Earnings call transcript Q4 2022

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Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Fourth Quarter 2022 Financial Results.

We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Simos Spyrou; and Mr. Officers; Financial Co-Chief Begleris, Mr. Christos Operating Nicos Mrs. and Rescos, Chief Officer; Company. Officer Charis Strategy the Plakantonaki, Chief of At participants time, this all listen-only mode. are in a will followed There presentation session. a by question-and-answer be being advise this [Operator you I must conference Instructions] is recorded today. that

will your today, of sir. Mr. to ahead, speakers go pass floor please I now one the Spyrou,

Simos Spyrou

results and quarter I'm conference to like welcome XXXX. to our you, [Foreign Co-Chief Officer would Language] operator. Thank fourth of I Financial regarding for our financial call Spyrou, of Simos Star the Bulk Carriers, you

Before on you banker cost front to benefit results, go the questions. we vessel latest In the to take on our up before read the the will and and an evolution I our kindly QX begin, during ask X balance on presentation. quarter, operations, ESG a Safe Slide our we our on moment Harbor of of for opening overview industry presentation, statement views fundamentals, today's through number sheet, update an

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

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

the last a which the on in the months, of performance the XX graph bottom over the highlights The market. the strength page illustrates drybulk robust platform of cumulative

adjusted million. $XXX EBITDA months, income net is adjusted XX last and is Our $XXX million

million $X.X we dividend period, have cumulative same of Over shareholders. per $XXX share or our a to the returned

or dividend per share a we of XXXX, $XXX have declared total Since $X.XX million.

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

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

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

operating for and bridge including quarter balance proceeds end repayments, the in CapEx million. payments cash cash generated $XXX graphically million million dividend and X installments QX. for treatment of flow cash, of and at with for the After We Slide a system illustrates activities flow payment, saving the $XXX started cash debt the quarter arrived $XXX we energy quarter. at the and third of ballast water devices positive

the the debt of $XX calculation million. we from backed that adjusted XXXX $XXX of For million an we our dividend of end to have distribution, January at drew balance prepayment

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

to-date Since our liquidity at $XXX our total have that by $X.XX Meanwhile, costs reduced result significantly totaling completed $XXX margins. stands achieving of total at a forma stands million. million lower per million pro year interest as $X.X debt billion. Our XXXX, approximately we refinancings

million. is XX Our $XXX amortization next month

years. and vessels average unlevered million we debt interest XXXX. with XX an XX for or with maturities $XXX points $XXX of at rate have approximately rate X.X We rate until environment, an In basis maturity million no an have value notional market remaining average of increasing of outstanding an fixed swaps interest

As XXXX, XX, million. of $XX was value swaps mark-to-market December the these of

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

Nicos Rescos

our availability of days we to illustrate fitted Bulk system with a the HSFO how Spyrou. from profitability. contributed vessels At VLSFO. benefit spread will scrubber X, In at spread levels, of you, our surpassed Star the XXX scrubbers widening to current between operating HiX XX.X%. average Thank Slide continues meaningfully fuel healthy and the XXX,XXX

year average fuel in $XXX hovers currently approximately for demand. $XXX the per spread fuel spread dollars and per export Singapore ton power of Indicatively, achieved per was full ton our at ton average around lifetime XXXX. the $XXX of XX% prices, cater when QX based annual The we

the of on we tons left shows For slide, of HSFO on consumption restructuring bottom-line impact have of a approximately market the sensitivity annum present our can the per based benefit that table our vessels. on scrubber-fitted XXX,XXX that top purposes, for

to update. G&A cash expenses was same XXXX. $X,XXX excluding expenses operational provide OpEx Please per the turn for per QX X, the non-recurring we period. were Slide vessel for where Net $XXX day

XXXX, assumes additional Star operations Bulk calendar an costs vessels management for spread. managers, management and streamlining During of third-party XX ship

rate peers listed of In Rightship addition, score. at our we continue safety terms of to top in the

and and we our relevant X, fleet total provide the off-hire our vessel Slide and drivers to expenses around snapshot guidance Turning future days. upgrade

our installation CII regulations. across program fleet and line EEXI completed quarter have first We with the and in

and fleet further upgrading the our We footprint, devices cargo in our further environmental investing will improving consumption the commercial and saving of aimed with attractiveness reducing energy continue fleet. telemetry, in fuel our enhancing

are Our dry dock we vessel expect approximately estimates expected XXX yard $XXX.X current is vessels towards with and based docking XXXX at a XX million same the above calendar total, around upgrade estimated The $XX.X of million on capacity. vessels project expense and dry for off-hire retrofit CapEx. numbers employment our with In planning, period. for days

now an will on Plakantonaki, Officer, ESG Strategy floor update I our Chief efforts. pass our Charis for to the

