Star Bulk Carriers Q4 2025 Earnings Report

Star Bulk Carriers EPS Results

• Actual EPS: $0.62
• Consensus EPS: $0.52
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: N/A

Star Bulk Carriers Revenue Results

• Actual Revenue: $230.79 million
• Expected Revenue: $250.51 million
• Beat/Miss: Missed by -$19.72 million
• YoY Revenue Growth: N/A

Star Bulk Carriers Announcement Details

• Quarter: Q4 2025
• Date: 2/25/2026
• Time: After Market Closes
• Conference Call Date: Thursday, February 26, 2026
• Conference Call Time: 11:00AM ET

Star Bulk Carriers (NASDAQ:SBLK) is a global dry bulk shipping company that owns and operates vessels used to transport major and minor bulk commodities. Its fleet serves the international supply chains for iron ore, grain, bauxite, fertilizers, steel products and other dry cargoes.

The company operates a diversified fleet that includes large Capesize and Newcastlemax vessels as well as Panamax, Ultramax and Supramax bulk carriers. Star Bulk’s vessels serve customers and ports across major shipping routes worldwide, supporting commodity trade between producers, exporters and end markets.

Star Bulk Carriers was founded in 2006 and is headquartered in Maroussi, Greece, with the company incorporated in the Marshall Islands. In 2024, it completed its combination with Eagle Bulk Shipping, expanding its presence in the larger and smaller segments of the dry bulk market. Petros Pappas serves as chief executive officer.

Star Bulk Carriers Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Star Bulk reported solid Q4 results with adjusted net income of $74.5 million (adjusted EPS $0.16) and adjusted EBITDA of $126.4 million, while continuing active shareholder returns including a $0.37 Q4 dividend and ongoing share repurchases.
• Positive Sentiment: The company ended the quarter with strong liquidity — roughly $502 million in cash, an undrawn $110 million revolver and approximately 27 debt-free vessels with an aggregate market value near $630 million, providing material financial flexibility.
• Positive Sentiment: Operationally efficient platform: fleet-wide TCE of about $19,012/day, daily operating expense plus G&A near $6,444/day and a pre-debt/pre-CapEx cash margin of ~$12,570 per vessel, alongside ongoing fleet upgrades (55 of 80 ESD installs completed, telemetry on 121 of 126 vessels) and eight Kamsarmax newbuilds due in 2026.
• Neutral Sentiment: Market outlook is cautiously constructive: net fleet growth was ~3% in 2025 with a modest orderbook (12.8% of fleet) and demand projected to rise ~0.6% in tons and ~1.9% in ton-miles in 2026, but near-term uncertainty persists due to IMO Net‑Zero postponement and variable commodity cycles.
• Neutral Sentiment: On ESG and regulation, Star Bulk has hedged compliance risk by entering a pooling agreement to cover its 2026 CO2 deficit, achieved a RightShip average GHG rating of C, and is investing in efficiency, connectivity and AI tools to reduce emissions and improve performance.

Presentation

[Operator]

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Fourth Quarter 2025 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, Constantinos Simantiras, Head of Market Analysis, and Mrs. Charis Plakantonaki, Chief Strategy 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, at which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded.

[Operator]

We now pass the floor to one of your speakers today, Mr. Spyrou. Please go ahead, sir.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today. I'm Simos Spyrou, Co-Chief Financial Officer of Star Bulk Carriers. I would like to welcome you to our conference call regarding our financial results for the fourth quarter of 2025. Before we begin, I kindly ask you to take a moment to read the safe harbor statement on slide number two of our presentation. In today's presentation, we will review our fourth quarter 2025 company highlights, financial performance, capital allocation initiatives, cash evolution during the quarter, operational performance, our continued investments in the fleet, developments on the regulatory front, and our perspective on industry fundamentals. We will then open the floor for questions.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

