Star Bulk Carriers Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 14, 2023

There are 11 speakers on the call.

Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Q3 2023 Financial Results. We have with us Mr. Petros Pampas, Chief Executive Officer Mr. Hamish Norton, President Mr. Simos Spyrou Mr.

Operator

Christos Megalaris, Co Chief Financial Officers Mr. Nikos Rescos, Chief Operating Officer and Mrs. Harris Placadonacci, 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.

Operator

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.

Speaker 1

Thank you, operator. I'm Simo Spyrou, Co Chief Financial Officer of Star Bulk Carriers, And I would like to welcome you to our conference call for our financial results for the Q3 of 2023. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on Slide number 2 of our presentation. In today's presentation, we will go through our Q3 results, financings and share buybacks, An update on fleet and 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 3 of the presentation for a summary of our 3rd Quarter 2023 highlights.

Speaker 1

Net income for the 3rd quarter amounted to $44,000,000 or $0.46 per share and adjusted net income of $33,000,000 or 0.34 $0.01 adjusted earnings per share. Adjusted EBITDA was $84,000,000 for the quarter. For the Q3, as per our existing dividend policy, we declared a dividend per share of $0.22 with record date as of December 5, 2023. Since 2021, Dividend distributions and share buybacks exceed $1,000,000,000 or $10.7 per share. Our total cash today stands at $268,000,000 pro form a for the delivery of our 4 remaining sold vessels and share buyback from Oaktree.

Speaker 1

Meanwhile, our total debt stands at approximately $1,260,000,000 On the top right of the page, You will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $15,068 per vessel per day. Our combined daily operating expenses and net cash G and A expenses per vessel per day amounted to $4,851 Therefore, our TCE less OpEx, Less G and A is approximately $9,200 per day per vessel. Looking towards fleet renewal, we have agreed to sell 5 of our vessels with an average age of 15.6 years. During the 9 months of 2023, we have sold 12 vessels and received insurance proceeds from one vessel which had a combined average age of 12.4 years.

Speaker 1

Total gross proceeds from these sales were $272,500,000 This additional cash has been used for share buyback at a discount to NAV. On October 2023, we entered into 2 firm and 2 optional seat building contracts For the construction of up to 482000 deadweight ton Kamsarmax newbuildings vessels with delivery dates in Q4 2025 and Q2, Q3 2026. Slide 4 illustrates a summary of the recently announced strategic repurchase that was agreed with Oaktree Capital. We believe we have utilized a variety of tools to drive shareholder value, and we expect these transactions to be accretive to NAV per share, EPS and EPS. As of today, we have agreed to repurchase 20,000,000 shares at an average price of $19 per share from affiliates of Oaktree Capital.

Speaker 1

Given that the shares repurchased have been mostly financed by vessel sales at attractive prices, we are creating significant shareholder value As the implied NAV from this historical sales is higher than current NAV. During this quarter, we have issued and sold 678,282 common shares Under our effective ATM offering program at an average price of $19.81 per share, resulting in gross proceeds of $13,430,000 and locking a favorable arbitrage. As of the date of this release, we have 93,861 1,792 shares outstanding or 83,861,792 as adjusted for the closing of the 2nd block repurchased by Oaktree. At the bottom of the page, you will see an illustration of our share repurchase and the sources of financing that allowed us to complete the buyback. I will now pass the floor to our COO, Nikos Rescos, to talk about our operational performance and update us on our fleet renewal efforts.

Speaker 2

Thank you, Simo. Please turn to Slide 5, where we provide an operational update. Operating expenses excluding nonrecurring expenses was at 4,008 dollars 1.51 for Q3 2023. Net cash G and A expenses were $10.24 per vessel per day for the same period. In addition, we continue to rank at the top amongst our listed peers in terms of ride ship safety score.

Speaker 2

Slide 6 provides a fleet update and some guidance around our future drydock and vessel efficiency upgrade expenses and the relevant total of 5 days. Our expected drydock expense for the next quarter in 2024 is estimated at $39,700,000 for the drydocking of 33 vessels with another $8,600,000 towards our vessel upgrade CapEx. In total, we expect to have approximately 1,000 off hire days for the same period. In line with the EXI and CII regulations, we'll continue investing and upgrading our fleet The latest operational technologies available aimed in improving our fuel consumption and reducing our environmental footprint, further enhancing the commercial attractiveness of the Star Bulk fleet. Regarding our energy saving devices program, We have completed and tested retrofits on 26 vessels, with 7 or more vessels to be retrofitted by the end of this year.

