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 2023. 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 2023 |
First quarter 2022 |
Voyage Revenues |
$224,035 |
$360,883 |
Net income |
$45,875 |
$170,364 |
Adjusted Net income (1) |
$37,077 |
$175,562 |
Net cash provided by operating activities |
$83,190 |
$229,156 |
EBITDA (2) |
$94,391 |
$220,683 |
Adjusted EBITDA (2) |
$84,802 |
$225,881 |
Earnings per share diluted |
$0.44 |
$1.67 |
Adjusted earnings per share diluted (1) |
$0.36 |
$1.72 |
Dividend per share for the relevant period |
$0.35 |
$1.65 |
Average Number of Vessels |
127.6 |
128.0 |
TCE Revenues (3) |
$156,100 |
$304,904 |
Daily Time Charter Equivalent Rate ("TCE") (3) |
$14,199 |
$27,405 |
Daily OPEX per vessel (4) |
$4,858 |
$4,988 |
Daily OPEX per vessel (excl. non recurring expenses) (4) |
$4,696 |
$4,747 |
Daily Net Cash G&A expenses per vessel (5) |
$1,059 |
$1,065 |
|
|
|
(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, as well as
for the definition of each measure. (4) Daily OPEX per vessel
is calculated by dividing vessel operating expenses by Ownership
days (defined below). Daily OPEX per vessel (which excludes
non-recurring expenses) is calculated by dividing vessel operating
expenses minus any non-recurring items (such as, increased costs
due to the COVID-19 pandemic or pre-delivery expenses, if any) by
Ownership days. In the future we may incur expenses that are the
same as or similar to certain non-recurring expenses 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:
“Star Bulk was profitable for the first quarter
of 2023, the seasonally weakest period of the year, reporting Net
Income of $45.9 million and a TCE of $14,199. On the basis of our
dividend policy, our Board of Directors has approved a dividend of
$0.35 / share, representing our ninth consecutive quarterly
payment. Since the beginning of 2021, the Company has returned over
$1 billion to shareholders through dividends and share
buybacks.
Looking at our fleet, we took advantage of the
increase in vessel values and agreed to opportunistically sell two
2011 built Capesize vessels, the Star Borealis and Star Polaris. We
also agreed with the war risk insurers of the Star Pavlina that the
vessel became a constructive total loss, given its prolonged
detainment in Ukraine following the ongoing conflict between Russia
and Ukraine. Looking towards fleet renewal and increased fuel
efficiency, we have secured seven long-term charter-in EEDI-Phase 3
latest generation eco vessels, built at first class shipyards, six
of which are expected to be delivered during 2024.
We are also very positive as far as our
cooperation with the Iron Ore Consortium on Green
Corridors is concerned. Our recent study showed that ships
powered by clean ammonia could carry iron ore from Australia to
East Asia as soon as 2028 and could reach 5% of that market by
2030, assuming broad acceptance of ammonia as a fuel.
We are optimistic about the medium term
prospects of the dry bulk market given the favorable order book and
upcoming environmental regulations. We believe Star Bulk remains
well positioned, with a strong balance sheet and a fully scrubber
fitted fleet, to take advantage of the positive market backdrop and
continue creating value for its shareholders.”
Recent Developments
Declaration of Dividend
As of March 31, 2023, our aggregate amount of
cash on our balance sheet was $254.6 million and after giving
effect to the share repurchases and the prepayments of debt in
connection with the changes in our fleet as described below, that
took place during the first quarter of 2023, the cash available for
distribution under our dividend policy was $306.0 million. Taking
into account the Minimum Cash Balance per Vessel, as defined in our
2022 annual report, on May 16, 2023, pursuant to our dividend
policy, our Board of Directors declared a quarterly cash dividend
of $0.35 per share, payable on or about June 27, 2023 to all
shareholders of record as of June 7, 2023. The ex-dividend date is
expected to be June 6, 2023.
Share Repurchase Program
& Shares Outstanding
Update
In March 2023, we repurchased 331,223 common
shares in open market transactions at an average price of $21.12
per share for an aggregate consideration of $7.0 million pursuant
to the $50.0 million share repurchase program announced in August
2021. In addition, in April 2023, we repurchased 200,000 common
shares in open market transactions at an average price of $20.74
per share for an aggregate consideration of $4.15 million, pursuant
to the abovementioned share repurchase program. All of the
abovementioned shares were cancelled and removed from our share
capital as of the date of this release.
