-------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------------------------------------------
FORM 6-K
-------------------------------------------------------------------------------
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2024
Commission File Number: 001-33869
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
(Translation of registrant's name into English)
-------------------------------------------------------------------------------
Star Bulk Carriers Corp.
c/o Star Bulk Management Inc.
40 Agiou Konstantinou Street,
15124 Maroussi,
Athens, Greece
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 to this Form 6-K is a Management's Discussion and
Analysis of Financial Condition and Results of Operations and the unaudited
interim condensed consolidated financial statements of Star Bulk Carriers
Corp. (the "Company") as of and for the three months ended March 31, 2023 and
2024.
Attached as Exhibit 99.2 to this Form 6-K is a copy of the Company's press
release (the "Press Release") announcing its unaudited financial and operating
results for the Company's three months ended March 31, 2024, which was issued
on May 22, 2024.
The information contained in Exhibit 99.1 of this Form 6-K is hereby
incorporated by reference into the registrant's Registration Statements on
Form F-3 (File Nos. 333-264226, 333-232765, 333-234125 and 333-252808) and
Registration Statement on Form S-8 (File No. 333-176922), in each case to the
extent not superseded by information subsequently filed or furnished (to the
extent we expressly state that we incorporate such furnished information by
reference) by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, in each case as amended.
-------------------------------------------------------------------------------
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Form 6-K, and the documents to which the Company refers in this Form 6-K,
as well as information included in oral statements or other written statements
made or to be made by the Company, contain "forward-looking statements,"
within the meaning of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Exchange Act, with respect to
our financial condition, results of operations and business and our
expectations or beliefs concerning future events. Words such as, but not
limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan,"
"targets," "projects," "likely," "will," "would," "could" and similar
expressions or phrases may identify forward-looking statements.
All forward-looking statements involve risks and uncertainties. The occurrence
of the events described, and the achievement of the expected results, depend
on many events, some or all of which are not predictable or within our
control. Actual results may differ materially from expected results.
In addition, important factors that, in our view, could cause actual results
to differ materially from those discussed in the forward-looking statements
include:
the possibility that costs or difficulties related to the integration of the
Company's and Eagle's (as defined below) operations will be greater than expected;
the possibility that the expected synergies and value creation from the Eagle Merger (as
defined below) will not be realized, or will not be realized within the expected time period;
general dry bulk shipping market conditions, including fluctuations in charter rates and vessel values;
the strength of world economies;
the stability of Europe and the Euro;
fluctuations in currencies, interest rates and foreign exchange rates;
business disruptions due to natural and other disasters or otherwise, such as the impact
of any new outbreaks or new variants of coronavirus ("COVID-19") that may emerge;
the length and severity of epidemics and pandemics and their impact
on the demand for seaborne transportation in the dry bulk sector;
changes in supply and demand in the dry bulk shipping industry, including the
market for our vessels and the number of new buildings under construction;
the potential for technological innovation in the sector in which we operate and any
corresponding reduction in the value of our vessels or the charter income derived therefrom;
changes in our expenses, including bunker prices, dry docking, crewing and insurance costs;
changes in governmental rules and regulations or actions taken by regulatory authorities;
potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions;
the impact of increasing scrutiny and changing expectations from investors, lenders, charterers and
other market participants with respect to our Environmental, Social and Governance ("ESG") practices;
our ability to carry out our ESG initiatives and thereby meet our ESG goals and targets~
new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime
Organization, and/or regional/national imposed by regional authorities such as the European Union or individual countries;
potential cyber-attacks which may disrupt our business operations;
general domestic and international political conditions or events, including "trade wars," the ongoing conflict between
Russia and Ukraine, the conflict between Israel and Hamas and the Houthi attacks in the Red Sea and the Gulf of Aden;
the impact on our common shares and reputation if our vessels were to call on ports located
in countries that are subject to restrictions imposed by the U.S. or other governments;
our ability to successfully compete for, enter into and deliver our vessels under time charters or other employment
arrangements for our existing vessels after our current charters expire and our ability to earn income in the spot market;
potential physical disruption of shipping routes due to accidents, climate-related reasons (acute and chronic),
political events, public health threats, international hostilities and instability, piracy or acts by terrorists;
-------------------------------------------------------------------------------
the availability of financing and refinancing;
the failure of our contract counterparties to meet their obligations;
our ability to meet requirements for additional capital and financing to complete our newbuilding program and grow our business;
the impact of our indebtedness and the compliance with the covenants included in our debt agreements;
vessel breakdowns and instances of off-hire;
potential exposure or loss from investment in derivative instruments;
potential conflicts of interest involving our Chief Executive Officer, his family and other members of our senior management;
our ability to complete acquisition transactions as and when planned and upon the expected terms;
the impact of port or canal congestion or disruptions; and
the risk factors and other factors referred to in the Company's reports filed
with or furnished to the U.S. Securities and Exchange Commission ("SEC").
Consequently, all of the forward-looking statements we make in this document
are qualified by the information contained or referred to herein, including,
but not limited to, (i) the information contained under this heading and (ii)
the information disclosed in the Company's annual report on Form 20-F for the
fiscal year ended 2023, filed with the SEC on March 13, 2024.
You should carefully consider the cautionary statements contained or referred
to in this section in connection with any subsequent written or oral
forward-looking statements that may be issued by us or persons acting on our
behalf. Except as required by law, the Company undertakes no obligation to
update any of these forward-looking statements, whether as a result of new
information, future events, a change in the Company's views or expectations or
otherwise, except as required by applicable law. New factors emerge from time
to time, and it is not possible for the Company to predict all of these
factors. Further, the Company cannot assess the impact of each such factor on
its business or the extent to which any factor, or combination of factors, may
cause actual results to be materially different from those contained in any
forward-looking statement.
-------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: May 23, 2024
Star Bulk Carriers Corp.
By: /s/ Simos Spyrou
Name: Simos Spyrou
Title: Co-Chief Financial Officer
-------------------------------------------------------------------------------
Exhibit Description
Number
99.1 Management's Discussion and Analysis of Financial Condition and Results of Operations and our unaudited interim condensed
consolidated financial statements of the Company as of and for the three months ended March 31, 2023 and 2024.
99.2 Press Release dated May 22, 2024.
Exhibit 99.1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following is a discussion of the financial condition and results of
operations of Star Bulk Carriers Corp. ("Star Bulk") for the three-month
periods ended March 31, 2023 and 2024. Unless otherwise specified herein,
references to the "Company," "we," "us" or "our" shall include Star Bulk and
its subsidiaries. You should read the following discussion and analysis
together with the unaudited interim condensed consolidated financial
statements and related notes included elsewhere herein. For additional
information relating to our management's discussion and analysis of financial
conditions and results of operations, please see our Annual Report on Form 20F
for the year ended December 31, 2023, which was filed with the U.S. Securities
and Exchange Commission (the "Commission") on March 13, 2024 (the "2023 Annual
Report"). Unless otherwise defined herein, capitalized words and expressions
used herein shall have the same meanings ascribed to them in the 2023 Annual
Report. This discussion includes forward-looking statements which, although
based on assumptions that we consider reasonable, are subject to risks and
uncertainties which could cause actual events or conditions to differ
materially from those currently anticipated and expressed or implied by such
forward-looking statements.
Overview
We are a global shipping company providing worldwide seaborne transportation
solutions in the dry bulk sector. Our vessels transport major bulks, which
include iron ore, coal and grain, and minor bulks which include bauxite,
fertilizers and steel products. We were incorporated in the Marshall Islands
on December 13, 2006 and, on December 3, 2007, we commenced operations when we
took delivery of our first vessel. We maintain offices in Athens, New York,
Limassol, Singapore, Germany and Denmark. Our common shares trade on the
Nasdaq Global Select Market under the symbol "SBLK." On April 9, 2024, the
previously announced Eagle Merger (as defined below) was completed following
the approval of shareholders of Eagle Bulk Shipping Inc. (NYSE: EGLE)
("Eagle") and receipt of applicable regulatory approvals and satisfaction of
customary closing conditions.
Eagle Merger
On December 11, 2023, we entered into a definitive agreement with Eagle (the
"Eagle Merger Agreement") to combine in an all-stock merger (the "Eagle
Merger"). The Eagle Merger was completed on April 9, 2024 following Eagle
shareholders' approval and receipt of applicable regulatory approvals and
satisfaction of customary closing conditions. Each Eagle shareholder received
2.6211 shares of Star Bulk common stock for each share of Eagle common stock
owned. As a result of the Eagle Merger, a total number of 29,017,999 shares of
Star Bulk common stock were issued on April 9, 2024. Eagle common stock has
ceased trading and is no longer listed on the New York Stock Exchange.
Our Fleet
During the first quarter of 2024, the previously announced sold vessels
Star Glory
,
Big Fish
,
Pantagruel
,
Star Bovarius
and
Big Bang
were delivered to their new owners while
Star Dorado
was delivered to her new owners in late April 2024.
Following the closing of the Eagle Merger, we acquired Eagle's fleet which
consisted of 52 dry bulk Supramax/Ultramax vessels. Prior to the closing of
the Eagle Merger, Eagle had agreed to sell the vessels
Crested Eagle
,
which was delivered to her new owners on April 18, 2024, and
Stellar Eagle
,
which is expected to be delivered to her new owners by June 2024.
In addition, in February, March and April 2024, we agreed to sell vessels
Star Audrey
,
Star Pyxis
,
Star Paola
and
Crowned Eagle
.
Star Paola
was delivered to her new owners on April 29, 2024 and the remaining three
vessels are expected to be delivered to their new owners by June 2024.
Overall, in connection with the sales that completed or will be completed
during the second quarter of 2024, we expect to collect total proceeds of
$129.6 million and to make debt prepayments in connection with these sales of
approximately $22.6 million.
1
-------------------------------------------------------------------------------
On a fully delivered basis, taking into account the delivery of the vessels
agreed to be sold or constructed as of May 21, 2024 as further discussed
above, our owned fleet consists of 161 operating vessels with an aggregate
carrying capacity of approximately 15.4 million dwt, 97% of which are fitted
with Exhaust Gas Cleaning Systems ("scrubbers") consisting of Newcastlemax,
Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax and Supramax vessels.
The following tables present summary information relating to our fleet as of
May 21, 2024:
2
-------------------------------------------------------------------------------
Operating Fleet:
Date
Wholly Owned Subsidiaries Vessel Name DWT Delivered to Star Bulk Year Built
1 Sea Diamond Shipping LLC Goliath 209,537 July 15, 2015 2015
2 Pearl Shiptrade LLC Gargantua 209,529 April 2, 2015 2015
3 Star Ennea LLC Star Gina 2GR 209,475 February 26, 2016 2016
4 Coral Cape Shipping LLC Maharaj 209,472 July 15, 2015 2015
5 Star Castle II LLC Star Leo 207,939 May 14, 2018 2018
6 ABY Eleven LLC Star Laetitia 207,896 August 3, 2018 2017
7 Domus Shipping LLC Star Ariadne 207,812 March 28, 2017 2017
8 Star Breezer LLC Star Virgo 207,810 March 1, 2017 2017
9 Star Seeker LLC Star Libra 207,765 June 6, 2016 2016
10 ABY Nine LLC Star Sienna 207,721 August 3, 2018 2017
11 Clearwater Shipping LLC Star Marisa 207,709 March 11 2016 2016
12 ABY Ten LLC Star Karlie 207,566 August 3, 2018 2016
13 Star Castle I LLC Star Eleni 207,555 January 3, 2018 2018
14 Festive Shipping LLC Star Magnanimus 207,526 March 26, 2018 2018
15 New Era II Shipping LLC Debbie H 206,861 May 28, 2019 2019
16 New Era III Shipping LLC Star Ayesha 206,852 July 15, 2019 2019
17 New Era I Shipping LLC Katie K 206,839 April 16, 2019 2019
18 Cape Ocean Maritime LLC Leviathan 182,511 September 19, 2014 2014
19 Cape Horizon Shipping LLC Peloreus 182,496 July 22, 2014 2014
20 Star Nor I LLC Star Claudine 181,258 July 6, 2018 2011
21 Star Nor II LLC Star Ophelia 180,716 July 6, 2018 2010
22 Sandra Shipco LLC Star Pauline 180,274 December 29, 2014 2008
23 Christine Shipco LLC Star Martha 180,274 October 31, 2014 2010
24 Star Nor III LLC Star Lyra 179,147 July 6, 2018 2009
25 Star Regg V LLC Star Borneo 178,978 January 26, 2021 2010
26 Star Regg VI LLC Star Bueno 178,978 January 26, 2021 2010
27 Star Regg IV LLC Star Marilena 178,978 January 26, 2021 2010
28 Star Regg II LLC Star Janni 178,978 January 7, 2019 2010
29 Star Regg I LLC Star Marianne 178,906 January 14, 2019 2010
30 Star Trident V LLC Star Angie 177,931 October 29, 2014 2007
31 Global Cape Shipping LLC Kymopolia 176,990 July 11, 2014 2006
32 Star Trident XXV LLC Star Triumph 176,343 December 8, 2017 2004
33 ABY Fourteen LLC Star Scarlett 175,649 August 3, 2018 2014
34 ABY Fifteen LLC Star Audrey (2) 175,125 August 3, 2018 2011
35 ABM One LLC Star Eva 106,659 August 3, 2018 2012
\
3
-------------------------------------------------------------------------------
Operating Fleet - Continued:
Date
Wholly Owned Subsidiaries Vessel Name DWT Delivered to Star Bulk Year Built
36 Nautical Shipping LLC Amami 98,681 July 11, 2014 2011
37 Majestic Shipping LLC Madredeus 98,681 July 11, 2014 2011
38 Star Sirius LLC Star Sirius 98,681 March 7, 2014 2011
39 Star Vega LLC Star Vega 98,681 February 13, 2014 2011
40 ABY II LLC Star Aphrodite 92,006 August 3, 2018 2011
41 Augustea Bulk Carrier LLC Star Piera 91,951 August 3, 2018 2010
42 Augustea Bulk Carrier LLC Star Despoina 91,951 August 3, 2018 2010
43 Star Nor IV LLC Star Electra 83,494 July 6, 2018 2011
44 Star Alta I LLC Star Angelina 82,981 December 5, 2014 2006
45 Star Alta II LLC Star Gwyneth 82,790 December 5, 2014 2006
46 Star Trident I LLC Star Kamila 82,769 September 3, 2014 2005
47 Star Nor VI LLC Star Luna 82,687 July 6, 2018 2008
48 Star Nor V LLC Star Bianca 82,672 July 6, 2018 2008
49 Grain Shipping LLC Pendulum 82,619 July 11, 2014 2006
50 Star Trident XIX LLC Star Maria 82,598 November 5, 2014 2007
51 Star Trident XII LLC Star Markella 82,594 September 29, 2014 2007
52 Star Trident IX LLC Star Danai 82,574 October 21, 2014 2006
53 ABY Seven LLC Star Jeanette 82,566 August 3, 2018 2014
54 Star Sun I LLC Star Elizabeth 82,403 May 25, 2021 2021
55 Star Trident XI LLC Star Georgia 82,298 October 14, 2014 2006
56 Star Trident VIII LLC Star Sophia 82,269 October 31, 2014 2007
57 Star Trident XVI LLC Star Mariella 82,266 September 19, 2014 2006
58 Star Trident XIV LLC Star Moira 82,257 November 19, 2014 2006
59 Star Trident XVIII LLC Star Nina 82,224 January 5, 2015 2006
60 Star Trident X LLC Star Renee 82,221 December 18, 2014 2006
61 Star Trident II LLC Star Nasia 82,220 August 29, 2014 2006
