Q4 2023 Star Bulk Carriers Corp Earnings Call
Thank you for standing by ladies and gentlemen, and welcome to the Star bulk carriers conference call on the fourth quarter 2023 financial results, we have with US Mr. Petros Pappas, Chief Executive Officer, Mr. Hamish Norton President Mr. Cmos steroids.
Operator: Thank you for standing by, ladies and gentlemen, and welcome to Star Bulk Carriers' conference call on the fourth quarter 2023 financial results. We have with us Mr. Petraeus Papadopoulos, executive officer; Heymay Norton present; Timo Sperre, and Mr. Christos Begleris.
<unk> and Mr. Christos, they glamorous co chief financial officers, Mr. Nicos rescue Chief operating officer, and Mrs. Jaras play to China E Chief strategy Officer at the company at this time all participants are in listen only mode. There will be a.
Operator: Co-Chief Financial Officer. Chico Resco, Chief Operating Officer, and Mrs. Sharif. At this time, all participants are in listen-only mode.
Operator: There will be a presentation followed by a question and answer session at which time, if you wish to ask a question, please press star 1 on your telephone keypad. I must advise you that this conference is being recorded today. We will now pass the floor over to Sparrow.
Presentation, followed by a question and answer session at which time. If you would if you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced I must advice you that this conference is being recorded today ill now pass the floor over to your speakers today.
Simos Pirou: Thank you, Operator. I'm Simos Pirou, Co-Chief Financial Officer of Star Bulk Carriers, and I would like to welcome you to our conference call regarding our financial results for the fourth quarter of 2023. Before we begin, I kindly ask you to take a moment to read the Safe Harbor Statement on slide number 2 of our presentation. In today's presentation, we will go through our Q4 results, financing, and share buybacks. A short update on the Eagle Bulk transaction, fleet developments and operations, the latest on the ESG front, and our views on industry fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our fourth quarter 2023 highlights. Net income for the fourth quarter amounted to approximately $40 million, and adjusted net income was approximately $64 million. Adjusted EBITDA was $114 million for the quarter.
Mr. Shapiro. Please go ahead Sir.
Thank you operator.
Cmos failure co Chief financial Officer of Star bulk carriers.
And I would like to welcome you to our conference call regarding our financial results for the fourth quarter of 'twenty two 'twenty three.
Before we begin <unk>.
We ask you to take a moment to read the safe Harbor statement on slide number two of our presentation.
In today's presentation, when we go through our Q4 results financings and share buybacks.
A short update on the Eagle bulk transaction flip development and operations the latest somebody ESG problem and our views on industry fundamentals before opening up for questions.
Let us now turn to slide number three of the presentation for a summary of our fourth quarter 2023 highlights.
Net income for the fourth quarter amounted to approximately $40 million and adjusted net income of approximately $64 million.
Adjusted EBITA was $114 million for the quarter.
For the fourth quarter I spent our existing dividend policy.
Simos Pirou: For the fourth quarter, as per our existing dividend policy, we declare a dividend per share of 45 cents with a record date of March 12, 2024. Since June 2021, we have returned to shareholders $1.1 billion in dividend distributions and over $400 million in share buybacks. Our total capital today stands at $312 million, pro forma for the delivery of our four remaining sold vessels and repayment of their respective debt, as well as the bridge facility. Meanwhile, our pro forma total debt stands at approximately $1,121,000,000, translating into a pro forma net debt of approximately 800 million.
We declared a dividend per share of 45 cents with record date as of March 12 2024.
Since June 2021, we have returned to shareholders 1.1 billion in dividends distributions and over 400 million in share buybacks.
Our total cost today.
It stands at 312 million.
The format for the delivery of our four remaining sold vessels and the repayment of their respective debt as well as the bridge facility.
Meanwhile, our pro forma total debt stands at approximately 1.121 billion.
Translating in the pro forma net debt of approximately 800 million.
On the top right of the page you will see our daily figures per vessel for the quarter.
Simos Pirou: On the right side of the page, you will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $18,296 per vessel per day. Our combined daily OPEX and net cash GNA expenses per vessel per day amounted to $6,081. Therefore, our TCE, less OPEX and GNA, is approximately $12,215 per day per vessel.
Our time charter equivalent rate was $18296 per vessel per day.
Our combined daily Opex and net cash G&A expenses per vessel per day amounted to $6081.
Therefore, our D C less opex and G&A is approximately $12215 per day per vessel.
Simos Pirou: Looking towards fleet renewal, in the last 12 months, we have agreed to sell 17 vessels with an average age of 13.7 years and received insurance proceeds from one vessel which was declared a constructive total loss. Total gross proceeds from these vessels were $366 million. During the fourth quarter, we completed a 380 million repurchase of 20 million shares from Oaktree Capital. The shares were repurchased and subsequently consolidated. The Oak Reserve buyback was funded from vessel sale proceeds of $254 million, plus $76 million of new debt financing.
Looking towards fleet renewal in the last 12 months, we have agreed to sell 17 vessels with an average age of 13 seven years and received insurance proceeds from one vessel, which was declared as a constructive total loss.
Total gross proceeds from these vessels.
We're 366 million.
During the fourth quarter, we completed a 380 million repurchase of 20 million shares from Oaktree capital.
The shares were repurchased and subsequently canceled.
The old through share buyback was funded from vessel sale proceeds of 254 million.
Plus 76 million of new debt financing.
Simos Pirou: 13 million of proceeds from the ATM, and 38 million cash released from the minimum cash threshold of 2.1 million per vessel for the 18 vessels that have been sold. Slide 4 graphically illustrates the changes in the company's cash balance during the fourth quarter. We started the quarter with $302 million in cash and generated positive cash flow from operating activities of $88.6 million.
13 million of proceeds from the ATM.
And 38 million cost released from the minimum cost threshold of 2.1 million per vessel for the 18 vessels that have been sold.
Slide four graphically illustrates the changes in the Companys cash balance during the fourth quarter.
We started the quarter with $302 million in gas and.
And generated positive cash flow from operating activities of 88 6 million.
After including debt proceeds and repayments.
Simos Pirou: After including debt proceeds and repayments, CAPEX payments for ESD and ballast water treatment system installations, the third quarter dividend payment, The Oak Cresceir Apprentices, and ATM issuances, we arrived at a cash and cash equivalent balance of $282 million at the end of the quarter. This figure includes a $20 million adjustment as this amount was released from the vessel sales and went against the financing of the Oak Reserve buyback. Slide 5 illustrates a summary of the recently announced Eagle Bulk transaction. We have been working closely with Eagle Bulk's team and our lawyers to be able to complete the merger in early April 2024. This transaction will create a global leader in dry bulk shipping with a large, diversified, and scrubber-fitted fleet of 167 vessels. This is an all-stock transaction on NAV to NAV basis with a combined market cap of approximately 2.6 billion. Eagle shareholders will receive 2.6211 shares of Star Bulk per share of Eagle.
Capex payments for E S D and ballast water treatment system installations.
