Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers conference call on the second quarter 2026 financial results. We have with us Mr. Hamish Norton, President, Mr. Simos Spyrou, Co-Chief Financial Officer, Mr. Christos Begleris, Co-Chief Financial Officer, Mr. Constantinos Sinopoulos, Deputy Chief Financial Officer, Mr. Nicos Rescos, Chief Operating Officer, Mrs. Charis Plakantonaki, Chief Strategy Officer, Mr. Constantinos Simantiras, Head of Market Research. 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. Spyrou. Please go ahead, sir.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today. I'm Simos Spyrou, Co-Chief Financial Officer of Staple Carriers, and I would like to welcome you to our conference call regarding our financial results for the second quarter of 2026. Before we begin, I kindly ask you to take a moment to read the Safe Harbor Statement on slide number two of the presentation. In today's presentation, we will review our second quarter 2026 company highlights, financial performance, capital allocation initiatives, cash evolution during the quarter, operational performance and cash flow potential, our continued investments in the fleet, developments on the regulatory front, and our perspective on industry fundamentals. We will then open the floor for questions. Turning to slide three. The second quarter was characterized by strong profitability, disciplined capital allocation, and continued balance in strength. For the second quarter of 2026, net income amounted to 144.9 million, while adjusted net income reached 134.8 million, or 1.21 adjusted earnings per share. Adjusted EBITDA was 184.2 million, demonstrating the robust cash-generating capacity of our platform. Shareholder returns. We continue to actively return capital to shareholders through our policy of distributing 100% of our operating cash flow, subject to maintaining a minimum cash balance of $2.1 million per vessel. Our board of directors declared a $0.90 per share dividend for the quarter, payable on September 3 to all shareholders of record as of August 21. Our balance sheet remains a key strategic advantage. Total cash and cash equivalents are approximately at $532 million. Outstanding debt is approximately $955 million. Untrown revolver capacity at $110 million. Importantly, we also currently own 29 debt-free vessels with an aggregate market value close to $790 million. During the third quarter of 2026, We expect to collect net sale proceeds of approximately 31.5 million for the sold vessels. Our low leverage as well as this unencumbered asset base provides substantial financial flexibility to fund growth opportunities as well as downside protection. On the top right of the slide, you can see our per vessel daily performance metrics for the quarter. Time charter equivalent of $24,486 per day per vessel. Combined daily operating expenses and net cash G&A expenses of $6,542 per day per vessel. This results in a daily cash margin of approximately $17,944 per vessel per day before debt service and capex. These numbers highlight the operating efficiency of our platform and our ability to generate meaningful cash flow. Slide 4 summarizes our capital allocation Track record since 2021. Over this period, we have executed approximately $3.2 billion in value-enhancing actions, including dividends, share refugies, and debt repayment. Namely, we have returned approximately $14.9 per shares in dividends, representing approximately 52% of our current share price. We have reduced total net debt by 66%, bringing leverage to a level where net debt stands at 50% of demolition value of our fleet. We have also expanded the fleet opportunistically through accretive fleet acquisitions, issuing equity at or above an AV, thereby increasing scale while protecting per share value. The result is a larger, more efficient platform with materially lower financial risk and significantly enhanced free cash flow per share potential. Slide number five illustrates the movement in our cash balance during the second quarter. We began the second quarter with $409 million in cash. We generated $150 million in operating cash flow. After vessel sale proceeds, debt roll-downs and repayments, CAPEX payments related to new building installments and ESD and ballast water treatment installations, and the fourth quarter dividend payment, we ended up with $565 million in cash. This sequential increase in costs underscores a strong internal cost generation of the company, even after substantial shareholder returns and investments in fleet upgrades. Moving to slide number six. In the second quarter of 2026, StarPulse delivered a well-balanced operating performance across all segments, supported by our diversified fleet of 138 vessels and over 12,200 ownership days. Newcastle Max and Cape Sides vessels contributed 35% of our revenue and 39% of our adjusted EBITDA, benefiting from strong market positioning and representing 41% of our fleet market value. Panamax and Camsomax segments continue to provide stable earnings, contributing 28% of revenue and 24% of adjusted EBITDA, namely $77.7 million and $42.4 million respectively. Ultramax and Supramax vessels remain the largest contributor to revenue at 37%, generating 104.4 million in revenue and 66.5 million in adjusted EBITDA, reflecting the strength of our exposure in geared segments. Slide number seven highlights the inherent operating leverage embedded in our business model. With approximately 49,000 fleet available days on an annualized basis for the next 12 months, and based on the current next-12-month SFA curve of approximately 22,000 per day on a fleet-wide basis, the company would generate approximately $4.1 per share of free cash flow, representing 14.3% its implied cash flow yield. The slide illustrates the strength of our platform in a rising market. Every $1,500 per share fleet-wide increase in TCE equates to an EBITDA increase of $72 million. This would translate to $0.64 per share of incremental dividend to our shareholder, given our existing approach to distributions. In summary, During the second quarter, we delivered solid profitability, strengthened our liquidity position, continued to reduce leverage, returned meaningful capital to shareholders, and preserved significant optionality for future capital allocation. Our balanced resilience, operating efficiency, and Discipline Capital Allocation Framework position us well to navigate market volatility while continuing to enhance per share value. With that, I will now pass the floor to our COO, Nicos Rescos, for an update on our operational performance and the continuing investments we are making in our fleet.

