Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bowl Carriers Conference Call on the Third Quarter 2025 Financial Results. We have with us today Mr. Petros Papas, Chief Executive Officer, Mr. Hamish Norton, President, Mr. Simos Spiro, and Mr. Christos Beglaris, Co-Chief Financial Officers, Mr. Nikos Reskos, Chief Operating Officer, and Mrs. Harris Plaka-Dinoki, and Mr. Constantine Simatris. At this time, all participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you'd like to ask a question, please press star 1 on your telephone keypad. I must advise you that this conference is being recorded today. We will now pass the floor over to your speakers. Mr. Spiro, please go ahead, sir.

Thank you, Senator. I'm Christos Beglenis. Co-Chief Financial Officer of Starbell Carriers, and I would like to welcome you to our conference call regarding our financial results for the third quarter of 2025. 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 third quarter company highlights, financial results, actions taken to create value for our shareholders, cash evolution during the quarter, national operations, our investments in our fleet, the latest on the regulatory 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 2025 highlights. The company reported the following. Net income amounted to 18.5 million, adjusted net income of $32.4 million, or $0.16 adjusted income per share. Adjusted EBITDA was $87 million for the quarter. During the third quarter, we repurchased 250,000 shares for a total of $4.4 million, while from the beginning of the fourth quarter until today, we have bought back 360,000 shares for $6.7 million. Our board of directors decided to continue prioritizing returns to shareholders given the company's strong position, declaring a dividend per share of $0.11 for the quarter, payable on or December 18, 2025. Our total cash today stands at $454 million. Meanwhile, our total debt stands at 1.028 billion. Through undrawn revolver facilities, we have additional liquidity of 115 million, resulting to pro forma liquidity of more than 570 million. We have approximately 91 million remaining from our recently renewed share repurchase program. Finally, we currently have 15 debt-free vessels with an aggregate market value of $336 million. On the top right of the page, you will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $16,634 per vessel per day. Our combined daily OPEX and net cost general and administrative expenses per vessel per day amounted to $6,421. Therefore, our TC, LES, OPEX, and GAS GMA is approximately $10,213 per vessel per day. Slide four provides an overview of the company's capital allocation policy over the last three years and the various levers we have used to strengthen the company, increase the increasing value of our shares, and return capital to our shareholders. In total, since 2021, we have taken actions totaling 2.8 billion in dividends, share buybacks, and debt repayment to create value for our shareholders. At the same time, Starbucks has been growing the platform at opportune times through consecutive fleet buyouts by issuing shares at or above net asset value. On the top right-hand corner, we illustrate how the company has used both dividends and buybacks over time to return capital. We have returned in total $13.2 per share in dividends since 2021. This corresponds to approximately 70% of our current share price. On the bottom of the page, we saw our net debt evolution. Since 2021, our average net debt has reduced by 50%, reaching a level where it is covered by the fleet scrap value at a comparable level. Slide 5 graphically illustrates the changes in the company's cash balance during the third quarter. We started the quarter with $431 million in cash. We generated positive cash flow from operating activities of $92 million. After including vessel sales proceeds, debt proceeds and repayments, capex payments for energy saving devices and ballast water treatment systems, share buybacks and the dividend payment for the second quarter, we arrived at a cash balance of $457 million at the end of the quarter. I will now pass the floor to our COO, Nikos Reskos, for an update on our operational performance and the investment we continue to make on our fleet.

Thank you, Christos. Please turn to slide 6, where we provide an operational update. All of the expenses for Q3 2025 stand at $5,096 per vessel per day. Net cash G&A expenses were $1,325 per vessel per day for the same period. In addition, we continue to rate at the top amongst our listed peers in terms of rideship safety scores. Slide 7 provides a fleet update and some guidance around our future dry dock and relevant total off-hours days. During October, we entered into three prompt resale innovation agreements with Hengli Shipbuilding for 382,000 deadweight scrubber-feeded Kamsa Max New Buildings scheduled for delivery in Q3, 2026. Our five Kamsa Max New Buildings under construction at Kingdao Shipyard are expected to be delivered during Q3 and Q4, 2026. We have secured $130 million in debt on the five King Daniel Building Camsomax vessels, plus another $74 million expected against the three Hengli Camsomax vessels. As of Q3, we have completed 51 ESD installations, with four vessels completed during the quarter, and with nine remaining and planned for 2025. On the top right of the page, we have our CAPEX schedule, illustrating our new building CAPEX, and racial energy efficiency upgrade expenses. On the bottom of the page, we provide our expected driver expense schedule, which for the remaining of 2025 and 26 is estimated at 20 and 47 million, respectively. In total, we expect to have approximately 580 and 1,140 of our days for the same periods. Please turn to slide eight for an update on our fleet. On the vessel sales front, we'll continue disposing non-ecovessels opportunistically, reducing our average fleet age and improving overall fleet efficiency. We'll continue to optimize our fleet through selective disposals and acquisitions. During Q3, we sold and delivered six Camsomax and Supramax vessels, collecting total proceeds of $75.5 million, with another two Supramaxes, Tairana and Salsa Piper, delivered in October. generating around 25 million in proceeds. We maintain eight long-term chartering contracts, which provide flexibility and leverage across market cycles. Considering the information changes in our fleet mix, we operate one of the largest drive-out fleets amongst U.S. and European-listed peers, with 145 vessels on a fully-delivered basis and an average age of 11.9 years. I will now pass the floor to our CSO, Harris Plakotonaki, for an update on recent global environmental regulation developments.

