Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Fourth Quarter 2020 Financial Results. We have with us Mr. Petros Pappas Chief Executive Officer; Mr. Hamish Norton President; Mr. Nicos Rescos Chief Operating Officer; Mr. Simos Spyrou and Mr. Christos Begleris Co-Chief financial Officers 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 that this conference is being recorded today. We now pass the floor to one of your speakers today, Mr. Begleris. Please, go ahead sir.

Thank you, operator. I'm Christos Begleris, Co-Chief Financial Officer of Star Bulk Carriers and I would like to welcome you to the Star Bulk Carriers conference call regarding our financial results for the fourth quarter of 2020. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on slide number two of our presentation. Today's presentation will focus on an overview of our fourth quarter and full year results, our cash evolution during the quarter, our operational performance, our future drydock and ballast water treatment system expenses and the latest industry's fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our fourth quarter 2020 financial highlights. In the three months ending December 31, 2020, TCE revenues amounted to $140.7 million, compared to $148 million for the same period in 2019. Adjusted EBITDA for the quarter was $81.5 million versus $88.3 million in the fourth quarter of 2019. Net income for the fourth quarter amounted to $27.8 million or $0.29 earnings per share, versus $23.5 million net income or $0.25 earnings per share in the fourth quarter of 2019. Our time charter equivalent rate during this quarter was $13,415 per vessel per day. Total cash today stands at $232 million with total debt at approximately $1.63 billion. A $30 million revolving facility is currently undrawn and this included pro forma in the above figures. As far as our recent vessel acquisitions are concerned, we have taken delivery of the three 2010 built Capesize vessels acquired from E.R. Capital and expect to take delivery of the seven Scorpio Bulkers vessels in March 2021, reaching a total of 126 vessels on the water on a fully delivered basis. Turning to slide number four. This is a summary of our full year 2020 financial highlights. Adjusted EBITDA for 2020 was $229.1 million versus $237.3 million in 2019. Net income for 2020 amounting to $9.7 million or $0.10 earnings per share, versus $16.2 million net loss or $0.17 loss per share in 2019. Slide five graphically illustrates the changes in the company's cash balance during the fourth quarter. The company started the quarter with $222.1 million in cash and generated positive cash flow from operating activities of $58.1 million. After including debt proceeds and repayments, CapEx payments for scrubber and ballast water treatment system installments, we arrived at a cash balance of $195.5 million at the end of the quarter. I would just highlight here that the reduction in our cash balance is due to the fact that during the fourth quarter we prepaid voluntarily the $30 million revolving facility which can be withdrawn at any time. Slide six. We demonstrate the changes in the company's net debt over the past year. In early 2020, the company started with an adjusted net debt of $1.52 billion, peaking in May 2020 at $1.54 billion and then continuously decreasing until today... [Technical Difficulty]

Excuse me, ladies and gentlemen, the speaker's line is just disconnected. Please hold the line while we reconnect the line. Thank you.

…where we summarize our operational performance. OpEx was $4,169 per vessel per day for the quarter and $4,122 per vessel per day for the whole of 2020. The increase was primarily due to increased crew expenses throughout the year, due to COVID-19 disruptions and crew changes. Otherwise, our vessels have operated largely uninterrupted during the second half of 2020, despite the COVID-19 pandemic. Net cash G&A expenses were $1,068 per vessel per day for the quarter and $1,035 per vessel per day for 2020. The combination of our in-house management and the scale of the group, enable us to provide our service at very competitive costs, complemented by excellent ship management capabilities with Star Bulk currently number one amongst our listed peers in terms of Rightship Ratings. Slide 8 provides some guidance around our future drydocks and ballast water treatment system expenses for 2021 and the relevant total of five days. The 2021 numbers are based on current estimates around retrofit planning, vessel employment and yard capacity. These figures incorporate our current understanding of present and future shipyard congestion. Since the beginning of the year, 10 vessels have enter drydock and five have already been retrofitted with ballast water systems. Our expected CapEx for 2021 is estimated at $20.9 million for the drydocking of 31 vessels, with another $23.2 million for the ballast water system CapEx of 23 vessels. In total, we expect to have approximately 943 off-hire days during the year. I will now pass the floor to our CEO, Petros Pappas for a market update and his closing remarks.

