SOURCE: Star Bulk Carriers Corp.

August 12, 2008 19:46 ET

Star Bulk Carriers Corp. Reports Financial Results for the Second Quarter and First Half 2008

ATHENS, GREECE--(Marketwire - August 12, 2008) - Star Bulk Carriers Corp. (the "Company" or "Star Bulk") (NASDAQ: SBLK), a global shipping company focusing on transportation of dry bulk cargoes, today announced the unaudited interim consolidated condensed financial and operating results for the quarter and first half ended June 30, 2008.

Financial Highlights:

Second Quarter 2008

--  The Company reported net income of $31.57 million for the second
    quarter of 2008 compared to net income of $0.58 million for the second
    quarter of 2007.
    
--  Voyage and time charter revenues were $ 59.23 million for the second
    quarter of 2008.  This figure includes revenues of $17.05 million
    attributable to the amortization of the fair value of below/above market
    acquired time charters.
    
--  Earnings per share, basic and diluted for the second quarter of 2008
    were $0.62 and $0.56, respectively.  These figures are based on a weighted
    average of 50,963,213 shares outstanding, basic and on a weighted average
    of 56,047,237 shares outstanding, diluted in the second quarter of 2008.
    

First Half 2008

--  The Company reported net income of $48.29 million for the first half
    of 2008 compared to net income of $0.85 million for the first half of 2007.
    
--  Voyage and time charter revenues were $ 100.92 million for the first
    half of 2008.  This figure includes revenues of $34.92 million attributable
    to the amortization of the fair value of below/above market acquired time
    charters.
    
--  Earnings per share, basic and diluted for the six months ended June
    30, 2008 were $1.01 and $0.91, respectively.  These figures are based on a
    weighted average of 47,855,865 shares outstanding, basic and on a weighted
    average of 52,798,013 shares outstanding, diluted in the first half of
    2008.
    

We commenced operations during the fourth quarter of 2007 (December 3, 2007). Included in this release are our Unaudited Interim consolidated condensed financial statements which include comparisons between the first half of 2008 and 2007. During the period from the Company's inception (May 13, 2005) to the date it commenced operations (December 3, 2007), the Company was a development stage enterprise.

The Unaudited Interim consolidated condensed Income Statements, Balance Sheets, and Cash Flow Statements presented herein, include the accounts of Star Bulk Carriers Corp. and its wholly owned subsidiaries and of its predecessor Star Maritime Acquisition Corp. ("Star Maritime").

Star Maritime was organized under the laws of the State of Delaware on May 13, 2005 as a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more assets or target businesses in the shipping industry.

On November 27, 2007, Star Maritime obtained shareholder approval for the acquisition of the initial fleet of eight drybulk carriers and for effecting the Redomiciliation Merger whereby Star Maritime merged with and into Star Bulk with Star Bulk as the surviving entity. The Redomiciliation Merger was completed on November 30, 2007 as a result of which each outstanding share of Star Maritime common stock was converted into the right to receive one share of Star Bulk common stock and each outstanding warrant of Star Maritime was assumed by Star Bulk with the same terms and restrictions except that each became exercisable for common stock of Star Bulk. Star Bulk's common stock and warrants are listed on the Nasdaq Global Market under the symbols "SBLK" and "SBLKW" respectively.

First Quarter 2008 Results; Adjustment of Net Income and Earnings Per Share for First Quarter 2008:

In connection with the acquisition of the vessels in the initial fleet, the Company agreed to issue to TMT Co. Ltd. a total of 1,606,962 additional shares of common stock in two equal tranches of 803,481 shares 10 days after the filing of the Company's Form 20-F in 2008 and 2009 respectively. The company intended to report the issuance of these shares in either the second or third quarter 2008 whenever the issuance of the first tranche would take place. The Company has now concluded that proper treatment US GAAP, is to deem the additional shares as having been issued for reporting purposes upon the completion of delivery of all vessels in the initial fleet, which occurred in March 2008. Accordingly, the Company has restated its first quarter earnings. Net income and earnings per share for the first quarter of 2008 were reported as $17.8 million and $0.40 respectively. Instead, net income for the first quarter is now adjusted from previously reported $17.8 million to $16.7 million and earnings per share for the same period are adjusted from previously reported $0.40 to $0.37 per share. The resulting change to the first quarter of 2008 also includes an increase in previously reported vessel cost and additional paid-in capital adjustment of $18.9 million. No change in the Company's dividend policy will be made as a result of this restatement.

