Petros Pappas - Chief Executive Officer Hamish Norton - President Simos Spyrou - Co-Chief Financial Officer Christos Begleris - Co-Chief Financial Officer

Amit Mehrotra - Deutsche Bank Noah Parquette - JP Morgan Chase & Co. Sherif Elmaghrabi - Morgan Stanley

Thank you for standing by, ladies and gentlemen, and welcome to the Star Bulk Carriers Conference Call on the Fourth Quarter 2015 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 am 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 of 2015. Before, we begin, I kindly ask you to take a moment to read the Safe Harbor statement on Slide Number 2 of our presentation. In Slide 3, we want to highlight the actions we have taken over the past 18 months to actively improve our liquidity and expand our financial runway in this challenging market environment. During 2015, we proactively raised $425 million of equity through two separate offerings. Our core shareholders have shown their active support to the Company by participating with $268 million in these offerings. Previously in October 2014, we had raised $50 million in senior notes to strengthen our liquidity. Over the same period, we have sold 23 vessels for more than $435 million of gross proceeds generating a total of $86 million of free cash for the Company. We have taken some painful, but necessary steps to sell assets that they released significant amounts of cash to extend the Company’s runway. These 23 vessels consist of six newbuildings and six modern vessels as well as eleven 90’s build vessels that did not fit our commercial profile. Throughout this period though we have had a very constructive dialogue with various shipyards building our vessels where from we have a great the following. We adjust the remaining CapEx obligations on newbuildings. We agreed not to take delivery of four newbuliding contracts, who have also been able to delay delivery of 16 vessels by eight months on average which in the current rate environment has reduced our cash burn. The aggregate effect of these actions is approximately $80 million in cash savings. We have put a lot of time and effort on a daily basis in order to reduce our operating and G&A expenses throughout 2015, saving over this period an additional $21 million. The total effect of this aforementioned actions have benefited the Company for more than $660 million which grew a long way in supporting Star Bulk in this weak market. I want to stress that we will continue to work hard to find ways that we can collaborate with all stakeholders in order to improve the Company’s liquidity and make sure we extend our runway into the future. I would like now to pass the floor to one of our Co-Chief Financial Officers, Christos Begleris to walk you through our fourth quarter financial highlights.

Thank you, Petros. Let us now turn to Slide Number 4 of the presentation for a summary of our fourth quarter 2015 financial highlights in comparison to last years same period. In the three months ending December 31, 2015 net revenues adjusted for non-cash items less voyage expenses amounted to $44.1 million, 3.2% less than the $45.6 million for the same period in 2014. Adjusted EBITDA for the fourth quarter 2015 was $6.6 million versus $16.6 million in the fourth quarter 2014. Excluding non-cash and one-off expenses, our adjusted net loss for the fourth quarter amounted to $24.6 million or $0.11 loss per share versus $4.7 million adjusted net loss or $0.05 loss per share in the fourth quarter of 2014. Our time charter equivalent rate during this quarter was $7,886 per day compared to $11,384 per day last year. Our average daily operating expenses excluding $900,000 of non-recurring pre-delivery expenses were $3,966 per day, a reduction of 9.4% compared to the fourth quarter of 2014 similar adjusted figure of $4,378 per day. As of December 31, our total cash balance including restricted and pledged cash stood at $222.1 million. On the liability side, total debt as of December 31, 2015 stood at $991.3 million. Based on the above, our net debt was $769.2 million. During the quarter, we also had an impairment loss of $287.7 million impacting our results, a $185.1 million of which was our vessels sold. Total impairment charges for 2015 were $322 million reflecting the weaker asset value environment. Having said that, I’ll now pass the floor to our President, Hamish Norton for an update on our operational performance for the quarter.

Thank you, Christos. Please turn to Slide 5, where we summarize our operational performance for 2015. In this difficult market, we aim at low breakeven rates and aimed to continue to be one of the lowest cost dry bulk operators. We believe that a combination of our in-house management abilities and the scale of the group provide us with a distinct advantage in terms of cost and quality. On the left hand graph on Slide 5, you can see that we continue to improve our average daily OpEx to $4,233 per vessel per day in 2015 which is an 11% reduction compared to a year-ago and of course for the fourth quarter it’s even lower. On the right hand side, you can see the evolution of our average daily net cash G&A expenses per vessel. Our expenses per vessel are lower than in 2014 at $1,134 per vessel per day which is a reduction of 22%. And this illustrates our ability to spread the cost of our employees over a much larger fleet as well as being very efficient with how we use our employees. We are focused on maintaining the highest standards of vessel maintenance safety and operation over 88% of the vessels managed by Star Bulk have a rating of five stars by Rightship, which is a [wedding] organization and that’s the maximum rating. OpEx and G&A expense reductions have aided the Company and estimated $21 million during the year relative to the previous levels of OpEx and G&A per ship per day. The reduction of both our daily operating expenses and our daily G&A expenses are mostly the results of economies of scale from managing a larger fleet, but of course managing that scale very efficiently. Slide 6, shows that Star Bulk is one of the lowest cost operators among the U.S. listed dry bulk peers based on the latest available public information for the peers and the full-year 2015 information for Star Bulk. Now it’s true that we probably achieved most of the available cost savings already. However, we continue to look for and find additional savings by reviewing and renegotiating agreements with suppliers and service providers. That process is not going to stop as we remain vigilant on the cost side in order to remain competitive. And now, I’ll pass the floor to our Co-CFO, Simos Spyrou to continue with an update on our agreements with the shipyards.