Thank you, Nico. Please turn to slide 9 for a brief update of supply. During 2020, a total of 48.8 million deadweight was delivered, and 15.4 million deadweight was sent to demolition for a net fleet growth of 33.4 million deadweight or 3.7%. Quarantine related to the coronavirus outbreak and complications on crew changes, created strong supply and efficiencies throughout the year, while freezing weather conditions during December disrupted port operations in the North Pacific and led to a record high congestion. New environmental regulations and uncertainties around the future vessel proportion are expected to keep dry bulk newbuilding activity under control over the next years. The order book decreased to a historical low of 5.8% of the fleet, with just 14.7 million deadweight firm orders, reported during 2020. Increased demand from ship breakers push scrap prices higher and made demolition of all the tonnage a more attractive option for ship owners. The IMO low sulfur regulation and switch to more expensive VLSFO led to a 0.3% decrease of average steaming speeds during 2020, despite the strong correction in crude oil prices at the start of the year. We expect that oil prices will increase as the global economy recovers from the pandemic and the higher bunker price environment to incentivize low steaming and improved scrubber savings. As a result of the above positive trends, net fleet growth is projected to correct, an average around 1.5% per annum between 2021 and 2023. Let's now turn to slide 10 for a brief update of demand. 2020 was a challenging year for trade as COVID-19 affected consumption and disrupted the supply chain of all dry bulk cargoes. According to Clarksons, total dry bulk trade during 2020 is estimated to have declined by 2.1% in tons with a negative effect concentrated in the…

[Operator Instructions] And your first question comes from Randy Giveans from Jefferies. Please go ahead. Your line is open

Hey gentlemen. How’s it going?

Hi Randy. Fine.

Good, pretty normal conditions for Houston and Athens, we’re both getting some snow here, but other than that, crazy times. All right. Can you provide a breakdown for 1Q 2021 quarter-to-date rates by your asset class? And then also just kind of bigger picture. Obviously Capesizes are still relative weak compared to Panamaxes right? Pan is about $20,000 a day Capes around $16,000, but the forward curves are obviously pointing to an inflection where Capes are going to outperform them. So kind of if you can talk on the current market why that is, Panamax are outperforming Capes and why you and the forward curve are confident that that reverses here in the coming months?

Thanks Randy. That's a lot of questions. First of all our coverage, our coverage for Q1 is around 50% for the Capes at a bit above $19,000 net. Our Panamax is 92% coverage at about $13,400 net. And our Supra coverage about 87.5% at about $12,750. Total coverage 75%, 76% at about $14,500. You asked why Panamax is doing better than Cape right now. We think that this is happening because there is a stronger soybean market in the U.S. because -- also because of the cold weather there's more coal in being moved at present. And especially because of the Australia-China situation, there is more imports from Indonesia and these imports are carried mostly on Panamax and not Capesize. Also, we see coal from Colombia, a lot of it on Panamax. And therefore, we see a lot of trade on coal and grains that is usually mostly Panamax cargoes. And that is why we've seen this squeeze, especially on the Panamax. Now don't expect to see $25,000 and $22,000 on the Panamax forever. Hopefully, will happen in the future, but it's not going to be a continuous thing. And for that reason today, you saw that rates have gone down. But generally, it's a very positive situation and the reason for that positive situation is what we call in this office ocean imbalance, ocean imbalance. And that is due to the fact that there's more exports from the Atlantic to the Pacific then the other way around. And therefore, when a cargo -- when cargoes are loaded in the Atlantic and go to the far east, these vessels have to come back. During the last couple of months, there's been very few vessels in the Atlantic, and that has squeezed the Atlantic a lot. And the charters instead of…

Yes, more than full. That was very impressive. Thank you for that. Now I guess following up on that briefly, how have the asset values been impacted by this kind of current market strength as well as in your view and others the optimistic outlook based on the strong FFA forward curve for the back half of this year and even 2022? And then any appetite from Star Bulk, specifically for additional acquisitions and maybe ships for shares now that your share price is closer to NAV?

We're always looking at attractive fleet acquisitions if we can arrange that as you've seen us do in the past.

And also if we find an opportunity, we will take advantage of it. We see a very, very positive future going forward. And as far as prices, I think, they have gone up by like 10%, 15%. And I expect them to go further up going forward.

And just on a completely separate note, let me just correct one error that we made in the presentation. We talked about $20.9 million of CapEx relating to dry docking and that should be $20.9 million of projected dry docking expense in 2021.