Thank you, Nico. Please turn to slide 9, where we highlight the key milestones on the ESG front. For the seventh consecutive year, Starbuck has published its annual environmental, social, and governance report, which provides a comprehensive overview of the company's sustainability strategies, performance, and future goals. Through transparent and data-driven reporting, the publication highlights measurable progress toward long-term ESG objectives, supported by detailed action plans and sustainability-focused key performance indicators. The report has been developed in accordance with the Global Reporting Initiative standards, the Sustainability Accounting Standards Board for Marine Transportation, and aligns with the United Nations Sustainable Development Goals. In October 2025, during the latest IMO, Environmental Protection Committee, the IMO member states decided to postpone the adoption of the net zero framework for one year. The framework had been previously approved during the April MEPC. Despite this development around global regulations, the carbon decarbonization strategy remains focused on food renewals energy efficiency, and research and development on green technologies. We also continue to contribute to the work of the Maritime Emission Reduction Center, together with our partners, and have participated for one more year in the Carbon Disclosure Project on climate change and water security. On the technology front, we have commenced assessing the application of artificial intelligence across the company, having completed the diagnostic, identified and prioritized these cases, and selected the first ones to be developed. We also continue our technology upgrades on board our vessels, including firewall installations and Starlink deployment. As part of our enhanced corporate responsibility program, during Q3 2025, we delivered anti-harassment training to all employees across company offices, in line with regulatory requirements. I will now hand the floor to our head of market analysis, Konstantinos Simagridas, for a market update and some closing remarks.

Thank you, Harris. Please turn to slide 10 for a brief update of supply. During the first 10 months of 2025, a total of 31.2 million deadwood was delivered and 3.9 million deadwood was sent for demolition for a net fleet growth of 2.6% year-to-date and 2.9% year-over-year. The new building order book remains modest, at 10.9% of the existing fleet, as contracting activity has been soft during 2025, falling to a five-year low of $22.1 million year-to-date. Limited severe capacity availability up to late 2027, high sea building costs, and uncertainty over future green propulsion have kept new orders under control. Furthermore, the IMO's decision to postpone the adoption of the net zero framework for one year is likely to extend this order in caution well into 2026. At the same time, the fleet is aging, and by the end of 2027, roughly 50 percent of the existing fleet will be over 15 years old. Moreover, the increasing number of vessels undergoing the third special survey is estimated Average steaming speeds have picked up slightly in recent months, supported by firmer freight rates and lower bunker prices, but remain close to historical lows. Furthermore, environmental regulations become stricter every year and are expected to continue to incentivize slow steaming and moderate effective supply. Finally, global port congestion eased during Q3 and has returned to long-term averages. For the remainder of 2025 and 2026, congestion is expected to follow seasonal trends and to have a relatively neutral impact on effective supply growth. Let us now turn to slide 11 for a brief update of demand. According to Clarkson's total drivable trade during 2025, during the first half, but experienced a strong recovery during the third quarter. Trade volumes increased by 5.1% year-over-year during Q3, supported by strong iron ore, grain, and mineral bulk exports, and a recovery of coal volumes. Stone miles have received extra support from stronger Atlantic exports, longer Pacific trade distances, and war-related inefficiency. The recent ceasefire agreement in the Middle East has intensified the discussion for the return of Red Sea crossings, and we should expect a gradual normalization during 2026. Chinese dry pot imports recovered and increased 4.4 percent year-over-year during the third quarter, after having contracted by 4.2 percent during the first half. Imports to the rest of the world increased 4.6% year-over-year to a new record high and remain on a strong upward trend over the past two years as lower commodity prices and a weaker U.S. dollar help stimulate demand for raw materials. During 2026, drive of demand is projected to increase by 2.1% in ton miles. The IMF forecast for global GDP growth stands should help reduce uncertainty and support trade activity over the next year. Iron ore trade is expected to expand by 0.8% driven by output cuts that began in May with a target to reduce overcapacity, while output in the rest of the world increased by 0.5% year over year. China's property sector remains under pressure, but record-high steel exports have helped mitigate the weakness in domestic consumption. Iron ore imports increased to all-time highs during Q3, assisted by lower domestic production in the first half, As of 2026, tonne miles are expected to benefit from new high-quality iron ore mines in Guinea that should gradually replace lower-quality Chinese production and imports from shorter distances. Coal trade is expected to contract by 6.2 percent in 2025 and by 1.1 percent in 2026. Volumes experienced a strong recovery during Q3 after a strong pullback during the first half of 2025 due to weaker demand in China and India. Chinese coal fundamentals have recently improved as domestic output is contracting, thermal electricity generation has recovered, and domestic coal prices are moving higher due to the expectations of a colder winter. new thermal energy capacity, strong demand from Southeast Asian economies, and global focus on energy security. Total grain volumes surged by 11% year over year, even by record harvests in Brazil and the U.S., and strong exports from Argentina following the temporary export tax suspension. Grain exports from other sources have recently increased, but black sea volumes remain weak due to war-related disruptions. It is worth highlighting that China has not purchased any soybean carbon over the coming months, as China agreed to buy 12 million tons in 2025 and 25 million tons per annum through 2028. Minor bulk trade is expected to expand by 5 percent during 2025 and by 2.1 percent in 2026. Minor bulk trade has the highest correlation with global GDP growth and continues to benefit from healthy outlooks across major economies. White price differentials continue to fuel Chinese steel exports and backhaul trades, despite rising protectionist measures. outlook for the drive-off market, supported by a favorable supply outlook, stricter environmental regulations, and easing trade tensions. We remain focused on actively managing our diverse, scrubber-fitted fleet to capitalize on market opportunities and deliver value to our shareholders. Without taking any more of your time, I will now pass it over to you.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Chris Robertson with Deutsche Bank. Please proceed with your question.