On May 16, 2023, our Board of Directors
cancelled the previous share repurchase program under which $8.5
million was still outstanding and authorized a new share repurchase
program of up to an aggregate of $50.0 million (“Share Repurchase
Program”). The timing and amount of any repurchases will be in the
sole discretion of our management team, and will depend on legal
requirements, market conditions, share price, alternative uses of
capital and other factors. Repurchases of common shares may take
place in privately negotiated transactions, in open market
transactions pursuant to Rule 10b-18 of the Exchange Act and/or
pursuant to a trading plan adopted in accordance with Rule 10b5-1
of the Exchange Act. We are not obligated under the terms of the
Share Repurchase Program to repurchase any of our common shares.
The Share Repurchase Program has no expiration date and may be
suspended or terminated by our Board of Directors at any time
without prior notice. We will cancel common shares repurchased as
part of this program.
As of today, we have 102,881,065 shares
outstanding.
Fleet Update
During the first quarter of 2023, we agreed with
the war risk insurers of the vessel Star Pavlina, that the vessel
became a constructive total loss as of February 24, 2023, given its
prolonged detainment in Ukraine following the commencement of
Russia’s military action against Ukraine on February 24, 2022. As
of the date of this release, we have collected the corresponding
insurance value of this vessel.
On March 24, 2023, we agreed to sell the vessels
Star Borealis and Star Polaris. The Star Borealis was delivered to
its new owner with the respective sale proceeds being collected on
May 4, 2023, while the delivery of Star Polaris is expected to
occur by the end of May or early June 2023.
As of the date of this release, we have entered
into long-term charter-in arrangements with respect to four
Kamsarmax newbuildings and two Ultramax newbuildings 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. Please see below a summary table of the respective
contracts:
# |
Name |
DWT |
Built |
Yard |
Country |
Delivery / Estimated Delivery
(1) |
Minimum Period |
1 |
Star Shibumi |
180,000 |
2021 |
JMU |
Japan |
November 2021 |
November 2028 |
2 |
NB Kamsarmax # 1 |
82,000 |
2024 |
Tsuneishi |
Japan |
Q1 - 2024 |
7 years |
3 |
NB Kamsarmax # 2 |
82,000 |
2024 |
Tsuneishi |
Japan |
Q4 - 2024 |
7 years |
4 |
NB Kamsarmax # 3 |
82,000 |
2024 |
JMU |
Japan |
Q2 - 2024 |
7 years |
5 |
NB Kamsarmax # 4 |
82,000 |
2024 |
JMU |
Japan |
Q3 - 2024 |
7 years |
6 |
NB Ultramax #1 |
66,000 |
2024 |
Tsuneishi, Cebu |
Philippines |
Q1 - 2024 |
7 years |
7 |
NB Ultramax #2 |
66,000 |
2024 |
Tsuneishi, Cebu |
Philippines |
Q4 - 2024 |
7 years |
|
|
640,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As of the date
of this release, we have also entered into a charter-in agreement
for the vessel Tai Kudos which is expected to be redelivered to its
owners in October 2023. |
|
Financing
In March 2023, we entered into a committed
termsheet with Nordea Bank Abp for a loan facility of up to $50.0
million (the “Nordea $50.0 million Facility”). The facility will be
used to refinance the outstanding amounts under the loan agreements
of the vessels Star Eleni and Star Leo and is expected to be drawn
by the end of June 2023. The outstanding amount of the pre-existing
loan facilities for the two vessels of $42.3 million was prepaid on
May 2, 2023. The Nordea $50.0 million Facility is expected to be
drawn in two tranches and will mature 5 years after the drawdown
and will be secured by first priority mortgages on the Star Eleni
and Star Leo.
In March 2023, we entered into a committed
termsheet with Skandinaviska Enskilda Banken AB for a loan facility
of up to $30.0 million (the “SEB $30.0 million Facility”). The
facility amount will be used to replenish the cash used in May 2023
to prepay the outstanding amount of $25.1 million in aggregate,
under the loan agreement and lease agreement for each of the
vessels Star Aquarius and Star Pisces, respectively and is expected
to be drawn in May 2023. The SEB $30.0 million Facility is expected
to be drawn in two tranches and will mature 5 years after the
drawdown and will be secured by first priority mortgages on the
Star Aquarius and Star Pisces.