Turning to slide 3. The fourth quarter was characterized by solid profitability, disciplined capital allocation, and continued balance sheet strength. For the fourth quarter of 2025, our net income amounted to $65.2 million, while adjusted net income reached $74.5 million or $0.16 adjusted EPS. Adjusted EBITDA was at $126.4 million, demonstrating the strong cash generating capacity of our platform, even in a moderate rate environment. We continued to actively return capital to our shareholders. During the fourth quarter, we repurchased 1.2 million shares for a total of $22.7 million. Year to date, during the first quarter of 2026, we have repurchased approximately 1.9 million shares, totaling $37.9 million.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

In addition, our Board of Directors declared a $0.37 per share dividend for the fourth quarter, payable on March 19th, to all shareholders of record as of March 9th, 2026. Our balance sheet remains a key strategic advantage. Total cash and cash equivalents are approximately at $459 million. Outstanding debt is approximately at $1 billion. We have an undrawn revolving capacity of $110 million. Importantly, we also have 27 debt-free vessels with an aggregate market value of approximately $630 million. This unencumbered asset base provides substantial financial flexibility to fund growth opportunities as well as, and downside protection.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

To further enhance shareholder value, we have taken the following capital allocation actions. Dividend policy. Going forward, we intend to distribute 100% of our free cash flow, subject to maintaining a minimum cash balance of $2.1 million per vessel, while preserving a minimum quarterly dividend of $0.05 per share. We have also authorized a new $100 million share repurchase program on substantially the same terms as the prior program. This dual track approach, dividends plus opportunistic buybacks funded from vessel sales, allows us to dynamically allocate capital depending on the market conditions and the discount or premium of our shares relative to the intrinsic value.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

These initiatives reflect both our confidence in the company's forward cash flow visibility and our commitment to maintaining a competitive and sustainable capital return profile. On the top right side of slide number 3, you can see our per vessel daily performance metrics for the quarter. Time charter equivalent came at $19,012 per day per vessel. Combined daily operating expenses and net cash G&A expenses at $6,444 per day per vessel. This results in a daily cash margin of approximately $12,570 per vessel per day before debt service and CapEx. These numbers highlight the operating efficiency of our platform and our ability to generate meaningful cash flow, even at mid-cycle rate levels.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

Slide number 4 summarizes our capital allocation track record over the last five years. Since 2021, we have executed approximately $3 billion in value-enhancing actions, including dividends, shares repurchases, and debt repayment. During this period, we have returned $13.49 per share in dividends, representing approximately 55% of our current share price. We have reduced our total net debt by 47%, bringing leverage to a level where it's below 65% of the current demolition value of the fleet. At the same time, we expanded the fleet opportunistically through accretive fleet acquisitions, issuing equity at or above NAV, thereby increasing scale while protecting per share value. The result is a larger, more efficient platform, with materially lower financial risk and significantly enhanced free cash flow per share potential.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

Slide number 5 illustrates the movement in our cash balance during the fourth quarter. We began the quarter with $457 million in cash. We generated $101 million in operating cash flow, and after-sale proceeds, debt drawdowns and repayments, CapEx payments related to new buildings installments, and energy-saving devices and ballast water treatment systems, share buybacks and the fourth quarter dividend payment, we ended the quarter with $502 million in cash. This sequential increase in cash underscores the strong internal cash generation of the company, even after substantial shareholder returns and investment in fleet upgrades.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

Slide number 6 highlights the inherent operating leverage embedded in our business model. With approximately 49,500 fleet available days per annum, and based on the current next 12-month FFA curve of approximately $18,500 per day on a fleet-wide basis, the company would generate approximately $2.7 per share of free cash flow, representing at almost 11% implied cash flow yield. The slide illustrates the strength of our platform on a rising market. Every $1,500 per day fleet-wide increase in our TCE equates to an EBITDA increase of $73 million. This would translate to $0.65 per share of incremental dividend to our shareholders, given our existing approach to distributions.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

In summary, during the fourth quarter, we delivered solid profitability, strengthened our liquidity position, continued to delever, returned meaningful capital to shareholders, and preserved significant optionality for future capital allocation. Our balanced resilience, operating efficiency, and disciplined capital allocation framework position us well to navigate market volatility while continuing to enhance per share value.

