Thank you for standing by, ladies and gentlemen. Welcome to the Star Bulk Conference Call on the Fourth Quarter 2013 Financial Results. We have with us Mr. Spyros Capralos, President and Chief Executive Officer and Mr. Simos Spyrou, Chief Financial Officer 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 the conference is being recorded today, Wednesday, March 05, 2014. We now pass the floor to one of your speakers today, Mr. Spyros Capralos. Please go ahead, sir.

Thank you, Operator. I’m Spyros Capralos, President and Chief Executive Officer of Star Bulk Carriers, and I would like to welcome you to the Star Bulk Carriers' fourth quarter and 12 months 2013 financial results conference call. Along with me today to discuss our financial results is our CFO, Mr. Simos Spyrou. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on slide number two of our presentation. Since I know that you read very fast, now go to the downward slide number two. I would like to summarize our recent strategic initiatives as presented on slide number four. First of all, we have designed and executed an aggressive fleet expansion and renewal strategy with 11 fuel efficient newbuildings from top-class yards as well as opportunistic acquisitions of premium second-hand tonnage, at what is essentially the bottom of the drybulk shipping cycle. We secured compelling delivery slots in 2015 and early 2016 now worth $60 million $65 million above the contract price. We have adopted the flexible commercial strategy so as to maintain long-term spot market exposure taking full advantage of a market recovery as well as the savings from our fuel efficient new buildings. We have diversified the composition of our fleet by weighing more on larger vessels, which will benefit mostly from our broad market recovery due to the economies of scale they offer of a per ton basis and the increase in long-haul shipments. Furthermore, we have and we will continue to do so leverage our sponsor's vast experience in shipping, involving acquiring, operating and successfully disposing vessels along various stages of the shipping cycle, the benefits of the above span across various areas from access to first year shipyards to long-term relationships with charters and brokers. Finally, despite…

Thank you, Spyros. Let us now turn to slide number seven of the presentation for a preview of our fourth quarter 2013 and 12-month final to highlight in comparison to last year's. In the three months ended December 31, 2013, net revenues amounted to $17.3 million, essentially in line versus the same period of 2012. Net revenues represent our total revenues adjusted for non-cash items less voyage expenses. The reason we refer to our net revenues is because this figure nets out any difference in the number of voyage charters we performed in each period and therefore is directly comparable to other periods. Overall, we were able to partially benefit from the increasing spot freight rates during the fourth quarter of 2013 as certain of our charterers opted to redeliver the vessel to us at the latest redelivery date, the customary situation and the tightening freight markets. This was the case with one of our newest Star Polaris, which had an early redelivery date in the middle of October and the latest in the middle of January with the second being the actual date that was redelivered to us. Our adjusted EBITDA for the fourth quarter 2013 was $7.4, increased by 16.5% versus last year's respective figure. Overall, during the fourth quarter of 2013, the company had a marginal profit of $54,000 compared to a net loss of $1.4 million in the fourth quarter 2012. Excluding non-cash items, our net income for the fourth quarter amounted to $2.1 million compared to an adjusted net income of $0.3 million in the fourth quarter 2012. Our time charter equivalent rate during this quarter was $14,467 per day, compared to $14,969 last year. Our average daily operating expenses were $5,392 per vessel, compared to $5,730 during the same period last year, representing a…

Thank you, Simos. Please now turn to Slide 11, to give you a brief overview of our fleet profile. We currently own 17 drybulk vessels, 5 Capesizes, 2 Post Panamaxes, 2 Ultramaxes and 8 Supramaxes, with a total dead weight capacity of $1.61 million dead weight tons and an average age of about 8.9 years. As said earlier, we have a newbuilding program consisting of 11 fuel efficient eco-friendly vessels under order in first class shipyards, consisting of three Newcastlemaxes, two Capesizes and four Ultramaxes, with deliveries spanning between 2015 and early 2016. Upon full delivery of our newbuildings, we will own a total of 28 vessels from 17 vessels in the water today. The fleet is managed internally which provides full efficiency and transparency to our shareholders. Aside from the management to our own fleet, we also provide ship management services to 14 third-party vessels for a daily fee of $750 per day. On the bottom left graph, you can see that upon completion of our newbuilding program, we will have grown our total fleet under management that is including third-party vessels managed by us, to more than 3.8 million deadweight representing a 35% compounded annual rate of growth on deadweight basis from 2009. This figure is inclusive of an additional number of approximately 30 more third-party vessels that we expect to take under management until 2016. This will bring our operating fleet to approximately 70 vessels getting us the size to benefit from high purchasing power and economies of scale. Please turn now to Slide 12, whereby we try to provide some further color on our recent acquisition announced last week. The latest additions to our fleet 208,000 deadweight tonne Newcastlemax vessels, built by SWS, similar to the ones we already have on order with them. We believe…