The financing arrangements discussed above
contain financial and other covenants substantially similar to
those covenants described in Item 5 of our 2022 annual report
regarding our credit facilities.
Excess debt proceeds drawn from the new
facilities described above will be used to prepay debt in other
Star Bulk debt facilities.
In March 2023 we prepaid the outstanding debt
under the facilities financing the vessels Star Pavlina, Star
Borealis and Star Polaris for an aggregate amount of $44.4
million.
Following the completion of the $509.9 million
of new refinancings that we performed during 2022 and 2023, we have
13 unlevered vessels and we expect to save approximately $6.7
million per year in interest costs from more competitive
margins.
As of today, following a number of interest
rates swaps we have entered into, we have an outstanding total
notional amount of $636.5 million under our financing agreements
with an average fixed rate of 45 bps and an average maturity of 1.0
year. As of March 31, 2023 the Mark-to-Market value of our
outstanding interest rate swaps stood at $26.2 million. The above
interest rate swaps are designated and qualify for hedge
accounting, except for one which matures in August 2023.
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 2023 our TCE rate per main vessel
categories was as follows: |
Capesize /
Newcastlemax Vessels: |
$16,807 per
day. |
Post Panamax / Kamsarmax / Panamax Vessels: |
$13,904 per day. |
Ultramax / Supramax Vessels: |
$12,393 per day. |
|
|
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 103,381,943 and 102,257,673
weighted average diluted shares for the first quarter of 2023 and
2022, respectively.
First Quarter 2023 and 2022 Results
For the first quarter of 2023, we had a net
income of $45.9 million, or $0.44 earnings per share, compared to a
net income for the first quarter of 2022 of $170.4 million, or
$1.67 earnings per share. Adjusted net income, which excludes
certain non-cash items, was $37.1 million, or $0.36 earnings per
share, for the first quarter of 2023, compared to an adjusted net
income of $175.6 million for the first quarter of 2022, or $1.72
earnings per share.
Net cash provided by operating activities for
the first quarter of 2023 was $83.2 million, compared to $229.2
million for the first quarter of 2022. Adjusted EBITDA, which
excludes certain non-cash items, was $84.8 million for the first
quarter of 2023, compared to $225.9 million for the first quarter
of 2022.
Voyage revenues for the first quarter of 2023
decreased to $224.0 million from $360.9 million in the first
quarter of 2022 and Time charter equivalent revenues (“TCE
Revenues”)1 were $156.1 million for the first quarter of 2023,
compared to $304.9 million for the first quarter of 2022. TCE rate
for the first quarter of 2023 was $14,199 compared to $27,405 for
the first quarter of 2022 which is indicative of the weaker market
conditions prevailing during the recent quarter.
For the first quarters of 2023 and 2022, vessel
operating expenses were $55.8 million and $57.5 million,
respectively. 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 related restrictions, estimated to be $1.4
million. In addition, we incurred $0.5 million of additional
operating expenses due to change of management of certain vessels
from third party to in-house. Vessel operating expenses for the
first quarter of 2022 included COVID-19 related expenses of $2.8
million. Excluding non-recurring expenses such as increased costs
due to the COVID-19 pandemic and pre-delivery and pre-joining
expenses due to change of management, our daily operating expenses
per vessel decreased to $4,696 for the first quarter of 2023 from
$4,747 for the first quarter of 2022.
Drydocking expenses for the first quarters of
2023 and 2022, were $8.0 million and $8.7 million, respectively.
During the first quarter of 2023, five vessels completed their
periodic dry docking surveys while during the corresponding period
in 2022, eight vessels completed their periodic dry docking
surveys.
General and administrative expenses for the
first quarters of 2023 and 2022 were $11.7 million and $8.8
million, respectively, primarily due to the increase in the stock
based compensation expense to $3.4 million from $1.2 million.
