Star Bulk Carriers Corp. (the "Company" or "Star Bulk") (Nasdaq and
Oslo: 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 ended March
31, 2020.
Financial Highlights
|
|
|
|
(Expressed in thousands of U.S. dollars, except for daily rates and
per share data) |
|
|
|
First
quarter 2020 |
First
quarter 2019 |
|
Voyage Revenues |
$160,862 |
|
$166,490 |
|
|
Net income/(loss) |
$2,755 |
|
($5,342 |
) |
|
Net cash provided by operating activities |
$32,097 |
|
$12,408 |
|
|
EBITDA (1) |
$57,596 |
|
$46,424 |
|
|
Adjusted EBITDA (1) |
$32,642 |
|
$43,875 |
|
|
Adjusted Net income / (loss) (2) |
($22,174 |
) |
($8,532 |
) |
|
Earnings / (loss) per share basic |
$0.03 |
|
($0.06 |
) |
|
Adjusted earnings / (loss) per share basic (2) |
($0.23 |
) |
($0.09 |
) |
|
Average Number of Vessels |
|
116.0 |
|
|
107.3 |
|
|
TCE Revenues (3) |
$100,323 |
|
$104,223 |
|
|
Daily Time Charter Equivalent Rate ("TCE") (3) |
$10,949 |
|
$11,192 |
|
|
Average daily OPEX per vessel (4) |
$4,047 |
|
$4,046 |
|
|
Average daily Net Cash G&A expenses per vessel (5) |
$1,057 |
|
$971 |
|
|
|
|
|
|
- EBITDA and Adjusted EBITDA are non-GAAP measures. Please see
the table 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 generally accepted
accounting principles in the United States (“U.S. GAAP”) as well as
for the definition of each measure. To derive Adjusted EBITDA from
EBITDA, we exclude non-cash gains / (losses).
- Adjusted Net income / (loss) and Adjusted earnings / (loss) per
share basic and diluted are non-GAAP measures. Please see the table
at the end of this release for a reconciliation to Net income /
(loss), 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.
- Daily Time Charter Equivalent Rate (“TCE”) and TCE Revenues are
non-GAAP measures. Please see the table 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.
- Average daily OPEX per vessel is calculated by dividing vessel
operating expenses by Ownership days.
- Average daily Net Cash G&A expenses per vessel is
calculated by (1) deducting the Management fee Income (if any),
from, and (2) adding the Management fee expense to, the
General and Administrative expenses (net of stock-based
compensation expense) and (3) then dividing the result by the
sum of Ownership days and Charter-in days. Please see the table 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:
“COVID-19 caused an unprecedented disruption on
global trade, including dry bulk shipping. Our three main
priorities during the pandemic have been the physical health of our
people, the financial health of our company and the uninterrupted
service to our customers and we believe we have fared well on all
three of our goals.
Despite the difficult market conditions, Star
Bulk reported a profitable first quarter for 2020, with TCE
Revenues of $100.3 million and Net Income of $2.8 million. The
average TCE for the quarter was $10,949/ day per vessel with daily
Opex and Net Cash G&A expenses per vessel being $4,047/day and
$1,057/day respectively. We have completed our investment in
scrubbers, with 114 operational units that will serve to comply
with environmental regulations and enhance our commercial
performance in the future.
Our next priority has been to increase our
liquidity and strengthen our balance sheet through vessel
refinancings. As of today we have received credit committee
approval on financings that would release up to $27.5 million of
net proceeds to be used for working capital purposes and we
continue to work with lenders to significantly increase this figure
in the coming months.
While 2020 trade volumes are projected to
contract, the bulk of the negative effect is expected to be
concentrated on the first half of 2020. An expected synchronized
global economic stimulus should expand trade activity in the medium
term, providing opportunities to our Company.”
Recent Developments
Scrubber Update
- By early May, we had successfully
completed the installation of scrubbers on 114 vessels out of the
116 vessels in our fleet.
Financing Activities
- In March 2020, we borrowed $55.0 million under the DSF $55.0
million Facility. We used $51.6 of this amount to refinance the
outstanding amounts under the lease agreements of the M/V Star
Eleni and the M/V Star Leo, and also increased our cash position by
$3.4 million.
- As of March 31, 2020, we had borrowed $24.2 million under the
HSBC Working Capital Facility. As of the date of this press
release, we borrowed an additional net amount of $4.5 million.
- In May 2020, we received credit committee approval from ING
Bank N.V., London Branch for a loan of up to $70.0 million (the
“ING 70.0 million Facility”). The facility will be used to
refinance all outstanding amounts under the lease agreements of the
vessels M/V Star Claudine, M/V Star Ophelia, M/V Star Lyra, M/V
Star Bianca, M/V Star Flame and M/V Star Mona. We expect to draw
down this facility in July 2020. The facility will mature 6 years
after the drawdown. The ING 70.0 million Facility will be secured
by first priority mortgages on the six vessels.
