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Star Bulk announces results for second quarter and first half of 2010
Star Bulk Carriers Corp., a global shipping company focusing on the transportation of dry bulk cargoes, yesterday announced that its Board of Directors declared a cash dividend of $0.05 per outstanding share of the Company’s common stock for the three months ended June 30, 2010. The dividend is payable on or about August 30, 2010, to shareholders of record as of August 25, 2010.
The Company also announced today its unaudited financial and operating results for the second quarter and first half of 2010.
Akis Tsirigakis, President and CEO of Star Bulk, commented: “We are
pleased to report strong second quarter 2010 financial results well
above expectations. Our financial performance in the second quarter 2010
reflects the consistent implementation of our business strategy
including operating cost reduction efforts and pursuing organic fleet
expansion. At the same time we continue rewarding our shareholders with
meaningful regular dividend of $0.05 cents per share implying an
annualized yield of 7% at the current share price.
“Our vessel operating costs are lower by 42% compared to the same period
last year mainly due to our cost efficient in-house fleet management
which was fully implemented during the first quarter of 2010 and
continues to produce tangible results while our fleet utilization rose
to 99.5%. Furthermore, our interest expense was reduced by half due to
the accelerated principal repayment nature of our loans. Also, our
revenue visibility remains high with contacted operating days of 98% for
the remainder of 2010 and 64% for 2011.
“We have also continued our organic growth during this quarter expanding
our fleet by ordering our second capesize newbuilding in April 2010,
without diluting our shareholders. So far in 2010, we have contracted to
acquire three Capesize vessels, the 2000 built M/V Aurora and two
newbuildings. These acquisitions will expand our fleet carrying capacity
in DWT by about 57%.”
George Syllantavos, Chief Financial Officer of Star Bulk, commented: “As
of today, our senior debt has been reduced to $201 million while our
cash position stands at approximately $54 million, translating into a
conservative net debt position of approximately 21% of our total assets.
Through our front-loaded principal repayment schedule we have repaid
$32 million during the first half 2010 and $46 million year-to-date.
This front-loading produced tangible results by lowering our interest
costs, while through our resistance to enter into interest rate hedge
mechanisms we avoided interest rate swap costs that have burdened other
companies.
“We are confident our strong balance sheet will enable us to meet our
debt and capital expenditure commitments and continue rewarding our
shareholders with a regular dividend.”
Second Quarter 2010 and 2009 Results
For the second quarter 2010, total revenues amounted to $30.0 million
compared to $32.4 million for the second quarter 2009. This decrease was
mainly due to the decrease in the number of vessels that operated, from
an average of 12 vessels during the second quarter of 2009 to 11
vessels for the second quarter of 2010. Operating income amounted to
$7.3 million for the second quarter 2010 compared to an operating loss
of $1.0 million for the second quarter 2009. Net income for the second
quarter 2010 amounted to $6.0 million or $0.10 earnings per share
calculated on 61,055,907 and 61,191,174 weighted average number of
shares, basic and diluted, respectively. Net loss for the second quarter
2009 amounted to $3.4 million or $0.06 loss per basic and diluted
shares calculated on 60,994,760 weighted average numbers of shares.
Excluding these items net loss for the second quarter of 2009 would
amount to $2.8 million or $0.05 loss per basic and diluted share.
Adjusted EBITDA for the second quarter 2010 and 2009 was $20.0 million
and $15.5 million, respectively. A reconciliation of EBITDA and adjusted
EBITDA to net cash provided by cash flows from operating activities is
set forth below.
An average of 11.0 and 12.0 vessels were owned and operated during the
second quarter 2010 and 2009, respectively, earning an average Time
Charter Equivalent, (‘TCE”) rate of $28,640 per day and $30,019 per day,
respectively. We refer you to the information under the heading
“Summary of Selected Data” later in this earnings release for further
information regarding our calculation of TCE rates.
Vessel operating expenses decreased approximately 42% to $5.3 million
for the second quarter 2010 compared to $9.1 million for the same period
last year. The decrease is mainly due to a more cost efficient in-house
management of the vessels which was fully implemented during the first
quarter of 2010 and due to the decrease in the number of vessels that
operated during the second quarter of 2009 compared to the second
quarter of 2010.
Voyage expenses decrease by $1.2 million in the second quarter of 2010
as compared to the same period of 2009 mainly due to the fact that
during the second quarter of 2009 one of our vessels was under a COA.
Depreciation expense decreased to $11.5 million for the second quarter
2010 from $15.8 million for the second quarter 2009. The decrease in
depreciation expense was due to the fact that our fleet was reduced from
an average of 12 vessels during the second quarter 2009, to an average
of 11 during the second quarter 2010. Furthermore, depreciation expense
was further reduced due to the reclassification of the vessel Star Beta
during the first quarter of 2010 as an asset held for sale. The vessel
Star Beta was delivered to her buyers in July 2010.
