Star Bulk Carriers Corp. Q3 FY2025 earnings call

• Reported Q3 2025 financial results including net income, adjusted EBITDA, and share repurchases.
• Declared a dividend per share of $0.11 payable on December 18, 2025.
• Operational expenses for Q3 2025 were $5,096 per vessel per day, net cash G&A expenses were $1,325 per vessel per day.
• Entered into renovation agreements for newbuildings, with newbuildings scheduled for delivery in 2026 and secured debt for them.
• Completed 51 EST installations, with plans for more. Sold 6 Kamsarmax and Supramax vessels in Q3, with additional proceeds from vessel deliveries in October.
• Published annual ESG report, continued decarbonization strategy, commenced AI assessment, and delivered anti-harassment training.
• Market update on supply and demand for dry bulk, including fleet growth, trade volumes, and economic forecasts.

Net income for the third quarter of 2025 amounted to $18.5 million with adjusted net income of $32.4 million or $0.16 adjusted income per share. Adjusted EBITDA was $87 million for the quarter. During the third quarter, 250,000 shares were repurchased for $4.4 million, and since the start of the fourth quarter, 360,000 shares were bought back for $6.7 million. A dividend per share of $0.11 was declared. Total cash stood at $454 million, total debt at $1.028 billion, with pro forma liquidity over $570 million. Time charter equivalent rate was $16,634 per vessel per day, combined daily OpEx and net cash G&A expenses per vessel per day were $6,421, resulting in TCE less OpEx and cash G&A of approximately $10,213 per vessel per day. Revenue contribution details aren't applicable as it's a single company's performance rather than product segments.

• Secured $130 million in debt for 5 Qingdao newbuilding Kamsarmax vessels and $74 million expected for 3 Hengli Kamsarmax vessels.
• Amortization profile is expected to remain around $50 million per quarter in 2026.
• Dividend policy not an obstacle due to having sufficient cash above the minimum required per vessel.
• Optimistic medium- to long-term outlook for the dry bulk market supported by favorable supply outlook and easing trade sanctions.

• Geopolitical uncertainties that could impact the dry bulk market.
• Changes in environmental regulations that might affect the company's operations and strategy.
• Fleet aging potentially reducing effective capacity if not managed properly.

Q: Assuming you guys can hear me. So my first question is looking at the new financings, you secured up to $204 million on the 8 newbuilding assets being delivered in 2026. So taking these financings into account and then the regularly scheduled amortization or planned repayments during the year, what is your expectation around the total net change in debt in 2026 as a whole?

A: Just a clarification, please. We have secured financing for the first 5, that's $130 million. And we are in discussions about the financing of the last 3 that we have confirmed this month. So the final numbers and figures for those vessels will be actually disclosed during the next disclosure of March.

Q: Okay. Got it. I guess just related then to planned amortization during 2026. Could you comment around that?

A: Our amortization will remain around the $50 million mark per quarter. What is happening is that some older facilities are getting refinanced. And then the new facilities for the new buildings have an amortization profile of 17 years, has not impacting in any major way the amortization profile of Star Bulk. So our amortization profile will remain around $50 million to $52 million per quarter for 2026.

Q: As a follow-up to that, just as it relates to the dividend policy on the minimum cash balance per owned vessel, is that being calculated based on the pro forma size of the fleet after the newbuild deliveries? Or should we think about that as an average number per quarter as the deliveries are taking? Or is it being calculated right now at pro forma?

A: Okay. So our dividend policy is perhaps slightly confusing. But the -- were you referring to the $2.1 million per ship that we have to keep on our balance sheet before we want to pay a dividend?

Q: Yes, Hamish.

A: Okay. Well, so basically, there has been no change to that. And we're so far above that level in terms of our cash balance that we -- it's not been an obstacle to any dividend payments in the last 2 years. I mean we have something on the order of $450 million of cash. And we have 142 vessels growing by the number of newbuildings.

Q: To Chris' question, though, I mean, the amount of CapEx -- equity CapEx required for the new buildings have already been covered by proceeds of past vessel sales. So essentially, funds that we have been using from operation to pay dividends are not impacted from these they have already generated process.

Q: Just wanted to ask maybe just a follow-up to the new buildings. And I guess maybe in general about fleet composition. You've acquired these 3 Kamsarmaxes that will deliver next year. You've got the other 5 Kamsarmax newbuildings. And if I recall, you got chartered in maybe long term last year, was it 5 other Kamsarmaxes. So you've been very active on the Kamsarmax front, at least with respect to, say, bringing in new buildings there. And just wanted maybe to kind of get a refresh as to what's behind that? What is it maybe specifically about that class that keeps you coming back to it, say, versus the Ultras/capes?

A: Omar, first of all, we ordered Kamsarmaxes because our existing Kamsarmax fleet is getting older. So we need to do some renewal on that level. Second, we actually -- our S&P department managed to get very early deliveries during 2026, which we expect to be a good year. The prices were low. The vessels had scrubbers, so they're eco vessels. So we're happy with how they are doing, how they will be doing. Then think about this. Kamsarmaxes at $35 million equals $70 million, which basically is the cost of the Capesize. It's difficult to find Capesize vessels to order for anywhere close to 2025. I mean, I think that if we were going to order, it would probably be end '27 or '28. So who knows what will happen in 3 years from now. But if you calculate that Kamsarmaxes may, let's say, 2 Kamsarmaxes will do $16,500 per day, meaning $33,000 per day for 2 vessels minus $10,000 for the OpEx. That actually ends up at $23,000. So we get EBITDA of $23,000 on the 2 vessels, which actually would equal a charter rate equivalent of $29,000 for a Cape. Therefore, as long as we cannot order Capes and we found the opportunity to order Kamsarmaxes delivering very early comparatively. And as we think that the investment will bring the same results with the Cape, we went ahead and bought Kamsars.

Q: And I think he also wanted to know what we could do around Capes.

A: Okay. Around Capes. Right now, everybody keeps the Capes close to his chest and they are expensive and everybody whoever sells Capes likes to sell the worst performers that they have. And therefore, to find an opportunity is not as easy or you have to pay a very high price and not for new buildings, for secondhand. I mean there are cases where secondhand vessels are -- prices are equal to those of new buildings. When we took over Eagle Bulk, we had a big number of Supras under our ownership. So during the last 1.5 years or 2 years, we have disposed of about 28 Supras. And therefore, we're bringing the balance of Capes, Kamsars, and Supras more on an equal foot basis sorry, -- and we're keeping basically our Ultramaxes. We have sold the Supras, which are older, not eco, and we're keeping the better vessels.