Thank you for standing by ladies and gentlemen and welcome to the Star Bulk Carriers Conference Call Fourth Quarter and year-ended December 31, 2016 Financial Results. We have with us Mr. Petros Pappas, Chief Executive Officer; Mr. Hamish Norton, President; Mr. Simos Spyrou and Mr. Christos Begleris, Co-Chief Financial Officers of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today. We now pass the floor to one of your speakers today, Mr. Pappas. Please go ahead, sir.

Thank you, operator. I'm Petros Pappas, Chief Executive Officer of Star Bulk Carriers and I would like to welcome you to the Star Bulk Carriers Conference Call regarding our financial results for the fourth quarter and full year 2016. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on Slide number 2 of our presentation. Let us now turn to Slide number 3 of the presentation for a summary of our fourth quarter 2016 financial highlights in comparison to the same period last year. In the three months ending December 31, 2016 net revenues adjusted for non-cash items, less volume expenses amounted to $50.9 million, 15.5% more than the $44.1 million for the same period in 2015. Adjusted EBITDA for the fourth quarter 2016 was $15.6 million versus $6.6 million in the fourth quarter 2015, a significant increase of 135.6%. Adjusted net loss for fourth quarter amounted to $16.2 million or $0.29 loss per share versus $24.5 million adjusted net loss or $0.56 loss per share in Q4 2015. Our time charter equivalent rate during this quarter was $8,202 per day compared to $6,897 per day in the same quarter last year. These time charter rates are on the basis of 98% and 97.7% utilization respectively. Starting from this quarter, we have changed the calculation method so as to be in-line with the reporting of the majority of our peers. Our average daily operating expenses, were $4,047 per vessel per day, a decrease of 1.4% compared to the fourth quarter 2015 figure of $4,104 per day per vessel. I will now pass the floor to our Co-CFO, Christos Begleris for an update on our operational performance for the quarter.

Thank you, Petros. Slide 4 summarizes Star Bulk's strong liquidity position. Following the restructuring of our debt facilities agreed in September, our all-in cash breakeven which includes OpEx, corporate overhead, interest, lease payments, and drydock provision has been reduced significantly to approximately $7,400 per day per vessel. This reduction of 31.5% has decreased cash burn and enables the Company to have positive cash flow when rates are stronger. Latest one year TCE rates from Clarkson's are at levels above or breakeven. During Q4 2016, we had a positive cash flow of $6.1 million. On the right hand side, we provided recent balance sheet information on our cash and debt positions. As of February 21, our total cash balance stood at $249.2 million. Total debt as of the same date stood at $960.9 million. The remaining CapEx on the five Newcastlemax vessels that we are due to take delivery of is at $187 million. $112.7 million is due in 2017 when we take delivery of three vessels and $74.3 million is due in nearly 2018 when we take delivery of our final two vessels. Three of the five vessels have bareboat financing with fixed debt mounts and no LTV test at drawdown. We are negotiation for 60% loan to value financing on the remaining two vessels that on the basis today's valuation would leave around $10 million to $15 million of equity required in order to take delivery of the vessels. In Slide 5, we want to update you on our fleet employment. We have fixed 23 vessels for an average rate of $8,440 per vessel per day for periods ranging from a couple of months up to 15 months forward. For 2017, we have covered approximately 26% of our available days at rates close to or above or breakeven. Please…

Thank you, Christos. Please turn to Slide 8 for a brief update of supply. During 2016, the dry bulk fleet has grown by 2.2% versus 2.4% in 2015. A total of 27.2 million deadweight was delivered and 29.1 million deadweight was sent for demolition. Dry bulk contracting has been minimal at a total of 1.4 million deadweight, if we exclude the 30 Valemaxes ordered during the first quarter of 2016. Limited order in cancellations and conversions have helped trimmed the dry bulk order book to approximately 10% by the end of 2016 from 17% in 2015. For as long as scrapping remains higher than ordering, this is a positive development, which along with further slippage and potential cancellations we supported a dearth of supply of vessels during 2018 and 2019. As the dry markets have recently substantially improve and scrapping has slowed down to annual rate of around 17 million tons deadweight, we expect full year net flip growth to increase from 2.2% during 2016 to around 3.5% during 2017, but then below 1% during 2018. Let now turn to Slide 9 for a brief update of demand. After more than two years of strong declines commodities priced reached the bottom during the first half of 2016 and have experienced a strong recovery through the beginning of 2017. We believe that the monetary and fiscal stimulus in China during 2015 and first half of 2016 has resulted in a recovery of state consumption as well as electricity requirements. Infrastructure and residential fixed asset investment has been key to this rebound. Home prices have in China continued to increase while global steel production and profitability have also recovered since list. Furthermore, the increase in property starch and growing infrastructure spending in China and Southeast Asia is expected to support positive steel…

Thank you and we will now begin the question and answer session. [Operator Instructions]. Your first question comes from the line of Noah Parquette of JP Morgan. Your line is now open, sir.