Akis Tsirigakis, President and CEO of Star Bulk commented: "We are pleased to report our third consecutive profitable quarter since we commenced operations in December 2007. During the second quarter 2008 we acquired two additional vessels, bringing our acquisition total to five vessels since we completed the Redomiciliation Merger. Out of these five vessels we have already taken delivery of four and expect to take delivery of the fifth vessel in September 2008. Also, during the second quarter we agreed to sell our oldest vessel, Star Iota, which once delivered will lower our average age of our fleet to 8.9 years. Following the completion of this sale and purchase activity we will have a fleet of twelve vessels with a cargo capacity of over one million in dwt. Furthermore, our strong balance sheet which is approximately 27% of our debt to fleet value provides us with the ability to look for further fleet growth.

We also declared a dividend of $0.35 per share, our third consecutive quarterly dividend since our inception. I would like to mention that our time charter coverage protects our dividend payment from any market volatility. The dividend represents approximately 57% of our expected 2008 free cash flow and I would also like to mention that we are not a full payout company. As having one of the highest dividend yields in the sector we believe it is important to focus on opportunities for further fleet expansion thereby creating long term shareholder value."

Fleet Employment Profile (As of August 12, 2008)

Currently Star Bulk's fleet is employed as follows:

                                                                    Time
                                     Year                          Charter
Vessel Name         Type     DWT     Built Time Charter Expiry (1) Rate (2)
----------------  -------- --------- ----- ----------------------- --------
CAPESIZE FLEET

Star Alpha        Capesize   175,075  1992    Jul 5 - Oct 5, 2009  $ 47,500

Star Beta         Capesize   174,691  1993   Feb 12 - May 2, 2010  $106,500

                                             Mar 1 - Mar 31, 2009  $100,000
Star Sigma        Capesize   184,400  1991        Mar 2010         $ 69,000
                                                  Mar 2011         $ 63,000
                                                Mar - Aug 2012     $ 57,000
SUPRAMAX FLEET
                                             Jan 4 - Feb 14, 2009  $ 28,500
Star Gamma        Supramax    53,098  2002        Feb 2010         $ 45,000
                                                  Feb 2011         $ 38,000
                                                Jan - Mar 2012     $ 31,000

Star Delta        Supramax    52,434  2000    Feb 7 - May 7, 2009  $ 25,800


                                                Dec 15, '08 -
Star Epsilon      Supramax    52,402  2001      Mar 15, '09        $ 25,550
                                              Feb 2014 - May 2014  $ 32,400

Star Zeta         Supramax    52,994  2003    Apr 2011 - Jul 2011  $ 42,500

Star Theta        Supramax    52,425  2003 April 2 - Jun 16, 2009  $ 32,500

Star Kappa        Supramax    52,055  2001  Aug 24 - Nov 23, 2010  $ 47,800
Star Omicron      Supramax    53,489  2005     Feb - May 2011      $ 43,000

                                                  Mar 2009         $ 55,900
Star Cosmo (3)    Supramax    52,247  2005        Mar 2010         $ 41,900
                                                  Mar 2011         $ 27,900

VESSELS ACQUIRED - NOT YET DELIVERED

                                                  Jul 2009         $112,600
Star Ypsilon (4)  Capesize   150,940  1991        Jul 2010         $ 93,300
                                                  Jul 2011         $ 74,100

VESSELS HELD FOR SALE

Star Iota (5)      Panamax     78,585 1983 Mar 7 - Apr 17, 2009    $ 18,000
Grand Total             13  1,184,835

(1) The date range presented represents the earliest and latest expiration dates allowed under the respective charter party. Charterers have the right to add off-hire days, if any, which occurred during the charter period.

(2) Represents the gross daily rate.

(3) Star Cosmo delivered to Star Bulk on July 1, 2008.

(4) Star Ypsilon is expected to be delivered to Star Bulk in September 2008.

(5) Star Iota is expected to be delivered to its buyers in September 2008.

We commenced operations during the fourth quarter of 2007 (December 3, 2007) and therefore we are unable to present a meaningful comparison of our first half and/or second quarter of 2008 and 2007 results.

