Star Bulk(SBLK) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net income of $18.5 million, with an adjusted net income of $32.4 million, translating to an adjusted income per share of $0.16. Adjusted EBITDA for the quarter was $87 million [4] - Total cash reached $454 million, while total debt stood at $1.028 billion. Pro forma liquidity, including undrawn revolver facilities, exceeded $570 million [4] - The company repurchased 250,000 shares for $4.4 million during the third quarter and an additional 360,000 shares for $6.7 million in the fourth quarter to date [4] Business Line Data and Key Metrics Changes - Operating expenses for Q3 2025 were reported at $5,096 per vessel per day, with net cash G&A expenses at $1,325 per vessel per day [9] - The time-charter equivalent (TCE) rate was $16,634 per vessel per day, resulting in a TCE less OpEx and CAS G&A of approximately $10,213 per vessel per day [5] Market Data and Key Metrics Changes - Total dry bulk trade volumes increased by 5.1% year-over-year during Q3, supported by strong iron ore, grain, and minor bulk exports [17] - Chinese dry bulk imports rose by 4.4% year-over-year in Q3 after a contraction in the first half of the year [18] - The fleet growth for the first ten months of 2025 was 2.6%, with a modest newbuilding order book at 10.9% of the existing fleet [15] Company Strategy and Development Direction - The company is focused on fleet renewal and energy efficiency, with ongoing investments in green technologies and compliance with environmental regulations [13] - The strategy includes selective disposals and acquisitions to optimize fleet efficiency, with a focus on Kamsarmax vessels due to their favorable economics compared to Capesize vessels [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medium to long-term outlook for the dry bulk market, supported by a favorable supply outlook and easing trade tensions [22] - The company anticipates a gradual normalization of trade activity in 2026, particularly in light of recent geopolitical developments [18] Other Important Information - The company has completed 51 energy-saving device installations, with plans for additional upgrades in 2025 [10] - The board declared a dividend of $0.11 per share for the quarter, payable on December 18, 2025 [4] Q&A Session Summary Question: Expectations around total net change in debt in 2026 - The company secured financing for five newbuilds at $130 million and is in discussions for the remaining three, with amortization expected to remain around $50 million per quarter [26][27] Question: Dividend policy and cash balance calculations - The dividend policy is based on maintaining a cash balance above $2.1 million per vessel, which is currently well covered by the company's cash reserves [30][32] Question: Strong rate performance in sub-cape segments - Management attributed the strong performance to spillover effects from larger vessels and improved demand fundamentals in the grain and coal markets [33] Question: Fleet composition and Kamsarmax focus - The company is renewing its aging Kamsarmax fleet and taking advantage of favorable pricing and early delivery schedules for newbuilds [38][39] Question: Opportunities in the Capesize market - Management noted that finding Capesize vessels at reasonable prices is challenging, and current market conditions favor investments in Kamsarmax vessels [44]