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Star Bulk reports Q3 loss, delays four newbuilding deliveries

Star Bulk reports Q3 loss, delays four newbuilding deliveries
Athens-based Star Bulk Carriers has sank to a third quarter loss and come to an agreement to defer the delivery of four newbuilding bulker carriers.

In the quarter ended 30 September 2015, Star Bulk posted a loss of $41.97m compared to the slim profit of $221,000 in the same period of 2014.

The poor third quarter result was mainly due to a loss on sale of vessel and loss on derivative financial instruments, as well as larger voyage and vessel operating expenses.

The third quarter loss came despite a revenue jump of 86.9% year-on-year to $68.81m due to an increase in its average number of vessels to 71.2 from 31.5 in the year-ago period.

“The weak dry bulk market conditions have impacted our top line, while our operating results were affected by dry docking costs of $6.2m. Our bottom line has been affected by non-cash losses of $12.5m related to the sale of three of our on-the-water vessels, as well as the reassignment of one lease agreement to a third party,” explained Petros Pappas, ceo of Star Bulk.

“On the capex side, we have recently come to an agreement to defer the delivery of four newbuilding vessels from the fourth quarter of 2015 to 2016, preserving our strong liquidity position and increasing their resale value,” he continued.

As at 17 November, the company has deferred $464m of capital expenditures from 2015 to 2016 and delay vessel deliveries by a total of 105 months.

“Year-to-date we have disposed of eleven 90’s built vessels that did not fit our commercial profile, as well as one modern vessel for which we could realise a relatively firm value compared to the market,” Pappas said.

“During the third quarter of 2015 we have disposed of three vessels, while one more vessel was sold in October of 2015 with total net proceeds of $19.5m after repayment of relevant debt facilities.”