62 Star Trident XIII LLC Star Laura 82,209 December 8, 2014 2006
63 Star Nor VIII LLC Star Mona 82,188 July 6, 2018 2012
64 Star Trident XVII LLC Star Helena 82,187 December 29, 2014 2006
65 Star Nor VII LLC Star Astrid 82,158 July 6, 2018 2012
66 Waterfront Two LLC Star Alessia 81,944 August 3, 2018 2017
67 Star Nor IX LLC Star Calypso 81,918 July 6, 2018 2014
68 Star Elpis LLC Star Suzanna 81,711 May 15, 2017 2013
69 Star Gaia LLC Star Charis 81,711 March 22, 2017 2013
70 Mineral Shipping LLC Mercurial Virgo 81,545 July 11, 2014 2013
4
-------------------------------------------------------------------------------
Operating Fleet - Continued:
Date
Wholly Owned Subsidiaries Vessel Name DWT Delivered to Star Bulk Year Built
71 Star Nor X LLC Stardust 81,502 July 6, 2018 2011
72 Star Nor XI LLC Star Sky 81,466 July 6, 2018 2010
73 Star Zeus VI LLC Star Lambada 81,272 March 16, 2021 2016
74 Star Zeus II LLC Star Carioca 81,262 March 16, 2021 2015
75 Star Zeus I LLC Star Capoeira 81,253 March 16, 2021 2015
76 Star Zeus VII LLC Star Macarena 81,198 March 6, 2021 2016
77 ABY III LLC Star Lydia 81,187 August 3, 2018 2013
78 ABY IV LLC Star Nicole 81,120 August 3, 2018 2013
79 ABY Three LLC Star Virginia 81,061 August 3, 2018 2015
80 Star Nor XII LLC Star Genesis 80,705 July 6, 2018 2010
81 Star Nor XIII LLC Star Flame 80,448 July 6, 2018 2011
82 Star Trident III LLC Star Iris 76,466 September 8, 2014 2004
83 Star Trident XX LLC Star Emily 76,417 September 16, 2014 2004
84 Cape Town Eagle LLC Cape Town Eagle 63,707 April 9, 2024 2015
85 Vancouver Eagle LLC Vancouver Eagle 63,670 April 9, 2024 2020
86 Oslo Eagle LLC Oslo Eagle 63,655 April 9, 2024 2015
87 Rotterdam Eagle LLC Rotterdam Eagle 63,629 April 9, 2024 2017
88 Halifax Eagle LLC Halifax Eagle 63,618 April 9, 2024 2020
89 Helsinki Eagle LLC Helsinki Eagle 63,605 April 9, 2024 2015
90 Gibraltar Eagle LLC Gibraltar Eagle 63,576 April 9, 2024 2015
91 Valencia Eagle LLC Valencia Eagle 63,556 April 9, 2024 2015
92 Dublin Eagle LLC Dublin Eagle 63,550 April 9, 2024 2015
93 Santos Eagle LLC Santos Eagle 63,536 April 9, 2024 2015
94 Antwerp Eagle LLC Antwerp Eagle 63,530 April 9, 2024 2015
95 Sydney Eagle LLC Sydney Eagle 63,523 April 9, 2024 2015
96 Copenhagen Eagle LLC Copenhagen Eagle 63,495 April 9, 2024 2015
97 Hong Kong Eagle LLC Hong Kong Eagle 63,472 April 9, 2024 2016
98 Orion Maritime LLC Idee Fixe 63,458 March 25, 2015 2015
99 Shanghai Eagle LLC Shanghai Eagle 63,438 April 9, 2024 2016
100 Primavera Shipping LLC Roberta 63,426 March 31, 2015 2015
101 Success Maritime LLC Laura 63,399 April 7, 2015 2015
102 Singapore Eagle LLC Singapore Eagle 63,386 April 9, 2024 2017
103 Westport Eagle LLC Westport Eagle 63,344 April 9, 2024 2015
104 Hamburg Eagle LLC Hamburg Eagle 63,334 April 9, 2024 2014
105 Fairfield Eagle LLC Fairfield Eagle 63,301 April 9, 2024 2013
5
-------------------------------------------------------------------------------
Operating Fleet - Continued:
Date
Wholly Owned Subsidiaries Vessel Name DWT Delivered to Star Bulk Year Built
106 Greenwich Eagle LLC Greenwich Eagle 63,301 April 9, 2024 2013
107 Groton Eagle LLC Groton Eagle 63,301 April 9, 2024 2013
108 Madison Eagle LLC Madison Eagle 63,301 April 9, 2024 2013
109 Mystic Eagle LLC Mystic Eagle 63,301 April 9, 2024 2013
110 Rowayton Eagle LLC Rowayton Eagle 63,301 April 9, 2024 2013
111 Southport Eagle LLC Southport Eagle 63,301 April 9, 2024 2013
112 Stonington Eagle LLC Stonington Eagle 63,301 April 9, 2024 2012
113 Ultra Shipping LLC Kaley 63,283 June 26, 2015 2015
114 Stockholm Eagle LLC Stockholm Eagle 63,275 April 9, 2024 2016
115 Blooming Navigation LLC Kennadi 63,262 January 8, 2016 2016
116 Jasmine Shipping LLC Mackenzie 63,226 March 2, 2016 2016
117 New London Eagle LLC New London Eagle 63,140 April 9, 2024 2015
118 Star Lida I Shipping LLC Star Apus 63,123 July 16, 2019 2014
119 Star Zeus IV LLC Star Subaru 61,571 March 16, 2021 2015
120 Stamford Eagle LLC Stamford Eagle 61,530 April 9, 2024 2016
121 Star Nor XV LLC Star Wave 61,491 July 6, 2018 2017
122 Star Challenger I LLC Star Challenger (1) 61,462 December 12, 2013 2012
123 Star Challenger II LLC Star Fighter (1) 61,455 December 30, 2013 2013
124 Star Axe II LLC Star Lutas 61,347 January 6, 2016 2016
125 Aurelia Shipping LLC Honey Badger 61,320 February 27, 2015 2015
126 Rainbow Maritime LLC Wolverine 61,292 February 27, 2015 2015
127 Star Axe I LLC Star Antares 61,258 October 9, 2015 2015
128 Tokyo Eagle LLC Tokyo Eagle 61,225 April 9, 2024 2015
129 ABY Five LLC Star Monica 60,935 August 3, 2018 2015
130 Star Asia I LLC Star Aquarius 60,916 July 22, 2015 2015
131 Star Asia II LLC Star Pisces 60,916 August 7, 2015 2015
132 Nighthawk Shipping LLC Nighthawk 57,809 April 9, 2024 2011
133 Oriole Shipping LLC Oriole 57,809 April 9, 2024 2011
134 Owl Shipping LLC Owl 57,809 April 9, 2024 2011
135 Petrel Shipping LLC Petrel Bulker 57,809 April 9, 2024 2011
136 Puffin Shipping LLC Puffin Bulker 57,809 April 9, 2024 2011
137 Roadrunner Shipping LLC Roadrunner Bulker 57,809 April 9, 2024 2011
138 Sandpiper Shipping LLC Sandpiper Bulker 57,809 April 9, 2024 2011
139 Crane Shipping LLC Crane 57,809 April 9, 2024 2010
140 Egret Shipping LLC Egret Bulker 57,809 April 9, 2024 2010
141 Gannet Shipping LLC Gannet Bulker 57,809 April 9, 2024 2010
6
-------------------------------------------------------------------------------
Operating Fleet - Continued:
Date
Wholly Owned Subsidiaries Vessel Name DWT Delivered to Star Bulk Year Built
142 Grebe Shipping LLC Grebe Bulker 57,809 April 9, 2024 2010
143 Ibis Shipping LLC Ibis Bulker 57,809 April 9, 2024 2010
144 Jay Shipping LLC Jay 57,809 April 9, 2024 2010
145 Kingfisher Shipping LLC Kingfisher 57,809 April 9, 2024 2010
146 Martin Shipping LLC Martin 57,809 April 9, 2024 2010
147 Bittern Shipping LLC Bittern 57,809 April 9, 2024 2009
148 Canary Shipping LLC Canary 57,809 April 9, 2024 2009
149 Star Lida XI Shipping LLC Star Pyxis (2) 56,615 August 19, 2019 2013
150 Star Lida VIII Shipping LLC Star Hydrus 56,604 August 8, 2019 2013
151 Star Lida IX Shipping LLC Star Cleo 56,582 July 15, 2019 2013
152 Star Trident VII LLC Diva 56,582 July 24, 2017 2011
153 Star Lida X Shipping LLC Star Pegasus 56,540 July 15, 2019 2013
154 Golden Eagle Shipping LLC Golden Eagle 55,989 April 9, 2024 2010
155 Imperial Eagle Shipping LLC Imperial Eagle 55,989 April 9, 2024 2010
156 Stellar Eagle Shipping LLC Stellar Eagle (2) 55,989 April 9, 2024 2009
157 Crowned Eagle Shipping LLC Crowned Eagle (2) 55,940 April 9, 2024 2008
158 Glory Supra Shipping LLC Strange Attractor 55,742 July 11, 2014 2006
159 Star Regg III LLC Star Bright 55,569 October 10, 2018 2010
160 Star Omicron LLC Star Omicron 53,489 April 17, 2008 2005
Total dwt 15,378,842
-------------------------------------------------------------------------------
(1) Subject to a sale and leaseback financing transaction as further described in Note
7 to our consolidated financial statements included in the 2023 Annual Report.
(2) Vessel agreed to be sold, and delivery to her new owners is expected by June 2024.
Time charter-in vessels and time charter-in newbuilding vessels:
In addition, we have entered into long-term charter-in arrangements, the
details of which are described in the below table.
# Name DWT Built Yard Country Delivery / Estimated Delivery Minimum Period
1 Star Shibumi 180,000 2021 JMU Japan November 30, 2021 November 2028
2 Star Voyager 82,000 2024 Tsuneishi, Zhousan China January 11, 2024 January 2031
3 Stargazer 66,000 2024 Tsuneishi, Cebu Philippines January 16, 2024 January 2031
4 Star Explorer 82,000 2024 JMU Japan March 8, 2024 March 2031
5 NB Kamsarmax # 4 82,000 2024 JMU Japan Q3 - 2024 7 years
6 NB Kamsarmax # 2 82,000 2024 Tsuneishi, Zhousan China Q4 - 2024 7 years
7 NB Ultramax #2 66,000 2024 Tsuneishi, Cebu Philippines Q4 - 2024 7 years
Total dwt 640,000
7
-------------------------------------------------------------------------------
Vessels Under Construction:
In 2023, we entered into firm shipbuilding contracts for the construction of
five 82,000 dwt Kamsarmax newbuilding vessels with expected deliveries between
September 2025 and July 2026.
Expected
Shipyard
Delivery
Wholly Owned Subsidiaries Vessel Name DWT Date
1 Star Thundera LLC Hull No 15 82,000 Qingdao Shipyard Co. Ltd. September 2025
2 Star Caldera LLC Hull No 16 82,000 Qingdao Shipyard Co. Ltd. September 2025
3 Star Terra LLC Hull No 17 82,000 Qingdao Shipyard Co. Ltd. April 2026
4 Star Nova LLC Hull No 18 82,000 Qingdao Shipyard Co. Ltd. July 2026
5 Star Affinity LLC Hull No 23 82,000 Qingdao Shipyard Co. Ltd. April 2026
Total dwt 410,000
Liquidity and Capital Resources
Our principal sources of funds have been cash flow from operations, equity
offerings, borrowings under secured credit facilities, debt securities or
bareboat lease financings and proceeds from vessel sales. Our principal uses
of funds have been capital expenditures to establish and grow our fleet,
maintain the quality of our dry bulk carriers, comply with international
shipping standards, environmental laws and regulations, fund working capital
requirements, make principal and interest payments on outstanding indebtedness
and make dividend payments when approved by our Board of Directors.
Our short-term liquidity requirements include paying operating costs, funding
working capital requirements and the short-term equity portion of the cost of
vessel acquisitions, our newbuilding program and vessel upgrades, interest and
principal payments on outstanding indebtedness and maintaining cash reserves
to strengthen our position against adverse fluctuations in operating cash
flows. Our primary source of short-term liquidity is cash generated from
operating activities, available cash balances and portions from new debt and
refinancings as well as equity financings.
Our medium- and long-term liquidity requirements are funding the equity
portion of our newbuilding vessel installments and secondhand vessel
acquisitions, if any, funding required payments under our vessel financing and
other financing agreements and paying cash dividends when declared. Sources of
funding for our medium- and long-term liquidity requirements include cash
flows from operations, new debt and refinancings or bareboat lease financings,
sale and lease back arrangements, equity issuances and vessel sales.
Please also refer to Note 12 to our unaudited interim condensed consolidated
financial statements, included herein, for further discussion on our
commitments as of March 31, 2024.
As of May 21, 2024, we had total cash of $472.3 million and outstanding
borrowings (including lease financing agreements and $69.4 million outstanding
in connection with the convertible notes of Eagle) of $1,520.2 million. In
addition, following a number of interest rates swaps that we have entered
into, we have converted a total of $126.3 million of such debt from floating
to an average fixed rate of 61 bps with average maturity of 1.4 years.
Our debt agreements contain financial covenants and undertakings requiring us
to maintain various ratios. A summary of these terms is included in Note 8 of
the Company's consolidated financial statements for the year ended December
31, 2023, included in the 2023 Annual Report.
8
-------------------------------------------------------------------------------
We believe that our current cash balance and our operating cash flows to be
generated over the short-term period will be sufficient to meet our liquidity
needs for the foreseeable future (and at least through the end of the second
quarter of 2025), including funding the operations of our fleet, capital
expenditure requirements and any other present financial requirements,
including the cost of our newbuilding program as well as the cost for the
installation of Energy Saving Devices ("ESD"). In addition, we may sell and
issue shares under our two effective At-the-Market offering programs of up to
$150.0 million at any time and from time to time. As of May 21, 2024,
cumulative gross proceeds under our At-the-Market offering programs were $33.6
million. We may seek additional indebtedness to finance future vessel
acquisitions and our newbuilding program in order to maintain our cash
position or to refinance our existing debt on more favorable terms. Our
practice has been to fund the cash portion of the acquisition and construction
cost of dry bulk carriers using a combination of funds from operations and
bank debt or lease financing secured by mortgages or title of ownership on our
dry bulk carriers held by the relevant lenders, respectively. We may also use
the proceeds from potential equity or debt offerings to finance future vessel
acquisitions. Our business is capital-intensive and its future success will
depend on our ability to maintain a high-quality fleet through the acquisition
and construction of newer dry bulk carriers and the selective sale of older
dry bulk carriers. These acquisitions and newbuilding contracts will be
principally subject to management's expectation of future market conditions as
well as our ability to acquire dry bulk carriers on favorable terms. However
our ability to obtain bank or lease financing, to refinance our existing debt
or to access the capital markets for offerings in the future, may be limited
by our financial condition at the time of any such financing or offering,
including the market value of our fleet, as well as by adverse market
conditions resulting from, among other things, general economic conditions,
prevailing interest rates, weakness in the financial and equity markets and
contingencies and uncertainties that are beyond our control. Our liquidity is
also impacted by our dividend policy, as discussed below.
Dividend Policy
Our dividend policy is described in Item 8. Financial Information-A.
Consolidated statements and other financial information-Dividend Policy of our
2023 Annual Report.
As of March 31, 2024, the aggregate amount of cash on our balance sheet was
$268.5 million. Taking into account the Minimum Cash Balance per Vessel, as
defined in our 2023 Annual Report, on May 22, 2024, pursuant to our dividend
policy, our Board of Directors declared a quarterly cash dividend of $0.75 per
share, payable on or about June 20, 2024 to all shareholders of record as of
June 6, 2024.
Since Star Bulk is a holding company with no material assets other than the
shares of its subsidiaries through which it conducts its operations, Star
Bulk's ability to pay dividends in the future will depend on its subsidiaries'
ability to distribute funds to it. Any future dividends declared will be at
the discretion and remain subject to approval of our Board of Directors each
quarter after its review of our financial condition and other factors,
including but not limited to our earnings, the prevailing charter market
conditions, capital requirements, limitations under our debt agreements and
applicable provisions of Marshall Islands law, which generally prohibits the
payment of dividends other than from operating surplus or while a company is
insolvent or would be rendered insolvent upon the payment of such dividend.
Star Bulk's dividend policy and declaration and payment of dividends may be
changed at any time and are subject to available funds and our Board of
Directors' determination that each declaration and payment is at the time in
the best interests of Star Bulk and its shareholders after its review of our
financial performance. There can be no assurance that our Board of Directors
will continue to declare or pay any dividend in the future.
Other Recent Developments
Please refer to Note 15 to our unaudited interim condensed consolidated
financial statements, included elsewhere herein, for developments that took
place after March 31, 2024.
Operating Results
Factors Affecting Our Results of Operations
We deploy our vessels on a mix of short to medium time charters or voyage
charters, contracts of affreightment or in dry bulk carrier pools, according
to our assessment of market conditions. We adjust the mix of these charters to
take advantage of the relatively stable cash flow and high utilization rates
associated with medium to long-term time charters, or to profit from
attractive spot charter rates during periods of strong charter market
conditions, or to maintain employment flexibility that the spot market offers
during periods of weak charter market conditions. The following table reflects
certain operating data of our fleet, including our ownership days and TCE
rates, which we believe are important measures for analyzing trends in our
results of operations, for the periods indicated:
9
-------------------------------------------------------------------------------
Three-month period ended March 31,
(TCE rates expressed in U.S. Dollars) 2023 2024
Average number of vessels (1) 127.6 113.3
Number of vessels (2) 127 111
Average age of operational fleet (in years) (3) 11.2 11.9
Ownership days (4) 11,483 10,314
Available days (5) 10,994 9,969
Charter-in days (6) 247 271
Time Charter Equivalent Rate (TCE rate) (7) $ 14,199 $ 19,627
-------------------------------------------------------------------------------
(1) Average number of vessels is the number of vessels that constituted our
owned fleet for the relevant period, as measured by the sum of the
number of days each operating vessel was a part of our owned fleet
during the period divided by the number of calendar days in that period.
