Star Bulk Carriers Corp. (SBLK) Q3 2008 Earnings Report, Transcript and Summary

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Conference Call on the Third Quarter and Nine Months 2008 Financial Results. We have with us Mr. Akis Tsirigakis, Chairman and Chief Executive Officer and Mr. George Syllantavos, Chief Financial Officer of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by question-and-answer session. (Operator instructions) I must advise that this conference is being recorded today, Tuesday, November 25th, 2008. And we now pass the floor to your speaker today, Mr. Akis Tsirigakis. Please go ahead, and thank you, sir. Akis Tsirigakis Thank you and good morning ladies and gentlemen and welcome to the Star Bulk conference call. I am Akis Tsirigakis. I am the Chief Executive Officer of Star Bulk Carriers. And with me today is George Syllantavos, our Chief Financial Officer. Now, please be advised that today’s presentation has been posted on our website at www.starbulk.com, where it is available to download if you so wish. As a reminder, this conference is also being website and is user controlled. To access the webcast, please refer to your earnings press release, which was disseminated last evening from the Web address, which will direct you to the registration page. If you do not have a copy of the press release or presentation, you may contact Nicolas Bornozis, at Capital Link, 212-661-7566, which is the phone number, and he will be happy to fax or email a copy to you. Now, I kindly ask you to turn to Slide two, to view our Safe Harbor statement. This conference contains certain forward-looking statements within the Safe Harbor provision of the Securities Litigation Reform of 1995 and investors are cautioned that such forward-looking statements involve certain risks and uncertainties, which may affect the Company’s business prospect and the result of operation. Such risks are more fully discussed in the Company’s filing with the Securities and Exchange Commission. I will pause for a second to allow you to read the Safe Harbor statement. Now, before turning the slide, I wish to point out that the Company has changed the method of accounting for dry docking expenses in early spring by adopting to expense the dry docking cost as they occur as opposed to the previous method of amortizing this cost over the period between dry docks. This simpler method is in line with SEC’s views as well. At this time, we also have a liquidity of over $50 million in cash, a moderate debt level compared to our peers and strong cash flow generation. We face no issues with our loan covenants and enjoy an excellent working relationship with our lending institutions. We don not have commitments to purchase newbuilding vessels or similar capital expenditures that would require us to obtain additional financing. Therefore, we are confidence in our ability to meet our financial commitments for the foreseeable future. Now, please turn to Slide three of our presentation to discuss our third quarter and nine months ended September 30th, 2008, financial results. For the third quarter net increase was $35.2 million representing $0.63 earnings per share basic and $0.62 diluted. Our cash flow per share was $0.53 basic and $0.52 diluted. Net income figure for the third quarter 2008 includes a gain of $1.02 million or about $0.02 per basic and diluted share in connection with the sale of the vessel Star Iota. For the nine months ended September 30th, 2008, net income was 483.5 million, representing $1.63 earnings per share basic, and $1.54 diluted. Our cash flow per share for the nine-month period was $1.29 basic and $1.22 diluted. Net income figure for the nine months ended September 30th, 2008, includes vessel impairment loss of $3.63 million or about $0.07 per basic and diluted share in connection with the sale of the vessel Star Iota. On November 17, 2008, we declared cash and stock dividend on our common stock totaling $0.35 per common share payable on or about December 1st, 2008, to stockholders of record on November 28th, 2008. The dividend payment consists of a cash portion in the amount of $0.18 per share with the remaining half of the dividend being payable in the form of newly issues common shares. The amount of newly issued shares would be based on the volume weighted average price of Star Bulk’s shares on the NASDAQ Global Market during the five trading days before the ex dividend days of November 25th 2008. Our approach to structuring our dividend in respect of the third quarter of 2008 in the form of cash and the remaining half in the form of newly issued shares conveys our continued belief in the financial health of our Company. This approach aims to continue to reward our shareholders while at the same time further reinforcing our financial position by conserving a significant of valuable cash, which can be redeployed to enhance shareholder value for the long term. As previously announced, management and our directors will reinvest all of their cash dividends into newly issued shares in a private placement, which further demonstrates ours as well as their confidence in the Company. Now, please turn to Slide four to review our fleet operating performance for the third quarter 2008. An average of 12.1 vessels were owned and operated earning an average time charter equivalent, or TCE rate as we call it, of $62,156 per day. Adjusted to exclude the effect of the amortization of time charters attached to vessels acquired at above or below market rates, the TCE rate for the third quarter of 2008 was $45,756 per day. Our fleet utilization on the basis of ownership days for the quarter was 92% and on the basis of available days was 98%. Please proceed to Slide five for another view of our Company. We became operational on November 30th, 2007, with an initial fleet of eight dry bulk carriers. Since then we have additionally acquired three Supramax and two Capesize vessels, and have sold one Panamax vessel. Currently, we have an operating fleet of 12 dry bulk carriers with an average age of approximately 9.5 years, and a combined cargo carrying capacity of 1,106,250 deadweight tons. Please turn to Slide six. We so far have achieved a 50% fleet growth since we commenced operations. Not only have we taken delivery of the initial eight vessels within a few months since the commencement of operations, we have since acquired an additional five vessels, and have sold one vessel, the Star Iota. In this context, we expanded our fleet from eight to 12 vessels without compromising our focus on maintaining moderate leverage and we have succeeded in securing what we believe are stable and predictable cash flows by