Thank you, Simo. Turning to slide 8, which covers our operational performance. will continue to operate one of the most cost-efficient platforms in the drive-out sector. Demi-Opex for the second quarter came in at $5,180 per vessel, and Netcast GNA at $1,362, both among the lowest in our peer group, as illustrated. The sustained cost discipline reflects our scale, our integrated management platform, which translates directly into superior cost generation through the cycle. Moving to slide 9, which outlines our fleet-wide investment program. On the new building front, all five of our latest generation high-specification Councilmax new buildings are on track for delivery during 2026, with $122 million of capex remaining. Financing is in place, where we expect to draw down up to $129 million of debt against the five new building vessels, leaving the program fully funded on competitive terms. In a strengthening Camsomax market, the prompt deliveries of these vessels remain highly attractive to our customers, combined with a mark-to-market gain of approximately 56 million for our shareholders. On vessel upgrades, during the second quarter, we'll continue pushing through with energy-saving devices and with high-efficiency propeller installations. Having completed 62 ISD installations across the fleet, with a further seven scheduled for the year, 88% of our fleet is now fitted with ESDs. On vessel efficiency, we continue investing in hull upgrades in the way of optimized propellers, silicon panes, and deployment of hull-cleaning robots, where we measure tangible performance improvements ranging between 7% and 15%. This translates into improved commercial performance, lower emissions, and, for instance, our competitors. The top right of the slide illustrates our CAPEC schedule, presenting both the remaining new building installments and our vessel efficiency upgrade spending alongside the corresponding debt drawdowns. At the bottom, you can see our dry dock schedule for the remainder of 26 and 27. For Q3 and Q4 2026, approximately $16 and $11 million and around $460 and 280 off-hire days, respectively. For 2027, we expect to have $17 million in drive-thru costs and 450 off-hire days. Turn to slide 10 for a fleet update. We'll continue to actively rejuvenate the fleet through a disciplined combination of selective disposals and new building deliveries, prioritizing the divestment of all non-ecotonics to reduce average age and lift overall efficiency. As previously announced, the sales of Star Scarlet and Star Mariella were completed in Q2, 2026. During the second quarter, we agreed to sell one minicap and two capsule maxes, namely Star EVA, Star Moira, and Pendulum. Star Moira and Pendulum were delivered to the new owners in June and July 2026, while Star EVA is expected to be delivered during the third quarter of this year. In connection with the sales mentioned above, in the second quarter of 2026 we collected sales proceeds of approximately $60.2 million net of commissions and made debt repayments of approximately $21.4 million, while in the third quarter we expect to collect sales proceeds approximately $31.5 million net of commissions. Overall, a total amount of approximately $70.3 million net of commission on debt repayments will be collected from the vessel sales. Having sold 50 vessels since 2023, we have reinvested most of the net sale proceeds to fund accretive shared buybacks throughout this period. This quarter also marks the start of our new building delivery cycle with a larger generation of camshaft vessels joining the fleet. We took delivery of three out of the eight camshafts as new building vessels and expect to take delivery of the five remaining during Q3 and Q4 2026. We continue to maintain seven long-term chartering contracts, which provide commercial flexibility across market cycles. Starbuck operates one of the largest drive-up fleets among U.S. and European listed peers, with 138 vessels on a fully delivered basis and an average age of approximately 12.4 years, providing scale, modernity, and operating leverage to compound shareholder value as the market cycle evolves. I will now pass the floor to our Chief Strategy Officer, Charis Plakantonaki, for an update on recent global environmental regulation developments and our ESG performance.

