Star Bulk Carriers Corp. (NASDAQ:SBLK) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 11:00 am ET

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Star Bulk Carriers Corp. (NASDAQ:SBLK) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Fourth Quarter 2018 Financial Results. We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Simos Spyrou and Mr. Christos Begleris, Co-Chief Financial Officers 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 Instructions) I must advise you that this conference is being recorded today.

We now pass the floor to one of your speakers today, Mr. Begleris. Please go ahead, sir.

Executive
Christos Begleris

Thank you, operator. I'm Christos Begleris, Co-Chief Financial Officer of Star Bulk Carriers, and I would like to welcome you to the Star Bulk Carriers conference call regarding our financial results for the fourth quarter and full year of 2018. Before we begin, I kindly ask you to take a moment to read the Safe Harbor Statement on Slide Number 2 of our presentation. Let us now turn to Slide Number 3 of the presentation for a summary of our fourth quarter 2018 financial highlights. In the three months ending December 31, 2018 TCE revenues amounted to $137.8 million, 53.1% higher than the $90 million for the same period in 2017. Adjusted EBITDA for the fourth quarter 2018 was $82.4 million versus $55.7 million in the fourth quarter of 2017. Adjusted net income for the fourth quarter of 2018 amounted to $30.3 million or $0.33 gain per share versus $21.5 million or $0.34 gain per share in the fourth quarter of 2017. This is our fifth consecutive profitable quarter.

Our Time Charter Equivalent Rate during this quarter was $14,140 per day compared to $13,860 per day in the same quarter last year. During Q4 2018, our average daily operating expenses were at $3,938 per vessel per day. During this quarter, we concluded the refinancing of $248 million reducing the average margin of these facilities by 120 basis points. We remain committed to refinancing debt at lower interest rates when such opportunities arise. Following the share repurchase program announced last November, the Company has purchased approximately 341,000 shares at an average price of $9.29 per share. We have also committed financing for the procurement and installation of scrubbers of $140 million to be drawn during the rollout of our program in 2019.

Slide 4 shows a summary of our 2018 financial highlights. Adjusted EBITDA for the full year of 2018 was at $260.9 million versus $128 million in 2017. Adjusted net income for 2018 amounted to $86.1 million or $1.12 gain per share versus $4.3 million adjusted net loss or $0.07 loss per share in 2017. Slide 5 graphically illustrates the changes in the Company's cash balance during the fourth quarter. The fleet generated free cash flow of $29.7 million. After including debt proceeds and repayments from our refinancing activities, CapEx payments for our acquisition and scrubber installments, final payment of our deferred debt amounts and share repurchase program; we arrived