Thank you, operator. Good morning. Good afternoon, Team Star. Thank you for taking my questions. Assuming you guys can hear me. So my first question is looking at the new Financing, you secured up to $204 million on the eight new building assets being delivered in 2026. So taking these financings into account and then the regularly scheduled amortization or planned repayments during the year, what is your expectation around the total net change in debt in 2026 as a whole?

Just a clarification, please. We have secured financing for the first five. at $130 million, and we are in discussions about the financing of the last three that we have confirmed this month. So the final numbers and figures for those vessels will be actually disclosed during the next close of month.

Okay, got it. I guess just related then to planned amortization during 2026, could you comment on that?

Our amortization will remain around the $50 million mark per quarter. What is happening is that some older facilities are getting refinanced, and then the new facilities for the new buildings, have an amortization profile of 17 years. That's not impacting in any major way the amortization profile of Starbucks. So our amortization profile will remain around $50 to $52 million per quarter for 2026.

That's helpful. Thank you. As a Just to follow up to that, as it relates to the dividend policy on the minimum cash balance per owned vessel, is that being calculated based on the pro forma side of the fleet after the new build deliveries, or should we think about that as an average number per quarter as the deliveries are taking place? Or is it being calculated right now at pro forma? Okay.

So, our dividend policy is perhaps slightly confusing. But, you know, the 2.1, were you referring to the 2.1 million per ship that we have to keep on our balance sheet before we want to pay a dividend? Yes, Samus, yep. Okay, well, so basically there has been no change to that, and we're so far above that level. In terms of our cash balance, it's not been an obstacle to any dividend payments in the last few years. We have something on the order of $450 million of cash, and we have 142 vessels growing by the number of new buildings.

To Chris's question, though, I mean, the amount of equity cap is required for the new buildings have already been covered. by proceeds of past vessel sales. So, essentially, funds that we have been using from operations to pay dividends are not impacted from the already generated proceeds.

I think I understand the question. I think I was misunderstanding the question. We don't have to allocate cash to specific accounts. We just take the number of vessels and multiply it by 2.1. And our aggregate cash has to be greater than that.

Right. My question was related on the number of vessels specifically, Hamish, the 2.1 times the certain number. Now, is that number pro forma the new build deliverings? Or like in 4Q, for example, is that as the fleet stands today, or are you already taking into account the number of new buildings?

It's as the fleet stands today, but we're so far above that level that it's not impacting our ability to pay dividends. It's not even close. Right. Right.

Okay. All right. Last question for me, just turning to rates. Looking at the strong rate performance right now in the sub-cape segments, do you attribute that to a waterfall impact from the stronger cape size rates, or is that a function of the stronger demand fundamentals in the sub-cape segments?