Got it. Okay. Thank you for that. And sounds good. Yes, FFA is 70 time still a pretty big disconnect between new builds and secondhand. So hopefully you continue to focus on those secondhands. Right. Thanks again. That’s it from me. I will go back to burning my furniture for once. Thanks.

Thank you, Randy.

Thank you. Your next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.

Thanks. Hi, everybody. I guess, Petros the first quarter bookings were stronger, especially, on the Capes stronger than I would have expected. I imagine that there's some scrubber benefits in there. If you can just kind of help us think about that dynamic.

Yes, there is some scrubber benefit in there. And going forward it seems that it's going to be higher because there was a part of the year that the differential was like $50 to $60. Right now it seems it's around $120 to $125. So I think it's going to be higher going forward. So I mean it depends how much a vessel burns. A vessel that burns, for example, 30 tons may make times 123 is 3,600 times about 60 -- 70% at sea should be $2,500 a day. So Capes more smaller vessels less. It will take us a few years to repay, I think about 3 years, 2.5 three years probably as things stand right now, which we think it's a decent return. Also, one thing I want to say is that during the last quarter as we usually do we did hedge part of Q1 and a little bit of Q2 as well and of course at lower levels than what we're seeing today. But Q1 this year has been totally different from the last 11 years -- 10 years. And we always had a little bit towards the last quarter to be on the safe side. Last year the rates were like $3,000. This year the rates are $15,000. So we missed out a little bit, but you cannot go all out and totally make it. So that's why you see average at $14,500 otherwise the coverage would be at $17,000 or $16,500.

Right. Yes, you guys usually do that in the first quarter. Yes. Okay. Christos, Simos can you just update us on the like the actual current share count? I don't usually ask that. The only reason I ask that obviously, you've done a few ship for share deals and I just want to make sure that we're having the actual exact pinpoint share count. And then the other thing I wanted help on. You gave us the dry docking days in the first quarter. But can you actually give us the total revenue days in the first quarter and the entirety of 2020 just because there's so many moving parts on the asset side?

Hi, Amit, this is Simos. We have as we speak today 99.2 million shares outstanding. And we have announced that on delivery of the seven Scorpio vessels, we will lease another three million shares. So pro forma for the delivery of the vessel is going to be 102 million shares 102.2 million shares outstanding.

Okay. And the revenue days?

The revenue days you should assume on a fully delivered basis 45,000 days per annum. Have we provided Nico the guidance on the price on the evolution over the year off-hires?

We can take it off-line if you need to. It's not a big deal.

Yeah. It's about 42,000 days for the 116 vessels, then about the 1,000 days in addition for the three E.R. vessels. And if we assume that everything is delivered for the Scorpio vessels by March 31, then it's another nine months times seven times 34.25. So it's another almost 2,000 days for the Scorpio vessels. And that's how you get to the 45,000 that Simos mentioned before.

Yeah. We have provided guidance of the off-hire days which are 462 days in Q1, 270 days in Q2, 183 days in Q3 and 30 days in Q4.

Great. Thank you. A couple of quick other ones, if I may. The – is the amortization schedule change from last quarter on the debt, or no is it still the same?

So basically with the acquisition of the three E.R. vessels, we basically add approximately $7.5 million of amortization per quarter.

And then the Scorpio?

And then on the Scorpio vessels, we add approximately $10 million more on an annualized basis. So it's $17 million more on an annualized basis from what we were before.

Got it. Okay. Thank you. And then the last, I guess, the more important question, I actually think your stock is now trading at or above NAV. I know NAV is a moving target with respect to gross asset values. You've obviously done, these really great ship for share deals. They've been pretty small when your stock was trading at a discount to NAV – struck at NAV. Aren't those deals now more frequent given your public equity value is actually at NAV or even above NAV? And can we just assume that you're going to grow significantly more as a result of this currency that you're benefiting from?

Well, Amit, making predictions is hard especially about the future, but we'll do our best.

Yeah. But Hamish, I'm going to press you a little bit on that. Have you gotten more inquiries related for ship for share deals as a result of this valuation you've gotten relative to NAV? Because I feel like we've been trying to get to this point for a long time. We're at this point now even a little bit earlier than maybe we would have all expected. Are you getting more inquiries on sellers that are looking to have liquidity that now you guys can provide in an advantageous way?

Well, look we're always getting inquiries. In fact in the past, it's been challenging to turn these inquiries into deals. We would hope that now we might be better able to turn an inquiry into a deal. But again, there are many, many obstacles always to doing a deal and so we'll just have to see what happens. We may get luckier now that our share price is higher, but there's no way to know for sure except to try.

