in to

the added We have the bottom an overview. of the table page at with

charter-in XXXX We Kamsarmax minimum to during a two agreements seven duration for the expected Ultramax have be of entered which newbuildings, and with delivered are into newbuildings long-term four years.

in November In charter Capesize Star XXXX. delivery addition, of up we long-term period XXXX, Shibumi, to vessels November for took the a a contract under

of Slide and to illustrates we payment during $XX.X XXXX. saving with arrived payment including systems, operating per from cash activities X refinancings quarter at changes dividend payments treatment cash flow debt After quarter, the balance the in for end which cash the dividend repayments, record first cash $XXX.X for the June and in first million. the We implies of repurchases, the share a started devices million graphically proceeds and Company's shareholders positive balance of of adjusted the the QX million quarter. $XXX.X the a generated at energy ballast of share of water $X.XX X, CapEx

sheet. to now of the strength Please X, turn highlight slide our we balance where

our total distributed from general Meanwhile, stands three for and Net the debt Our will will the proceeds pro sale corporate debt that $XX.X repayment from after excluded can at million. cards dividends kept stands purposes. stands at $X.XX today forma [ph] at liquidity million $XXX be be and be total billion. vessels as

couple the from of million spent a deducted capital positive and will been Note XX, that of the be these $XX.X buyback We the $XX.X $XX.X on million previous trade of $XX.X mark-to-market March had million proceeds. months derivatives of the of million the working during that as have XXXX.

of further the the of working capital course trade the in grow that expect the we conditions, market quarter current second Given will year.

at months is XX $XXX million. next amortization Our

on the present number slide management we overview of an In side. our risk X, debt

we we reducing margins. possible in, completed Since annum achieving are the Given XXXX, leverage expense approximately costs $X peers. the refinancings our order managing finance interest and significantly focused to lowest on of environment a in per have as that million increasing compared result ensure costs by rate we totaling have to interest million interest reduced $XXX lower

XXXX, In an as one average of are mark-to-market the of million Total swaps approximately $XX.X the for the date, of outstanding remaining of the XX, XXXX year. part activities gain from million these of a points. remaining had average the proactively basis million. at XX realized we of debt position as March same of senior was notional at $XX base is our significant current an rate maturity $XXX rate The for and

The decision effect can among the graphs of has rate page, interest lower see that of its average has average cost bottom its Bulk the at this Star currently one the cumulative is interest reduced in peers. and a depicted listed where

for now Rescos Nicos floor I will pass update our the an operational COO, performance. to our on

Thank you, Simos.

the In Bulk HSFO continues fuel X, spread illustrate Star and between from slide we VLSFO. to benefit how

have average fitted XXX,XXX scrubber operating system surpassed XXX with availability vessels days XX.X%. of an Our

scrubbers With the our spread, current HiX contributed profitability. to our meaningfully

at ton, $XXX ton. prices during ton cater for we where since hovers Singapore quarter at and XX% approximately based average our per HiX spread currently inception $XXX fuel The stands our Indicatively, around spot stands secured first spread demand. of the per at annual $XXX per

on HSFO consumption slide, on impact we of bunker table fitted that shows for present scrubber purposes, the tons vessels. line right approximately bottom the per of top have can annum benefit the based our XXX,XXX administrative a our the For of sensitivity on

per expenses where the for cash slide expenses, operational were turn XXXX. we excluding Operating $X,XXX Please provide nonrecurring update. period. $X,XXX day at same X, expenses per were Net an QX vessel to G&A for

the top peers store. our we Rightship safety rate amongst listed the in at addition, terms In continue of

some guidance the Slide upgrade relevant around efficiency a dock dry and update days. and provides vessel offhire fleet total X and future the expenses

Polaris. agreed first the sell opportunistically and we two and quarter, advantage built the values in increase the vessels, vessel Borealis took Capesize In Star XXXX of to Star

detainment the war. constructive of total risk given loss on Star in Pavlina reached its following war the further We agreement Ukraine with have prolonged insurers,

