Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Second Quarter 2023 financial results. We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Simos Spyrou; and Mr. Christos Begleris, Co-Chief Financial Officers; Mr. Nicos Rescos, Chief Operating Officer; and Ms. Charis Plakantonaki, Chief Strategy Officer of the company. [Operator Instructions]. I must advise you that this conference is being recorded today. We will now pass the floor over to 1 of your speakers, Mr. Begleris. Thank you. Please go ahead.

Thank you, operator. I am Christos Begleris, Co-Chief Financial Officer of Star Bulk Carriers, and I would like to welcome you to our conference call regarding our financial results for the second quarter of 2023. Before we begin, I kindly ask you to take a moment to read the safe harbor statement on Slide #2 of our presentation. In today's presentation, we will go through our second quarter results, cash evolution during the quarter, an overview of our balance sheet, an update on fleet and operations, the latest on the ESG front and our views on industry fundamentals before opening up for questions. Let us now turn to Slide #3 of the presentation for a summary of our second quarter 2023 highlights. Net income for the second quarter amounted to $44 million, and adjusted net income amounted to $49 million or USD 0.47 per share adjusted earnings. Adjusted EBITDA was $96 million for the quarter. For the second quarter, as per our existing dividend policy, we declared a dividend per share of $0.40 payable on or about September 7, 2023. During this quarter, we bought back 307,439,000 shares at a cost of $6.1 million. Since 2021, dividend distributions and share buybacks exceed $1 billion or $10.5 per share. On the top right of the page, you will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $15,835 per vessel per day. Our combined daily OpEx and net cash G&A expenses per vessel per day amounted to $5,824. Therefore, our TCE less OpEx and G&A is approximately $10,000 per vessel day. Looking towards fleet renewal, we have agreed the sale of 5 Supramax vessels built in 2012 in China. Our opportunistic sale of these vessels, inclusive of trading profits produced during the period realized excellent…

Thank you, Christos. Please turn to Slide 6, where we provide an operational update. Operating expenses, excluding nonrecurring expenses were $4,772 for Q3 2022. Net cash G&A expense were $1,051 per vessel per day for the same period. In addition, we'll continue to rate at the top amongst our little peers in terms of Rightship safety score. Slide 7 provides a quick update and some guidance around our future dry dock and vessel efficiency upgrade expenses and a relevant total of 5 days. Our expected dry dock expense for the next 12 months is estimated at $33.6 million for the dry docking of 37 vessels, with another $96 million towards our vessel upgrade CapEx. In total, we expect to have approximately 960 off-hire days for the same period. In line with EEXI and CII regulations, we will continue investing in upgrading our fleet further with energy-saving devices and latest operational technologies deployed across the fleet aimed in improving our fuel consumption and reducing our environmental footprint, further enhancing the commercial attractiveness of the Star Bulk fleet. Regarding our ESP retrofit program, we have completed 21 vessels until today, and 12 more vessels are planned to be fitted by the end of the year. The above numbers are based on current estimates around dry dock and retrofit planning, vessel employment and yard capacity. During the second quarter, we have successfully completed onboard testing of carbon capture technology with the capabilities to retain up to 30% in net CO2 emissions. We will continue working on carbon capture technology with our industrial partners aiming developing a cost-effective solution, which can be selectively retrofitted in the future on select vessels of our fleet and within the scope of our carbon credit scheme. Finally, we're actively working on demand, supply and bunkering of carbon-neutral fuels to gel with the safety consideration and vessel design development with a particular focus on clean ammonia and in line with developing work taking place under the Iron Ore Consortium and the green corridors initiative. I will now pass the floor to our CFO, Charis Plakantonaki, for a near 3 update.

Thank you, Nicos. Please turn to Slide 8, where we highlight our continued leadership on the ESG front. Star Bulk remains committed to transparent reporting. For the first time, we have completed the measurement of the company's Scope 3 emissions, which will be reported publicly in our upcoming ESG report. We have also submitted Star Bulk questionnaire for the company's participation in the 2023 carbon disclosure project for a third year in a row. Following the increased decarbonization ambitions agreed for the industry during MEPC80 and with the inclusion of [indiscernible] we are enhancing our strategic planning to comply the greenhouse gas emission reduction regulations, both at an international and European level. On the societal front, we have created the first company blood bank through blood donations of our employees, and we're committed to supporting people with disability as well as contributions related to education and health in Greece. During Q2 2023, all our company employees attended mandatory trainings of cyber security to help create awareness on cyber risks and on the company's relevant policies and procedures. Star Bulk is also piloting new cyber technologies on its vessels to help monitor onboard systems and manage cyber risks for the fleet. As we are increasing the company's ESG commitments, the Star Bulk code of business conduct and its relevant policies, including whistleblowing in compliance with the UN Global Corporate Principles and the New Global Reporting Initiative standards. I will now pass the floor to our CEO, Petros Pappas, for a market update. Thank you for closing remarks.