Thank you, Hamis. Please turn to Slide 7, where we summarize the agreements with yards and their effect on the Company’s liquidity. Throughout this period we’ve been in contact and have had good cooperation with the yards building our vessels to further improve the payment and delivery schedules. We maintain excellent relationship and continue to constructively find measures that improve our liquidity. Our agreements to date are summarized as follows; overall, we have managed to push back the delivery of 16 vessels by a total of 124 months, approximately eight months per vessel on average. The delivery dates and $188 million in CapEx payments for five Newcastlemax vessels have been pushed from 2016 to 2017 and 2018. The above is clearly positive to the common liquidity, but it also creates value for these vessels long-term. The permanent reduction in the vessel aids as well as the potential for better commercial prospects in case the market continued conditions are better once delivered in 2017 and 2018 are of significant value. CapEx has been reduced by $223 million through a variety of agreements, reassignment of two newbuilding lease agreements at no extra cost to the Company, termination of two shipbuilding contracts, adjustment of remaining CapEx obligation for seven vessels. The graph on this page illustrates both the shift in CapEx payments as well as the new total amounts the Company will need to pay to take delivery of the fleet. At the bottom of the page, you will also see our updated CapEx schedule as of February 25, 2016 as well as committed debt amounts we have for those vessels. Having said that, I will now pass the floor back to Petros for a market update and his closing remarks.

Thank you, Simos. Please turn to Slide 8 for a brief update of supply. During 2015 the dry bulk fleet grew by 2.5% compared to 4.4% in 2014, a total of 49.3 million deadweight was delivered and 30.4 million deadweight was send for demolition. The dry bulk order book decreased from 23% in the beginning of the year to 15% at the end of the year as a result of limited ordering, cancellations and conversions. During the first two months of 2016 it is encouraging that more than nine million deadweight have been scrapped or sold for demolition with half reported to be Capesize vessels. Delivery slippage is expected to remain in line with 2015 at slightly above 40% resulting in net fleet growth for 2016 of around 1.5%. Let’s now turn to Slide 9 for a brief update of demand. Dry bulk trade growth during 2015 experienced a sharp slowdown compared to 2014. Dry bulk demand is estimated to have remained flat over the last year both in volume and ton-mile terms compared to 5.5% increase in ton-miles in 2014. Iron ore ton-miles increased by 0.3% compared to 9.2% increase in 2014. Coal ton-miles decreased by 3.5% compared to an increase of 3.7% in 2014. Grain and soybean ton-miles increased by 4.4% compared to an 8.2% increase in 2014. Minor bulk ton-miles increased by 1% compared to a 3% increase in 2014. The main causes behind the poor market where the oil price correction that begin in quarter four 2014 and led to an increase of a fleets overall speed. Global crude steel production decreasing by 3%. China coal imports decreasing by 30% and Australia iron ore exports gaining market share from Brazil with a negative effect on ton-miles. According to Clarksons, total ton-mile growth during full 2016 is expected to marginally improve to 1% mainly driven by strong grain export growth from Latin America and a global economic stimulus from low commodity prices and interest rates. The steel industry is expected to find support during the second half of 2016, has the cumulative effect of China’s monetary and fiscal stimulus measures start to yield results. On a positive note, Chinese iron ore and coal domestic production are reported to have decreased by 9% and 5% respectively during full 2015. As a result despite the fact that China’s steel production has stagnated, iron ore imports have received support from the gradual substitution of domestic supplies. Additionally, Chinese coal imports are likely to stabilize at current levels and could even experience a small rebound assisted by the gradual relaxation of coal import duties from Australia. 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. We highlight once again that the most important market improving factor is on the supply response. 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. Closing, I would like to reiterate our commitment to take all necessary actions to navigate the Company through these turbulent times. In Slide 10, we present our current cash and debt position as of February 25, 2016. Our cash position currently stands at $175 million. Our total debt including capital lease obligation stands at approximately $925 million. Expected equity proceeds from the sale of the committed vessels is $39 million, which is due to be received in the next couple of months. These transactions will boost our cash and extend the Company's runway. It is worth noting that after our latest discussions with the yards, we now only have $8 million of equity CapEx to be paid until June 30, 2017. This is a significant achievement given the importance of liquidity over the foreseeable future. Without taking any more of your time, I will now pass the floor over to the operator to answer any questions you might have.