As generation at built fleet part have towards and first overall long-term shipyards, during have fleet class renewal Japanese fuel our which vessels, we improving the eco delivery efficiency, strategy six charter-in XXXX. of secured seven of latest

by ballast in fleet and have we will our now footprint, investing together attractiveness upgrading commercial and technologies, all of We fleet fleet. regulations, further in the other across enhancing program our with the cargo our continue CII our line energy-saving EEXI with reducing telemetry and the water completed improving and and the devices, environmental with aimed fuel consumption installation

have upgrade the expense with our project XXXX remaining docking In of expected is million yard total, current offhire are at planning, for XXX for estimates days same the the another dock The CapEx. employment and vessels, for above Our $XX.X expect approximately dry months million to numbers towards vessel for vessel capacity. dry retrofit XX we around and X period. based estimated $X on

Charis ESG will I update. for Officer, floor an now Strategy pass Chief Plakantonaki, to our the

Nicos. you, Thank

by developments adoption XXXX efforts to supply Australia venturing between could ore improve and allow Iron carriers Along Corridor. efficiency clean of ongoing first set our now our be XXXX. The ammonia study have X% of on with by study with power and ammonia the that continuously and Ore energy has trade Green concluded the fleet, clean with we the Consortium the the in Asia, demand-supply the this vessel for feasibility completed fuel to deployed in reach potential Eat by West and trade bulk iron

ammonia through acceptance corridor marine suitable safe prerequisites support, of collaboration and remain Key the the engines, the a value chain. development for of as policy fuel, continued the

including to and efforts industry’s Parallel technologies, decarbonization different and dialogue Green of research [on-boarding carbon actively project, we accelerate the And help development Corridor to green the on participate this we fuels our sector. capture storage]. continue in

on employer company’s and and We remain Survey make the as an our well-being a people, Employee having improvements focused wherever comprehensive assess to weaknesses of our strengths completed necessary.

front, the standards relevant the to Conduct are commitments. governance Code Company’s we with the ESG Initiative broader and of new On our with Global policies comply and enhancing its Reporting

turn I will to our closing the CEO, his and now market Petros for Pappas, a update remarks. floor

XX Thank to supply. slide of Please update a you, brief for Charis. turn

XX.X four to a demolition XX.X growth first and was or total a fleet for of X.X months net deadweight sent million the deadweight was year-on-year. During XXXX, million delivered X.X% of deadweight million of

best on Supply Uncertainty until seen to capacity limited keep XXXX shipbuilding bulk orders under and costs helped dry outlook shipyard recent of late the history have high we be propulsion, new shipping. have control. the future continues in

and XX.XX levels, freight fleet The knots month above versus to age fleet, QX downturns order that of X.X% as speed just fleet at book X.X orders has should the the rates steaming make have prices the deadweight scrap next year's the attractive spot decreased incentivize decreased record bulk tonnage fuel overage steaming of during lowered. with Nevertheless, over to low and improved and seasonal knots last to bunker Furthermore, million levels between of the reported X.X% and as firm an of we will slow below has to elevated still of inefficient continue a low record years. regulations demolition April. over of and expect dry the CII levels prices and average stand last XX steaming. and rebounded speeds EEXI the option January XX.X stabilized years stand while The during of

above the months, on patterns supply related that, levels. pre-COVID that highs in normalized XX gradually trading correction earnings. global has pressures congestion has said port a last have put Having war, the inefficiencies active slightly experienced record downward from congestion During to inflated and changes strong and

result of next above years. is the unlikely per exceed three to a annum As growth fleet over net trends, the X%

is a tons slide total in to during XXXX dry brief by update to projected bulk X.X% in turn According demand. for to expand ton trade now miles. Clarksons, X.X% XX and Let's of

and from on of of tightening war central total the has effects surge quarter hitting costs first fight to inflation. Indonesia. and monetary been exports increased X% back coal the by by ongoing the banks the approximately of the rest strong During in Commodities industrial economy Chinese Ukraine, year-on-year in bulk aggressive affected demand profitability the reopening dry world of of energy XXXX, volumes from the the from

