Safe Bulkers (SB) 10 Mar 222021 Q4 Earnings call transcript

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

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

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

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

presentation start will We our in three. slide

and intend Black We to laws and crews situation assess do We We loyalty we on in fleet. and with any vessels Ukraine we bulk sailing to are [ph] and and sanctions Russian clashes the further currently have the the international has both Sea. or in of Ukrainian any will comply the have not against conflict, drybulk economy on soon closely on the and the to war global impact continue the will don’t out that monitor deeply about it Ukraine. concerned which in vessels the end broken we avoiding our Russian hope

time improve vessels, able slide liquidity. As good very slide, was our and we for can several affected. be the advanced the substantially company. we year present environmentally commodity into from our of enter XXXX a quarterly charters, In fleet number see We will results. deleverage trades renew our major synopsis were our with favorable four, to

our per a company result strong performance, dividend is share. of As a declaring the $X.XX

million income, EBITDA $XX.X terms million in net profitability, we of adjusted earnings net million share. of and In $XX.X of $XX.X of $X.XX revenues, per reached

X.XXXX. OpEx rate G&A $XX,XXX, of of reached and daily In performance, we terms equivalent of time charter aggregate

RCFs, their reserve $XXX deliveries. four vessels capacity we we liquidity newbuilds $XXX recently cash, successfully million Furthermore, -- X, March is in borrowing unsecured facilities unencumbered Most of to credit newbuilds borrowing that, issued secured bond of XXXX, in of their $XXX have of about is February, seven a a deliveries. unencumbered and capital in terms relation and up and annum. million as additional additional in we Further and In have relation to and we which upon resources, $XX five-year commitments. vessels million additional have seven coupon to capacity four X.XX% per have at in €XXX non-amortizing million

for stood most the X.X Our we sold average effectively we efficient average of renewing $XXX.X fleet years March vessels. collected vessels and with with $XXX.X paid X, million $XXX.X as secured years with five age for seven at XX.X debt and XXXX we age, our vessels second-hand million and the million younger

it the XX with track of of segments ample fundamentals, we company’s our we the company pure have management fleet of of in $X.XX X our with and ahead we the by plus expected onwards. owner we’re is same successfully per drybulk from led record secured it through sheet that [ph] Polys XXXX in liquidity, environmental second-hand vessel five. leverage, company. ahead declared low and XXXX, impact replacement reliable renewing EU terms noting and of of newbuilds balance presented Phase the and now counterparties, years at strong the Allow III vessels time, slide Finally, with nine secured to cash competition from Panamax me during investment XX in second-hand competition regulations ahead dividend us carryover experience five guide expansion Hajioannou. Tier key Safe newbuilds peer Bulkers With share, you to highlights top the of X in a Phase of for delivered as flows

new of have inflated also differential. price revenue from fitted fuel million plus $XX scrubber vessels due capacity additional the yearly the to about We an

company long XX% environmental the is at believe comprised Japanese and low value. advantage. both with of The chartering are commercial orderbook in Our and for superior positioned with based market upgrades, today well fundamentals years booked the XXXX. remains vessels is and premium substantial XX specifications vessels for XX with and operational positive We resale run

present development Index slide high CRB further the stands of upside five-year which we with Commodity potential. at Moving seven, to currently

precious example, represent basic As and indicated futures metals leading I metals industrial trade, indicators commodity prices, will shipping. agriculture, for energy, for

by We a a at for XXXX which of will commodities global vessel prices to set to X.X% for program the means the best and stands infrastructure China XXXX in while in growth conflict. growth pace of of seen strong amplified The XXXX, tonne-mile related XXXX a Further for about XXXX. demand at X.X% XXXX, at growth growth spending GDP global general about Ukrainian fleet certain IMF in growth bridges, of further a increase IMF squeeze the spends in have X.X% trillion coal stimulus materials X.X% $XXX that the yearly is and for during ongoing billion , agricultural, XXXX. that, forecast roads, be across and the expected result the X.X% GDP conflict have and drybulk like drybulk The board are GDP there $X as X.X% during X% for expected iron Ukrainian supported XXXX allocated for the before the similar demand forecast scenario. ore, supply assuming industrial for expected forecasted recovery by while on projects decade. realistic USA infrastructure XXXX

