Connecticut-based Eagle Bulk Shipping has rewarded investors with a profit and a quarterly dividend in what is quite likely its finale as a publicly traded shipowner.
The Gary Vogel-led owner outperformed consensus analyst expectations with net income of $6.7m or $0.71 per share that does not include adjustments for deal costs in its pending takeover by Star Bulk Carriers of Greece, which will go to a vote on 5 April.
The average analyst expectation was for a profit of $0.68 per share on the same basis.
With deal costs factored in, Eagle reported adjusted net income of $13m or $1.39 per basic share.
The owner handed out a final dividend of $0.60 per share, higher than the 30% of adjusted net income it has set as a minimum payment.
Eagle also has confirmed the sale of two 2009-built supramaxes known to be circulating on the sale-and-purchase market for a combined $29.1m.
TradeWinds reported on 8 February that Eagle had sold the 56,000-dwt Stellar Eagle for $14.7m and was circulating the sister ship Crested Eagle, citing a market source.
Eagle confirmed details of the Stellar Eagle sale and said the Crested Eagle had gone for $14.4m. Both bulkers were to face third special surveys this year.
Vogel, who is to step aside following the closure of the Star deal, celebrated three consecutive years of profit for the Stamford-based company in remarks within the earnings statement. Eagle will not hold an earnings call this quarter owing to the pending combination.
“We saw a meaningful improvement to our bottom line in Q4, reflecting both a strong recovery in freight rates and an increase in our relative performance against the market. We outperformed the benchmark BSI [Baltic Supramax Index] by 20% during the period, achieving a net TCE [time charter equivalent] of $16,169,” Vogel said.
“Following two extraordinary years for the dry bulk market during which Eagle generated record profits, freight rates came off significantly in 2023 against a backdrop of unwinding congestion.”
The current quarter, traditionally the weakest in dry bulk markets, has started in reasonably good shape as well. While Eagle’s guidance to a time charter equivalent rate at $15,000 with 90% of days fixed is down sequentially from the quarter past, it is also easily above Eagle’s financial breakeven, which is thought to be about $11,500 per day.
Eagle’s unadjusted net income for the quarter was $6.7m, or $0.63 per diluted share, which was down from the $23.3m, or $1.50 per diluted share, reported in the final three months of 2022.
For the full year, net income was $22.7m, or $1.96 per diluted share, less than a 10th of the $248m, or $15.57 per share, recorded in all of 2022.
As for the Star Bulk takeover, the current implied consideration for Eagle shares is $62.57, or a 40% premium over Eagle’s share price when the deal was announced on 8 December. Eagle shareholders will receive 2.62 Star shares for each unit of the US company.
Eagle shares closed at $61.27 on Thursday and were up nearly 3% to $62.95 in early trading on Friday on the New York Stock Exchange.
The close track with the implied deal price reflects that Eagle investors have high confidence the deal will go through as planned on 5 April.