Speaker 2

The above numbers are based on current estimates around drydock and retrofit planning, vessel employment and yard capacity. During the Q2, we have progressed further with onboard testing of carbon capture technology with a capability to retain up to 30% in net CO2 emissions. We will continue working on carbon capture technology With our industrial partners aiming in developing our cost effective solution, which can be selectively retrofitted in the future on vessels of our fleet. We are actively working on demand, supply and bunkering of carbon neutral fuels together with safety consideration and vessel design developments. Please turn to Slide 7.

Speaker 2

I have an update around our recent newbuilding order. We have decided to take further Thanks to our Castorama fleet renewal. Having designed and subsequently quartered 2 latest generation Eco Castorama vessels, We delivered in Q4 2025 and Q2 2026 including options. The vessels had to be built in China to a high specification, Fitted with the latest fuel efficient engine coming into production in 2024, a shaft generator using the energy requirements while at sea And now turn marine power provisions aimed at offering our charters the optionality to connect to Alon based power grid to support the vessel's entire loading and discharging operations. The above measures ensure best in class fuel consumptions and emissions.

Speaker 2

On the sales front, we continue disposing our vessels opportunistically, having agreed to sell 5 vessels at historically attractive prices, reduced our average fleet age and improving overall fleet efficiency. I will now pass the floor To our Chief Strategy Officer, Caris Plakadonaki, for an ESG update.

Speaker 3

Thank you, Nico. Please turn to Slide 8, where we highlight our continued leadership on the ESG front. For a 5th consecutive year, Star Bulk has published its annual ESG report, which provides a transparent and comprehensive account of the company's ESG performance, strategy and objectives. The report has been prepared in accordance with the latest 2021 GRI standards And has received limited external assurance from Ernst and Young on specific DRI disclosures and net ASP indicators. Among other key performance indicators, we report a reduction of 4.6 percent in total Q2 equivalent emissions as well as an improved average fleet annual efficiency ratio compared to the previous year as a result of operational and technical initiatives.

Speaker 3

The report also disclosed the company's COP 3 emissions, a first among grid based dryborexity companies. Having engaged the company's stakeholders, we present an impact analysis towards environment, people and economy, paving the way for double materiality to be implemented next year. Following this development, Star Bulk has improved its Sustain Analytics EAC Risk Smart Score from 23.2 in 20.22 to 21.3 to date, achieving the highest score among our U. S. Listed peers.

Speaker 3

On the societal front, we have improved the company's employee retention rates, further implementation of well-being and engagement programs, And we have contributed to the union of Crick's Epona's efforts to support the local communities in Greece, which have suffered severe damages from floods. We continue our active involvement in the development of an iron ore green corridor between West Australia and East Asia. I will now turn the floor to our CEO, Petros Pappas, for a market update and his closing remarks.

Speaker 4

Thank you, Harris. Please turn to slide 9 for a brief update of supply. During the 1st 10 months of 2022, A total of $30,700,000 deadweight was delivered and $4,900,000 deadweight was sent to demolition for a net fleet growth of $25,800,000 deadweight or 2.8% year to date and 3% year over year. The supply outlook continues to be close to the best we have seen in the recent history of drybulk shipping With an order book of 8.1 percent of the fleet and 29,600,000 deadweight from orders year to date. Uncertainty on future propulsion, high sea building costs and limited CPR capacity until the end of 2026 have helped keep new orders under control.

Speaker 4

Furthermore, vessels above 20 years of age stand at 8.2% of the fleet, while scrap prices have stabilized at elevated levels and should make demolition of over aged and fuel inefficient tonnage an attractive option during seasonal downturns over the next years. The average steaming speed of the drybulk fleet decreased to a new low of 10.95 knots During Q3, as a result of higher bunker costs, lower freight rates and new environmental regulations, We expect the EEXI CII regulations to increasingly incentivize slow steaming and help moderate Supply over the next years. Global port congestion adjusted significantly lower During the last 2 years, an inflated supply by approximately 5% with a negative effect on earnings throughout 2023. Nevertheless, changes in trading patterns and inefficiencies related to the war in Ukraine Have normalized congestion slightly above pre COVID levels during the Q3 and from now on should follow seasonal patterns. As a result of the above trends, net fleet growth is unlikely to average above 2% per annum during 202420242025.

