Star Bulk Carriers (SBLK) 4 Aug 232023 Q2 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Second 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 Ms. and Rescos, Chief Officer; company. Officer Charis Strategy the Plakantonaki, Chief of [Operator Instructions]. advise that must I you today. being recorded this conference is

your pass to you. We floor go speakers, of Please now Thank Mr. will ahead. Begleris. the X over

of Co-Chief our I Carriers, Star the financial would to results Begleris, I our to quarter Officer welcome of for Thank you, you Christos XXXX. conference Financial operator. like am Bulk and call second regarding

the safe take Before read we a ask of #X to I statement begin, moment harbor our kindly you Slide on to presentation.

on cash through on In for up of quarter, during we and the our industry will today's the questions. views overview and fleet presentation, our fundamentals go second an before on update quarter results, front latest evolution opening balance operations, an sheet, ESG the our

us income to to for Slide turn of second earnings. second of the quarter for for $XX share per presentation million, highlights. quarter. $XX Adjusted or to and quarter our EBITDA adjusted million the amounted the a was Net $XX net income million summary XXXX USD X.XX amounted now Let #X adjusted

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

bought we During this per $X exceed of distributions a at and buybacks million. cost XXX,XXX,XXX quarter, back Since shares $X.X share dividend $XX.X XXXX, billion share. or

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

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

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

in sale of XXXX agreed towards Looking in Supramax X the have vessels we fleet built China. renewal,

and returns cash of vessels, these trading the realized the produced equity an X.Xx on with multiple a IRR of of invested XX%. shareholders period our approximately profits sale opportunistic for during of inclusive Our excellent

$XX in gain accounting from approximately total. of is vessels sale million The the

proceeds $XX.X total vessel proceeds received first sold Looking net we $XXX.X million. X have million additional including and used X million. can and at half existing This total for renewal, for the million of purposes, share corporate from vessels debt equity cash remaining Out this, be net sale buybacks. to for for buyback of repayments will insurance proceeds of already our general buffer share of we fleet and be added $XXX XXXX, used have $XXX

share first Slide of X of positive and per dividend XX, and repayments, quarter We date during for cash generated is arrived the energy CapEx ballast the August in payment $X.XX started balance end of a million company's saving quarter of $XXX.X $XXX system illustrates graphically After the operating we dividend XX, at from with to The implies the the changes $XX.X second record payment payments cash proceeds treatment expected XXXX. flow debt share a of cash quarter. and of the August in at million the activities balance devices cash and including which million. repurchases, the be and equivalent quarter, cash shareholders XXXX. installments, dividend to water ex

of strength the balance highlight our we where X Slide to sheet. turn Please

dead price is Our at billion. $X.XX X weight at delivery scrap forma million cash Supramax scrap of total remaining The on the $XXX pro value Meanwhile, of stands approximately per total today million ton. $XXX our for stands debt than our of vessels. fleet $XXX based our more light

is a the the million. fleet connection we threshold into cash repayments in debt repurchases set the with in receive changes made dividend in above will and $XXX at share Taking the account which our XXXX,

as XXXX. have of mark-to-market a of XX, working positive derivatives We and million capital of of trade $XX million $XX June

during performed we unlevered the and will have sale Supramax vessels, X completion the and X the of XXXX refinancings the vessels. Following XXXX of

is amortization months $XXX Our XX next million.

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

you, $X,XXX operational an expenses QX update. Please expenses, Operating we XXXX. Thank excluding were turn nonrecurring provide where for to X, Christos. Slide

expense G&A were cash the vessel $X,XXX Net per same per day for period.

we'll little in safety Rightship of to our top peers addition, at score. amongst the terms continue In rate

some a Slide efficiency and and around our X of provides relevant vessel quick guidance X update future dock days. and a expenses dry total upgrade

expense Our million expected dry dry towards vessels, estimated CapEx. next vessel at is of dock another for for XX the million our $XX XX docking upgrade the months $XX.X with

line CII reducing expect in upgrading approximately we the of the commercial to aimed the our XXX in will across our footprint, have environmental regulations, continue and same fleet with total, latest days In operational our further fuel we and fleet. the off-hire for deployed energy-saving technologies In fleet improving further Star attractiveness Bulk devices period. investing and EEXI with consumption enhancing

