Star Bulk Carriers Corp. Reports Financial Results for the First Quarter Ended March 31, 2019
ATHENS, Greece, May 22, 2019 (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 first quarter ended March 31, 2019. Financial Highlights
Petros Pappas, Chief Executive Officer of Star Bulk, commented: “Star Bulk announced today its first quarter 2019 financial results, reporting TCE Revenues of $99.0 million, $43.9 million of Adjusted EBITDA and a Net Loss of $5.3 million during a challenging and seasonally weak period of the year, which included approximately 300 off-hire days for scrubber installations. By the end of May 2019 we are on track to have 40 vessels scrubber fitted. We expect to have a fully scrubber fitted fleet by January 2020. Because we expect 2020 to be a more profitable year, we want to maximize the operating days in 2020 and we thus bring forward to 2019 all our drydocks that would otherwise be due in 2020. We expect to undergo 52 drydocks during this year mostly concurrent with scrubber installations which, in combination with 50 at sea installations, will reduce as much as possible our off hire time during 2019. "Our average TCE for the quarter, including realized freight and bunker hedging, was $11,192 / day per vessel with 96.5% fleet utilization, and average daily Opex and Net Cash G&A expenses per vessel, at $4,015/day and $971/day respectively. As of today, we have fixed a minimum of 76% of our Q2 2019 days at average TCE rates of $10,006 per day. "We continue being busy on the financing front, having drawn and agreed to refinance approximately $329 million of debt since the beginning of the year, reducing our average margin in these facilities by 217bps. Over the past nine months, we have agreed to refinance approximately $1.04 billion creating savings of about $10 million annually in interest expense, or $250 per vessel day. We have also drawn $22.4 million of scrubber financing with another $112.2 million in place to be drawn later in the year.” Recent Developments FLEET UPDATE
DEBT FINANCING UPDATE
UPDATED SHARE COUNT During 2019, we repurchased 1,535,322 of our common shares in open market transactions at an average price of $7.45 for aggregate consideration of $11.4 million, pursuant to the previously announced share repurchase program, all of which were canceled and removed from our share capital until the date of this release. Following the cancelation of the repurchased shares, we have 91,750,000 common shares outstanding as of the date of this release.
As of today, we have fixed employment for approximately 76% of the days in Q2 2019 at average TCE rates of $10,006 per day. More specifically: Capesize / Newcastlemax Vessels: approximately 69% of Q2 2019 days at $10,152 per day. Post Panamax / Kamsarmax / Panamax Vessels: approximately 73% of Q2 2019 days at $10,131 per day. Ultramax / Supramax Vessels: approximately 89% of Q2 2019 days at $9,712 per day. Amounts shown throughout the press release and variations in period–on–period comparisons are derived from the actual numbers in our books and records. First Quarter 2019 and 2018 Results Voyage revenues for the first quarter of 2019 increased to $166.5 million from $121.1 million in the first quarter of 2018. Adjusted time charter equivalent revenues (“Adjusted TCE Revenues”) (please see the table at the end of this release for the calculation of the Adjusted TCE Revenues) were $98.3 million for the first quarter of 2019, compared to $81.6 million for the first quarter of 2018. Adjusted TCE Revenues primarily increased as a result of an increase in the average number of vessels in our fleet to 107.3 in the first quarter of 2019, up from 72.0 in the first quarter of 2018. The TCE rate though for the first quarter of 2019 was $10,624 compared to $12,586 for the first quarter of 2018 reflecting the weaker dry bulk market environment prevailing during the first quarter of 2019 compared to the same period in 2018. For the first quarter of 2019, operating income was $17.2 million, which includes depreciation of $29.8 million. Operating income of $23.3 million for the first quarter of 2018 included depreciation of $21.2 million. Depreciation increased during the first quarter of 2019 due to a higher average number of vessels in our fleet as described above. Operating income declined in the first quarter of 2019 as compared to the first quarter of 2018, because of higher depreciation expense, lower TCE rates as well as the significantly higher dry-docking expense following our management’s decision to bring forward to 2019 all the 2020 dry-docking services in order to install scrubbers and take advantage of the low market environment. For the first quarter of 2019 we had a net loss of $5.3 million, or $0.06 loss per share, basic and diluted, based on 93,080,589 weighted average basic and diluted shares. Net income for the first quarter of 2018 was $9.9 million, or $0.15 earnings per share, basic and diluted, based on 64,107,324 weighted average basic shares and 64,303,356 weighted average diluted shares, respectively. Net loss for the first quarter of 2019, included the following significant non-cash items, other than depreciation expense mentioned above:
Net income for the first quarter of 2018, included the following significant non-cash items, other than depreciation expense:
Adjusted net loss for the first quarter of 2019, was $8.5 million, or $0.09 loss per share, basic and diluted, compared to adjusted net income of $11.9 million, or $0.18 earnings per share, basic and diluted, for the first quarter of 2018. A reconciliation of Net income/(loss) to Adjusted Net income/(loss) and Adjusted earnings/(loss) per share basic and diluted is set forth in the financial tables contained in this release. Adjusted EBITDA for the first quarters of 2019 and 2018, was $43.9 million and $46.4 million, respectively. A reconciliation of EBITDA and Adjusted EBITDA to net cash provided by/(used in) operating activities is set forth in the financial tables contained in this release. For the first quarters of 2019 and 2018, vessel operating expenses were $39.1 million and $26.3 million, respectively. This increase was primarily due to the increase in the average number of vessels to 107.3 from 72.0. Vessel operating expenses for the first quarter of 2019 included pre-delivery and pre-joining expenses of $0.3 million compared to $0.4 million in the first quarter of 2018. Excluding these expenses, our average daily operating expenses per vessel for the first quarter of 2019 and 2018, were $4,015 and $3,991, respectively. During the first quarter of 2019, dry docking expenses amounted to $9.7 million. During the respective period six of our vessels underwent their periodic dry docking surveys, resulting in expenses of $5.6 million and remaining $4.1 million were incurred in connection with upcoming dry dockings. During the first quarter of 2018, none of our vessels underwent their periodic dry docking surveys, but we incurred expenses of $1.1 million in connection with upcoming dry dockings. General and administrative expenses for each of the first quarters of 2019 and 2018 were $7.2 million and $7.3 million, respectively. Our average daily net cash general and administrative expenses per vessel together with management fees for the first quarter of 2019 were reduced to $971 from $1,101 during the first quarter of 2018 (please see the table at the end of this release for the calculation of the Average daily Net Cash G&A expenses per vessel). Charter-in hire expense for the first quarters of 2019 and 2018 was $22.6 million and $16.5 million, respectively. The increase is due to charter-in days of 1,740 in the first quarter of 2019 compared to 928 in the first quarter of 2018. In both quarters, the charter in days are attributable to the activities of our subsidiary Star Logistics. Management fees for the first quarters of 2019 and 2018 were $4.1 million and $1.9 million, respectively. The increase is attributable to the new management agreements entered into in connection with the acquired fleets during the third quarter of 2018. For the first quarter of 2019 we incurred a gain on forward freight agreements and bunker swaps of $8.3 million, consisting of realized gain of $5.2 million and unrealized gain of $3.1 million. For the first quarter of 2018 we incurred a loss on forward freight agreements and bunker swaps of $0.8 million, consisting of realized gain of $0.1 million and unrealized loss of $0.9 million. Interest and finance costs net of interest and other income/ (loss) for the first quarters of 2019 and 2018 were $21.8 million and $13.4 million, respectively. The increase is primarily attributable to the increase in the weighted average balance of our outstanding indebtedness of $1,462.1 million during the first quarter of 2019 compared to $1,045.1 million for the same period in 2018. Liquidity and Capital Resources The reduction was due to the weaker dry bulk market environment prevailing during the first quarter of 2019 compared to the same period in 2018, which resulted in a relatively lower TCE rate of $10,624 compared to $12,586 for the first quarter of 2018. Despite the increase in the average number of vessels in our fleet, the decrease in TCE rates as well as the increased dry-docking activity during the first quarter of 2019, resulted in a decrease of Adjusted EBITDA to $43.9 million for the first quarter of 2019 from $46.4 million for the corresponding period in 2018. The respective decrease in Adjusted EBITDA was combined with a (i) net working capital outflow of $11.0 million during the first quarter of 2019 compared to a net working capital outflow of $1.8 million for the first quarter of 2018 and (ii) higher net interest expense for the first quarter of 2019 compared to the corresponding period in 2018. Net cash used in investing activities for the first quarters of 2019 and 2018 was $40.0 million and $71.3 million, respectively. For the first quarter of 2019, net cash used in investing activities mainly consisted of i) $32.3 million paid in connection with our newbuilding and newly acquired vessels and other capitalized expenses and ii) $31.0 million paid for the acquisition and installation of scrubber equipment and ballast water management systems for certain of our vessels, offset partially by proceeds from the sale of three vessels of $20.4 million and insurance proceeds of $2.9 million. For the first quarter 2018, net cash used in investing activities mainly consisted of $71.3 million paid for advances and other capitalized expenses for our newbuilding and vessels delivered during the quarter. Net cash used in financing activities for the first quarter of 2019 was $26.0 million and net cash provided by financing activities for the first quarter of 2018 was $30.5 million. For the first quarter of 2019, net cash provided by financing activities mainly consisted of:
offset by:
For the first quarter of 2018, net cash provided by financing activities consisted of:
offset partially by:
Unaudited Consolidated Statements of Operations
Unaudited Consolidated Condensed Balance Sheets
Unaudited Cash Flow Data