XXXX X% to in recover projecting is GDP and growth to IMF in XXXX. slow to to The down global X.X%

easing quarters reopening over expand is from is inflationary is recovery a in demand with inflate COVID-XX over gradual from at to of market. the XX considerable materials activity. Dry from and pressures expected of Concurrently, energy projected support condition generated months bulk costs, last increased as and of is an trade its accelerate to housing to XXXX, energy the should correction amid healthy China that of the in by at X.X% stage prices raw economy XXXX the earliest manufacturing a the levels stimulus X% next infrastructure

ore positive Iron X.X% total At output of lift contracted and expand the by during had indicator production in during X.X% guidance iron China underperformed is demand ton for have its strong imports two-year miles XX.X% the effect the affected decreased the December. in to during margins, X.X% low, next leading to Vale’s with of while by the steel QX following COVID a weak by expects during that profit inflated X.X%, strict the going volumes providing production by tons from the a same declined XXXX. stockpiles by year-over-year to forward. ore sales quarters. company but Chinese rest exports. over increased for expected QX, steel Steel quarter trade offset annual in time, first world the QX, domestic policy on the

benefiting Russian during expected security is few for coal expand the outlook upgraded years, XXXX. has tons miles. while is in reshuffling ton-miles trade and in and next trade to energy coal Global trade on by focus the the of X.X% Coal ton European X.X%

lifted During imported expected coal production, of the ban to quarter, Capesize while volumes, fourth in India business. quarter strong XXXX the and benefit China coal the started by increases and domestic first unofficial Australian recording that record been during on high is has despite China

grain and downward year-over-year stronger outlook rest prices Nevertheless, indicated of strong despite is by quantities The crop considerable put is loss QX expected pressures the Brazil. new X.X% year. the from and conditions, due supply the and have down for the trade trade export during to positive still trade ton-miles tons landscape good the soybean adjusting from X% on during which Ukraine, Grains for market is volumes expand were after in to XXXX. of to

trade ton-miles by during XXXX. X.X% expected Minor is X.X% bulk to in tons expand and in

been has place such the global XXXX. growth by that the slowdown sector took As highest half to the of and has correlation global GDP during second affected

a fertilizer inflating production, to Moreover, Ukraine high are that disrupted exports European and at created and Capesize strong The Union for Atlantic West has and steel bauxite vessels. generate shortages backhaul ton-mile Africa continue trades. war pace expand in

Bulk for the is investment positive take well transition. needs Finally, prospects and recovery environmental the market the advantage long-term freight low of infrastructure large in order to record given of bulk regulations rates. scrubber and remain green dry fleet positioned world's Star fitted book, the to diverse due

the of any I Without to have. now will time, your you taking any pass answer over the may more to questions operator floor

Bank. Our Instructions] is first Mehrotra Amit from question [Operator with Deutsche

Hey. related to Chris Thanks Amit. taking Good the morning, This is This Nicos. is steaming for might for This of on question fleet. a be our the everybody. questions. for slow

or could? up kind it I here little or it is or given -- year, fleet -- has bit thinking and here. in speeding So, in terms would a the the it EEXI the see the CII guys this versus -- much any slowed there's know we is regulations about in uptick you fleet speeding upper where not you additional do remarks, up But of as prepared the the of down, downside be -- of an back as particular, the of limit just slowing should think in terms fleet mentioned there you

Well, We we the you, XX.X contrary, some the the XXXX tightens that the rating see is as on every substantially. will vessel. the Chris. with don't increasing of moment, around fleet towards speed there CII increase regulation Thank the at from impact at speeding about be an X%, To feel annual knots.

few So, the believe years, fleet. should we of next that the a see slowing down over we

flexibility is on cannot of add going heavier place for on the that big speed a that's much smaller we that increasing. fact see be there the ships, which portion top is of taking the to on you so idling If fleet, on impact fleet the a CII, of lot a