[Simos Spyrou, Co-CFO at Star Bulk Carriers]

With that, I will now pass the floor to our COO, Nicos Rescos, for an update on our operational performance and the continued investments we are making in our fleet.

[Nicos Rescos, COO at Star Bulk Carriers]

Thank you, Simo. Please turn to slide 7, covering our operational performance. We continue to run one of the most cost-efficient platforms in the dry bulk sector. Daily operating expenses for Q4 came in at $5,045 per vessel, and net cash G&A at $1,399 per vessel, both among the lowest in our peer group, as illustrated. Importantly, this operational cost discipline has not come at the expense of quality. Star Bulk continues to rank at the top amongst listed peers in RightShip safety scores. Moving to Slide eight, we outline our fleet-wide investment program. On the new building front, all eight of our Kamsarmax new buildings are on track for delivery during 2026, with $206.6 million of CapEx remaining.

[Nicos Rescos, COO at Star Bulk Carriers]

Financing is well advanced. We have secured $130 million of debt against the five Qingdao vessels and expect a further $74 million against the three Chengxi vessels. On vessel upgrades, we made meaningful progress during 2025, fitting 13 additional vessels with energy-saving devices and six with high-efficiency propellers. In total, we have now completed 55 out of 80 ESD total installations across the fleet, and with another 14 planned for 2026. We have also nearly completed our telemetry rollout, with 121 out of 126 eligible vessels, now retrofitted with digital monitoring equipment. The top right of the page shows our CapEx schedule, illustrating both the new building payments and our vessel efficiency upgrade spending, alongside the corresponding debt financing.

[Nicos Rescos, COO at Star Bulk Carriers]

At the bottom, you can see our expected drydock schedule for 2026, which totals approximately $55.6 million, with around 1,585 of our days for the full year. Turn to slide 9 for our fleet update. We'll continue to optimize our fleet through selective disposals, prioritizing the sale of older, non-ECO tonnages to reduce our average fleet age and improve overall efficiency. During Q4, we delivered three vessels to their new owners, two Supramaxes and a Panamax, Star Runner, Star Sandpiper, and Star Emily. In December, we agreed to sell Star Stonington, an Ultramax, which was delivered to their new owners in February. Looking into Q1 2026, we have committed two additional older vessels for sale, an inefficient Capesize and a Kamsarmax, Star Scarlett and Star Mariella, with deliveries expected in April.

[Nicos Rescos, COO at Star Bulk Carriers]

We'll continue to maintain seven long-term chartering contracts, which provide commercial flexibility across market cycles. Star Bulk operates one of the largest dry bulk fleets among U.S. and European listed peers, with 141 vessels on a fully delivered basis, an average age of approximately 12.1 years.

[Nicos Rescos, COO at Star Bulk Carriers]

I will now pass the floor to our Chief Strategy Officer, Charis Plakantonaki, for an update on recent global environmental regulation developments.

[Charis Plakantonaki, Chief Strategy Officer at Star Bulk Carriers]

Thank you, Nico. Please turn to slide 10, where we highlight our progress across ESG priorities. Despite the one-year postponement of the IMO Net-Zero Framework in October 2025, we remain committed to our strategy to reduce greenhouse gas emissions from our fleet's operations. Alongside the ongoing renewal of our fleet, in Q4 2025, we continued to enhance the energy efficiency of our vessels through targeted technical and operational measures, including the successful testing of hull cleaning robots and silicone antifouling coatings. In 2025, the Star Bulk fleet achieved an average C rating in the RightShip's Greenhouse Gas Rating. We also maintained our B score for effective environmental management in the 2025 Carbon Disclosure Project and Water Management Submission.