global overall for €X.X EU is demand. period XXXX package XXXX recovery of boost billion the a to of Lastly, for the further

charter slide Let’s to look on have market present a quick conditions. eight turn to

the to graph, market XX,XXX lately deliveries to In with color the freight status FFA slide support commodity supply prevailing healthy. driven bottom red orderbook nine, we XXXX be about and continues presented during throughout XXXX. In freight shown have graph, position XXXX, in of XX,XXX in As in XXXX. environment, five have in XXXXX shown we for The forward expected market will volatile the Panamaxes, fundamentals for commodities first dynamics for about Capes likely been is curve charter we on strong is Similarly, year-to-date top present by XXXX. the to are XX,XXX to the which deliveries. markets curve this XXXX. market analyze. Capes the agreements for as quarter The the the coupled our two

Capes In May. slide the first for same the the years orderbook bottom for in low Panamax Our graph, is record the and forward also we delivery newbuild present in vessels.

certain target orderbook. about touch the slide and Turning valuation upon XX, about to we market acquisitions

cycle, IMO regulations recent business strategy, as vessels we -- invested of newbuild part with fleet emissions. nine compliant far renewal in our the that new design NOX have as of During the newest

million, we Xk of acquired million. Panamax have second which in and acquisition with newbuilds So market about value, is current compared average build design $XX.X the as was in two hand The the about Japanese $XX.X about nine model vessels, average price shipyards.

to and the for revenues that future new in fitted average second-hand the scrubber per our annum All tonnes our of of the more For XX year $XX fitted market actually intrinsic XXX previously The very is million. vessels. has about expansion X,XXX about to continue inflated invested today’s million [inaudible] prices created tonne high low all, the in mega at pushed Certain markets balance has in evident scrubber newbuild to $XXX with a $XX.X three increase investment of in is carbon gain the of these compared high per differential five vessel This value per million, scrubber the time about the scrubber market the The Singapore technology represented company about to as million. the levels, of vessel certain pleasant significant $XXX is and XXXX [inaudible] six and XX all translated return our of about the close fitted centered was well recovery of current of which full tonne. increase $X for about vessels. is value scrubber $XX.X has months prices for shareholders million. dose average Presently our vessel. is aggregate

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

and good everyone. morning you, Thank Loukas, to

slide start our so we XX. highlights, As financial on am with I quarterly

with the of fitted market to and quarter During period same lower significantly improved vessels. expenses and operated the revenues, scrubber include -- fourth market compared XXXX, XXXX expenses, earnings charter fourth increased from the of reduced we also interest quarter

Net during in stood by quarterly additional by assisted increased revenues in income of -- income improved earned same mainly XXXX, XX% TCE The million, $X.X charter scrubber in same $XX,XXX million a we period due time by same last We market compared $XX.X the revenues compared the Our to during period that a $XX.X million revenues XXXX. TCE the $XX.X $XXXXX XXXX of net of net increased the period reached trade to XX,XXX at result the fitted fourth to for of our million the as to XXXX. versus want quarter year. compared of vessels. net had

$XX,XXX revenues year. at time daily quarter same last versus Our charter $XX,XXX stood

dockings G&A We believe expenses expenses, operating performed for excluding OpEx our by one and XXXX for docking directors OpEx industries pre-delivery Vessel both related was $X,XXX our fees, this stood the for during affected increased manager the as the G&A compensation, and OpEx number all docking we dry daily as increased COVID-XX. last our focus operations. and crew well OpEx increased, versus at of provision quarter $X,XXX and quarter daily dry dry-dockings, expenses is pre-delivery in demonstrating include mainly lean expenses and lower both the our in $X,XXX and to stood the Our $X,XXX expenses on aggregate of of company. of for expenses administration as and related works $X,XXX last OpEx provisions, of and to versus parts, at increased officers all and dry stores our increased G&A, figure The due repatriation services spare technical XXXX.