Thank you, Nicos. Please turn to slide 11, where we highlight our progress across ESG priorities. Ahead of the upcoming IMO, Marine Environment Protection Committee, Starbuck remains actively engaged through the relevant industry organizations in the discussions on the net zero framework and its alternative proposals, committed to advancing practical, realistic, and effective greenhouse gas reduction regulations with consistent global applications. On the European front, the emissions trading system was revised across sectors, keeping maritime in the scheme at 50% of emissions on EU voyages, broadening its scope, and creating a dedicated allowance reserve for Sustainable Marine Fuels. Starhawk continues to participate in the Maritime Emission Reduction Center, whose membership has expanded to include Cargill and Dubai Drivers. Current programs of work, Spanhaler Propeller Technics, Alkrooming Robotics, Wind Assistance Propulsion, Onboard Carbon Capture, and Subgenerator Retrofits. On the social side, We are advancing our people agenda through the development of a new crewing campaign in Manila and a company portal to enhance corporate communication alongside an extensive summer internship program supporting youth talent development. Fifteen startup vessels take part in the adopted SIP education program, bringing the experience of life at SIP to schools across Greece. On governance, The fiscal year 2026 marks Starbucks' first sustainability reporting cycle under the EU Corporate Sustainability Reporting Directive, with its closures aligned to the European Sustainability Reporting Standards, reinforcing data quality, internal controls, and assurance records. We continue to embed artificial intelligence responsibly across our operations, advancing the four pillars of our AI strategy. Leveraging the AI capabilities of our software providers, piloting of-the-self AI tools, building custom AI solutions, and continuously scanning new technological developments. Recognizing the cyber risks associated with AI, we have deployed CrowdStrike AI detection and response, conducted a second consecutive year mandatory cybersecurity awareness training for all on-shore staff, and performed a low-intensity simulation. We also introduced a new AI research policy governing the responsible use of AI by sort of staff in line with the user's technical intentions Regulations. I will now pass the floor to our Head of Market Analysis, Constantinos Simantiras, for a market update and his closing remarks.

