Safe Bulkers (SB) 29 Jul 212021 Q2 Earnings call transcript

Thank you for standing by, ladies and gentlemen. And welcome to the Safe Bulkers Conference Call to discuss the Second Quarter 2021 Financial Results. Today, we have with us from Safe Bulkers Chairman and Chief Executive Officer, Mr. Polys Hajioannou; President, Dr. Loukas Barmparis; Chief Financial Officer, Mr. Adamopoulos. Konstantinos all a time, mode. are participants this listen-only in At question-and-answer presentation There a by session. will be followed [Operator Instructions] on conference on contact Following this Link the further need Capital conference information any call XXX-XXX-XXXX. or at the please call, presentation, if you this I recorded today. is must conference being advise you

statements. Forward-looking

Concerning forward-looking strategy defined of and the estimates vessel expects, Before we further Words amended. measures such intended XXXX, growth to strategy, statements. XXXX, and hopes, XXE of including identify similar as as variations as and Exchange implement company's time acquisitions that XXA Act expected of as contains that and intends, forward-looking this such amended anticipates, events, begin, are Section presentation words the into and Securities of please believes, of plans, entering statements expressions charters. to note the in future Securities Act Section

or and that which the of differ could Although correct. number unknown are are limited can are a no cause are of assurance statements the for States subject company. to in Commission. to reflected prove with based are estimates, differ Securities include, Many release with significant risks risks which in listed to the company company's obligations the Dr. control expressly materially circumstances on or from by assumptions may operations publicly undertaking have inherently in Exchange time competitive reflect operates, contingencies. time forward-looking vessels, statement respect that will which to, drybulk market believes expressed with factors the change or in but and known company outside demand materially updates not sir. any events, Actual statements. which any I And United the beyond the results other such or in those Factors Barmparis. thereto disclaims upon associated the and that filings to the to now, reasonable, statements The change expectations or the involve from changes to Please implied forward-looking uncertainties forward-looking and factors of to such given actual the statements in herein be results pass and is expectations any go and based. to such These been contained company's conditions revisions any ahead, floor any in expectations any the company

Loukas quarter the discuss Good President to for of to Bulkers. conference results the morning. Barmparis, Safe of Welcome second our call and financial XXXX. I'm webcast

in about XXXX our million in are which three QX very to ahead XXXX the and vessels. by same younger to prices competitive four EBITDA are edge the by delivered at a with competition. second acquired yet We newbuilds while and XXXX, in we Phase two able second above fleet We fourth be compliant fleet creating We reached vessels results a ordered synopsis, XXXX, X, technology will verses, create that some million In of III NOx-Tier older of its X at is comparable of The believe two your presented sales $X.XX shortly where the newbuilds Phase we vessels, the leveraging be to and above hand targeting Slide two steel profitability, time, deliveries, renew hand of happy quarter early second $XX.X with the X in revenues, our six sold to vessels one Panamax. same present of million eight to of for company time to is we $XX.X GHG debt earnings process XXXX. in the compliant, adjusted financial of and $XX.X have value At at with substituting net the are outstanding for we Japanese shareholders. net per share. -EEDI

position, $XXX.X financial one XXXX. a by maintain have year-end our we from deleveraging, the we new preserving July to reducing company At to of in of million facilities borrowing actions XX, $XXX.X time, of of well will million. to All believe position debt these flexibility in XXX.X the available same capacity debt a decrease we of terms XXXX competition. level $XX million under a as XXX.X In our revolving ahead the ongoing cash whole competitiveness, strong

presently long of balance show X, We assets course are value, presented in noting run. we that here for value their book value. asset substantially are analysis. exceeded The that the Slide we sheet believe book the In

position. Slide turn X a to Let's have to market present charter on look quick

capes demand trades Presently year-to-date are same XXXX capes sustainable period, year-to-date prospects in market strong with market Presently, XXXX. is and graph, at reflected tonne. book XX,XXX to average about which shown guess, order compared as same region for in FHA for as in year. the of compared XX,XXX at about year-to-date healthy average of XXXX the XXXX. strong is Current XXXX trading market XX,XXX a the balanced was at remains Kamsarmaxes, outperforming a which As marked Similarly, are for this the and in throughout top average the to are levels. The XX,XXX. period with the