- In May 2020, we received credit committee approval from Alpha
Bank for a loan of up to $35.0 million (the “Alpha Bank 35.0
million Facility”). The facility will be used to refinance the
outstanding amount under the loan agreement of the vessel M/V Star
Martha and the lease agreements of the vessels M/V Star Sky and M/V
Stardust. We expect to draw down this facility in July 2020. The
facility will mature 5 years after the drawdown. The Alpha Bank
35.0 million Facility will be secured by first priority mortgages
on the three vessels.
- In May 2020, we received credit committee approval from Piraeus
Bank for a loan of up to $50.4 million (the “Piraeus Bank $50.4
million Facility”). The facility will be used to refinance all
outstanding amounts under the lease agreements of the vessels M/V
Star Luna, M/V Star Astrid, M/V Star Genesis, M/V Star Electra and
M/V Star Glory. We expect to draw down this facility in July 2020.
The facility will mature 5 years after the drawdown. The Piraeus
Bank $50.4 million Facility will be secured by first priority
mortgages on the five vessels.After the completion of the
above-mentioned debt refinancing transactions, we expect to
strengthen our financial position by receiving aggregate net
proceeds of $27.5 million.
- We are in the process of working towards obtaining further
commitments for other debt refinancing transactions that will
enable us further increase our cash position.
Scrubber Financing
Activities
- During the first quarter of 2020,
we drew down the following indebtedness to finance our scrubber
installation program: (i) the last available tranche of $3.3
million under the Atradius Facility, (ii) $18.8 million under the
DNB $310.0 million Facility, (iii) $1.3 million under the SEB
Facility and (iv) $4.7 million under the lease agreements with
CMBL.
- Subsequent to March 31, 2020
and as of May 26, 2020, we drew down (i) $10.9 million under the
lease agreements with CMBL.
- As of the date of this press
release we have paid approximately $200.0 million of CAPEX related
to scrubber procurement installations and have an additional $12.0
million for remaining CAPEX to be paid.
- As of the date of this press
release we have incurred $142.5 million of indebtedness related to
scrubber procurement installations and have an additional $7.2
million of available scrubber-related financing under our debt and
lease agreements.
Interest rate derivative
contractsAs of the date of this press release, we have
agreed to fix the floating LIBOR related component of our interest
cost on approximately 25% of our outstanding indebtedness at an
average 3M USD LIBOR rate of 66.0bps.
Hedging VLSFO-HSFO spreadAs of
the date of this press release, we have hedged approximately
151,000 metric tons of our estimated fuel consumption by selling
the 2020 Singapore spread between Very Low-Sulfur Fuel Oil (VLSFO)
– High-Sulfur Fuel Oil (HSFO) at an average price of $214 per ton,
out of which 28,000 metric tons at an average price of $236 per ton
were realized in first quarter of 2020 and the remaining 123,000
metric tons at an average price of $209 will be realized in the
remainder of 2020. In addition we have hedged approximately 24,000
metric tons of our estimated fuel consumptions by selling the 2021
Singapore spread between VLSFO –HSFO at an average price of $106
per ton.
Dividend update:As of March 31,
2020, we owned 116 vessels and had total cash of $131.3 million.
This cash balance includes $5.6 million from proceeds received from
the sale of the M/V Star Cosmo and M/V Star Epsilon.
According to our dividend policy, having reserved these
sales proceeds for share repurchases, debt prepayment and
vessel acquisitions and based on the minimum cash balance that
needs to be maintained per vessel of $1.15 million as of March 31,
2020, or $133.4 million on a fleet wide basis, our Board of
Directors (the “Board”) has decided not to declare any dividend for
Q1 2020.
Other DevelopmentsFollowing the
decision of the Annual General Meeting of our shareholders, held on
May 12, 2020, we have applied to delist our shares from trading on
the OSLO BORS.
Impact of COVID-19 and
our proactive measuresWhile it is still too early to fully
assess the impact of COVID-19 on our financial condition and
operations and on the dry bulk industry in general, we have
identified the following adverse effects of the COVID-19 pandemic
on our business:
- Significant delays and increased costs associated with sixteen
vessels that had scrubbers retrofitted during the COVID-19 outbreak
in China. All vessels have now completed the scrubber
retrofits and commenced their respective employment.
- Significant reduction in market charter rates, as a result of
the decreased demand for dry bulk commodities and the uncertainty
with regard to the timing of a return to more normalized global
trade patterns.
- Potential adverse impact on asset values reflecting the weaker
freight markets environment and lack of liquidity in the second
hand market. Star Bulk is fully compliant with all its financial
covenants as of end of the first quarter of 2020.
- Potential for operational disruption and idle time for our
vessels as crew rotation, supplying our vessels with spares or
other supplies and overhauling or maintenance by attending
engineers has been adversely affected by COVID-19 due to travel
restrictions and quarantine rules.