ESP completed capacity. retrofit today, we and planning, retrofit the employment until numbers year. XX and vessel vessels based dry and fitted are have The more yard to our XX Regarding planned end the around above on current program, vessels estimates dock by of be are

have capture completed we testing quarter, technology of second net XX% the with up carbon COX successfully retain to capabilities emissions. the During in onboard to

on solution, selectively our the in future retrofitted carbon will can developing industrial on select which the scope of carbon our capture credit fleet scheme. aiming technology within of be continue with working and vessels partners We a our cost-effective

ammonia with bunkering the design corridors on development demand, green carbon-neutral Finally, Iron safety supply to and taking focus Ore work in we're with of with fuels particular on consideration place a actively clean initiative. developing and and the Consortium under line the working vessel gel and

floor pass a Charis will to near for I our X Plakantonaki, the update. CFO, now

the reporting. continued ESG Thank Bulk Slide Star you, we committed to remains leadership transparent highlight to turn Nicos. Please front. our X, on where

report. Scope reported publicly emissions, time, have company's our in upcoming measurement of completed the which the the ESG X will first we be For

year submitted have Star disclosure a the in also row. company's participation project We for in questionnaire Bulk third carbon the for a XXXX

reduction and greenhouse both for Following the during [indiscernible] level. comply the regulations, emission our agreed an to with and inclusion gas of enhancing international increased we MEPCXX industry planning the decarbonization ambitions at are strategic the European

through and health the bank in our and blood created contributions of with committed employees, we education to disability front, as blood company well supporting first Greece. we're to as related societal people donations the On have

all our company cyber During risks policies on risks cyber new trainings the relevant awareness company's mandatory on monitor to security of fleet. cyber and the is help create and Star procedures. and also vessels to QX attended manage piloting on its cyber technologies systems XXXX, Bulk employees onboard help for

compliance conduct increasing Corporate UN its of are Star Global we and Principles the whistleblowing As standards. Global and with code Reporting the the the ESG policies, Bulk company's commitments, relevant in including New business Initiative

remarks. to for Pappas, our I Petros will market you update. the now a Thank CEO, floor for pass closing

X a brief to supply. of Slide you, update turn Thank for Charis. Please

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

orders order have and under low fleet control. The record of of supply The and history XXXX, outlook building propulsion, the future to to stands levels on January deadweight shipyard firm the the June. X.X% continues new limited costs recent bulk best close helped shipping. orders with be of book high late capacity Uncertainty the reported million have seen between keep as dry we in ship until XX.X

X.X% of should option during at an the have to speed environmental elevated new over last has steaming higher vessels average age fuel The of stabilized XX.XX low record Furthermore, bunker a month demolition a next dry level the downturns the bulk rates result corrected costs, stands and lower regulations. while inefficient of of seasonal over at new make years attractive the and scrap of fleet levels as freight above knots XX of fleet, years. overage prices tonnage and

will regulations the incentivize the that slow next supply expect CII help EEXI, steaming moderate and increasingly We years. over

the that and gradually supply over last has earnings strong first put approximately downward X% a experienced by X on from congestion record Over the half. port quarters, highs increased global pressures has reduction

above in Nevertheless, changes and support from may have pre-COVID further patterns war normalized the related volumes. levels the the find trade to over quarters inefficiencies market seasonal strength slightly and trading in next congestion

net X% and during As above exceed per trends, to of unlikely growth a is supply annum result 'XX 'XX. the

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

dry XXXX, by back During bulk economy, on from exports the and of volumes of bulk the of exports the Australia and half increased the the Chinese approximately first recovery X% ore year-on-year reopening total iron record minor of high Brazil. and coal

in overall uncertainty XX% commodities GDP QX, company's struggle. X.X% is the the first increased China as by for the increased import volumes its outlook property bulk XXXX. very the demand steam Despite losing year-on-year half strong economy, continues the of is as by market during the dry for of but to recovery

was with demand energy The is to XXXX. the the policy economies GDP X.X% to affected hand, as world XXXX in slow other imports in XXXX X% the the X.X%, in monetary the inflation. Ukraine, On costs by global commodities declined their from of projecting and growth during in war down rest and ongoing fight tightening Western IMF high by

by the during X.X% XXXX expand increased of by well X.X% the high by providing stockpiles as world first production a lift time, strict steel output rest X.X% while imports. margins. in China iron is by the following from indicator the low, trade positive ore ore ton expected in to of domestic same tons policy. contracted costs to energy total XXXX. Iron as this the for the miles and a period, half year-on-year steel production decreased over COVID X-year XX%, declined affected by At have during Steel weak of

output rest infrastructure iron to the China has Global the securities the world last to reshuffling from June, while Russian of outlook and at ton-miles least the expand More year-on-year for energy X.X% a trade January is the next trade European X.X% of coal expected recovery few keep is ton gradual and and during Coal in focus stimulus time from tons the by levels in with for par during basis at the in ore trade years, But miles. further production since could is benefiting upgraded on of steel year's Greece 'XX. inflate demand. on first expected XXXX.

