Safe Bulkers (SB) 27 Jul 232023 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 2023 Financial Results. Today, we have with us Mr. Polys Hajioannou, Chairman and Chief Executive Officer; Dr. Loukas Barmparis, President; and Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company. participants a all mode. time, this are listen-only in At a presentation There a by question-and-answer will be followed session. on contact Following need on or any Instructions] further presentation, [Operator this information the call, conference XXX-XXX-XXXX. Link at Capital if you the please call that I being recorded conference today. must this is advise you

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

that Although correct. are can no assurance statements the reflected prove company have forward-looking that will believes in such reasonable, expectations to given the be expectations such been

which that actual vessels, These to Actual competitive statements implied and with revisions and factors inherently on thereto herein or forward-looking such materially conditions of those the beyond respect statement the drybulk company. to and unknown or expectations are for control company's to is not release reflect publicly based from filings or undertaking are may contingencies, the in from factors demand but differ operates, any company the outside States, which expressed estimates, contained limited change in United results and with materially of Exchange time-to-time and circumstances any are market forward-looking could any associated subject statements. to any a include, by differ Factors the risks expressly number events, The uncertainties the listed of or with disclaims based. change in company cause upon which the assumptions Commission. in obligations and in to to, company's or risks the many are statements the involve Securities results updates significant which known in any and other changes the operations

pass I'll floor Barmparis. sir. now the Please to ahead, go And Dr.

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

market economic During this of growth the past the quarter, our which revenues second by supported took of reflective our quarter, delivery weakened, believe chartering uncertainties. we charter In is newbuild, contracts. we while were fourth has

with capital, strong same comfortable per our Our and liquidity us the with dividend a and time common reward at leverage our share be flexible shareholders $X.XX to enable stock. of of

is developed capital structure conservative significant capacity. with cash and Our

Our requirements our CapEx adequately revenues. by contracted future are covered

After of are at average it's the period capes an an charter average the rate been with X. at that to balance eight XX,XXX, duration above market with in Capes all our XX,XXX. years remaining two forward-looking has $XX,XXX currently Our market will nothing sheet the reviewing strong. There in statements we levels. Slide move X, at capes low Slide today is worth language daily actually of charters volatility It's with

market remains Panamax side, very charter On the the weak.

XXXX. according precious over Slide the prices, Commodity drop Price Bank Moving after future shipping, month, Energy which CRP to commodity of rising Index, represent in to the reflecting metals. World on projected basic agency, XXXX including XX% we declined sharply development Commodity a prices the present the by is Index X, agriculture, [indiscernible] and XX% of past for metals, and industrial

which to Reserve the War result global weakening. economy and as the policymakers fight increase rates We Russian such the inflation, to is a by yesterday as witness percentage of point by interest one quarter of a Chinese aim the continue of the Federal

supply/demand in even positive at to XXXX. gradually decline for turmoil for BIMCO GDP July on pressures is the marginally sector though demand inflation energy inflation raised growth expectations and XXXX and prices landing of and recent to X.X% financial projections global the in X.X%. The inflation According imbalances. outlook April at improved to from to increased stable projected at IMF XXXX of revised was for X%, underlying X% signs XXXX forecasts The could induced China, July the IMF the XXXX due at consumption-led global slow. of the on steel demand the to that stands receded projection forecasted recovery there forecast were growth world X.X% war economy. remains High X.X% In more prices upwards soft core are and expected for X.X% inflation as XXXX the growth global stands drybulk for

real are market investment, were foreign and and forecasts the Price as weighing central declined bank in elevated to by expectations is in unemployment projection XXXX, X% commodities for real then an GDP The demand. negative indicates demand XXXX X.X% estate drop estate IMF's World be with cross-border reflects increase from XX% the There a steam of whole stronger rates. Nonetheless, in as economy target domestic spillovers the on maybe Index weakness. Chinese investment. India's World as July in weakness seems Bank losing sector weaker-than-expected in emergence result youth inflation for in the XXXX. to and Bank increase unresolved future and problems cut remains labor well a rising XX.X% X.X% at the May again The leading XXXX below a weak Commodity July continued interest April projection has

the Slide digits. X. remaining medium scrapping. term drybulk are about as as expected ours the fleet optimistic in the Let's total medium have of sized to coming older designs. more than years. at regulations About of like fleet old accelerate years build cautiously XX% effect We XX aging vessels move in freight prospects on Japanese to efficient market of environmental the to is the presented to single side slide orderbook stands The – in supply