Thank you, Charis. Please turn to Slide 9 for a brief update of supply. During the first half of 2023, a total of 18.6 million deadweight was delivered and 2.6 million deadweight was sent to demolition for a net fleet growth of 16 million deadweight or 1.6% year-to-date and 2.9% year-over-year. The supply outlook continues to be the best we have seen in the recent history of the dry bulk shipping. Uncertainty on future propulsion, high ship building costs and limited shipyard capacity until late 2025, have helped keep new orders under control. The order book stands close to record low levels of 7.4% of the fleet with 14.4 million deadweight reported as firm orders between January and June. Furthermore, vessels above 20 years of age stands at 8.1% of the fleet, while scrap prices have stabilized at elevated levels and should make demolition of overage and fuel inefficient tonnage an attractive option during seasonal downturns over the next years. The average steaming speed of the dry bulk fleet has corrected to a new record low level of 10.95 knots over the last month as a result of higher bunker costs, lower freight rates and new environmental regulations. We expect that the EEXI, CII regulations will increasingly incentivize slow steaming and help moderate supply over the next years. Over the last 5 quarters, global port congestion experienced a strong reduction from record highs that has gradually increased supply by approximately 5% and has put downward pressures on earnings over the first half. Nevertheless, changes in trading patterns and inefficiencies related to the war have normalized congestion slightly above pre-COVID levels and the market may find further support over the next quarters from seasonal strength in trade volumes. As a result of the above trends, net supply growth is unlikely to…

[Operator Instructions]. Today's first question is coming from Amit Mehrotra of Deutsche Bank.

This is Chris Robertson on for Amit. I just wanted to start on the updated drydocking schedule. It looks like it picked up since the last earnings call by a few hundred days. So I just wanted to drill into that a bit. Is that pulling forward some 2024 dry docking that was scheduled? Or is that due to just maybe longer time periods for installation of equipment? So I'm just trying to get an idea of why it's gone up?

Thank you, Chris, this is Nicos. We're basically accelerating some of the vessels into this quarter, and we're basically installing energy device a bit earlier due to the lower market instead of taking it for 2024. So it's basically more ships run and more days on specific dry docks.

Okay. Yes, got it. That's good. This is related to the use of proceeds from the vessel sales. So I wanted to ask about you guys looking at the net share count from the beginning of the year to the end of the quarter. It looks like net-net of repurchases, but also offsetting that the issuance of shares under the compensation program. It looks like the net share count is up around 326,000 year-to-date. So as we think about coming quarters, do you expect this net share count, will that increase further, do you think? Or will there be some opportunities here to use some of the proceeds from the vessel sales to more aggressively repurchase shares to offset any issuances remaining under the comp program?

Well, I don't think we intend to issue more shares under the comp program this year. We haven't issued yet the second batch of the shares, which is going to be issued in November.

It will be issued. Okay. So there will be some shares issued in November. Roughly how much?

So it should be to the tune of an additional 200,000 shares.

Okay. So that's it on the order of 200,000 shares under the comp program, less any buybacks that we might do.

The shares outstanding today is 103,183,510 and fully diluted with the -- shares remaining it's going to be 103,398,510. So it's approximately 210,000 remaining.

Okay. Last question for me is more market oriented. You extensively wanted to what's happening with China. I guess just looking at the rest of the world, what would be, in your mind, the most low-hanging fruit in terms of an immediate demand response other than kind of global GDP improving from here, what region or what sector do you think will have more of an immediate impact in terms of recovery?