(2) As of the last day of each period reported.
(3) Average age of our operational fleet is calculated as of the end of each period.
(4) Ownership days are the total calendar days each vessel in the fleet was owned by us for the
relevant period, including vessels subject to sale and leaseback transactions and finance leases.
(5) Available days are the Ownership days after subtracting off-hire
days for major repairs, dry docking or special or intermediate
surveys, change of management and vessels' improvements and upgrades.
The available days for the first quarter of 2023 were also
decreased by off-hire days relating to disruptions in connection
with crew changes as a result of COVID-19. Available Days, as
presented above, may not necessarily be comparable to Available Days
of other companies, due to differences in methods of calculation.
(6) Charter-in days are the total days that we charter-in third party vessels.
(7) Time charter equivalent rate represents the weighted average daily TCE
rates of our operating fleet (including owned fleet and charter-in
vessels). TCE rate is a measure of the average daily net revenue
performance of our operating fleet. Our method of calculating
TCE rate is determined by dividing (a) TCE Revenues, which consists
of: voyage revenues (net of voyage expenses, charter-in hire
expense, amortization of fair value of above/below market acquired
time charter agreements, if any, as well as adjusted for the
impact of realized gain/(loss) on forward freight agreements ("FFAs")
and bunker swaps) by (b) Available days for the relevant time
period. Available days do not include the Charter-in days as per
the relevant definitions provided above. Voyage expenses primarily
consist of port, canal and fuel costs that are unique to a particular
voyage, which would otherwise be paid by the charterer under
a time charter contract, as well as commissions. In the calculation
of TCE Revenues, we also include the realized gain/(loss) on
FFAs and bunker swaps as we believe that this method better reflects
the chartering result of our fleet and is more comparable to the
method used by some of our peers. TCE Revenues and TCE rate, which
are non-GAAP measures, provide additional meaningful information
in conjunction with voyage revenues, the most directly comparable
GAAP measure, because they assist our management in making
decisions regarding the deployment and use of our vessels and because
we believe that they provide useful information to investors
regarding our financial performance. TCE rate is a standard shipping
industry performance measure used primarily to compare period-to-period
changes in a shipping company's performance despite changes in
the mix of charter types (i.e., voyage charters, time charters,
bareboat charters and pool arrangements) under which its vessels
may be employed between the periods. TCE Revenues and TCE rate,
as presented above, may not necessarily be comparable to those
of other companies due to differences in methods of calculation.
10
-------------------------------------------------------------------------------
The following table reflects the calculation of our TCE rates as discussed in
footnote (7) above. The table presents reconciliation of TCE Revenues to
voyage revenues as reflected in the unaudited interim condensed consolidated
income statements.
Three-month period ended March 31,
2023 2024
(In thousands of U.S. Dollars, except as otherwise stated)
Voyage revenues $ 224,035 $ 259,390
Less:
Voyage expenses (67,492) (57,094)
Charter-in hire expenses (6,615) (3,926)
Realized gain/(loss) on FFAs/bunker swaps 6,172 (2,706)
Time charter equivalent revenues ("TCE Revenues") $ 156,100 $ 195,664
Available days 10,994 9,969
Daily time charter equivalent rate ("TCE rate") $ 14,199 $ 19,627
Voyage Revenues
Voyage revenues are driven primarily by the number of vessels in our operating
fleet, the duration of our charters, the number of charter-in days, the amount
of daily charter hire or freight rates that our vessels earn under time and
voyage charters, respectively, which, in turn, are affected by a number of
factors, including our decisions relating to vessel acquisitions and
disposals, the number of vessels chartered-in, the amount of time that we
spend positioning our vessels, the amount of time that our vessels spend in
dry dock undergoing repairs, maintenance and upgrade work, the age, condition
and specifications of our vessels, levels of supply and demand in the seaborne
transportation market.
Vessels operating on time charters for a certain period of time provide more
predictable cash flows over that period of time, but can yield lower profit
margins than vessels operating in the spot charter market during periods
characterized by favorable market conditions. Vessels operating in the spot
charter market generate revenues that are less predictable, but may enable us
to capture increased profit margins during periods of improvements in charter
rates, although we would be exposed to the risk of declining vessel rates,
which may have a materially adverse impact on our financial performance. If we
employ vessels on period time charters, future spot market rates may be higher
or lower than the rates at which we have employed our vessels on period time
charters.
Voyage Expenses
Voyage expenses may include port and canal charges, agency fees, fuel (bunker)
expenses and brokerage commissions payable to related and third parties.
Voyage expenses are incurred for our owned and chartered-in vessels during
voyage charters or when the vessel is unemployed. Bunker expenses, port and
canal charges primarily increase in periods during which vessels are employed
on voyage charters because these expenses are paid by the owners.
Charter-in Hire Expenses
Charter-in hire expenses represent hire expenses for chartering-in third and
related party vessels, either under time charters or voyage charters.
Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs, the cost of
insurance and vessel registry, expenses relating to repairs and maintenance,
the cost of spares and consumable stores, tonnage taxes, regulatory fees,
maintenance expenses, lubricants and other miscellaneous expenses. Other
factors beyond our control, some of which may affect the shipping industry in
general, including for instance, developments relating to market prices for
crew wages, lubricants and insurance, may also cause these expenses to
increase.
11
-------------------------------------------------------------------------------
Dry Docking Expenses
Dry docking expenses relate to regularly scheduled intermediate survey or
special survey dry docking necessary to preserve the quality of our vessels as
well as to comply with international shipping standards and environmental laws
and regulations. Dry docking expenses can vary according to the age of the
vessel and its condition, the location where the dry docking takes place,
shipyard availability and the number of days the vessel is under dry dock. We
utilize the direct expense method, under which we expense all dry docking
costs as incurred.
Depreciation
We depreciate our vessels on a straight-line basis over their estimated useful
lives, which is determined to be 25 years from the date of their initial
delivery from the shipyard. Depreciation is calculated based on a vessel's
cost less the estimated residual value.
Management Fees
Management fees include fees paid to third parties as well as related parties
providing certain procurement services to our fleet.
General and Administrative Expenses
We incur general and administrative expenses, including our onshore personnel
related expenses, directors' and executives' compensation, share based
compensation, legal, consulting, audit and accounting expenses.
(Gain) / Loss on Forward Freight Agreements and Bunker Swaps, net
When deemed appropriate from a risk management perspective, we take positions
in freight derivatives, including FFAs and freight options with an objective
to utilize those instruments as economic hedges to reduce the risk on specific
vessels trading in the spot market and to take advantage of short-term
fluctuations in the market prices. Upon the settlement, if the contracted
charter rate is less than the average of the rates, for the specified route
and time period, as reported by an identified index, the seller of the FFA is
required to pay the buyer the settlement sum. The settlement amount is an
amount equal to the difference between the contracted rate and the settlement
rate, multiplied by the number of days in the specified period covered by the
FFA. Conversely, if the contracted rate is greater than the settlement rate,
the buyer is required to pay the seller the settlement sum. Our FFAs are
settled mainly through reputable exchanges such as European Energy Exchange
("EEX") or Singapore Exchange ("SGX") so as to limit our exposure in
over-the-counter transactions. Customary requirements for trading in FFAs
include the maintenance of initial and variation margins based on expected
volatility, open position and mark to market of the contracts. The fair value
of the FFAs or freight options is treated as an asset or liability until they
are settled with the change in their fair value being reflected in earnings.
Any such settlements by us or settlements to us under FFAs or freight options,
if any, are recorded under (Gain)/Loss on forward freight agreements and
bunker swaps, net.
Also, when deemed appropriate from a risk management perspective, we enter
into bunker swap contracts to manage our exposure to fluctuations of bunker
prices associated with the consumption of bunkers by our vessels. Bunker swaps
are agreements between two parties to exchange cash flows at a fixed price on
bunkers, where volume, time period and price are agreed in advance. Our bunker
swaps are settled mainly through reputable exchanges such as Intercontinental
Exchange ("ICE") so as to limit our counterparty exposure in over-the-counter
transactions. Bunker price differentials paid or received under the swap
agreements as well as changes in their fair value are recognized under
(Gain)/Loss on forward freight agreements and bunker swaps, net.
The fair value of freight derivatives and bunker swaps is determined through
Level 1 inputs of the fair value hierarchy (quoted prices from the applicable
exchanges such as EEX, SGX or ICE). Our FFAs and bunker swaps do not qualify
for hedge accounting and therefore unrealized gains or losses are recognized
under (Gain)/Loss on forward freight agreements and bunker swaps, net.
Impairment loss
When indicators of impairment are present for the Company's vessels and the
undiscounted cash flows estimated to be generated by those vessels are less
than their carrying value, the carrying value is reduced to its estimated fair
value and the difference is recorded under "Impairment loss". Furthermore,
vessels agreed to be sold or actively marketed as of reporting day are
measured at the lower of their carrying amount or fair value less cost to sell
and the difference, if any, is recorded under "Impairment loss" in the
unaudited interim consolidated income statements.
12
-------------------------------------------------------------------------------
Other operational gain
Other operational gain includes gain from all other operating activities which
are not related to the principal activities of the Company, such as gain from
insurance claims.
Gain on sale of vessels
Gain on sale of vessels represents net gains from the sale of our vessels
concluded during the period.
Loss on Write-Down of Inventory
Loss on write-down of inventory results from the valuation of the bunkers
remaining onboard our vessels following the decrease of bunkers' net
realizable value compared to their historical cost as of each period end.
Interest and Finance Costs
We incur interest expense and financing costs in connection with our
outstanding indebtedness under our existing loan facilities (including sale
and leaseback financing transactions). We also incur financing costs in
connection with establishing those facilities, which are presented as a direct
deduction from the carrying amount of the relevant debt liability and amortize
them to interest and financing costs over the term of the underlying
obligation using the effective interest method.
Interest Income
We earn interest income on our cash deposits with our lenders and other
financial institutions.
13
-------------------------------------------------------------------------------
Results of Operations
The three-month period ended March 31, 2024 compared to the three-month period
ended March 31, 2023
Voyage revenues net of Voyage expenses
: Voyage revenues for the three months ended March 31, 2024 increased to
$259.4 million from $224.0 million in the corresponding period in 2023. Time
charter equivalent revenues ("TCE Revenues") (as defined above) were $195.7
million compared to $156.1 million for the corresponding period in 2023. As a
result, the TCE rate for the first three months of 2024 increased to $19,627
compared to $14,199 for the corresponding period in 2023 which is indicative
of the stronger market conditions prevailing during the recent quarter. Please
refer to the table above for the calculation of the TCE Revenues and TCE rate
and their reconciliation with Voyage Revenues, which is the most directly
comparable financial measure calculated and presented in accordance with U.S.
GAAP.
Charter-in hire expenses
: Charter-in hire expenses for the three months ended March 31, 2024 and 2023
were $3.9 million and $6.6 million, respectively. This decrease is
attributable to the decreased rates for the charter-in vessels during the
first quarter of 2024 compared to the rates for the corresponding period in
2023.
Vessel operating expenses
:
For the three months ended March 31, 2024 and 2023, vessel operating expenses
were $51.2 million and $55.8 million, respectively. The decrease in our
operating expenses was primarily driven by the decrease in average number of
vessels in our fleet to 113.3 from 127.6.
Dry docking expenses:
Dry docking expenses for the three months ended March 31, 2024 and 2023 were
$10.0 million and $8.0 million, respectively. In each of the first quarters of
2024 and 2023, five vessels completed their periodic dry docking surveys, but
the vessels that completed their dry docking surveys in the first quarter of
2024 were of greater deadweight ton ("dwt") scale which resulted in increased
drydocking expenses.
Depreciation
:
Depreciation expense decreased to $32.0 million for the three -month period
ended March 31, 2024 compared to $35.1 million for the corresponding period in
2023. The fluctuation is primarily driven by the decrease in the average
number of vessels in our fleet to 113.3 from 127.6.
General and administrative expenses and Management fees
:
General and administrative expenses for the three-month period ended March 31,
2024 were $10.7 million compared to $11.7 million in the corresponding period
in 2023, primarily due to the decrease in the stock-based compensation expense
to $2.2 million from $3.4 million. Management fees for the three months ended
March 31, 2024 and 2023 were $4.4 million and $4.2 million, respectively.
(Gain)/Loss on forward freight agreements and bunker swaps, net
:
For the three-month period ended March 31, 2024, we incurred a loss on FFAs
and bunker swaps of $5.9 million, consisting of an unrealized loss of $3.2
million and a realized loss of $2.7 million. For the three-month period ended
March 31, 2023, we incurred a net gain on FFAs and bunker swaps of $1.3
million, consisting of an unrealized loss of $4.9 million and a realized gain
of $6.2 million.
Impairment loss:
During the three months ended March 31, 2023, an impairment loss of $7.7
million was incurred in connection with the agreement to sell two vessels.
During the three months ended March 31, 2024, no impairment loss was incurred.
Other operational gain:
Other operational gain for the three-month period ended March 31, 2024,
decreased to $1.6 million from $33.2 million in the three-month period ended
March 31, 2023. In the first quarter of 2023, other gains from insurance
claims relating to various vessels also included an aggregate gain of $30.9
million from insurance proceeds and daily detention compensation relating to
Star Pavlina
which became a constructive total loss due to its prolonged detainment in
Ukraine following the ongoing conflict between Russia and Ukraine.
Gain on sale of vessels:
Our results for the
three-month period ended March 31, 2024
, include an aggregate net gain of $8.8 million which resulted from the
completion of the sale of certain vessels (
Star Glory, Pantagruel, Big Bang
and
Star
Bovarius). No such case existed in the three months ended March 31, 2023.
14
-------------------------------------------------------------------------------
Loss on write-down of inventory:
Our results for the three months ended March 31, 2023 include a loss on
write-down of inventories of $2.2 million resulting from the valuation of the
bunkers remaining on board our vessels as a result of the bunkers' lower net
realizable value compared to their historical cost. No such loss was incurred
in the first quarter of 2024.
Interest and finance costs net of interest income and other income/(loss)
: Interest and finance costs net of interest income and other income/(loss)
for the three months ended March 31, 2024 and 2023 were $18.0 million and
$12.6 million, respectively. The driving factor for this increase is the
significant increase in variable interest rates prevailing during the first
quarter of 2024 and the lower interest earned from fixed deposits which was
partially offset by the decrease in our weighted average outstanding
indebtedness and the positive effect from our interest rate swaps.
Cash Flows
Net cash provided by operating activities for the three months ended March 31,
2024 and 2023 was $114.3 million and $83.2 million, respectively. This
increase was primarily driven by the higher charter rates due to the stronger
market conditions prevailing during the recent period compared to the
corresponding period in 2023 partly offset by the increase in our interest
payments for the reasons outlined above under "
Interest and finance costs"
.
Net cash provided by investing activities for the three months ended March 31,
2024 was $72.6 million and net cash used in investing activities for the three
months ended March 31, 2023 was $5.0 million, respectively. The increase was
attributable to the vessel sale proceeds of $94.0 million that we received
during the three-month period ended March 31, 2024, partially offset by the
greater amount of cash paid in 2024 in connection with the advances for
vessels under construction and vessel upgrades.
Net cash used in financing activities for the three months ended March 31,
2024 and 2023 was $180.0 million and $109.9 million, respectively. The
increase was primarily driven by greater net debt outflows of $141.9 million
in the first quarter of 2024 compared to $40.3 million in the same period in
2023, partially offset by both the lower dividend payments of $38.0 million in
2024 compared to $62.1 million in the corresponding period in 2023 and the
$7.0 million paid in connection with the repurchase of our common shares that
took place in the three-month period ended March 31, 2023.
Significant Accounting Policies and Critical Accounting Estimates
For a description of all our significant accounting policies and our critical
accounting estimates, see Note 2 to our audited financial statements and "Item
5 - Operating and Financial Review and Prospects," included in our 2023 Annual
Report. There have been no material changes from the "Critical Accounting
Estimates" previously disclosed in our 2023 Annual Report.