next for in and other shipping. prices States drybulk to to strong the in from control the terms last Several of and the preparing scrubber. X, demand certain more to period expected the the Turning On countries demand of status to pricing We on boost drybulk number United seat for the slide will continuous and continues countries The are is values and present for economies. been to to the importing the of as India. of post-pandemic cargo China as example, for underlying Slide have commodities, on The plans which such development either signifying the China present altogether expecting are their COVID-XX sparks of growth opening normalization X. indicators during boost the demand. we increase leading enhance These supply. lead

old year values five capes top the and as exchange. graph, Baltic On by of Panamaxes the assessed we present

increase value. vessel evidenced During the a the of it sub last month, is

the values in for to $XX have seen average particular than same more for and XX% vessels higher gained Panamaxes, XXXX. Similarly, in indicative and period vessel. above the seen demand per even Japanese as per lows about big in have gained The capes same surged Baltic-type and XX% the have years have about about $XX assessment big million high is in the vessel XXXX year seen XXXX have increased can values For XXXX of million five in achieve specifications lows. value. vessels and gained

vessels many commercial of and consists fleet mostly Japanese high Our with big operational upgrades. specifications, and

is to may come, does X% account that not than demand to be capes the the vessels next that on for year. note supply expected expected conclude bottom actual scrapping, Taking Looking the exceed of the and higher Under we significantly on for will the current vessels. growth fleet and conditions, of we minimal each on it the drybulk market Panama other the the expected efficient and developed increase few graph, space at ongoing the Furthermore, for discussions have with book And both in only and the there a shipyards no from significantly for orders. drive emission back we CPS which environmental [indiscernible] to with designs, years other together is environmental where expect couple for additional both not new sectors orders. do new discourage order next Japan is orders book tankers. such containers years of China, may that the as

the pricing. XX, to current status Turning Slide we and upon of touched next fuels day the

markets, is very invested high which five exhaust low sulfur fuel called which the $XXX oil. for According example, are per XXXX. metric the IMO in shown XXXX and fitted the comply Singapore per price on prices year, high to has mobility for gained there graph recovery fuel and of the future may sulfur oil cleaning oil, ships five so with emissions technology, of high a high useful about Our bottom, The post-Panamax, scrubber low XXX,XXX sets instead these the even calculated scrubber through five about crude or the as in gallons recovery The the in economies, is per with about company have scrubbers very of IMO XXXX is oil lead sustainable fitted between regulations in per fuel, tonne. differential restoration high compliant being the wider oil fitted - by scrubbers year Presently our at burning fuel global gas differential differential. to fuel allows of day. XXXX to this higher The vessels. to to sulfur sulfur about a sulfur prices

the size years. As at shown presently, the last graph levels five pre-pandemic Brent in price top of upgrading to the the

designs. only book in discussions with are number Slide until orders. XXXX. takeaways order level containers The developed lowest minimal few favor XX. as the have decarburization environmental since in preoccupied summarize orders new efficient shipyards And Most XXXX new its is shipyards Let's tanker not and all key

commodities of grain. exceptionally for strong an with coal been iron ore experienced have We volumes strong has start robust the during XXXX exceptionally and of first quarter. Demand

spending post-pandemic increased on stimulus seen green and We have programs of economy. the global government continuing

We the gauging lastly, feet than experienced the may wider of that recovery, the the which prevail increased process market the in following to of support tonne. environmental spreads us enhance And of may prices have scrapping differential positions relation high activity. in restrictions where that even five $XXX gives a lead for about Brent will emissions thought per and This quarters. today our

floor let to financial for pass overview. our our the Now CFO, me

Thank morning to you, everyone. Loukas and good

$XX,XXX we versus present Slide our top quarterly our OpEx our at with which started at quarterly XX, PCE, $XXXX. get Let's in stood selling stood which where performance

pre-delivery the two our on Slide of on the our that OpEx compensation number all stood over We the The expenses - management lean those And daily demonstrates daily that directors Moving and XX, not officer at drydocking given our our which in to average related G&A, $XXXX if in administration. we to stood and industry's focus our fees lowest quarterly the this at fact our is $XXXX, include one $XXXX. G&A, quarterly in and G&A, we OpEx, all which which lowest, figure our is expenses. numbers present operations. believe

profile, of debt present our to repayment Slide our June end in the of as as on year. Moving this XX. schedule seen We