EBITDA $XX.X of same quarter million Our period million, for in to adjusted to $XX.X compared the the increased XXXX XXXX. for four

Our to share compared million quarter for XXX.X adjusted calculated the period was weighted on $X.XX of in XXXX $X.XX calculated per of weighted fourth a XXX.X on shares. number during a average same number the shares, million average of earnings XXXX

the quarterly for Let’s presentation the quarter comparison XXXX in fourth to of with slide same period conclude our on our XX XXXX. operational of highlights

year general As was very XXXX a a our company. good for note,

deliveries favorable into We’re liquidity. able charters, to and substantial place several orders, vessel, enter advanced with time renew approval environmentally our fleet

a share. declare our dividend company’s $X.XX a Board of of decided As result to had performance, Directors to common the

with We in month, a by semi-annually. successfully bond unsecure five-year in to issued that addition, February and March a commitments, that amount million another would have company In in resulting about maintaining €XXX million power. $XXX liquidity as Bulkers due us about million the significant of $XXX emphasize of liquidity of like of $XXX coupon and combined Safe RCF with of of we a X the granted last healthy is secured strong million provides X.XX% of position

take release presents financial press ready more Our And results. to we’re a of now your and detail questions. operational

Thank you. Instructions] you. Thank [Operator

question. first go Please Wetherbee your comes We line Citi. will now This take of from of Chris ahead.

for This Wetherbee. on Thanks is Hey. guys. Winski Chris Eli

and the rates to start the volatility. with wanted perception around Just here

broader to elevated to particularly had you escalate, of going for do happening fluctuations couple higher now remain they’re quarters what’s guys right we any but think them sight do we with possibility So, more in or line last to contract? to spot environment, the in continuing continue see

volatility on the in market charter mean You markets? -- the charter

with Yeah. than or Is now geopolitical customers? Exactly. high think been, of is the you some still we Yeah. issues there do there more expect to has read through the your of in terms demand

Yes.

will And take and expect We depends is going, a of of expect Brent side. a lot of miles. long what we big especially. changes will right for fair on volumes lot how other to bulker a the long keep course, for sanctions could because happen well week on $XX which I this saw war be because not quite price these how $XX, we that the there conflict rates the will commodities could things be because shipping, -- price freight on necessarily the prices will one mean, now, of are long be But would and of amount volatility, there prices. changes bad this is and time, on oil, there and of side for fluctuate of of of good be tonne the a the

is is expensive So orderbook trend. all But low. affecting very overall because the trend this models are the is strong, and the

for next indeed few volatility months. the expect we So

release. this saying the you I contract customers average duration terms that think right duration your years, that’s of in X.X what it now about in the the are is contracts? believe What of Sure. I said is said

and see shift So their more trying to that, more preferences? term to of do you in longer that terms

No.

the longer, of trend I size find six little year the offered and up months the is think in ones XX vessel to charter bulk dry the on and in generally the on Panamaxes is bit rates bigger may one the contracts the you our Capesizes, to months but charters.

one for like capital guys And Bulkers? more declared me, does it. liquidity Thanks. then allocation stronger long-term what look dividend, you for Got position, Safe the $X.XX

location? capital Long-term

CapEx.

Yes. Look the…

Capital…

year, them. a company QX market. to last line which seven dividend with of started with dividend quarter We the this years of the also in after market of the And low actions possible is or years of deleverage on the was good first six started year taking delivery least comfortable the to in other vessels the the with and take newbuilding debt we

believe year year. So a this all depends on strong for the year well. freight market. signs market possibly next as have good be good There we next will and We are freight that

Thank you, guys.

