Q2 2025 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 second quarter, 2025 Financial results.
With us today. Mr. Petros Pappas chief executive officer Mr. Hamish Norton. President Mr. Simos spu
And Mr. Christus begleys. Coochie Financial officers, Mr. Nico's rescos. Chief Operating Officer. Mrs. Chattis plente.
Plain Charis Plakantonaki, Chief Strategy Officer of the company, and Constantinos, Head of Market Analysis of the company.
At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. At that time, if you wish to ask a question, please press *1 on your telephone keypad and wait for your name to be announced.
I must advise you that this conference is being recorded today.
We now pass the floor to 1 of our speakers. Mr. Spu, please go ahead.
Thank you, operator.
I'm seeing more code Financial Officer of Starbucks carriers. And I would like to welcome you to our conference call regarding our financial results for the second quarter of 2025.
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 Q2 highlights results.
Actions taken to create value for our shareholders cash Evolution. During the quarter, a short update on the merger. Synergies vessel operations Fleet update. The latest on the regulatory front and our reviews on the industry fundamentals before opening up for questions.
Let us now turn to slide number, 3, of the presentation for a summary of our second quarter 2025 highlights.
The company reported the following.
Net income amounted to 40,000 uh dollars with adjusted net income of 13.2 million or 11 cents per share adjusted net income.
Adjusted, Evita was 69 million for the quarter.
During the second quarter, we repurchased 3.3 million shares for a total of 54 million.
Our board of directors decided to continue prioritizing returns to shareholders, given the company's strong position, declaring a dividend of 5 cents per share for the quarter, payable on September 10th.
Our total cash today. Stands at 47 million.
12 billion.
Through Android revolver facilities. We have additional liquidity of 115 million, resulting to preform, liquidity of more than half a billion.
Finally, we currently have 12 debt-free vessels within aggregate market value of 246 million.
On the top right of the page, you will see our daily figures per vessel for the quarter.
Our Time Charter Equivalent rate was $13,624 per vessel per day.
Our combined daily operating expenses and net cash GNA expenses per vessel per day, amounted to 6,277 per vessel.
Therefore, our time Charter equivalent less Opex, less GNA is approximately 7,350 per day per vessel.
Slide 4 provides an overview of the company's capital allocation policy over the last 3 years and the various levels we have leveraged to strengthen the company, increase the intrinsic value for shares, and return capital to our shareholders.
In total seems 2021, we have taken actions, totaling 2.75 billion in dividends, share, BuyBacks, and debt, repayment to create value for our shareholders.
At the same time, Starbucks has been growing the platform at opportune times.
Through consecutive fleet buyouts by issuing shares at or above NAV.
On the bottom of the page, we saw our net debt evolution.
Since 2021, our average net debt has been reduced by 46% reaching a level where it discovered by the fleet scrap value.
Given the fleet growth on a per vessel basis. It has decreased from 11.2 million per vessel to 5.3 million per vessel, a reduction of more than 53%
Slight 5 graphically illustrates the changes in the company's cash balance during the second quarter.
We started the quarter with 437 million in cash.
We generated positive cash flow from operating activities of 55 million.
After including debt proceeds and repayments capex payments for energy saving, divide devices and balanced water, uh, treatment systems installations
vessel sale proceeds.
Share BuyBacks and the first quarter dividend payments. We arrived at a cash balance of 431 million. At the end of the quarter.
I will now pass the floor to our Chief Operating Officer. Nick of frescos for an update on synergies and our operational performance.
Thank you, SEMO.
Flight 6 provides an update on the eagle integration and synergies. We're now closing the first year mark since they do acquisition, their completion of our strategy in realizing significant cost Savings in the operating and job, and administrative expenses.
Over 53 million of cumulative, cost. Synergies have been achieved since April 2024.
Cost synergies achieved during Q2, 2025 standard, approximately 13 million.
With operating experts in GNA savings for legal fleet at approximately $1,990 per vessel per day.
We expect to complete the phase out of third-party crew managers by Q3 2025 and replacing with our current platform hence meeting our targeted cost optimization.
Please try to slide 7 where we provide an operational update?
Operating expenses for q1 to Q2 2025 standard 4928.
Netcast GNA expenses were 1,349 per vessel per day for the same period.
In addition, we continue to rate at the top, amongst our listed peers, in terms of right shift, safety score.
Slide date provides a flip update and some guidance around our future Dry Dock and the relevant total of hard days.
Vessels.
In total, we expect to have approximately 1,000 of hard days for the same period.
On the top right of the page. We have our CAPIC schedule, illustrating a new building capex and vessel Energy Efficiency, upgrade expenses.
Based on our latest construction schedule. Our 5 comes from a new building vessels constructed. King down Shipyard, are expected to be delivered during 2026.