Third quarter dividend payment.
The oaktree share repurchases.
ATM issuances.
We arrived at the cash and cash equivalent balance of 282 million at the end of the quarter.
This figure includes a 20 million adjustment.
This amount was released from the vessel sales and again to the financing of the old through share buyback.
Yeah.
Slide five illustrates a summary of the recently announced Eagle bulk transaction.
We have been working closely we figured both team and our lawyers to be able to complete the merger.
Early April 'twenty to 'twenty four.
This transaction will create a global leader in dry bulk shipping with a large diversified and scrubber fitted fleet of 167 vessels.
This is an all stock transaction on N. A beta of Navy bases with a combined market cap of approximately $2 6 billion.
It gives shareholders will receive $2 60 to 11 shares of star bulk their share of igo.
Simos Pirou: Star Bulk shareholders will own approximately 71%, and Neagle shareholders will own approximately 29% of the combined entity. Since the deal was announced, we filed with the SEC an F4 registration statement with respect to the shares of Star Bulk's common stock to be issued to Eagle shareholders pursuant to the Eagle merger agreement, which became effective on February 12, 2024. The Board of Directors of EGLE fixed February 12, 2024 as the record date for the determination of EGLE shareholders entitled to receive notice of and vote at the EGLE Special Meeting, which will be held on April 5th, 2024. Subject to EAGLE shareholder approval and customary closing conditions, we expect that the EAGLE merger will close shortly thereafter.
Starbucks shareholders will own approximately seven 1% and major shareholders will own approximately 29% of the combined entity.
Since the deal was announced we filed with the SEC and S. Four registration statement with respect to the shares of Starbucks common stock to be issued to eagle's shareholders. They shouldn't do the merger agreement, which became effective on February 12 2020.
Four.
The board of directors will figure fixed February 12th 'twenty 'twenty four is the record date for the determination of eagle's shareholders entitled to receive notice of and vote at the annual special meeting.
Vaguely special meeting will be held on April 5th 'twenty 'twenty four.
Subject to any shareholder approval and customary closing conditions, we expect the big merger.
We will close shortly thereafter.
I will now pass the floor to our C O makos rest goes.
Nikos Reskos: I will now pass the floor to our COO, Nikos Reskos, to talk about our operational performance and an update on our fleet renewal and CAPEX update. Thank you, Seymour. Please turn to slide 6, where we provide an operational update. Operating expenses excluding non-recurring expenses were $4,977 for Q4 2023. In addition, we continue to rate at the top amongst our listed peers in terms of rideship safety. Please turn to slide 7 for an update on our fleet sales and our recent new building order. In December, we entered into an additional three firm shipbuilding contracts with King Dow Shipyard for the construction of 82,000 Camsomax New Building vessels at competitive price levels, having increased the size of our order from two to five vessels. The vessels are being built in China to a high specification, fitted with the latest fuel-efficient engine coming into production in 2024, a shaft generator reducing the energy requirements while at sea, and an alternate marine power provision. The above measures ensure best-in-class fuel consumption and emissions.
Talk about our operational performance and then update on our fleet renewal.
<unk> Capex update.
Thank you Simone.
Please turn to slide six we provide an operational update.
Operating expenses, excluding nonrecurring expenses was $4977 for Q4 2023.
Net cash G&A expenses were $1104 per vessel per day for the same period.
In addition, we're continuing to right at the top amongst our listed peers in terms of variety of safety score.
Please turn to slide seven for an update on our fleet sales and our recent new building orders.
In December we entered into an additional three firm shipbuilding contracts with Kingdom shipyard for the construction of an.
82000 comes from our new building vessels, a competitive price levels.
Having increased the size of our order from two to five vessels.
The vessels are being built in China for high specification fleet with our latest fuel efficient engine coming into production in 2024.
South generate or reducing the energy requirements, while subsea and NASDAQ Marine power provisions.
Both measures.
Ensure best in class fuel consumption and emissions.
Nikos Reskos: On the vessel sales front, we continue disposing of vessels opportunistically at historically attractive levels, having agreed during Q4 to sell seven vessels for a total gross proceeds of $122 million, reducing our average fleet age and improving overall fleet efficiency. During Q1, we agreed to sell another two case-size vessels, the Big Bang and the Pantagruel, for a total gross revenue of $36.3 million. Furthermore, we took delivery of two out of the six long-term chartering eco-vessels that will be delivered to us throughout 2024, and specifically, a Tunisia-Zurich and Camsomax and a Tunisia-Sebel Ultramax. Considering the aforementioned changes in our fleet mix, we operate one of the largest drybug fleets amongst U.S. and European-listed peers, with 122 vessels on a fully-delivered basis, with an average age of 10.5 years.
On the vessel sales fronts will continue disposing of vessels opportunistically.
Historically attractive levels haven't got agreed during Q4 to sell seven vessels for total gross proceeds of 122 million.
Reducing our average fleet age and improving overall fleet efficiency.
During Q1, we agreed to sell another two capesize vessels, the big Bang and the Pantagruel for total gross proceeds of $36 3 million.
Furthermore, we took delivery of two out of the six long term chartering eco vessels will be delivered to us throughout 2024, and specifically auto nation solution comes from Us imagine Asia Cebu trucks.
Considering the aforementioned changes in our fleet mix, we operate one of the largest dry bulk fleets amongst U S and European listed peers.
122 vessels on a fully delivered basis with an average age of 10 five years.
Slide eight provides a fleet update and some guidance around our future dry dock and the relevant total off hire days.
Nikos Reskos: Slide 8 provides a fleet update and some guidance around our future dry dock and the relevant total of hired days. On the top right of the page, we provide a CAPEX schedule illustrating our new building CAPEX and vessel energy efficiency upgrade expenses, with 100% of our fleet now having ballast water treatment systems fitted. Our expected dry dock expense for 2024 is estimated at $30.5 million for the dry docking of 40 vessels. In total, we expect to have approximately 950 off-hard days during the same period.
On the top right of the page, we provide a Catholic schedule illustrating our new building Capex and vessel energy efficiency upgrade expenses, 100% of our fleet now being ballast water treatment systems fitness.
Our expected Drydock expense for 2024 is estimated at $36 5 million for the dry docking of 40 vessels.
In total we expect to have approximately 950 off hire days for the same period.
Nikos Reskos: Based on our latest construction schedule, our new building vessels are expected to be delivered in Q4 2025, Q2 and Q3 2020. In line with EXI-CII regulations, we will continue investing in and upgrading our fleet with the latest operational technologies available, aimed at improving our fuel consumption and reducing our environmental footprint, further enhancing the commercial attractiveness of the Star Bulk fleet. Regarding our energy-saving devices program, we have completed and tested retrofits on 31 vessels, with 16 more to follow for retrofit by the end of 2024.
Based on our latest construction schedule, our new building vessels are expected to be delivered in Q4, 2025, Q2 and Q3 2026.