Vessel management fees for the first quarter of 2023 decreased to
$4.2 million from $4.8 million in the corresponding period of 2022
due to the change of management of certain vessels, from third
party to in-house as described above. 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 2023 and 2022 were $1,059 and $1,065,
respectively.
Depreciation expense decreased to $35.1 million
for the first quarter of 2023 compared to $38.5 million for the
corresponding period in 2022. The decrease is primarily driven by
the change in the estimated scrap rate per light weight tonnage
from $300 to $400 effective January 1, 2023, which resulted in
lower depreciation expense by $3.9 million.
During the first quarter of 2023, an impairment
loss of $7.7 million was incurred, resulting from the agreement to
sell the vessels Star Borealis and Star Polaris described above as
part of our fleet update.
Other operational gain for the first quarter of
2023 of $33.2 million includes a) gains from insurance proceeds
relating to Star Pavlina’s total loss discussed in our fleet update
above of $28.2 million, b) daily detention compensation for Star
Pavlina pursuant to its war risk insurance policy of $2.7 million
in aggregate as well as c) other gains from insurance claims
relating to other vessels of $2.3 million in aggregate.
Our results for the first quarter of 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 their lower net realizable value compared to
their historical cost.
Interest and finance costs for the first
quarters of 2023 and 2022 were $15.7 million and $12.1 million,
respectively. The driving factor for this increase is the
significant increase in variable interest rates, which was
partially offset by the positive effect from our interest rate
swaps and the decrease in our weighted average outstanding
indebtedness.
Interest income and other income for the first
quarter of 2023 amounted to $3.1 million, compared to an interest
income and other income, of $0.3 million in the first quarter of
2022. This variation is mainly due to higher interest earned from
fixed deposits during the first quarter of 2023 and higher foreign
exchange gains recognized in the same period compared to the first
quarter of 2022.
___________________________________
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 2023 |
|
First quarter 2022 |
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
Voyage revenues |
$ |
224,035 |
|
|
$ |
360,883 |
|
Total revenues |
|
224,035 |
|
|
|
360,883 |
|
|
|
|
|
Expenses: |
|
|
|
Voyage expenses |
|
(67,492 |
) |
|
|
(53,404 |
) |
Charter-in hire expenses |
|
(6,615 |
) |
|
|
(4,012 |
) |
Vessel operating expenses |
|
(55,785 |
) |
|
|
(57,466 |
) |
Dry docking expenses |
|
(8,007 |
) |
|
|
(8,727 |
) |
Depreciation |
|
(35,069 |
) |
|
|
(38,461 |
) |
Management fees |
|
(4,244 |
) |
|
|
(4,839 |
) |
Loss on bad debt |
|
(300 |
) |
|
|
- |
|
General and administrative expenses |
|
(11,665 |
) |
|
|
(8,765 |
) |
Gain/(Loss) on forward freight agreements and bunker swaps,
net |
|
1,308 |
|
|
|
(2,623 |
) |
Impairment loss |
|
(7,700 |
) |
|
|
- |
|
Other operational loss |
|
(155 |
) |
|
|
(614 |
) |
Other operational gain |
|
33,233 |
|
|
|
267 |
|
Loss on write-down of inventory |
|
(2,166 |
) |
|
|
- |
|
|
|
|
|
Operating income |
|
59,378 |
|
|
|
182,239 |
|
|
|
|
|
Interest and finance costs |
|
(15,702 |
) |
|
|
(12,082 |
) |
Interest income and other income/(loss) |
|
3,149 |
|
|
|
261 |
|
Gain/(Loss) on interest rate swaps, net |
|
(372 |
) |
|
|
- |
|
Gain/(Loss) on debt extinguishment, net |
|
(419 |
) |
|
|
- |
|
Total other expenses, net |
|
(13,344 |
) |
|
|
(11,821 |
) |
|
|
|
|
Income before taxes and equity in income/(loss) of