Second Quarter 2008 Results

For the quarter ended June 30, 2008, Voyage Revenues amounted to $59.23 million and Operating Income amounted to $33.20 million. Net Income for the second quarter of 2008 was $31.57 million representing $0.62 earnings per share calculated on 50,963,213 weighted average number of shares, basic and $0.56 earnings per share calculated on 56,047,237 weighted average number of shares, diluted.

The above Net Income figure includes:

--  Vessel impairment loss of $0.59 million, or $0.01 per basic and
    diluted share, in connection with the sale of the vessel Star Iota.
    
--  Amortization of fair value of below/above market acquired time
    charters of $17.05 million, or $0.33 and $0.30 per basic and diluted share,
    respectively, associated with time charters attached to vessels acquired,
    which are amortized over the remaining period of the time charter as
    increases to net revenue and depreciation expense.
    
--  Expenses of $0.79 million, or $0.02 and $0.01 per basic and diluted
    share, respectively, relating to the amortization for the Stock-based
    compensation recognized for a total 315,000 restricted common shares issued
    to directors.
    

Excluding all the above items for the quarter ended June 30, 2008, adjusted Net Income was $15.73 million representing $0.31 earnings per share calculated on 50,963,213 weighted average number of shares, basic and $0.28 earnings per share calculated on 56,047,237 weighted average number of shares, diluted. Therefore, the effect of the above items on earnings per share would be $0.31 and $0.28 per basic and diluted share, respectively.

EBITDA for the second quarter of 2008 was $45.36 million. Adjusted EBITDA for the same period excluding all the above items was $29.69 million. Please see later in this release for a reconciliation of EBITDA and adjusted EBITDA to net cash provided by cash flows from operating activities.

An average of 10.6 vessels were owned and operated during the second quarter of 2008, earning an average Time Charter Equivalent, or TCE rate of $65,097 per day. Adjusted to exclude the effect of the amortization of below/above market acquired time charters the time charter equivalent rate for the second quarter of 2008 was $46,068. Please see later in this release for further information regarding our calculation of TCE rate.

First Half 2008 Results

For the first half year ended June 30, 2008, Voyage Revenues amounted to $100.92 million and Operating Income amounted to $50.89 million. Net Income for the first half of 2008 was $48.29 million representing $1.01 earnings per share calculated on 47,855,865 weighted average number of shares, basic and $0.91 earnings per share calculated on 52,798,013 weighted average number of shares, diluted.

The above Net Income figure includes:

--  Vessel impairment loss of $4.64 million, or $0.10 and $0.09 per basic
    and diluted share, in connection with the sale of the vessel Star Iota.
    
--  Amortization of fair value of below/above market acquired time
    charters of $34.92 million, or $0.73 and $0.66 per basic and diluted share,
    respectively, associated with time charters attached to vessels acquired,
    which are amortized over the remaining period of the time charter as
    increases to net revenue and depreciation expense.
    
--  Expenses of $2.22 million, or $0.05 and $0.04 per basic and diluted
    share, respectively, relating to the amortization for the stock-based
    compensation recognized for a total 315,000 restricted common shares issued
    to directors.
    

Excluding all the above items for the half year ended June 30, 2008, adjusted Net Income was $20.24 million representing $0.42 earnings per share calculated on 47,855,865 weighted average number of shares, basic and $0.38 earnings per share calculated on 52,798,013 weighted average number of shares, diluted. Therefore, the effect of the above items on earnings per share would be $0.59 and $0.53 per basic and diluted share, respectively.

EBITDA for the first half of 2008 was $71.90 million. Adjusted EBITDA for the same period excluding all the above items was $43.85 million. Please see later in this release for a reconciliation of EBITDA and adjusted EBITDA to net cash provided by cash flows from operating activities.

An average of 9.4 vessels were owned and operated during the second quarter of 2008, earning an average Time Charter Equivalent, or TCE rate of $64,378 per day. Adjusted to exclude the effect of the amortization of below/above market acquired time charters the time charter equivalent rate for the second quarter of 2008 was $41,747. Please see later in this release for further information regarding our calculation of TCE rate.