Speaker 4

Let's now turn to Slide 10 for a brief update of demand. According to Clarksons, total dry bulk trade during 2023 is projected expand by 4.6% in ton miles. During the 1st 3 quarters of 2023, total drybulk trade volumes Increased by 3.1% year over year, supported by record coal and minor bulk Trade and the recovery of iron ore exports. Despite weak macro sentiment and a struggling property sector, China drybulk imports have increased by 13.7% during the 1st 9 months. On the other hand, imports to the rest of the world have Declined by 3.7 percent as demand was affected by the war in Ukraine, increased food and energy costs And tightening monetary policy by Western Economies in the effort to fight inflation.

Speaker 4

During 2024, dry bulk demand is projected decreased by 1.8% in ton miles with the IMF forecast for global GDP growth presently standing at 2.9%. A series of government stimulus measures over the last year are expected to support Chinese demand for raw materials during 2024. Moreover, dry bulk demand from the rest of the world and especially India and the Middle East is experiencing a recovery. Iron ore trade is expected to expand by 4.7% during 2023 and to marginally contract by 0.2% in 2024. China steel production increased by 2.4% year over year during the 1st 3 quarters, supported by infrastructure projects, manufacturing and strong exports.

Speaker 4

At the same time, domestic iron ore output contracted by 5.5 while stockpiles decreased to a 3 year low. Steel production from the rest of the world declined by 3.8% Over the same period, affected by high energy costs and weak steel margins, but a noticeable rebound in output is taking place supported by rising steel prices in the Atlantic. Coal trade is expected to Global focus on energy security has inflated coal trade, while the reshuffling of European and Russian trade has benefited ton miles. Moreover, the unofficial ban by China on Australian coal has been lifted and is providing support to Capesize and Panamax vessels. During the 1st 9 months of 2023, Chinese imports surged compared to last year as thermal electricity increased by 6.1%, whilst hydropower contracted and domestic coal production growth was limited to 4.2%.

Speaker 4

India is emerging as a leading coal importer as electricity demand is currently outpacing Domestic coal production growth, while stocks at power plants stand at very low levels. Grain and soybean trade is expected to expand by 3.4% during 2023 and 3.6% in 2024. During the 1st 3 quarters of the year, grain trade was affected by the decrease of exports from Argentina, the U. S. And Ukraine.

Speaker 4

Brazil experienced record soybean and corn seasons that have helped fill the gap of crop losses. Increasing constraints in Panama Canal crossings are likely to benefit ton miles during the U. S. Export season this year. Grain supply in 2024 is projected to remain high, but the El Nino weather conditions might affect Latin American and Australian crops.

Speaker 4

Nevertheless, Chinese demand and increased global focus on food security is expected to inflate grain trade over the next years. Mine robot trade is expected to expand by 3.9% during 2023 and 3.8% in 2024. Microbout trade has the highest correlation to global GDP growth and is supported by improving global macroeconomic fundamentals. The war in Ukraine and the subsequent sanctions on Russian Industries have disrupted the Atlantic fertilizer Insteel industry have created shortages to support backhaul trades. Moreover, expanding West Africa bauxite exports Continue to generate strong top mile for Capesize vessels, with exports up by approximately 30% year to date.

Speaker 4

Finally, outlook for the drybulk market remains positive due to increasingly favorable supply dynamics, The improving macro sentiment and large global infrastructure investment needs for the world's green transition. Star Bulk is well positioned due to its scrubber fitted and diverse fleet to take advantage of market opportunities and remains focused on actively managing its fleet and continuing to create value for its shareholders. Without taking any more of your time, I will now pass the floor over to the operator for any questions you may have.

Speaker 5

Thank

Operator

Our first question comes from the line of Amit Mehrotra with Deutsche Bank. Please proceed with your questions.

Speaker 6

Hey, good morning, good afternoon. This is Chris Robertson on for Amit. Thanks for taking our questions. Hi, guys. Just looking at the rates booked quarter to date, it looks so far to be Sequentially stronger than 3Q.

Speaker 6

But just looking forward for the remainder of the quarter, do you think that we'll see a bit of a pullback On normal seasonality or are there any short term factors like canal congestion or anything else going on that might keep the rates a little bit more robust Unusual as we enter into the end of the year.