Thank you very much sir. [Operator Instructions] Your first question today comes from the line of Amit Mehrotra from Deutsche Bank. Please go ahead.

Yes. Thank you very much. Good afternoon gentlemen. My first question is on the cash requirements associated with the debt repayments I didn’t see that slide in the updated presentation, Christos or Simos if you could just update us on that and also timing of any balloon payments? Thanks.

Hi, Amit. The principal debt repayments that we have are to the tune of a $100 million per years. Additionally, we have two balloon payments in 2016 totaling $62 million. However, we are in discussions with banks in order to extend the maturity in those two facilities and I believe you will see result soon on that front.

And that would be a refinancing of those facilities.

Right. Just wanted to ask you to follow-up on that Christos, I mean the progress towards that refinancing I mean I guess that’s kind of been the case for the last couple of quarters here. Can you just give us some more because that’s obviously a pretty serious cash call and overhang on the stock so if you could just provide a little bit more color in terms of when we could expect announcement, how far you are long in that negotiation, any color would be appreciated?

Amit you can expect some further color in the next few months on that.

Okay. And then the other question I had with respect to the newbuilding, with respect to the newbuilding book and Christos I don't know if there's anything you can provide in terms of color, guidance on how much equity payments have actually been made so far in the vessels that are yet to deliver. And the reason I’m asking just trying to understand the potential liquidity that is available down the road if there is maybe additional sales of the newbuilding book.

Well, I mean that sort of two parts of the question maybe Simos can answer the first part and maybe Petros or I can answer the second part.

Okay.

Well, Amit what we are showing on the presentation is that the total remaining CapEx for the vessels to be delivered as of today is $297.1 million out of which we expect that the equity CapEx for the next 16 months is just $8 million. Out of this $8 million almost $5 million are due to be paid tomorrow for a delivery and the remaining just 3 is remaining equity CapEx for the next 16 months.

Right. So I understand that. My question was really about the payments that have actually been made to date I assume all of those are equity payments. If you could just provide sort of a total amount of that number in terms of what’s already been paid in?

Well, for the – right now we have let’s say nine newbuilding vessels, as of the end of this month we are going to have six newbuilding vessels to be delivered and for those nine vessels the equity that has already been paid is the tune of $80 million was that your question?

Yes. Thank you Christos. I appreciate it.

Yes.

And Amit as far as the newbuliding sales that you asked in the last two and a half months we have basically sold 10 vessels and we cancelled two newbuildings. So we think we’ve – we are actually fine for now. Now, it’s going forward we see prices increasing and we see that it makes sense we might do something more, but for now we’re okay.

Okay. Thanks Petros and then one last question for me on the operations. The OpEx slide that you guys keep on showing is obviously really good and impressive. And the question I had is that $4,200 a day that you guys present on Slide 6. Just wondering is than on an accrual basis or is that on a cash cost basis?

It’s on accrual basis.

Okay. And then if we think about your OpEx though like in this market obviously every $1,000 or even $100 a day is significant savings, but if I look at sort of over the next 12 months, the OpEx number I mean it’s got to be lower than that $4,200, right, because a lot of the actual costs, some of the costs are basically already been outlaid or incurred. And so what should we sort of think about what your real cash OpEx is over the next 12 to 18 months?

I mean remember that the cash, the OpEx reported does not include drydocking which is also expense. So I mean maybe Simos and Christos you can talk about what items are non-cash in that OpEx, I mean it’s not a lot right.

We do not have anything that is non-cash in that OpEx.

Okay.

To your question, Amit the 2016 budget that we have and we have been actually slightly below that budget so far this year is bit below actually 4,000 per day. And I believe we are set to achieve this budget.

Right, okay.

Yes, I don’t know Amit what sort of non-cash costs you are thinking about.

Well, Hamish it’s not non-cash, it’s more the lumpiness of the cash payments, so things like insurance and lubricants, oils and things like that that have already been incurred that are amortized over the use on the P&L, but not necessarily affected on the cash flow statement.

The lubricant acquisitions for the fleet since we have so many ships in the water tend to average out maybe Simos and Christos can talk about timing of payments to for the insurance.

I mean if it’s not a big deal then maybe [indiscernible] I’m just trying to see…

It’s not a big deal.