Thanks.

$XXX But the our is remaining million. of couple for $XXX million, years next CapEx

Thank you.

from take comes go now will question. Stifel. We Ben Nolan This ahead. your of Please next

open. now Your line is

put a Stifel. longer although a guys. chartering competitors a of I Hey, strategy, is talked Nolan your -- This at and have on newbuild a your this couple Ben vessel. on one a contract week bit we’ve I about you seen little duration

sort to and and is guys if specification something am you obviously the consider some guys doing a if newbuilds that curious market would high You you I of in that vessels? often on guys it have very new that few done those it’s of much there’s past. depth something have

freight much there’s Look, market. ships, -- to the also on because on larger horizon there long-term easier charter, do on more on it’s it

like So curve market. Panamaxes, for is charters the can smaller freight steep here. be both guided the In very by the top Capesize the in sizes Panamaxes,

Panamaxes charters delivery. this pretty at years the which with make the the no under a sense on done a of years. for consider a it look lot the five done new to go Kamsarmaxes. market -- make feature, new enter next on It not sense Capesize, -- And tonnes, the or and to tonnes when three years was upon owner on three market in much the good is the vessel doesn’t or time on they the I was was doesn’t an of on so there’s So lot newbuild feature that supply a

mix. of So a I I the that, of see believe was good the point I view say it and owner

little benefit scrubbers the vessels. is scrubbers out about Okay. adding gears that as bit, have lot I assume working going you much guys to switching out the moment, scrubber at and come that And maybe then of your your they thoughts fleet any on dry obviously, a very effectively your to a for finishing exposure? or up with dock

vessels may two doesn’t we is happening now sense scrubbers, It months. with because finishing for for Yeah. right what in last of of because to should a three make whole it’ll think put the we the months last year. I don’t spreads for spike the in Ukraine. see what This lot and the temporarily or now

And the there we fit dry time market the decent this when was XX day. period in make $X,XXX dock or We put in bit XXXX, scrubbers going so $X,XXX the did spread doesn’t days, dock extra to It market put ships in for in ships when XX to the the of days dry $XX,XXX do is a would the are extra sense. to that anticipation there $X,XXX, spread. of be the it or

doing see now I don’t right more. So us anything

since we plans. doing Capesize don’t which a to to right it, but ago have have We now plan a we’re do year vessel,

upgrade in we focused our more that the when think this this, do we I of prepared be will because war back day. to come we fleets efficiency focus for their and improvements this indexes, their on energy We’re next all down, our reduce settles can of can CII on environmental have the story and ships how and

you ATM had guys a don’t you are yeah? and like or not while. else do first are Okay. that, the me, which trying that where been I for you active I are And last to, you the Is believe in to sort in the the you need you anything you is under That’s program, an that release of, and helpful. indication more capital where just time as saw you

price use worth clear It’s plan to the and not we don’t consider still that at stock considering is we the that it. level

So…

Okay.

at that For we more level need the the being time it’s don’t really any liquidity.

September So that, that’s why scheme. didn’t we touch that since

Okay.

have liquidity. hand, increased we have other the our as On you seen,

through have the extra liquidity We vote.

And most changes We’re renewal, the on invest in technologies for the opportunity for tell a with now, prepare but right it to and you day there, bit for in forget away months, as mean, us to I apart the we the is it fleet waiting won’t environmental ships war. new one, from in will that, younger to I replacing I’m go we the of the older have. thereafter the about climate new next we’re now. focused them three for important the is change newbuildings not because

time, especially to have years I years, and will climate very the with making believe energy. the and investments, two three next in environmental three deal of course, will shortage Of see we to the of come don’t how on that we planning fast. but derail initial will back our be months from focus shortage Europe of we gas the the But want

Understood. All right. I appreciate it. Thank you, guys.