The Company has taken proactive measures to
ensure the health and wellness of crew and onshore employees while
maintaining effective business continuity and the uninterrupted
service to our customers.
Our business continuity plans onshore for our
global offices in Athens, Limassol, Singapore, New York, Oslo and
Manilla, have allowed for an efficient transition to a remote
working environment. Additionally, we have also placed a
temporary ban on all non-essential travel.
The actual impact of these effects and the
efficacy of any measures we take in response to the challenges
presented by the COVID-19 will depend on how the outbreak will
develop, the duration and extent of the restrictive measures that
are associated with COVID-19 and their impact on global economy and
trade.
Q1 2020 Employment OverviewDaily Time Charter
Equivalent Rate (“TCE”) and TCE Revenues are non-GAAP measures.
Please see the table 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 the respective
measures.
For the first quarter of 2020 our TCE rate was:
- Capesize / Newcastlemax Vessels: $16,592 per day.
- Post Panamax / Kamsarmax / Panamax Vessels: $8,301 per
day.
- Ultramax / Supramax Vessels: $8,209 per day.
Amounts shown throughout the press release and variations in
period–on–period comparisons are derived from the actual unaudited
numbers in our books and records.
First Quarter 2020 and 2019
Results
Voyage revenues for the first quarter of 2020
decreased to $160.9 million from $166.5 million in the first
quarter of 2019. This decrease was partially attributable to a
decrease in Available days and Charter in days during the
corresponding periods, as described below. Adjusted Time Charter
Equivalent revenues (“Adjusted TCE Revenues”) were $99.8 million
for the first quarter of 2020, compared to $103.6 million for the
first quarter of 2019 (please see the table at the end of this
release for the calculation of the Adjusted TCE Revenues). While
the average number of our vessels in the first quarter of 2020
increased to 116.0 from 107.3 in the first quarter of 2019, the
Available days for the first quarter of 2020 were less than the
Available days for the first quarter of 2019 due to the off-hire
days for the last scheduled scrubber installations and increased
dry docking activity during the first quarter of 2020. In addition
the TCE rate for the first quarter of 2020 and 2019 was $10,949 and
$11,192, respectively, impacted by the onset of COVID-19 which had
a negative effect on the overall dry bulk market.
For the first quarter of 2020, operating income
was $23.4 million, which includes $34.6 million of depreciation,
compared to operating income of $17.2 million for the first quarter
of 2019, which included $29.8 million of depreciation.
For the first quarter of 2020, we had net income
of $2.8 million, or earnings per share of $0.03, basic and diluted,
based on 95,797,142 weighted average basic shares and 95,916,480
weighted average diluted shares. Net loss for the first quarter of
2019 was $5.3 million, or loss per share of $0.06, basic and
diluted, based on 93,080,589 weighted average shares basic and
diluted.
Net income for the first quarter of 2020,
included the following significant non-cash items, other than the
depreciation expense mentioned above:
- Stock-based compensation positive amortization effect of $0.9
million, or $0.01 per share, basic and diluted, which resulted
after reassessing the probability of achieving the performance
conditions for some of our awards and thus previously recognized
expense, in the fourth quarter of 2019, was reversed.
- Amortization of the fair value of below-market acquired time
charters of $0.5 million, or $0.005 per share, basic and diluted,
associated with time charters attached to vessels previously
acquired. The respective amortization was recorded as an increase
to voyage revenues;
- Unrealized gain on forward freight agreements and bunker swaps
of $24.0 million, or $0.25 per share, basic and diluted; and
- Loss on debt extinguishment of $0.5 million or $0.01 per share,
basic and diluted, recognized in connection with the refinancing of
one of our debt facilities.
Net loss for the first quarter of 2019 included
the following significant non-cash items, other than the
depreciation expense mentioned above:
- Unrealized gain on forward freight
agreements and bunker swaps of $3.1 million, or $0.03 per share,
basic and diluted; and
- Amortization of the fair value of
below-market acquired time charters of $0.6 million, or $0.01 per
share, basic and diluted, associated with time charters attached to
vessels previously acquired. The respective amortization was
recorded as an increase to voyage revenues.
Adjusted net loss for the first quarter of 2020,
which excludes certain non-cash items, was $22.2 million, or $0.23
loss per share, basic and diluted, compared to adjusted net loss of
$8.5 million, or $0.09 loss per share, basic and diluted, for the
first quarter of 2019.
Adjusted EBITDA for the first quarter of 2020,
which excludes certain non-cash items, was $32.6 million, compared
to $43.9 million for the first quarter of 2019.
For the first quarters of 2020 and 2019, vessel
operating expenses were $42.7 million and $39.1 million,
respectively. This increase was proportional to the increase in the
average number of vessels to 116.0 from 107.3, and thus our average
daily operating expenses per vessel remained at the same levels, of
$4,047 and $4,046 for the first quarter of 2020 and 2019,
respectively.