investee |
$ |
46,034 |
|
|
$ |
170,418 |
|
|
|
|
|
Income taxes |
|
(103 |
) |
|
|
(37 |
) |
|
|
|
|
Income before equity in income/(loss) of
investee |
|
45,931 |
|
|
|
170,381 |
|
|
|
|
|
Equity in income/(loss) of investee |
|
(56 |
) |
|
|
(17 |
) |
|
|
|
|
Net income |
$ |
45,875 |
|
|
$ |
170,364 |
|
|
|
|
|
Earnings per share, basic |
$ |
0.45 |
|
|
$ |
1.67 |
|
Earnings per share, diluted |
$ |
0.44 |
|
|
$ |
1.67 |
|
Weighted average number of shares outstanding, basic |
|
102,974,041 |
|
|
|
101,981,583 |
|
Weighted average number of shares outstanding, diluted |
|
103,381,943 |
|
|
|
102,257,673 |
|
|
|
|
|
Unaudited Consolidated Condensed Balance Sheet
Data
(Expressed in thousands of U.S. dollars) |
|
|
|
ASSETS |
March 31, 2023 |
|
December 31, 2022 |
|
Cash and cash equivalents and resticted cash, current |
$ |
252,547 |
|
|
284,323 |
|
Other
current assets |
|
257,139 |
|
|
217,769 |
|
TOTAL CURRENT ASSETS |
|
509,686 |
|
|
502,092 |
|
|
|
|
|
|
Vessels and
other fixed assets, net |
|
2,818,233 |
|
|
2,881,551 |
|
Restricted
cash, non current |
|
2,021 |
|
|
2,021 |
|
Other
non-current assets |
|
42,197 |
|
|
47,960 |
|
TOTAL ASSETS |
$ |
3,372,137 |
|
$ |
3,433,624 |
|
|
|
|
|
|
Current
portion of long-term bank loans and lease financing |
$ |
204,358 |
|
$ |
181,947 |
|
Other
current liabilities |
|
106,458 |
|
|
100,608 |
|
TOTAL CURRENT LIABILITIES |
|
310,816 |
|
|
282,555 |
|
|
|
|
|
|
Long-term
bank loans and lease financing non-current (net of unamortized
deferred finance fees of $10,611 and $11,694, respectively) |
|
1,041,612 |
|
|
1,103,233 |
|
Other
non-current liabilities |
|
27,184 |
|
|
28,494 |
|
TOTAL LIABILITIES |
$ |
1,379,612 |
|
$ |
1,414,282 |
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
1,992,525 |
|
|
2,019,342 |
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
3,372,137 |
|
$ |
3,433,624 |
|
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Condensed Cash Flow
Data
(Expressed in thousands of U.S. dollars) |
|
Three months ended March 31,
2023 |
|
|
|
Three months ended March 31,
2022 |
|
|
|
|
|
|
Net cash provided by / (used in) operating
activities |
$ |
83,190 |
|
|
$ |
229,156 |
|
|
|
|
|
|
|
|
|
Acquisition of other fixed assets |
|
(69 |
) |
|
|
(101 |
) |
|
|
Capital
expenditures for vessel modifications/upgrades |
|
(5,320 |
) |
|
|
(6,313 |
) |
|
|
Hull and
machinery insurance proceeds |
|
358 |
|
|
|
1,600 |
|
|
Net cash provided by / (used in) investing
activities |
|
(5,031 |
) |
|
|
(4,814 |
) |
|
|
|
|
|
|
|
|
Proceeds
from vessels' new debt |
|
47,000 |
|
|
|
- |
|
|
|
Scheduled
vessels' debt repayment |
|
(42,850 |
) |
|
|
(52,756 |
) |
|
|
Debt
prepayment due to vessel total loss and sales |
|
(44,443 |
) |
|
|
- |
|
|
|
Financing
and debt extinguishment fees paid |
|
(587 |
) |
|
|
- |
|
|
|
Proceeds
from issuance of common stock |
|
- |
|
|
|
4,350 |
|
|
|
Repurchase
of common shares |
|
(7,005 |
) |
|
|
- |
|
|
|
Dividend
paid |
|
(62,050 |
) |
|
|
(204,801 |
) |
|
Net cash provided by / (used in) financing
activities |
|
(109,935 |
) |
|
|
(253,207 |
) |
|
|
|
|
|
|
|
Summary of Selected Data
|
First quarter 2023 |
|
First quarter 2022 |
Average number of vessels (1) |
|
127.6 |
|
|
128.0 |
Number of vessels (2) |
|
127 |
|
|
128 |
Average age of operational fleet (in years) (3) |
|
11.2 |
|
|
10.1 |
Ownership days (4) |
|
11,483 |
|
|
11,520 |
Available days (5) |
|
10,994 |
|
|
11,126 |
Charter-in days (6) |
|
247 |
|
|
199 |
Daily Time Charter Equivalent Rate (7) |
$14,199 |
|
$27,405 |
Daily OPEX per vessel (8) |
$4,858 |
|
$4,988 |
Daily OPEX per vessel (excl. non recurring expenses) (8) |
$4,696 |
|
$4,747 |
Daily Net Cash G&A expenses per vessel (9) |