For this vessels, we have secured 130 million of their financing against the new building installments.
In line with IMO carbon reduction regulations, we will continue investing and upgrading our Fleet with the latest operational Technologies. Available and in improving our fuel consumption, reducing our environmental footprint and enhancing the commercial attractiveness of the Starbucks Fleet.
Regarding our energy saving Technologies retrofit program, we have so far completed 47, explanations with another 13 plans, for 2025.
Please turn to slide 9 for an update on our Fleet.
On the vessel sails front, we'll continue disposing. No Echo vessels opportunistically reducing our average age and improving overall Fleet efficiency.
During the second quarter, we agreed to sell and deliver to their new owners, some of our less efficient, supermarkets and camps and accessories, puffing baugher star Canary star Patrol Oreo, and star Georgia.
Furthermore, during the second quarter, we have further agreed to sell. Start Nighthawk Star Runner start the ice. Our goal starts a piper and star all, which are expected to be delivered to the new owners by the end of the year.
We expect to receive aggregate net sales proceeds of $104 million during Q3 and Q4 2025.
Following the rollover of vehicle Bank, uh, existing chartering contracts. We now have a total of 8 chartering vessels.
Considering the affirmation change on a flip mix. We operate 1 of the largest dry, bulk fleets amongst us and European listed peers with 142 vessels on a fully delivered basis. And with an average age of 11.9 years,
I'll now pass the floor to achieve strategy officer Harris Pony, for an update on recent Global Environmental regulation developments
Thank you Nico. Please turn to slide 10. Where we highlight progress on our artistic priorities.
In anticipation of the 84th session of the imos. And if you see in October 2025, we continue to assess the impact of the draft natural framework approved by the Imola table, and we research future strategies to ensure timely and efficient compliance with the forthcoming, Global regulations expected to take effect in January 2028.
On the fueling new Maritime forms. We have reviewed compliance jobs and select groups of strategies for 2025266.
Entering a pooling agreement with an external party to cover. 100% of stone Shield, to get for 25 and partially for 26. Given the cost effectiveness of purchasing services.
Starbucks remains committed to supporting the professional development of the Next Generation in the city industry.
A total of 30 people for University, students, from creation of growth, our careers that are taking interest rates across various Departments of our company.
During Q2 2025, the company renewed its social responsibility to communications, including the sponsorship of athletes from cities, nationals, kids, students, and our continued support of the unit of Greek supporters scholarship programs.
In preparation for the company's annual need to report to be published in the third quarter of 2025, we are conducting a new impact analysis of our history. Material topics, engaging, our internal stakeholders in accordance with the global reporting initiative standards.
We continue to invest in digitalization and cyber security including the role of starting and onward Fargo while actively exploring applications of AI technology in our operations.
I will now find the floor to our Head of Market Analysis.
For a market update, I would like to disclose my remarks.
Thank you, Harris.
Please turn to slide 11 for a brief update of supply.
During the first half of 2025, as to, all of 18.1 Million Dead weight for delivery and 2.2 million deaths was sent to demolition.
Medium dead weight or 1.5% year to date and 2.9% over the last 12 months.
The new building order book remains modest at 10.8% of the existing Fleet. Contracting activity was solved in the first half falling to a 9-year low of just 9.7 million deadweight.
Limited the CTR capacity. Up to 7, half 2027 high-c, building costs and uncertainty over future. Green propulsion have kept new orders under control. At the same time. The fleet is aging. And by the end of 2027, approximately, 50% of the current Fleet will be over. 15 years old, moreover, the increasing number of vessels undergoing. Their third special survey is estimated to reduce effective capacity by approximately half percent per animal between 2025 and 2027.
The average steaming speed of the fleet has slightly rebounded from 21 record, low supported by firmer, prey traits and a relatively stable buncher environment.
However, speeds remain below last year levels and have stabilized at around 11 knots.
Furthermore, new IMR carbon regulations are expected to continue to incentivize slow steaming and moderate effective supply in the medium term.
Finally, global port congestion, after experiencing a brief recovery in Q1, has now returned to long-term averages.
For the remainder of 2025 and 2026, we expect congestion to follow seasonal Trends, and to have a neutral or slightly positive impact on the supply and demand balance.
Let us now turn to slide 12 for a brief update of demand.
According to Clarkson's, the total dry bulk trade during 2025 is projected to contract by 0.9%.
While 10 miles are expected to expand by 0.2%.
For 2026 trade growth is estimated as 0.3% in Toms and 0.6% in tone miles.
President, Trump's aggressive Target, negotiations and policy shifts. Have added uncertainty to traditional forecasting models. Nevertheless, the global economy shows considerable resilience in the first half of the year in slate. This report the IMF upgraded Global GDP forecast following easing, trade tensions and recent us deals with the EU Japan and other nations.
