Star Bulk Carriers 4Q15 Earnings Call Notes

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Star Bulk Carriers’ (SBLK) CEO Petros Pappas on Q4 2015 Results

2016 should be one of the most challenging years in dry bulk history

“”We expect 2016 to be one of the most challenging years in dry bulk history. Practically this should ultimately be seen as a positive factor for the medium-term as it will encourage further scrapping and we’ll discuss newbuilding orders and further train the order book through cancellations and conversions.”

Absence of ordering and increased demolition is putting a cap on fleet growth

“Absence of ordering and increased demolition since early 2015 is slowly putting a cap on fleet growth for the next couple of years and is creating the foundation for a sustainable recovery to take place sometime in the not too distant future. ”

Cost of laying up ships is $2000 per day

“Let’s say that the cost is $2,000, let’s say that the operating expense of vessel is $5,000. If the market rates are at $3,000, we are losing $2,000 a day that is exactly the point where you have to decide whether you keep on operating or you lay-up the vessel because whether you lay-up the vessel or you keep on operating you lose $2,000 a day. So there the decision is qualitative, you have to think what is going to happen during the next two, three, six months onwards and it’s not an exact sense, but we have to figure out how we believe a market to be going forward.”