Well, first of all, I think there is a spillover effect from the bigger vessels. But let's not forget that grain trade improved by 11% during Q3, and that coal did very well as well during the third quarter. So that helped a lot the... the Kamsomax vessels, and on the Supramax vessels, minor trade was doing well as well. And I think also perhaps there was an urgency in ordering more cargoes whilst we didn't know whether there was going to be major tariffs, and that also helped out.

Thank you. I'll turn it over. Thank you, guys. Thank you, Chris.

As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Omar Naka with Jefferies. Please proceed with your question.

Thank you. Hi, guys. Good afternoon. I just wanted to ask maybe just a follow-up to the new buildings, and I guess maybe in general about fleet composition. You've acquired these three CancerMaxes that will deliver next year. You've got the other five CancerMax new buildings, and if I recall, you got chartered in maybe long-term last year with the five other CancerMaxes. So you've been very active on the CancerMax front. at least with respect to, say, bringing in new buildings there. And just wanted maybe to kind of get a refresh as to what's behind that. What is it maybe specifically about that class that keeps you coming back to it, say, versus the Ultras slash the Capes?

Hi, Omar. First of all, we ordered Camsomaxes because our existing Camsomax fleet is getting older. So we need to do some renewal on that level. Second, we actually, our S&P department managed to get very early deliveries during 2026, which we expect to be a good year. The price was, the prices were low. The vessels had scrubbers, so they're echo vessels, so we're happy with how they're doing, how they will be doing. Then, think about this. Two caps and maxes at 35 million equals 70 million, which basically is the cost of a cape size. It's difficult to find Cape-sized vessels to order for anywhere close to 2025. I mean, I think that if we were going to order, it would probably be end-27 or 28. So who knows what will happen in three years from now. But if you calculate that capital markets may, let's say two capital markets will do $16,500 per day, meaning $33,000 per day for two vessels minus $10,000 for the OPEX, that actually ends up at $23,000. So we get EBITDA of $23,000 into two vessels, which actually would equal a charter rate equivalent of $29,000 for a cape. Therefore, as long as we cannot order capes And we found the opportunity to order cams and maxes delivering very early comparatively. And as we think that the investment will bring the same results with the Cape, we went ahead and bought cams.

Wow, okay. Thank you. That's actually very interesting and clear, you know, the methodology there. But I guess as you kind of think about that, because I know in the past, and I know, Hamish, we've talked about this, you know, post the Eagle transaction, you've been a bit maybe bottom heavy in terms of the ultra-supras and hoping to maybe naturally get into, you know, caves to kind of even things out. What do you think you can do there then? Obviously, you know, Petros, you just mentioned, you know, the arbitrage, perhaps, of acquiring camps versus capes. But is there a means to maybe bolster the cape presence? It seems like, obviously, you said new buildings are far off. How about the sale and purchase market?

Well, the supras actually, there's an equivalent calculation for the supras as well. But there also, we have engaged in a trade which we call the pendulum trade. We return, especially the supras, you can return to the Atlantic with steel cargos and other cargos, which is not as easy for the camps and marxists. And you can do that at low teams right now. But then on the front hall, you can do $23,000 to $25,000. And therefore, if you add the two and divide by two, you get an average of... around $17,000, which makes supras and ultras equivalent to caps and maxes, and therefore by, according to the calculation I gave you earlier, equivalent to capes. And actually, supras are cheaper. Supra new buildings are cheaper than caps and maxes.

And I think he also wanted to know what we could do around cape.

Okay, around capes. Right now, everybody keeps the capes close to his chest, and they are expensive, and everybody who ever sells capes likes to sell the worst performers that they have. And, therefore, to find an opportunity is not as easy. Or you have to pay a very high price, and not for new buildings, for secondhand. I mean, there are cases where secondhand vessels are prices are equal to those of new buildings. When we took over Eagle Bulk, we had a big number of Supras under our ownership. So during the last year and a half or two years, we have disposed of about 28 Supras. And therefore, we're bringing the balance back. of capes, camsas, and supras more on an equal food basis. Thank you, Petros. And we're keeping basically our ultra-maxes. We have sold the supras, which are older, not eco, and we're keeping the better vessels.

Yeah, not certainly. Well, very detailed response as usual, Petros, but obviously very logical, so very helpful to understand that. And it looks like the value really is perhaps now, even though the outlook may be more exciting as we think about it just sort of conceptually, the outlook may be more exciting for CAPES. You have them great, but if you want to deploy capital, it sounds like the sub-CAPES is where it's at. Thanks, guys. I'll turn it over. Thank you, Omar.

We have reached the end of the question and answer session. I'd like, I'd now like to turn the call back over to Mr. Papas for closing comments.