Star Bulk Carriers Corp., a global shipping company focusing on the transportation of dry bulk cargoes, announced its unaudited financial and operating results for the fourth quarter of 2021. Unless otherwise indicated or unless the context requires otherwise, all references in this press release to “we,” “us,” “our,” or similar references, mean Star Bulk Carriers Corp. and, where applicable, its consolidated subsidiaries.
Petros Pappas, Chief Executive Officer of Star Bulk, commented:
“The favorable market conditions during 2021, enabled the Company to reach record–high profitability. During the fourth quarter, Star Bulk earned net income of $300.2 million, TCE Revenues of $428.0 million and EBITDA of $353.1 million with TCE for the quarter increasing to $37,406/day per vessel. On a full year basis, we managed to have our best year ever, with net income of $680.5 million and EBITDA of $892.0 million.
The increased cash flow from operations helped us further strengthen our balance sheet reaching a current cash balance of $593.7 million, reducing our net debt to $938.8 million. We continue to be committed to our policy of increased shareholder returns, announcing a dividend of $2.00 per share for the fourth quarter. For the full year 2021, Star Bulk will have made total distributions to its shareholders of $4.25 per share, demonstrating its ability to take advantage of strong market conditions and pay meaningful returns to its shareholders.
On the ESG front, Star Bulk has participated in the Carbon Disclosure Project (“CDP”) for the 2021 disclosure cycle and has managed to achieve a “Management” level score (B-), the highest score achieved amongst US listed dry bulk companies.
We remain optimistic about the prospects of the dry bulk markets due to promising supply and demand balance for the coming years. Upcoming environmental regulations and continued global economic growth create a favorable picture for the future of the industry. Star Bulk, has built a solid platform and remains well positioned to take advantage of such continued positive dynamics and reward its shareholders over the long term.”
Recent Developments
Declaration of Dividend
As of December 31, 2021, we owned 128 vessels and our Total Cash Balance was $473.3 million. Taking into account the Minimum Cash Balance per Vessel as of December 31, 2021 of $2.10 million, on February 16, 2022, pursuant to our dividend policy, our Board of Directors declared a quarterly cash dividend of $2.00 per share payable on or about March 15, 2022 to all shareholders of record as of March 2, 2022. The ex-dividend date is expected to be March 1, 2022.
Shares Outstanding Update
As of February 16, 2022, we have not sold any common shares under either of our effective at-the-market programs and our number of outstanding shares is 102,294,758.
Vessel Employment Overview
Daily Time Charter Equivalent Rate (“TCE”) is a non-GAAP measure. Please see the table at the end of this release for a reconciliation to Voyage Revenues, which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
For the fourth quarter of 2021 our TCE rate was:
Capesize / Newcastlemax Vessels: $47,219 per day.
Post Panamax / Kamsarmax / Panamax Vessels: $31,763 per day.
Ultramax / Supramax Vessels: $34,024 per day.
For the year ended December, 2021 our TCE rate was:
Capesize / Newcastlemax Vessels: $32,286 per day.
Post Panamax / Kamsarmax / Panamax Vessels: $24,860 per day.
Ultramax / Supramax Vessels: $23,752 per day.
Amounts shown throughout the press release and variations in period–on–period comparisons are derived from the actual unaudited numbers in our books and records. Reference to per share figures below are based on 102,285,188 and 96,983,233 weighted average diluted shares for the fourth quarter of 2021 and 2020, respectively.
Fourth Quarter 2021 and 2020 Results
For the fourth quarter of 2021, we had a net income of $300.2 million, or $2.93 earnings per share, compared to a net income for the fourth quarter of 2020 of $27.8 million, or $0.29 earnings per share.
Adjusted net income, which excludes certain non-cash items, was $302.4 million, or $2.96 earnings per share, for the fourth quarter of 2021, compared to an adjusted net income for the fourth quarter of 2020 of $29.5 million, or $0.30 earnings per share.
Net cash provided by operating activities for the fourth quarter of 2021 was $296.4 million, compared to $58.1 million for the fourth quarter of 2020. Adjusted EBITDA, which excludes certain non-cash items, was $355.1 million for the fourth quarter of 2021, compared to $81.5 million for the fourth quarter of 2020.
Voyage revenues for the fourth quarter of 2021 increased to $499.9 million from $186.0 million in the fourth quarter of 2020 which is indicative of the significantly improved market conditions prevailing during the current period. Time charter equivalent revenues (“TCE Revenues”)1 were $428.0 million for the fourth quarter of 2021, compared to $140.5 million for the fourth quarter of 2020. TCE rate for the fourth quarter of 2021 was $37,406 compared to $13,415 for the fourth quarter of 2020.
For the fourth quarters of 2021 and 2020, vessel operating expenses were $54.2 million and $46.1 million, respectively. Vessel operating expenses for the fourth quarter of 2021 included pre-delivery and pre-joining expenses of $0.1 million and additional crew expenses related to the increased number and cost of crew changes performed during the period as a result of COVID-19 restrictions estimated to be $2.6 million. Vessel operating expenses for the fourth quarter of 2020 included COVID-19 related expenses of $1.6 million. Excluding non-recurring expenses such as pre-delivery and pre-joining expenses and the increased costs due to COVID-19, our daily operating expenses per vessel for the fourth quarters of 2021 and 2020 were $4,373 and $4,169, respectively.
General and administrative expenses for the fourth quarters of 2021 and 2020 were $9.3 million and $7.6 million, respectively and was mainly increased due to the increase of the share-based compensation expense to $1.7 million in the fourth quarter of 2021 from $0.3 million in the corresponding period of 2020. Vessel management fees for the fourth quarters of 2021 and 2020 were $4.9 million and $4.6 million, respectively. Our daily net cash general and administrative expenses per vessel (including management fees and excluding share-based compensation and other non-cash charges) for the fourth quarters of 2021 and 2020 were $1,042 and $1,068, respectively.
Interest and finance costs net of interest and other income/(loss) for the fourth quarters of 2021 and 2020 were $13.1 million and $15.2 million, respectively. This decrease is primarily attributable to the decline in the average interest rate on our outstanding indebtedness, mainly driven by the refinancing of certain of our debt agreements and the redemption of our outstanding 8.30% Senior Notes in July 2021 , the interest rate swap agreements that we entered into in 2020 and 2021 and the lower LIBOR rates during the fourth quarter of 2021 compared to the same period in 2020, as well as the decrease in the weighted average outstanding debt balance during the corresponding periods.