XX% which markets. means fleet, environmental global of built fleet XX% that of As can we forthcoming is our within – the better said, in our the fleet compete based Japanese versus the charter

orderbook few signifying our very the with ahead compete companies Phase the peers X We of on vessel drubulk performance. our are the environmental intention to of and operation one

As XXXX. XX Safe of Slide of is majority the increasing fleet as end has our same we emissions complete Phase the out alternative but X program are upgrade time, from XX eco-ships phase. seven This a the reducing friction has XX fuels. of XX vessels, COX our is increased biofuels vessels. and paints Furthermore, efficiency capitalized, and book low monitoring the of expensed. preparation which We're in today of by to upgrades and environmental time owning OpEx global after on rising expected end fleets Bulkers the another and the are delivered ongoing any is energy not at existing X, major by program of are been time reflected of in also XXXX, built the newbuilds, in development will vessels of have XXXX, to

capacity efficient in Safe market policies markets for technological will vessels Concluding orderbook fleet, aging and and XXXX, to an compressing those of the We increased with the new further. of regulations XXXX, X lead favor half willing invest our monetary view as fleets. geopolitical Bulkers for during efficiency driven in such Demand low adding of the first of the vessels industry-wide tight environmental tightening creates delivered our fleets there disruptions effects differential by in demand. opportunities Slide the done. market Such believe two-tier efficient after the and the may volatility fleets to of has has combined that Japanese been even

XX%, differentiates us and alignment the Let throughout of me present which increasing of Slide with X of from ownership. environmental are characteristics comfortable key creation values key The Phase our X, fundamentals vessel leverage The fleets. peers. our certain upgrading existing or management of newbuilds the interest [indiscernible] strong

are delivery tonnage consumption the We X environmental intend four years. in market have to fuel in the the taken global on which already best basis vessels performance the the Phase of on We and of following deadweight globally. performing drybulk compete newbuilds,

we're building this Lastly, future concurrently the company. of

dividend. to with be been a we meaningful constantly have shareholders rewarding We our consider what

Let's our cash fleet of million our million. in $XXX remains our structure presented value By scrap our comfortable to maintaining comparable liquidity, capital a flows our debt focus Slide X. of $XXX leverage XX%, about now on and as of

continue delivery of take is fleet old the XX.X our only we two fleets. vessels our years will be same to in age and Although new as in years next

five average year weighted fixed bonds. rates interest X% secured with our coupon million €XXX consolidated debt Our were for of slightly a a in at X.XX% below being portion

of our newbuilds already have We this capital capital of orderbook $XX.X amount remaining in the relation for $XXX X and million have our million expenditure to in paid paid aggregate. expenditure requirements

capital flexibility provides newbuilds existing million, $XXX the Furthermore resource fours additional capital $XXX we strong relation their with and capital million in to vessels of stands approximately and contracted to liquidity in our seven Our have volume delivery. which allocation. revenue together management at unencumbered

move we for Let's Slide Bulkers. analyze to XX the investment where Safe rationale

that under reflect flows We energy shares. and of by program Safe million over that remaining challenges of intention will finance consumption and per performance. dry terms Bulkers' commercial market balance. of directing is last the seven to comfortable of leverage the about competitive opportunities. our dividend scale problem. the environmental offer pursue believe with in provide a those of declared and transition efficiencies a upgrading We the ageing shareholders have program XX to quarters, fuel qualities Safe that advantage with that the will Bulkers share finance cash is and utilizing environmental navigate having consecutive believe maintain The share our companies our to large strong We strong buyback the orderbook newbuild while us environmental the relatively each a our fleet replaced fundamentals concluded of $X.XX a fleet distinct bulk a among We challenges flexibility rewarding

additional our review, recommendation transport, in our trying important sustainability have maritime governance passing Before and the Adamopoulos, it the Initiative, report for you social and Guidelines special our to Global make that here to let for through in note I Reporting are This like new very Konstantinos floor we're CFO, which has footprint. Board, would financial the accordance Reporting invite us because improve prepared provided issuance of there on look doing with alongside GRI, to the to been Standards download Accounting materially job Sustainability a available me our and website, the report, XXXX environmental a for standards Sustainability to a our the we're good for is our stakeholders. SASB, and indicators and