General and administrative expenses for the
first quarters of 2020 and 2019 were $6.0 million and $7.2 million,
respectively. Management fees for the first quarters of 2020 and
2019 were $4.6 million and $4.1 million, respectively. This
increase is attributable to the increase in the average number of
vessels in our fleet during the first quarter of 2020 compared to
the corresponding period in 2019. Our average daily net cash
general and administrative expenses per vessel (including
management fees) for the first quarter of 2020 and 2019 were $1,057
and $971, respectively. This increase in daily figures is
attributable to significantly fewer charter-in days during the
corresponding periods (please see the table at the end of this
release for the calculation of the Average daily Net Cash G&A
expenses per vessel).
Charter-in hire expense for the first quarters
of 2020 and 2019 was $8.8 million and $22.6 million, respectively.
This decrease is attributable to significantly fewer charter-in
days of 367 during the first quarter of 2020 compared to 1,740 days
during the first quarter of 2019.
For the first quarter of 2020, we incurred a net
gain on forward freight agreements and bunker swaps of $27.6
million, consisting of $3.6 million of realized gain and $24.0
million of unrealized gain. For the first quarter of 2019, we
incurred a net gain on forward freight agreements and bunker swaps
of $8.3 million, consisting of $5.2 million of realized gain and
$3.1 million of unrealized gain.
During the first quarter of 2020, dry-docking
expenses amounted to $13.4 million. During the first quarter of
2020, 15 of our vessels completed their periodic dry docking
surveys resulting in expenses of $10.3 million and the remaining
$3.1 million was incurred in connection with in progress
dry-dockings for seven of our vessels. Dry-docking expenses for the
first quarter of 2019 were $9.7 million. During that period, six of
our vessels underwent their periodic dry-docking surveys, resulting
in expenses of $5.6 million while the remaining $4.1 million was
incurred in connection with dry-dockings completed in subsequent
periods.
Interest and finance costs net of interest and
other income/ (loss) for the first quarters of 2020 and 2019 were
$20.1 million and $21.8 million, respectively. Despite the increase
in the weighted average balance of our outstanding indebtedness of
$1,593.2 million during the first quarter of 2020 compared to
$1,462.1 million for the same period in 2019, the interest and
finance costs net of interest and other income/ (loss) decreased
due to the decrease in the average interest rate on our outstanding
indebtedness, mainly driven by the refinancing of certain of our
debt agreements and the lower LIBOR rates during the first quarter
of 2020.
Liquidity and Capital ResourcesCash
Flows
Net cash provided by operating
activities for the first quarters of 2020 and 2019 was $32.1
million and $12.4 million, respectively.
Despite the increase in the average number of
vessels in our fleet which resulted in higher operating expenses,
the decrease in TCE rates to $10,949 for the first quarter of 2020
from $11,192 for the first quarter of 2019 and the increase in
dry-docking expenses of $3.6 million, led to a decrease of Adjusted
EBITDA to $32.6 million for the first quarter of 2020 from $43.9
million for the corresponding period in 2019. However this decrease
in Adjusted EBITDA was offset by (i) a net working capital inflow
of $18.0 million during the first quarter of 2020 compared to a net
working capital outflow of $11.0 million for the first quarter of
2019 and (ii) lower net interest expense in the first quarter of
2020, thereby increasing cash provided by operating activities for
the first quarter of 2020.
Net cash used in investing activities
for the first quarters of 2020 and 2019 was $31.9 million and $40.0
million, respectively.
For the first quarter of 2020, net cash used in
investing activities mainly consisted of:
- $33.9 million paid for the
acquisition and installation of scrubber equipment and ballast
water management systems for certain of our vessels;
offset by:
- $2.0 million of insurance
proceeds.
For the first quarter of 2019, net cash used in
investing activities mainly consisted of:
- $32.3 million paid in connection with our newbuilding and newly
acquired vessels and other capitalized expenses;
- $31.0 million paid for the acquisition and installation of
scrubber equipment and ballast water management systems for certain
of our vessels;
offset by:
- $20.4 million of proceeds from the
sale of three vessels; and
- $2.9 million of insurance
proceeds
Net cash provided by financing
activities for the first quarter of 2020 was $4.9 million and net
cash used in financing activities for the first quarter of 2019 was
$26.0 million.
For the first quarter of 2020, net cash provided
by financing activities mainly consisted of:
- $107.3 million of proceeds from debt financing transactions,
including financing from leases;
offset by:
- $96.9 million lease and debt obligations paid in connection
with: (i) the regular amortization of outstanding vessel financings
and finance lease installments, and (ii) early repayment due to the
refinancing of two finance lease agreements;
- $0.8 million of financing fees paid in connection with the new
financing agreements; and
- $4.7 million of dividends paid in March 2020 for the fourth
quarter of 2019.