Thanks. I just want to first talk a little bit about the rationale for the share offering in January. Can you talk a little bit about what the strategy was or is this just way to get an additional buffer on insurance or you plan on expanding these asset values and some color will be helpful.

Noah, hi it's Hamish Norton. So when we saw the stock price performance in January, we thought it's always painful to issue equity especially since management, our large investors in the Company at least relative to our former net worth. We thought it's wise to add a profit to balance sheet, and we have no present intention that is showing anymore.

Okay. That's very helpful. So I just wanted to ask about the charters that you've done in last three to four months. Can you talk a little bit -- is this just trying to take some risk off the table for the next 6 to 12 months or do you have kind of focused employment strategy like mixed between spot and time charter that you want to more not on normalized basis.

Hi Noah, it's Petros. What we've done up till now is last quarter, we fixed some vessels through to the end of Q2 because we wanted to protect a potential Q1 downturn which basically did not materialize but rates we fixed at were similar to what the market is today. I think what we will be doing because nobody knows where this market is going, although we are relatively positive for this year especially because of demand which was not as expected as it is turning out but on the other hand we should not forget that we have about 45 to 50 million tones deadweight coming in this year. And as we're seeing that scrapping is slowing down, so I proceed scrap being a busier below 20 million probably more like $15 to $17 and that would mean an influx of about 30 million tons of net deadweight in the market. Now you must apply by 7, it's 110 million of new cargo that's needs to be cared therefore you need about ton-miles have a lot do with demand and if this export, there are more exports for example cranes, which we foresee there might be 30 plus million tons of extra grain and cargo this year which is coming from the Americas. And it's going to be a few tons of millions of additional iron ore coming from Brazil they said ton-miles, so even if demand is going to be in terms 2% increase, in ton-miles it could be 3% or to 3.5%. As I said, we think that supply is going to be 3.5% as well so. We're seeing a strong first half of this year and much stronger than last year but it’s possible that the second half of this year is not as strong comparatively to last year. Therefore, we probably wait for a little while and then fix a percentage of our fleet forward for a year or so, probably trying to cover Q1 next year as well. So basically that's what our plan is.

Okay. That was very helpful. That's all I have. Thank you.

Thank you.

And your next question comes from the line of Ben Nolan from Stifel. Your line is now opened.

Hi, this is Steven on for Ben Nolan. My first question really deals with the recent equity offering that you completed. You've been successful raising a good amount of cash. Do you feel, you're in a position of focus a little less on balance sheet strength and potentially be more aggressive towards one or two vessel acquisitions with the next coming months?

Yeah. Steven, it's Hamish Norton. I think we raised the money as general corporate purposes and will look out for vessel acquisition opportunities that make sense either way we think it's good for the Company and ultimately good for investors. But I mean in terms of focusing on balance sheet strength, I do think we've largely put that behind us.

Okay. Perfect. Then my last question just deals with the new environmental regulations are coming up in 2020 with lower sulphur emissions. Given that you had moderately young fleet and still some older vessels. What are your plans? Are you focusing more on scrubber technology or potentially just purchasing lower sulphur fuel?

It’s a great question and I think most people in the industry have really not been focusing very hard on this yet, but we think that the environmental regulations are probably very bullish for shipping generally because when you have to pay more for fuel, your fleet slows down, and when the fleet slows down, the carrying capacity is reduced and the supply demand balance moves in favor of the ship owner. And so we think that people who burn low sulphur fuel will do well, and we think that people who have working scrubbers will probably do somewhat better. And as to the question of whether it's worth the money to get a scrubber and how well they work, we're at the early stages of that exploration, but we're looking at it very seriously.

And it's also important what other people are going to be doing and what their plans are. So we are at definitely as Hamish said monitoring the market. We're actually monitoring the market even before those regulations on sulphur came out, but definitely we think it’s a positive for the market as of perhaps January 2020 and perhaps earlier than that.

Alright. That's it for. Thank you for your time.

Thank you.

[Operator Instructions] Your next question comes from the line of Amit Mehrotra from Deutsche Bank.

Good morning, afternoon, everybody. Thanks for taking the questions. Hamish, I just wanted to follow-up on your buffer comment. I guess to Noah's question regarding the private placement. I'm sorry. I didn’t quite follow that reasoning. The stock price going up was arguably responding to some recovery in asset values which obviously but itself provides you some natural equity buffer so at least mark-to-market basis. So it seems to me like the equity offering in February this month kind of on the heels of what you guys did in September, was done more from a position of strength, and I was just hoping if you can provide some more color around the specific usage of that cash other than general corporate purposes, because according to our math, it doesn’t seem like you need it from cash flow perspective given the September raise and then push out of the amortization is still in middle of 2018.