World growth was revised up by 0.2% of points, to 3% for 2025, and 3.1% for 2026. While us and China GDP forecast, for 2025 were upgraded by 0.2 and 0.8% respectively.
Similar upward revisions in trade forecast, should be expected over the next coming months, especially if the trade truth between the US. And China is extended over the next
few over the next quarter.
During the first half of 2025 total drive of boardrooms, underperformed due to strong declines in coal and grain shipments iron or not trade was stable while box site and minor bulk flows increase significantly.
During the second half Dawn, during the second quarter ton miles found support by stronger. Atlantic experts, longer Pacific, trade distances, and the ongoing Red Sea rerouting
Chinese driver Imports, contracted by 4.2% year-over-year in the first half. Following 2 years of strong expansion in domestic output inputs and Rising stock piles. However China's GDP growth has exceeded expectations on the back of aggressive stimulus. Measures that began in September with a name to revive domestic consumption stabilize the housing market and offset the impact of tariffs.
Drive up demand from the rest of the world have experienced a strong recovery of the last 7 quarters. A trend that is expected to continue supported by lower commodity prices and a weaker US dollar.
During the first half of 20125 in Port Road by 2.8% year-over-year driven by southeast Asia India and Middle East demand.
Iron ore trade, is projected to contract by 1.2% in tone and by 0.7% in tone miles during 2025. Chinese still production fell 2.2% year on year during the first half driven by 22 output, reductions to address over capacity.
However, iron ore Imports are expected to gain support as Sports. Stock piles have declined in recent months and domestic iron ore production contracted by 8.4% year to date.
That we can domestic demand while still production in the rest of the world was stable here over a year.
By late, 2025 iron, Orton miles. We received support from New high-grade, Atlantic iron ore mines that are expected to gradually replace lower Quality Imports and Chinese domestic production.
Cold trade is projected to contract by 5.8% in Toms. And by 7.6% in total miles during 2025 export volumes, pull back during the first half after reaching new record highs during the second half of 2024, Chinese and Indian thermal electricity production, decline domestic, coal production, increase and stockpile treats all-time highs
Weak coal fundamentals and the rising production of renewable energy in China create downside risks. However, the global focus on energy security, strong demand from Southeast Asian economies, and the recovery of Australia will gradually provide support for coal trade.
Great trade is projected to contract M marginally by 0.1% in tons. But to expand by 1.9% in tone miles. During 2025, during the first half, total grain volumes dropped by 3.7% year-over-year, driven by a sharp decline in Black Sea, and European exports and weaker Chinese demand.
Latin America, exports, remain relatively flat at elevated levels, following a strong, Brazilian soya bean season and increased volumes from Argentina.
Moreover.
Falling commodity prices a weaker US dollar and pent-up demand are expected to boost grain trade activity during the rest of 2025 and 2026.
Minor bulk trade is projected to expand by 2.1% in tons and by 3.6% in total miles during 20205. Minor bulk trade is closely tied to Global GDP growth and has benefited from improving Outlook across major economies.
a favorable price, Arbiters continues to fuel Chinese steel experts and back hole trades, while boxside exports from West Africa, expanded by 31% in the first half, generating strong tone miles for the case size Fleet,
As the final comment, despite ongoing Global geopolitical uncertainties. We remain optimistic about the medium to long-term outlook for the driver Market supported by favorable Supply Outlook stricter, IMO environmental regulations and China's accumulating stimulus. Measures, we remain focused on actively managing our diverse scrubber fitted Fleet to capitalize on Market opportunities and deliver value to our 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.
Ladies and gentlemen, if you do have questions, please press star. Followed by 1 on your touch phone.
You will hear a tone that your line has been acknowledged.
Please make sure to lift the speaker on the hand, the handset of your speaker.
Before pressing the keys.
And your first question will be from Chris Robertson at Deutsche Bank. Please go ahead.
Thank you, operator. Good morning everybody. Thank you for taking my questions.
Good morning.
Uh, yeah, just given the recent strengthening in the midsize segment in terms of the rates, do you have any expectations around further decommissioning of older tonnage in the smaller segments? Or do you expect the target to maybe shift between particular segments or another, or just particular age profiles going forward?
Disposal of the smaller ships.
Uh, hi. Chris.
Um, we the intent.
The intention is to continue.
Disposing of smaller vessels.
Smaller older.
And inefficient vessels are going forward and that is also a kind of a heads. In case, the market does not go the way, we think it will.
got you uh, I guess as a follow-up to that when you think about
You know, invest in alternative fuel Technologies and other more expensive options.
Hi, Chris. This is Nikos.
Uh we're looking at the various Technologies and testing uh all sorts of uh from uh home cleaning robots to a testing carbon capture technology.
