Star Bulk Carriers Podcast Interview: Business Highlights and Strategic Overview
In a recent Capital Link Trending news podcast, Nicolas Bornozis, President at Capital Link and Hamish Norton, President at Star Bulk Carriers (NASDAQ: SBLK) discussed Star Bulk’s recent earnings, business strategy, and the impact of environmental regulations on the shipping industry. They also touched on the company’s dividend policy, shareholder returns, and the recent merger with Eagle Bulk Shipping, as well as the company’s fleet management and future growth aspirations.
In a recent Capital Link Trending news podcast, Nicolas Bornozis , President at Capital Link and Hamish Norton , President at Star Bulk Carriers (NASDAQ: SBLK) discussed Star Bulk’s recent earnings, business strategy, and the impact of environmental regulations on the shipping industry. They also touched on the company’s dividend policy, shareholder returns, and the recent merger with Eagle Bulk Shipping, as well as the company’s fleet management and future growth aspirations.
Key Takeaways:
- Strong Earnings Performance: Star Bulk’s Q2 2024 results demonstrate a significant improvement over the same period in 2023 aided by a much larger fleet following its merger with Eagle Bulk.
- Equipped with Scrubbers: The majority of Star Bulk’s fleet is equipped with scrubbers, contributing a significant amount to daily earnings.
- Fleet Expansion: The merger with Eagle Bulk Shipping added approximately 55 vessels to Star Bulk’s fleet. Star Bulk is still looking to grow prudently its fleet further and increase its market cap. Eventual inclusion in a stock market index would enable SBLK to attract index investors.
- Integration with Eagle Bulk Focuses on Synergies: Eagle’s ability to achieve strong revenues per ship and Star Bulk as a low-cost operator is a good combination. The planned cost and revenue synergy target of $50 million remains unchanged, aiming for the savings to be fully realized within 2025.
- Debt Reduction: The company has been actively reducing its debt, paying down around $200 million annually and reducing its interest expense.
- Balancing Shareholder Returns with Reinvestment in the Business: Since 2021, dividend distributions have been over $1.25 billion or $12.2 per share, and share buybacks are over $0.4 billion.
- Shareholder Structure: The decrease of Oaktree’s shareholding to below five percent significantly enhances the free float.
- Dry Bulk Market Strength: Continued Chinese imports and longer shipping routes have strengthened the market.
- Environmental Regulations: Further to EU ETS, Fuel EU is coming into effect as of 2025. The increasing environmental regulations and the plethora of alternative fuels, make it more complex to operate a shipping company; the more complex the business environment, the bigger the advantage of being a large company like Star Bulk, which has about 2% of the world’s dry bulk fleet.
About Star Bulk Carriers (NASDAQ: SBLK)
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, minerals 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, New York, Limassol, Singapore, Germany and Denmark. Its common stock trades on the Nasdaq Global Select Market under the symbol “SBLK”. On a fully delivered basis and as adjusted for the delivery of a) the vessels agreed to be sold and b) the five firm Kamsarmax vessels currently under construction, Star Bulk owns a fleet of 159 vessels, with an aggregate capacity of 15.2 million dwt, consisting of 17 Newcastlemax, 16 Capesize, 1 Mini Capesize, 7 Post Panamax, 44 Kamsarmax, 1 Panamax, 48 Ultramax and 25 Supramax vessels with carrying capacities between 53,489 dwt and 209,537 dwt.
In addition, in November 2021 Star Bulk took delivery of the Capesize vessel Star Shibumi, under a long-term charter-in contract for a period up to November 2028. In January 2024 Star Bulk took delivery of vessels Star Voyager, Star Explorer and Stargazer, and in June 2024, Star Bulk took delivery of the vessel Star Earendel, each subject to a seven-year charter-in arrangement. Star Bulk also entered into long-term charter-in arrangements with respect to one Kamsarmax newbuilding and one Ultramax newbuilding which are expected to be delivered during 2024 with an approximate duration of seven years per vessel plus optional years.