Thank you, Spyros. If we can now turn to Slide 16, to summarize drybulk trade demand dynamics. As most of you know, iron ore and coal are the two most important commodities for the drybulk shipping accounting for more than half of the seaborne drybulk trade. On the top-right graph, you can see how Chinese crude steel production and Chinese iron ore imports have evolved in the last eight years. During 2013, Chinese iron ore imports have increased by 10% on the back of strong steel production growth and increased domestic to imported iron ore substitution. As we have explained in previous presentations, Chinese domestic iron ore is of very low quality compared to international commercial mining standards due to its low ferrous content: This trend has been consistent over the past 10 years with China producing iron ore of lower ferrous content year-on-year. The large part of Chinese iron ore production is non-competitive with high-cost breakeven, above $100 per ton due to small production scale, low quality of iron ore reserves and long distance from Chinese steel mills. On the other than, the major international iron ore exporters comprising mainly of Vale, Rio Tinto, BHP and Potash enjoy low breakeven price levels due to large scale of operations and high quality of iron ore reserves. Furthermore, substantial addition mining capacity of minimum 400 metric tons per annum is expected come on line until 2016, mainly by these companies. To put this into prospective, Vale alone has lined up an investment of 19 million metric tons per annum additional iron mining capacity to come on line in early 2016, a truly significant amount for a sold project. Overall, it is apparent that the international iron ore market will see substantial additional supply coming in from producers that have the ability…

Thank you, Simos. In conclusion, as you can see on slide 19, we believe that investing in Star Bulk offer certain distinct benefits. First of all, our fleet is poised to benefit from the drybulk market recovery, while we have the financial power to capitalize on any distressed opportunities that may arise. Secondly, our investments get exposure to superior assets with a diverse quality modern fleet, including 11 top-spec eco-newbuildings orders. Furthermore, we focus on what we do best. That is owning and operating drybulk vessels. While we have diversified our asset base to higher margin vessels such as Newcastlemaxes. The experienced fleet managers led by a Chairman, Mr. Pappas. We have expanded our shareholder base to our credit institutions, such as Monarch and Oaktree, clearly a vote of confidence in our transparent and efficient operations. Lastly, we posses strongly in-house ship management capabilities for which we take full advantage by managing third-party vessels as well. This activity generates riskless revenue, diversifying our consolidated cash flows. Furthermore, as the size of our operating fleet increases, we enjoy substantial economies of scale and cost synergies, benefiting both, the third-party vessels under management as well as our own vessels equitable. Overall, we believe Star Bulk has a good set of characteristics that bases among the most promising companies in the drybulk industry. This has been clearly demonstrated throughout this exciting year and we certainly look forward to continue along this path. In closing, I would like to thank our shareholders for their ongoing support and loyalty and we assure them that we will continue our efforts to ensure the company's long-term viability and enhanced shareholder value. Without taking any more of your time, I will now pass the floor over to the operator. In case you have any questions, both Simos and myself will be happy to answer them.

Thank you very much, indeed Mr. Capralos. (Operator Instructions). Your first question from Stifel Financial comes from Ben Nolan. Your line is now opened, sir.

Nice quarter, gentlemen. I have a few questions for you if I could. Number one, with respect to the most recent Newcastlemax it does seem to be nice deal both, in terms of the acquisition price and the financing. Could you just maybe walk me through how that deal originated? Were these vessels already ordered by someone else that were just where the order was walked away from or was this a speculative bill by the shipyard or is it a brand-new order to the fleet and how did you come by the terms that you did?

Okay, Ben. First of all, we also think that it was a very accretive transaction for us as it combines the high leverage as well as the options to be able to acquire those vessels anytime from now until 10 years from now and then we have the obligation to pay for them. Having done the cash flows and the calculations, we think that in today's market and also in the future market it leaves, if you add also the operating expenses for those vessels, it leaves a quite substantial for profit on the table. This deal, we benefited from this from the connections of our Chairman and that previous good relationship with the yard since we are constructing a lot of our vessels in this yard, so we managed to get those spots and I think this is important for the development of our fleet.

Okay. From a modeling perspective, these will be seen as I guess capital leases, correct? Rather than bareboat chartered and even though technically I suppose they are Bareboats, but you would depreciate them.

Yes.

All right. My next question related to sort of where, following this acquisition of these vessels, where do you see yourself standing from a liquidity perspective both, from the remaining equity that you need to pay for your newbuildings, but then also additional capacity to grow? I mean, could you maybe walk me through where you believe that to be and any additional financing you may be able to get or anything like that sort?