For the first quarter of 2019, net cash used in
financing activities mainly consisted of:
- $175.0 million of proceeds from financing transactions
including financing from leases;
offset by:
- $194.1 lease and debt obligations
paid in connection with: (i) the regular amortization of
outstanding vessel financings and finance lease installments; and
(ii) early repayment due to the refinancing of certain of our lease
agreements and the sale of three of our vessels;
- $1.7 million used to repurchase our
common shares in open market transactions;
- $4.4 million of financing fees paid
in connection with the new financing agreements; and
- $0.8 million of prepayment fees
paid in connection with early repaid debt.
Summary of Selected Data
|
|
|
|
|
|
First quarter 2020 |
|
First quarter 2019 |
|
Average number of vessels (1) |
|
116.0 |
|
|
107.3 |
|
Number of vessels (2) |
|
116 |
|
|
106 |
|
Average age of operational fleet (in years) (3) |
|
8.5 |
|
|
8.0 |
|
Ownership days (4) |
|
10,556 |
|
|
9,658 |
|
Available days (5) |
|
9,118 |
|
|
9,255 |
|
Charter-in days (6) |
|
367 |
|
|
1,740 |
|
Daily Time Charter Equivalent Rate (7) |
$10,949 |
|
$11,192 |
|
Average daily OPEX per vessel (8) |
$4,047 |
|
$4,046 |
|
Average daily Net Cash G&A expenses per vessel (9) |
$1,057 |
|
$971 |
|
|
|
|
|
|
(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
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 and
scrubber installation. (6) Charter-in days are the total
days that we charter-in third-party vessels. (7)
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 voyage revenues (net of voyage
expenses, charter-in hire expense, amortization of fair value of
above/below-market acquired time charter agreements and provision
for onerous contracts, if any, as well as adjusted for the impact
of realized gain/(loss) on forward freight agreements (“FFAs”) and
bunker swaps) by 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. Starting
with the second quarter of 2019, we include the realized
gain/(loss) on FFAs and bunker swaps in the calculation of TCE
Revenues. We believe the revised method will better reflect the
chartering result of our fleet and is more comparable to the method
used by our peers. The change has been applied retrospectively for
all periods presented herein. TCE revenues, a non-GAAP measure,
provides additional meaningful information in conjunction with
voyage revenues, the most directly comparable GAAP measure, because
it assists the Company’s management in making decisions regarding
the deployment and use of its vessels and because the Company
believes that it provides useful information to investors regarding
the Company's 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 may not necessarily be comparable to TCE of
other companies due to differences in methods of calculation. For
the detailed calculation please see the table at the end of this
release with the reconciliation of Voyage Revenues to TCE. We
include TCE rate, a non-GAAP measure, as it provides additional
meaningful information in conjunction with voyage revenues, the
most directly comparable GAAP measure, and it assists our
management in making decisions regarding the deployment and use of
our operating vessels and assists investors and our management in
evaluating our financial performance. (8) Average daily
OPEX per vessel is calculated by dividing vessel operating expenses
by Ownership days. (9) Please see the table at the end of this
release for the reconciliation to General and administrative
expenses, the most directly comparable GAAP measure. We believe
that Average 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.
Unaudited Consolidated Statement of
Operations
|
(Expressed
in thousands of U.S. dollars except for share and per share
data) |
|
|
First quarter 2020 |
|
First quarter 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
Voyage
revenues |
|
|
$ |
160,862 |
|
|
$ |
166,490 |
|
|
Total revenues |
|
|
|
160,862 |
|
|
|
166,490 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
Voyage
expenses |
|
|
|
(55,310 |
) |
|
|
(44,906 |
) |
|
Charter-in
hire expense |
|
|
|
(8,774 |
) |
|
|
(22,617 |
) |
|
Vessel
operating expenses |
|
|
|
(42,718 |
) |
|
|
(39,077 |
) |
|
Dry docking
expenses |
|
|
|
(13,361 |
) |
|
|
(9,715 |