Charis Plakantonaki

Thank where Please we the you, margins. Nico. turn update on ESG provide to an X, Slide

issues. B second the year versus last to B minus. a Project maturity growth and for global score indicates the a which indicating action level, improving its of Disposal average has also It For average of C, participated Bulk industry B coordinated exceeding management the climate a the and score in Awareness Level. in and Bulk year taking C its Star row, Star Company's plays continues of the above Carbon rating of of performance gain

by first improving also namely the X its affects Scope emissions, will Bulk chain. aim its time emissions indirectly reporting measuring we in our which and value During the for XXXX continue stewardship, environmental Star to

has came Bulk all ensure in international EEXI taken maritime set to organization, as Star by and technical XXXX. with front, force targets which regulatory the measures CII and On operational necessary into the January compliance the

governance, towards security Bulk systems, controls. vulnerable also deploying is also environmental groups, education its to With to systems performance, commercial contributions cyber new enhancing program, operational and and and making optimize the processes We our onshore well-being continue and and is board sports. vessels further its on protection, its Star Company’s strengthening and regards

I will now Petros remarks. updates CEO, and a market to our the pass Pappas closing floor for

Petros Pappas

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

high the have limited control. of we best During until million total million costs XXXX, X.X% or and continues have sent demolition Uncertainty helped bulk seen X.X fleet dwt a was dwt orders and dry history XX.X the proportion, ship building under future delivered million The yard in for outlook was XXXX supply dwt of on capacity to new shipping. XX.X of to ship be a net growth keep year-over-year. recent

the levels levels book below the option fleet overage have The with of due of orders X.X% CII speed should at the of demolition during reported freight X.X% tonnage Furthermore, average attractive of at rate elevated firm decreased back last dwt a and XXXX. XX.X to of market. and XX.X bunker and just fuel-efficient stabilized to by make on costs The record and EEXI the regulation. prices stands during knots scrap million bulk seasonal steaming downturns year high weaker dry order as fleet the the during an

The steaming along oil support and a port banker medium savings. term, and second costs We the scrubber commodities. to will a situation the Russian the higher continue correction Global inflated with environmental energy in of related half expect new on congestion sanctions strong during amid prices incentivize remain slow experienced regulation of demand oil XXXX. and to

bottlenecks. to do due a levels, decrease the changes smaller Chinese during types half. gradual the for vessel in congestion of remains of and pre-COVID easing patterns strong Nevertheless, to You restrictions especially imports trading related seasonal the and global first war above

of a bulk unlikely the over exceed per three the X% to next growth As result annum is trends, years.

weaker total trade contracted demand. XXXX X.X% affected estimated during turn for dollar. XX commodity Slide and global bulk strong to by brief prices, Let's economic Clarksons, to due slowdown ton dry update of in now by interest Trade the Chinese imports, to rate a inflation to have a in activity of U.S. war and surging miles. hikes, is was a Ukraine, According

will growth the larger We bulk standing the projected relaxation zero that COVID for second the most the XXXX, internal year. during strict have by policy presently strong reopening bulk effect is with X.X%. at Chinese dry increase During of miles forecast believe demand global IMF with to the GDP the X% the dry economy benefiting for a of and market sizes half of positive the

offered expand property during began as XXXX and strict production activity market by and by COVID limited economic ton X.X% in during to during trade to that X.X% X% no bulk of decreased XXXX. steel longer minor due long to patterns or the contracted continue war Furthermore, route coal, to trade to related in Ukraine grain, the by crude to miles. support is Iron XXXX, haul China policy -- XXXX. shift a the inefficiencies downturn will and inflate projected

following X.X% production nevertheless, affected lower world imports Crude provided during from for war energy positive and rest forward. the showed steel while domestic the by in by surge indicator productions and half, margins in the ore China's the costs iron stabilization signs steel stockpiles of steel output second Ukraine, of decreased weaker point

inefficiencies outlook XXXX Russian is levels upgraded gas Coal coal few to energy miles. years XXXX. prices for high security projected X.X% Coal trade have affecting due and to is and in increased trade of high while expanded by coal next X.X% by capacity. the XXXX during the to Global during on expand the focus and trade and record disruptions European suffering ton prices benefiting export the