Thank you, Charis. Please turn to slide 12 for a brief update of supply. During the first half of 2026, a total of 22.2 million deadweight was delivered and 1.9 million deadweight was sent for demolition. That brings net fleet growth to 20.3 million deadweight, or 1.9% year-to-date, or 343% growth over the last 12 months. The new building order book has increased. Total Drival Contracting remains under relative control, reflecting limited seeder availability until late 2029, high seed building costs, and ongoing uncertainty around green propulsion technologies. At the same time, the fleet continues to age, and by the end of 2027, approximately 50% of the current fleet would be over 15 years old. Furthermore, the growing number of vessels undergoing their third special survey is estimated The average steaming speed of the fleet remains at low levels of around 11 knots for a prolonged period, despite firm freight rates, as elevated bunker prices supported by tensions in the Middle East continue to encourage slow steaming. Finally, global port congestion fully normalized during 2025 and is now following seasonal patterns. Nevertheless, congestion has recently experienced a rebound due to adverse weather conditions and war-related inefficiencies. Let us now turn to slide 13 for a brief update of demand. According to CloudSense, total drive of trade during 2026 is projected to expand by 2.4% The duration and extent of the Middle East conflict remains the key uncertainty for the global microeconomic outlook. The IMF projects global GDP growth to slow from 3.5 percent in 2025 to 3 percent Before recovering to 3.4% in 2027. So far, rival trade has remained resilient as direct exposure through the Strait of Hormuz is relatively limited, while increased coal cargos and restocking have provided strong support to the sectors. During the first half of 2026, total dry bulk trade increased by 3.3% year-on-year, supported by record-high grain volumes, a recovery in coal exports during the second quarter, and growth in iron ore, oxide, and mineral bulk trades. Strong miles expanded at a faster pace of 4.5%, driven by strong Atlantic exports and longer Pacific distances. Chinese drive-up imports increased by 5% year-over-year in the first half against a low base last year. However, during the second quarter, the country's economy grew at its lowest pace in more than three years, reflecting weak domestic consumption, the prolonged downturn in the property sector, and lower fixed-asset investments. Thank you very much. and Anton Miles in 2026. China's steel production declined by 3.1% year-over-year during the first half, driven by policy curves on steel supply, while production in the rest of the world increased by 0.9%. Chinese steel exports declined by 5.6% from last year's record levels amid rising protectionism, but remained Having said that, the iron ore market remains supply-driven, and ton-miles are expected to receive strong support from the continued ramp-up of high-quality iron ore from Simandou and stronger Brazilian exports. Coal trade is projected to grow by 1 percent and Anton Miles during 2026, with demand forecasts recently revised upward following a strong recovery during the second quarter amid war-related dislocation in global energy markets. In China, thermal power generation rose 2.9% during the first half, while domestic production fell by 2.2%, widening the gap that seaborne cargoes must fill. India shows a similar pattern, with stockpiles drawn down sharply in recent months. A developing El Niño is expected to keep northern hemisphere temperatures elevated through the summer, adding to cooling demand. Together, these factors should sustain coal volumes at elevated levels through the remainder of 2026. Grain trade is projected to expand by 6.5% in tons and by 9.8% in ton miles in 2026. Total grain exports increased by 10% year-over-year during the first half, driven by record shipments from Latin America and seasonally strong U.S. exports following the are expected to remain elevated during the second half of the year, as uncertainty over 2027 prospects, combined with escalating attacks on vessels in the Black Sea, is encouraging importers to build inventories. Mineral valve trade is projected to expand by 1.9% in tons and by 3% in ton miles in 2026. Exports increased marginally by 0.7% in Q2. as a 45% decline in Middle East volumes weighed on fertilizer, steel, and building materials trade. Guinean bauxite exports, by contrast, rose 16% during the first half and generated strong ton miles for the capeside flea. As a final comment, we remain optimistic about the dry bulk market outlook, supported by a favorable supply backdrop, new long-distance Atlantic exports, and tightening environmental regulations. In a period of heightened geopolitical uncertainty, we remain focused on actively managing our diversified, scrubber-feated fleet to capitalize on market opportunities and deliver value to our shareholders. Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have.

Thank you. We will now be conducting a question and answer session. If you would 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 would 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. Omar Nata, Cliff Clarkson. Please proceed with your question.

Thank you. Hi, guys. Good afternoon. Thank you for the update. Thanks for the update on the market and the company overall. I guess I just wanted to dive just a little bit more into kind of the strategy. I still look at the moment. You've got the cash positions out to $500 million. You're about to finalize the deliveries of the new building, Cancer Max, over these next several months. Dividend is ramping up with the strong drive-off market we're seeing here. And just, I guess, as we think about your footprint in the market today, and given the better valuation of the stock, how are you thinking about the fleet and growth? Does it make sense to be a bit more acquisitive in this environment? Or what do you think about the food as it stands today?