entering our vessels in period employment. As mentioned, we also sold our oldest vessel, the Star Iota, a Panamax built in 1983, for $18.35 million, which we consider to be an attractive price for a 25-year old vessel. Following the delivery of the Star Iota to its buyers in October 2007, we have completed ten – sorry, eight I want to say – we have completed all deliveries of vessels for either purchase of sale to date. Through these transactions, we reduce the average age of the fleet to approximately 9.5 years and exceeded the one million deadweight tonnage mark, meaning that we have achieved a 62% growth in terms of deadweight. Please turn to Slide seven. This slide provides what we believe to be desired parameters for a value investor and we consider the Star Bulk with all of them. Therefore, we believe we maintain a strong position in the current turbulent market environment. Although (inaudible) proven track record, we believe that Star Bulk has one of the better set of fundamentals in the dry bulk sector and the ability to provide long term shareholder value. We believe our stock represents itself with strong upside potential. Now, please turn to Slide eight. This slide provides you with a shareholding structure. As of November 11, 2008, 81.3% of the Company’s common stock was owned by the public and about 18.7% by Star Bulk officer and directors. We have continued to implement our share and warrant repurchase program, having repurchased 977,000 shares of common stock year-to-date. There remains approximately $37.1 million of additional repurchasing capacity in the Company’s repurchasing plan. We continue to believe that at current trading levels of our common stock in the public market the deployment of a portion of available cash to repurchase shares remain an accretive proposition. If you can now turn to Slide nine, this slide provides our fleet employment chart. I won't get into the details as it is self-explanatory. However, I wish to mention that we maintain a diversified charter portfolio with no more than two vessels committed to any single charterer, thereby limiting our exposure to counter-party risk. We aim to further manage counter-party risk by communicating with our charterers in an effort to keep abreast of market development. Please turn to Slide 10. A high degree of time charter coverage depicted graphically here allows for visible and stable cash flows that significantly protect from market volatility that may arise. I would also like to add that under time charters the fuel cost is passed to the charterers. I believe it is important to mention also this fact because any volatility in today’s charter rates as depicted in the BDI or dry bulk Baltic Dry Index as we call it does not currently affect our revenue generation since our operating days are 100% contracted for 2008. Additionally, our operating days are 74% and 64% contracted for 2009 and 2010, respectively. Please turn to Slide 11. This slide provides you with our fleet time charter equivalent breakdown for the year 2008 and 2009 depicted graphically. Please note on this graph unfixed revenue days are estimated using current FFA rates. As you can see from this slide, and we believe it’s an important indicator of the health of our Company, is that our free cash flow for 2008 is 65% and for 2009 is 43.5%. Please proceed to Slide 12. We highlight our defensive strategically we I mentioned a short while ago. In summary, our minimized exposure to the volatile shipping market with the help of our high time-charter coverage, hedged counter-party risk with no more than two vessels committed to a single charterer, and a strong balance sheet, allows to feel very comfortable about the current position of the Company. I will now pass the floor over to our CFO, George Syllantavos, to discuss our financials. George? George Syllantavos Thank you, Akis. Good morning to everyone. Let us move now to Slide 14 for an overview of our balance sheet. As of September 30th this year our fixed assets amounted to $837.3 million and total assets amounted to $892.4 million. Non-current liabilities amounted to $314.1 million. Our stockholders’ equity was up at $520.2 million and total liabilities and stockholders’ equity totaled $892.4 million. We can now turn to Slide 15 to discuss our third quarter income statement. I must reiterate today we commenced operations during the fourth quarter of 2007. Therefore, we are unable to present a very meaningful comparison to our results between third quarter ’07 and third quarter of ’08. For the third quarter ended September 30th, 2008, voyage revenues amounted to $65.18 million and operating income amounted to $37.64 million. Net income for the third quarter of 2008 was $35.24 million, representing $0.63 earnings per share calculated on 55,873,973 weighted average number of shares basic and $0.62 earnings per share calculated on 56,971,504 weighted average number of shares diluted. Excluding non-cash items such as vessel impairment, amortization of fair value of below and above market acquired time charters and amortization of stock based compensation, our net income for the third quarter of 2008 would have amounted to $17.77 million or $0.32 earnings per share calculated on 55,873,973 weighted average number of shares basic and $0.31 earnings per share calculated on 56,971,504 weighted average number of shares diluted. I would like to add that the third quarter ’08 earnings reflect the effect of increased repairs expenditure for the Star Alpha. Moreover, the benefit of the high first year charter rates for the Star Cosmo and the Star Epsilon are not reflected in the financials since revenue accounting entries per U.S. GAAP are based on the average rate of each vessel’s three-year staggered rate schedule where the first year is the highest year and the last year is the lowest rate year in such schedule. Turning now to Slide 16, for the nine months ended September 30, 2008, voyage revenues without adjustments amounted to $166.1 million and operating income amounted to $88.53 million. Net income for the nine months ended September 30, 2008, was $83.54 million, representing $1.63 earnings per share calculated on the 51,201,845 weighted average number of shares basic and $1.54 earnings per share calculated on 54,200,802 weighted average number of shares diluted. Adjusted net income would have amounted to $38 million, representing $0.74 earnings per share calculated on the weighted average number of shares basic and $0.70 earnings per share calculated on the 54,200,802 weighted average number of shares diluted. I would now like to pass the floor back to Akis for the continuation of the presentation.