Dry-docking related expenses

During the first quarter of 2008, we elected to change our method of accounting for dry-docking costs from the deferral method, under which costs associated with dry-docking a ship are deferred and charged to expense over the period until a ship's next scheduled dry-docking, to the direct expense method, under which we will expense all dry-docking costs as incurred. We view this as a preferable method since it eliminates the subjectivity and significant amount of time that is needed to determine which costs related to dry-docking activities should be deferred and amortized over a future period.

During the second quarter and first half of 2008 dry-docking costs amounted $3.60 million and $6.40 million, respectively.

Fleet Developments

Vessel delivery

On July 1, 2008, the Company took delivery of the Supramax dry bulk carrier vessel Star Cosmo.

Financing activities

On July 1, 2008, the Company concluded a loan agreement of up to $35 million with Piraeus Bank A.E. in order to partly finance the acquisition cost of vessel Star Cosmo. The full amount of the loan was drawn down, on same date. The loan bears interest at Libor plus a margin and will be repaid in twenty-four quarterly installments through July 2014.

Summary of Selected Data

(TCE rate in Dollars in thousands)
                                             Three months     Six months
                                                Ended           Ended
                                            June 30, 2008   June 30, 2008
                                            --------------  --------------
Average number of vessels (1)                         10.6             9.4
Number of vessels                                       11              11
Average age of operational fleet (in years)
 (2)                                                  10.4            10.4

Ownership days (3)                                     965           1,702

Available days (4)                                     911           1,573
Voyage days for fleet (5)                              896           1,543
Fleet Utilization (6)                                   93%             91%
Time charter equivalent rate (7)                    65,097          64,378

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(2) Average age of operational fleet is calculated as at June 30, 2008.

(3) Ownership days are the total calendar days each vessel in the fleet was owned by Star Bulk for the relevant period.

(4) Available days for the fleet are the total calendar days the vessels were in possession for the relevant period after subtracting for off-hire days with major repairs dry-docking or special or intermediate surveys or transfer of ownership.

(5) Voyage days are the total days the vessels were in our possession for the relevant period after subtracting all off-hire days incurred for any reason (including off-hire for dry-docking, major repairs, special or intermediate surveys).

(6) Fleet utilization is calculated by dividing voyage days by ownership days for the relevant period and takes into account the dry-docking periods.

(7) Time charter equivalent rate, or TCE rate, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE rate is determined by dividing voyage revenues (net of voyage expenses) or time charter equivalent revenue or TCE revenue by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods.

During the six months ended June 30, 2008, our fleet utilization was significantly affected by the dry-docking of the three vessels, Star Beta, Star Iota and Star Theta, which resulted in 130 off-hire days. If days associated with these dry-dockings were excluded from the above table, fleet utilization would amount to approximately 99% and 98% for second quarter and first half 2008, respectively.

TCE rate and adjusted TCE rate

Star Bulk Carriers Corp. included TCE revenues, a non-GAAP measure, as it provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE rate is also included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods and because the Company believes that it presents useful information to investors.

The Company excluded amortization of fair value of above/below market acquired time charter agreements, to derive the adjusted TCE rate.

The following table reflects the calculation of our TCE rates and adjusted TCE rates as reflected in the unaudited interim consolidated condensed income statements for the three and six month periods ended June 30, 2008:

                                             Three months     Six months
(Dollars in thousands)                          Ended           Ended
                                            June 30, 2008   June 30, 2008
                                            --------------  --------------

Voyage revenues                                     59,226         100,921
Voyage expenses                                       (899)         (1,585)

Time Charter equivalent revenues                    58,327          99,336

Total voyage days for fleet                            896           1,543

                                            --------------  --------------
Time charter equivalent (TCE) rate                  65,097          64,378
                                            ==============  ==============

Voyage revenues                                     59,226         100,921
Less:
Amortization of fair value of above/below
 market acquired time charter agreements           (17,050)        (34,920)
Voyage expenses                                       (899)         (1,585)

Adjusted Time Charter equivalent revenues           41,277          64,416

Total voyage days for fleet                            896           1,543

                                            --------------  --------------
Adjusted Time charter equivalent (TCE) rate         46,068          41,747
                                            ==============  ==============

Dividend Payments

On July 29, 2008, the Company declared dividend of $0.35 per share payable on or about August 18, 2008, to the stockholders of record as of August 8, 2008.