In line with <unk> regulations, we will continue investing in upgrading our fleet with our latest operational technologies available and in improving our fuel consumption and reducing our environmental footprint further enhancing the commercial attractiveness of the Starbucks fleet.
Regarding our energy saving devices program will have completed and tested retrofits of 31 vessels with six more to follow for retrofit by the end of 2024.
Both numbers are based on current estimates around dry dog and retrofit planning vessel employment and yard capacity.
Harris Plakantonaki: The above numbers are based on current estimates around dry dock and retrofit planning, vessel employment, and yard capacity. Finally, we are working together with Eagle Management towards a seamless integration of the ship management platforms from April 2024 onwards, should the merger receive shareholder approval. I will now pass the floor to our Chief Strategy Officer, Harris Plakantonaki, for an ESG update. Thank you, Mikko.
Finally, we're working together with Eagle management towards a seamless integration of the ship management platforms from April 2024 onwards should the merger receive shareholder approval.
I'll now pass the floor to our Chief strategy Officer Harriss, the Nike finally ESG outfit.
Thank you Nikos.
Let's turn to slide nine we highlight our continued leadership on the ESG front.
Harris Plakantonaki: Please turn to slide 9, where we highlight our continued leadership on the ESG. Star Bulk, along with four other leading ship owners in Greece, has joined the Lloyds Register Foundation in establishing the Maritime Emissions Reduction Center, an Athens-based non-profit organization. The Center will support the development and adoption of new and existing solutions to reduce greenhouse gas emissions of the global economy while fostering the collaboration among maritime value chain stakeholders, safely navigate to Medelln. For a third year in a row, Starbulk has participated in the Carbon Disclosure Project, maintaining its score of B, which indicates a maturity of management level for taking coordinated action on climate, and also above the global average for sea, which indicates awareness. On the regulatory front, Star Bulk has taken all necessary measures to prepare for and ensure compliance with the inclusion of shipping in the EU Emissions Trading Scheme, which came into force on the 1st of January 2024. We have also prepared to timely align RISD reporting with the EU's Corporate Sustainability Reporting Directive, which will apply for the first time in the 2024 financial year for reports published in 2021.
Sorry book, along with four other leading C partners increase haven't joined the Lloyd's Register Foundation.
Obviously in the maritime emissions reduction center, and NASA space nonprofit organization.
Center will support the development and adoption of new and existing solutions to reduce greenhouse gas emissions of the global fleet.
By fostering collaboration among maritime value chain stakeholders to safely navigate the next you know.
For a third year in a row Starbucks has participated in the kind of disclosure and project maintaining its quota.
We syndicated maturity of management landfill or taking coordination action on climate change.
These scar starbuck above the industry average at the mines and also above the global average of C suite seem to create awareness.
On the regulatory front Starbucks is taking all necessary measures to prepare for and ensure compliance with the inclusion of shipping in the EU emissions trading scheme, which came into force on the first of January 'twenty 'twenty four.
We have also prepared to timely aligner recently reporting with a huge corporate sustainability reporting directly.
This will apply for the first time.
That would be 24 financing here for you.
First published in 2075.
During Q4 of 2023, we continued enhancing our employee engagement and wiping programs, increasing their retention rates of our store employees.
With regards to regulation Starbuck is continuing to invest in new systems technologies for AC and training those today as soon as communications.
Including the deployment of high bandwidth Internet and next generation firewalls, one bogey.
Harris Plakantonaki: During Q4 2023, we continued to enhance our employee engagement and well-being programs, increasing the retention rates of our SOAR employees. With regard to regulations, Star Bulk is continuing to invest in new systems, technologies, policies, and training to strengthen its communications and cyber security, including the deployment of high-bandwidth internet and next-generation firewalls on board its vessels in December 2023. Star Bulk was granted the Sustainability Award at the annual Lloyd's List Greek City Award.
In December 2023, Starbucks was granted the sustainability award.
I'm glad to know at least Greek CP networks.
I will not disclose our CEO Petros Pappas for a market that faith in his closing remarks.
Thank you Harris.
Please turn to slide 10 for a brief update of supply.
During 2023 a total of 35.3.
Deadweight was delivered and five 4 million deadweight was centered demolition.
For a net fleet growth of $29 9 million deadweight or three 1% year over year.
Furthermore, there's a 42.8 million dead weight were placed during the year with a new building order book is presently standing at the still low level of raising the high percent of the fleet.
Fotis Giannakoulis: I will now pass the floor to our CEO, Petros Papas, for a market update and his closing remarks. Thank you, Harry. Please turn to slide 10 for a brief update on supply. During 2023, a total of 35.3 million dead weight units were delivered, and 5.4 million dead weight units were sent to demolition, for a net fleet growth of 29.9 million dead weight units, or 3.1% year over year. Firm orders of 42.8 million deadweight were placed during the year, with a new building order book presently standing at a still low level of 8.5% of the fleet. Limited CPR capacity until late 2026, high shipbuilding costs, and future green propulsion uncertainty are keeping new orders under relative control. Furthermore, vessels above 20 and 15 years of age stand at 8.5%.
Limited shipyard capacity until late 2026 high spec building costs and future Green propulsion uncertainty.
Keeping new orders under relative control.
Furthermore, vessels above 20, and 15 years of age.
<unk> phased in at 5% and 26% of the fleet.
Expected really.
While scrap prices have stabilized at elevated levels and should make the militia in a world where rates and energy efficient donuts and more attractive option during seasonal downturns over the next few years.
During the second half of the year the average stimulus speed of the dry bulk fleet decreased to a new low of 10 point 95 nuts.
Downward pressures from inflated bunker costs and new environmental regulations.
We expect the excite C III regulations to increasingly incentivize slow steaming retrofits and to help moderate supply over the next several years.
Local port congestion adjusted lower over the last two years and we expect that these will follow seasonal patterns from now on.
Fotis Giannakoulis: 20.6% of the fleet respectively, while scrap prices have stabilized at elevated levels and should make demolition of overage and energy inefficient tonnage a more attractive option during seasonal downturns over the next year. During the second half of the year, the average steaming speed of the dry bag fleet decreased to a new low of 10.95 knots, due to downward pressures from inflated bunker costs and new environmental regulations.
In the short term the combination of dropped in Panama and Richie tensions has led to a major decrease of canal transits and is causing inefficiencies that are candidly mitigated by the seasonal market.
Mrs.
As a result of the above trends.
I'm, a little fleet growth is unlikely to exceed 25% per annum over the next few years.
Let's now turn to slide 11 for a brief update of demand.
According to Clarksons total dry bulk trade during 2023 is estimated to have expanded by four 4%.