Yeah. Thanks Amit. And by the way we read a report and we completely agree that charter rates are sort of weak on an absolute basis. Although we think on a relative basis, we actually did pretty well given the market, but we wish the absolute rates were higher. As to your question, you're probably right that we would be fine without that $50 million that we raised in January, but at the time, it seemed like it was insurance that was probably worth buying and we don’t think it was a mistake at all, but that doesn’t mean we need it. It's just a matter of the pluses and minuses of buying insurance. You always hope you don’t need insurance. And in terms of use of that cash, whether it sits on the balance sheet or whether it buys ships it acts as a buffer to the balance sheet and we'll see what we do with that if anything shortly.

Okay. That's helpful. And then just a couple questions on the market in general not from a supply demand standpoint but from an interested and dry bulk assets and so Petros or Hamish or anyone else. Just seems like there are just significantly more bids out there for dry bulk assets and in some instances for second half tonnage in some instances there are even not bidding wars but people sort of trying to outbid each other a little bit at least which is obviously a huge difference from where we came from this time last year where there were absolutely zero bids for dry bulk assets. So the question I have is that, are you hearing that in terms of are you seeing that at the market? And then the second question just a follow-up related to that is that. You guys have done pretty significant ships for share deals in the past. And I was just trying to think are there potential sellers out that maybe willing to roll their equity into Star Bulk and allow you guys to further grow at maybe the right point in the cycle and also participate in the upside via the share capital at Star Bulk. Is there any interest there from that standpoint? Thanks.

Petros, do you want answer it.

You take the second question, the rest I will answer.

Okay. So let me take your second question. In principle, we would be open to ships for shares deal which is effectively a share for share merger with a private or public company. We're very focused on shareholder value and we as a regular matter look at what all the opportunities might be. That being said, these deals are always very challenging to do. I don’t think we see anything eminent. It's particularly difficult given the upside we've got in Star Bulk in a recovery market and duplicating that upside in a ships for share deal. There are very few situations that preserve both the relatively high leverage of Star Bulk and the very long runway due to our cash balance.

And then just related to that question, can you just comment on what you're seeing right now on the ground or on the water rather with respect to just the second hand market for dry bulk assets?

Yeah. Well, you know we are well bunch in dry shipping. So it’s a quick draw like a harvest. The minute that you see positive things happening people want to go ahead and purchase assets. So what we’re seeing right now is between 10 and 20 inspectors on every vessel that is for sale. Therefore, there is a lot of demand and a lot of interest mostly on lower value vessels. I would say more like Supramax and especially Kamsarmax, and capes that are below $25 million per vessel. This is because I think there are not many loans available right now. It's not easy for everyone to get finance and therefore a lot of these deals are either being done on a cash basis or with very low finance, and that's why we've seen prices go up like 30% or 40% in such types of vessels. In the last 12 months and especially in the last four or five months, less so on cape market because that market didn’t saw as much upside on the charter rates, but I think this will be catching up soon. So yes, there is much more competition and a lot of interest and right now it's becoming very quickly a buyer's market. Now let’s not lose focus because the vessels that are being booked today are about half the value of what they were being booked two and half years ago. So prices at some point went down 60% or 70% from what they were two years ago, two and half years ago, and now they are 50% or 45% below. So yes, we've seen the prices going up, but we're still at a low level comparatively.

Alright. I guess what a difference that you can make. Alright, Petros, Hamish, everybody, thank you so much for answer my question. Have a good day.

Thank you, Amit.

[Operator Instructions] We've got a question in the queue from the line of Magnus Fyhr, Seaport Global. Your line is opened.

Good afternoon. Just one question on the CapEx, the $83.5 million on page 4, is that total CapEx for 1Q or is it for February 19 or sorry February 21?

Hi Magnus, this is Christos. This is total CapEx for the first quarter of 2017. We are actually taking delivery of two Newcastlemaxes this quarter. So these correspond to effectively delivery and once we deliver installment for those two Newcastlemaxes.

And the cash outlay for CapEx?

Zero because those are the bearable financings, hence fully financed.

So all the $83.5 million was spent before February 21?

Well, no, it will be spend by Q1 2017. Yeah, so Magnus, all of that CapEx is funded by capital lease proceeds. Those ships are legally owned by CSSE leasing and we've paid what we needed to pay out of our pockets long ago. And so there is no money out of pocket for that CapEx. That capital lease shows up on our balance sheet is that, but it's technically a lease.

Alright. Thanks for clarifying.

Yeah.

There are no further questions at this time. You can continue.

Okay. Thank you everybody. No more comments from our side. Thank you very much for listening to us. Thanks.

That concludes your conference for today. Thank you for participating. You may all disconnect now.