15
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Index to Unaudited Interim Condensed F-1
Consolidated Financial Statements
Unaudited Consolidated Balance Sheets as F-2
of December 31, 2023 and March 31, 2024
Unaudited Interim Condensed Consolidated Income Statements F-3
for the three-month periods ended March 31, 2023 and 2024
Unaudited Interim Condensed Consolidated Statements of Comprehensive F-4
Income/(Loss) for the three-month periods ended March 31, 2023 and 2024
Unaudited Interim Condensed Consolidated Statements of Shareholders' F-5
Equity for the three-month periods ended March 31, 2023 and 2024
Unaudited Interim Condensed Consolidated Statements of Cash F-6
Flows for the three-month periods ended March 31, 2023 and 2024
Notes to Unaudited Interim Condensed F-7
Consolidated Financial Statements
F-1
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Unaudited Consolidated Balance Sheets
As of December 31, 2023 and March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
ASSETS December 31, March 31,
CURRENT ASSETS 2023 2024
Cash and cash $ 227,481 $ 228,452
equivalents
Restricted 32,248 38,072
cash, current
(Notes 8
and 13)
Trade accounts 68,624 68,581
receivable,
net
Inventories 62,362 56,820
(Note 4)
Due from 23 -
managers
Due from 38 40
related
parties
(Note 3)
Prepaid 19,296 21,268
expenses and
other
receivables
Derivatives, 6,305 4,883
current
asset portion
(Note 13)
Accrued income - 159
Other current 22,830 28,055
assets
Vessel 15,190 -
held for
sale (Note 5)
Total Current 454,397 446,330
Assets
FIXED ASSETS
Advances for - 17,952
vessels under
construction
(Note 5)
Vessels and 2,539,743 2,441,744
other fixed
assets, net
(Note 5)
Total Fixed 2,539,743 2,459,696
Assets
OTHER
NON-CURRENT
ASSETS
Long term 1,736 1,710
investment
(Note 3)
Restricted cash, 2,021 2,021
non-current
(Notes 8
and 13)
Operating 27,825 109,793
leases,
right-of-use
assets (Note 6)
Derivatives, 2,533 2,077
non-current
asset portion
(Note 13)
TOTAL ASSETS $ 3,028,255 $ 3,021,627
LIABILITIES &
SHAREHOLDERS'
EQUITY
CURRENT
LIABILITIES
Current portion $ 249,125 $ 177,873
of long-term
bank loans
(Note 8)
Lease 2,731 2,731
financing
short term
(Note 7)
Accounts 39,317 45,055
payable
Due to 7,386 10,070
managers
Due to related 1,659 1,082
parties
(Note 3)
Accrued 31,372 33,932
liabilities
Operating lease 5,251 15,639
liabilities,
current
(Note 6)
Derivatives, 5,784 8,999
current
liability portion
(Note 13)
Deferred 16,738 14,002
revenue
Other current - 2,000
liabilities
Total Current 359,363 311,383
Liabilities
NON-CURRENT
LIABILITIES
Long-term bank loans, net of current portion 970,039 901,525
and unamortized loan issuance costs of
$8,508 and $7,062, as of December 31, 2023
and March 31, 2024, respectively (Note 8)
Lease financing long term, net of 15,208 14,538
unamortized lease issuance costs of $98
and $85, as of December 31, 2023 and
March 31, 2024, respectively (Note 7)
Operating lease 22,574 94,154
liabilities,
non-current
(Note 6)
Other 1,001 997
non-current
liabilities
TOTAL 1,368,185 1,322,597
LIABILITIES
COMMITMENTS &
CONTINGENCIES
(Note 12)
SHAREHOLDERS'
EQUITY
Preferred Shares; $0.01 par value, - -
authorized 25,000,000 shares; none issued
or outstanding at December 31, 2023 and
March 31, 2024, respectively (Note 9)
Common Shares, $0.01 par value, 300,000,000 shares 840 844
authorized; 84,016,892 shares issued and outstanding
as of December 31, 2023; 84,386,892 shares issued
and outstanding as of March 31, 2024 (Note 9)
Additional 2,287,055 2,289,212
paid
in capital
Accumulated 5,393 5,339
other
comprehensive
income/(loss)
Accumulated (633,218 ) (596,365 )
deficit
Total 1,660,070 1,699,030
Shareholders'
Equity
TOTAL $ 3,028,255 $ 3,021,627
LIABILITIES AND
SHAREHOLDERS'
EQUITY
The accompanying notes are integral part of these unaudited interim condensed
consolidated financial statements.
F-2
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Unaudited Interim Condensed Consolidated Income Statements
For the three-month periods ended March 31, 2023 and 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
Three months ended March 31,
2023 2024
Revenues:
Voyage revenues (Note 14) $ 224,035 $ 259,390
Expenses/(Income)
Voyage expenses (Note 3) 67,492 57,094
Charter-in hire expenses 6,615 3,926
Vessel operating expenses 55,785 51,172
Dry docking expenses 8,007 10,021
Depreciation (Note 5) 35,069 31,990
Management fees (Notes 3) 4,244 4,404
General and administrative expenses (Note 3) 11,665 10,695
Impairment loss 7,700 -
Loss on write-down of inventory 2,166 -
Other operational loss 155 181
Other operational gain (33,233 ) (1,617 )
Loss on bad debt 300 -
(Gain)/Loss on forward freight agreements and bunker swaps, net (Note 13) (1,308 ) 5,921
Gain on sale of vessels (Note 5) - (8,769 )
Total operating expenses, net 164,657 165,018
Operating income 59,378 94,372
Other Income/ (Expenses):
Interest and finance costs (Note 8) (15,702 ) (20,499 )
Interest income and other income/(loss) 3,149 2,526
Gain/(Loss) on interest rate swaps, net (Note 13) (372 ) (810 )
Gain/(Loss) on debt extinguishment, net (Note 8) (419 ) (813 )
Total other expenses, net (13,344 ) (19,596 )
Income before taxes and equity in income of investee $ 46,034 $ 74,776
Income taxes (103 ) 106
Income before equity in income/(loss) of investee 45,931 74,882
Equity in income/(loss) of investee (Note 3) (56 ) (26 )
Net income 45,875 74,856
Earnings per share, basic $ 0.45 $ 0.89
Earnings per share, diluted 0.44 0.89
Weighted average number of shares outstanding, basic (Note 10) 102,974,041 83,835,611
Weighted average number of shares outstanding, diluted (Note 10) 103,381,943 84,177,253
The accompanying notes are integral part of these unaudited interim condensed
consolidated financial statements.
F-3
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income /
(Loss)
For the three-month periods ended March 31, 2023 and 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
Three months ended March 31,
2023 2024
Net income $ 45,875 $ 74,856
Other comprehensive
income / (loss):
Unrealized gains / losses
from cash flow hedges:
Unrealized gain / (loss) from hedging interest rate swaps recognized 190 1,369
in Other comprehensive income/(loss) before reclassifications
Unrealized gain / (loss) from hedging foreign currency forward contracts - (240 )
recognized in Other comprehensive income/(loss) before reclassifications
Less:
Reclassification adjustments of (7,273 ) (1,183 )
interest rate swap gain/(loss)
Other comprehensive (7,083 ) (54 )
income / (loss)
Total comprehensive $ 38,792 $ 74,802
income
The accompanying notes are integral part of these unaudited interim condensed
consolidated financial statements.
F-4
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Unaudited Interim Condensed Consolidated Statements of Shareholders' Equity
For the three-month periods ended March 31, 2023 and 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
Common
Stock
# of Par Additional Accumulated Accumulated Total
Shares Value Paid-in Other deficit Shareholders'
Capital Comprehensive Equity
income/(loss)
BALANCE, 102,857,416 $ 1,029 $ 2,646,073 $ 20,962 $ (648,722 ) $ 2,019,342
January
1,
2023
Net - - - - 45,875 45,875
income
Other - - - (7,083 ) - (7,083 )
comprehensive
income /
(loss)
Issuance of vested and 450,000 4 3,442 - - 3,446
non-vested shares and
amortization of
share-based compensation
Repurchase and (331,223 ) (3 ) (7,002 ) - - (7,005 )
cancellation
of common
shares, net
Dividends - - - - (62,050 ) (62,050 )
declared
($0.60 per
share)
BALANCE, 102,976,193 $ 1,030 $ 2,642,513 $ 13,879 $ (664,897 ) $ 1,992,525
March
31,
2023
BALANCE, 84,016,892 $ 840 $ 2,287,055 $ 5,393 $ (633,218 ) $ 1,660,070
January
1,
2024
Net - - - - 74,856 74,856
income
Other - - - (54 ) - (54 )
comprehensive
income /
(loss)
Issuance of vested and 370,000 4 2,157 - - 2,161
non-vested shares and
amortization of share-based
compensation (Note 9)
Dividends - - - - (38,003 ) (38,003 )
declared ($0.45
per share)
(Note 9)
BALANCE, 84,386,892 $ 844 $ 2,289,212 $ 5,339 $ (596,365 ) $ 1,699,030
March
31,
2024
The accompanying notes are integral part of these unaudited interim condensed
consolidated financial statements.
F-5
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
For the three-month periods ended March 31, 2023 and 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
Three months
ended March 31,
2023 2024
Cash Flows from
Operating Activities:
Net income $ 45,875 $ 74,856
Adjustments to reconcile net income/(loss) to net
cash provided by/(used in) operating activities:
Depreciation 35,069 31,990
Amortization of debt (loans 1,043 779
& leases) issuance costs
Noncash lease 2,770 2,988
expense
Gain/(Loss) on debt 419 813
extinguishment, net
Impairment 7,700 -
loss
Gain on sale - (8,769 )
of vessels
Loss on 300 -
bad debt
Share-based 3,446 2,161
compensation
Gain from insurance proceeds (28,163 ) -
relating to vessel total loss
Loss on write-down 2,166 -
of inventory
Change in fair value of forward 4,864 3,215
freight derivatives and bunker swaps
Other non-cash 42 (4 )
charges
Change in fair value of interest rate 372 975
swaps not designated as cash flow hedges
Gain on hull and - (470 )
machinery claims
Equity in income/(loss) 56 26
of investee
Changes in operating
assets and liabilities:
(Increase)/Decrease
in:
Trade accounts 13,579 43
receivable
Inventories (1,585 ) 5,181
Prepaid expenses and (8,010 ) (8,318 )
other receivables
Derivatives - 849
asset
Due from related 24 (2 )
parties
Due from 31 23
managers
Increase/(Decrease)
in:
Accounts 2,434 7,141
payable
Operating lease (2,770 ) (2,988 )
liability
Due to related 113 (577 )
parties
Accrued (1,222 ) 2,561
liabilities
Due to 6,222 2,684
managers
Deferred (1,585 ) (2,736 )
revenue
Other current - 2,000
liabilities
Net cash provided by / (used 83,190 114,262
in) Operating Activities
Cash Flows from
Investing Activities:
Advances for vessels under construction & (5,389 ) (22,048 )
vessel upgrades and other fixed assets
Cash proceeds - 94,021
from vessel sales
Hull and machinery 358 591
insurance proceeds
Net cash provided by / (used (5,031 ) 72,564
in) Investing Activities
Cash Flows from
Financing Activities:
Proceeds from bank 47,000 -
loans and leases
Loan and lease prepayments (87,293 ) (141,895 )
and repayments
Financing and debt (587 ) (133 )
extinguishment fees paid
Dividends paid (62,050 ) (38,003 )
Repurchase of (7,005 ) -
common shares
Net cash provided by / (used (109,935 ) (180,031 )
in) Financing Activities
Net increase/(decrease) in cash and (31,776 ) 6,795
cash equivalents and restricted cash
Cash and cash equivalents and 286,344 261,750
restricted cash at beginning of period
Cash and cash equivalents and $ 254,568 $ 268,545
restricted cash at end of period
SUPPLEMENTAL CASH
FLOW INFORMATION:
Cash paid during
the period for:
Interest $ 13,640 $ 20,878
Non-cash investing and
financing activities:
Vessel 50 2,514
upgrades
Right-of-use assets and lease - 84,954
obligations for charter-in contracts
Reconciliation of (a) cash and cash equivalents, and
restricted cash reported within the consolidated balance
sheets to (b) the total amount of such items
reported in the statements of cash flows:
Cash and cash $ 234,498 $ 228,452
equivalents
Restricted 18,049 38,072
cash, current
Restricted cash, 2,021 2,021
non-current
Cash and cash equivalents and restricted cash at $ 254,568 $ 268,545
end of period shown in the statement of cash flows
The accompanying notes are integral part of these unaudited interim condensed
consolidated financial statements.
F-6
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
1.
Basis of Presentation and General Information:
Star Bulk Carriers Corp. ("Star Bulk") is a global shipping company providing
worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk
was incorporated in the Marshall Islands on December 13, 2006 and maintains
offices in Athens, New York, Limassol, Singapore and Germany. Star Bulk's
common shares trade on the NASDAQ Global Select Market under the ticker symbol
"SBLK".
The unaudited interim condensed consolidated financial statements include the
accounts of Star Bulk and its wholly owned subsidiaries (collectively, the
"Company") and have been prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") and
applicable rules and regulations of the U.S. Securities and Exchange
Commission (the "SEC") for interim financial information. Accordingly, they do
not include all the information and notes required by U.S. GAAP for annual
financial statements.
These unaudited interim condensed consolidated financial statements have been
prepared on the same basis as the annual consolidated financial statements for
the year ended December 31, 2023 and, in the opinion of management, reflect
all normal recurring adjustments considered necessary for a fair presentation
of the Company's financial position, results of operations and cash flows for
the periods presented. Operating results for the three-month period ended
March 31, 2024 are not necessarily indicative of the results that might be
expected for the fiscal year ending December 31, 2024.
The unaudited interim condensed consolidated financial statements presented in
this report should be read in conjunction with the annual consolidated
financial statements for the year ended December 31, 2023 included in the
Company's Annual Report on Form 20-F for the year ended December 31, 2023 (the
"2023 Annual Report"). The balance sheet as of December 31, 2023 has been
derived from the audited consolidated financial statements as of that date,
but, pursuant to the requirements for interim financial information, does not
include all of the information and footnotes required by U.S. GAAP for
complete financial statements.
Unless otherwise defined herein, capitalized words and expressions used herein
shall have the same meanings ascribed to them in the 2023 Annual Report.
As of March 31, 2024, the Company owned a modern fleet of 111 dry bulk vessels
consisting of Newcastlemax, Capesize, Post Panamax, Kamsarmax, Panamax,
Ultramax and Supramax vessels with a carrying capacity between 53,489
deadweight tonnage ("dwt") and 209,537 dwt, a combined carrying capacity of
12.4 million dwt and an average age of 11.9 years. Also, the Company has
entered into firm shipbuilding contracts for the construction of five 82,000
dwt Kamsarmax newbuilding vessels with expected deliveries between September
2025 and July 2026. In addition, through certain of its subsidiaries, the
Company charters-in a number of third-party vessels
on both a short-term and long-term basis
to increase its operating capacity in order to satisfy its clients' needs.
Lastly, the Company entered into long-term charter-in arrangements with
respect to six newbuilding vessels, with an approximate duration of seven
years per vessel, plus optional years at the Company's option. Three of those
vessels were delivered during the three months ended March 31, 2024 and the
remaining three are expected to be delivered to the Company by the fourth
quarter of 2024.
On December 11, 2023, the Company entered into a definitive agreement with
Eagle Bulk Shipping Inc. (NYSE: EGLE) ("Eagle") (the "Eagle Merger Agreement")
to combine in an all-stock merger (the "Eagle Merger"). Pursuant to the Eagle
Merger Agreement, each share of Eagle common stock, par value $0.01 per share,
issued and outstanding immediately prior to the effective time of the Eagle
Merger (excluding Eagle common stock owned by Eagle, Star Bulk, Star Infinity
Corp., a wholly owned subsidiary of Star Bulk, or any of their respective
direct or indirect wholly owned subsidiaries) would be converted into the
right to receive 2.6211 shares, par value $0.01 per share, of Star Bulk common
stock.
F-7
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
1.
Basis of Presentation and General Information - continued:
The Eagle Merger was completed on April 9, 2024 (Note 15), following Eagle
shareholders' approval and receipt of applicable regulatory approvals and
satisfaction of customary closing conditions. Eagle common stock has ceased
trading and is no longer listed on the New York Stock Exchange. The Eagle
Merger will be accounted for as an acquisition of Eagle by Star Bulk under the
asset acquisition method of accounting in accordance with generally accepted
accounting principles in the United States of America ("U.S. GAAP"). Star Bulk
will be treated as the acquiror for accounting purposes. Following the closing
of the Eagle Merger, Star Bulk is the largest U.S. listed dry bulk shipping
company with a global market presence and combined fleet of 161 owned vessels
on a fully delivered basis, 97% of which are fitted with scrubbers, ranging
from Newcastlemax/Capesize to Ultramax/Supramax vessels.
2.
Significant accounting policies and recent accounting pronouncements:
A summary of the Company's significant accounting policies and recent
accounting pronouncements is included in Note 2 to the Company's consolidated
financial statements included in the 2023 Annual Report. There have been no
changes to the Company's significant accounting policies and recent accounting
pronouncements in the three-month period ended March 31, 2024.
3.
Transactions with Related Parties:
Details of the Company's transactions with related parties did not change in
the three-month period ended March 31, 2024 and are discussed in Note 3 of the
Company's consolidated financial statements for the year ended December 31,
2023, included in the 2023 Annual Report.
Transactions and balances with related parties are analyzed as follows:
Balance Sheets
December 31, 2023 March 31,
2024
Long term investment
Interchart $ 1,380 $ 1,357
Starocean 231 228
CCL Pool 125 125
Long term investment $ 1,736 $ 1,710
Due from related parties
Management and Directors Fees $ - $ 2
Interchart 3 3
Starocean 35 35
Due from related parties $ 38 $ 40
Due to related parties
Management and Directors Fees $ 172 $ -
Oceanbulk Maritime S.A. and its affiliates 15 43
Iblea Ship Management Limited 1,472 1,039
Due to related parties $ 1,659 $ 1,082
F-8
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
3.