[Charis Plakantonaki, Chief Strategy Officer at Star Bulk Carriers]

We continue to contribute actively to the work of the Maritime Emissions Reduction Center, working with our partners to assess emerging technologies aimed at improving vessel performance. To comply with FuelEU Maritime and consistent with last year, we entered into a pooling agreement with an external party to cover 100% of our CO2 deficit for 2026 and part of 2027, purchasing surplus units, the most cost-effective compliance strategy. On the technology front, we completed the deployment of Starlink and installed onboard firewalls across the fleet to enhance connectivity and strengthen cybersecurity.

[Charis Plakantonaki, Chief Strategy Officer at Star Bulk Carriers]

As part of our artificial intelligence strategy, we delivered the company's first custom-built AI application while continuing to leverage AI within existing systems and to develop new tools to further automation and optimization. The well-being of our people remains a priority. During Q4 2025, we conducted a comprehensive company-wide employee survey to listen closely to our teams and identify tangible solutions to better support them in their roles.

[Charis Plakantonaki, Chief Strategy Officer at Star Bulk Carriers]

I will now pass the floor to our Head of Market Analysis, Constantinos Simantiras, for a market update and his closing remarks.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Thank you, Charis. Please turn to slide 11 for a brief update of supply. During 2025, 36.2 million deadweight was delivered, and 5.2 million deadweight was sent to demolition, resulting in net fleet growth of 31 million deadweight, or 3% year-over-year. The new building order book has grown over the past three years, but remains at relatively low 12.8% of the fleet. Contracting remains under control, decreasing to 45.8 million deadweight during 2025, reflecting limited shipyard capacity through 2028, high shipbuilding costs, and ongoing uncertainty around green propulsion technologies. The IMO's recent decision to postpone adoption of the IMO Net-Zero Framework will likely extend this uncertainty into 2026. That said, we've seen a noticeable uptick in contracting in the Capesize segment over the last few months.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Meanwhile, the fleet continues to age. By the end of 2027, approximately 50% of the existing fleet will be over 15 years old. Moreover, the rising number of vessels undergoing their third special survey and dry docks is estimated to reduce effective capacity by approximately 0.5% around during 2026 and 2027. On the operational side, average fleet steaming speeds have recovered from last year's historical lows and stabilized at around 11.1 knots over the past two quarters, incentivized by firmer freight rates and lower bunker costs. Over the coming years, stricter environmental regulations are expected to continue to support slow steaming and help constrain effective supply. Finally, global port congestion dropped to six-year lows during the fourth quarter of 2025, but has since returned to long-term average levels.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

For 2026, we anticipate congestion to follow typical seasonal patterns and to remain broadly neutral for the supply and demand balance. There could be some upsides from delays at new mining hubs in West Africa, where loading operations remain particularly time-intensive. Let us now turn to slide 12 for a brief update of demand. According to Clarksons, total dry bulk trade grew 1.3% in volume and 2.1% in ton-miles during 2025. This was driven by record bauxite and minor bulk exports, plus a solid recovery in iron ore, coal, and grain volumes in the second half. Strong Atlantic exports, longer Pacific distances, and ongoing war-related inefficiencies supported ton-mile growth throughout the year.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Red Sea crossings improved somewhat during the fourth quarter after the October ceasefire, but they're still roughly 40% below pre-Houthi levels, and geopolitical risks in the region remain high. China's total dry bulk imports were essentially flat during 2025, as the 4.2% decline during the first half was fully offset by a 4.1% rebound during the second half, with iron ore and coal imports reaching new all-time highs during December. Imports to the rest of the world continued to recover in 2025, with notable strength in the second half amid reduced uncertainty in international trade relationships. Non-China import volumes grew 3.2% throughout the year, supported by lower commodity prices, a weaker U.S. dollar enhancing affordability, and resilient demand in key regions.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Growth was mainly driven by Southeast Asia, India, and the Middle East, with additional support from Africa and intra-Asian trade. Looking ahead, dry bulk demand is projected to grow by 0.6% in tons and 1.9% in ton-miles during 2026. The IMF recently raised its 2026 global GDP forecast by 0.2% to 3.3%, with upward revisions of 0.3% for both the U.S. and China. The trade truce between the U.S. and China, new agreement with major partners and the recent decision by the U.S. Supreme Court on presidential authority to impose reciprocal tariffs should reduce uncertainty, support economic activity, and demand for raw materials.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