Ben, this is Simos. As we said earlier, we have currently $52 million on our balance sheet and we do not any remaining CapEx for 2014. Actually all our CapEx requirements are for 2015 and 2016. Assuming 60% debt financing on the acquisition of the older price of newbuildings, which to ourselves seems that it is conservative. The remaining equity CapEx for 2015 is $77 million. For 2016, it's $50 million, so over all its $92 million. Basically, your model, you can see the cash flow generation for 2014 and 2015 and estimate if and when will be need of new equity raise.

Okay, so by and large, I guess you should be able to fund that out of cash on hand and cash flow, but there may be at some point you need to do a modest equity raise. Is that how to think of it?

Depending on the market conditions and freight rates are going to be and our cash flow generation, yes.

Sure. Okay. All right. Then last question. Obviously, as of late, we have seen an improvement in asset values really in the past month, how do you come out with respect to being a buyer at these levels? Do you feel like there's still substantial value in addition to where we have moved such that you would still be a buyer right now or do you feel like it could afford to cool off a little bit first. I mean, where do you see the market from a acquisition standpoint?

Usually, we do not like to buy in a market when there is frenzy with a asset prices. I think we did our move; we placed our orders for newbuildings at the right time before the markets picked up. We felt that there were some good deals out there and we acquired Japanese Ultramaxes as well as the Post Panamaxes. We are there. If we find, then we think there is a good business opportunity then we may do a deal, but not just for the sake of doing a deal, because what is the [interest] versus the bottom line.

Sure. Okay. That's helpful across the board. I appreciate and again, congratulations on nice quarter.

Thank you, Ben.

Thank you, Mr. Nolan. Now from Maxim Group, your next question comes from the line of Noah Parquette. Please go ahead, sir.

Hi, guys. Just a follow-up on Ben's question about being buyers at these levels, you touched on it, but can you maybe give a little bit more detail about how you see the dividend being part of how you return capital to shareholders. I imagine won't be until more of your ships are delivered, but can you tell us more about what you want to see in the market when you are more comfortable with that.

Good morning, Noah. Basically, we believe that first of all, we need to see a much firmer market where chartering rates will be at higher levels than what we are experiencing and that's why we have most of our fleet in the spot market, because we believe that rates will continue firming. When we would feel comfortable with the rates and when we see the upward potential is not there anymore, then our risk assessment will be chartering some vessels longer term and making sure that the cash flows will be there. At that time, we will able to start considering bring back capital to our shareholders.

Okay, so it would be safe to say once we start seeing you sign charters for - fixed ships and more of the vessel they delivered then time [is at hand].

That's correct, because right now, we still see a growth potential. We see that that we have many vessels that will come. In the water, we have 11 newbuilding vessels that will come into water in 2015 and beginning of 2016. Therefore, I think and the market we think has a good potential for further growth into chartering rates.

That makes sense. Then I guess, just quickly you have the Star Mega older Capesize that comes out charter later this year. What are your thoughts on what to do with them?

Yes. When the charter rates will finish and then we will put all the details on the table about when is the next dry docking view, how the market will be at that time. We think we will be at least trading that vessel until the time for the next drydock and then we will decide what we are going to do. We may even sell both vessels at that time when the charters expire.

Noah, Star Mega had the earliest delivery day this year. We see a further tightening in the market. Charters might decide to opt for the latest delivery, which is January 2015, depending on where the market is going to be at that time.

How much of a discount of a ship of that age get versus a 2012 built or something [ship].

It has about 10% to 15% discount.

Okay.

It depends always up to time with availability and of course charters prefer to in some cases even if the discount is not there to keep vessel that they already know they have been trading for quite some time and therefore we don't know whether they will decide and how the market conditions will be at that time, whether that will keep or not.

Okay. Thanks again.

Thank you.

Thank you, sir. Now from Morgan Stanley, your next question comes from Fotis Giannakoulis. Your line is now open, sir.

Yes. Hi, gentlemen. I also want to ask about your new customer acquisition. If you can give us a little bit more background led you to such an acquisition. Obviously, the financing looks very attractive to you, but how did this opportunity come true to you and why did you choose to buying Newcastlemaxes.

Thank you, Fotis, and good morning. We have already ordered Newcastlemaxes from that same yard, SWS, which is one of the most reputable yards in China. When these came, as a deal that we could be part of it, we opted to proceed, because the financing was very advantageous and this deal gives a lot of opportunities to us and the option to acquire this vessel within the 10-year period. Looking at the financials, even though the credit terms of the spread that we are paying the financial cost is higher than what we would normally pay non-commercial loans, we thought that the acquisition price of $59 million and $56.5 million for the other one as well as all of the total cost involve makes it advantageous. If we are proven right that the market will become stronger for these class of vessels. We like Newcastlemaxes. We think that in the future Newcastlemaxes will be the winners in these Capesize segment and that's why we proceeded to do it, and because we found that the those had deliveries late '15 and early '16. That has helped our decision, because these days it's very difficult and very rare to be able to get some quality yards deliveries at those early days.