Speaker 4

Hi, Chris. We think that this Q4 is going to be A normal Q4, better than the rest of the year as it always has almost always has been, Because the 2nd part of the year usually carries about 54% of trade Versus the first part. I don't know, I don't think anything will change to that. Also the hold days are coming. We believe that Q4 will be better than the rest of the quarters as usual.

Speaker 6

Okay. Yes, I got that. Just looking at the dividend policy moving forward here, is the minimum liquidity threshold going to be continue to be calculated off the 128 vessels? Or will that be adjusted at some point to reflect the recently concluded and announced vessel sales?

Speaker 1

Chris, we have announced today that we have released the $2,100,000 for the 13 vessels that have been sold or are committed to be sold. So in reality, the threshold is now 115 remaining vessels times $2,100,000

Speaker 6

Got it. That's helpful. Okay. And last question for me, just On the newbuilding vessels, it looks like they'll be built with conventional but very efficient engines. Are there any design aspects to it that would enable future retrofitting of different technologies?

Speaker 6

And can you explain a little bit more what AMP is?

Speaker 2

Hi, Chris. This is Nikolas. Thank you for the question. Well, first of all, the ships have been upgraded with the latest engine from MAM BMW that is coming out next year. And these are some of the first ships that are ordered with this engine, which automatically brings the consumption down Compared to other vessels currently built by about 2 to 3 tonnes a day.

Speaker 2

So that's pretty significant. AMP is a physical equipment which allows you to use a real basically in port and connect to ports that do have a power grid on dock so that you can shut off generators. You can actually operate the entire vessel Using shore power, basically a plug in facility. We believe that apart from the U. S, which is already available in certain ports, this is going to be adopted Worldwide in the next few years, and we prefer to offer this option to charterers.

Speaker 7

Got it.

Speaker 5

Yes, sounds good. Possible possibilities? Well,

Speaker 2

we have made a study for methanol, geofuel methanol. We will wait to see developments on the supply Size of green methanol before we make any firm decision to upgrade the vessels.

Speaker 6

Any idea on the CapEx that might be required on that in the future?

Speaker 2

You mean the methanol? Yes. That's estimated on a cash amount roughly around $5,000,000

Speaker 6

Okay, got it. That's helpful. All right, guys. I'll turn it over. Thanks for taking our questions.

Speaker 4

Thank you.

Operator

Our next question comes from the line of Omar Khokta with Jefferies. Please proceed with your question.

Speaker 8

Thank you. Hey, guys. Good afternoon.

Speaker 5

Good afternoon. Hi, Omar.

Speaker 8

Hi. Yes, just first question I have is maybe kind of following up on Just talking about the market a bit and the 4Q or the Q4 being the strongest of the year, obviously, we've seen rates improve And strengthened thus far into the quarter and averages are at their best across the board. I guess in terms of This improvement, is this basically just would you characterize this as purely seasonal? Or are there other What are the demand factors or fundamental factors in the background that have caused this to improve accordingly?

Speaker 4

Well, during the second part of the year, there is more iron ore trade. There's more production from Brazil, which also improves ton miles. I think this time around, coal imports in India will also Be strong because India has very low stocks And the rest of the trade, bauxite and grains will continue to as usual. So I think iron ore ton miles And cold imports in India will be the major reasons why this market is going to be stronger during Q4.

Speaker 8

Okay. Yes, just kind of wondering if you by seeing this market This strength, not necessarily saying it's strong, but it's definitely much better than it has been. Has that maybe given you a bit more conviction on Perhaps next year or the medium term outlook being better? Or do you not look at this as a shift? And maybe characterized this as

Speaker 9

just much more of a

Speaker 8

seasonal thing and so let's not get too excited. Just want to get maybe kind of how Star Bulk in general is viewing this market strength we've seen over the past couple of months?

Speaker 4

Well, my personal opinion is that 2024 is going to be Similar to 2023, unless if there are any geopolitical developments that That are difficult to foresee. I think that iron ore, for example, We'll be about the same, mainly because the rest of the world is going to Start improving the economies and also because China has very low stocks. On the core front, I think that we may see lesser trade actually To a certain degree, mainly because of the El Nino effect. And of course, The world is trying to reduce coal consumption. I think bauxite to China Will improve and will as every year.

Speaker 4

And I think that grains are going To be doing better, the El Nino is actually positive for grains. So overall, I would say a similar market, Perhaps a bit better.

Speaker 8

Okay. Thank you. Thanks for that market color, Petros. And maybe just kind of a follow-up perhaps to the newbuildings, as Chris was asking. You've obviously disposed of the 13 ships this year.