That said, elevated Chinese stockpiles across a range of commodities, slower industrial production, and softer fixed asset investment present downside risks, though these should be partly offset by new mine capacity ramping up. Breaking it down by key commodities, iron ore trade grew 2.2% during 2025, and is projected to rise 1.9% in 2026. For the first time since 2020, China crude steel production fell below 1 billion tons, down 4.5% overall in 2025, and 11% in Q4, as a result of policy curbs on steel supply and the ongoing real estate slowdown. Record high Chinese steel exports helped offset weak domestic consumption, while steel output in the rest of the world increased by 1.2%.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Domestic iron ore output declined by 2.5% in 2025, while stockpiles on Chinese ports currently stand at close to all-time highs after the Q4 import surge. Chinese iron ore imports are expected to remain broadly flat in 2026, while stronger Brazil volumes and the gradual ramp up of high-quality exports from West Africa should support ton-mile growth over the coming years. Coal trade contracted 5.6% during 2025, and is projected to decline another 2.5% in 2026. Volumes experienced a strong recovery in the second half, but stayed below 2024 levels. Stronger renewable expansion in China should continue to pressure demand. Domestic production in China and India is outpacing consumption growth and stockpiles remain high.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Indonesian coal exports are expected to decline further in 2026, following announced production cuts of up to 25%, which could tighten volume, but potentially support ton-miles through longer haul flows. India's new thermal energy capacity, growing demand from Southeast Asia, and global focus on energy security, should provide support for coal trade over the next years. Grain trade grew 2.9% in 2025, and is projected to surge 7.8% in 2026. Second half 2025 volumes jumped 10%, led by robust exports from Brazil, Argentina, and Australia, plus better-than-expected U.S. shipments. Black Sea exports remain subdued, but should gradually recover over the next two years. More important, China resumption of U.S. soybean purchases under the trade truce will carry into 2026, boosting ton-miles for mid-sized Panamaxes [audio distortion].

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

China has committed 20 million tons by the end of the current season, around 25 million tons annually through 2028. Minor bulk trade grew 5.2% in 2025, is projected to expand by 2.1% in 2026. Minor bulks carry the highest correlation with global GDP and continue to benefit from healthy macro outlooks across major economies. That said, growth should moderate somewhat next year due to rising protectionism and a slowdown in growth of West African bauxite volumes after last year's 33% surge.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

As a final comment, we remain optimistic about the dry bulk market outlook, underpinned by a favorable supply backdrop, tightening environmental regulations, and easing trade tensions. In a period of heightened geopolitical uncertainty, we remain focused on actively managing our diverse, ECO-rated fleet to capitalize on market opportunities and deliver value to our shareholders.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you may have.

[Operator]

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Chris Robertson with Deutsche Bank.

[Chris Robertson, Equity Research Analyst at Deutsche Bank]

Thank you, operator, and good morning, team. My question is just related to the underlying demand and ton-mile expansion that's happening in the iron ore market with Brazil and West Africa. Are there any other dry bulk commodities that have a similar dynamic where, you know, let's say, underlying demand for the commodity remains flattish or maybe even slightly weaker, but ton-mile demand is held stable or expands because of the geo, the geographical dispersion of where the commodities are coming from? Any commentary around that would be helpful.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Hi, Chris. Besides, besides bauxite and iron ore, we see a very strong trade on grains, which are going to be increasing by about 7.5%-8%. As most of them are coming from Brazil, we will get some extra ton-miles from there. We also see demand from West Africa on smaller vessels, that is going to create congestion as well, because of construction projects that they got. I think this is going to be a positive as well. Now, minor bulk, coal. Coal, if Indonesia actually goes ahead with cutting down 25% of their exports, this might also increase ton-miles, as imports may have to come from further away.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

We think that overall there is other possibilities as well, but the bauxite and the iron ore trade are actually going to be big pluses.

