EMEA News
Star Bulk: Discipline in 2016 and 2017 is Key for Dry Bulk Recovery
New York-listed Star Bulk Carriers Corp. [NASDAQ:SBLK] (Star Bulk) Tuesday reported large financial losses for 2015, along with a series of newbuild cancellations and deferments, after what it said was "the most challenging market for dry bulk shipping over the last 30 years."
The company did however report increased revenues for the year, rising to $234.3 million in 2015 compared to $147.4 million in 2014, but losses were far larger as well.
Overall the company reported a net loss of $458.2 million for 2015, compared to a loss $11.7 million in 2014.
“On the newbuilding front, we have reached agreements with our ship building yards and our lease financing institutions not to take delivery of 4 vessels," said Star Bulk CEO Petros Pappas.
"In addition, we have agreed to adjust the remaining CAPEX obligations for the remaining vessels under construction, saving in aggregate $223.1 million of CAPEX. We have also agreed to defer $188.0 million of CAPEX obligations for 5 Newcastlemax vessels from 2016 to 2017‐2018."
The historically dire conditions for dry bulk have been well reported, and Pappas said they were the most challenging over the last 30 years, "with lacklustre demand and persistent oversupply."
With rates having fallen even further so far in 2016, Pappas nevertheless struck a positive chord on the future outlook.
“Overall, the measures that we have taken to strengthen our balance sheet and improve our liquidity position during the last months, through equity raisings, vessel disposals and cancelations, delivery deferrals, purchase price reductions and cost cutting efforts are over $660 million," he said.
“It is encouraging that the ship owners’ response to the challenging market through supply adjustment has been unprecedented. In the first two months of 2016, approximately 9 million dwt has been sold for demolition, compared to 30 million dwt for the full year of 2015.
"Owners discipline in 2016 and 2017 is key for a sustainable dry bulk recovery.”
In January of 2016 Ship & Bunker reported that Star Bulk's stock was in danger being de-listed from the NASDAQ stock exchange for breaching certain listing requirements.
