Star Bulk(SBLK) - 2024 Q4 - Annual Report

Revenue and Fleet Growth - Voyage revenues increased to $1,265.5 million in 2024 from $949.3 million in 2023, a growth of approximately 33.3%[356] - The average number of vessels in the fleet rose to 144.3 in 2024 from 123.3 in 2023, resulting in an increase in available days to 50,649 from 43,357[356] Operating Expenses - Vessel operating expenses increased to $275.0 million in 2024 from $221.3 million in 2023, reflecting higher costs associated with the increased fleet size[359] - Dry docking expenses rose to $62.7 million in 2024 from $42.0 million in 2023, attributed to more vessels undergoing dry docking[360] - Depreciation expense increased to $164.1 million in 2024 from $138.4 million in 2023, driven by the larger fleet size[361] - General and administrative expenses increased to $70.8 million in 2024 from $54.4 million in 2023, largely due to the expanded fleet[363] Cash Flow and Financial Performance - Net cash provided by operating activities was $471.2 million in 2024, up from $335.8 million in 2023, primarily due to higher charter rates and increased fleet size[380] - The company reported a net gain of $43.3 million from vessel sales in 2024, compared to a gain of $29.4 million in 2023[365] - Net cash provided by investing activities increased to $356.2 million in 2024 from $235.5 million in 2023, driven by higher vessel sale proceeds of $303.2 million compared to $251.0 million in 2023 and $104.3 million received from the Eagle Merger[382] - Net cash used in financing activities rose to $648.2 million in 2024 from $595.9 million in 2023, primarily due to increased net debt outflows of $342.0 million in 2024 compared to $51.2 million in 2023 and higher dividends paid of $277.0 million versus $158.1 million in 2023[383] Debt Facilities and Refinancing - The ABN $67.9 million Facility was refinanced, extending the repayment date to June 2027 and secured by seven vessels, with a prepayment of $6.3 million made in April 2024[386] - The CEXIM $106.5 million Facility, drawn in November 2019, is repayable in 40 equal quarterly installments of $0.7 million, secured by three vessels[388] - The DNB $107.5 million Facility, drawn in September 2021, is repayable in 20 equal quarterly principal payments of $2.2 million, with a balloon payment of $19.7 million due in September 2026[391] - The ABN AMRO $97.1 million Facility was fully drawn and secured by four vessels, with the second tranche maturing in October 2024[392] - The Credit Agricole $62.0 million Facility is repayable in 20 quarterly installments, with a balloon payment of $8.8 million due in November 2026, secured by five vessels[394] - As of December 31, 2024, the ING Facility is secured by a total of 18 vessels following various prepayments made throughout 2023 and 2024[397] - The company made significant prepayments in 2024, including $58.5 million related to the vessel Star Pavlina and $9.1 million for the vessel Star Bovarius[396] - The company assumed $375.5 million of bank loans as part of the Eagle Merger, which were refinanced using various facilities totaling $388.1 million[420] Vessel Valuation and Impairment Risks - The company has 6 out of 151 operating vessels with a market value below their carrying value, with an aggregate difference of $4.0 million[443] - The company has identified several dry bulk carrier vessels whose market value is lower than their carrying value as of December 31, 2023, indicating potential impairment risks[457] - The risk factors include potential declines in market values of vessels due to shipping industry conditions, which could affect borrowing capacity and lead to impairment charges[458] Management and Governance - The company appointed Mr. Gary Weston to the Board of Directors following the Eagle Merger on April 9, 2024, indicating ongoing strategic changes[461] - The company has a diverse Board of Directors with extensive experience in shipping and finance, which supports its strategic decision-making[462] - The Chief Executive Officer, Petros Pappas, has been with the company since its inception and has significant experience in vessel acquisitions and disposals[464] - The company has a strong focus on developing and executing vessel acquisitions and dispositions, with over 200 transactions managed by the Chief Operating Officer, Nicos Rescos[470] Employee and Director Compensation - Total compensation for senior management in 2024 was $2.5 million, with non-employee directors receiving an annual cash retainer of $15,000 each[483] - The aggregate compensation of the Board of Directors for 2024 was approximately $0.2 million[483] - The company does not have a retirement plan for its officers or directors[483] - The company awarded 435,450 common shares to key employees as of December 31, 2024, with a closing stock price of $14.95[492] Shareholder Agreements and Ownership - The company repurchased a total of 20 million common shares, reducing Oaktree's ownership from approximately 25.3% to 7.3%[523] - As of July 2, 2024, Oaktree shareholders beneficially own approximately 4.6% of the company's common shares, leading to the termination of the Oaktree Shareholders Agreement[524] - The Pappas shareholders beneficially own approximately 3.6% of the total issued and outstanding common shares as of February 17, 2025[525] - The Pappas Shareholders Agreement restricts the Pappas shareholders from engaging in certain transactions until terminated[530] Compliance and Financial Covenants - As of December 31, 2024, the company was in compliance with all financial covenants in its debt agreements[427] - The company is involved in ongoing discussions regarding financial covenants in credit facilities, which may be influenced by market conditions and vessel valuations[458]