EBITDA and adjusted EBITDA Reconciliation

Star Bulk Carriers Corp. considers EBITDA to represent net income before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by United States generally accepted accounting principles, or U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included herein because it is a basis upon which the Company assesses its liquidity position; it is used by our lenders as a measure of our compliance with certain loan covenants; and because the Company believes that it presents useful information to investors regarding the Company's ability to service and/or incur indebtedness.

The Company excluded amortization expense associated with above/below market acquired time charter associated with time charters attached to vessels acquired, the vessel impairment loss and expenses relating to the amortization of Stock-based compensation recognized to derive the adjusted EBITDA rate.

The following table reconciles net cash provided by operating activities to EBITDA and adjusted EBITDA:

(Dollars in thousands)                       Three months     Six months
                                                Ended           Ended
                                             June 30, 2008   June 30, 2008
                                            --------------  --------------


Net cash provided by operating activities           30,776          47,594
Net increase (decrease) in current assets              183           1,882
Net decrease in current liabilities,
 excluding current portion of long term
 debt                                               (2,816)         (8,038)
Amortization of fair value of above/below
 market acquired time charter agreements            17,050          34,920
Amortization of deferred Finance fees                  (64)            (81)
Vessel impairment loss                                (588)         (4,642)
Equity Incentive plan compensation expenses           (789)         (2,222)

Other non-cash                                         (16)            (74)
Net Interest expense                                 1,624           2,563

                                            --------------  --------------
EBITDA                                              45,360          71,902
                                            ==============  ==============

Less:
Amortization of fair value of above/below
 market acquired time charter agreements           (17,050)        (34,920)
Plus:
Stock-based compensation                               789           2,222
Vessel impairment loss                                 588           4,642
                                            --------------  --------------

Adjusted EBITDA                                     29,687          43,846
                                            ==============  ==============

Financial Statements

The Unaudited Interim Consolidated Condensed Income Statements, Balance Sheets, and Cash Flow Statements include the accounts of Star Bulk Carriers Corp. and its wholly owned subsidiaries and of its predecessor Star Maritime Acquisition Corp.

Income Statements

The following are Star Bulk Carriers Corp.'s Unaudited Interim Consolidated Condensed Income Statements for the three and the six month periods ended June 30, 2007 and 2008:

(Expressed in thousands of U.S. dollars except for share and per share
                                  data)

                              3-month     6-month     3-month     6-month
                              period      period      period      period
                            ended June  ended June  ended June  ended June
                             30, 2007    30, 2007    30, 2008    30, 2008
                            ----------  ----------  ----------  ----------
                            Unaudited   Unaudited   Unaudited   Unaudited
REVENUES:
Voyage revenues                      -           -      59,226     100,921
                            ----------  ----------  ----------  ----------

Voyage expenses                      -           -         899       1,585
Vessel operating expenses            -           -       5,781      10,333
Drydocking expenses                  -           -       3,598       6,392
Depreciation                         1           1      12,166      21,046

Management fees                      -           -         340         590

Vessel impairment loss               -           -         588       4,642
General and administrative
 expenses                          608       1,456       2,657       5,444
                            ----------  ----------  ----------  ----------
Operating (loss) income           (609)     (1,457)     33,197      50,889
                            ----------  ----------  ----------  ----------


Interest and finance costs           -           -      (1,904)     (3,242)
Interest income                  1,188       2,311         280         679
Other                                -           -          (4)        (33)
                            ----------  ----------  ----------  ----------
Total other income
 (expenses), net                 1,188       2,311      (1,628)     (2,596)
                            ----------  ----------  ----------  ----------

                            ----------  ----------  ----------  ----------
Net income                         579         854      31,569      48,293
                            ==========  ==========  ==========  ==========

Earnings per share, basic         0.02        0.03        0.62        1.01
                            ==========  ==========  ==========  ==========
Earnings per share, diluted       0.02        0.03        0.56        0.91
                            ==========  ==========  ==========  ==========

Weighted average number of
 shares outstanding, basic  29,026,924  29,026,924  50,963,213  47,855,865
                            ==========  ==========  ==========  ==========
Weighted average number of
 shares outstanding,
 diluted                    29,026,924  29,026,924  56,047,237  52,798,013
                            ==========  ==========  ==========  ==========