Fotis Giannakoulis: We expect the XI-CII regulation to increasingly incentivize slow steaming, retrofits, and to help moderate supply over the next decade or so. Global pork congestion has adjusted lower over the last two years, and we expect that it will follow seasonal patterns from now on. In the short term, the combination of drought in Panama and Red Sea tensions has led to a major decrease in canal transit and is causing inefficiencies that are currently mitigated by seasonal market weakness. As a result of the above trends, nominal fleet growth is unlikely to exceed 2.5% per annum over the next few years. Let's now turn to slide 11 for a brief update of the map. According to Clarkson's, total dryback trade during 2023 is estimated to have expanded by 4.4% in ton-miles, trade volumes during the fourth quarter increased by 6.2% year-over-year, supported by record coal and iron ore exports and a recovery of mine ore bulk trade, while stronger Atlantic exports and inefficiencies have benefitted my life. China dry bulk imports increased by 12.2% despite weak macro sentiment and a struggling property sector, gradual stimulus measures over the last year, heavy investment in infrastructure and manufacturing, and higher experts have provided support for raw materials demand.
Minus three.
Trade volumes during the fourth quarter increased by six 2% year over year.
Hosted by our record coal and iron ore exports and a recovery of minor bulk trade, while a stronger Atlantic exports and then efficiencies have benefited thorn miles.
China Drybulk imports increased by 12, 2%, despite the weak macro sentiment and that's that I think property sector.
Gradual stimulus measures over the last year heavy investment on infrastructure and manufacturing and higher exports have provided support for all materials demand.
On the other hand, drybulk imports from the rest of the world declined by.
2%.
Demand during the first half of 2023 was affected by high energy input costs.
Related to the war in Ukraine, and tightening monetary policy by Western economies in the airports to fight inflation.
Yeah.
During 2020 for dry bulk demand is projected to increase by 1% in tons.
M S upgrading as global GDP growth forecast to three 1%.
The Chinese economic recovery from the zero carbon policy.
Still at early stages and is expected to accelerate once the property market stabilizes and consumer confidence returns.
Demand from the rest of the world.
We're experiencing a strong recovery since September and supported by declining energy food and borrowing costs.
Meanwhile, the year started with tonne mile is receiving strong support by geopolitical and cannot leading efficiencies.
Okay.
Iron ore trade expanded by six 2% during 2023 and is projected to contract by 0.4% during 2024.
China crude steel production increased by zero point, 90% during 'twenty to 'twenty three after two consecutive years of contraction supported by inflated steel product exports.
Fotis Giannakoulis: On the other hand, bulk imports from the rest of the world declined by.. percent as demand during the first half of 2023 was affected by high energy and food costs related to the war in Ukraine and tightening monetary policy by Western economies in the efforts to fight in place. During 2024, dry bulk demand is projected to increase by 1% in tons, with the IMF upgrading its global GDP growth forecast to 3.1%. The Chinese economic recovery from the zero COVID policy is still at early stages and is expected to accelerate once the property market stabilizes and consumer confidence returns. Demand from the rest of the world is experiencing a strong recovery since September, supported by declining energy, food, and borrowing costs. Meanwhile, the year started with Ton Miles receiving strong support by Geopolitical and Canal in the future. Iron ore trade expanded by 6.2% during 2023 and is projected to contract by 0.4% during 2024. China's crude steel production increased by 0.9% during 2023 after two consecutive years of contraction.
Domestic iron ore stockpiles are moving higher but still well below last year's levels.
Crude steel production from the rest of the world declined by one 2% during 2023 as the first half was affected by high energy costs and weak margins.
Having said that steel production ex China experienced a strong recovery during the fourth quarter.
And is expected to remain strong throughout 2024.
Coal trade expanded by 6.9% Europe 23.
Rejected the contract by one 4% during 'twenty.
If you had before.
I'll focus on energy security is inflated coal trade wildly.
While there is shuffling of Russian exports has benefited ton miles.
Chinese imports shares by an impressive 61% compared to 20.
Two it's thermal electricity increased by 6.4% hydro power contracted by 4.9% and domestic oil production growth was limited to four 3%.
He is emerging as a leading coal imports there with.
Electricity is currently outpacing domestic oil production growth and stockpiles at relatively low levels.
Greatest greatest trade contracted by 0.6% during the three and is projected to rebound by 2.9% during 'twenty 'twenty four.
Got any trade was affected by the Greensville vegetables from Argentina, the U S in Ukraine, well, Brazil experienced record soybean and corn seasons that help fill the gap.
Fotis Giannakoulis: Supported by the Inflated Steel Product Expo. Domestic iron ore output in stockpiles is moving higher, but still stands well below last year's level. Crude steel production from the rest of the world declined by 1.2% during 2023, as the first half was affected by high energy costs and weak margins.
Falling prices of agricultural commodities bear.
Crop yields in North and South America, the recovery of Ukrainian volumes and increased demand from emerging economies are expected to deflate gate trade over the next years Morever.
Fotis Giannakoulis: Having said that, Steel Production X China experienced a strong recovery during the fourth quarter and is expected to remain strong throughout 2024. Coal trade expanded by 6.9% during 2023 and is projected to contract by 1.4% during 2021. Global Focus on Energy Security as Inflated Coal Trade, while the reshuffling of Russian exports has benefited tonnemiles. Chinese imports surged by an impressive 61% compared to 2022, thermal electricity increased by 6.4%, hydropower contracted by 4.9%, and domestic coal production growth was limited to 4.3%.
Finally, mechanical constrains this year will inflate on miles H historically, 25% of U S exports are moving through to come off.
Minor bulk trade has expanded by three 7% during 2023 and is projected to expand by three 9% during 2024.
Minor bulk trade that has the highest correlation to global GDP growth and your supported by bromine global macroeconomic fundamentals.
Atlantic still shortages.
You did 75 specific experts and inflate backhaul trades.
Furthermore, expanding west Africa bauxite exports.
Generates strong ton miles for Capesize vessels with Guinea exports up 24% during 2023.
As a final comment they often look for the dry bulk market remains positive due to favorable supply dynamics geopolitically driven inefficiencies in trade.
Fotis Giannakoulis: India is emerging as a leading coal importer, with electricity demand currently outpacing domestic coal production growth and stockpiles at relatively low levels. Grains trade contracted by 0.6% during 2023 and is projected to rebound by 2.9% during 2024. Grain trade was affected by the increase in exports from Argentina, the U.S., and Ukraine, while Brazil experienced record soybean and corn seasons that helped fill the gap. Falling prices of agricultural commodities, better crop yields in North and South America, the recovery of Ukrainian volumes, and increased demand from emerging economies are expected to inflate grain trade over the next years. Panama Canal constraints this year will inflate grain miles, as historically 25% of U.S. export Minor bulk trade expanded by 3.7% during 2023 and is projected to expand by 3.9% during 2024.
And the recovery of demand supported by large global infrastructure in.
Investment needs for the World is getting into this.
Starbuck expects to take advantage of the recent strength in the dry bulk market.
Having mostly maintain these diverse scrubber fitted fleet in the spot market and will continue to create value for its shareholders.
Without taking any more of your time I will now pass the floor over to the operator to answer any questions you may have.
Thank you yeah, if he would like to ask a question.
Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.
You May press Star two.
Thank you.
For participants using speaker equipment, it may be necessary.
Before pressing the star Keys, our first question is from Amit.
