Star Bulk Sinks Deeper in Red

first_imgzoom Dry bulk shipping company Star Bulk posted a net loss of USD 40.2 million in the first quarter of 2015 amid historically low rates in the dry bulk market, widening further the loss reported in the first quarter of 2014 which amounted to USD 0.9 million.Revenues in the first quarter reached USD 45.5m compared to USD 20.1m a year earlier.Net loss for the first quarter of 2015 mainly included amortization of fair value of above market acquired time charters of USD 3.9 million, associated with time charters of vessels acquired in the third quarter of 2011, vessels acquired as part of the acquisition of Oceanbulk in July 2014 and three Excel Vessels.Petros Pappas, Chief Executive Officer of Star Bulk, commented: “In order to proactively enhance our liquidity position, we tapped the capital markets in May 2015, raising a total $180 million of additional common equity. This capital raise was supported again by our major shareholders, Oaktree Capital Management, Monarch Alternative Capital, my family and business associates, as well as many reputable institutional investors.”The company decided to delay remaining newbuilding vessels by a total of 77 months, or approximately 3.3 months per vessel, deferring USD 288.0 million of newbuilding installments from 2015 to 2016.  In addition, Star Bulk cancellation one newbuilding vessel without incurring penalties and has managed to reduce expected equity capital expenditures by USD 11.6 million.“As part of our fleet renewal plan, since January 1, 2015, we have successfully disposed of eight older vessels for total gross proceeds of $42.7 million. In addition, we have completed the acquisition of the last six vessels from the fleet of Excel Maritime and have taken delivery of nine newbuilding vessels. As of today, 25 newbuilding vessels are due for delivery over the next 18 months with relevant capital obligations fully financed. “While rates remain low, there have been some positive developments on the supply side, with record scrapping levels, high slippage, minimal ordering, diminishing orderbook and, notably, negative Capesize fleet growth year to date. “In my experience, due to the cyclical nature of the shipping business a deep and prolonged market downturn is usually followed by a steep and sustainable recovery. Overall, the actions we have taken so far have allowed us to protect our asset base and navigate safely through turbulent waters,” Pappas added.last_img

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