Star Bulk Carriers Corp. Q4 FY2024 earnings call

• Eagle Bulk Integration: Realized $22 million in cumulative cost synergies, with Q4 synergies at $4.6 million, running at $50 million annualized. Saved $1,685 per vessel per day in OpEx and G&A for Eagle fleet, reduced voyage cost by $4.4 million, and refinanced debt for interest savings.
• Fleet Update: In 2024, sold 13 vessels for $233 million. Expected drydock expense in 2025 is $68 million for 53 vessels. Newbuildings expected in Q4 2025 and H1 2026, with $130 million debt refinancing secured. Completed 42 ESD installations in 2024, planning to retrofit 23 more in 2025.
• ESG: Sustained B score in CDP for environmental management, B score in water management, Sapphire tier in vessel speed reduction, retained C+ Greenhouse Gas rating from Rightship, improved Sustainalytics ESG Risk Smart Score to 18.4, and received Automated Mutual Assistance Vessel Rescue Award.
• Dividend Policy: New policy allocates up to 60% of excess cash flow to dividends, remainder for share buybacks, growth, and fleet renewal.

For the fourth quarter of 2024, Star Bulk Carriers reported net income of $42 million, with adjusted net income of $41 million or $0.35 adjusted earnings per share. Adjusted EBITDA was $104 million. The company announced and amended its dividend policy, with a new 100 million share repurchase program. Excess cash flow for the quarter was $17.6 million, and a dividend per share of $0.09 was declared. They repurchased 500,000 shares for $7.4 million during the quarter. Pro forma total cash was $452 million, total debt $1.3 billion. There are 13 debt-free vessels with an aggregate market value of $250 million.

• Fleet capacity growth to not exceed 3% per annum in 2025-2026, with effective supply growth possibly below 2% after adjusting for speed, congestion, and dry dock hires.
• Dry bulk trade projected to increase 0.4% in tons and 0.9% in ton miles in 2025. IMF forecasts global GDP growth at 3.3%. China's GDP expected to slow, India's stable. Volatile market anticipated in 2025 due to US trade policy changes, but cautiously optimistic medium-term with favorable supply and Chinese stimulus.

• Geopolitical uncertainty, including potential trade wars and fragile ceasefire agreements affecting Red Sea crossings, which could impact dry bulk trade, especially for smaller vessels.
• Market volatility due to changes in international trade patterns and economic performance in key markets like China and India.

Q: Regarding cost synergies from Eagle Bulk merger, how much runway left for savings and inflation counterforces?

A: Nicos Rescos said there's more margin for improvement, including aligning crew wages, still restructuring operating expenses. Hamish Norton added there may be revenue synergies too.

Q: On capital allocation, how to calculate excess cash? What's the plan for buybacks?

A: Christos Begleris said excess cash is operating cash flow less debt principal repayments and dry dock expenses. Hamish Norton stated they retain flexibility to use 40% or more of cash for buybacks, and may use vessel sales for buybacks if beneficial.

Q: About seven vessels in long-term agreements, are they fixed rate and portion of chartering expenses?

A: Petros Pappas confirmed the seven vessels are at fixed rates. Simos Spyrou said chartering expenses for the quarter related to these vessels were about 50% of $26 million.