Well, Chris, first of all, the reason behind the market falling to the levels that we're seeing today, I think, is that congestion plus -- the reduction of congestion plus the increase in deadweight did not -- was not covered by the reduction in the speed in the additional ton miles of -- that were produced during the first half of the year. So that actually ended up in being slightly negative. And I think this is one of the reasons we saw a slow market. Also, let's not forget that usually during the first half of the year, we see less trade in the second half of the year, and I think that our statistical analysis over the years shows that 46% of the first half of trade is done during the first half and 54% during the second half. So I think this is -- the reason why we didn't see a stronger market up to now. Going forward, I think that we've seen most of the negatives, we don't believe that congestion will fall much further than what we've seen. We think that the world economy is stabilizing and may turn around positively. Vessel supply is not going to be very strong in the next 18 months, especially 2024 is going to be a year where rather few vessels will be delivered. And particularly grain trade, we believe, is going to turn around and be much stronger during the second half. And because during the first half, we saw a reduction of about 4% of grain trade. We think that at the end of the year, it's going to turn positive. So these things are going to turn around. And we think that China is going to exert a stronger effort on the infrastructure side. And we think that coal will remain strong. We think will probably remain where they are, especially as oil prices are relatively high. We think that the weaker dollar is going to help trade because commodities are cheaper and freight is cheaper. So that induces more trade. We think that the ton mile inefficiencies will remain because even if the war stops, I don't think that Russia will start trading with Europe right away or with the West in general. We see a low iron ore inventory in China. And generally, as we don't see more negatives coming up, but we see more positives. So we have faith in the market for the remainder of the year and for 2024.

Yes. Definitely a lot of small things that add up for some, hopefully, incremental improvement from here.

The next question is coming from Omar Nokta of Jefferies.

Just wanted to follow up on the share buyback. I think you mentioned in the opening remarks that you've already spent about $13 million since receiving the proceed for the sales. And I just wanted to ask kind of given where things are at the moment, given your outlook and where the stock price is, that 140, if I recall, that remains -- what's your thought about -- how much of that are you kind of thinking you'd like to utilize towards the buyback versus, say, debt repayment?

Well, there are more possibilities than that, right? There's buybacks, there's debt repayment and then there the potential of renewal of the fleet. And all 3 of those are under active consideration.

Okay. And is there any -- I guess, there isn't really a preference at the moment, although I could since perhaps you did spend $13 million. So maybe there is a good amount of interest to buy the stock?

Well, as I say, I mean, we're considering all 3 uses, but there are some very interesting possibilities that may arise in terms of renewing the fleet as well. So that's not out of the question.

Okay. Okay. And you would be willing to do that with the cash proceeds you've received irrespective of where the valuation is on the stock?

Well, we'll take that into account. I mean, we're always looking out to do the best thing for the shareholders.

Okay. And then Hamish you mentioned another option, obviously, not with the proceeds, but you have sold the 6 ships recently. What are you thinking about further disposals from here? Anything on the horizon there?

Well, we think we got an excellent price for the ships we sold. And if we can continue to get similarly good prices, on shifts that we are happy to sell. I think we'll keep doing that.

[Operator Instructions]. The next question is coming from [indiscernible] of Bank of America.

I guess I just -- I want to start off with maybe 1 on just the outlook. I think earlier, the team alluded to expectations on grain trade turning positive. May I ask if that's more coming from lane dislocation or just the general expectation of macro recovery? And has the team seen any lanes being dislocated following the Black Sea corridor closure? And any noticeable call outs there?

I think it's a general positive feeling in the sense that the negatives have probably reached their low points, and the positives are still around. It's a macro and -- a combination of macro and micro, I would say.

I see. So a combination of like a broader GDP view as well as just ton mile description?

Yes.

Okay. And as my follow-up, I hate to be hitting the point again, but on the $140 million proceeds in terms of your capital view, I think there were mentions of Hamish brought up fleet renewal as a potential reduce of proceeds. Just wondering if maybe the team could clarify a little bit about how that would be likely expressed with this be true for the new builds? Or has there been any updates in terms of opportunity availability in the secondhand market? Just maybe expand a little bit on that.

Well, I think this is something we're looking into. And when we find an excellent opportunity, whether new building or secondhand we'll consider that along with considering debt repayment and stock buyback. We really haven't made a decision on the use of that $140 million at the moment. But at some point in the not-too-distant future, we will probably decide what to do with it.

Yes, it's Christos. Yes. And just to add to that, this is Christos. We are always open to also buy vessels using our shares, so that net asset value as we have done in the past. Now that's not the use of cash but it's definitely a use of our share capital in order to buy vessels and renew our fleet through self-acquisitions like the 58 vessels that we have done since 2018.

I see. And just to clarify, on the framework as to how you look at this, would it be safe to assume it's kind of based on an IRR mentality in terms of what return looks more attractive, like in terms of how you would aim to deploy the cash?

Yes. I mean basically, we look at the rate of return on capital and whether that is in excess of our cost of capital and cost of equity is appropriate.

At this time, I'd like to turn the floor back over to management for any additional or closing comments.

No further comments, operator. Have a nice vacation everybody, and thank you very much.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time, and enjoy the rest of your day.