$1,059 |
|
$1,065 |
|
|
|
|
(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
the periods 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 for
the fleet 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 each period presented 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 vessels, not owned by
us.(7) Time charter equivalent rate represents the weighted average
daily TCE rates of our operating fleet (including owned fleet and
fleet under charter-in arrangements). TCE rate is a measure of the
average daily net revenue performance of our vessels. 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 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 (excluding non-
recurring expenses) is calculated by dividing vessel operating
expenses minus any non-recurring expenses or other additional
expenses due to conditions outside of the Company’s control (such
as pre-delivery expenses for each vessel at acquisition or at
change of management or increased costs due to the COVID-19
pandemic, if any ) by Ownership days. We exclude non-recurring
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 (excluding
non-recurring expenses) 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 non-recurring 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
non-recurring expenses that were previously excluded. (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.
EXHIBIT I: Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA Reconciliation
We include EBITDA 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, change in fair value of forward freight agreements
and bunker swaps 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 of U.S. dollars) |
|
First quarter 2023 |
|
|
|
First quarter 2022 |
|
Net cash provided by/(used in) operating activities |
$ |
83,190 |
|
|
$ |
229,156 |
|
Net decrease / (increase) in current assets |
|
(4,411 |
) |
|
|
6,119 |
|
Net increase / (decrease) in operating liabilities, excluding
current portion of long term debt |
|
(6,004 |
) |
|
|
(19,801 |
) |
Impairment loss |
|
(7,700 |
) |
|
|
- |
|
Gain/(Loss) on debt extinguishment, net |
|
(419 |
) |
|
|
- |
|
Share – based compensation |
|
(3,446 |
) |
|
|
(1,233 |
) |
Amortization of debt (loans & leases) issuance costs |
|
(1,043 |
) |
|
|
(1,339 |
) |
Unrealized gain / (loss) on forward freight agreements and bunker
swaps |
|
(4,864 |
) |
|
|
(4,060 |
) |
Total other expenses, net |
|
13,344 |
|
|
|
11,821 |
|
Gain from insurance proceeds relating to vessel total loss |
|
28,163 |
|
|
|
- |
|
Loss on bad debt |
|
(300 |
) |
|
|
- |
|
Income tax |
|
103 |
|
|
|
37 |
|
Loss on write-down of inventory |
|
(2,166 |
) |
|
|
0 |
|
Equity in income/(loss) of investee |
|
(56 |
) |
|
|
(17 |
) |
EBITDA |
$ |
94,391 |
|
|
$ |
220,683 |
|
|
|
|
|
Equity in (income)/loss of investee |
|
56 |
|
|
|
17 |
|
Unrealized (gain)/loss on forward freight agreements and bunker
swaps |
|
4,864 |
|
|
|
4,060 |
|
Loss on write-down of inventory |
|
2,166 |
|
|
|
- |
|
Gain from insurance proceeds relating to vessel total loss |
|
(28,163 |
) |
|
|
- |
|
Share-based compensation |
|
3,446 |
|
|
|
1,233 |
|
Loss on bad debt |
|
300 |
|
|
|
- |
|
Impairment loss |
|
7,700 |
|
|
|
- |
|
Other non-cash charges |
|
42 |
|
|
|
(112 |
) |
Adjusted EBITDA |
$ |
84,802 |
|
|
$ |
225,881 |
|
|
|
|
|
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 2023 |
|
|
|
First quarter 2022 |
|
Net income |
$ |
45,875 |
|
|
$ |
170,364 |
|
Loss on bad debt |
|
300 |
|
|
|
- |
|
Share – based compensation |
|
3,446 |
|
|
|
1,233 |
|
Other non-cash charges |
|
42 |
|
|
|
(112 |
) |
Unrealized (gain) / loss on forward freight agreements and bunker
swaps, net |
|