EBITDA and Adjusted EBITDA Reconciliation We include EBITDA herein since it is a basis upon which we assess our liquidity position. It is also used by our lenders as a measure of our compliance with certain loan covenants and we believe that it presents useful information to investors regarding our ability to service and/or incur indebtedness. EBITDA does not represent and should not be considered as an alternative to cash flow from operating activities or net income, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation. To derive Adjusted EBITDA from EBITDA, we excluded non-cash gains/losses such as those related to sale of vessels, stock-based compensation expense, the write-off of the unamortized fair value of above/below market acquired time charters, impairment losses, the write-off of claims receivable and loss from bad debt, change in fair value of forward freight agreements and bunker swaps, provision for onerous contracts, and the equity in income/(loss) of investee, if any, which may vary from period to period and for different companies and because these items do not reflect operational cash inflows and outflows of our fleet. The following table reconciles net cash provided by operating activities to EBITDA and Adjusted EBITDA:
Net income/(Loss) and Adjusted Net income/(Loss) Reconciliation and calculation of Adjusted Earnings/(Loss) Per Share To derive Adjusted Net Income and Adjusted Earnings/(Loss) Per Share from Net Income, we excluded non-cash items, as provided in the table below. We believe that Adjusted Net Income and Adjusted Earnings/(Loss) Per Share assist our management and investors by increasing the comparability of our performance from period to period since each such measure eliminates the effects of such non-cash items as gain/(loss) on sale of assets, gain/(loss) on derivatives, impairment losses and other items which may vary from year to year, for reasons unrelated to overall operating performance. In addition we believe that the presentation of the respective measure provides investors with supplemental data relating to our results of operations; and therefore with a more complete understanding of factors affecting our business than GAAP measures alone. Our method of computing Adjusted Net Income and Adjusted Earnings/ (Loss) Per Share may not necessarily be comparable to other similarly titled captions of other companies due to differences in methods of calculation.
Voyage Revenues to Daily Time Charter Equivalent (“TCE”) Reconciliation
Average daily Net Cash G&A expenses per vessel Reconciliation
Conference Call details: Our management team will host a conference call to discuss our financial results on Thursday, May 23, 2019 at 11:00 a.m., Eastern Time (ET). Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(877) 553-9962 (from the US), 0(808) 238-0069 (from the UK) or + (44) (0) 2071 928 592 (Standard International Dial In). Please quote "Star Bulk." A replay of the conference call will be available until Thursday, May 30, 2019. The United States replay number is 1(866) 331-1332; from the UK 0(808) 238-0667; the standard international replay number is (+44) (0) 3333 009 785 and the access code required for the replay is: 3128607#. Slides and audio webcast: There will also be a simultaneous live webcast over the Internet through the Star Bulk website (www.starbulk.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. About Star Bulk Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk’s vessels transport major bulks, which include iron ore, coal and grain, and minor bulks, which include bauxite, fertilizers and steel products. Star Bulk was incorporated in the Marshall Islands on December 13, 2006 and maintains executive offices in Athens, Oslo, New York, Limassol and Geneva. Its common stock trades on the Nasdaq Global Select Market and on the Oslo Stock Exchange under the symbol “SBLK”. On a fully delivered basis, Star Bulk will have a fleet of 109 vessels, with an aggregate capacity of 12.45 million dwt, consisting of 17 Newcastlemax, 19 Capesize, 2 Mini Capesize, 7 Post Panamax, 35 Kamsarmax, 2 Panamax, 17 Ultramax and 10 Supramax vessels with carrying capacities between 52,055 dwt and 209,537 dwt. Where we refer to information on a “fully delivered basis,” we are referring to such information after giving effect to the delivery of two newbuilding vessels. Forward-Looking Statements Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, examination by the Company’s management of historical operating trends, data contained in its records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. In addition to these important factors, other important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in the forward-looking statements include general dry bulk shipping market conditions, including fluctuations in charter rates and vessel values; the strength of world economies; the stability of Europe and the Euro; fluctuations in interest rates and foreign exchange rates; changes in demand in the dry bulk shipping industry, including the market for our vessels; changes in our operating expenses, including bunker prices, dry docking and insurance costs; changes in governmental rules and regulations or actions taken by regulatory authorities; potential liability from pending or future litigation; general domestic and international political conditions; potential disruption of shipping routes due to accidents or political events; the availability of financing and refinancing; our ability to meet requirements for additional capital and financing to complete our newbuilding program and grow our business; the impact of the level of our indebtedness and the restrictions in our debt agreements; vessel breakdowns and instances of off‐hire; risks associated with vessel construction; potential exposure or loss from investment in derivative instruments; potential conflicts of interest involving our Chief Executive Officer, his family and other members of our senior management and our ability to complete acquisition transactions as planned. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties. The information set forth herein speaks only as of the date hereof, and the Company disclaims any intention or obligation to update any forward‐looking statements as a result of developments occurring after the date of this communication. Contacts Company: Investor Relations / Financial Media: |
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