) |
|
Depreciation |
|
|
|
(34,637 |
) |
|
|
(29,825 |
) |
|
Management
fees |
|
|
|
(4,606 |
) |
|
|
(4,089 |
) |
|
General and
administrative expenses |
|
|
|
(6,033 |
) |
|
|
(7,233 |
) |
|
Gain/(Loss)
on forward freight agreements and bunker swaps |
|
|
|
27,586 |
|
|
|
8,341 |
|
|
Other
operational loss |
|
|
|
(51 |
) |
|
|
- |
|
|
Other
operational gain |
|
|
|
477 |
|
|
|
156 |
|
|
Gain/(Loss)
on sale of vessels |
|
|
|
- |
|
|
|
(313 |
) |
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
|
|
23,435 |
|
|
|
17,212 |
|
|
|
|
|
|
|
|
|
Interest and
finance costs |
|
|
|
(20,553 |
) |
|
|
(22,236 |
) |
|
Interest and
other income/(loss) |
|
|
|
447 |
|
|
|
477 |
|
|
Loss on debt
extinguishment |
|
|
|
(542 |
) |
|
|
(823 |
) |
|
Total other expenses, net |
|
|
|
(20,648 |
) |
|
|
(22,582 |
) |
|
|
|
|
|
|
|
|
Income/(Loss) before equity in investee |
|
|
|
2,787 |
|
|
|
(5,370 |
) |
|
|
|
|
|
|
|
|
Equity in
income/(loss) of investee |
|
|
|
11 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
Income/(Loss) before taxes |
|
|
$ |
2,798 |
|
|
$ |
(5,342 |
) |
|
|
|
|
|
|
|
|
Income
taxes |
|
|
|
(43 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
Net
income/(loss) |
|
|
$ |
2,755 |
|
|
$ |
(5,342 |
) |
|
|
|
|
|
|
|
|
Earnings/(loss) per share, basic and diluted |
|
|
$ |
0.03 |
|
|
$ |
(0.06 |
) |
|
Weighted
average number of shares outstanding, basic |
|
|
|
95,797,142 |
|
|
|
93,080,589 |
|
|
Weighted
average number of shares outstanding, diluted |
|
|
|
95,916,480 |
|
|
|
93,080,589 |
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Condensed Balance
Sheets
|
|
(Expressed in thousands of U.S. dollars) |
|
|
|
ASSETS |
|
March 31, 2020 |
|
December 31, 2019 |
|
Cash and cash equivalents and resticted cash, current |
|
$ |
130,281 |
|
|
125,241 |
|
Other
current assets |
|
|
167,135 |
|
|
140,801 |
|
TOTAL CURRENT ASSETS |
|
|
297,416 |
|
|
266,042 |
|
|
|
|
|
|
|
Vessels and
other fixed assets, net |
|
|
2,968,637 |
|
|
2,965,527 |
|
Restricted
cash, non current |
|
|
1,021 |
|
|
1,021 |
|
Other
non-current assets |
|
|
2,644 |
|
|
6,081 |
|
TOTAL ASSETS |
|
$ |
3,269,718 |
|
$ |
3,238,671 |
|
|
|
|
|
|
|
Current
portion of long-term debt and lease financing |
|
$ |
231,518 |
|
$ |
202,495 |
|
Other
current liabilities |
|
|
134,596 |
|
|
108,436 |
|
TOTAL CURRENT LIABILITIES |
|
|
366,114 |
|
|
310,931 |
|
|
|
|
|
|
|
Long-term
debt and lease financing non-current (net of unamortized deferred
finance fees of $21,113 and $19,034, respectively) |
|
|
1,309,717 |
|
|
1,330,420 |
|
Senior Notes
(net of unamortized deferred finance fees of $1,077 and $1,179,
respectively) |
|
|
48,923 |
|
|
48,821 |
|
Other
non-current liabilities |
|
|
5,668 |
|
|
4,459 |
|
TOTAL LIABILITIES |
|
$ |
1,730,422 |
|
$ |
1,694,631 |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
1,539,296 |
|
|
1,544,040 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
3,269,718 |
|
$ |
3,238,671 |
|
|
|
|
|
|
|
Unaudited Cash Flow Data
(Expressed in thousands of U.S. dollars) |
|
First quarter 2020 |
|
|
First quarter 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by / (used in) operating activities |
|
$ |
32,097 |
|
|
$ |
12,408 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by / (used in) investing activities |
|
|
(31,944 |
) |
|
|
(40,034 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by / (used in) financing activities |
|
|
4,887 |
|
|
|
(26,017 |
) |
|
|
|
|
|
|
|
|
|
|
|
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
excluded non-cash gain/(loss) such as those related to sale of
vessels, stock-based compensation expense, the write-off of the
unamortized fair value of above/below-market acquired time
charters, impairment losses, the write-off of claims receivable and
loss from bad debt, change in fair value of forward freight
agreements and bunker swaps, provision for onerous contracts, and
the equity in income/(loss) of investee, 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 alternative to cash flow from operating
activities or net income, as determined by United States Generally
Accepted Accounting Principles, or U.S. GAAP, and our calculation
of EBITDA and Adjusted EBITDA may not be comparable to that
reported by other companies due to differences in methods of
calculation.