Chris, XX.X. Actually, I even below Petros. actually this it's is think

over anyway. I XX.X XX.X or speeds remember well think And seen much have I we years, it's so. not if the above last go

risk would on downside. is say the So, I the that

I we slowing actually think that the in will future, down. see vessels

Petros. for got that. That's pretty distinct, Yes, Thank it. Okay. you

XXXX, the first there's China do for production for year, are there's to room in some restocking we at further some quarter, of think levels additional We been or think the you stabilizing, quarters? steel the drawdowns see drawdowns for time. with production proposed we'll Just inventory cycle few do and next saw increased a the drawdowns in the you since curbs like that there turning inventory moment. kind saw a in very low that But the

Well, the which iron we we, at as stocks therefore, least the imports will we is I'm to million not two and which wrong, year down are so has see the concerned, the law XXX as for more in And performed that Brazil, exports seeing up more will ton half ore tons, which of last actually if years. yet from second miles. not far to its increase are expectations expect

And And down increase So, will floor about its on we I on the second efforts that think then, seen trade also positive ore lot. level. half. infrastructure during that China I've iron gone has -- are space new a

from see as -- effort its as support, that So, over expect will think both we the public strengthen sector that there. I I continues, private the China economy would the to and

Okay. Last Got question me. for you.

XQ? on -- rate just We've for the did of more seen around here. rates the of thoughts half perform guys the recovery a of bookings, color halfway around deceleration the since rest slowing already quarter of than second the but how quarter-to-date economic or any we’re might quarter, the in through. little into second China guidance current Any You bit some

support improve as said think I going this prices, will are that actually general as I GDPs China effort Well, oil are that economy. before, energy in think increase as as I I world prices will concerned. far the its think also down, to And

going not just it's be think I China. to So,

economic -- even stop see will rise start their as course, may forward. the will later in interest situation especially, and going are And a we on at rates of year. better falling think I

Thank All you right. for over. Yes. I'll very guys. it turn much the time,

is next Our Jefferies. question from with Omar Nokta

to… wanted just I

Omar. Hi

there. Hi,

And ships Just are obviously, of construction maybe these work. definitely that were them are new regular first that been orders just And chartered in just development and wanted just under ask have charters? or significant. already off, are And the bareboat or also, current to against in new have [ph] they been they then trends they and newbuildings, about terms accordingly? placed are -- pretty being these leases, I how and these are

Omar, we're these actually hi, or ordered These were ordered. four deals it’s Petros. vessels being already And were for reasons. doing

we we fixed all, rates of think them the have First good. are

So, we expect to profits. make

the it's to Secondly, way modernize -- is way a our it fleet.

Also, going course, no fuels these infrastructure scrubbers as fuel offer right knows vessels and that and when at to and optionality. be bridge generation come be time. there's those consider nobody in to be Third, when capital vessels and forget ample us the that not vessels. to those let's costs. now This we And of have the they new vessels a between will

So we for have them plus options. years seven

that out well. think So, to things only vessels. these And of there I more as I come good is think come

More reported? you've Okay. potential charter-ins as what

Yes.

I this for in come? seen throughout and then, the And 'XX, moving there Capes perspective, been just are market the fact asset higher value, four ask, the to great. seen transacted values what's off wanted we've wanted yes, deals your a in that? is I [ph] least one, And has of what's Okay, maybe is of ship also S&P lot a behind especially. been the to driving from there. guess, year? continuous climbing I just market the so to maybe And to But terms so ask, We've you significantly I there also, to more higher. softer it And being 'XX relative guess, despite a reasons mentioned that and at start, year move

lot the of a not space people. are going we're of all, and Well, first newbuildings is shipyards of prices we owners, ship up. bullish There in

not idea this newbuildings of will prices So, fall. that there is

Also, are longer than owners vessels zero reasons the new the allow one So more to until and the potentially I water, ordering. think is much in are come ambition will vessels this for the them the vessels ship why of periods survive eco that in.

reasons are I So are up. people basically, these why why are the going prices ordering think and

Okay.