Yes.
Please proceed.
Thanks, Operator, hi, everybody to talk to you all.
I wanted to maybe start with the dividend expectations.
The first quarter, there's obviously a lot of moving parts in terms of you know year to date bookings and asset sales asset acquisitions.
Fotis Giannakoulis: Minor bulk trade has the highest correlation to global GDP growth and is supported by improving global macroeconomic fundamentals. However, Atlantic steel shortages continue to incentivize Pacific exports and inflate the backhaul trade. Furthermore, expanding West African bauxite exports generate strong tonnemelts for cape-sized vessels, with Guinean exports up 24% during 2023. As a final comment, the outlook for the drive-back market remains positive due to favorable supply dynamics, geopolitically-driven inefficiencies in trade, and a recovery of demand supported by large global infrastructure investment needs for the world's green transition. Star Bulk expects to take advantage of the recent strength in the dry bulk market, having mostly maintained its diverse scrubber-fed fleet in the spot market, and will thus continue to create value for its shareholders. Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have. If you would like to ask... Star One. Confirmation total indicate. Thank you. Press star 2 to remove your question from the list.. and Peter Coyle.
Been helpful in the past and kind of helping US calibrate you know directionally at least.
Wondering if you can kind of help us synthesize all those moving parts and and what our expectations would be around the dividend for the first quarter.
[noise] Amy's.
Oh, I was actually thinking that might be a CFO question, but.
Yeah, I mean, obviously, we don't give guidance.
On on dividends.
Yeah.
You know.
Yeah.
The first quarter.
Yeah.
Not looking at that right.
And we have provided a figure of pro forma costs as of today, Hey me Sir.
Including the remaining deliveries for the four vessels.
Vessel sale, so its 312 million pro forma as of today.
Uh Huh B you Amit you should be.
The only keeping us a minimum liquidity the $2 1 million.
Our vessel that we have on the water right now so it's a you know pro forma for the last four deliveries. It's 110 vessels. Then you should add a figure of approximately 38 million, which is the dividend that we have just declared.
To be paid during the following days for Q4. So roughly you can see you know how it what is the remaining you know excess cost ourself today and make your projections for the remaining of the quarter.
Yeah.
Okay.
Working capital go ahead female.
Uh huh.
Do we expect working capital to be a source or a thing.
Operator: Thank you. Thank you. Thank you. Thank you. Our first question is from... Mehrotra, with Dwayne. Thanks, operator. Hi, everybody.
Uh huh.
Yeah Bob.
More or less it should be you know slightly negative.
Uh-huh.
Okay. Okay. That's helpful.
Amit Mehrotra: Good to talk to you all. I want to maybe start with dividend expectations. For the first quarter, there's obviously a lot of moving parts in terms of, you know, year-to-date bookings and asset sales, and asset acquisitions. You've been helpful in the past in kind of helping us calibrate, you know, directionally at least, wondering if you can kind of help us synthesize all those moving parts and and what our expectation is to be able to have a dividend for the first. Hamish, Well, I was actually thinking that might be a CFO question, but... You know, I mean, obviously, we don't give guidance on dividends, um, you know. The, This first quarter is, is, you know. Not looking that bad.
You can follow up on maybe more precise numbers later on the I guess the second question for me obviously, there's there's a lot of disruption in the Red Sea I think there were some reports that maybe a few of your vessels had been kind of under threat in that region.
He managed Petros like what do you guys think is going to happen now obviously, we've seen containership rates move higher we seen tanker rates move higher.
Is there is there a <unk>.
Synthetic reduction in capacity, it's occurring as you go.
Dry bulk vessels go around the Cape of good hope what are you seeing in terms of the latest for the dry bulk market in terms of what's happening in the Red Sea.
Hi, I'm at Okay first of all let me explain.
The the situation about our company.
We we had two cases of period charters, where we all started charter is not to go through the Suez Canal, but legally we could not do that.
Hamish: And we have provided a figure, proforma cash as of today, Hamis, including the remaining deliveries for the four vessel sales, so it's 312 million proforma as of today. Amit, you should only keep us minimum liquidity, the 2.1 million per vessel that we have on the water right now, so it's proforma for the last four deliveries, it's 110 vessels. Then you should add a figure of approximately 38 million, which is the dividend that we have just declared to be paid during the following days for Q4, so roughly, you can see what the remaining excess cash is as of today and make your projections for the remaining of the quarter. Yeah, okay, work in Casablanca, Guillaume Campe. Do we expect working capital to be a source or a thing? Ahhh, more or less, it should be slightly negative.
Because until that time, we did not know about the attacks.
Do the Eagle Mountain Genco vessels, and therefore, we got advice that we had to follow.
The charter party and send the vessels through Suez show that prepares vessels past.
And was attacked three times Fortunately.
Fortunately it was not a harris nobody on board nor the vessel.
But why is that what's happened in the second vessel was already passing sweaters. So we couldnt diverted.
And.
And that has to continue and was attacked again going forward, we will not be passing a stress can all anymore. Because we are obviously a target of the hoodies are having.
Hamish: Mm-hmm. Okay, okay. That's helpful and we can follow up on maybe more precise numbers later on. I guess the second question for me is, obviously, there's a lot of disruption in the Red Sea. I think there were some reports that maybe a few of your vessels have been kind of under threat in that region. Hamish, Petra, what do you guys think is going to happen now?
And being a public company registered in the U S. So that's.
That was a I wanted to clarify this so that.
People know now.
Yeah.
Vista.
Let me give you a few examples if you had the vessel in the U S Gulf.
And you wanted to go to Qingdao in.
China.
It would be a distance of like 10000 miles.
Amit Mehrotra: Obviously, we've seen container ship rates move higher. We've seen tanker rates move higher. Is there a synthetic reduction in capacity occurring as dry bulk vessels go around the Cape of Good Hope? What are you seeing in terms of the latest for the dry bulk market in terms of the top? Hi, Amit.
But the Panama Canal it doesn't work for bulk carriers as it doesn't right now.
You would have to go through Suez Canal and that would be 14100, the mildest therefore, 41%.
Longer distance and the win and if you cannot do Suez Canal. Then you have to go through the Cape which is 15400 <unk>.
Fotis Giannakoulis: Okay, first of all, let me explain the situation with our company. We had two cases of period charters where we asked our charterers not to go through the Suez Canal, but legally, we could not do that because, until that time, we did not know about the attacks on the Eagle Bulk and Jenko vessels, and therefore, we got advice that we had to follow the Charter Party and send the vessels through the Suez Canal. The first vessel passed, and it was attacked three times. Fortunately, it did not hurt.
Hum.
Myles and therefore, it's 54%.
Uh huh longer than it would be through the Panama Canal and then again, if you're in Rotterdam and you want to go to Qingdao.
If you go through Suez Canal, it would be 11000 miles and throw that gave would be 14300 miles therefore.
30% longer.
So.
If in theory, no vessel passed through.
