ATHENS, Greece, Feb. 19, 2020 (GLOBE NEWSWIRE) — Star Bulk Carriers Corp. (the “Company” or “Star Bulk”) (Nasdaq and Oslo: SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, today announced its unaudited financial and operating results for the fourth quarter and the year ended December 31, 2019.
Financial HighlightsEBITDA and Adjusted EBITDA are non-GAAP measures. Please see the table at the end of this release for a reconciliation of EBITDA and Adjusted EBITDA to Net Cash Provided by / (Used in) Operating Activities, which is the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) as well as for the definition of the respective measures. To derive Adjusted EBITDA from EBITDA, we exclude non-cash gain / (loss). In addition, we installed scrubbers on the majority of our vessels in 2019. Some of these vessels were scheduled to undergo their dry docking surveys due in 2020. In order to avoid any further off-hire days for these vessels in 2020, we decided to complete the dry docking survey for these vessels concurrently with the installation of scrubbers in 2019. As a result, in 2019, we incurred fees and expenses associated with the dry docking of these vessels, which would have otherwise been incurred in 2020. For continuity and comparison purposes in the Adjusted EBITDA calculation we include only the dry docking expenses for the vessels which were due to undergo their periodic dry dock during 2019.Adjusted Net income / (loss) and Adjusted earnings / (loss) per share basic and diluted are non-GAAP measures. Please see the table at the end of this release for a reconciliation to Net income / (loss), which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. In addition, as discussed above, for continuity and comparison purposes in the Adjusted Net Income calculation we include only the dry dock expenses for the vessels which were due to undergo their periodic dry dock during 2019.Daily Time Charter Equivalent Rate (“TCE”) and TCE Revenues are non-GAAP measures. Please see the table at the end of this release for a reconciliation to Voyage Revenues, which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, as well as for the definition of the respective measures.Average daily OPEX per vessel is calculated by dividing vessel operating expenses by Ownership days.Average daily Net Cash G&A expenses per vessel is calculated by (1) deducting the Management fee Income (if any), from, and (2) adding the Management fee expense to, the General and Administrative expenses (net of stock-based compensation expense) and (3) then dividing the result by the sum of Ownership days and Charter-in days. Please see the table at the end of this release for a reconciliation to General and administrative expenses, which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Petros Pappas, Chief Executive Officer of Star Bulk, commented:
“Star Bulk reported a strong performance for the fourth quarter 2019, with TCE Revenues of $148.0 million, Adjusted EBITDA of $88.5 million and Net Income of $23.5 million. The average TCE for the quarter increased to $15,535/ day per vessel despite our fleet being affected by our scrubber installation program. Daily Opex and Net Cash G&A expenses per vessel were reduced to $3,899/day and $925/day respectively. On a yearly basis, we realized Adjusted EBITDA of $237.2 million and Adjusted Net Income of $24.2 million. On the basis of our existing dividend policy, we will be paying out a cash dividend for the quarter of $0.05 per share.