the XXXX. end Chinese started of grain the is account -- months, rebound war XXXX. last shock grain trade place coal trade. abrupt the did resumption that the the At of quarter fourth for during the during which of by X.X% by unofficial the to export of market XXXX, During six origin Australian start taking supply month, for Ukrainian the contracted as a XXXX ban experience marking projected is how and during Grain XX% X.X% total of trade

supply. of the export at taking through free Ukrainian onwards, of crops. August outlook XXXX the while trade increase soybean the of is currently partially substantial resumed The for Furthermore, around crop positive gap is the world results exporting economy recovery of Chinese is harvested already From high of XX% Ukrainian the filling nations place, levels. should record Brazilian initiative soybean as a demand another route lost the Ukraine

has Minor container during affected by Minor the smaller vessels. highest economic bulk XXXX. to X.X% is XXXX geared and moderating and expand bulk growth correction slowdown trade GDP Moreover, has trade projected correlation ship global of trade dry to by support the during market volumes. contracted is bulk the X.X%

and hand, Africa disrupted fertilizing European shortages with the the bulk benefit miles war West trade base high Atlantic strong Ukraine Union other exports expand Furthermore, bauxite for the On continue to of generate ton steel production the trades. creating and vessels. in should Capesize that

environmental the weakness, in effect regulations and seasonal prospects market given diverse the long to its market the the Star XX-year well-positioned of from take despite order current spot advantage encouraging term Bulk bulk demand is of remain bulk fitted rates. the opening fleet, book, scrubber freight positive of the in dry the the economy. Finally, on due recovery low dry Chinese

Without have. taking may now more to I any answer the operator to will you any the time, floor questions pass over

Operator

you. Thank

now question question-and-answer be with Instructions] Deutsche Amit Please question. your will from a We conducting with Mehrotra first is [Operator session. proceed Our Bank.

Chris Robertson

everyone. morning, Robertson is Good This Hi. Chris on Amit. for

this Sorry, morning. he's traveling

about testing rates. of flow and seasonally coming the dividend talk the focused I weak then on expected pretty in to quarter, wanted Just are people the of the think, kind movement upcoming hyper bottom probably cash here

maintenance costs about capital X, So docking have about the as thinking working can could also through kind You year you capital you laid well? the movements? talk of debt on amortization us kind are Slide but this you of remind well kind out regular and pretty dry how of expected us

Petros Pappas

Chris. Hi,

which with debt is start easy let's amortization. the So,

for for As we said, is million year. entire $XXX XXXX the this approximately

down obtained we it's better So, that due slightly during from our XXXX schedules in we to refinancing. had what amortization

in the expect of Now positive. decreasing, market quarter slightly be essentially in would change that working capital we for is to first XXXX the

Simos Spyrou

That of cash. be source is to a

Petros Pappas

Correct.

Chris Robertson

kind movements any Okay. could That there? flow aware that makes could of installations, capital, other sense. dividend dry ballast we working that the impact Any the system things be other cash docking, besides water

Petros Pappas

presentations. providing the are in macro investor figures our We

you to presentation. go our actually will of our you that, if investor X Page on So find. website, It's

all we well for expect as the find will estimates You CapEx as dry next items few dock quarters. that

Chris Robertson

Okay, great.

Just as a follow-up.

control here You front. guys pretty good cost OpEx had the on some

be maintain should back coming pressures upward out might there Or that on right we for that put OpEx? you now now was do think Q day. dollars non-recurring the And savings? around talk aware it this day, last think you any around you $X,XXX quarters? new how cost you of at down $X,XXX level pressure about per are per I OpEx dollars there the the Can can it's achieved reported

Nicos Rescos

Hi, Chris. This result auction is taken. we Nicos. This of our offshore our is have

of trying mentioned is third-party to we big the managed in basis. and cost a number As streamline earlier, ships taking it bit a

to supplies, are and source We discounts really our it. our are inflation on and better getting increase we getting that's the reach trying current pressure on of spares and

Chris Robertson

Okay.

Sorry, last question.