Well, you know, the opportunity to be more, you know, it certainly looks better than it looked, you know, a couple of months ago. But, you know, on balance with cash, we think that probably cash is going to be better conserved for a little bit. You know, we think the asset prices are relatively high. But with the share trading better, we'll see if there's an opportunity to use that as a currency and grow the platform. We can only do what we can do. It's been, as you know, difficult over the last couple of years to do anything with the equity market.

And if I may add, Omar, hi, this is Christos. We run calculations all the time on potential acquisitions of vessels, and as Hamish said, to justify a cash acquisition at today's levels, the break-even rate to produce a meaningful return to equity shareholders is quite high. So if we could use our share accretively, We will definitely do so.

Okay, thanks for that caller. And I guess just maybe touching on that a bit, I recall a few quarters ago Petros had discussed the idea of going after the CancerMax versus the cave-sized class because the ROE was better. Do you still feel that way? Is it still more attractive if you were to deploy capital? I guess it sounds like secondhand a bit on the pricier side, but if you look at it, Whether it's secondhand or new buildings, is the cancer max still a bit more of an attractive asset class relative to CAPES, purely when you look at it from an ROE perspective?

Hi, Omar. This is Constantinos. We definitely see a more balanced spread between the two, I would say, compared to the previous comments we made a couple of quarters ago. I mean, values have increased on the cancer maxes.

And we've demonstrated an ability to do substantially better than index on both Cancer Maxes and Ultra Maxes.

Hi Omar, this is Nicos. There are windows in the market where there will be an arbitrage, like we did with the latest Cancer Max at the beginning of the year, where there is a good market profit that is sitting there. We feel that with new building window moving now well into 29 and 2030, and prices still firming up on the larger vessels, opportunities are more scarce. But as I said, there are some windows where we could combine a contraction with perhaps the commercial ability to secure part of the income going forward and reduce the break-even that Christos mentioned earlier. We're cautious to see how the market evolves in the next four years.

Okay, yeah, thank you. Thank you all for the responses. I'll turn it over. Thanks, Omar.

Our next question is from Chris Robertson with Deutsche Bank. Please proceed with your question.

Thank you, operator. Good morning and good afternoon, TeamSTAR. Thank you for taking my questions. Hi, Chris. Just kind of following up on Omar's questions there, we talked a lot about being an acquirer or potential looking for secondhand assets and the price friction there. But you could also be a seller into this market of some of the older tonnage. Just wanting to... Thank you, Chris. This is Nicos.

We are in the market every day just to see what is the opportunity to dispose the remaining older assets, the less eco vessels. We see that the older vessels still command a good premium from the Chinese. We also see that the revenue side of these assets provides good yields for the company at the time being. So we are pacing ourselves, forecasting what we think the market will be before we dispose the next batch of sales or council markets. I think it will happen, but at the moment where the earnings are very attractive, and we'll see prices perhaps firming a bit further before we make a decision to sell a few more.

It's not directly relevant, but we haven't actually talked about the fact that the geopolitical situation has caused the spread between heavy fuel oil and very low sulfur fuel oil to be quite large recently. It's over $150 a ton.

It's close to, it's around $250 a kilo. and these large spreads on the older vessels really boost their yield. And I think we should also add that now that with our share trading at a smaller discount to NAV, the incentive to sell those high yield earning vessels is less.

Thank you for that color. Just turning to the broader market here, as you think about voyage and cargoes from Brazil, whether it's iron ore or agricultural products, and as it relates to the Panama Canal, so of course there's a few reduced transits per day, there could be risk here of drought as it relates to El Nino going forward. How much of your fleet in particular is being diverted via Cape of Good Hope rather than going through the canal? And what are you seeing in the broader market in terms of potential disruptions there that could only add to greater inefficiency and greater ton miles?

