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HomeDry CargoEagle Bulk's profits shrink in second quarter


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Eagle Bulk’s profits shrink in second quarter

Eagle Bulk Shipping, one of the world’s largest owner-operators within the midsize drybulk vessel segment, reported financial results for the quarter ended June 30, 2023.

Quarter Highlights:

  • Generated Revenues, net of $101.4 million
  • Achieved TCE(1) of $14,434/day based on TCE Revenue(1) of $65.0 million
  • Realized net income of $18.0 million, or $1.42 per basic share
  • Adjusted net income(1) of $16.7 million, or $1.31 per basic share
  • Generated Adjusted EBITDA(1) of $24.8 million
  • Closed on the purchase and took delivery of two high-specification 2020-built scrubber-fitted Ultramax bulkcarriers
  • Vessels were renamed the Halifax Eagle and Vancouver Eagle
  • Completed the sale of two non-core, non-scrubber-fitted Supramax bulkcarriers (Montauk Eagle and Newport Eagle)
  • Executed upsize and extension of credit facility
  • Increased borrowing capacity by $175 million, reduced margin and extended maturity to September 2028
  • Repurchased 3.8 million shares of common stock, representing 28% of outstanding shares (prior to purchase)
  • Declared a quarterly dividend of $0.58 per share for the second quarter of 2023
  • Dividend is payable on August 24, 2023 to shareholders of record at the close of business on August 16, 2023

Recent Developments:

  • Completed the sale of the Sankaty Eagle, a non-core, non-scrubber-fitted Supramax bulkcarrier (July 2023)
  • Coverage position for the third quarter of 2023 is as follows:
  • 67% of owned available days fixed at an average TCE of $10,900

Eagle’s CEO Gary Vogel commented, “We meaningfully outperformed the benchmark BSI (Baltic Supramax Index) as we achieved a net TCE of $14,434 in the second quarter, in what proved to be a challenging market for the industry due to lackluster demand from China and ongoing easing of congestion.

While earnings for the quarter were muted, in line with the market, dividends per share were impacted positively by over 40% as a result of our significant share repurchase effected during the quarter. We also finalized the acquisition of two 2020-built scrubber fitted Ultramax vessels as well as the sale of three non-scrubber fitted Supramaxes.

Looking ahead, the forward curve for the balance of the year remains in contango reflecting the market’s continued expectation for a recovery in rates as supply/demand dynamics continue to strengthen. With congestion now back to pre-COVID levels, and essentially fully unwound, we see rates pushing back-up above the forward curve. We remain positive about the medium-term prospects for the drybulk industry, particularly given the historically strong supply side fundamentals.

With a fully modern fleet of 52, predominately scrubber-fitted vessels, and $195 million of liquidity, Eagle is in a unique leadership position to continue to take advantage of opportunities for the benefit of our shareholders.”

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