Star Bulk (SBLK 9.30 -0.30) reported an adjusted third quarter net loss of $0.08 per share
this morning, which came in worse than expectations. On the top line, however,
revenue rose 35% to $80.8 million, coming in above expectations.
This increase was primarily driven by the rise in charterhire rates during the third quarter of 2017, which led to a TCE rate of $9,619 compared to a TCE rate of $6,885 for the third quarter of 2016, representing a 40% increase, as well as the slight increase in the average number of vessels in our fleet during the third quarter of 2017 of 70.7 compared to 69.5 during the third quarter of 2016.
Reported average TCE per vessel for the third quarter 2017 was $9,619/day with an average fleet utilization of 99.9%. The company has taken advantage of the tightening market during the last two months by fixing 15 vessels on medium to long term charters adding cash flow visibility at healthy TCE rates above fully loaded breakeven.
Overall, the company has fixed 80% of its fleet available days during the fourth quarter 2017 at an average daily TCE rate of $12,615 and 25% of fleet available days in Q1 2018 at an average daily TCE rate $11,982.
Full year 2017 trade growth is estimated to be 4.2%, higher than 2016, which was 1.2%. Leading this growth includes iron ore growth, thermal and coking coal, grains and minor bulk. And trade growth expected to further improve over the next years, due to:
- Global recovery of commodity prices (Steel, Coal and Oil) · Record high steel mill profitability
- Healthy steel consumption from China infrastructure & real estate on the back of 2016 stimuli and One belt One road projects
- Healthy Pacific demand for high grade iron ore mainly · produced in Brazil boosting ton-mile
- China and India coal needs for electricity generation & steel making currently exceeding domestic coal production growth
- Strong grains consumption and healthy crops boosting exports
- And global minor bulk growth recovery
Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk's vessels transport major bulks, which include iron ore, coal and grain, and minor bulks, which include bauxite, fertilizers and steel products.