Since the beginning of the year, we are seeing commercial and operational benefits on our scrubber investment, having 90 vessels with scrubbers certified today. Currently, we have fixed a minimum of 72.3% of our Q1 2020 days at average TCE rates of $12,580 per day. We expect to complete the scrubber certification program of our fleet by the end of March in view of delays experienced in Chinese yards on a number of our vessels as a consequence of the corona virus outbreak.”Recent DevelopmentsDeclaration of DividendAs of December 31, 2019, we owned 116 vessels and had total cash of $126.3 million. This cash balance includes $5.6 million from proceeds received from the sale of vessels Star Cosmo and Star Epsilon.  According to our dividend policy, having reserved these sales proceeds for share repurchases, debt prepayment and vessel acquisitions, and based on the minimum cash balance that needs to be maintained per vessel for December 31, 2019 of $1.0 million, our Board of Directors (the “Board”) declared a quarterly cash dividend of $0.05 per share on February 19, 2020, payable on or about March 12, 2020, to all shareholders of record as of March 2, 2020 (“Record Date”). The ex-dividend date is expected to be February 28, 2020.Scrubber UpdateThe Company continues to execute its plan to install scrubbers on 114 out of 116 vessels in its fleet, having a total of 90 scrubbers certified and in operation as of February 19, 2020.Financing ActivitiesIn January 2020, we entered into a committed term sheet with Danish Ship Finance A/S for a loan of up to $55.0 million (the “DSF $55.0 million Facility”). The facility will be available in two tranches of up to $27.5 million each, and will be used to refinance the outstanding amounts under the lease agreements of the Star Eleni and the Star Leo. The two tranches are expected to be drawn in March 2020 and will mature 5 years after the drawdown. The Danish $55.0 million Facility will be secured by first priority mortgages on the two vessels.In February 2020, we entered into a definitive loan agreement with HSBC France for an amount of up to $30.0 million in order to finance working capital requirements (the “HSBC Working Capital Facility”). As of the date of this press release, no amount has been drawn.Scrubber Financing ActivitiesWe incurred the following indebtedness to finance our scrubber installation program:In November 2019, we drew down (i) $10.9 million under the DNB $310.0 million Facility, (ii) $1.4 million under the ING Facility and (iii) $4.6 million under the lease agreements with CMBL.In December 2019, we drew down $18.3 million under the Atradius Facility and $6.1 million under the DNB $310.0 million Facility.Subsequent to December 31, 2019 and as of February 19, 2020, we drew down (i) the last available tranche of $3.3 million under the Atradius Facility and (ii) $8.2 million under the DNB $310.0 million Facility.On February 20, 2020, we expect to drawdown a further $1.3 million under the lease agreements with CMBL.Following these drawdowns, we will have incurred $116.3 million of indebtedness related to scrubber procurement installations and have an additional $33.5 million of available scrubber-related financing under all of our debt and lease agreements.Hedging VLSFO – HSFO spread
In December 2019, we hedged approximately 10% of our estimated annual fuel consumption by selling the 2020 Singapore spread between Very Low-Sulfur Fuel Oil (VLSFO) – High-Sulfur Fuel Oil (HSFO) at $266 per ton.Commercial Update
We have transferred our Geneva-based commercial activities to a newly established wholly owned subsidiary based in Singapore under the name of Star Bulk (Singapore) Pte. Ltd.Employment Update
Daily Time Charter Equivalent Rate (“TCE”) and TCE Revenues are non-GAAP measures. Please see the table at the end of this release for a reconciliation to Voyage Revenues, which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, as well as for the definition of the respective measures.For the fourth quarter of 2019 our TCE rate was:
Capesize / Newcastlemax Vessels: $25,651 per day.
Post Panamax / Kamsarmax / Panamax Vessels: $11,260 per day.
Ultramax / Supramax Vessels: $9,815 per day.For the year ended December 31, 2019 our TCE rate was:
Capesize / Newcastlemax Vessels: $18,006 per day.
Post Panamax / Kamsarmax / Panamax Vessels: $11,180 per day.
Ultramax / Supramax Vessels: $10,179 per day.The below forward-looking estimated daily TCE rates for Q1 2020 are calculated using the discharge-to-discharge method of accounting while U.S. GAAP requires us to recognize revenues in our books using the load-to-discharge method of accounting. Both methods recognize the same total TCE revenues over the completion of a voyage. The discharge-to-discharge method, however, recognizes revenues over more days, affecting the daily TCE rates. Under the load-to-discharge method of accounting, increased ballast days at the end of the quarter will reduce the revenues that can be booked following the accounting cut-off at the end of the quarter, affecting the daily TCE rates for the respective period.As of today, we have fixed employment for approximately 72.3% of the days in Q1 2020 at average TCE rates of $12,580 per day.More specifically:Capesize / Newcastlemax Vessels: approximately 65.4 % of Q1 2020 days at $19,721 per day.Post Panamax / Kamsarmax / Panamax Vessels: approximately 78.2 % of Q1 2020 days at $10,266 per day.Ultramax / Supramax Vessels: approximately 72.5 % of Q1 2020 days at $8,250 per day.Amounts shown throughout the press release and variations in period–on–period comparisons are derived from the actual unaudited numbers in our books and records.Fourth Quarter 2019 and 2018 Results
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