In this episode of Capital Link's Trending News Webinar Series, Star Bulk Carriers SBLK President Mr. Hamish Norton offered his insights and a strategically detailed look at how the company approaches shareholder value creation through disciplined capital allocation. Star Bulk makes capital deployment decisions anchored in measurable returns, with a readiness to adapt to shifts in asset pricing, freight rates, and regulatory pressures.

To watch the full webinar, please visit the following link:

https://youtu.be/82WutfqKAAE

Fleet Upgrade Strategy

Star Bulk continues to invest in efficiency improvements that reduce fuel consumption, enhance environmental compliance, and extend vessel competitiveness. In Q2 2025, the company fitted three vessels with energy-saving devices (ESDs) and high-efficiency propellers, bringing the total to 47 installations, with 13 more planned for 2025. These measures, alongside five newbuilding Kamsarmax vessels scheduled for 2026 delivery, are designed to achieve fuel savings of 10–15% while ensuring compliance with tightening IMO carbon regulations.

Capital Return Policy: Dividends, Buybacks, and Financial Discipline

Since 2021, Star Bulk has delivered $2.75 billion in total shareholder value creation — $1.4 billion in dividends, $518 million in share buybacks, and $876 million in debt repayment.

A central principle in this approach is what Mr. Norton terms "pure arbitrage": using vessel sale proceeds to repurchase shares when they trade at a significant discount to net asset value (NAV).  In Q2 2025, Star Bulk repurchased approximately 3.3 million shares for $54 million, funded largely by the sale of nine older, less efficient vessels, which generated equity proceeds of about $82.1 million (with $50.6 million to be received in H2 2025). The company renewed its $100 million share repurchase authorization in the quarter.

Dividends remain a core element, with the company declaring $0.05 per share for Q2 2025 (record date August 28^th) and maintaining a policy of paying out approximately 60% of operating cash flow.

Debt reduction reinforces this capital return policy. Star Bulk amortizes around $250 million annually without refinancing, which has brought net debt down to $761 million as of August 4, 2025 — well covered by the fleet's scrap value of $932 million. Cash stood at $407 million, with an additional $115 million in undrawn revolver capacity, giving the company pro forma liquidity in excess of $520 million.

As Mr. Norton explained, when shares are "ridiculously low," operating cash can be used for buybacks; when valuations approach NAV, liquidity is preserved for future opportunities.

Market Outlook: Tight Supply, Seasonal Strength, and Strategic Deployment

Supply Side Fundamentals

According to Clarkson data presented in Star Bulk's Q2 report, the dry bulk orderbook remains low at ~10.8% of the fleet (~113.2 million dwt). About 27.7% of the global fleet is over 15 years old, and increased special surveys and dry docks are expected to trim effective capacity by more than 0.5% annually through 2027. Regulatory compliance is also prompting slower steaming, further reducing available supply.

Demand Drivers

On the demand side, Mr. Norton highlighted the "ocean imbalance" — with more ships in the Pacific and fewer in the Atlantic — which has supported rates and is likely to persist, though less strongly, into early 2026. Star Bulk positions vessels to capture Atlantic exposure during peak imbalance periods.

In 2025, Star Bulk expects a stronger-than-usual H2, driven by Chinese restocking of coal and grain inventories, Brazilian iron ore seasonality, and the commencement of long-haul shipments from Guinea's Simandou mine in Q4 — a development expected to materially boost ton-mile demand.

The company also noted record export volumes in June 2025, partly due to cargoes expedited ahead of tariffs. While Star Bulk's direct exposure to tariffs is limited, Mr. Norton cautioned that slower global GDP growth from trade restrictions could indirectly weigh on demand. Conversely, he sees upside potential from post-conflict reconstruction, noting, "It's astonishing how much dry bulk you need to reconstruct cities."

2026 Outlook

Star Bulk projects dry bulk trade growth of +0.3% in tons and +0.6% in ton-miles for 2026. Combined with limited fleet growth and ongoing slow steaming, the supply-demand balance is expected to remain favorable.

Positioned for Cyclical Resilience

Star Bulk's positioning reflects a deliberate alignment of capital returns, operational efficiency, and market strategy. By focusing buybacks on periods of deep NAV discounts, maintaining a reliable dividend policy, and preserving liquidity for opportunistic investments, Star Bulk is managing both upside potential and downside protection. As Mr. Norton concluded, "We think Star Bulk is an exceptional opportunity as currently priced"

Disclosure: Capital Link is the investor relations advisor to Star Bulk Carriers SBLK. This content is for informational purposes only and not intended to be investing advice. We would like to highlight that this is not a Capital Link article with our own editorial on the company. It is a company management interview. Thus, all comments in the article are theirs.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.