[Chris Robertson, Equity Research Analyst at Deutsche Bank]

Yeah, makes sense. Thanks for the color there. Just kind of following up on the potential for greater congestion in West Africa. Are any of the projects, or whether it's rail or trucking or the ports themselves, et cetera, are there any projects right now to build out that infrastructure a bit more to make the supply chain more efficient? Kind of, what's going on there that may lead to, you know, congestion maybe going up in the short term, but being alleviated in the long run as potentially infrastructure is more built out?

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

I don't know details about that. What I know is that coals, Supramax, Ultramax coals in West Africa have increased by about 30% during the past year. If our analyst knows anything about the projects, he can--

[Charis Plakantonaki, Chief Strategy Officer at Star Bulk Carriers]

Yes, I would add that it's exactly what you said, Chris. We expect that we will have, in the short term, an increase in congestion, and over the next few years, as the infrastructure is upgraded, this will gradually go down, but this is not something that would take place in one, two years.

[Chris Robertson, Equity Research Analyst at Deutsche Bank]

Got it. Yeah, that's super helpful. Thank you very much. I'll turn it over.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Thank you, Chris.

[Operator]

As a reminder, that is star one, if you would like to ask a question. We'll go next to Omar Nokta with Clarksons Securities.

[Omar Nokta, Senior Equity Analyst at Clarksons Securities]

Thank you. Hey, guys, good afternoon. I just wanted to ask maybe just about the capital return policy, just a bit more detail on that. You know, clearly, the move back to a 100% payout or maybe somewhat similar to how it was prior to the focus on the buybacks last year. The decision, I guess, to boost the dividend payout, did that come about simply just given the strong share performance we've seen here recently, or is there more to it?

[Hamish Norton, President at Star Bulk Carriers]

Hi, Omar. It's Hamish Norton. You know, the-- Basically, the better the share does, the stronger the incentive to pay a dividend as opposed to a share repurchase. You know, so there's nothing really more to it than that.

[Omar Nokta, Senior Equity Analyst at Clarksons Securities]

Okay. Thank you. Then just a follow-up into that is, as we think about free cash flow, is earnings a good representation of that to approximate what free cash flow looks like? I know quarter to quarter, there's going to be changes. Is earnings a good way to look at it? Do you think it understates free cash flow, or any color you want to give on that?

[Hamish Norton, President at Star Bulk Carriers]

It's not terrible, but, you know, you have to look at the difference between depreciation and debt repayment.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Change in working capital as well.

[Hamish Norton, President at Star Bulk Carriers]

Yeah.

[Christos Begleris, Co-CFO at Star Bulk Carriers]

If I may add, hi, Omar, this is Christos. A few things. First of all, debt principal repayment is slightly higher than depreciation. Therefore, the free cash flow is lower than net income. Also, as Hamish said, it's the change in net working capital. In a market that rises fast, you would expect the working capital change to be greater, thereby reducing the free cash flow. Whereas in a market that is reducing, the change in working capital will be positive, and therefore, that is boosting the free cash flow available for dividends.

[Omar Nokta, Senior Equity Analyst at Clarksons Securities]

Okay. Thanks, Christos. Thanks, Hamish. That's it for me. Thank you.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

Thank you, Omar.

[Operator]

This now concludes our question and answer session. I would like to turn the floor back over to management for closing comments.

[Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research at Star Bulk Carriers]

No closing comments, operator. Thank you very much.

[Operator]

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.

Participants

Executives

• Charis Plakantonaki, Chief Strategy Officer
• Christos Begleris, Co-CFO
• Constantinos Simantiras, Deputy Chief Investment Officer and Head of Research
• Hamish Norton, President
• Nicos Rescos, COO
• Simos Spyrou, Co-CFO

Analysts

• Chris Robertson, Equity Research Analyst at Deutsche Bank
• Omar Nokta, Senior Equity Analyst at Clarksons Securities