General and administrative expenses increased to $3.2 million for the
second quarter 2010 from $1.7 million for the second quarter 2009,
respectively. This increase is mainly due to a higher stock-based
compensation expense.
First Half 2010 and 2009 Results
For the first half 2010, total revenues amounted to $59.3 million
compared to $77.5 million for the first half 2009. This decrease is
mainly due to higher charter rates earned for most of our vessels during
2009 and the lower amortization of fair value of below/above market
acquired time charters of $0.7 million for the first half 2010 compared
to $5.4 million for the first half 2009. Operating loss amounted to
$24.2 million for the first half 2010 compared to operating income of
$24.2 million for the first half 2009. Net loss for the first half 2010
amounted to $27.0 million representing $0.44 loss per basic and diluted
share calculated on 61,052,850 weighted average number of basic and
diluted shares. Net income for the first half 2009 amounted to $19.0
million representing $0.31 earnings per share calculated on 60,694,160
weighted average number of shares, basic and diluted.
Adjusted EBITDA for six months ended June 30, 2010 and 2009 was $34.6
million and $43.3 million respectively. A reconciliation of EBITDA and
adjusted EBITDA to net cash provided by cash flows from operating
activities is set forth below.
An average of 11.0 and 12.0 vessels were owned and operated during the
six months ended June 30, 2010 and 2009, respectively, earning an
average TCE rate of $27,291 and $32,591 per day, respectively. We refer
you to the information under the heading “Summary of Selected Data”
later in this earnings release for further information regarding our
calculation of TCE rates.
Total expenses, amounted to $48.5 million for the six months ended June
30, 2010 compared to $64.5 million for the six months ended June 30,
2009. Vessel operating expenses were $10.9 million for the first half
2010 compared to $15.8 million for the same period last year. The
decrease are mainly due to a more cost efficient in-house management
which was fully implemented during the first half of 2010 and the
decrease in the number of vessels that operated compare to the first
half of 2010.
Depreciation expense decreased to $23.0 million for the first half 2010
from $31.5 million for the first half 2009. The decrease in depreciation
expense was due to the fact that our fleet was reduced from an average
of 12 vessels during the first half of 2009, to an average of 11 during
the first half of 2010. Furthermore, depreciation expense was further
reduced due to the reclassification of the vessel Star Beta during the
first quarter of 2010 as an asset held for sale.
General and administrative expenses increased to $5.7 million for first
half 2010 from $4.6 million the first half 2009, respectively. This
increase was mainly due to a higher stock based compensation expense.
Liquidity and Capital Resources
Cash Flows
Net cash provided by operating activities for the six months ended June
30, 2010 and 2009, was $33.3million and $42.1 million, respectively. Net
cash provided by operating activities for the six month period ended
June 30, 2010 was primarily a result of recorded net loss of $27.0
million, adjusted for depreciation of $23.0 million, and an impairment
loss of $34.8 million resulting from the sale of vessel Star Beta which
has been classified as asset held for sale and recorded at fair value
less costs to sell. Net cash provided by operating activities for the
six month period ended June 30, 2009 was primarily a result of recorded
net income of $19.0 million, adjusted for depreciation of $31.5 million
and stock based compensation and fair value of derivatives of $3.9
million, offset by amortization of fair value of below/above market
acquired time charter agreements of $5.4 million and non-cash gain on
time charter agreement termination of $10.9 million.
Net cash used in investing activities for the six months ended June 30,
2010 and 2009 was $27.3 million and $25.5 million, respectively. Net
cash used in investing activities for the six month ended June 30, 2010,
was primarily due to the 20% advance given for the vessel Star Aurora
that is to be acquired during the fourth quarter of 2010, amounting to
$8.5 million plus 20% installments related to each of our two
newbuildings amounting to $21.5 million in aggregate and offset by a
decrease in restricted cash amounting to $2.6 million. For the six month
period ended June 30, 2009, there was no cash used in investing
activities due to the lack of acquisitions and/or sales of vessels
during the period, however, there was an increase in restricted cash of
$25.4 million related to the waivers obtained for the existing loan
agreements.
Net cash used in financing activities for the six months ended June 30,
2010 and 2009 was $38.6 million and $22.6 million respectively. For the
six month ended June 30, 2010, net cash used in financing activities
consisted of loan installment payments amounting to $32.2 million, cash
dividend payments of $6.2 million and financing fees amounting $0.2
million. For the six months ended June 30, 2009, net cash used in
financing activities consisted of the payments of loan installments
amounting to $24.5 million offset by cash provided from our Director’s
dividend reinvestment of $1.9 million.
Source: Star Bulk Carriers
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