Thank you, George. I would like to make some comments on the general market conditions and some points on supply and demand for dry bulk shipping. Turning to Page 18, we begin with an industry overview. The supply side commenced to improve. Scrapping is back and in October 2008 we have had the highest monthly scrapping activity in five years. This amount equals the cumulative scrapping of the last 24 months and in fact the price of scrap metal on dollars per ton basis went down from in excess of $700 per ton to $100-$200 dollars per ton. Please turn to Slide 19. This slide highlights several significant factors that we believe will lead to bulk carriers supply constraints. Due to the current credit crunch, the newbuildings without time charter coverage are unlikely to get financed and therefore will not be built and even if they do they will have tighter financing terms. Additionally, massive order cancellations combined with financial difficulties have already lead some shipyards to bankruptcy with a likeliness of more to follow. We continue to believe that the credit crunch has a cleansing by eliminating speculative ordering of vessels and providing supply constraints. Please turn to Slide 20 where we provide you with a view of the confirmed and/or alleged newbuilding cancellations. To-date, 335 vessels, or about 36 million deadweight have been cancelled. As a measure of this aggregate is equivalent to about 53% of the 2009 orderbook with more cancellations expected to happen in the near future. In fact, we would not be surprised if that number more than doubled. Now, turning to Slide 21, we would like to highlight reasons why dry cargo movements are at a standstill. According to the World Trade Organization statistics 90% of the world trade are facilitated by letters of credit. Since banks are not issuing letters of credit and have literally stopped guaranteeing buyers’ performance this has resulted to shipments of dry cargo to literally stop. Once the issuance of letters of credit normalizes, we believe we will see cargo movement again and a market rebound. Moving to Slide 22, as you – as many of you may have already heard, China recently announced a $586 billion stimulus package of which 20% is planned and I emphasize the word ‘planned’ for fourth quarter 2008. More than 50% of that $586 billion package is earmarked for infrastructure development in China. This measure was taken by China to react to the global slowdown, encourage domestic consumption, and aim its growth rate at about 8% to 9% growth in 2009 if it will be materialized. I would like to add that the stimulus package represent about 15% of China’s GDP. Thank you. And I will now pass the floor over to the operator and if you have any questions, we would be happy to answer them.

Thank you very much indeed, sir. We now begin the question-and-answer session. (Operator instructions) From Cantor Fitzgerald, your first question comes from Natasha Boyden. Please ask your question, ma’am. Natasha Boyden – Cantor Fitzgerald: Thank you, operator. Good morning, gentlemen or good afternoon.