Konstantinos, is the yours. floor

Loukas, everyone. and you, Thank good morning to

increasing a quarter a and from interest earnings rates. decreased operated decreased Scrubber note, gradually to environment to during weakening in revenues expenses, operating XXXX. general the lower vessels, in of fitted same we charter hires, interest compared XXXX, We period market the to As second expenses due higher due increased

financial compared Slide XX, quarterly to quarter same second period the of we our of have XXXX for highlights the XXXX.

of to Our adjusted million second stood year $XX.X period quarter year. for the EBITDA same million compared last $XX.X the this for at

for share highlights average per XXX period for same earnings of to calculated the weighted same second quarter million in $X.XX adjusted period number XX, with Slide shares of of the calculated a XXXX quarter weighted the Our we million of average XXX XXXX, XXXX In a on present number our was of operational during compared compared on XXXX. second shares. $X.XX quarterly

second XX.XX $XX,XXX average an time-charter of equivalent during average, compared time-charter average period of vessels an of XX.XX the quarter During XXXX, operated to $XX,XXX same earning the XXXX. we earning on of vessels equivalent

global relation breakeven on our like Ukraine highlight emphasize board Russia's the than company's economy our with heavily point in all that historical dividend highs, company is a Concluding of and non-con maintaining is from total debt-free $XXX for million outlook. several in million on RCF $XX.X QX revenue combined financial common cash at four upon also facilities present being scrap in a about declared on Furthermore, capital capacity. healthy as seven another to is with undrawn financial that and decades, July commissions weigh of conditions The tightening experiencing of and X% in Inflation And have XX.X to we [indiscernible] XXXX. and and $XXX higher available interest of newbuilds the contracted capacity in delivery. that million high vessels power. net additional excluding million provide resources We multiple regions Based most would Slide rates per position [ph] on significant a revenue. existing us have of seen we challenges. liquidity invasion borrowing XXX.X And market the million share. we about directors borrowing of performance, XXst. And XX,

may to be report and just Once to of ready download enable from possible reminder, We be taking comfortable strong believe expand our session. website, our the opportunities was which our and that shareholders for able sustainability a you published, capital, us the again, fleet our our as and flexible we're just leverage rewarding advantage XXXX arise. Q&A liquidity now a with will may that while

you. you. Thank [Operator Thank Instructions]

proceed first question Jefferies. the of Please from question. with comes Our your Nokta with line Omar

Thank you. afternoon. Hey guys, good

I were maybe the yes, to a, just just of a just as you in have have Just follow-up on couple relation that first the share liquidity But questions buyback. highlighting. just

very You've for past back active been of year, shares. much the buying

and to give it? put what the restart was the to drove market the reading. what confidence on recent wanted way in based ask, suspension for is the to that's pause I are just developed You it reasoning here at of of least guess for looking the months. release you now softer press buyback just you probably off But the freight

Good Omar. you. morning to Hey,

market as front the per of the deliver of couple following not and have quarter As in strategy in have of delivery five continue quarters, our seen you our the we performing around we XX-year emphasize We the environmental ships in quarters new us buildings with to now combined as quarters. buyback come was to program. improvement the next on expectation, buildings they the new two the many get of our have last old

suspend the to to performing. we it quarter withdraw not So it second for decided the suspend but temporarily, it low of

that revitalize this stock better I will react I may earlier. as immediately but can reinstate. soon, we think markets, and program ourselves, start freight market will think don't this the rates improving as markets soon we be improving on see program

book the very front competing investments. this owners few fast. are these low. very if more doing this environmental It point, many one increasing because The consider regulations Yards anything investments the for the No I important, very is doing continue their is to on order is are changing is even are market owners, prices. low,

our are running ships and in four remember ordered that the You ships delivered XX four comes max. eight order book, whilst Japan have on XXs were low to ships in order book the over yards people

that Now, performing. in is ships, dropped XXX market find ships, are after still, S&P they modern a which last market. despite have the everyone fine XX%, quarter, prices but the cannot