Balance Sheet

The following are Star Bulk Carriers Corp.'s unaudited Consolidated Condensed Balance Sheets as at December 31, 2007 and June 30, 2008:


(Expressed in thousands of U.S. dollars except for share and per share
                                  data)

                                                 December 31,   June 30,
                                                    2007          2008
                                                ------------- -------------
                                                 (unaudited)   (unaudited)
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                           18,985        38,043
   Trade accounts receivable, net                           -            40
   Inventories                                            598           804
   Prepaid expenses and other receivables                 299           830
   Due from managers                                        -         1,045
   Vessel held-for-sale                                     -        15,562
                                                ------------- -------------
   Total Current Assets                                19,882        56,324
                                                ------------- -------------

FIXED ASSETS
   Advances for vessels to be acquired                118,242        15,611
   Vessels and other fixed assets, net                262,946       704,459
                                                ------------- -------------
   Total Fixed Assets                                 381,188       720,070
                                                ------------- -------------

OTHER NON-CURRENT ASSETS
   Deferred finance charges                               600         1,029
   Due from managers                                      120           180
   Fair value of above market acquired time
    charter agreements                                  1,952         1,585
   Restricted cash                                          -        11,010
                                                ------------- -------------
TOTAL ASSETS                                          403,742       790,198
                                                ============= =============

LIABILITIES & STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES
   Short term loan                                          -        22,000
   Accounts payable                                       168         1,636
   Due to related party                                   480         1,262
   Due to managers                                          -           168
   Accrued liabilities                                  1,493         3,136
   Deferred revenue                                       916         4,293
                                                ------------- -------------
   Total Current Liabilities                            3,057        32,495
                                                ------------- -------------

NON-CURRENT LIABILITIES
   Long term debt                                           -       183,000
   Fair value of below market acquired time
    charter agreements                                 25,307        65,264
   Other non-current liabilities                            -            74
                                                ------------- -------------
   Total Non-current Liabilities                       25,307       248,338
                                                ------------- -------------

   STOCKHOLDERS' EQUITY
Preferred Stock; $0.01 par value, authorized
 25,000,000 shares; none issued or outstanding
 at December 31, 2007 and June 30, 2008                     -             -

Common Stock, $0.01 par value, 100,000,000
 shares authorized; 42,516,433 and 54,532,989
 shares issued and outstanding at December 31,
 2007 and June 30, 2008, respectively                     425           545
Additional paid in capital                            368,454       477,472
Retained earnings                                       6,499        31,348
                                                ------------- -------------
   Total Stockholders' Equity                         375,378       509,365
                                                ------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            403,742       790,198
                                                ============= =============

Cash flow Statements

The following are Star Bulk Carriers Corp.'s Unaudited Interim Consolidated Condensed Cash Flow Statements for the six month periods ended June 30, 2007 and 2008:

(Expressed in thousands of U.S. dollars)

                                                         Six months Ended
                                                             June 30,
                                                        ------------------
                                                          2007      2008
                                                     (unaudited)(unaudited)
Cash Flows from Operating Activities:
   Net income                                                854    48,293
Adjustments to reconcile net income to net cash
 provided by/(used in) operating activities:
   Depreciation                                                1    21,046
   Amortization of fair value of above market acquired
    time charter agreements                                    -       367
   Amortization of fair value of below market acquired
    time charter agreements                                    -   (35,286)
   Amortization of deferred finance charges                    -        81
   Vessel impairment loss                                      -     4,642
   Stock-based compensation                                    -     2,222
   Other non cash charges                                      -        74
Changes in operating assets and liabilities:
   (Increase)/Decrease in:
   Value of trust account                                 (3,169)        -
   Trade accounts receivable                                   -       (40)
   Inventories                                                 -      (206)
   Prepaid expenses and other receivables                     27      (531)
   Due from managers                                           -    (1,105)
   Increase/(Decrease) in:
   Accounts payable                                         (129)    1,468
   Due to related party                                        -       782
   Accrued liabilities                                         -     2,295
   Due to managers                                             -       168
   Income taxes payable                                     (207)        -
   Deferred interest                                       1,129         -
   Deferred revenue                                            -     3,377
                                                        --------  --------
   Net cash provided by/(used in) Operating Activities    (1,494)   47,647
                                                        --------  --------