Simos Spyrou

Chris. This is Simos.

add XXXX, there would have which for would not Just not middle be XXXX. of the figure I around for QX figures it to QX, more give for and [visa]. expect the X,XXX, X,XXX, entire to bit budget QX I that a between I and is would you and would conservative, in figure the a

Chris Robertson

Got helpful. really it. that's No,

I Just is think very feature I mean, really discipline quick much of me, Star capital last question for a Bulk.

your doing acquisitions, shares done over currency. the have a past using an as incredible job years the guys You creative in

looking on the opportunities to you found of forward, of that or at So there, out anything I you speaking might bloc there's interesting for moment. said, either acquisition kind be generally en kind come not do you deals guess compelling? any think that's But table the at that you looking

Hamish Norton

last Well, or now close things than in we're has deals looking that in hopeful easier the so. been year it are little environment be Chris, we to a and at may the

So, to be may we're get done. optimistic things that we able actually

Operator

is Omar Nokta your Jefferies. question with next with from Please proceed Our question.

Omar Nokta

know of using ask in but that Star sensitive, going was past asking, getting along of maybe in ask, Hamish, to that the -- is way I kind what I was it's deals I on but to the would I be I deals? before shares those terms could Bulk in bit a of done, probably get planning

Hamish Norton

we're at involve Everything, would shares. looking

Omar Nokta

you. Thank Okay.

first they the profitable a So, just as remain I Company. broadly you've got so the about even that bit did you'll remain bookings based power of looks like in to ask the of off as maybe want Slide in if first quarter. rates earnings far quarter It soft on the the that are, XX

positive And quarter? do I agree here changes also, territory is, the assume in my we one, in question in from market guess that the first you then no of you if in could remain And here, your to spreads also? you else would the quarter terms or say, premium be holding maybe all equal capture or profitable able size with spreads fuel bigger and the second vessels, you're eco

this result rates, of pullback the capture And at earlier to really market I how getting really fixing of across as down shifts the a due quality shifts much were get you trying then profitable sense to I'm guess what a for it is just the being of much in spot premiums and before you you different how have? to and able

Petros Pappas

now. the that I I Hi. and and Petros. is think bulk able giving goes. market open $XX,XXX, XX,XXX around be we'll we're right has see I just am, profitable how position that course our Newcastlemax, do depending during QX. of to to we break Yes, you The with we'll of above be maintain our think, believe level

One thing to following. is have the you understand

but that is in on the rate I knots. XX look calculate like capes, we a do like oil. the What X,XXX the think and at steam at we is fuel slow vessels situations a $X,XXX speed of that less actually burn we calculating being X.XXX much according this trip would ends because usually spot like up the that, You to

can you benefit, bigger capacity vessels, If to the even the is. is if carrying stays higher it what should be market of the March scrubber which to which is, the reach vessels, that you other close Newcastlemax and where the very for than during add average capes levels

market little the at than now. is bit it right least better bit is the a a market Although, March is FFA what during

the if is you FFA $XX,XXX. average around look Now at regarding QX,

we're we the think better markets, fact not that good the the that, Now, year. if for during guess I will to of QX the steam vessels very scrubber hopefully benefits again add and in and profitable positive we the than and be slow you probably, rest very QX,

Chris Robertson

published whatnot. that scrubber is power Thanks the not for guess simply that's speeds I the we really when but whole to, I that Again, relevant, indicative and see of Petros. the to X,XXX that excluding see into take helpful account you very really it's earnings almost, guess

Petros Papas

cape about XX% which tons, -- go tons, burn knots gained you like the If run if which is sorry, XX tons, knots, XX which you tons less speed, XX% or knots XX burn below then you XX is XX probably is you at therefore, XX by XX you from. and and XX where consumption, almost that's

Chris Robertson

the out obviously, dividend And maybe and to the this about like? one dividend; dividend paying do related first long-term threshold. the ending on few you've actual simply, question If cash have the What policy does final policy just the you follow-up and of or maybe you with excess is below XXX floor look million Chris' just pennies cash there a had does amount, certain stick or a it is zero that that is payout? and

Petros Papas

our Well, foreseeable the with the call as future over might quarter is and of declines a anticipate cash than clear balance then dividend. there but XXXX that basically if happening. cash would frankly be pretty XXXX, below not minimum a for in anticipate But and minimum dividend, policy leaving don't we don't parts declines threshold, our amount less that the the we actually us -- any in market

Operator

[Operator over hand to for time. the I'd back at Instructions] like no to questions floor any are further this management closing There comments.

Petros Pappas

operator. Thank you very much. comments, No further

Operator

This concludes today's conference.

You participating. for time. your lines may at disconnect this you Thank

Star Bulk Carriers (SBLK) 17 Feb 232022 Q4 Earnings call transcript