4,864 |
|
|
|
4,060 |
|
Unrealized (gain) / loss on interest rate swaps, net |
|
372 |
|
|
|
- |
|
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) |
|
419 |
|
|
|
- |
|
Equity in (income)/loss of investee |
|
56 |
|
|
|
17 |
|
Adjusted Net income |
$ |
37,077 |
|
|
$ |
175,562 |
|
Weighted average number of shares outstanding, basic |
|
102,974,041 |
|
|
|
101,981,583 |
|
Weighted average number of shares outstanding, diluted |
|
103,381,943 |
|
|
|
102,257,673 |
|
Adjusted Basic and Diluted Earnings Per Share |
$ |
0.36 |
|
|
$ |
1.72 |
|
|
|
|
|
Voyage Revenues to Daily Time Charter Equivalent (“TCE”)
Reconciliation
(In thousands of U.S. Dollars, except for TCE rates) |
|
First quarter 2023 |
|
|
|
First quarter 2022 |
|
Voyage
revenues |
$ |
224,035 |
|
|
$ |
360,883 |
|
Less: |
|
|
|
Voyage
expenses |
|
(67,492 |
) |
|
|
(53,404 |
) |
Charter-in
hire expenses |
|
(6,615 |
) |
|
|
(4,012 |
) |
Realized
gain/(loss) on FFAs/bunker swaps, net |
|
6,172 |
|
|
|
1,437 |
|
Time
Charter equivalent revenues |
$ |
156,100 |
|
|
$ |
304,904 |
|
|
|
|
|
Available
days |
|
10,994 |
|
|
|
11,126 |
|
Daily Time Charter Equivalent Rate ("TCE") |
$ |
14,199 |
|
|
$ |
27,405 |
|
|
|
|
|
Daily Net Cash G&A expenses per vessel
Reconciliation
(In thousands of U.S. Dollars, except for daily rates) |
|
First quarter 2023 |
|
|
|
First quarter 2022 |
|
General and
administrative expenses |
$ |
11,665 |
|
|
$ |
8,765 |
|
Plus: |
|
|
|
Management
fees |
|
4,244 |
|
|
|
4,839 |
|
Less: |
|
|
|
Share –
based compensation |
|
(3,446 |
) |
|
|
(1,233 |
) |
Other
non-cash charges |
|
(42 |
) |
|
|
112 |
|
Net
Cash G&A expenses |
$ |
12,421 |
|
|
$ |
12,483 |
|
|
|
|
|
Ownership
days |
|
11,483 |
|
|
|
11,520 |
|
Charter-in
days |
|
247 |
|
|
|
199 |
|
Daily Net Cash G&A expenses per vessel |
$ |
1,059 |
|
|
$ |
1,065 |
|
|
|
|
|
Conference Call details:Our management team
will host a conference call to discuss our financial results on
Wednesday, May 17, 2023 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 13738660. 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 BulkStar 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 16, 2023 and as
adjusted for the delivery of Star Polaris to its new owner as
discussed above, Star Bulk operates a fleet of 125 vessels, with an
aggregate capacity of 13.6 million dwt, consisting of 17
Newcastlemax, 20 Capesize, 2 Mini Capesize, 7 Post Panamax, 40
Kamsarmax, 2 Panamax, 20 Ultramax and 17 Supramax vessels with
carrying capacities between 52,425 dwt and 209,529 dwt.
Forward-Looking
StatementsMatters 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 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, and the impact of the discontinuance of the
London Interbank Offered Rate for US Dollars, or LIBOR, after June
30, 2023 on any of our debt referencing LIBOR in the interest rate;
business disruptions due to natural disasters or other disasters
outside our control, such as the ongoing novel coronavirus
(“COVID-19”) pandemic (and variants that may emerge); the length
and severity of epidemics and pandemics, including COVID-19 and its
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 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” and the ongoing conflict between Russia and
Ukraine; 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 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 and 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 forward‐looking
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) 661‐7566 |
Athens,
Greece |
E‐mail:
starbulk@capitallink.com |
Email:
info@starbulk.com |
www.capitallink.com |
www.starbulk.com |
|
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