Transactions with Related Parties - continued:
Income statements
Three months ended March 31,
2023 2024
Voyage expenses:
Voyage expenses-Interchart $ (1,032 ) $ (1,035 )
General and administrative expenses:
Consultancy fees $ (139 ) $ (199 )
Directors compensation (46 ) (39 )
Office rent - Combine Marine Ltd. & Alma Properties (9 ) (9 )
General and administrative expenses - Oceanbulk Maritime S.A. and its affiliates (60 ) (44 )
Management fees:
Management fees- Iblea Ship Management Limited $ (829 ) $ (601 )
Equity in income/(loss) of investee:
Interchart $ (51 ) $ (23 )
Starocean (5 ) (3 )
4.
Inventories:
The amounts shown in the consolidated balance sheets are analyzed as follows:
December 31, 2023 March 31,
2024
Lubricants $ 13,945 $ 13,501
Bunkers 48,417 43,319
Total $ 62,362 $ 56,820
F-9
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
5.
Vessels and other fixed assets, net and Advances for vessels under construction:
The amounts in the consolidated balance sheets are analyzed as follows:
Cost Accumulated Net Book
depreciation Value
Balance, December $ 3,508,701 $ (968,958 ) $ 2,539,743
31, 2023
- Acquisition of other fixed assets, 3,694 - 3,694
vessel improvements and other vessel costs
- Vessel (116,137 ) 46,435 (69,702 )
sales
- Depreciation - (31,990 ) (31,990 )
for the period
Balance, March $ 3,396,258 $ (954,514 ) $ 2,441,744
31, 2024
During the first quarter of 2024, the vessels
Big Fish
(classified as held for sale as of December 31, 2023),
Star Glory
and
Star Bovarius
were delivered to their new owners. These vessels had been agreed to be sold
in 2023.
Additionally, during the first quarter of 2024, the Company agreed to sell the
vessels
Big Bang
,
Pantagruel
,
Star Audrey
,
Star Pyxis
and
Star Paola
. The vessels
Pantagruel
and
Big Bang
were delivered to their new owners on February 26, 2024 and March 6, 2024,
respectively. The vessels
Star Audrey
and
Star Pyxis
are expected to be delivered to their new owners by June 2024, and the vessel
Star Paola
was delivered to her new owner on April 29, 2024 (Note 15). Given their
employment as of March 31, 2024, none of the above-mentioned vessels met the
criteria to be classified as held for sale as of March 31, 2024.
In connection with the aforementioned deliveries of the sold vessels, a net
gain of $8,769 was recognized and reflected separately in the unaudited
interim condensed consolidated income statement for the three-month period
ended March 31, 2024.
As of March 31, 2024, 109 of the Company's vessels, having a net carrying
value of $2,400,235, serve as collateral under certain of the Company's loan
facilities and were subject to first-priority mortgages (Note 8). Title of
ownership is held by the relevant lenders for another 2 vessels with a
carrying value of $41,087 to secure the relevant sale and lease back financing
transactions (Note 7). In addition, 18 of the Company's vessels having a net
carrying value of $340,579 are subject to second-priority mortgages and serve
as collateral under certain of the Company's loan facilities (Note 8).
The amounts reported under "
Acquisition of other fixed assets, vessel improvements and other vessel costs
" in the table above which were incurred during the three-month period ended
March 31, 2024 were incurred mainly in connection with the Company's continued
technical upgrades to its fleet, such as the installation of ballast water
treatment systems ("BWTS") and Energy Saving Devices ("ESD").
F-10
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
5.
Vessels and other fixed assets, net and Advances for vessels under
construction - continued:
Vessels under construction:
During 2023, the Company entered into five firm shipbuilding contracts with
Qingdao Shipyard Co., Ltd. for the construction of five 82,000 dwt Kamsarmax
newbuilding vessels. The delivery of two of these vessels is expected in
September 2025, another two in April 2026 and the last one in July 2026.
The amounts shown in the consolidated balance sheets are analyzed as follows:
Balance, December 31, 2023 $ -
- Pre-delivery yard installments 17,750
- Capitalized interest and finance costs 202
Balance, March 31, 2024 $ 17,952
As of March 31, 2024, the total aggregate remaining contracted price for the
five vessels under construction was $164,800, payable in periodic installments
up to their deliveries, of which $21,300 is payable during the next twelve
months ending March 31, 2025, and the remaining $143,500 is payable until
their expected delivery from the shipyard in July 2026.
6.
Operating leases:
a) Time charter-in vessel agreements
The carrying value of the assets and liabilities recognized on the balance
sheet as of December 31, 2023 and March 31, 2024 in connection with the time
charter-in vessel arrangements with an initial term exceeding 12 months (Note
1), amounted to $27,548 and $109,576, respectively. The time charter-in
payments required to be made after March 31, 2024, for these outstanding
operating lease liabilities are as follows:
Twelve month periods ending Amount
March 31, 2025 $ 21,001
March 31, 2026 21,343
March 31, 2027 20,174
March 31, 2028 21,402
March 31, 2029 18,481
March 31, 2030 and thereafter 27,858
Total undiscounted lease payments $ 130,259
Discount based on incremental borrowing rate (20,683 )
Present value of lease liability $ 109,576
Operating lease liabilities, current 15,452
Operating lease liabilities, non-current 94,124
The weighted average remaining lease term of these charter-in vessel
arrangements as of March 31, 2024 is 6.37 years.
The charter-in expenses for the long-term charter-in arrangements for the
three-month periods ended
March 31, 2023
and 2024, were $2,879 and $3,926, respectively.
F-11
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
6.
Operating leases - continued:
b) Office rental arrangements
The carrying value of the assets and liabilities recognized
on the balance sheet
as of December 31, 2023 and March 31, 2024 in connection with the office
rental arrangements
,
amounted to $277 and $217, respectively.
The office rental payments required to be made after March 31, 2024, for these
outstanding operating lease liabilities are as follows:
Twelve month periods ending Amount
March 31, 2025 $ 187
March 31, 2026 30
March 31, 2027 -
March 31, 2028 -
March 31, 2029 -
March 31, 2030 and thereafter -
Total undiscounted lease payments $ 217
Discount based on incremental borrowing rate -
Present value of lease liability $ 217
Operating lease liabilities, current 187
Operating lease liabilities, non-current 30
The weighted average remaining lease term of these office rental arrangements
as of March 31, 2024 is 1.06 years.
The lease expenses for these office rental arrangements for the three-month
periods ended
March 31, 2023
and 2024 were
$125
and $60, respectively.
F-12
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
7.
Lease financings:
Details of the Company's lease financings are discussed in Note 7 of the
Company's consolidated financial statements for the year ended December 31,
2023, included in the 2023 Annual Report.
The Company's lease financings bear interest at SOFR plus a margin. The
corresponding interest expense of the Company's bareboat lease financing
activities is included within "Interest and finance costs" in the unaudited
interim condensed consolidated income statements (Note 8).
The principal payments required to be made after March 31, 2024, for the
outstanding finance lease obligations recognized on the balance sheet, as of
that date, are as follows:
Twelve month periods ending Amount
March 31, 2025 $ 2,731
March 31, 2026 2,731
March 31, 2027 2,731
March 31, 2028 2,731
March 31, 2029 4,725
March 31, 2030 and thereafter 1,705
Total bareboat lease minimum payments $ 17,354
Unamortized lease issuance costs (85 )
Total bareboat lease minimum payments, net $ 17,269
Lease financing short term 2,731
Lease financing long term, net of unamortized lease issuance costs 14,538
F-13
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
8.
Long-term bank loans:
Details of the Company's credit facilities are discussed in Note 8 of the
Company's consolidated financial statements for the year ended December 31,
2023, included in the 2023 Annual Report.
In addition to the scheduled repayments during the three-month period ended
March 31, 2024 and in connection with the sale of vessels described in Note 5,
the Company prepaid the following amounts: i) $9,111 corresponding to the
outstanding loan amount of the vessel
Star Bovarius
under the
ING Facility, ii) an aggregate amount of $23,814
corresponding to the outstanding loan amount of the vessels
Big Fish
,
Big Bang
and
Pantagruel
under the
NBG $125,000 Facility and iii) $5,821
corresponding to the outstanding loan amount of the vessel
Star Dorado
under the Citi $100,000 Facility. In addition, the Company prepaid the
outstanding loan amount of $58,500 under the latest drawn tranche of ING
Facility of $62,000,
with original maturity in November 2024.
As of December 31, 2023 and March 31, 2024, the Company was required to
maintain minimum liquidity, not legally restricted, of $58,000 and $55,500,
respectively, which is included within "Cash and cash equivalents" in the
consolidated balance sheets. In addition, as of December 31, 2023 and March
31, 2024, the Company was required to maintain a minimum liquidity, legally
restricted (including the cash collateral required under certain of the
Company's FFAs, as described in Note 13), of $34,269 and $40,093,
respectively. The increase in restricted cash is attributable to the increase
in collateral required under certain of the Company's financial instruments
(Note 13).
As of March 31, 2024, the Company was in compliance with the applicable
financial and other covenants contained in its bank loan agreements and lease
financings (Note 7), which are described in Note 8 of the Company's
consolidated financial statements for the year ended December 31, 2023,
included in the 2023 Annual Report.
The principal payments required to be made after March 31, 2024 for the
outstanding bank debt as of that date, are as follows:
Twelve month periods ending Amount
March 31, 2025 $ 177,873
March 31, 2026 207,651
March 31, 2027 265,857
March 31, 2028 229,155
March 31, 2029 121,849
March 31, 2030 and thereafter 84,075
Total Long-term bank loans $ 1,086,460
Unamortized loan issuance costs (7,062 )
Total Long-term bank loans, net $ 1,079,398
Current portion of long-term bank loans 177,873
Long-term bank loans, net of current portion and unamortized loan issuance costs 901,525
F-14
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
8.
Long-term bank loans - continued:
All of the Company's bank loans bear interest at SOFR plus a margin. The
weighted average interest rate (including the margin) related to the Company's
debt including lease financings (Note 7), following a number of interest rates
swaps the Company has entered into (Note 13), for the three-month periods
ended March 31, 2023 and 2024 was 4.36% and 6.58%, respectively.
The amounts of "Interest and finance costs" included in the unaudited interim
condensed consolidated income statements are analyzed as follows:
Three Months Ended March 31,
2023 2024
Interest on financing $ 21,580 $ 20,701
agreements
Reclassification adjustments of interest rate swap loss/(gain) transferred (7,273 ) (1,183 )
to Interest and finance costs from Other Comprehensive Income (Note 13)
Amortization of debt (loan 1,043 779
& lease) issuance costs
Other bank and 352 202
finance charges
Interest and $ 15,702 $ 20,499
finance costs
During the three-month period ended March 31, 2024, the Company wrote off an
amount of $779 of unamortized debt issuance costs, following the loan
prepayments discussed above, which are included along with prepayment fees of
$34, under "Gain/(Loss) on debt extinguishment, net" in the unaudited interim
condensed consolidated income statement for the corresponding period. During
the three-month period ended March 31, 2023, the Company wrote off an amount
of $419 of unamortized debt issuance costs following the loan prepayments
discussed above, which are included under "Gain/(Loss) on debt extinguishment,
net" in the unaudited interim condensed consolidated income statement for the
corresponding period.
9.
Preferred and Common Shares and Additional Paid-in Capital:
Details of the Company's preferred shares and common shares are discussed in
Note 9 of the Company's consolidated financial statements for the year ended
December 31, 2023, included in the 2023 Annual Report.
During the three-month period ended March 31, 2024, the Company issued 370,000
common shares pursuant to its Performance Incentive Program discussed in Note
11 of the Company's consolidated financial statements for the year ended
December 31, 2023, included in the 2023 Annual Report.
Pursuant to its dividend policy, during the three-month period ended March 31,
2024, the Company declared and paid a cash dividend of $38,003 or $0.45 per
common share.
F-15
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
10.
Earnings per Share:
The computation of basic earnings per share is based on the weighted average
number of common shares outstanding for the three-month periods ended March
31, 2023 and 2024. The calculation of basic earnings per share does not
consider the non-vested shares as outstanding until the time-based vesting
restriction has lapsed. Diluted earnings per share gives effect to stock
awards and restricted stock units using the treasury stock method, unless the
impact is anti-dilutive.
The Company calculates basic and diluted earnings per share as follows:
Three Months Ended March 31,
2023 2024
Income :
Net income $ 45,875 $ 74,856
Basic earnings per share:
Weighted average common shares outstanding, basic 102,974,041 83,835,611
Basic earnings per share $ 0.45 $ 0.89
Effect of dilutive securities:
Dillutive effect of non vested shares 407,902 341,642
Weighted average common shares outstanding, diluted 103,381,943 84,177,253
Diluted earnings per share $ 0.44 $ 0.89
11.
Equity Incentive Plans:
Details of the Company's equity incentive plans and share awards granted
through December 31, 2023, are discussed in Note 11 of the Company's
consolidated financial statements for the year ended December 31, 2023,
included in the 2023 Annual Report.
The stock-based compensation cost for the three-month periods ended March 31,
2023 and 2024, which is included under "General and administrative expenses"
in the unaudited interim condensed consolidated income statements, amounted to
$3,446 and $2,161, respectively.
F-16
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
11.
Equity Incentive Plans - continued:
A summary of the status of the Company's non-vested restricted shares as of
March 31, 2024 and the movement during the three-month period ended March 31,
2024 is presented below.
Number of shares Weighted Average Grant
Date Fair Value
Unvested as at January 1, 2024 364,001 $ 20.11
Granted 370,000 21.26
Vested (370,000 ) 21.26
Unvested as at March 31, 2024 364,001 $ 20.11
As of March 31, 2024, the estimated compensation cost relating to non-vested
restricted share awards not yet recognized is $3,466 and is expected to be
recognized over the weighted average period of 1.16 years. During the
three-month period ended March 31, 2024 the Company paid $164 for dividends to
shareholders of non-vested shares.
12.
Commitments and Contingencies:
a)
Commitments:
The following tables set forth inflows and outflows related to the Company's
charter party arrangements and other commitments, as at March 31, 2024.
Charter party arrangements
:
Twelve month periods ending March 31,
+ inflows/ Total 2025 2026 2027 2028 2029 2030 and
- outflows thereafter
Future, minimum, non-cancellable $ 97,329 $ 87,312 $ 10,017 $ - $ - $ - $ -
charter revenues (1)
Total $ 97,329 $ 87,312 $ 10,017 $ - $ - $ - $ -
-------------------------------------------------------------------------------
(1) The amounts represent the minimum contractual charter revenues to be generated from the
existing, as of March 31, 2024, non-cancellable time charter agreements, until their
expiration, net of address commission, assuming no off-hire days, other than those
related to scheduled interim and special surveys of the vessels. Future inflows also
include revenues deriving from index linked charter agreements using i) the index rates
at the commencement date of each agreement, in compliance with ASC 842, and do not
reflect relevant index charter rate information prevailing as of March 31, 2024 and
ii) the remaining minimum duration of each non-cancellable time charter agreement.
F-17
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
12.
Commitments and Contingencies - continued:
b)
Commitments - continued:
Other commitments:
Twelve month periods ending March 31,
+ inflows/ Total 2025 2026 2027 2028 2029 2030 and
- outflows thereafter
Charter-in expense $ (98,560 ) $ (15,102 ) $ (15,102 ) $ (15,143 ) $ (15,102 ) $ (38,111 ) $ -
newbuilding vessels (1)
Vessel BWTS upgrades (11,134 ) (10,620 ) (514 ) - - - -
and ESD (2)
Total $ (109,694 ) $ (25,722 ) $ (15,616 ) $ (15,143 ) $ (15,102 ) $ (38,111 ) $ -
-------------------------------------------------------------------------------
(1) The amounts represent minimum contractual charter-in payments, to be made from the delivery
date of the six charter-in newbuilding vessels (Note 1) until the end of their lease term.
(2) The amounts represent the Company's commitments as of March 31, 2024 for installation
of BWTS upgrades and ESD on its vessels to comply with environmental regulations.
c)
Legal proceedings
Various claims, suits, and complaints, including those involving government
regulations and product liability, arise in the ordinary course of the
shipping business. In addition, losses may arise from disputes with
charterers, agents, insurance and other claims with suppliers relating to the
operations of the Company's vessels. The Company accrues for the cost of
environmental liabilities when management becomes aware that a liability is
probable and is able to reasonably estimate the probable exposure. Currently,
management is not aware of, and has not accrued for, any such claims or
contingent liabilities requiring disclosure in the unaudited interim condensed
consolidated financial statements.
F-18
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
13.