almost half, imports last there hydropower of doubled compared expansion in production. Chinese and as the to limitations first domestic the is underperforming, are year, During coal

the the XXXX been providing lifted has However, of that during fourth coal ban vessels. is started and China some -- Capesize quarter unofficial by Australian already on

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

and in During the rate high crop affected conditions from Argentina was wheat U.S. prices. and corn half, poor first

hand, strong record of the corn expected crop last is season a export On closure and cargoes soybean Brazil mitigate of the corridor Black than the that Ukrainian Sea grain to more the month. following had a other experienced loss

half. to recent correction the security during and prices Minor next indicator XXXX. demand bulk strong inflate and in expand a years miles by grain trade tons increased expected on second for is of and Moreover, during Chinese positive X.X% food ton to trade X.X% are focus grain over volumes grain the the expected provides in

was global exports bulk backhaul Minor bauxite shortages miles trade and strong half. and global highest exports in Moreover, war the the EU, to The GDP has trades production fertilizing that with continued first the to during Capesize slowdown. African XX%. to expanding steel affected by vessels year-to-date Ukraine and Atlantic generate correlation inflated disrupted up half West created the for by ton growth

for the Star diverse prospects to positioned investment low green take scrubber large given market and focused and on questions taking continuing floor and due you to now to answer transition. remained record shareholders. recovery advantage any actively of the managing I operator of well Finally, the rates new is Bulk dry to may long-term environmental the your book, will fleet regulations fleet time, needs create order more of bulk and its have. its Without the fitted positive, infrastructure over value the pass remains to any in for freight world's

[Operator first Deutsche Amit is Mehrotra question from Instructions]. coming Bank. of Today's

drydocking Robertson just hundred like up Amit. earnings wanted looks the since days. updated start last This to for on call is by it Chris picked on It the few I a schedule.

equipment? trying into wanted docking gone that forward time to So just of that periods maybe I I'm was drill idea XXXX an So a is it's bit. to scheduled? Or why that of pulling just just installation some dry for to due up? Is that get longer

energy Chris, it XXXX. device some of you, is instead basically into to bit of Thank the this lower Nicos. quarter, earlier market vessels taking this due and basically installing for We're a the accelerating we're

more ships more So it's basically docks. days and specific on dry run

good. This sales. got of the to from proceeds That's the Yes, it. use is vessel Okay. related

compensation looking program. issuance quarter. that count guys beginning the also So from the I share under wanted year net of to net you repurchases, about count the ask XXX,XXX year-to-date. It up the to shares of at It like end the offsetting share net-net of the around looks looks of the is but the like

do quarters, the count, aggressively from about of be comp as use more think increase to to we So opportunities do further, the some will you think? some that offset vessel net Or to there under you this program? share here will repurchase remaining expect any shares proceeds sales the issuances coming

to Well, I more intend year. under issue don't program think comp the we this shares

going which haven't We issued batch November. second of to the is in issued the yet shares, be

issued. be will It

Okay.

So shares some in Roughly there issued be November. much? how will

should it the an So shares. be of to XXX,XXX tune additional

Okay.

that's less might do. it any the on the under order So XXX,XXX program, shares buybacks we of that comp

shares XXX,XXX,XXX. today to is shares XXX,XXX,XXX with remaining fully and going be -- diluted The the outstanding it's

approximately it's XXX,XXX remaining. So

market me for question Last Okay. is more oriented.

in be, fruit in global you of I terms in or at what an from impact You mind, what here, extensively an guess rest than what's will kind have immediate the more most would response world, demand of of the happening region do just China. terms looking low-hanging what other your sector improving of recovery? GDP immediate of the wanted think to with

Chris, market increase falling today, the ton we're in of first reduction covered congestion is deadweight in the plus speed the Well, in additional behind of that the the seeing miles of reduction think, plus were that the produced of -- all, year. levels did congestion to I not not first during -- the the by half reason was the -- the that

let's see of not the this in half being the years during done half. trade saw usually that the year, And and of half during we the trade think in year, first I first is Also, XX% slow the half actually the is negative. that the second a our and of of analysis second up market. the during that statistical less of So over first that XX% I ended forget we shows reasons slightly one the think half

a this think I market stronger reason to why the up So -- is now. didn't we see

positively. that think think what congestion that We I that of forward, world the than is and further will believe Going may to vessels we've XXXX stabilizing months, the XX we seen. don't not most few fall a going is much negatives, turn be where the be going seen strong we've economy Vessel be around in will especially to next supply very year is delivered. rather

a during about trade. half, first turn the half. And to around and particularly turn We think much grain at during reduction going trade, positive. And of of is X% grain the be that we because to believe, second the stronger the of we going saw end year, it's

around. is So will And high. we that stronger And especially remain turn these prices going remain exert strong. infrastructure the to will oil China are, are things We think relatively they on think we think going to probably side. where are a that as coal effort

is freight going We because weaker dollar think cheaper that to and the are trade cheaper. help commodities is