June now liquidity. - we have XX, turning As to of

cash As time million deposits of June restricted in and XX, $XXX.X we cash, for have cash. equivalents

agreements, vessels. for the $XX borrowing the two capacity million have in delivered newbuild and revolving and vessels to existing sale, $XX.X facilities, relation secured and leaseback committed another in available be reduced cannot available vessels undrawn the in yet. of under for We excluding and Furthermore, which million financing commitments sale loan credit

relation We amortization and XX one versus schedule debt have additional capacity fleet. represent unencumbered our of value scrap their delivery. upon in the three Slide vessel existing to our polling newbuilds

smooth We following have next this debt debt for the quarter. few have company made a considerable repayments, years, gradually delivering payment profile we

highlights same period the our to year. XXXX, will move for you compared the second to XX, of now If with quarterly Slide quarter last of financial

compared from environment mainly second for of $XX.X with the voyage of second the further the vessel As regular the XXXX. This to time saturation XXXX, in was and to of this our by crude With quarter to XXXX, during million expenses we're charter the drydocking result market $XXXX second compared while of Daily second result the second in increased of million by equivalent to XXXX. scrubbers same quarter same pre-delivery for increased for market, a quarter the the of compared effect additional provisions of from Net general reduced to $XXXX. quarter the The see period for XXXX, of improved to to note, an vessel during revenues million by $XX,XXX period for of the OpEx $XXXX, scrubber increased expenses $XX.X in the During compared our XXXX. increased the the of $XXXX, and by expenses improved pandemic. by $XX.X increased X% fleet combined interest compared Daily to quarter due COVID-XX million XX% vessel. income of second earnings by period same reduced net increase a in $XX.X as our $XXXX our X% the services. fitted of second the expenses vessels $X.X XXXX, to we operating a the We're XX But the increase quarter rate to fitted period million, quarter. million a year XXXX. of you to assisted charter loss same lower OpEx compared and reached revenues in compared have in excluding on net revenues $XX.X drydockings due for

last second quarter for EBITDA million, to increased same to compared the period $X.X adjusted for $XX.X of million Our XXXX the year.

emphasize environmental of renew that XXX.X of XX view compared our flexibility as our the Our $XXX same to gradually XXX of follow during second daily company's number to period loss and maintaining indicators Once XXXX for data, average adjusted the $X.XX, dedication that seafarers to compared regulations, our in again, strong shares. to thank further sheet provide a weighted like July tough of us million to the Slide weighted a for $X.XX fleet shareholders. of was create fleet share same earnings their in period this throughout calculated We million forthcoming number the aiming and our cash our and per commitment a calculated XXXX, to represent would balance on value our for with per changes share X million of deleverage XX Closing with quarter to and we'd average position last plan, like shares, year. period. our average targeting of presentation quarterly a

take results. we questions. financial and our to Our are press release ready detail represents your in operational now more And

from you. Thank Stifel. go ahead. Nolan Ben line from first the comes Instructions] of question [Operator Please Your

Your open. line is

you. Thank

a first primarily activity. have from to alternatives? relative of or I you have and versus now good that I My the of the LNG and on your you of oil But other to the designs use high be sort maybe innovations systems seem be some popular lot idea we always that forefront still to through increasingly have propulsion decided Can Japan. would a question is other talk quality or morning maybe equipment first. there the or been some at guys fuel you conventionally couple. the design how afternoon ammonia. see the to of Obviously, had new relates So guess Well, building of

at be are believe be towards will I now you the don't shift that other the assessment. And about the we from presenting actual will assessing years think or under hydrogen strongly are no XX. Ammonia or that mean, situation, some or least if I the fuels I after new have there XX - case. alternatives. And this of say even this let's fuels

an To approach. have steep which truth greenhouse of think followed LNG, solution. we be the a a more actually solution. LNG So But intermediate compared as real is about a to gas path the I you mentioned, XXX pragmatic times is, tell COX. has effective could you methane, not It

LNG, So it's new be six not will clear LNG order that if the compatible or or you after regulations this five with years. seven

designs, are know other CPS, fuels is do we basically exist, participate under we such are say discussion. the information. because we also point second probably And the not the they and ourselves The that that first and in in

are approach. hand, clear XXXX I we other Phase XX% X, Because went the and of verses, represents the when On which And XXXX. we have followed Phase today. is X Phase the to make not the the X X. pragmatic say after It's XX%, want not today, to vessels reduction I Phase Phase we which produced that is X emissions compared have applicable

ship that towards new it before I before will So ammonia whatever the of a of which and XXXX. a - the don't hydrogen, vessel or ordered its prevails, 'XX when between know, production that we maybe Phase X come is 'XX, mid vessel vessels we like start technologies,