Fair value measurements and Hedging:
Fair value on a recurring basis:
Interest rate swaps
Details of the Company's interest rate swaps are discussed in Note 18 of the
Company's consolidated financial statements for the year ended December 31,
2023, included in the 2023 Annual Report.
The following table summarizes the interest rate swaps in place as of March
31, 2024:
Counterparty Trading Date Inception Expiry Fixed Rate Initial Notional Current Notional
ING Mar-20 Mar-20 Mar-26 0.7000% $ 29,960 $ 21,400
ING Mar-20 Apr-20 Oct-25 0.7000% $ 39,375 $ 25,313
SEB Mar-20 Apr-20 Jan-25 0.7270% $ 58,885 $ 41,639
Citi Jun-20 Aug-20 May-24 0.1293% $ 56,075 $ 37,908
Citi Jun-20 Aug-20 May-24 0.3380% $ 31,350 $ 21,130
ING Jul-20 Jul-20 Jul-26 0.3700% $ 70,000 $ 29,167
SEB Feb-21 Apr-21 Jan-26 0.4525% $ 37,050 $ 15,600
The above interest rate swaps were designated and qualified as cash flow
hedges while they are in effect, with the exception of those swaps that have
been entered with Citi (the swaps with current notional amount of $59,038)
which were de-designated from cash flow hedge on December 31, 2023 since they
no longer meet the hedging relationship criteria. For the three-month period
ended March 31, 2024, the losses from the de-designated interest rate swaps
amounting to $810 are separately reflected under "Gain/(Loss) on interest rate
swaps, net" in the unaudited interim condensed consolidated income statement
for the corresponding period. The effective portion of the unrealized
gains/losses from all other swaps (designated as cash flow hedges) is recorded
in Other Comprehensive Income / (Loss) and no portion of these cash flow
hedges was ineffective during the three-month period ended March 31, 2024.
A gain of approximately $2,751 in connection with the interest rate swaps is
expected to be reclassified into earnings during the following 12-month period
ending March 31, 2025 when realized.
Foreign Currency Forward Contracts:
Details of the Company's foreign currency forward contracts are discussed in
Note 18 of the Company's consolidated financial statements for the year ended
December 31, 2023 included in the 2023 Annual Report.
The effective portion of the unrealized gains/(losses) from the foreign
currency forward contracts is recorded in Other Comprehensive Income / (Loss)
and a loss of $240 is expected to be reclassified into earnings during the
year ending December 31, 2024 when realized.
Forward Freight Agreements ("FFAs") and Bunker Swaps
The results of the Company's freight derivatives and bunker swaps for the
three-month periods ended March 31, 2023 and 2024 and the valuation of their
open positions as at December 31, 2023 and March 31, 2024 are presented in the
tables below.
F-19
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
13.
Fair value measurements and Hedging - continued:
Fair value on a recurring basis - continued:
The amount of Gain / (Loss) on FFAs and bunker swaps, net and on interest rate
swaps recognized in the unaudited interim condensed consolidated income
statements, are analyzed as follows:
Three Months Ended March 31,
2023 2024
Consolidated Statement
of Operations
Gain/(Loss) on interest
rate swaps, net
Realized gain/(loss) of de-designated - (1,785 )
accounting hedging relationship
Urealized gain/(loss) of de-designated (372 ) 975
accounting hedging relationship
Total Gain/(loss) $ (372 ) $ (810 )
recognized
Interest and
finance costs
Reclassification adjustments of interest rate swap loss/(gain) transferred to 7,273 1,183
Interest and finance costs from Other comprehensive income/(loss) (Note 8)
Total Gain/(loss) $ 7,273 $ 1,183
recognized
Gain/(Loss) on FFAs
and bunker swaps, net
Realized gain/(loss) 3,490 (2,706 )
on FFAs
Realized gain/(loss) 2,682 -
on bunker swaps
Unrealized (3,425 ) (3,215 )
gain/(loss) on FFAs
Unrealized gain/(loss) (1,439 ) -
on bunker swaps
Total Gain/(loss) $ 1,308 $ (5,921 )
recognized
The following table summarizes the valuation of the Company's financial
instruments as of December 31, 2023 and March 31, 2024, based on Level 1
quoted market prices in active markets.
Quoted Prices in Active Markets for
Identical Assets or Liabilities (Level 1)
December 31, 2023 March 31, 2024
Balance Sheet (not designated as (designated as (not designated as (designated as
Location cash flow hedges) cash flow hedges) cash flow hedges) cash flow hedges)
ASSETS
Forward freight Derivatives, current $ - $ - $ - $ -
agreements - current asset portion
Bunker swaps Derivatives, current - - - -
- current asset portion
Total $ - $ - $ - $ -
LIABILITIES
Forward freight Derivatives, current $ 5,784 $ - $ 8,999 $ -
agreements - current liability portion
Total $ 5,784 $ - $ 8,999 $ -
Certain of the Company's derivative financial instruments discussed above
require the Company to periodically post additional collateral depending on
the level of any open position under such financial instruments, which as of
December 31, 2023 and March 31, 2024 amounted to $13,496 and $19,847,
respectively, and are included within "Restricted cash, current" in the
consolidated balance sheets.
F-20
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
13.
Fair value measurements and Hedging - continued:
Fair value on a recurring basis - continued:
The following table summarizes the valuation of the Company's derivative
financial instruments as of December 31, 2023 and March 31, 2024, based on
Level 2 observable market based inputs or unobservable inputs that are
corroborated by market data.
Significant Other
Observable
Inputs (Level 2)
December 31, 2023 March 31, 2024
Balance (not (designated (not (designated
Sheet designated as as designated as as
Location cash flow cash flow cash flow cash flow
hedges) hedges) hedges) hedges)
ASSETS
Interest Derivatives, $ 1,356 $ 4,682 $ 381 $ 4,475
rate current
swaps - asset
current portion
Foreign exchnage Derivatives, - 267 - 27
forward current
contracts asset
- current portion
Interest Derivatives, - 2,533 - 2,077
rate swaps non-current
- asset
non-current portion
Total $ 1,356 $ 7,482 $ 381 $ 6,579
The carrying values of temporary cash investments, restricted cash, accounts
receivable and accounts payable approximate their fair value due to the
short-term nature of these financial instruments. The fair value of long-term
bank loans and financing under bareboat leases (Level 2), bearing interest at
variable interest rates, approximates their recorded values as of March 31,
2024, due to the variable interest rate nature thereof.
14.
Voyage revenues:
The following table shows the voyage revenues earned from time charters,
voyage charters and pool agreements for the three-month periods ended March
31, 2023 and 2024, as presented in the consolidated income statements:
Three Months Ended March 31,
2023 2024
Time charters $ 113,953 $ 141,710
Voyage charters 109,818 121,058
Pool revenues 264 (3,378 )
$ 224,035 $ 259,390
As of March 31, 2024, trade accounts receivable from voyage charter agreements
decreased to $22,886 from $24,223 as of December 31, 2023 and are presented
under "Trade accounts receivable, net" in the consolidated balance sheets. The
outstanding balance is mainly affected by the timing of commencement of
revenue recognition. No write-off was recorded in periods presented in
connection with the voyage charter agreements.
Further, as of March 31, 2024, capitalized contract fulfilment costs which are
recorded under "Other current assets" increased by $1,865 compared to December
31, 2023, to $6,140 from $4,275. The outstanding balance is mainly affected by
the timing of commencement of revenue recognition.
F-21
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
14.
Voyage revenues - continued:
Under ASC 606, unearned voyage charter revenue represents the consideration
received for undelivered performance obligations. The Company recorded $5,556
as unearned revenue related to voyages charter agreements in progress as of
December 31, 2023, which were recognized in earnings in the three-month period
ended March 31, 2024 as the performance obligations were satisfied in that
period. In addition, the Company recorded $5,887 as unearned revenue related
to voyage charter agreements in progress as of March 31, 2024, which is
presented under "Deferred revenue" in the consolidated balance sheets and will
be recognized in earnings as the performance obligations will be satisfied.
The amount invoiced to charterers in connection with the additional revenue
for scrubber-fitted vessels under time-charter contracts (included in voyage
revenues earned from time charters in the above table) was $19,294 and $15,536
for the three-month periods ended March 31, 2023 and 2024, respectively, and
did not include the fuel cost savings gained from the scrubber-fitted vessels
which were employed under voyage charter agreements.
Demurrage income for the three-month periods ended March 31, 2023 and 2024
amounted to $2,836 and $4,342, respectively, and is included in voyage
revenues from voyage charters in the above table.
The adjustment to Company's revenues from the vessels operating in the CCL
Pool, deriving from the allocated pool result for those vessels as determined
in accordance with the agreed-upon formula, for the three-month periods ended
March 31, 2023 and 2024 was $789 and $(3,360), respectively, and is included
within "Pool revenues" in the table above. Pool Revenues also include other
minor participation adjustments.
F-22
-------------------------------------------------------------------------------
STAR BULK CARRIERS CORP.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2024
(Expressed in thousands of U.S. dollars except for share and per share data,
unless otherwise stated)
15.
Subsequent Events:
a)
On April 9, 2024,
the Eagle Merger was completed following Eagle shareholders' approval and
receipt of applicable regulatory approvals and satisfaction of customary
closing conditions. As a result of the Eagle Merger, a total number of
29,017,999 shares of Star Bulk common stock were issued on April 9, 2024.
b)
In connection with the consummation of the Eagle Merger, the Company entered
into a First Supplemental Indenture, dated as of April 9, 2024 (the
"Supplemental Indenture"), which amends and supplements the base indenture,
governing the convertible bond debt of Eagle (the "Convertible Bond Debt").
The Supplemental Indenture was entered into to provide for a change in the
conversion right of the Convertible Bond Debt resulting from the Eagle Merger
and a guarantee of the obligations under the Convertible Bond Debt by the
Company.
c)
On April 10, 2024, the Company entered into a loan agreement with ABN AMRO
Bank N.V. (the "ABN AMRO Loan") for a loan amount of up to $94,100. The full
amount of the loan was drawn on April 12, 2024. The ABN AMRO Loan is secured
by first priority mortgages on 12 vessels acquired in connection with the
Eagle Merger.
d)
On April 10, 2024, the Company entered into a loan agreement with DNB Bank ASA
(the "DNB Loan") for a loan amount of up to $100,000. The full amount of the
loan was drawn on April 12, 2024. The DNB Loan is secured by first priority
mortgages on 13 vessels acquired in connection with the Eagle Merger.
e)
On April 10, 2024, the Company entered into a loan agreement with ING Bank
N.V., London Branch (the "ING Loan") for a loan amount of up to $94,000. The
full amount of the loan was drawn on April 12, 2024. The ING Loan is secured
by first priority mortgages on 12 vessels acquired in connection with the
Eagle Merger.
f)
On April 19, 2024, the Company agreed to sell the vessel
Crowned Eagle
, one of the vessels acquired in connection with the Eagle Merger. The vessel
is expected to be delivered to her new owners by June 2024.
g)
On April 22, 2024, the Company entered into a loan agreement with E.SUN
commercial Bank Ltd. (the "E.SUN Loan") for a loan amount of up to $100,000.
The full amount of the loan was drawn on April 23, 2024. The E.SUN Loan is
secured by first priority mortgages on 13 vessels acquired in connection with
the Eagle Merger.
h)
On April 29 and April 30, 2024, the vessels
Star Paola
and
Star Dorado
were delivered to their new owners, respectively.
i)
On
May 22, 2024, the Company's Board of Directors declared a quarterly cash
dividend of $0.75 per share payable on or about June 20, 2024 to all
shareholders of record as of June 6, 2024.
F-23
Exhibit 99.2
STAR BULK CARRIERS CORP. REPORTS NET PROFIT OF $74.9 MILLION
FOR THE FIRST QUARTER OF 2024,
AND DECLARES QUARTERLY DIVIDEND OF $0.75 PER SHARE
ATHENS, GREECE, May 22, 2024
- Star Bulk Carriers Corp. (the "Company" or "Star Bulk") (Nasdaq: SBLK), a
global shipping company focusing on the transportation of dry bulk cargoes,
today announced its unaudited financial and operating results for the first
quarter of 2024.
Unless otherwise indicated or unless the context requires otherwise, all
references in this press release to "we," "us," "our," or similar references,
mean Star Bulk Carriers Corp. and, where applicable, its consolidated
subsidiaries.
Financial Highlights
(Expressed in thousands of U.S. dollars,
except for daily rates and per share data)
First quarter 2024 First quarter 2023
Voyage Revenues $ 259,390 $ 224,035
Net income $ 74,856 $ 45,875
Adjusted Net income $ 73,239 $ 37,077
(1)
Net cash provided by operating activities $ 114,262 $ 83,190
EBITDA $ 126,336 $ 94,391
(2)
Adjusted EBITDA $ 122,965 $ 84,802
(2)
Earnings per share basic $ 0.89 $ 0.45
Earnings per share diluted $ 0.89 $ 0.44
Adjusted earnings per share basic and diluted $ 0.87 $ 0.36
(1)
Dividend per share for the relevant period $ 0.75 $ 0.35
Average Number of Vessels 113.3 127.6
TCE Revenues $ 195,664 $ 156,100
(3)
Daily Time Charter Equivalent Rate ("TCE") $ 19,627 $ 14,199
(3)
Daily OPEX per vessel $ 4,962 $ 4,858
(4)
Daily OPEX per vessel (as adjusted) $ 4,962 $ 4,696
(4)
Daily Net Cash G&A expenses per vessel $ 1,223 $ 1,059
(5)
-------------------------------------------------------------------------------
(1) Adjusted Net income and Adjusted earnings per share
are non-GAAP measures. Please see EXHIBIT I at the
end of this release for a reconciliation to Net
income and earnings per share, which are the most
directly comparable financial measures calculated
and presented in accordance with generally accepted
accounting principles in the United States (" U.S.
GAAP"), as well as for the definition of each measure.
(2) EBITDA and Adjusted EBITDA are non-GAAP liquidity measures.
Please see EXHIBIT I at the end of this release for a
reconciliation of EBITDA and Adjusted EBITDA to Net Cash
Provided by / (Used in) Operating Activities, which is the
most directly comparable financial measure calculated and
presented in accordance with U.S. GAAP, as well as for the
definition of each measure. To derive Adjusted EBITDA from
EBITDA, we exclude certain non-cash gains / (losses).
(3) Daily Time Charter Equivalent Rate ("TCE") and
TCE Revenues are non-GAAP measures. Please see
EXHIBIT I at the end of this release for a
reconciliation to Voyage Revenues, which is the most
directly comparable financial measure calculated
and presented in accordance with U.S. GAAP. The
definition of each measure is provided in footnote
(7) to the Summary of Selected Data table below.
(4) Daily OPEX per vessel is calculated by dividing vessel operating
expenses by Ownership days (defined below). Daily OPEX per
vessel (as adjusted) is calculated by dividing vessel operating
expenses excluding increased costs due to the COVID-19 pandemic
or pre-delivery expenses for each vessel on acquisition or change
of management, if any, by Ownership days. In the future we
may incur expenses that are the same as or similar to certain
expenses (as described above) that were previously excluded.
(5) Daily Net Cash G&A expenses per vessel is calculated by (1) adding
the Management fee expense to the General and Administrative
expenses, net of share-based compensation expense and other non-cash
charges and (2) then dividing the result by the sum of Ownership
days and Charter-in days (defined below). Please see EXHIBIT I
at the end of this release for a reconciliation to General and
administrative expenses, which is the most directly comparable financial
measure calculated and presented in accordance with U.S. GAAP.
-------------------------------------------------------------------------------
Petros Pappas, Chief Executive Officer of Star Bulk, commented:
"During Q1 2024, Star Bulk successfully leveraged a counter seasonally strong
dry bulk market and generated a Net Income of $74.9 million with a TCE per
vessel per day of $19,627. We are declaring a dividend of $0.75 per share,
representing the thirteenth consecutive dividend payment. Since June 2021 we
will have paid dividends totaling $11.52 per share to each shareholder.
On April 9th we completed the merger with Eagle Bulk Shipping Inc., a
milestone transaction for both companies. Having embarked on the work of
integrating the best of both organizations, we aim to take advantage of our
combined scale, technical and commercial knowledge and talented staff to
better serve our customers and strengthen our financial position. With a
scrubber fitted fleet of 161 vessels on a fully delivered basis, we aspire to
continue to provide safe and efficient transportation solutions to our clients
and strong financial returns to our shareholders.
We continue modernizing our fleet, by taking delivery during the quarter of
three latest generation EEDI-Phase 3 long-term charter-in vessels, built at
first class shipyards. At the same time, we have taken advantage of elevated
asset values to continue selling primarily older and less fuel efficient
vessels, including seven vessels which we are delivering during Q2 2024. These
vessels average ~13.5 years of age, and will generate total gross proceeds of
$129.6 million before repayment of associated debt.