Ladies and gentlemen, please remain on the line. We are experiencing a technical difficulty. Once again, please remain on the line. We are experiencing a technical difficulty. Bulk Carriers Bulk Carriers Ladies and gentlemen, we are back. Chris, if you are there, you may continue with your question.

Sorry, guys. I don't know how much of my question you heard, but I was just speaking on, as it relates to Brazilian volumes, whether iron ore or ag, and going through the Panama Canal versus diverting via Cape of Good Hope. How much of your fleet is going via Cape? How much of the greater fleet is doing that? And what's the expectation here around potential water conditions from El Nino and drought potential, and how much of and that could potentially impact effective capacity and increase terminal demand later this year.

Okay. Hi, Chris. This is Constantinos. So, on the Panama Canal, we expect that we will see less S-crossing. It's worth mentioning that the dry bulk vessels crossing the Panama Canal over the last few years have decreased in any case, especially Here we could say that they've been priced out slightly. However, the water levels are decreasing, as you mentioned, because of El Niño. We will see, we expect to see a positive effect, especially on the Panamax vessels carrying during the U.S. soya bean season. And it's something that we should, you know, will be more pronounced during the September, November months. And as a fleet, we currently, you know, on the larger vessels, we go through the Cape of Good Hope, as you mentioned. All right, great.

Thanks for the call, and I'll turn it over. Thank you.

Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Stephanie Moore with Jefferies. Please proceed with your question.

Hi, thank you. I appreciate the question. Hi there. I think you pretty consistently have highlighted that the Simundu project is definitely a major source of future 10-mile growth. Could you maybe give us an update on timing, expected export volumes over the next 12 to 24 months? When investors should be able to start to see a meaningful impact on either utilization or other demand on utilization, or maybe any other demand initiatives that are gaining traction? Any update there, especially on timing, would be helpful. Thank you.

Ladies and gentlemen, we are experiencing a technical difficulty. Once again, please remain on the line. We are experiencing a technical difficulty. Bulk Carriers Bulk Carriers Hello, ladies and gentlemen. We are back. And, Stephanie, if you are there, you may proceed with your question.

Hi there. So I don't know if you heard that question, but I wanted to ask on the Simandou Project. So obviously you called out in the past that it's a major... Stephanie, I'm so sorry.

They have disconnected again. I'm going to try dialing in a different number. Please hold. Okay. Okay. Music by Kevin MacLeod © BF-WATCH TV 2021 Ladies and gentlemen, we have returned. Stephanie, if you are on the line, please continue your question.

Yes, hi guys. So I just wanted to touch on the Steam and Do Project. So obviously in the past you talked a lot about this being a major source of 10-mile growth. So can you just give us an update on timing, expectations, and do you think that project will continue to ramp over the next 12 to 14 months when we should start to see kind of that major contribution? And then also it's always helpful if there are any other kind of projects or demand initiatives that are on our radar even over the next couple of years.

Thank you, Stephanie.

This is Constantinos. I apologize for the... There were a few delays at the end of last year. It is ramping up this year. It's running at a pace of approaching almost 20 million per annum capacity. I think the number will be somewhere between 15 and 20 million by the end of the year, but the pace is ramping up. And now we're going through the seasonality in Guinea. During the third quarter, due to rainy season, so volumes actually pulled back during July-August. But the expectations are that by 2027, the pace will ramp up to about between 45 to 50 million tons per annum, and further pushing in 2028 will accelerate in 2028 closer, approaching close to 100 million tons, and by 2029 might reach www.mastagaki.com There are other volumes around in West Africa which could add between 10 and 20 million tons over the next two years. And there's also expansion in Brazil, adding again about 10 to 20 million tons. So over the next three, four years we should see an increase of high-quality iron ore volumes of as much as 150 million tons from the Atlantic combined.

We have reached the end of the question and answer session. I would like to turn the floor back over to management for closing remarks.

I have no closing remarks, operator. Thank you very much.

Okay, this concludes today's teleconference. You may disconnect your lines at this time.