Speaker 8

You raised a good amount of capital. Doing so, you used it to buy a big chunk of the Oaktree position. I guess in terms of where Star Bulk is today in your market footprint, you're down to 115 ships, still substantial critical mass. So how do you think about the fleet footprint as it is as we kind of think about where you're going into next year? You have the CancerMAX new building that you just announced.

Speaker 8

Should we be thinking of SORBO continuing to be a seller in this market of older tonnage and then perhaps replacing them over time with more of these new buildings?

Speaker 5

I think we'll do the right commercial thing. Obviously, our fleet is getting older every year, and it can't get old indefinitely. So we will look at the right opportunities to Sell ships that are not going to have a long life and get ships that will have a long life. And as always, we also continue to look at merger possibilities and we see We are seeing opportunities all the time. As we've said in the past, these are always hard to close.

Speaker 2

And just to add, Omar, this is Christos. We also have the 7 charter in vessels, which Effectively, our own young vessels and further renew the fleet.

Speaker 5

Yes. And of course, those vessels give us a lot of optionality.

Speaker 4

Yes. And they're all delivering this year, right? Yes.

Operator

Our next question comes from the line of Ben Nolan with Stifel. Please proceed with your question.

Speaker 7

Thanks. A

Operator

little bit curious on

Speaker 7

the new builds. Obviously, you're selling assets. They're historically A little bit higher priced. And I appreciate the need to replenish the fleet

Operator

and so forth, but new builds are

Speaker 7

a bit more And they normally would be too.

Speaker 8

Do you view this as just

Speaker 7

sort of a necessary evil in terms of Paying a little bit of a higher price in order to make sure that your fleet is new? Or do you think maybe we're in a new paradigm where just asset prices are higher and the price that you're paying for the new builds is reasonable on that basis?

Speaker 4

Well, Ben, first of all, we're buying these vessels are actually their Speed and consumption is actually similar to that of the best Japanese vessels. And we made sure This would be the case, otherwise we wouldn't have gone forward. And Japanese vessels are similar. Japanese vessels are being sold like $6,000,000 or $7,000,000 more expensive than these ones. So, we do not consider them that expensive.

Speaker 4

Secondly, vessels like that, that burn like 7, 8 tons Less fuel than the older Kamsarmaxes actually save you almost $4,000 a day a Sailing day. So you recoup the differential very, very quickly. At the end of the day, we do not think that newbuilding Price is going to go down. There is very little availability right now. And if one So wanted I'm pretty sure that closer to the day, the delivery dates, one could sell these vessels even more expensive.

Speaker 5

And also, since the beginning of the COVID pandemic, U. S. Dollar inflation has not been small. Yes. It's over 10% change in prices.

Speaker 5

So you have to expect that Nominal dollar prices of new buildings will go up.

Speaker 4

Plus, We are seeing that decarbonization will probably take longer Than what we initially thought it would. And that will mean that best in class vessels We'll have the chance to trade for a lifetime.

Speaker 7

Got it. That all makes sense. And then my next question was around the buyback and then also the ATM activity. And I appreciate that you're buying at a lower price than you're selling with respect to the share price. Although, again, At least according to my math, the shares are still trading below NAV anyway that you slice it.

Speaker 7

Just curious The thinking may be behind not just selling a few extra ships in order to help fund the share repurchase versus being active on the ATM below NAV?

Speaker 5

Ben, basically, if you have a shareholder coming to you and saying, I'm afraid that when Oaktree sells, the overhang is keeping your share price When Oaktree sells, the price is going to collapse. Can you do something about it? And then we Sell shares at $0.81 above where we buy them in, obviously, the shareholder is better off. It would have been even better if we could sell more ships at a very high price. But what we did basically was we wanted to buy 20,000,000 shares, And we funded that with debt, equity and proceeds from ship sales, and we did what we could do in each of those areas.

Speaker 5

And in each case, we think it was beneficial for the shareholders. Right.

Speaker 4

The item was like 3.5% of the buyback. Well, yes. But I mean,

Speaker 5

basically, we sold the ships we could sell. We issued the equity at that we could issue at prices that we knew would be profitable. And we tried to limit the borrowings to the extent we could, but all of it was good for the shareholders, we think. Right.

Speaker 8

Okay. I appreciate the color

Operator

Our next question comes from the line of Nathan Ho with Bank of America. Please proceed with your question. Hey, great.