Fotis Giannakoulis: Nobody on board, nor was the vessel. But while that was happening, the second vessel was already passing Suez, so we couldn't divert it. And And And that had to continue, and it was attacked again. Going forward, we will not be passing the Suez Canal anymore because we are obviously a target of the Houthis, having been a public company registered in the U.S. So that was — I wanted to clarify this so that people know. Now, let me give you a few examples. If you had a vessel in the U.S. Gulf of Mexico and you wanted to go to Qingdao in China, it would be a distance of like 10,000 miles.
Through Suez or Panama Canal, and the voyage starches in the U S Gulf or the continent.
That would be like 35% increase in Midas, which are basically is about between 10 and 15 days longer. So on trips that are 50 days long they would become 60 or 65 days are longer.
So.
This is this is the worst possible situation. If you start from Brazil. It would you you don't you don't have a problem you just go through the Cape or if you start stop Moorefield, the south same thing if youre in the Mediterranean and you don't go through Suez Canal, It's even worse because you have to go to Gibraltar and all the way.
Fotis Giannakoulis: But if the Panama Canal doesn't work for Bulk Critics, as it doesn't right now, you would have to go through the Suez Canal, and that would be 14,100 miles, therefore a 41% longer distance. And if you cannot do the Suez Canal, then you have to go through the Cape, which is 15,400 miles, and therefore it's 54% longer than it would be through the Panama Canal. And then again, if you are in Rotterdam and you want to go to Tsingtao, if you go through the Suez Canal, it would be 11,000 miles, and through the cave would be 14,300 miles, therefore 30% longer. So... If, in theory, no vessel passed through the Suez or Panama Canal and the voyage started in the U.S. Gulf or the continent, that would be like a 35% increase in miles, which basically is about between 10 and 15 days longer. So on trips that are 50 days long, they would become 60 or 65 days longer. So this is the worst possible situation. If you start from Brazil, you don't have a problem; you just go through the Cape. Or if you start more to the south, the same thing.
Therefore.
And because front halls.
Or backhaul or less than the entire Atlantic Atlanta.
<unk> Pacific or in the Indian Austin's trades.
I would say that if both casinos were totally closed.
That would mean an increase in a in a decrease in supply of vessels of about 8%.
This has not happened in exactly of course through Panama Canal, we're not growing but there's a lot of vessels that are going through some has come out so I would venture to say.
Say that the effect right now all of a supply issue.
Is about.
For both canals would be about three 4%.
Sorry about the long explanation.
Okay. That's that's very helpful. Thank you Petros I guess my last question and then I'll hand, it over I wanted to ask Mr. Hamish because obviously you can't Miss you have up there.
Deep Hum corporate finance background, and I guess I've just been amazed if I look at over the last five years. The way you guys have grown I think you've added 50 560 vessels.
Through ship per share deals that were absolutely struck below the public equity value of the company, which.
Which is remarkable and obviously now you're adding the eagle transaction. So the promise of this Starbucks, becoming a platform through this low debt structure is it is coming to fruition and then and I guess the only question I had is it is there a certain amount of size, where you guys just become.
Fotis Giannakoulis: If you are in the Mediterranean and you don't go through the Suez Canal, it's even worse because you have to go to Gibraltar and all the way around, and because front halls, all back holes are less than the inter-Atlantic and the inter-Pacific or inter-Indian ocean trade. That would mean an increase in a decrease in supply of vessels of about 8%. This is not happening exactly. Of course, through the Panama Canal, we're not going, but there are a lot of vessels that are going through the Suez Canal. So I would venture to say that the effect right now of the supply is about 3-4% for both canals. Sorry about the long explanation. Okay, that's very helpful. Thank you, Tetris.
Too big to manage.
Or can this thing continue depending on the opportunities that present themselves.
I was wondering if you could answer that question and then I'll.
Also kind of are you seeing greater interest because it becomes a little bit of the snowball effect, where we're more and more of these come.
Get done more and more of these deals get done maybe more and more come to you as well to if you could talk about that.
Well I mean first of all it from your lips to God's ears.
No.
I I. This is how we would love to have everything work out.
First of all let's get the Eagle deal done done first before you know worrying about what to do next you know there there's a little bit of not wanting to bite off more than we can chew.
Amit Mehrotra: I guess my last question, and then I'll hand it over. I wanted to ask this of Hamish because, obviously, Hamish, you have a very deep corporate finance background, and I guess I've just been amazed, you know, if I look at the last five years, the way you guys have grown. I think you've added 55, 60 vessels through ship-for-share deals that were actually struck below the public equity value of the company, which is remarkable. And obviously, now you're adding this Eagle transaction. So, you know, the promise of this Star Bulk becoming a platform through this low debt structure is coming to fruition. And I guess the only question I had is, is there a certain amount of size where you guys just become too big to manage?
And we do need to integrate ego properly and make sure we keep the best of both companies.
You know before we start looking for for follow on deals.
Todd.
You know look I don't think there is a specific level at which the company is too big to manage.
You know we are a pretty small company compared to say you know a large airline right large container line.
And you know those companies are quite well managed and you know I think yeah. I think yeah. You know Nick is the west coast and they have something to say about our you know our.
Our ability to manage a fleet, that's two or four times the size, but you know.
If a container line or an airline can do with it I think we can do it.
And you know.
Amit Mehrotra: Or can this thing continue depending on the opportunities that present themselves? So, Amit, I was wondering if you could answer that question. And then also kind of, are you seeing greater interest because it becomes a little bit of a snowball effect where more and more of these things get done, more and more of these deals get done, maybe more and more will come to you as well? If you could talk about that. Well, I mean, first of all, from your lips to God's ears.
We haven't seen.
And the increase in interest yet, but you know I think it's reasonable to think we might.
Once once the Eagle deal is closed.
Okay.
Okay Alright. Thank you congrats on all your success everybody appreciate it.
Thanks, Amit.
Our next question is from Omar.
<unk> with Jefferies. Please proceed.
Thank you Hey, guys, good morning, or sorry, good afternoon.
Yes, I just wanted to touch on a couple of.
Questions in the back and forth you you had and then also a patch.
Petro and some of your opening comments just discussing the market clearly <unk> was a bit stronger than a lot of us were thinking going into the quarter and so far <unk> was averaging quite a bit better definitely than last year, but also your bookings to date are higher.
Hamish: This is how we would love to have everything work out. You know, first of all, let's get the Eagle Deal done first before, you know, worrying about what to do next. You know, there's a little bit of not wanting to bite off more than we can chew.
Here in <unk> versus <unk>. So just wanted to ask you you mentioned that the disruptions that are going on in the Red Sea in the Panama Canal, how may be smoothed out a bit of the the one two.
Hamish: And we do need to integrate Eagle properly and make sure we keep the best of both companies before we start looking for a follow-on deal. But, you know, look, I don't think there is a specific level at which a company is too big to manage.
The decline that we normally would see.
Obviously that seems like it's a main or it's a big piece of what's happening but is there also something else happening is there a demand story, that's driving this as well or do you attribute what we're seeing in the market here really just due to the disruptions.
