STAR Bulk Carriers has said it is already deriving benefits from its recent merger with Eagle Bulk as it posted a sharp increase in profits for the third quarter of 2024.

Net income for the quarter increased by 86% in comparison with the same period last year, to $81.3m.

The result included a gain of $9.1m from vessel sales, although the gain from disposals in the equivalent quarter of 2023 was double that amount.

The Nasdaq-listed owner has been taking advantage of elevated ship prices to shed older tonnage, so far selling a total of 29 vessels for proceeds of $563m.

Star Bulk said that it expects to make a further gain of $10.5m in the fourth quarter when another three agreed vessel sales will close.

Third-quarter voyage revenues jumped by 54% to $344.3m, reflecting the integration of the Eagle Bulk fleet of supramaxes and ultramaxes, as well as improved charter rates.

Average daily time charter earnings per vessel reached $18,843, up from an average charter rate of $15,068 per day in the third quarter last year.

The Greece-based owner now controls a fleet of 156 bulk carriers, all of which are equipped with exhaust gas cleaning systems, or scrubbers.

“We have already achieved significant synergies since the Eagle Bulk merger closed in early April,” said chief executive Petros Pappas.

He said that the company had been “crystalising a valuation arbitrage” as vessels were being sold by opportunistically using part of the proceeds for share repurchases at prices “significantly” below net asset value. Share buybacks had totalled $443m so far, he said.

“Substantial remaining cash is kept in reserve for future opportunities for fleet renewal, share repurchases or debt repayment,” Pappas added.

The company had strengthened its financial position by reducing net debt per vessel over the same period by 53%.

In October, a tranche of debt was repaid to ABN Amro and the mortgages on six of the company’s bulkers were removed, bringing to nine the number of debt-free vessels in the fleet.

“Regarding the dry bulk market, we remain optimistic about its medium-term prospects given the favourable supply picture, stricter environmental regulations and recent steps by the Chinese government to stimulate the economy,” he said.

Last month, Star Bulk signed up with one of its existing lenders for a $130m seven-year loan for post-delivery financing of five kamsarmax newbuildings it has under construction.

Cash and cash equivalents on the balance sheet stood at $467.9m at the end of September.

The board has declared a dividend of $0.60 per share for the quarter. In the last four years, through 15 consecutive dividend payments, the owner has returned operational free cash of more than $1.3bn to shareholders, Pappas said.

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