Good morning. Natasha Boyden – Cantor Fitzgerald: Just starting on some line items here on your income statement your vessel OpEx was substantial higher here than it was in previous quarters. Can you just tell us what was in that. Was any drydocking included in this number or what was included there? And what would be a good run rate to use going forward?

Alright, I guess, Natasha, you are looking at the vessel operating expense of $9.4 million, right? Natasha Boyden – Cantor Fitzgerald: Yes, exactly, versus last quarter 5.7 and the first quarter of 4.5.

Yes. Let me explain. Well, as you can see, on the drydocking side of things although we did repairs on the Alpha, that’s not mirrored in the drydocking expenses because those were categorized as repairs, upgradings. Therefore, our auditors thought that that should be part of the vessel operating expenses number. Out of that, therefore, out of that $9.4 million number $2.6 million-$2.7 million is associated with those repairs of the Star Alpha. Natasha Boyden – Cantor Fitzgerald: Okay, okay, so it was taken out of the drydocking line and put into vessel OpEx?

That’s right. That’s right. Natasha Boyden – Cantor Fitzgerald: Okay, okay, so that shouldn’t be in there going forward?

No.

That’s a one-time item.

That’s a one-time item. As you remember when we talked we have indicated that we have planned to stop the Alpha for some repairs due to its conditions as we had received it and as you know that repair went above and beyond our estimates there as we started looking into that quality of that – condition of the vessel. There – those expenses are within that number. That’s why it’s augmented by that amount. Natasha Boyden – Cantor Fitzgerald: Okay. But other drydockings in the future should fall back into the drydocking expense line item.

That’s right, that’s right. Natasha Boyden – Cantor Fitzgerald: Okay, great, great. That’s helpful. Thank you. And then on your G&A, you had some stock based compensation in the quarter. Do you expect 2.6 million to be a good run rate going forward?

No, I will tell you what. The 2.6 has some extraordinary items there. And let me briefly, quickly from the top of my head point them out. There is about $450,000 of stock based compensation attributed there. There is some extra cost due to our SOX – Sarbanes-Oxley advisory work we are doing for the end for the year. There are the cost for putting together – the legal cost for putting together the F-3 that we have put out there for the resale (inaudible) by Mr. Su of his – of his shares as per our original agreement with him. And some also legal expenses associated with that type of – that situation with F5 Capital. And also there is about another $200,000 associated with our move to the new offices and setting up during the third quarter of the year. So, there are quite a few one-time items there. Natasha Boyden – Cantor Fitzgerald: Okay. So, we are looking at more like sort of 1.7-1.8 as a better number going forward.

Yes, that’s the number, which is also actually the number here if you exclude those – these other numbers. Natasha Boyden – Cantor Fitzgerald: Okay great. That’s helpful. Thank you. Moving on to your dividend pay (inaudible) but can you explain your strategy regarding your dividend payout and share repurchase. What prompted your decision to alter your dividend payout strategy and then buy back shares as well and do you intend to maintain the dividend payout in the form of shares and cash and continue to buy back shares? Can you just explain that for us?

Well the share repurchase has mainly in the second and third quarter. Of course this dividend we have not had any additional share repurchases post dividend announcement. In fact not post October. So, regarding the structure of the dividend, of course we believe that we wanted to reward our shareholders for having earned let’s say that dividend. But at the same time we provide them with an upside potential with the shares that we give our investors because we do believe that the share price where it is today reflects – well the cash that we have on hand is almost a dollar per share. Therefore we believe that we could reward and have them participate in any upside of the share price.

Well, let me add to that maybe that it’s better understand. We – from the one side of things, Natasha, we thought that the third quarter dividend was let’s say earned because you make an announcement in November for something that’s happened in the July-September timeframe. At the same time, due to market conditions we felt that the stock was trade at some not logical yield levels and obviously the market thought this was junk stock. So we thought we were – plus also we know the following that on charter rate adjusted basis our NAV is at least double, more than double the levels where the stock trades today. Therefore we thought we give our shareholders a cash dividend that – a very attractive yield plus the stock dividend that will provide them the upside once the equity markets normalize and the stock starts trading in its normal actual levels vis-à-vis the value that it has in it. So we thought we made – we took a little of the old solution that in the long term would benefit shareholders and also have the Company keep about 11 – north of $11 million worth of cash, which can be very useful in order to – for some couple of opportunities as we move into this turbulent environment. Natasha Boyden – Cantor Fitzgerald: Right. Now was this a one-time thing?