Russia Europe iron in generally, will coming right away the a ton that negatives think We stops, with in think China. war West ore So don't positives. that if trading general. inefficiencies induces we start trade. see the remain or that We see but more mile up, low the inventory And more we as will even see don't I because more with

So we XXXX. have year remainder for the in the of and market faith for the

that here. Yes. Definitely small hopefully, incremental things add a lot from some, up improvement of for

Nokta The Omar of next is question from Jefferies. coming

buyback. up wanted on follow share the Just to

how your receiving moment, ask given in the sales. spent things proceed of like remains mentioned utilize you've is, the million to you about where outlook of wanted the given your think that that that versus, what's towards buyback -- I I you repayment? if -- that debt about the where are say, you'd kind I opening of much already $XX and thinking just kind are the thought since remarks at And price XXX, for stock the recall, to

active There's are and there that, fleet. of Well, are the then of debt those X right? consideration. more possibilities all under renewal potential repayment of there's than the And buybacks, there

really at any -- moment, you could spend although I there Okay. $XX isn't And guess, million. a did perhaps is there since I the preference

there of interest is stock? a to So maybe the buy good amount

X we're in fleet but well. there renewing mean, all possibilities may of as some are very as uses, the say, interesting arise Well, I terms that considering I

So that's not out of the question.

Okay.

that be valuation where do stock? on willing would the to cash you And of the is received proceeds irrespective with Okay. the you've

to into always I that out shareholders. the best take the we'll Well, account. looking do we're thing mean, for

Okay. And from on disposals then not thinking Hamish the you the have What are about there? recently. Anything here? you X horizon the you mentioned with another ships option, proceeds, further obviously, but sold

shifts And on we Well, the happy to good ships we continue we get we are sold. price can excellent think prices, to that got an sell. for we similarly if

keep we'll think I doing that.

next from Bank of of [indiscernible] coming Instructions]. [Operator America. question The is

I guess to outlook. I X off the -- want on start I maybe just just with

I general think or I alluded if ask recovery? earlier, the dislocation from expectations expectation lane trade on macro that's turning May more coming positive. grain the team to just of

the the And being there? has dislocated noticeable seen Black team Sea any corridor any outs closure? call And following lanes

the in a sense low a of and and around. it's macro combination still a negatives probably I say. have It's general are reached points, think positive feeling would positives that and -- macro I the their micro, the

see. I

ton broader like as So description? of a as view combination just a GDP well mile

Yes.

mentions follow-up, I proceeds million And capital your but in the Okay. up terms potential hate think fleet reduce renewal my of again, on a of be the of I view, $XXX as Hamish point there to were proceeds. brought hitting as

on the has terms the how any that in that. this availability if clarify be the market? Just in a true been wondering about with be bit expand secondhand updates team expressed Just bit opportunity new Or a for there of could would maybe likely little little maybe builds?

debt we're on a an million But at we'll future, opportunity, moment. use decision that probably And not-too-distant think or point what excellent we consider considering We new this in and whether building do stock we it. I secondhand to find with some that along of Well, the buyback. with into. made repayment looking when haven't is at $XXX will the really the something decide

Yes, it's just this Christos. that, Christos. to add Yes. is to And

asset that open vessels also always our so to have in net value buy done are shares, We past. we using the as

Now the that's buy that and our use done definitely a cash our XXXX. use self-acquisitions share in but through of renew order we have like the since capital vessels to it's not XX of fleet vessels

you it in on mentality of of IRR I aim would look see. how return this, kind the safe And looks just would to cash? terms on as of it's to like terms the to an based more at clarify, to framework what in assume attractive, deploy how be you

Yes. I in return is of and on cost of look and the mean basically, excess cost that equity capital we of is our at whether appropriate. rate capital of

like time, this any management to to for I'd or additional comments. over floor At back turn closing the

comments, Have further and No a very nice operator. much. you everybody, vacation thank

today's concludes gentlemen, for and Ladies This your thank event. you participation.

You at and may enjoy your day. disconnect lines time, your of the this rest