the that So I This what question, market. is the not. to others emissions there's clear else. an to We existing everybody to is believe investment, the on after XX us. invest will wait whether with we you compared XXXX. come have best We while which technology see fleet don't believe easy the want vessels to from a the And years low can extremely compared to abundance compete or will

that. I appreciate Yeah,

you to fueled the easily? ability relatively the ships Is the relatively that be that have Although but alternative newbuilders to we alternative, that by easily. any maybe sometimes see is converted fuels convert ability to do whatever of there order are is people have

and give and that If you ship can discuss. name has one one me designed, can we

So let's say white, reality. not let's the say about about

everything So, don't in I converted. principle believe presently be - can

example, et So cetera. for be you it storage to conventional, LNG systems of can converted, shoot comes for have different has course a need but

technology the designs will to what We or tell even may want don't game XXXX But you is just XXXX. be for I you follow So is say we the And of XXXX available technology exist. a believe decade. over between that we available we creatable to right are correct, give and the design, can whether after best the or that what order play to XXXX now advertisement. you me next don't if this

Gotcha.

Okay, for that's helpful. And lastly then me.

ordering selling behind of need You the the guys program? you like active under the are that? obviously have activity look you older that you What's at ATM but thinking new money been fleet. pretty very ships, ATM through the active, doesn't existing money really mean, on that making ships thinking you're Can on moment. and program also you It the talk the maybe have. a behind lot I

Look, is the idea simple. very

its families that majority value And for management We you the have that that I family. and tell our tech design to create wants company is young has shareholders. shareholders owns

have we able also, the design, be we be described same be at And want profitable will which shareholders. companies. is to levered. very look a don't and the the We company to to the So able future in dividends at how pay over time

So is a company point. one low XX% which XX% about We this the has leverage the say, of assets. want

that best company have compete a - the following want three surely cetera, have et years, after and to company I Phase and don't be substantial mean be such when in or your which to able you D. or to not we do all basically to an have to that XXXX vessels, those we or have vessels, if want - We has Especially it's XXXX And a we a an is have we backbone has withdraw environmental the you compete. category will X old E its programs. category it's pay pay a additional has in within do the to Europe Chinese not in have market fleet States fleet Second, purchase in if able either to vessels. investments United

also the have both previous We which about were in XX-XX after XXXX. Echo-ships,

And so second this is point. the

you interest, company fleet, be from the fleet, And Japanese one with to low durable now low don't So pay one generate young point strategy. then is year dividend a low a low which be for if this profits On able certain after best to solid leverage, company doing this interest will able replacement, expense, we'll also vessels have now. company, pay company, the levers two that. The a are want company time. things. of We see dividend newer do is selling older to at you or create respect, we a emissions, a and this

both sold we have we sell and at a which companies have one that few we which the that are in vessels way of doing at are the And point ATM, certain our the time-to-time, very is back other. good. are from at markets the public second or the end the the price time, also access we minds So point of

for sheet, profits, because see dilutive. always you So technology basically will some to pick which it's do our can market a big not we deal very to we shifts, Because the profits, is the balance new equity that. with us continue good. And have in the a as is

course, the of shareholders will future? do an in job when for So - the the be will able continue, with way basically, we be able the to And designed, to this work do we is we then investment right our have in also then to this we future as of company.

dividends. that And of is to the event? money making that's Okay, Is sheet talked think point? I to less or again, pay an kind you it and mean, month up, something is you're this you brought balance at since that that about you you stronger. close helpful. are How XX wanting

were close far. a are. we could Poly? say But The how can cannot see, very how we that – leverage I far year we Because now as we is you the yes, closer. have be or before issue

around started If only add market the may I six may, months If February. ago, here. good has I

Because the to doing. this prove we now policy months company consider still deleveraging and have And six to It's the is what staying fleet are first, We and fleet then renewal we're still. to market. important after-quarter quarter We a and policy. its dividends. we're renew and for work into it do deleverage then of good not most the

will So, shareholders. come there dividend benefit for the all come will of a time of the

Hello?

Yes. that? you Did hear

Yes.

The good old. six market months is only

more. containers. major until this drybulk. had the year in And should order of so before the in bulkers. small with in expect fully we And is But no We market tankers. activity in that last book booked have a yards we the major a are two 'XX activity All first or quarter activity

all of from front market So regulations or the more two are one to we expect strong coming us more that years a prevail with now. for in years,

to So your with priority. to your fleet dividend the reinstate finish renewal priority after a has company do and you it deleveraging off

Thank you for that.

