Star Bulk earns back $250 mln scrubber investment

Greek dry bulk shipping firm Star Bulk Carriers has earned back its $250 million investment in exhaust gas cleaning systems (scrubbers), within a span of 2.5 years, the company said.

The bulker owner has been a staunch supporter of scrubbers as a means of meeting the IMO 2020 sulphur cap and had a fleet of 114 bulkers fitted with scrubbers already in 2020.

The company explained that the investment included all related capital expenditure as well as the off-hire cost to install the scrubbers.

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“With our fleet (128 owned vessels) being ~94% scrubber fitted and the current Hi5 spread at very healthy levels, these scrubbers should augment our profitability for the foreseeable future,Petros Pappas, Chief Executive Officer of Star Bulk, commented.

Scrubbers have been a popular solution among owners due to their capability to bring premiums to owners who continued burning high sulphur fuel oil (HSFO) against very low sulphur fuel oil (VLSFO).

“With a limited supply of vessels, the upcoming environmental regulations curbing vessel ordering and speeds, our competitive operating costs and our scrubber-equipped fleet, we remain optimistic on the income earning prospects of our company despite a seemingly uncertain macroeconomic environment,” he said.

The company reported a strong performance in the second quarter of 2020 having earned a net income of $ 200 million, compared to a net income for the second quarter of 2021 of $124.2 million.

Star Bulk added that its Board of Directors has established an ESG Committee, which will guide and support management on ESG-related matters.

To remind, earlier this year Star Bulk joined a landmark initiative that aims to create the first of its kind green corridor between Australia and East Asia for shipping iron ore.

The initiative was launched by a consortium led by the Global Maritime Forum. The consortium also includes British-Australian resources company BHP, Anglo-Australian mining company Rio Tinto and German dry bulk shipping company Oldendorff Carriers.