Within, this is going to be a long game until we are able to replace, uh, um, engines to a new fuel. So we are looking at various options of how to optimize performance where lately, changing. Propellers on a bigger ships or together with efficiency devices ASDS. We're able to reduce consumption by about 10%. So there are measures, there are investments to be made with a short return on investment Horizon. And we see this uh, as being the trend for the next uh,
Let's say, 5 to 7 years.
Great. That's helpful. Thank you for taking my questions. I'll turn it over.
Once again.
Please press star 1 on your telephone keypad at this time. Thank you.
And next question will be from Omar, not at Jeffrey's. Please go ahead, Omar.
Hey guys, good afternoon. Um, just wanted to ask about the market and you touched on it a little bit. Um but you know we have seen a bit of a Resurgence here. Perhaps not maybe substantially but definitely an improvement from the first half, which maybe seems a bit unexpected. I would say, for this time of year, um, can you give just a sense of what's behind this move from from your angle and, and, and especially given that we're seeing it across all segments. What's it telling us about seasonality and perhaps, maybe your your, your outlook as a result of what we're seeing today.
Hi Omar.
Um,
Yeah, excali is a factor.
uh, but also keep in mind that uh, June exports actually reached an all-time high
So that's, that's actually was the beginning of, uh, the the uh, the better Market that we saw. We think that part of it is um uh Expediting Imports, exports.
Prior to potential effects of the tariffs.
And, um, we also have another theory in this office, uh, which we call Ocean imbalance. We, we, uh, realize at some point, a couple of months ago, that there were many vessels, uh, in, uh, in the Pacific, many more than usual. And lesser vessels in the Atlantic
And that actually, uh, started an upturn in the Atlantic. And also think about it the physically, uh, when when uh, there are less vessels than what's required, they need to balance and therefore that, uh, Edge into, uh, the inefficiencies.
Also, we saw some extra grain exports from Brazil, and that, uh, that helped as well.
Now.
As far as the future is concerned. We're pretty, uh, positive about, uh, Q4 as um,
As we've said in the past the second half of the year, uh, there's more trade than the first half of the year, which they well known 5466 46% um ratio between the 2 uh hubs.
54 for the second half that, of course changes over time.
Um, then we see a number of viral or shipments coming from Brazil and Australia in the second half of the weather is better as well.
um, the US soybeans season starting
Cole seems to be doing a bit better than previously.
Um,
of course, um, the ocean imbalance
is going to remain. This is not something that is meant that uh immediately
Uh, one question. We have about Q4: What effect will the tariffs have, and what is going to happen there? But that's something nobody can tell.
And uh, if you go, if you want to go further for 2026, I could talk to you for the next 10 minutes. But we're generally, um, we generally are looking forward to a relatively good year for 2026.
No. Thank you Patrick. That's that's helpful. Um, no. Appreciate the the detail there and maybe just for a point of clarity. You mentioned at the beginning of your remark to my answer to my question, um, that June exports hit a high was that just, uh, you referring to a specific commodity, or was that just naturally kind of the, you know, seaborne trade.
Um, I'm referring to Don Strait.
Okay.
okay, and then maybe just a bit more of like a financial question, you know, given
Uh, obviously, the stock has done well this year and recently, and you've been fairly active buying back the stock. You just recharged with the $100 million buyback.
Um, how do you view kind of the use of the buyback here in the second half? You're again, you're fairly active the past few months. The stock has has reacted favorably. Do you continue this this, um, this path or do you kind of maybe go back to the idea of the dividend, taking up a bigger percentage of the uh, free cash flow?
Well so uh Omar, it's hey, Miss Norton. Um.
We are, uh, basically going to try to do what's the right thing for the shareholders. Um, you know, that that's basically how we think, if our stock gets cheaper, you know, we'll probably use, uh, you know, cash flow to or, or, you know, at least cash from Ship Sails.
To buy back stock and and maybe some cash flow as well. Uh, if our stock does well, we'll probably, uh, use cash to basically build up a reserve on our balance sheet for opportunities. That we think may get quite good later on. Um, you know, at this point we're probably not going to buy ships because, you know, we think that the pricing, um,
Is is is a little high for for building up the fleet. But, uh, you know, we do think that there will be some opportunities, you know, in the, in the foreseeable future.
Um, probably we will not um, increase our dividend above, you know, roughly 60% of cash flow. And it, it may not be that much.
Uh, but we will pay a dividend.
Okay, thanks. Hey, Mr. Appreciate that, and petrol. Thanks as well. I'll turn it back.
Thank you, Omar.
Thank you. At this time, we have no other questions. I will turn the call back to the management team.
Thank you albertan. No further comments. Have a great summer everybody and thank you for following our, our um,
Yes, our performance.
Thank you, sir.
Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and we do ask that you please disconnect your lines