This is the decision of the – I mean that’s in – what our next – the Board will decide next on the basis of the dividend, I don’t know. Natasha Boyden – Cantor Fitzgerald: Okay.

(inaudible) that issue. Natasha Boyden – Cantor Fitzgerald: Right. I guess what I am trying to get at is that this isn’t going to be – you haven’t decided that this is how you are going to pay the dividend that regularly going forward?

This was a decision for this particular quarter. Natasha Boyden – Cantor Fitzgerald: Okay.

And we have no decisions for the future.

That’s right. Natasha Boyden – Cantor Fitzgerald: Okay, great. Okay, thank you. And then just lastly, you do – obviously you’ve had already had one issue with one of your contracts, which we are well aware of. We don’t need to rehash here, but you do have some other charters that are well above where the current spot and period rates are. Have you had any other of you charterers come to you and try to negotiate any lower rates. Our second question are any of the other charterers looking or of course for concern for you in terms of them being insolvent in any way shape or form?

Well, we are communicating very closely with our charterers because as I said before we wanted to be abreast of developments and know how they are faring and how our charterers are viewed also in the market. That is one thing. However, if you ask me about the status and the financial status of my charterers or of any charterers in particular in this environment I would not really be able to make a sensible comment of any charterer. Natasha Boyden – Cantor Fitzgerald: Yes. I’ve just seen obviously rumors abound in this market about certain charterers et cetera, but I guess we don’t want to comment on that. Okay, alright, well I’ll hop off and I’ll let someone else go on. Thank you very much.

Thank you.

Thank you, Natasha.

Thank you. And now from Maxim Group your next question comes from Charles Rupinski. Please ask your question, sir. Charles Rupinski – Maxim Group: Yes, hello, good afternoon or evening.

Hi, Charles. Charles Rupinski – Maxim Group: Hey. I just – most of my questions have been asked. I just had a couple of quick ones. On the – on your balance sheet for September 30th, the vessel held-for-sale, the Iota, I am assuming, has all that cash been paid basically?

Yes. All the cash paid at the time of – we got – we have the 12% down payment when we put together the MOA and then the balance was paid on October 6th, I believe, when we delivered the vessel, yes. Charles Rupinski – Maxim Group: Okay. Other question, like so I am assuming you are just cash – restricted cash and the cash coming in from there of about $34 million. What roughly is your total cash balance as of today, roughly?

It’s about $50 million. Charles Rupinski – Maxim Group: 50, okay. Alright. Other quick question on the – and this is just a mechanical question, which I can do myself, but do you have a figure on how many share are going to be roughly going to be issued on this stock dividends?

No, we have the calculation going as we speak because that was based on last night’s closing on the (inaudible) I will send you an email, but this is probably in my office. When I go out I can send you that email. It’s been calculated right now because we have to feed the NASDAQ with the actual figure. Charles Rupinski – Maxim Group: Okay. That’s fine. Well thank you very much.

YOU are welcome..

Thank you very much indeed. And now from Stephens, your next question comes from Kevin Sterling. Please ask your question, sir. Kevin Sterling – Stephens Inc.: Good afternoon, Akis and George.

Hi, Kevin. Kevin Sterling – Stephens Inc.: Let me start with the ICI charter and (inaudible) where do things stand with possibly collecting from (inaudible)? Is this case an arbitration?

Well the case is in arbitration. The arbitration proceedings have initiated. We have assigned our arbitrator a couple of weeks ago. The other side assigned theirs late last week. And we are in those proceedings which are expected to take a few months here, but we are moving forward and we have Queen’s council advise that we are right and we are going to prevail and that’s how we are pushing it forward – the process will take its course and we’ll see what happens. Kevin Sterling – Stephens Inc.: Okay. Thanks. Akis, you mentioned letters of credit. You have pretty much bringing trade or lack of letters of credit bringing trade to standstill. Are you beginning to see some letters of credit come back to the market now or is it still pretty tight out there?

It’s very tight. I don’t know how to express it in numbers. I can mention a number of 65 vessels outside of Lagos, Nigeria, with cargo on board that cannot deliver their cargos because of lack of letters of credit. This is how it is out there. And those are for cargos that are on board ships. There are other cargos that are sleeping in the docks, not going on board ships because again of lack of letters of credit. This is how bad it is.

It will take some time.

