19 Dec

Star Bulk’s liquidity and cash flow

WRITTEN BY Katie Dale

Star Bulk’s net cash operating activities

In this part of the series, we’ll discuss Star Bulk Carriers Corp.’s (SBLK) cash flow numbers given the company’s rapid expansion of its fleet size through acquisitions and other related developments. Investing and financing activities have reflected significant movements, while operating activities were affected by the company’s reported net loss. Star Bulk has industry peers (SEA) such as Diana Shipping Inc. (DSX), Knightsbridge Shipping Ltd (VLCCF), Navios Maritime Holdings Inc. (NM), and Eagle Bulk Shipping Inc. (EGLE).

Star Bulk’s liquidity and cash flow

For the nine months ended September 30, 2014, Star Bulk Carriers Corp. (SBLK) recorded net cash provided by operating activities of $7.7 million compared to $22.4 million in the year-ago period. The time charter equivalent (or TCE) rate for the same period declined to $12,813 from $14,414 in the year-ago period. The dip in net cash for operating activities was led by the net loss recorded by Star Bulk compared to net income in the year-ago period. Also, there was a negative movement in working capital of $6.3 million during the first nine months of 2014 compared to a positive movement of $3.4 million during the first nine months of 2013.

Net cash investing activities

Star Bulk’s net cash used in investing activities for the nine months ended September 30, 2014 and 2013 stood at $144.5 million and $9.9 million, respectively. Net cash used in investing activities for the 2014 period consisted of $31.4 million in advances for the company’s newbuilding vessels compared to $29.8 million in the same period a year ago. Also, the total acquisition of secondhand vessels, including Excel’s vessels, and fixed assets stood at $198.9 million.

Star Bulk recorded a net increase of $10.8 million in restricted cash compared to a decrease of $7.6 million in the year-ago period. Hull and machinery insurance proceeds amounted to $0.6 million compared to $4 million in the year-ago period. Also, the company assumed $96.3 million cash as part of the Ocean Bulk and the Pappas Companies acquisitions.

Net cash financing activities

Star Bulk’s net cash provided by financing activities for the nine months ended September 30, 2014, stood at $176.8 compared to $48.0 million in the year-ago period. For the nine months ended September 30, 2014, net cash provided by financing activities consisted of loan proceeds of $139.0 million from post-delivery financing of newbuilding vessels and $59.8 million drawn under the Excel Vessel Bridge Facility for the financing of the acquisition of the Excel vessels, as well as financing fees amounting to $0.9 million and loan installment payments amounting to $21.2 million.

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