Star Bulk Carriers Corp. Q3 FY2024 earnings call

• Star Bulk is the largest U.S.-listed public company and second worldwide in deadweight tons, specialized in dry dock shipping with high trading liquidity. It operates a fleet of 156 vessels with an average age of 11.9 years, 80 Eco vessels, and 98% of its fleet scrubber fitted.
• Synergies from Eagle Bulk integration have exceeded $9 million since April, with integration advancing smoothly across departments, and potential for further OpEx and dry dock cost savings in 2025 and remaining 2024.
• Cash balance started the quarter at $486 million, generated $138 million from operating activities, and ended at $473 million after various payments.
• Sixth annual ESG report published, showing 4% reduction in scope 1 GHG emissions, 5.8 improvement in fleet-wide CII, and 9.5 reduction in scope 3 emissions. Prepared for FuelEU Maritime Regulation and engaged with regulators on greenhouse gas reduction measures.

For the third quarter of 2024, Star Bulk Carriers reported net income of $81 million, with adjusted net income of $83 million or $0.71 adjusted earnings per share. Adjusted EBITDA was $143.4 million. A dividend per share of $0.60 was declared. Total liquidity stood at $433 million, with total debt at $1.3 billion. The time charter equivalent rate was $18,843 per vessel per day. Combined daily OpEx and net cash G&A expenses per vessel per day were $6,376, resulting in TCE less OpEx and cash G&A of $12,647. Synergies from the Eagle Bulk integration totaled over $9 million since the transaction completed in April. During the third quarter, 4 vessels were sold, with three expected to be delivered in the fourth quarter for total gross proceeds of $50 million.

• Synergies from Eagle Bulk integration are expected to continue, with potential for further savings in OpEx and dry dock costs in 2025 and remaining 2024.
• Fleet update includes 5 firm shipbuilding contracts with Qingdao Shipyard for Kamsarmax newbuildings, delivering in Q4 2025 and first-half 2026.
• Expected dry dock expense in 2024 is $18.3 million for 15 vessels with approximately 420 offhire days. In 2025, expected dry dock expense is $53.8 million for 47 vessels with 1200 offhire days.

• Geopolitical uncertainties such as tensions in the Red Sea and potential impact of Trump administration policies on trade.
• Uncertainties around future green propulsion, high shipbuilding costs, and limited shipyard capacity until late-2026.
• Market volatility in dry bulk shipping, including effects of tariffs and economic slowdowns.

Q: Omar Nokta with Jefferies asked about synergies from Eagle Bulk integration and if they're on pace for the target.

A: Nicos Rescos said they're on target with expectations of improving synergies per quarter, and Hamish Norton added synergies are at a $26 million annual run rate already.

Q: Ben Nolan with Stifel asked about G&A and market trends.

A: Simos Spyrou discussed reducing office and headcount expenses of Stamford and Singapore to bring them closer to Athens office levels, and Petros Pappas provided market insights on Capesize, Panamax, and Supramax segments.

Q: Christopher Robertson with Deutsche Bank asked about biofuels.

A: Charis Plakantonaki discussed biofuels for European trade, Hamish Norton and Nicos Rescos mentioned biofuels can be passed on to charters and are safe to use with proper handling.

Q: Bendik Folden Nyttingnes with Clarkson Securities asked about S&P market and Panamax segment.

A: Petros Pappas commented on Capesize being more resilient due to low order book and longer trade routes, while Panamax softness is temporary but expected to revert with better trade.

Q: Clement Mullins with Value Investors Edge asked about fleet strategy.

A: Hamish Norton and Petros Pappas discussed chartering vs. purchasing vessels depending on pricing, and intentions to buy back shares or place building orders at favorable prices