Hamish: You know, we are a pretty small company compared to, say, a large airline or a large container line. And, you know, those companies are quite well managed. You know, I think, you know, Nikos Riskos may have something to say about our ability to manage a fleet of two or four times the size, but, you know, If a container line or an airline can do it, I think we can do it. And, um, you know. We haven't seen it.
Hi, Omar.
First of all I should also add the effects that.
The Ukraine War.
And the market because Russia cannot oh.
It does not export anymore.
To closer the destinations in Europe, but they have to exports towards China, and India and therefore that also has an effect. So all of these.
Along with the Panama Canal and the Red Sea is three and efficiencies are creating a M. A major positive for for shipping and they're affecting the market.
Hamish: An increase in interest yet, but you know, I think it is reasonable to think we might once the Eagle deal is closed. Okay, all right, thank you. Congratulations on all your success, everybody.
During a quarter that would otherwise be slow slower but overall.
Amit Mehrotra: I appreciate it. Thanks, Amit. This question is from Omar Nokta with Jefferson. Thank you. Hey, guys, good morning, or sorry, good afternoon.
I would say that.
I first of all I think that these efficiencies will continue to exist I don't see them going away very soon.
It will have to be several months or even years before we'd go back to normality.
Omar Nokta: Yeah, I just wanted to touch on a couple of Amit's questions and the back and forth you had. And then also, Petros, in some of your opening comments, just discussing the market, clearly 4Q was a bit stronger than a lot of us were thinking going into the quarter. And so far, 1Q is averaging quite a bit better, definitely than last year.
So I think they will continue to support the market for a while.
Apart from that we see.
A strong U S economy is strong Indian economy, we believe that China will support its economy going forward and this is very important because during 2023 it was China single handedly.
Omar Nokta: But also, your bookings to date are higher here in 1Q versus 4Q. So just wanted to ask, you mentioned that the disruptions that are going on in the Red Sea and the Panama Canal have maybe smoothed out a bit of the 1Q decline that we normally would see. Obviously, that seems like it's the main driver or a big piece of what's happening. But is there also something else happening?
Supported.
The trade I think that.
They increased the report their imports by about 280 million tons, where the rest of the world was actually negative so within China will continue because they have not yet accomplish their goals.
Omar Nokta: Is there a demand story that's driving this as well? Or do you attribute what we're seeing in the market here really just due to the disruption? Hi Omar.
Along with the U S and Indian economies are we think that the rest of the world.
Starts.
Fotis Giannakoulis: First of all, I should also add the effects that, um... the Ukraine war is having on the market because Russia cannot, does not export anymore, to closer destinations in Europe, but they have to export to China and India. And therefore, that also has an effect. So all these, along with the Panama Canal and the Red Sea, these three inefficiencies are creating a major positive for shipping, and they are affecting the market during a quarter that would otherwise be slower. I would say that... First of all, I think that these inefficiencies will continue to exist. I don't see them going away very soon.
Two to recover as well.
And don't forget the environmental regulations. These are going to affect supply. There's no question about that and on top of that we have a relatively low order book.
5%. It's it's you will be seeing influx of vessels of about three to three 5% every year, we think up to now where there hasnt been much much scrapping because the margins are decent but in the future they will have to scrap them more.
So with a 3% three 5%.
Influx and.
Scrapping of about of about one 1.5%.
Fotis Giannakoulis: It will have to be several months or even years before we go back to normality, so I think they will continue to support the market for a while. Apart from that, we see a strong U.S. economy and a strong Indian economy.
It's a we've made to be seen.
2% to 2.5%.
Hum need for demand.
And already just just inefficient just cover that and and go even further than that so.
Personally I see for these reasons I see a strong market during 'twenty, four and most probably 25 as well.
Fotis Giannakoulis: We believe that China will support its economy going forward, and this is very important because, during 2023, it was China single-handedly that supported trade. I think that they increased their imports by about 280 million tons, while the rest of the world was actually negative. So we think China will continue because they have not yet accomplished their goals. Along with the U.S. and Indian economies, we think that the rest of the world will start to recover as well, and don't forget environmental regulation. These are going to affect supply. There's no question about that.
Yeah.
Great. Thank you Petros for that detail and then maybe just wanted to switch gears just on the other topic.
One of the topics thing that the dividend.
There is I think I met was mentioning and you know clearly that's been happening, which is that you become a bit more dynamic in terms of managing the fleet and it was much easier for me or for US. When you had those 128 ships and it was fairly static until it very easy for us to model the dividend.
Given the buybacks and I guess, just in general with you being a bit more active on the fleet front.
You're you're seemingly perhaps more transaction oriented any sort of thoughts on tweaking the dividend policy to a percentage of earnings payout or do you like I say, the strategic honesty or clarity of just the ending cash balance approach.
Fotis Giannakoulis: And on top of that, we have a relatively low order book at eight and a half percent. You will be seeing an influx of vessels of about 3% to 3.5% every year. We think up to now there hasn't been much scrapping because the markets are decent, but in the future, they will have to scrape more. So you know, with the 3%, 3%, 3.5% influx and scrapping of about 1-1.5%. We may be seeing the two and a half percent need for demand, and already just the inefficiencies cover that and go even further than that. Personally, for these reasons, I see a strong market during 24 and, most probably, 25 as well.
I think I think we value.
The fact that you can't get it wrong.
If it if it ends up depending on cash on your balance sheet that you have.
Yeah.
As a percentage of any other quantity.
You know Craig.
How are you to some unanticipated events.
Not match up with cash that you actually have.
So yeah.
I think he can do like this formulation I I I feel your pain as far as forecasting it.
Omar Nokta: Great. Thank you, Petros, for that detail. And then maybe just wanted to switch gears just on the other topic, or one of the topics being the dividend. And, you know, there's, I think Amit was mentioning, and, you know, clearly that's been happening, which is that you've become a bit more dynamic in terms of managing the fleet. And it was much easier for me or for us when you had those 128 ships, and it was fairly static. And so it was very easy for us to model the dividend.
Well Omar.
Is this a seamless just to reiterate again, what I said before to Amit we gave a figure of our cash balance pro forma today.
So far the delivery of the last four vessels to be delivered within the following months this is $312 million.
On purpose, we said that we are releasing that $2 1 million for our minimum cash threshold, Florida seven V 18 vessels.
It had been sold.
Hamish: You know, given the buybacks, I guess just in general, with you being a bit more active on the fleet front, you're seemingly perhaps more transaction oriented. Any sort of thoughts on tweaking the dividend policy to a percentage of earnings payouts? Or do you like, say, the strategic honesty or clarity of just the ending cash balance approach? You know, I think we value the fact that you can't get it wrong if it ends up depending on cash on your balance sheet that you have. A percentage of any other quantity, you know, could somehow, due to some unanticipated event, not match up with cash that you actually have. So, you know, I think you do like this formulation. I feel your pain, as far as forecasting is concerned.
You may assume that after the delivery of the last vessel.