Speaker 10

Thank you, Tim. I think I would just want to continue a little bit on Ben, a train of thought there. And I guess I'll just ask this question a little differently. I You spoke a little bit about buying back shares from Oaktree at a discount to a significant discount to NAV and right with the share issuance. And now, I think like with the disposal vessels that all seems to align with the same type of framework, but now with this new build, I'm just kind of curious on how the team is thinking about capital strategy in context of where you're currently seeing your net asset value.

Speaker 10

Like how are you deciding what to do with your cash given where your asset value is relative to your share price?

Speaker 5

Well, thanks for the question, Nathan. I think we looked at these new buildings, frankly, as being A chance an opportunity that we would not have the chance to duplicate. We think these are This was an exceptional situation where the shipyard wanted us specifically as a client and offered us Slots that were not going to be available anywhere else for a ship that has a quality that we couldn't get, Frankly, at other shipyards. They worked with us to put an engine on that isn't available yet generally and to put a shaft generator on and generally tweak their design to our needs. So We're not planning to go out and replace our fleet with new buildings, if that's sort of the point of the question.

Speaker 5

This, we thought, was frankly an opportunity that was too good to let go.

Speaker 10

Got it. Just to follow-up on that. For a like for like vessel, what would the lead times look like in, say, a Japanese or Korean yard?

Speaker 4

Lead times. For Korean or Japanese.

Speaker 5

For Korean or Japanese. Well, basically,

Speaker 4

we are About a year later.

Speaker 2

I mean, Japan is presently offering mid-twenty 20 7 for vessels, and Korea doesn't build bulk carriers Because they're occupied with LNG and container tanker vessels. And I guess China, there are no slots offered for 2025, you can only find slots for 2026, and those are very few and not this quality.

Speaker 4

And I think second half of 'twenty six, actually. Yes, as you said, very few.

Speaker 10

Okay. That's helpful. And Hamish, I think you brought up earlier about the possibility of potentially using mergers as another way of of renewing the fleet. Maybe if you wouldn't mind just expanding a little bit about that, what kind of opportunities you're seeing and how you're seeing the market currently? Well,

Speaker 5

we always see opportunities to buy fleets. And much of the time, we see the opportunity to use our shares. We only do these transactions if we can use our shares at or above NAV. And frankly, we're not looking to increase our leverage by any significant amount if we can avoid it. So we're a bit picky.

Speaker 5

The sellers have been, until recently, a bit picky. It's been hard to get these things done since the COVID pandemic. Although before COVID, we did about 8 of them, I think. The market seems to be turning around a little bit and maybe making it easier to close these transactions. So

Speaker 9

I'm hopeful.

Speaker 10

Great. Thank you so much. That's really helpful.

Speaker 4

Thank you.

Operator

Our next question comes from the line of Benediktivis with Clarkson Securities. Please proceed with your question.

Speaker 9

Yes, thank you. I think I just wanted to touch Let me turn to the market and touch upon some of the SG and A aspects. Do you see any impact From factors such as the carbon intensity indicator or the EU ETS system, do you see that affecting the drybulk market going into 2024 And beyond with regards to stuff like slow steaming?

Speaker 4

Well, we think that Vessels will probably among the means to have a better CII. I think that vessels will probably also reduce their speed. So I think that this is going to be beneficial Because there's going to be basically less supply of vessels. So we consider this company The environmental regulations is only positive for the shipping industry.

Speaker 9

Okay. Thank you. And just a little technical detail at the end there. The price point for the auctions are always the same as for the firm vessels and also Can you elaborate some on what you would expect the financing to look like if you decide to exercise those?

Speaker 2

The auction price is exactly the same as the firm vessel, not the first part. And

Speaker 5

We don't have a lot of cash to pay For the near term, it's like $7,000,000 for the 2 firm vessels and it would be $7,000,000 for the 2 optional vessels, And that holds us for a while. So We can finance it, frankly, with debt to begin with. It's not a big deal. And then closer to delivery, we'll figure out the best way to finance it from Shareholders' point of view.

Speaker 1

Just to clarify, this $7,000,000 plus $7,000,000 will not affect our Cash balance for the distributable cash for dividends.

Speaker 5

Yes, exactly. We're not planning to finance these out of operating cash

Operator

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

Speaker 4

No further remarks, operator. Thank you very much.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.

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Earnings Conference Call
Star Bulk Carriers Q3 2023
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