The following table reconciles net cash provided
by operating activities to EBITDA and Adjusted EBITDA:
|
(Expressed
in thousands of U.S. dollars) |
|
|
|
First quarter 2020 |
|
First quarter 2019 |
|
Net cash
provided by/(used in) operating activities |
|
|
|
$ |
32,097 |
|
|
$ |
12,408 |
|
|
Net decrease
/ (increase) in current assets |
|
|
|
|
(1,391 |
) |
|
|
15,346 |
|
|
Net increase
/ (decrease) in operating liabilities, excluding current
portion of long term debt |
|
|
|
|
(16,497 |
) |
|
|
(4,428 |
) |
|
Loss on debt
extinguishment |
|
|
|
|
(542 |
) |
|
|
(823 |
) |
|
Stock –
based compensation |
|
|
|
|
902 |
|
|
|
(251 |
) |
|
Amortization
of deferred finance charges |
|
|
|
|
(1,725 |
) |
|
|
(1,240 |
) |
|
Unrealized
gain / (loss) on forward freight agreements and bunker swaps |
|
|
|
|
24,041 |
|
|
|
3,085 |
|
|
Total other
expenses, net |
|
|
|
|
20,648 |
|
|
|
22,582 |
|
|
Gain/(Loss)
on hull and machinery claims |
|
|
|
|
9 |
|
|
|
30 |
|
|
Income
tax |
|
|
|
|
43 |
|
|
|
- |
|
|
Gain/(Loss)
on sale of vessels |
|
|
|
|
- |
|
|
|
(313 |
) |
|
Equity in
income/(loss) of investee |
|
|
|
|
11 |
|
|
|
28 |
|
|
EBITDA |
|
|
|
$ |
57,596 |
|
|
$ |
46,424 |
|
|
|
|
|
|
|
|
|
|
Equity in
(income)/loss of investee |
|
|
|
|
(11 |
) |
|
|
(28 |
) |
|
Unrealized
(gain)/loss on forward freight agreements and bunker swaps |
|
|
|
|
(24,041 |
) |
|
|
(3,085 |
) |
|
(Gain)/Loss
on sale of vessels |
|
|
|
|
- |
|
|
|
313 |
|
|
Stock-based
compensation |
|
|
|
|
(902 |
) |
|
|
251 |
|
|
Adjusted EBITDA |
|
|
|
$ |
32,642 |
|
|
$ |
43,875 |
|
|
|
|
|
|
|
|
|
|
Net income/(Loss) and Adjusted Net
income/(Loss) Reconciliation and calculation of Adjusted
Earnings/(Loss) per Share
To derive Adjusted Net Income and Adjusted
Earnings/(Loss) per share from Net Income, we excluded non-cash
items, as provided in the table below. We believe that Adjusted Net
Income and Adjusted Earnings/(Loss) 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,
gain/(loss) on derivatives, impairment losses 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 GAAP
measures alone. Our method of computing Adjusted Net Income and
Adjusted Earnings/ (Loss) per share may not necessarily be
comparable to other similarly titled captions of other companies
due to differences in methods of calculation.
The following table reconciles Net income /
(loss) to Adjusted Net income / (loss):
|
(Expressed
in thousands of U.S. dollars except for share and per share
data) |
|
|
First quarter 2020 |
|
First quarter 2019 |
|
Net
income / (loss) |
|
|
$ |
2,755 |
|
|
$ |
(5,342 |
) |
|
Amortization
of fair value of above/below market acquired time charter
agreements |
|
|
|
(487 |
) |
|
|
(641 |
) |
|
Stock –
based compensation |
|
|
|
(902 |
) |
|
|
251 |
|
|
Unrealized
(gain) / loss on forward freight agreements and bunker swaps |
|
|
|
(24,041 |
) |
|
|
(3,085 |
) |
|
(Gain) /
loss on sale of vessels |
|
|
|
- |
|
|
|
313 |
|
|
Loss on debt
extinguishment |
|
|
|
512 |
|
|
|
- |
|
|
Equity in
income/(loss) of investee |
|
|
|
(11 |
) |
|
|
(28 |
) |
|
Adjusted Net income / (loss) |
|
|
$ |
(22,174 |
) |
|
$ |
(8,532 |
) |
|
Weighted
average number of shares outstanding, basic |
|
|
|
95,797,142 |
|
|
|
93,080,589 |
|
|
Weighted
average number of shares outstanding, diluted |
|
|
|
95,916,480 |
|
|
|
93,080,589 |
|
|
Adjusted Earnings / (Loss) Per Share, basic and
diluted |
|
|
$ |
(0.23 |
) |
|
$ |
(0.09 |
) |
|
|
|
|
|
|
|
|
Voyage Revenues to Daily Time Charter Equivalent (“TCE”)
Reconciliation
|
|
|
|
|
|
|
(In
thousands of U.S. Dollars, except for TCE rates) |
|
|
|
|
|
|
|
|
|
First quarter 2020 |
|
First quarter 2019 |
|
Voyage
revenues |
|
|
$ |
160,862 |
|
|
$ |
166,490 |
|
|
Less: |
|
|
|
|
|
|
Voyage
expenses |
|
|
|
(55,310 |
) |
|
|
(44,906 |
) |
|
Charter-in
hire expense |
|
|
|
(8,774 |
) |
|
|
(22,617 |
) |
|
Realized
gain/(loss) on FFAs/bunker swaps |
|
|
|
3,545 |
|
|
|
5,256 |
|
|
Time
Charter equivalent revenues |
|
|
$ |
100,323 |
|
|
$ |
104,223 |
|
|
Amortization
of fair value of below/above market acquired time charter
agreements |
|
|
|
(487 |
) |
|
|
(641 |
) |
|
Adjusted Time Charter equivalent revenues |
|
|
$ |
99,836 |
|
|
$ |
103,582 |
|
|
|
|
|
|
|
|
|
Available
days |
|
|
