Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Starbuck Careers Conference call on the first quarter of 2022 financial results. We have with us Mr. Petros Papas, Chief Executive Officer, Mr. Hamish Norton, President, Mr. Nikos Reskos, Chief Operating Officer, Mr. Simos Spiro, and Mr. Christos Begleris, Co-Chief Financial Officer's and Charisse Blanco-Tanaki, Chief Strategy Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, please press the star and 1 in your telephone keypad and wait for the automated message advising line is open. I must advise you that this conference is being recorded. We now pass the floor to one of your speakers today, Mr. Seamus Spiro. Please go ahead, sir.

Thank you, operator. I'm Simo Spirou, co-chief financial officer of Starbuck Carriers, and I would like to welcome you to our conference call regarding our financial results for the first quarter of 2022. Before we begin, I kindly ask you to take a moment to read the safe harbor statement on slide number two of our presentation. In today's presentation, we will go through our Q1 results, cash evolution during the quarter, a walkthrough of our dividend policy, an overview of our balance sheet, an operational update, an ESG update, and the latest industry fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our first quarter 2022 highlights. The company reported the strongest first quarter result in Starbucks history. Net income for the first quarter amounted to 170.4 million, and adjusted net income of 175.6 million, or 1.72 adjusted earnings per share. Adjusted EBITDA was at 225.9 million for the quarter. For the first quarter, as per our existing dividend policy, we declared a dividend per share of $1.65, payable on June 16, 2022. With the graph on the bottom of the page, we want to highlight the cumulative performance over the last 12 months, which illustrates the strength of the platform in a rising dry bulk market. Our last 12 months adjusted EBITDA is at 1.04 billion and adjusted net income of 831 million. At the same time, we have returned a cumulative dividend of 576 million to our shareholders. On the top right of the page, you will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $27,405 per vessel per day. Our combined daily operating expenses and net cost GNA expenses per vessel per day amounted to $5,812. Therefore, our TCE less OPEX and GNA is around $21,600 per day per vessel. Looking at the similar fleet-wide adjusted TCE, less operating expenses and GNA figure on a full-year basis, Starbuck has been able to significantly outperform the adjusted peer average by more than $5,000 per day per vessel, implying an annual EBTA overperformance of more than $230 million on a 128-vessel fleet, and demonstrating how assets are efficiently utilized in the Starbuck platform. Looking at chartering coverage for the second quarter of 2022, we have covered 74% of our fleet's available days at a daily rate of $29,760 per day per vessel. Slide four. graphically illustrates the changes in the company's cash balance during the first quarter of 2022. We started the quarter with $473.3 million in cash and generated meaningful positive cash flow from operating activities of $229.2 million due to the strong freight market. After including debt proceeds and repayments, CAPEX payments for ballast water treatment systems installments, and the fourth quarter dividend payment, we arrived at a cash balance of $444 million at the end of the quarter. Slide five has a walkthrough of our dividend policy with an example for the dividend calculation for the first quarter of 2022 of $1.65 per share. As of March 31, 2022, we owned 128 vessels and our total cash balance was at $440 million. With a minimum cash balance per vessel as of March 31 of $2.1 million per vessel, on May 24, 2022, pursuant to our dividend policy, our board of directors declared a quarterly cash dividend of $1.65 per share payable on June 16 to all shareholders of record as of June 3, 2022. The ex-dividend date is expected to be June 2, 2022. In the last 12 months, our company has distributed dividends of $5.6 per share. We should note here that our dividend policy, as announced, is heavily dependent on changes in working capital. In a rising freight and bankers market, our receivables and our inventories are increasing, and this affecting our working capital. Given recent rally in the market and increase in banker prices, we currently estimate that our working capital will increase by approximately 40 million in the second quarter of 2022, negatively affecting our cash balance or quarter end and our dividend for the quarter by approximately 40 cents per share. This is a timing difference driven by the difference between when earnings are recognized and when cash comes in, and it will reverse at some point in the future. Please turn now to slide six, where we highlight the continued strength of our balance sheet. Our total cost today stands at $533 million. Our total debt stands at approximately $1.47 billion. Our next 12-month amortization is approximately $200 million. We have six unlevered vessels and no debt maturities until the end of the third quarter of 2023. We have fixed approximately 55% of our floating interest rate exposure to LIBOR at an average rate of 45 basis points. In slide 7, we demonstrate the inherent operating leverage and cash flow potential of the company, and the illustrative free cash flow per share, as well as the potential cash flow yield. With approximately 46,700 fleet available days per year, based on the current 2022 FFA care, Starbuck will produce $6.1 of free cash flow per share and a yield of 19%. I will now pass the floor to our COO, Nikos Reskos, for an update on our operational performance. Thank you, Simo.

Please turn to slide 8, where we provide an operational update. OPEX excluding non-recurring expenses was $4,747 per vessel per day for Q1 2022. Net cash G&A expenses were $1,065 per vessel per day for the same period. Despite continued adverse COVID-related restrictions and inflationary pressures which have a direct impact on OPEX, combination of our in-house management and the scale of the group enable us to sustain a very competitive cost base and maintain our position as the lowest cost operator among our peers. In addition, we continue to rate among the top three of our listed peers in terms of rights rating. Slide 9 provides a fleet snapshot and some guidance on our future dry job and balanced water system expenses for the next 12 months and a relevant total of high days. Our expected dry dock expense for the next 12 months is estimated at $36.4 million for the dry docking of 35 vessels, with another $16 million towards our vessel upgrade CAPEX. In total, we expect to have an approximate 1,200 off-hire days for the forward 12-month period. We anticipate that 98% of our fleet will be ballast water fitted by the end of Q4 2022. The above numbers are based on current estimates around dry dock and retrofit plumbing, vessel employment, and yard capacity. On the scrubber utilization front, Starbucks has by now surpassed 100,000 days of scrubber operating experience. High-five spreads have been volatile throughout the year, and it's currently hovering around $300 per ton, based on Singapore's spot prices, where we cater for 60% of our annual fuel demand. Q2 2022. With an estimated annualized consumption of 800,000 tons of heavy fuel oil across the fleet, at a conservative price of $150 per ton, we'll be reducing our cash break even by $2,500 per vessel per day. With 94 of our vessels being scrubber fitted, a continued increase in high fire spread can be a significant value generator for our company. I'll now pass the floor to our Chief Strategy Officer, Haris Lakatonaki, for an ESG update.