Linked above is the first quarter earnings report for Star Bulk Carriers SBLK. Star Bulk owns a dozen dry bulk vessels, 4 Capesize and the rest are Supramax. All of the ships are on time charter contracts until at least February 2010.
Overall, Star Bulk had a pretty nice quarter. Their vessels have maintained a steady TCE from last year and they generate on average $9,000 per day, per vessel in excess of their break even costs. The bottom line numbers are not as great as the first glance would indicate though, due to over $17 million in non-cash items pumping up the EBIDTA and net income. For these shipping companies the non-cash items and depreciation can have significant effect on net income, so it is always good to look at the cash flow.
According to the press release, SBLK had net cash provided by operating activities of $24.6 million. During the quarter $20 million of cash was classified as restricted to keep the bankers happy. $12 million was paid to reduce principal of long term debt. It appears the $12 million per quarter is the required loan pay down for the rest of 2009 and it jumps to about $15 million per quarter in 2010.
Cash flow is sufficient to cover expenses and pay down the debt and hopefully the company will at some point be able to resume the payment of a dividend.
SBLK has been the best performing stock Y-T-D in the universe of shipping stocks I follow. The shares have gained 106% from where they started the year and are 330% above the 52 week low. Based on the numbers I outlined above, the stock is still trading at about 3 times free cash flow and about 2 times cash revenues with good forward visibility on those revenues. I think the stock still has room to run.
Star Bulk Carriers reports 1st quarter results
Star Bulk Carriers *.
Linked above is the first quarter earnings report for Star Bulk Carriers SBLK. Star Bulk owns a dozen dry bulk vessels, 4 Capesize and the rest are Supramax. All of the ships are on time charter contracts until at least February 2010.
Overall, Star Bulk had a pretty nice quarter. Their vessels have maintained a steady TCE from last year and they generate on average $9,000 per day, per vessel in excess of their break even costs. The bottom line numbers are not as great as the first glance would indicate though, due to over $17 million in non-cash items pumping up the EBIDTA and net income. For these shipping companies the non-cash items and depreciation can have significant effect on net income, so it is always good to look at the cash flow.
According to the press release, SBLK had net cash provided by operating activities of $24.6 million. During the quarter $20 million of cash was classified as restricted to keep the bankers happy. $12 million was paid to reduce principal of long term debt. It appears the $12 million per quarter is the required loan pay down for the rest of 2009 and it jumps to about $15 million per quarter in 2010.
Cash flow is sufficient to cover expenses and pay down the debt and hopefully the company will at some point be able to resume the payment of a dividend.
SBLK has been the best performing stock Y-T-D in the universe of shipping stocks I follow. The shares have gained 106% from where they started the year and are 330% above the 52 week low. Based on the numbers I outlined above, the stock is still trading at about 3 times free cash flow and about 2 times cash revenues with good forward visibility on those revenues. I think the stock still has room to run.