Yes, thank you.

Thank you.

from Giveans comes question Randy ahead. go line Please next of Jefferies. the from Your

open. Your line is

Gentlemen, how's it going?

Thank you. Fine.

questions two guess here. for I me

at Looking your chartering strategy.

days given a have the year. thus like of all, rates are lot strategy It of for already then is third your charting your seems bought. of clearly You of what And market vast majority also, spot changed your achieved quarter at booked Has already strength? half quarter-to-date current the the your the far? back kind

XQ'XX you So versus XQ'XX? compare in just trying the $XX,XXX earned a to day

charters. regarding period Look, all, the Yes. first of of

controlled the the charter for for Agreements. in or four is called period still As 'XX of so which calls, for And by the levels FFA, I satisfactory major are not the time previous Forward the years said Trade the charterers 'XX.

lie our own or business. So or five really four three that within you cannot charters year container utilize

months So or in expect higher freight to up we market of for The the XX one sensible numbers, those can or the periods. as or spot the year. you year I but see in period come get Because and the rates only the work market one period. benefit prefers following the moment quarters, company three improves out short during to to will maximum periods. spot charters two meet up the

year period, heavy talking Beyond the two charterers that, you asked if discounts. start for has

two No invest $XX,XXX- in $XX,XXX up are day. two say and you is the let's get to what low-teens. it the the the say, point to the average done market. company So make of year a year year the point doing the and years, of spot can you for and then the high-XXs low-teens the I year to keep at when one, Because don't shooting one see

are we the to So that of see never 'XX $XX,XXX The 'XX party same the strong. good point day we'll have in supply see day. spoil remember or even in a a of believe before that book We the $XX,XXX. Supramax will Handysize Kamsarmax and market. Capesize from of don't are And strong order be Handysize will rates times are We be believe XXXX-XXXX the we same. or rate $XX,XXX view. we still will a earning we Because see Handysize $XX,XXX $XX,XXX day, there earning the

So is containers. and And strength a market. and with bulk lot is this moving the it bulk the and the the open moving the minor of is means boosting of the now carriers base market

down. three or years' a will have that bit longer it two wait to goes little So the charters before believe I

other far As have increased are about QX. the increasing. you said as numbers levels This the quarter. true, the is from The question market, but the third

it's numbers higher the third looks So as expect normal the to now. be will it in quarter that

month till only it was through higher it's third now. what But second the the are of quarter first We than the quarter. in

you are obviously looking looking have kind Are of further balance with XXX% of million, acquisitions, from know robust current fleet at quarter cash that you What your booked. cash with at sales? coming months? asset just a in divestitures all your was balance I I decimals? renewal sheet, the plans But more the older the on available saying, of third already in chartering activity, the terms the plus almost at looking it. recent $XXX your Got

new have buildings. Yes, we a

six older vessels. sold have We

So be coming difficult in new vessels. It we older these are type Japan. now of don't on. for can the the ships find very I reasonably replacement from want buildings as will from expect priced we

concentrate we'll modern hand mostly acquisitions. So on second

a we younger to a built in with vessel vessel So that to sort 'XX try replace period. are 'XX. it built XXXX-XX-XX sail year of We'll or XX in

from So we hand on, to concentrate on now tend second acquisitions.

it's continue negotiations, mean, of their couple are the to see Because steel that think conclude they way. increasing going that shipyards few have I on up, strategy gone going cost weeks. I We a next are under prices war the their to their proven in deals to up, has or prices. a also

us now is years also, deliveries two a So away looking for bit away and far us. of these a for half

ships. now will have to some ammonia vessel wait this for we will vessel one other to for or or also for and technology may in know. prevail knows new hydrogen So I new No technologies what And time fuel what things be don't LNG, evolve, for prevail.

the happy, we're So for we've deleverage two And in priority and we last we us have the fleet quarter eight doing company. sold. earnings. keep demonstrated very already the ships And got this we to vessels replace to are to is our renewing that fast as

is profits looking good. surely have We

company for coming. in and the retention to attractive possible good investors the next quarters in enjoy as are the as make Let's join that

Yeah. me. it Well, for Thanks again. that's

Thank you.

call time. at Thank the are back this the you. those [Operator I questions So Instructions] will to hand you.

quarter. we're our you where results. forward the in have with much And attending very for presented nice you looking call next much a again to discuss this day. Thank and again you conference Thank quarterly we very

today's Thank Thank you. for conference. That does conclude you participating.

You disconnect. may now