We are optimistic about the medium term prospects of the dry bulk market given
the favorable order book and upcoming more stringent environmental
regulations. Star Bulk remains well positioned, with a strong balance sheet
and an efficient ship management platform, to take advantage of the positive
market backdrop and continue creating value for its shareholders."
-------------------------------------------------------------------------------
Recent Developments
Declaration of Dividend
On May 22, 2024, pursuant to our dividend policy, our Board of Directors
declared a quarterly cash dividend of $0.75 per share, payable on or about
June 20, 2024 to all shareholders of record as of June 6, 2024.
Eagle Merger Update
As previously announced, on December 11, 2023, we entered into a definitive
agreement with Eagle Bulk Shipping Inc. (NYSE: EGLE) ("Eagle") (the "Eagle
Merger Agreement") to combine in an all-stock merger (the "Eagle Merger"). The
Eagle Merger was completed on April 9, 2024, following Eagle shareholders'
approval and receipt of applicable regulatory approvals and satisfaction of
customary closing conditions. Each Eagle shareholder received 2.6211 shares of
Star Bulk common stock for each share of Eagle common stock owned. Eagle
common stock has ceased trading and is no longer listed on the New York Stock
Exchange. Cash received following the Eagle Merger amounted to $104.3 million.
Eagle's 5.00% Convertible Senior Notes
From and after the effective time of the Eagle Merger (the "Effective Time"),
the right to convert each $1,000 principal amount of Eagle's 5.00% Convertible
Senior Notes due 2024 (the "Convertible Notes") into shares of Eagle common
stock was changed into a right to convert such principal amount of Convertible
Notes into the kind and amount of shares of Star Bulk common stock that a
holder of a number of shares of Eagle common stock equal to the conversion
rate immediately prior to the Effective Time would have been entitled to
receive at the Effective Time. Accordingly, from and after the Effective Time,
each $1,000 principal amount of Convertible Notes will be convertible at a
conversion rate equal to 83.6702 shares of Star Bulk common stock (subject to
further adjustments for, among other things, cash dividends).
In addition, following the consummation of the Eagle Merger, we unconditionally
guaranteed Eagle's obligations under its Convertible Notes with respect to,
among other things, the due and punctual payment of, and interest on each
Convertible Note and the payment or delivery of amounts due in respect of
Eagle's conversion obligation. The Convertible Notes mature on August 1, 2024.
Following the closing of the Eagle Merger, Star Bulk is the largest U.S.
listed dry bulk shipping company with a global market presence and combined
fleet of 161 owned vessels on a fully delivered basis, 97% of which are fitted
with scrubbers, ranging from Newcastlemax/Capesize to Ultramax/Supramax
vessels.
Fleet Update
Vessel S&P
In connection with the previously announced vessel sales,
Pantagruel,
Star Bovarius
and
Big Bang
were delivered to their new owners during the first quarter of 2024 while
Star Dorado
was delivered to her new owners in late April 2024.
In addition, in February, March and April 2024, we agreed to sell vessels
Star Audrey
,
Star Pyxis
,
Star Paola
and
Crowned Eagle
. Moreover, Eagle had agreed to sell the vessels
Crested Eagle
and
Stellar Eagle
prior to the closing of the Eagle Merger. In April 2024, two of these vessels
were delivered to their new owners while the remaining four vessels are
expected to be delivered to their new owners by June 2024.
Overall, during the second quarter of 2024, the Company has already collected
$53.9 million and expects to collect an additional amount of $75.7 million
with respect to the sale of 7 vessels. Debt prepayments already made in
connection with these sales during the second quarter of 2024 amounted to
$11.2 million and an additional amount of $11.4 million will be prepaid until
the end of the second quarter of 2024.
Charter-In Vessels
In January and March 2024, we took delivery of the newbuilding vessel
Stargazer,
an Ultramax vessel built in Tsuneishi Cebu, as well as
Star Voyager
and
Star Explorer
, two newbuilding Kamsarmax vessels built in Tsuneishi Zhousan and JMU,
respectively, all subject to seven-year charter-in agreements.
Since February 2023, we have sold 23 vessels, and one vessel became a
constructive total loss, resulting in total proceeds of $478.8 million, the
majority of which has been used to finance the purchase of 20.0 million shares
from Oaktree at an average share price of $19.00 per share.
Shares Outstanding Update
Following the completion of the Eagle Merger, as of the date of this release,
we have 113,810,792 shares outstanding.
The Convertible Notes mature on August 1, 2024 and currently have a conversion
ratio of 83.6702 shares of Star Bulk common stock per $1,000 principal amount
of Convertible Notes (subject to further adjustments for, among other things,
cash dividends). Based on the current conversion ratio, we expect to issue a
net amount of 4,462,534 new shares of Star Bulk common stock upon maturity and
conversion of the Convertible Notes. On a fully diluted basis we expect to
have 118,544,612 common shares outstanding.
-------------------------------------------------------------------------------
Financing
During April 2024, we entered into four new loan facilities that provide for
an aggregate loan amount of $388.1 million to refinance outstanding Eagle
indebtedness resulting in additional liquidity of $12.6 million as described
below:
On April 10, 2024, we entered into a loan agreement with ABN AMRO Bank N.V. (the "ABN AMRO Loan") for a loan amount of up to
$94.1 million, secured by first priority mortgages on 12 Eagle vessels. The full amount of the loan was drawn on April 12, 2024.
On April 10, 2024, we entered into a loan agreement with DNB Bank ASA (the "DNB Loan") for a loan amount of up to $100.0
million, secured by first priority mortgages on 13 Eagle vessels. The full amount of the loan was drawn on April 12, 2024.
On April 10, 2024, we entered into a loan agreement with ING Bank N.V., London Branch (the "ING Loan") for a loan amount of up to
$94.0 million, secured by first priority mortgages on 12 Eagle vessels. The full amount of the loan was drawn on April 12, 2024.
On April 22, 2024, we entered into a loan agreement with E.SUN Commercial Bank Ltd. (the "E.SUN Loan") for a loan amount of up to
$100.0 million, secured by first priority mortgages on 13 Eagle vessels. The full amount of the loan was drawn on April 23, 2024.
The final maturities of the abovementioned loans range from 5 years to 7 years.
In addition, following a number of interest rate swaps we have entered into,
we have an outstanding total notional amount of $126.3 million under our
financing agreements with an average fixed rate of 61 bps and an average
remaining maturity of 1.4 years. As of March 31, 2024, the Mark-to-Market
value of our outstanding interest rate swaps stood at $8.5 million, and our
cumulative net realized gain amounted to $33.8 million.
Vessel Employment Overview
Time Charter Equivalent Rate ("TCE rate") is a non-GAAP measure. Please see
EXHIBIT I at the end of this release for a reconciliation to Voyage Revenues,
which is the most directly comparable financial measure calculated and
presented in accordance with U.S. GAAP.
For the first quarter of 2024 our TCE rate for the following main vessel
categories was as follows:
Newcastlemax / Capesize Vessels: $27,357 per day.
Post Panamax / Kamsarmax / Panamax Vessels: $15,134 per day.
Ultramax $17,655 per day.
/ Supramax Vessels:
-------------------------------------------------------------------------------
Amounts shown throughout the press release and variations in period-over-period
comparisons are derived from the actual unaudited numbers in our books and
records. Reference to per share figures below are based on 84,177,253 and
103,381,943 weighted average diluted shares for the first quarter of 2024 and
2023, respectively.
First Quarter 2024 and 2023 Results
For the first quarter of 2024, we had a net income of $74.9 million, or $0.89
earnings per share, compared to a net income for the first quarter of 2023 of
$45.9 million, or $0.44 earnings per share. Adjusted net income, which
excludes certain non-cash items, was $73.2 million, or $0.87 earnings per
share, for the first quarter of 2024, compared to an adjusted net income of
$37.1 million for the first quarter of 2023, or $0.36 earnings per share.
Net cash provided by operating activities for the first quarter of 2024 was
$114.3 million, compared to $83.2 million for the first quarter of 2023.
Adjusted EBITDA, which excludes certain non-cash items, was $123.0 million for
the first quarter of 2024, compared to $84.8 million for the first quarter of
2023.
Voyage revenues for the first quarter of 2024 increased to $259.4 million from
$224.0 million in the first quarter of 2023 and Time charter equivalent
revenues ("TCE Revenues")
1
increased to $195.7 million for the first quarter of 2024, compared to $156.1
million for the first quarter of 2023, despite the decrease in the average
number in our fleet during the relevant periods. TCE rate for the first
quarter of 2024 was $19,627 compared to $14,199 for the first quarter of 2023
which is indicative of the stronger market conditions prevailing during the
recent quarter.
Vessel operating expenses for the first quarters of 2024 and 2023 amounted to
$51.2 million and $55.8 million, respectively. The decrease in our operating
expenses was primarily driven by the decrease in average number of vessels in
our fleet to 113.3 from 127.6.
Drydocking expenses for the first quarters of 2024 and 2023 were $10.0 million
and $8.0 million, respectively. In each of the first quarters of 2024 and
2023, five vessels completed their periodic dry docking surveys, but the
vessels that completed their dry docking surveys in the first quarter of 2024
were of greater deadweight ton ("dwt") scale which resulted in increased
drydocking expenses.
General and administrative expenses for the first quarters of 2024 and 2023
were $10.7 million and $11.7 million, respectively, primarily due to the
decrease in the stock based compensation expense to $2.2 million from $3.4
million. Vessel management fees for the first quarter of 2024 and 2023 were
$4.4 million and $4.2 million, respectively. Our daily net cash general and
administrative expenses per vessel (including management fees and excluding
share-based compensation and other non-cash charges) for the first quarters of
2024 and 2023 were $1,223 and $1,059, respectively. The increase in our daily
G&A expenses per vessel was primarily driven by the decrease in average number
of vessels in our fleet, something that we expect will gradually be offset
after the full integration of the Eagle fleet.
Depreciation expense decreased to $32.0 million for the first quarter of 2024
compared to $35.1 million for the corresponding period in 2023. The
fluctuation is primarily driven by the decrease in the average number of
vessels in our fleet to 113.3 from 127.6.
During the first quarter of 2023, an impairment loss of $7.7 million was
incurred, in connection with the sale of two vessels. During the first quarter
of 2024, no impairment loss was incurred.
Other operational gain for the first quarter of 2024 decreased to $1.6 million
from $33.2 million in the first quarter of 2023. In the first quarter of 2023,
other gains from insurance claims relating to various vessels also included an
aggregate gain of $30.9 million from insurance proceeds and daily detention
compensation relating to
Star Pavlina
that became a constructive total loss due to its prolonged detainment in
Ukraine following the ongoing conflict between Russia and Ukraine.
Our results for the first quarter of 2023 included a loss on write-down of
inventories of $2.2 million resulting from the valuation of the bunkers
remaining on board our vessels as a result of their lower net realizable value
compared to their historical cost. No such loss was incurred in the first
quarter of 2024.
During the first quarter of 2024, we incurred a loss on forward freight
agreements ("FFAs") and bunker swaps of $5.9 million, consisting of an
unrealized loss of $3.2 million and a realized loss of $2.7 million. During
the first quarter of 2023, we incurred a net gain on FFAs and bunker swaps of
$1.3 million, consisting of an unrealized loss of $4.9 million and a realized
gain of $6.2 million.
Our results for the first quarter of 2024 include an aggregate net gain of
$8.8 million which resulted from the completion of the previously announced
sales of vessels
Star Glory
,
Pantagruel
,
Big Bang
and
Star Bovarius
.
Interest and finance costs for the first quarters of 2024 and 2023 were $20.5
million and $15.7 million, respectively. The driving factor for this increase
is the significant increase in variable interest rates prevailing during the
corresponding periods which was partially offset by the decrease in our
weighted average outstanding indebtness and the positive effect from our
interest rate swaps.
-------------------------------------------------------------------------------
1
Please see the table at the end of this release for the calculation of the TCE
Revenues.
-------------------------------------------------------------------------------
Unaudited Consolidated Income Statements
(Expressed in thousands of U.S. dollars except for share and per share data) First quarter 2024 First quarter 2023
Revenues:
Voyage revenues $ 259,390 $ 224,035
Total revenues 259,390 224,035
Expenses:
Voyage expenses (57,094 ) (67,492 )
Charter-in hire expenses (3,926 ) (6,615 )
Vessel operating expenses (51,172 ) (55,785 )
Dry docking expenses (10,021 ) (8,007 )
Depreciation (31,990 ) (35,069 )
Management fees (4,404 ) (4,244 )
Loss on bad debt - (300 )
General and administrative expenses (10,695 ) (11,665 )
Gain/(Loss) on forward freight agreements and bunker swaps, net (5,921 ) 1,308
Impairment loss - (7,700 )
Other operational loss (181 ) (155 )
Other operational gain 1,617 33,233
Gain on sale of vessels 8,769 -
Loss on write-down of inventory - (2,166 )
Operating income 94,372 59,378
Interest and finance costs (20,499 ) (15,702 )
Interest income and other income/(loss) 2,526 3,149
Gain/(Loss) on interest rate swaps, net (810 ) (372 )
Gain/(Loss) on debt extinguishment, net (813 ) (419 )
Total other expenses, net (19,596 ) (13,344 )
Income before taxes and equity in income/(loss) of investee $ 74,776 $ 46,034
Income tax (expense)/refund 106 (103 )
Income before equity in income/(loss) of investee 74,882 45,931
Equity in income/(loss) of investee (26 ) (56 )
Net income $ 74,856 $ 45,875
Earnings per share, basic $ 0.89 $ 0.45
Earnings per share, diluted $ 0.89 $ 0.44
Weighted average number of shares outstanding, basic 83,835,611 102,974,041
Weighted average number of shares outstanding, diluted 84,177,253 103,381,943
-------------------------------------------------------------------------------
Unaudited Consolidated Condensed Balance Sheet Data
(Expressed in thousands of U.S. dollars)
ASSETS March 31, 2024 December 31, 2023
Cash and cash equivalents $ 266,524 259,729
and resticted cash, current
Vessel held - 15,190
for sale
Other current 179,806 179,478
assets
TOTAL CURRENT 446,330 454,397
ASSETS
Advances for vessels 17,952 -
under construction
Vessels and other 2,441,744 2,539,743
fixed assets, net
Restricted cash, 2,021 2,021
non current
Other non-current 113,580 32,094
assets
TOTAL ASSETS $ 3,021,627 $ 3,028,255
Current portion of long-term 180,604 251,856
bank loans and lease financing
Other current 130,779 107,507
liabilities
TOTAL CURRENT 311,383 359,363
LIABILITIES
Long-term bank loans and lease financing non-current (net of 916,063 985,247
unamortized deferred finance fees of $7,147 and $8,606, respectively)
Other non-current 95,151 23,575
liabilities
TOTAL $ 1,322,597 $ 1,368,185
LIABILITIES
SHAREHOLDERS' 1,699,030 1,660,070
EQUITY
TOTAL LIABILITIES AND $ 3,021,627 $ 3,028,255
SHAREHOLDERS' EQUITY
Unaudited Consolidated Condensed Cash Flow Data
(Expressed in thousands Three months ended Three months ended
of U.S. dollars) March 31, 2024 March 31, 2023
Net cash provided by / (used $ 114,262 $ 83,190
in) operating activities
Acquisition of (29 ) (69 )
other fixed assets
Capital expenditures for vessel modifications/upgrades (22,018 ) (5,320 )
and advances for vessels under construction
Cash proceeds 94,021 -
from vessel sales
Hull and machinery 591 358
insurance proceeds
Net cash provided by / (used 72,565 (5,031 )
in) investing activities
Proceeds from - 47,000
vessels' new debt
Scheduled vessels' (44,648 ) (42,850 )
debt repayment
Debt prepayment due to (97,247 ) (44,443 )
vessel total loss and sales
Financing and debt (133 ) (587 )
extinguishment fees paid
Repurchase of - (7,005 )
common shares
Dividends paid (38,003 ) (62,050 )
Net cash provided by / (used (180,031 ) (109,935 )
in) financing activities
-------------------------------------------------------------------------------
Summary of Selected Data
First quarter 2024 First quarter 2023
Average number of vessels (1) 113.3 127.6
Number of vessels (2) 111 127
Average age of operational fleet (in years) (3) 11.9 11.2
Ownership days (4) 10,314 11,483
Available days (5) 9,969 10,994
Charter-in days (6) 271 247
Daily Time Charter Equivalent Rate (7) $ 19,627 $ 14,199
Daily OPEX per vessel (8) $ 4,962 $ 4,858
Daily OPEX per vessel (as adjusted) (8) $ 4,962 $ 4,696
Daily Net Cash G&A expenses per vessel (9) $ 1,223 $ 1,059
(1) Average number of vessels is the number of vessels that constituted our
owned fleet for the relevant period, as measured by the sum of the number of
days each operating vessel was a part of our owned fleet during the period
divided by the number of calendar days in that period.
(2) As of the last day of each period presented.