Thank you Spyros. Little bit more about Newcastlemaxes. We have seen other companies ordering these vessels, but the deals that we have seen, they always have some time charter for a number of years. How is the spot market for Newcastlemaxes? How shall we think the revenues? Besides it sounds pleasantly surprising of a acquisition price is very similar to Capesizes, but is there any premium that we should consider and also how do operating expenses of a new newbuild - Newcastlemax compared without the Capesize.

I will start with easy part, which is the last part of the question. We expect Newcastlemaxes to have similar operating expenses as the Capes, but now on the revenue potential, and because also these Newcastlemaxes are also with modern designs and therefore there will be more advantages to the existing CapEx, but on the revenue potential, we haven't seen how much the market is willing to pay as a premium versus the Capes yet. We know that there is demand for such vessels, but still in questions whether we would be willing to time charter them for a long periods from now, our answer is no, because we think that we can have later on higher prices on what the market is experiencing today.

Regarding the spot market, is there liquidity enough for such vessels to operate with highest utilization like Capesizes?

Right now, there are not many such vessels in the water, but we think that because they can go to the same ports that Capes can go, we think that that's why they will have a higher and better potential, because they carry exactly the same and they can do exactly the same trades, carrying larger quantities of iron ore and coal.

Thank you, Spyros. One question about the market, we have seen conflicting signals for the iron ore market at the beginning of the year. On the one hand, the imports in China look quite strong. On the other hand, inventory of course are arising and steel production is uncertain. How do you view the steel market in China and do you see that there are any risks over a slowdown in steel production in China that could have an impact for Capesize in the drybulk market in general.

This is a many million dollar question, Fotis. It's very difficult to know exactly what will happened with China. Of course there are different views and we see and we analyze daily all those numbers that we see from China. Obviously, the market has picked up in the last two days which means that there is more demand for vessels, especially on the Capesize, which is most volatile of all the drybulk segments, but of course it's - things show that despite the slowdown of China, there is going to be still more imports coming in China, due to the poor quality of the domestically produced iron ore as well as the coal, but nobody can quantify exactly how much it's going to be substituted. It has to also do with the prices of iron and steel and of course we believe that long-term still China will be a continuing, growing importer of iron ore.

One last question and it has to do mainly with your relationship with your two major shareholders with Monarch and Oaktree. I understand that Oaktree has a separate fleet that is growing fast. First, how do you view the management income from operating the vessels of your major shareholder? At what levels this income can increase the next couple of years. Second, if you have initiated any discussions of potential expanding your asset base with vessels. They are right now in the hands of Oaktree.

We enjoy a very good relationship with Oaktree and Oceanbulk and that's why we are managing their vessels and we are doing I think a very good job, the same way we are treating their vessels as we treat our own vessels, and of course it’s a business that requires a lot of attention, effort and people and that's why actually we get paid the $750 per vessel which covers the costs and I think that the long-term when we will be getting many of their vessels, because right now we only have 11 of their vessels. The other three are from other third-party that we manage, so the moment we get more vessels in the water, I think that we leave also some money with some money on the table for us, but this is not the most important thing. We think the most important is that we manage to achieve synergies and economies of scale, we managed to make better deals with all of our suppliers and gives us a much bigger powder to be able to negotiate and have better deals that improve not only the managed vessels performance, but also our own vessels because everybody benefits from that. For example, at year end, when we get rebates from suppliers for certain categories of goods, those rebates are attributed according to the own fleet as well as to the managed fleet and that gives benefits to all parties and that's why I think that we enjoy a very good relationship with Oaktree and we continue managing that.

Regarding potential transaction with the Oaktree fleet?

We are always there exploring all kind of transactions and opportunities in the market, therefore right now right now there's nothing more I can say. We are looking at everything.

Thank you very much, Spyros.

Thank you very much Fotis. As there are no further questions, I'll pass the floor back to Mr. Capralos for closing remarks.

Thank you all for joining us today for our earnings conference call and we will look forward to your attendance in the next call with our first quarter 2014 results towards the end of May. Just before Posidonia. Thank you, all, and have a good day.

With many thanks to both our speakers today, that does conclude the conference. Thank you for participating. You may now disconnect. Thank you, Mr. Capralos.

Thank you.

Thank you.

Thank you, Mr. Spyros. Bye, bye.