Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Starbuck Carriers Conference Call on the third quarter 2022 financial results. We have with us Mr. Petros Papas, Chief Executive Officer, Mr. Hamish Norton, President, Mr. Simos Spirou, and Mr. Christos Beglaris, Co-Chief Financial Officers, Mr. Nikos Reskos, Chief Operating Officer, and Mrs. Charity 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 star 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 one of your speakers today. Mr. Few, please go ahead, sir.

Thank you, operator. I am Simo Spirou, Co-Chief Financial Officer of Starball Carriers, and I would like to welcome you to our conference call regarding our financial results for the third 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 Q3 results, cash evolution during the quarter, an overview of our balance sheet, an update on the fuel spread and vessel operations, the latest on the ESG front, and our views on industry fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our third quarter 2022 highlights. Net income for the third quarter amounted to 109.7 million and adjusted net income of 136.3 million or $1.34 per share adjusted earnings. Adjusted EBITDA was at 189.9 million for the quarter. For the third quarter, after our existing dividend policy, we declared a dividend per share of $1.20, payable on or about December 12, 2022. The graph on the bottom of the page highlights the cumulative performance over the last 12 months, which illustrates the strength of the platform in a robust rival market. Our last 12 months adjusted EBITDA is at $1.03 billion, and adjusted net income is $819 million. Over the same period, we have returned a cumulative dividend of $6.5 per share, or $670 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 at $24,365 per vessel per day. Our combined daily operating expenses and net cash G&A expenses per vessel per day amounted to $5,719 per day. Therefore, our TCE, less operating expenses, less G&A expenses, stands at $18,646 per vessel per day. Our results for the third quarter of 2022 include a loss on write-down of inventories of $14.9 million, resulting from the valuation of the bunkers remaining on board of our vessels, following the substantial decrease of the bunkers' net realizable value compared to their historical costs. We value our inventories at the lower between acquisition price and net realizable value. Usually, there is no such volatility in the value of the bankers. However, on periods of continuous decrease in banker prices, and to the extent the loss cannot be recovered, we believe it is prudent to be recognized on earnings. Slide four. graphically illustrates the cash flow bridge for the third quarter. We started the quarter with a performance cash balance of $431 million and generated meaningful positive cash flow from operating activities of $184.5 million due to the strong commercial performance. After including debt repayments, capex payments for ballast water treatment systems, and the second quarter dividend payments, we arrived at a cash balance and cash equivalent of 392.7 million at the end of the third quarter. Slide number five presents our fleet coverage for the next quarter. Looking at the fourth quarter of 2022, based on the latest pictures, our fleet-wide coverage available days at $22,772 per vessel per day. In terms of size segmentation, we have fixed 53 percent of our Cape size vessels at $26,328 per day. Seventy-six percent of our post-Panamax-Camsor Max vessels at $21,015 per vessel per day. And 66% of our Ultramax-Ultramax vessels are $22,462 per day per vessel. Please turn now to slide number six, where we highlight the continuous strength of our balance sheet. Our performance total liquidity today stands at $417 million. Meanwhile, our total debt stands at approximately 1.36 billion. During the year, we have agreed refinancing totaling approximately 400 million, that decrease our annual regular debt repayments by 12.5 million, and reduce our interest costs by approximately 5 million per annum, as a result of achieving significantly lower margins. Our next 12 months amortization is at 186 million. We have 13 unlevered vessels with market value of approximately 190 million and no dead maturities until 2024. In an increasing interest rate environment, we have interest rate traps with an outstanding notional of approximately 755 million fixed at an average rate of 46 basis points for an average remaining maturity of 1.4 years. As of October 31st, the mark-to-market value of these swaps was at 37.2 million.

That should be pretty obvious. If you look at our liquidity today plus the FFA curve today, while anything can happen in the dry bulk market, this would imply a dividend for the fourth quarter that's somewhat lower. Again, it's just an obvious point. It will depend on how the FFA curve turns into reality over the next few weeks and months.