All the proceeds of the sales.
Are used for the financing of the two blocks that we have acquired during the fourth quarter and the repayment of the bridge facility. So so the 312 million costs pro forma that we have as of today is the net.
Net cost.
Net of any sale proceeds.
And it includes only.
The $2 1 million threshold for the remaining 110 vessels.
The 38 million of cost that we will distribute a dividend for the fourth quarter and 90 cost above this is potentially the dividend.
Free cash for the fourth quarter. So you may start modeling out of these balance.
Hamish: But Omar, this is Simos, just to reiterate again what I said before to Amit. We gave a figure of our cash balance pro forma today as of the delivery of the last four vessels to be delivered within the following month. This is 312 million.
The dividend for a for the first quarter.
Okay got it yeah. Thanks, Christos for that color, we will do that and also thank you Hamish that's all an antitrust. Thanks, that's it for me.
Right welcome Thanks Omar.
Christos: On purpose, we said that we were releasing the 2.1 million for the minimum cash threshold for the 18 vessels that have been sold. So you may assume that after the delivery of the last vessel, all the proceeds of the sales are used for the financing of the two blocks that we acquired during the fourth quarter and the repayment of the bridge facility. So the 312 million cash pro forma that we have as of today is the net cash, net of any sale proceeds, and it includes only the 2.1 million threshold for the remaining 110 vessels. The $38 million of cash that we will distribute as a dividend for the fourth quarter, and any cash above this is potentially the dividend, or free cash for the first quarter.
Our final question is from Nathan <unk> with Bank of America. Please proceed.
Hey, good afternoon team I I think I I'd like to just maybe follow up a little bit more on on the fleet strategy, especially post acquisition, how we should be thinking about your fleet size over 'twenty 'twenty, four and 2025, obviously, a pretty significant expansion, but it's still like I think nearly 30% of your current fleet.
<unk> 15 years and older how much of a focus is it to source additional vessel sale opportunities from here.
Yeah.
Well I think we are going to be focused on growth.
Hum.
As well as fleet renewal.
Christos: So you may start modeling out of this balance the dividend for the first quarter. Okay, got it. Yeah. Thanks, Christos, for that color.
So you know I think that the fleet is probably kind of be quite that quite.
Nick.
For awhile.
Omar Nokta: We'll do that. And also, thank you, Hamish, and Petros.
Hum.
Basically because we do need to make sure that we sell older vessels at the appropriate time.
Omar Nokta: Thanks, guys. That's it. You're very welcome. Thanks, Omar. Our final question is from Nathan Ho with Bank of America. Hey, good afternoon, team.
And that we buy newer vessels at the appropriate time and then we you know.
No.
Andrew oriented business.
Combinations that are that are attractive.
Hum.
Due to our shareholders.
So.
Nathan Ho: I think I'd like to just maybe follow up a little bit more on the fleet strategy, especially post acquisition, and how we should be thinking about your fleet size over 2024 and 2025. Obviously, a pretty significant expansion, but still, like I think nearly 30% of your current fleet is approximately 15 years old and older. How much of a focus is it to source additional vessel sale opportunities from? Well, I think we are going to be focused on growth, as well as fleet. So, you know, I think that the fleet is probably going to be quite dynamic for a while. Magnus Fyhr, Benjamin Nolan, Magnus Fyhr, Fotis Giannakoulis, Omar Nokta, Star Bulk Critics, basically because we do need to make sure that we sell older vessels at the appropriate time, and that we buy newer vessels at the appropriate time, and that we, you know..., enter into business combinations that are attractive www.thevenusproject.com to our shareholders. So, You know, I don't see us sort of sitting back and relaxing.
I don't I don't see us sort of sitting back and relaxing.
We do as I said have to make sure we do a good job integrating eagle.
Hopefully that will not take all of 2024.
Got it got it okay. That's helpful and maybe just to follow up on both of them are in and meets the questions regarding the ritzy How's your conversations with some of the P&I clock and insurers been surrounding.
Ensuring charters through the Suez Canal now has that been or do you see that as like a significant capacity restraint moving forward for other carriers.
From an economic standpoint to transit across.
Yeah.
Okay.
Up to a couple of weeks ago costs have not gone up that much.
Right now it has gone up a little bit are we are very well covered at a relatively lowly our rates.
But as I said, we won't be going through Red Sea. So does it doesn't apply anymore for whoever does I suppose the more vessels that have hit the higher.
The insurance rates that will be asked by the by the insurers, but overall you know.
Hamish: We do, as I said, have to make sure we do a good job integrating EGLE, but hopefully, that will not take all of 2024. Got it, got it. Okay, that's helpful. And maybe just to follow up on both Omar and Amit's questions regarding the Red Sea. How have your conversations with some of the P&I clubs and insurers been surrounding, you know, insuring charters through the Suez Canal now? Has that been, like, do you see that as a significant capacity restraint moving forward for, say, other carriers from an economic standpoint to transit across? Up to a couple of weeks ago, the cost had not gone up that much. Um, right now, it's gone up a little bit. But we are very well covered at relatively low rates.
The cargo has to go to destination and it's a matter of calculation. So let's say a guy starts from from the continents with a charter with has yeah has chartered the vessel.
He will have to calculate whether it pays off to go through them, the Cape or through the Suez Canal.
As far as us and with the Suez Canal. He will also have to take into account the potential risks, but just looking at the cost is going to be let's say 11 days longer through the Cape. So you will have to pay higher and bankers for a living.
But through Suez Canal, he will have to pay for that.
The cost of the canal.
The insurance.
As the insurance increases it's possible that the winner they won't make much difference whether he goes through the Cape or throw swells.
Fotis Giannakoulis: But as I said, we won't be going through the Red Sea, so it doesn't apply anymore. For whoever does, I suppose the more vessels that are hit, the higher the insurance rates that will be asked by the insurers. But overall, you know, the cargo has to go to its destination, and it's a matter of calculation. So let's say a guy starts from the continent and charters a vessel. He will have to calculate whether it pays off to go through the Cape or the Suez Canal. As far as the Suez Canal is concerned, he will also have to take into account the potential risks. But just looking at the cost, it's going to be, let's say, 11 days longer through the Cape. So he will have to pay higher-end bankers for 11 days. But through the Suez Canal, he will have to pay for the cost of the canal plus insurance. So as insurance increases, it's possible that at the end of the day, it won't make much difference whether he goes through the Cape or through Suez.
Got it perfect. Thanks, again that that's really helpful.
Thank you.
We have reached the end of our question and answer session I would like to turn the conference back over to management for closing remarks.
No remarks, operator, thank you very much.
Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
Thank you.
Yeah.
[music].
Fotis Giannakoulis: Got it. Perfect. Thanks again. That's really helpful.
Nathan Ho: Thank you. We have reached the end of our question and answer session. Any remarks, Operator?
Operator: Thank you very much. Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your... Thank you. Thank you for watching! BF-WATCH TV 2021
Yeah.
Okay.
[music].
Yes.