I think the average those out as well Amit. I think we also average out insurance payment as well.

Got it. Okay, guys. That’s all for me. Thank you very much.

Thank you.

Thank you very much. Your next question comes from the line of Noah Parquette from JP Morgan. Please go ahead.

Thanks. So obviously you guys have done a lot of work in terms of improving CapEx program and stuff. I mean at this point can we think that your newbuild schedule isn’t going to change much. I mean most of the ships are being delivered on next couple of months and you have some in 2017 and 2018, is there more to be done there?

Yes. Exactly, you got it right. Nothing much more is going to change from the present situation I think.

Okay. And then going forward what are the levers do you have to pull to improve your situation if required. I mean are you thinking about that deferral I think you mentioned you’re okay on vessels from now, but I imagine an option in the future and you just talk a little bit about strategy you are thinking of?

Yes, sometimes on invests from a business point of view not to discuss publicly all the things that are at our disposal for the benefit of the shareholders and I'm sure you understand that. There are a lot of things we can do and we've got one of the most dedicated and talented management teams in the industry working for us. So you are correct in not making the mistake that thinking our situation is static, but we just can't talk about all the things that we’re able to do it because then we might not be able to do them.

Fair enough. I had a try.

You’ve seen that with us in the past we’ve performed, but we haven't necessarily been able to talk about what we were hoping to do.

I can totally understand that Hamish. And then can I ask a little bit, obviously you’ve shrunk the fleet a little bit I think you are giving guidance of G&A on a full fleet basis around a $1,000 today, are you still comfortable with that level with the smaller fleet or that changed all?

Well, our budget for 2016 Noah is at around $1,100 so a $1,000 to $1,100. We’re quite comfortable that we will achieve this level. We don’t expect it to be higher.

Okay. And then I just had a quick one. Can you give any guidance on rates that you’ve achieved in Q1 today in your fleet?

I think in the first two months of this year, our average income – net income was around $5,500. Yes, $5,500 I think January was $6,500 and February was $5,500 so actually probably around $6,000.

Okay. All right, that’s very helpful. Thank you.

Thank you very much. Your next question comes from the line of Sherif Elmaghrabi from Morgan Stanley. Please go ahead.

Hi gentlemen, thank you for taking my call. First, let me start off have you seen many vessels entering lay-ups and are you considering putting yours into lay-up. And also if you could just remind us one of the economics around putting a vessel into lay-up? How much of the savings in daily vessel expenses and how much does it cost to bring it back into operation afterwards?

Right, well we have – we presently have three vessels in lay-up, in cold lay-up and three vessels in warm lay-up. Now whether you have a vessel in cold or warm-up into decision of how you expect the market to move in the next two months. For example, therefore, if we think that the grain season in South America is starting somewhere in March, April then we would keep a vessel which today is not doing that well, we would keep it in warm lay-up because it's not worth fit going cold and then going through the expense of reactivating it again. So future employments has a lot to do with that decision, now as far as cost grow if we lay-up in the far east cost of lay-up is about between $2,100 and $2,300 per day and that it’s not very different between the sizes of the vessels maybe low 2’s for Supra’s and 2,300 for Cape. If we lay-up in Greece it’s about $1,500. Now the most of the cost is usually – this is on the basis of six months lay-up. Most of the cost is their reactivation costs. So let’s say a lay-up cost of $2,000, $1,000 on the basis of six months therefore let’s say around $180,000 maybe bit less is basically the reactivation about couple of hundred would be the lay-up itself and the rest 800 would be having maintaining the vessels engines from time-to-time, having [Audio Dip] the ports insurance and stuff like that. So as a yard stick rule I would say half is the reactivation and the rest is during the lay-up periods. Now how do you take the decision? 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.

All right, that’s very thorough and helpful. Thank you. Shifting gears a bit if Indonesia feels its ban on bauxite and nickel ore, do you think this could provide some relief to the market or is there just no appetite for more cargos given the wake commodity prices have moved?

What was the first part, if Indonesia does what?

Feels their ban on bauxite and nickel ore?

Well, Indonesia is close to China so actually if they keep the ban China might have to import it from further away…

So you [indiscernible] better.

So it will be more ton-miles.

Right, okay.

So I don’t think that relaxing a ban of Indonesia would be anything really positive for the market actually it’s probably fine as it is now and I think that China is importing increased quantities of bauxite from Australia, right now where the ton-miles are much higher and from West Africa.

All right, that’s it for me. Thank you gentlemen. End of Q&A

Thank you very much. We have no further questions at this time. [Operator Instructions].

No closing remarks. Thank you operator.

Thank you very much. In that case that does conclude our conference for today. Thank you everyone for participating. You may now disconnect.