|
9,118 |
|
|
|
9,255 |
|
|
Daily Time Charter Equivalent Rate ("TCE") |
|
|
$ |
10,949 |
|
|
$ |
11,192 |
|
|
|
|
|
|
|
|
|
Average daily Net Cash G&A expenses per vessel
Reconciliation
|
|
|
|
|
|
|
(In
thousands of U.S. Dollars, except for daily rates) |
|
|
|
|
|
|
|
|
|
First quarter 2020 |
|
First quarter 2019 |
|
General and
administrative expenses |
|
|
$ |
6,033 |
|
$ |
7,233 |
|
|
Plus: |
|
|
|
|
|
|
Management
fees |
|
|
|
4,606 |
|
|
4,089 |
|
|
Less: |
|
|
|
|
|
|
Stock –
based compensation |
|
|
|
902 |
|
|
(251 |
) |
|
One-time
expenses |
|
|
|
- |
|
|
- |
|
|
Net
Cash G&As expenses (excluding one-time expenses) |
|
|
$ |
11,541 |
|
$ |
11,071 |
|
|
|
|
|
|
|
|
|
Ownership
days |
|
|
|
10,556 |
|
|
9,658 |
|
|
Charter-in
days |
|
|
|
367 |
|
|
1,740 |
|
|
Average daily Net Cash G&A expenses per vessel
(excluding one-time expenses) |
|
|
$ |
1,057 |
|
$ |
971 |
|
|
|
|
|
|
|
|
|
Conference Call details:
Our management team will host a conference call
to discuss our financial results on Wednesday, May 27, 2020 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) 553‐9962 (US Toll-Free Dial In), 0(808) 238‐ 0669 (UK
Toll-Free Dial In) or +44 (0)2071 928592 (Standard International
Dial In). Please quote "Star Bulk."
A telephonic replay of the conference call will
be available until Wednesday, June 3, 2020 by dialing 1(866)
331‐1332 (US Toll-Free Dial In), 0(808) 238‐0667 (UK Toll-Free Dial
In) or +44 (0) 3333009785 (Standard International Dial In). Access
Code: 3128607#.
Slides and
Audio Webcast:
There will also be a simultaneous live webcast
over the Internet, through the Star Bulk website
(www.starbulk.com). 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,
coal 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, Oslo, New York, Limassol and Singapore. Its common stock
trades on the Nasdaq Global Select Market and on the Oslo Stock
Exchange under the symbol “SBLK”. Star Bulk owns a fleet of 116
vessels, with an aggregate capacity of 12.9 million dwt, consisting
of 17 Newcastlemax, 19 Capesize, 2 Mini Capesize, 7 Post Panamax,
35 Kamsarmax, 2 Panamax, 17 Ultramax and 17 Supramax vessels with
carrying capacities between 52,425 dwt and 209,537 dwt.
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.
The Company desires 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. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “may,” “should,” “expect,” “pending” and similar
expressions 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 the Company’s management of historical
operating trends, data contained in its records and other data
available from third parties. Although the Company believes 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 the Company’s control, the Company cannot assure you that it
will achieve or accomplish these expectations, beliefs or
projections.
In addition to these important factors, other
important factors that, in the Company’s 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 interest rates and foreign exchange
rates; changes in demand in the dry bulk shipping industry,
including the market for our vessels; changes in our operating
expenses, including bunker prices, dry docking and insurance costs;
changes in governmental rules and regulations or actions taken by
regulatory authorities; potential liability from pending or future
litigation; general domestic and international political
conditions; potential disruption of shipping routes due to
accidents or political events; business disruptions due to natural
disasters or other disasters outside our control, such as the
recent outbreak of COVID-19; the availability of financing and
refinancing; 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. 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:Simos Spyrou, Christos
BeglerisCo ‐ Chief Financial Officers Star Bulk Carriers Corp.c/o
Star Bulk Management Inc.40 Ag. Konstantinou Av.Maroussi
15124Athens, GreeceEmail: info@starbulk.comwww.starbulk.com
Investor Relations / Financial Media:
Nicolas BornozisPresidentCapital Link, Inc.230
Park Avenue, Suite 1536New York, NY 10169Tel. (212) 661‐7566E‐mail:
starbulk@capitallink.com
www.capitallink.com
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