But it will take some time. We were speaking with our – with banks lately. They said, yes, we have all this procedures in place and the funding that is required but just going through the internal procedures and releasing that credit to actual transactional level to the customer themselves will take weeks. So, we expect a little more time before the market normalizes in terms of the letters of credit. Kevin Sterling – Stephens Inc.: Okay. Thank you. You mentioned you are in compliance with all of your loan covenants. What are your loan covenants. I assume is it based upon NAV?

Well, there are various types of loan covenants in each how you call it loan agreement. I don’t think I could go on and describe them all on the call. But we are in compliance with them and we have been very closely cooperating with the banks to make them feel comfortable that we are indeed so. Kevin Sterling – Stephens Inc.: Okay. One last question here and this is just kind of an outlook question. With all the market turmoil, imagine it could create opportunities to buy second-hand vessels, which you’ve done very well in the past, and with your dry powder, are you guys still weighing options potentially buying some vessels maybe into 2009, particularly reduced prices, which we may see given the market turmoil?

Well, there is a possibility. What you might expect to see in this market environment is went from traditional shipping assets are very low charter hires are also low and may be the exercise does not appear very attractive in the first instance. However, most or at least 50% of the return traditionally in shipping has been made from the asset play point of view. We fully appreciate the fact that this is not something that the equity markets really like or appreciate, but this is how traditionally is with shipping and if one takes a long term view cannot ignore the asset play participation in the total recurrence. Now as far as we are concerned and this ties up a little bit with our bank – is in fact we have certain of our vessels debt free. And we are building also cash because the cash flow generation is pretty healthy in the Company. Therefore, if we see opportunities we won't miss them, I can assure you. Kevin Sterling – Stephens Inc.: Okay. And real one last follow-up question. You guys mentioned your stock is trading at a discount to NAV and I would agree with that, but it’s been (inaudible) the second – the ship brokers have started to stop quoting your second-hand vessel prices. Have enough deals been done lately so that – to calculate NAV I mean what have you guys seen in terms of vessel [ph] purchases and the kind of help understand NAV calculation in particular–

Well, I mean brokers are not helpful at this instance because there are not enough transactions out there. We conduct our own calculations of course from what we are seeing, but the problem is a selling problem because there are not enough transaction and it’s a buying problem too because the bank issue is hurting the bank side of the vessel SMB process. Regardless if vessel prices have fallen to where they were a couple of months ago, you still – it doesn’t really make sense or it still would like to have a portion in debt to acquire a vessel. And that not being readily there yet from the banking sector I think prevents the sector of having enough sales and purchases out there of vessels to have a clearer picture. I mean you should be a little bit more patient and maybe in the coming weeks things will clear up there too. Kevin Sterling – Stephens Inc.: Okay. Thank you, George. Gentlemen, thanks so much for your time today.

Thank you, Kevin.

Thank you very much. And your next question from Rockport Management comes from Peter Goldmark. Please ask your question, sir. Peter Goldmark – Rockport Management: Good afternoon gentlemen, this is Peter. I have a question, it’s sort of in two parts. Can you elaborate on the current very low valuation levels of Star Bulk and the dry bulk sector? And yes the second part of that is why is the market placing such a low valuation level on this sector and the Star Bulk – and Star Bulk in particular? Thank you.

Well, I would imagine on the – you are talking about the share valuation and in particular Star Bulk, I do not see the reason because I think we are all put in the same pot. We have just a valuation, if you base it on just on available cash, I think we are valued right now since the Company and not just our Company, just about all the companies in the dry bulk sector we are close to being bankrupt. Now that is clearly not the case and clearly not the case for Star Bulk. But this is the type of valuation levels that we see for the Company and we hope that is reversed. Peter Goldmark – Rockport Management: Hello, thank you.

Yes. Thank you. Peter Goldmark – Rockport Management: Okay. Thank you gentlemen.

Thank you.

Thank you, Mr. Goldmark. (Operator instructions) There are no further questions at this time. So we will now pass the floor back to Mr. Akis Tsirigakis for closing remarks.

Well, I would like to thank everybody for participating in the call. I do not think I have any additional remark and please remember to view our website for any updates on our Company or to ask further questions, should you have any, under our Investor Relations section. Thank you very much, again.

With many thanks to all speakers today, that does conclude our conference. But for those of you wishing to review this conference, the replay facility can be accessed by dialing the U.K. on country code +44-1452-550000 and the reservation number is 3128607 followed by the # sign. For those of you within the U.K. please dial 0845-245-5205 and again the reservation number is 3128607 followed by the # sign. Thank you for participating.