Maybe the sellers want more money now than they did a few months ago. So the bid-ask spreads have widened out a little bit is that fair to say too?

Well, look all kinds – all kinds of things can happen. It's – you can't plan on deals happening. We just try to do our best.

Okay. Thank you very much, everybody. Appreciate it.

Thank you, Amit.

Thank you. Your next question comes from Ben Nolan from Stifel. Please go ahead. Your line is open.

Hey, guys. I want to start – well, the quarter was I think pretty good. And the guidance is I think pretty good for the portion that you have fixed in the first quarter at least particularly on the Capesize vessels. And obviously, you're optimistic with respect to the outlook. The dividend program that you had was ended up being a little bit short-lived but sort of given the fact that you're now back to or solidly within positive earnings and it sounds like you expect to be there. How are you thinking about the possible, I don't know reinstatement or getting back on track with respect to that dividend, or have your capital allocation thoughts shifted at all?

Well, Ben, the fact is our dividend policy is still in force. And the only real question is something that's a matter of Board discretion, which is how to treat the $115 million of cash that we added to our balance sheet basically through refinancing of debt and effectively additional borrowing. And the Board has discretion to treat that as counting towards our cash minimum level for the dividend or not. So far, they have elected not to treat that cash as counting towards the minimum balance for the dividend, but they have the capacity to change their mind. And let's see, what happens with the market.

All right. Fair enough. And Petros, I want to ask a little bit of a -- you expounded quite a lot on Randy's sort of market-related question. I wanted to dig in, on one of those areas a little bit if I could. You have these, it seems like increasingly everybody is talking about these EEXI regulations that are coming. And first of all, do you envision there being any direct impact on your fleet? I suspect not. But ultimately, can you maybe walk through, how you would envision that playing out, in terms of give and takes on the supply side?

The EEXI, I don't think, it's going to have much effect on the global fleet. The CII will have more of an effect. And the only solution there for a big number of vessels is going to be not the only, but the easier solution is going to be to slow steam. Now whether some vessels will have to slow steam so much, that charters will not want them. And therefore they won't be usable, this is possible, but it's going to be probably a small number of vessels. In my view, then there is going to be slow steaming. And that is going to help a lot the market. Now regarding our fleet, we're going through every single vessel. And we're taking whether it needs to slow steam and to what extent. And we will be ready for this -- for it in 2023, when it comes into action. Nicos, do you have anything to add on that?

The investigation is ongoing, as Petros said. We're examining, obviously the slow steaming impact from each of the vessels and other operational measures and especially optimizing steaming voyages voyage planning. That's going to play a big part in the future. Yeah.

And obviously, it's very bullish for charter rates, that you have much of the fleet slow steaming to perhaps a greater extent than it is today.

Right. Well -- and forgive my ignorance on this. And I appreciate that, scrubbers are primarily implemented for sulfur, whereas what we're talking about here is carbon. But under the new regulations, would there be any change in sort of fuel specs? And would there be any knock-on implications, as to the need or usage of scrubbers?

We don't expect any change on the use of scrubbers, for multiple reasons. One is regulation. And the systems have been installed, do enjoy grandfathering. Otherwise on specification of fuel, HSFO is still widely available. There have been some shortages during the pandemic, but everything is coming back online also with the oil prices going up. What is required is to continue monitoring the performance of the systems. But we don't foresee, any kind of change in the utilization of the systems on board.

I mean, the only change in fuel spec is that in theory you can use bio-fuels to help meet your carbon emissions requirements. But of course, when everybody is required to meet carbon emissions requirements, the supply of bio-fuels is likely to be woefully insufficient. I mean, it's available now, because basically you're not required to use it.

Right. Yeah. That's interesting. Okay. And then, lastly for me just sort of record keeping. As it relates to the two most recent transactions are there any lockup periods on the shares that are being issued?

No lockup period Ben, for the new shareholders, although, the share amounts that they're getting are relatively small, compared to our total number of shares.

Right. All right. That's it for me. Thanks guys.

Thank you, Ben.

Thank you. There are no further questions, at this time. [Operator Instructions] And we seem to have no further questions, at this time. I would now like to hand back the floor to management, for closing remarks.

No closing remarks, operator. Stay safe. And thank you very much.

That does conclude our conference for today. Thank you all for participating. You may now disconnect.