And of ahead. This you. go Giveans Thank question. line of from Jeffries. take Randy our next we comes Please

line open. is Your

it Giveans Hey, Jeffries. from gentleman. Randy going? How’s

Fine. Yeah.

Fine.

Fine. Thank you.

giving quarter-to-date of at of rate your a the on guidance. market? guess first spot the the I with side Hey. lot same provide the looking us some kind Can you peers quarter, of

of first quite last two weeks months is market quarter three The we two the have as the see, been done. and improving all spot substantially, the weeks,

the of are quarter. the definitely months the third than the lower month QX, of in a up So catch there’s but the first year two

I So looking but -- is good. that think

will the lower other, of tip than guiding the quarter. be in will and a previous from expect balance are not bit than be you The lower two not months higher. the the little side one we’re the So what lot but

So much if the how was quarter the XX, XX, last it, number XX. was

XX.

And That’s quarter bit then this less. may a be little the…

Okay.

So huge later. be that would

conditions? flexible you from going forward? or dividend, you this based dividend on on dividend about a see a then policy And guys, market of to we this think how is Okay. kind in on Is decide did the a amount? should announcement How there great place

of timely a sustainable of tell dividend, which the have we of It’s we first of say, in more the renewal have it’s because No. then to a, in at every of one months take XXXX. I the fleet, like let’s starting beginning end that of ships, us, XXXX newbuilding as the two made a -- And are the now the delivery all one we time. months you, few with have for couple we companies

a For the we to rate in freight hit market expect ships, environment. the good

will As at of the one year able to the we charters very to charter, be two-year three-year seen they would or new secure time attractive market. certainly, have be and longer right the charters ships, than maybe

this we to start with now. thought So dividend right

We’re enough should the very it thought start for confident and for newbuilds environmental And same at and years now. we two keep the investments. time, the the liquidity next we for that

be dividend I every -- there Of to say, designed and course period. dividend as following the always policy quarter the meaningful we to pay we will our let’s is dividend, but review that is so to said, for, continue assurance no the

Got it. unsecured, few tapped in €XX that? And in kind towards proceeds, terms million the options is the I All Euro of the had of of of know it right. one or makes use kind leaning or another very that upside again, rates you be a other, of there, market can the of sense. terms impressive to on you ever right, maybe are the it That

It was favorable. the do a good first the price company one, No. again. Stock We market Exchange. was to consider it the used in don’t plan We Athens once. it because use We the to this drybulk bond

money in, if go it investors. just last if five after and course appropriate years you an changed do there have every what for or repay five and the conditions go is years, you quarter tap you with something for appetite refinancing and you then month other once, interest in you see it it’s what Of rates you not at happens the spread

helps months on all to which -- to new to liquidity competition. months environmental back time as advantage told all We or operate focus the mean, ships either the ships the forget investments, six will or investments So that the three I that. Because us in shouldn’t fleet to months will with company six I modern make gives on of you, ample the this time, the or climate. be of

Got again. it. Well, thank you,

Randy. Thanks,

line of today Please Magnus from go H.C. Fyhr the comes Wainwright. ahead. question next of Your

Your lines now open.

afternoon, Magnus H.C. gentlemen. Good This is Fyhr, Wainwright.

Okay.

Just a follow in the current XX%, we million CapEx use up how for you you cash out going years? debt. have most installment and the Should on Can break position, question three like, between to I mentioned guess $XXX forward. that of you assume, plan is you XXXX of much versus it

deliver The majority or payable XXXX is it because It’s at deliveries at and in coming of of XXXX of time time most -- XX%. the deliver. the in time of is are XX%

say want this the could more of everything we in in -- market but in say granted, we as I minimum mean, years our debt that, XXXX. or years. all we of plan is keep next because money profits right produce on them, will we years shipping. the for be to shipping very that’s to a XX that this in shareholders. CapEx business. most believe put will definitely last near that take opportunities and three cannot of I important Also, So for are on to two is We significant debt There fleet scrub we invest remember new we to a ships, to so value Look, the the not the