Cash Flows from Investing Activities:
   Advances for vessels to be acquired                         -   (15,611)
   Additions to vessel cost and office equipment              (4) (270,385)
   Increase in restricted cash                                 -   (11,010)
                                                        --------  --------
   Net cash used in Investing Activities                      (4) (297,006)
                                                        --------  --------

Cash Flows from Financing Activities:
   Proceeds from bank loan                                     -   213,500
   Bank loan repayment                                         -    (8,500)
   Proceeds from exercise of warrants                          -    94,029
   Repurchase of shares and warrants                           -    (6,059)
   Financing costs paid                                        -    (1,110)
   Cash dividend                                               -   (23,443)
                                                        --------  --------
   Net cash provided by Financing Activities                   -   268,417
                                                        --------  --------

Net increase/(decrease) in cash and cash equivalents      (1,498)   19,058
Cash and cash equivalents at beginning of period           2,118    18,985
                                                        --------  --------
Cash and cash equivalents at end of period                   620    38,043
                                                        ========  ========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest payments                                              -     2,548
Non-cash items:
Issue of common stock at fair value for delivery of
 vessels                                                       -    18,946
Fair value of below market acquired time charter
 agreements                                                    -    75,244

Other Developments

Star Bulk also announced today that a TMT Co. Ltd., an indirect shareholder of Star Bulk through its nominee (F5 Capital), has alleged that it has suffered unspecified damages arising from an alleged breach by Star Bulk of a purported obligation under the Master Agreement dated as of January 12, 2007 (the "Master Agreement") to maintain a registration statement in effect so as to permit TMT to sell its Star Bulk shares freely on the open market. Among other things, TMT demanded that Star Bulk repurchase approximately 3.8 million shares (the "Shares") from TMT at a share price of $14.04 per share, which was the closing price of Star Bulk shares on Nasdaq on June 2, 2008.

Star Bulk denied that it has any such obligation under the Master Agreement and has been discussing the matter with TMT.

Star Bulk denies liability and would vigorously contest any claims that might be brought by TMT.

Conference Call details:

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from outside the US). Please quote "StarBulk."

A replay of the conference call will be available until August 20, 2008. The United States replay number is 1(866) 247-4222; from the UK 0(800) 953-1533; the standard international replay number (+44) (0) 1452 55 00 00 and the access code required for the replay is: 3128607#.

Slides and audio webcast:

There will also be a simultaneous live webcast over the Internet, through the Star Bulk website (www.starbulk.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

About Star Bulk

Star Bulk is a global shipping company providing worldwide seaborne transportation solutions in the dry bulk sector. Star Bulk's vessels transport major bulks, which include iron ore, coal and grain and minor bulks such as bauxite, fertilizers and steel products. Star Bulk was incorporated in the Marshall Islands on December 13, 2006 and is headquartered in Athens, Greece. Its common stock and warrants trade on the NASDAQ Global Market under the symbols "SBLK" and "SBLKW" respectively. Currently, Star Bulk has an operating fleet of twelve dry bulk carriers, plus definitive agreements to acquire one Capesize dry bulk carrier and sell its Panamax dry bulk carrier. The total fleet consists of four Capesize, one Panamax and eight Supramax dry bulk vessels with an average age of approximately 10 years and a combined cargo carrying capacity of 1,184,835 deadweight tons.

Forward-Looking Statements

The information in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding: (1) the delivery and operation of assets of Star Bulk; (2) Star Bulk's future operating or financial results; (3) future, pending or recent acquisitions, business strategy, areas of possible expansion, and expected capital spending or operating expenses; (4) drybulk market trends, including charter rates and factors affecting vessel supply and demand; and (5) other statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "should," "may," or words of similar meaning.

Such forward-looking statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, Star Bulk's examination of historical operating trends, data contained in their records and other data available from third parties. Although Star Bulk believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Star Bulk cannot assure you that Star Bulk will achieve or accomplish these expectations, beliefs or projections. Important factors that could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of a seller to deliver one or more vessels, the strength of world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in Star Bulk's operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Additional factors that could cause Star Bulk's results to differ materially from those described in the forward-looking statements can be found in Star Bulk's Registration Statement on Form F-1/F-4 and reports on Form 6-K filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and Star Bulk disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication.

Contact Information