the being curve, being year commentary, now, XX sounds from done end And is well? deals plus of so activity it is on done as the the also maybe more the just your there or like range on modern of

old you do mean versus -- you What XX-year newbuilding mean vessels?

sorry. No,

lot Just not down seeing, meaning of available we've capacity not front. been you going highlighted, slot come in are the the newbuilding the S&P to market activity a newbuilding -- from terms as of is and prices there's

like is seems this on of it is repricing also So, the had modern you've it end repricing of or tonnage, that age the happening curve,

or There's because a XXXX. exactly We've ones repricing sold actually probably in also prices take are you seen in we've Yes. that existing the of -- And the newbuildings. if today, happen before. vessels in close the seen of that prices the vessels you a even than order therefore, eco, vessel higher actually water, for being will delivery water

Interesting. one just Yes. guess, final for one And maybe I me.

of sold prices. earlier, something those As those Capes are two similar? though be we You bit be today? delivery. mentioned to adding at you you'll adding of we a seeing selling dynamics ships thinking Should the new even charter-in, more Should good be of fairly we'll some terms be maybe the charter-in in pricing outward buildings take thinking advantage and via you'll be more older

all, the prices to of first high levels Well, -- what are. are of charter pretty prices Yes. the compared

expect happen. don't will that know But market we go means people what up. So this actually, the

Capes we We at sold very, we that are happy are very The sold, with. prices but prices positive, them we good. were two that very really really,

we of told age also would to all newbuilding getting things newbuildings, want of So, the vessels, will our is down that you good happen improve consumption charter really do of earlier, future. order future in want especially In we profile, in not I fleet, sell the our it will that of That strengthen improve the war tonnage. on the probably going I would few will some age it and new to will vessels, chest. will technologies plus vessels the now, in the we'll think case, a more we average and the but perhaps if and right cut trying rid what forward do we

Christos, this supported. trading inefficient especially Omar, performance the And large the to ones, add, is Petros just as given mentioned, discounts few a vessels is also and and NAV vessels, lately, to selling

thanks, Yes. That Christos, very it for I'll over. sense. And the helpful. makes turn Petros, Thanks, overview.

reminder. a As

Our next question Nolan is Stifel. from Ben with

on a my the some follow of questions. I about few had taking for If to start, charter-ins, Thanks wanted could I Yes. with those. other just questions

Secondly, let's include of do or were would your, And operating, if think First we these once all, party are all purchase end? look about they related how like? annual the options at cost, not? say, what X transactions should

Ben, the detail So, we comment, charters. can't unfortunately, those on of

they're footnotes. on see related what as comment we're not. far in the party statements You able in our can financial transactions, to then, And as Simos,

do have We anything. not. They’re not

that has No. as vessel position he has -- about the a to control have But always is you vessel forward charter of the the sell when chartered vessel, pull being one when as vessel to the far in that in and being advice advantage you a the able comes it. vessel, buy, one wants foresee the time owner you're

So, a chartered an option. have even don't in-vessel, purchase have to always advantage you it's if a

or the there release, second -- was days it for bringing was more the a I something I'm give going dry That's mistaken. the through going case, I I'm seemed guys quarter, then, Okay. And been there for whole if lot previously than into appreciate you my forward like curious -- the question, what is dry were the able had as there. second to docks be quarter? color are to second helpful. unless docking you

putting kind of software big Hi, and to QX also we're the we're these to some the in on advantage, are correct. of doing Ben. taking ships trade XQ, back doing This accelerating unfortunately QX. for market end What preparing install QX. of and of them Nicos. this We're devices is the towards in ships of to north the -- bigger vessels, This efficiency is

you why see concentrations that's So, here.

Okay.

dry docking XXXX should for of any sense -- is So, then? look to what as like sort that

scheduled have for XX XXXX. ships We --

I appreciate taking right. you All my guys questions. Okay.

at this I'd are questions remarks. you. over closing There no back to Thank to any hand the floor for time. like management further

day. Well, us, have thank See you No next around. good and time you very much more a comments. for following

concludes conference. today's This

may participation. this time. Thank your disconnect You your lines you at for