part and $XX the happens able the in million during -- in the to in the million no invest XXXX. CapEx have impact in to at the years of The of $XX be is and cycle funds in $XXX three the of two XXXX anything beginning the next XXXX, company -- in have million years. or the We -- this CapEx

is January delivery very early last February. the Our XXXX and early part like in XXXX of

grow in by XX months this months and vessel we will XX months. or another newbuild coming fleet fleet that that take a be hour next two will every around a and will next XX% company every we in So have months the the taking the is the two

reward So of a generate, the all ahead on same the liquidity good And will stay investments the investors environmental we’re will shareholders. that game. track with the at and make time, to we

Thank an balance there All all the have do those right. you retire mind given cash in that on sheet And some with amount to prefs? that for you the on just prefs, color. of the

The prefers mean. you Yes.

Yeah.

our part in to element, mind when be to certain But of prefers we should next what well, the then quarters said into it decide in of the the Board and a and do that be it that elevated. as well. It’s there in Board company also we’ve in ship it’s few percent the some as allocated be will will are going to mind the that part goes -- of what because prices retirement going

to You are understand, we not vessels. planning invest in expensive We’ll wait our opportunity.

last million all more the two asking obviously have as we maybe sellers weeks, weeks, $X price vessel. drybulk the now, for three expansion And see vessels anyway. fleet We of are

afford ships -- case in going have be jump wait. liquidity We’re and can not on to not to We prices. patience, who to while can expensive we people may afford on with acquisitions, not our jump on those invested

good. Thank me. it you. for That’s Very

you. Thank

Thank you.

We our on take next more ahead. you. We This have question. question the [ph]. line. the do Thank one will Act Please Mullins [Operator line now comes Investors Instructions] of Edge of Boudi from go Clemen

this Congratulations Boudi for am morning. quarter. Mullins, Edge. Good Clemen Investors I from

the is balance significantly would your has outstanding how of preferred, the to think part year mean something wondering on over cost if sheet you some past further was improved I reduce you Your consider about commentary you provide could preferred really and capital? the of

prefers. don’t that of improved know of is anything say have substantial substantially leverage the some approximate process of that retired. and the it we in maybe amount What we said go We company we about the has for know thought target can was as point retire we The about, remain, exactly. how much. cannot mean, some We about our may will as second achieve set Look, had that which we -- time XX%, is I structure region, ahead. the capital in of XX% an in

So prefers, already company, cover loans about we we we nine percentage us. already a delivered in the The of some some say, issued we percentage let’s have, bonds days position. that to have strong million Europe that are banking we be have of to ahead, about have as a strong and go

asset company value follow will while will asset same of not the the the leverage So the net the debt value, path. increase,

work maintain structure, may will have markets, us do to So bad the because second we we we capital if create benefit us liquidity capital the intend us locate the in and we good structure, years, and have markets, that opportunities -- which have opportunities the have right for following it’ll somehow gives and this we in market. move for expenses this lower we good in also to and --

helpful. That’s right. All

Regarding hedge Greek we to you a attractive you Will in be your have exposure? the what you very with comfortable issued are look this rate. the risk bond to market and the FX or

at certain euros $XX You in to some the so around as five but mean have may years. we point, year euro, million remember if $XXX have part company, we’ll the you a need we look, that. the exposure, a expenses bond, you think hit of million in

see exposure. will that unfortunate of to as we kept to is levels now So hit this them. spend war depreciated of the some we companies euros the happening be anyway that because -- one as have with part that There right we the can because euros, has are considering Ukrainian story euro opportunities

Thank congratulations for for you taking me. quarter. again That’s All this questions all my right. for and

much. very you Thank

appears Thank this questions It are at time. no there further you.

Okay.

-- and we’re in you now. forward would very to all about our next three much about months to which So looking with Thank the you. discuss again thank quarter in you results, participants from come

conclude our conference participating. for for This today. all you does Thank