(3) Average age of our operational fleet is calculated as of the end of each
period.
(4) Ownership days are the total calendar days each vessel in the fleet was
owned by us for the relevant period, including vessels subject to sale and
leaseback transactions and finance leases.
(5) Available days are the Ownership days after subtracting off-hire days for
major repairs, dry docking or special or intermediate surveys, change of
management and vessels' improvements and upgrades. The available days for the
first quarter of 2023 were also decreased by off-hire days relating to
disruptions in connection with crew changes as a result of the COVID-19
pandemic. Our method of computing Available Days may not necessarily be
comparable to Available Days of other companies.
(6) Charter-in days are the total days that we charter-in third party vessels.
(7) Time charter equivalent rate
represents the weighted average daily TCE rates of our operating fleet
(including owned fleet and charter-in vessels). TCE rate is a measure of the
average daily net revenue performance of our operating fleet. Our method of
calculating TCE rate is determined by dividing (a) TCE Revenues, which
consists of Voyage Revenues net of voyage expenses, charter-in hire expense,
amortization of fair value of above/below market acquired time charter
agreements, if any, as well as adjusted for the impact of realized gain/(loss)
on forward freight agreements ("FFAs") and bunker swaps by (b) Available days
for the relevant time period. Available days do not include the Charter-in
days as per the relevant definitions provided above.
Voyage expenses primarily consist of port, canal and fuel costs that are
unique to a particular voyage, which would otherwise be paid by the charterer
under a time charter contract, as well as commissions. In the calculation of
TCE Revenues, we also include the realized gain/(loss) on FFAs and bunker
swaps as we believe that this method better reflects the chartering result of
our fleet and is more comparable to the method used by some of our peers. TCE
Revenues and TCE rate, which are non-GAAP measures, provide additional
meaningful information in conjunction with Voyage Revenues, the most directly
comparable GAAP measure, because they assist our management in making
decisions regarding the deployment and use of our vessels and because we
believe that they provide useful information to investors regarding our
financial performance. TCE rate is a standard shipping industry performance
measure used primarily to compare period-to-period changes in a shipping
company's performance despite changes in the mix of charter types (i.e.,
voyage charters, time charters, bareboat charters and pool arrangements) under
which its vessels may be employed between the periods. Our method of computing
TCE Revenues and TCE rate may not necessarily be comparable to those of other
companies. For a detailed calculation please see Exhibit I at the end of this
release with the reconciliation of Voyage Revenues to TCE.
(8) Daily OPEX per vessel is calculated by dividing vessel operating expenses
by Ownership days. Daily OPEX per vessel (as adjusted) is calculated by
dividing vessel operating expenses excluding increased costs due to the
COVID-19 pandemic or pre-delivery expenses for each vessel on acquisition or
change of management, if any, by Ownership days. We exclude the abovementioned
expenses that may occur occasionally from our Daily OPEX per vessel, since
these generally represent items that we would not anticipate occurring as part
of our normal business on a regular basis. We believe that Daily OPEX per
vessel (as adjusted) is a useful measure for our management and investors for
period to period comparison with respect to our operating cost performance
since such measure eliminates the effects of the items described above, which
may vary from period to period, are not part of our daily business and derive
from reasons unrelated to overall operating performance. In the future we may
incur expenses that are the same as or similar to certain expenses (as
described above) that were previously excluded. Vessel operating expenses for
the first quarter of 2023 included additional crew expenses related to the
increased number and cost of crew changes performed during the period as a
result of COVID-19 restrictions imposed in 2020 estimated to be $1.4 million.
In addition vessel operating expenses for the first quarter of 2023, included
pre-delivery expenses due to change of management of $0.5 million.
(9) Please see Exhibit I at the end of this release for the reconciliation to
General and administrative expenses, the most directly comparable GAAP
measure. We believe that Daily Net Cash G&A expenses per vessel is a useful
measure for our management and investors for period to period comparison with
respect to our financial performance since such measure eliminates the effects
of non-cash items which may vary from period to period, are not part of our
daily business and derive from reasons unrelated to overall operating
performance. In the future we may incur expenses that are the same as or
similar to certain expenses (as described above) that were previously excluded.
-------------------------------------------------------------------------------
EXHIBIT I: Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA Reconciliation
We include EBITDA (earnings before interest, taxes, depreciation and
amortization) herein since it is a basis upon which we assess our liquidity
position. It is also used by our lenders as a measure of our compliance with
certain loan covenants, and we believe that it presents useful information to
investors regarding our ability to service and/or incur indebtedness.
To derive Adjusted EBITDA from EBITDA, we exclude non-cash gains/(losses) such
as those related to sale of vessels, share based compensation expense,
impairment loss, loss from bad debt, unrealized gain/(loss) on derivatives and
the equity in income/(loss) of investee and other non-cash charges, if any,
which may vary from period to period and for different companies and because
these items do not reflect operational cash inflows and outflows of our fleet.
EBITDA and Adjusted EBITDA do not represent and should not be considered as
alternatives to cash flow from operating activities or net income, as
determined by United States generally accepted accounting principles, or U.S.
GAAP. Our method of computing EBITDA and Adjusted EBITDA may not necessarily
be comparable to other similarly titled captions of other companies.
The following table reconciles net cash provided by operating activities to
EBITDA and Adjusted EBITDA:
(Expressed in thousands First quarter 2024 First quarter 2023
of U.S. dollars)
Net cash provided by/(used $ 114,262 $ 83,190
in) operating activities
Net decrease/(increase) 2,383 (4,039 )
in operating assets
Net increase/(decrease) in operating liabilities, excluding (11,069 ) (6,004 )
operating lease liability and including other non-cash charges
Impairment - (7,700 )
loss
Gain/(Loss) on debt (813 ) (419 )
extinguishment, net
Share - based (2,161 ) (3,446 )
compensation
Amortization of debt (loans (779 ) (1,043 )
& leases) issuance costs
Unrealized gain/(loss) on forward freight (3,215 ) (4,864 )
agreements and bunker swaps, net
Unrealized gain/(loss) on (975 ) (372 )
interest rate swaps, net
Total other 19,596 13,344
expenses, net
Gain from insurance proceeds - 28,163
relating to vessel total loss
Loss on - (300 )
bad debt
Income tax (106 ) 103
expense/(refund)
Gain on sale 8,769 -
of vessels
Gain from Hull & 470 -
Machinery claim
Loss on write-down - (2,166 )
of inventory
Equity in income/(loss) (26 ) (56 )
of investee
EBITDA $ 126,336 $ 94,391
Equity in (income)/loss 26 56
of investee
Unrealized (gain)/loss on forward freight 3,215 4,864
agreements and bunker swaps, net
Gain on sale (8,769 ) -
of vessels
Loss on write-down - 2,166
of inventory
Gain from insurance proceeds - (28,163 )
relating to vessel total loss
Share-based 2,161 3,446
compensation
Loss on - 300
bad debt
Impairment - 7,700
loss
Other non-cash (4 ) 42
charges
Adjusted $ 122,965 $ 84,802
EBITDA
-------------------------------------------------------------------------------
Net income and Adjusted Net income Reconciliation and Calculation of Adjusted
Earnings Per Share
To derive Adjusted Net Income and Adjusted Earnings Per Share from Net Income,
we exclude non-cash items, as provided in the table below. We believe that
Adjusted Net Income and Adjusted Earnings Per Share assist our management and
investors by increasing the comparability of our performance from period to
period since each such measure eliminates the effects of such non-cash items,
as gain/(loss) on sale of assets, unrealized gain/(loss) on derivatives,
impairment loss and other items which may vary from year to year, for reasons
unrelated to overall operating performance. In addition, we believe that the
presentation of the respective measure provides investors with supplemental
data relating to our results of operations, and therefore, with a more
complete understanding of factors affecting our business than with GAAP
measures alone. Our method of computing Adjusted Net Income and Adjusted
Earnings Per Share may not necessarily be comparable to other similarly titled
captions of other companies.
(Expressed in thousands of U.S. dollars except for share and per share data)
First quarter 2024 First quarter 2023
Net income $ 74,856 $ 45,875
Loss on bad debt - 300
Share - based compensation 2,161 3,446
Other non-cash charges (4 ) 42
Unrealized (gain)/loss on forward freight agreements and bunker swaps, net 3,215 4,864
Unrealized (gain)/loss on interest rate swaps, net 975 372
Gain on sale of vessels (8,769 ) -
Impairment loss - 7,700
Gain from insurance proceeds relating to vessel total loss - (28,163 )
Loss on write-down of inventory - 2,166
(Gain)/Loss on debt extinguishment, net (non-cash) 779 419
Equity in (income)/loss of investee 26 56
Adjusted Net income $ 73,239 $ 37,077
Weighted average number of shares outstanding, basic 83,835,611 102,974,041
Weighted average number of shares outstanding, diluted 84,177,253 103,381,943
Adjusted Basic and Diluted Earnings Per Share $ 0.87 $ 0.36
-------------------------------------------------------------------------------
Voyage Revenues to Daily Time Charter Equivalent ("TCE") Reconciliation
(In thousands of U.S. Dollars, except for TCE rates) First quarter 2024 First quarter 2023
Voyage revenues $ 259,390 $ 224,035
Less:
Voyage expenses (57,094 ) (67,492 )
Charter-in hire expenses (3,926 ) (6,615 )
Realized gain/(loss) on FFAs/bunker swaps, net (2,706 ) 6,172
Time Charter equivalent revenues $ 195,664 $ 156,100
Available days 9,969 10,994
Daily Time Charter Equivalent Rate ("TCE") $ 19,627 $ 14,199
Daily Net Cash G&A expenses per vessel Reconciliation
(In thousands of U.S. Dollars, except for daily rates) First quarter 2024 First quarter 2023
General and administrative expenses $ 10,695 $ 11,665
Plus:
Management fees 4,404 4,244
Less:
Share - based compensation (2,161 ) (3,446 )
Other non-cash charges 4 (42 )
Net Cash G&A expenses $ 12,942 $ 12,421
Ownership days 10,314 11,483
Charter-in days 271 247
Daily Net Cash G&A expenses per vessel $ 1,223 $ 1,059
-------------------------------------------------------------------------------
Conference Call details:
Our management team will host a conference call to discuss our financial
results on Thursday, May 23, 2024 at 11:00 a.m., Eastern Time (ET).
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: +1 877 405 1226 (US Toll-Free Dial In) or +1 201
689 7823 (US and Standard International Dial In), or +0 800 756 3429 (UK Toll
Free Dial In). Please quote "Star Bulk Carriers" to the operator and/or
conference ID 13746765. Click here for additional participant International
Toll-Free access numbers.
Alternatively, participants can register for the call using the call me option
for a faster connection to join the conference call. You can enter your phone
number and let the system call you right away. Click here for the call me
option.
Slides and audio webcast:
There will also be a live, and then archived, webcast of the conference call
and accompanying slides, available through the Company's website. To listen to
the archived audio file, visit our website
www.starbulk.com
and click on Events & Presentations. Participants to the live webcast should
register on the website approximately 10 minutes prior to the start of the
webcast.
About Star Bulk
Star Bulk is a global shipping company providing worldwide seaborne
transportation solutions in the dry bulk sector. Star Bulk's vessels transport
major bulks, which include iron ore, minerals and grain, and minor bulks,
which include bauxite, fertilizers and steel products. Star Bulk was
incorporated in the Marshall Islands on December 13, 2006 and maintains
executive offices in Athens, New York, Limassol, Singapore and Germany. Its
common stock trades on the Nasdaq Global Select Market under the symbol
"SBLK". As of May 22, 2024 and as adjusted for the delivery of a) the vessels
acquired in the Eagle Merger, b) the agreed to be sold
vessels
to their new owner as discussed above and c) the five firm Kamsarmax vessels
currently under construction, Star Bulk operates a fleet of 161 vessels, with
an aggregate capacity of 15.4 million dwt, consisting of 17 Newcastlemax, 16
Capesize, 1 Mini Capesize, 7 Post Panamax, 44 Kamsarmax, 2 Panamax, 48
Ultramax and 26 Supramax vessels with carrying capacities between 53,489 dwt
and 209,537 dwt.
In addition, as of the date of this release, we have entered into long-term
charter-in arrangements with respect to two Kamsarmax newbuildings and one
Ultramax newbuilding which are expected to be delivered during 2024 with an
approximate duration of seven years per vessel plus optional years. In
addition, in November 2021 we took delivery of the Capesize vessel
Star Shibumi
, under a long-term charter-in contract for a period up to November 2028.
Further, as discussed above, in January 2024 we took delivery of vessels
Star Voyager, Star Explorer
and
Stargazer
, each subject to a seven-year charter-in arrangement.
Forward-Looking Statements
Matters discussed in this press release may constitute forward looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance, and underlying assumptions
and other statements, which are other than statements of historical facts.
We desire to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. Words such as, but
not limited to, "believe," "expect," "anticipate," "estimate," "intend,"
"plan," "targets," "projects," "likely," "will," "would," "could," "should,"
"may," "forecasts," "potential," "continue," "possible" and similar
expressions or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, examination by our management of historical
operating trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were reasonable when
made, because these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict
and are beyond our control, we cannot assure you that we will achieve or
accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our
view, could cause actual results to differ materially from those discussed in
the forward-looking statements include the possibility that costs or
difficulties related to the integration of the Company's and Eagle's
operations will be greater than expected; risks related to the Eagle Merger
diverting management's attention from the Company's and Eagle's ongoing
business operations; the possibility that the expected synergies and value
creation from the Eagle Merger will not be realized, or will not be realized
within the expected time period; the risk that shareholder litigation in
connection with the transactions may affect the timing or occurrence of the
Eagle Merger or result in significant costs of defense, indemnification and
liability; transaction costs related to the Eagle Merger; general dry bulk
shipping market conditions, including fluctuations in charter rates and vessel
values; the strength of world economies; the stability of Europe and the Euro;
fluctuations
in currencies, interest rates and foreign exchange rates
; business disruptions due to natural disasters or other disasters outside our
control, such as any new outbreaks or new variants of coronavirus ("COVID-19")
that may emerge; the length and severity of epidemics and pandemics, including
their impact on the demand for seaborne transportation in the dry bulk sector;
changes in supply and demand in the dry bulk shipping industry, including the
market for our vessels and the number of newbuildings under construction; the
potential for technological innovation in the sector in which we operate and
any corresponding reduction in the value of our vessels or the charter income
derived therefrom; changes in our expenses, including bunker prices, dry
docking,
crewing and insurance costs; changes in governmental rules and regulations or
actions taken by regulatory authorities; potential liability from pending or
future litigation and potential costs due to environmental damage and vessel
collisions; the impact of increasing scrutiny and changing expectations from
investors, lenders, charterers and other market participants with respect to
our Environmental, Social and Governance ("ESG") practices; our ability to
carry out our ESG initiatives and thereby meet our ESG goals and targets; new
environmental regulations and restrictions, whether at a global level
stipulated by the International Maritime Organization, and/or regional/national
level imposed by regional authorities such as the European Union or individual
countries; potential cyber-attacks which may disrupt our business operations;
general domestic and international political conditions or events, including
"trade wars", the ongoing conflict between Russia and Ukraine, the conflict
between Israel and Hamas and the Houthi attacks in the Red Sea and the Gulf of
Aden; the impact on our common shares and reputation if our vessels were to
call on ports located in countries that are subject to restrictions imposed by
the U.S. or other governments; potential physical disruption of shipping
routes due to accidents, climate-related reasons (acute and chronic),
political events, public health threats, international hostilities and
instability, piracy or acts by terrorists; the availability of financing and
refinancing; the failure of our contract counterparties to meet their
obligations; our ability to meet requirements for additional capital and
financing to grow our business; the impact of our indebtedness and the
compliance with the covenants included in our debt agreements; vessel
breakdowns and instances of offhire; potential exposure or loss from
investment in derivative instruments; potential conflicts of interest
involving our Chief Executive Officer, his family and other members of our
senior management; our ability to complete acquisition transactions as and
when planned and upon the expected terms; and the impact of port or canal
congestion or disruptions. Please see our filings with the Securities and
Exchange Commission for a more complete discussion of these and other risks
and uncertainties. The information set forth herein speaks only as of the date
hereof, and the Company disclaims any intention or obligation to update any
forwardlooking statements as a result of developments occurring after the date
of this communication.
-------------------------------------------------------------------------------
Contacts
Company: Investor Relations / Financial Media:
Simos Spyrou, Christos Begleris Nicolas Bornozis
Co Chief Financial Officers President
Star Bulk Carriers Corp. Capital Link, Inc.
c/o Star Bulk Management Inc. 230 Park Avenue, Suite 1536
40 Ag. Konstantinou Av. New York, NY 10169
Maroussi 15124 Tel. (212) 6617566
Athens, Greece Email:
starbulk@capitallink.com
Email: info@starbulk.com www.capitallink.com
www.starbulk.com
{graphic omitted}