So market then year. XX% from that there's ships in of prices heavy like Capesize competition and years bulk carrier ship XX old at the dropped the coming they for beginning the a around by their moment, that's the

making for You past investing simply the on this, many type in or money because have make of tankers good XX containerships, buyers other competing bulkers. years vessels owners more now and of good money and in they're and still heavily

will quarter for we market not drop prices. approaching the will next, even if is the that phenomenon have We're this of bottom lot. prices the or low So S&P a

in is been canceled any buyback can come them do is program of is invest that and the the point. returns program So can at has no a thing we real efficiency of right best for be the savings given being, products, on but our who now lower. this environmental to state expects fuel us the price giving one Actually, $XXX fuel because time

of have the for much, buyback. discussion into it want a a make and Thanks that. follow up helpful to you too just detailed simple not on plenty sure market because and we Maybe not, liquidity. just the having very deeper but That's as and also weeds, the outlined getting little just maybe on correct

I think highlighted. just it was XXX plus had you

are you now that and In expect million. total ahead expected to XXXX. financed? in to have secured the you eight of terms financing The the new remainder at deliver that's and of CapEx have is finalize deliveries $XXX between terms What's what you right of second not half then amount the of do buildings, that due into

you million Yes, Loukas you will we as $XX give said. the but details, cash, have

We facility have RCF of XXX something.

on cash fleet existing program adding the ships. on to only for eight the on the so pay that is remaining the So without RCF, debt enough

to rate this they we to want of other owners, have are this from our We are current of some finance on put building. but Asia, the comfortable position. there potential without that but remember a So new so-called a in that will we're and ships, in levels, new some eager covenants our can course, we they especially back a many without sale in lot on don't the increase interest leverage that situation do things financing

So front. we're very comfortable this along

and I think consumption the every the the this will fast be friendly sincerely very most ships XX you changing of year surprise us how competitive, because big environmentally believe warming global more in vessels I a things going hit and are People and vessels. of environment environment other important is program from of to towards be engage of regions soon. to upgrading new get that regulations in will the old me,

the is So for going of most are Canada that owners in the few have overheating and the to happen. how which and that us, I especially Greece, time haven’t this But decades. we know front that last, degrees sure XX, of countries the in are pretending the in we weeks temperatures being, Europe last XX for many I’m Mediterranean southern in not of USA, in with don’t events temperatures, unfolding had

implementation we things to these European Union, weeks. we’re and have wildfires the all last faster So of couple pushing increase by

when hopefully expedite recovery that is on things And now think all all easing Europe. happening in investing will owners So the start off. ahead I will interest of year of what part these the early rates who these things in are come economic next

market, the time your shareholders. you our the biggest is This I the shifts for that policy returns for being. proper have in make If think you’ll

the has and Polys the just is is undrawn summary Slide out $XXX contracted the as capacity is mentioned can is about which you just look, what million. and we $XXX X, cash liquidity, a And point revolving number million. In million also said, also need to because before you revenues the mean CapEx, I good $XXX of

see So flexibility. we are have if the we that – can quite add all together, we you

have already $XX for in these vessels. paid advances We million $XX – million

And good able you most position to and make the how if question think as are capital, believe the have numbers of level change the additional allocate I sometimes, allocate your But things is before, way a for advantageous company, which future XX% in adaptation all Page an I X, the on a that comment will because the is said very, to quickly. very it we’re in I be look low the may have environmental and you there. Polys

you. Thank Thank see the Nice Yes. I Great. are obviously and you one where helpful. appreciate No, regulation. to over. guys you. at, that’s I’ll it turn Well, it’s that. of step the ahead liquidity

Thank you.

Thank to would closing have floor turn management at over like I It back Instructions] appears [Operator further for comments. we questions to now you. no time. this the

very worldwide the ETS, you next Thank once attending environmental the be Thank and would the gradually and to in more for impact with IMO and conference We looking results. by our is very industry. adopted of regulations on would discuss you and all who conference Europe, thank call, conference attended environment to also call we’re shipping the implemented FuelEU, the for the in our and much much. you QX the our the which be you forward will change again that all to coming will I like that call. come. has regulations new emphasize will like EU which And

does gentlemen, conclude this teleconference. Ladies today’s and

and for You at have a day. participation wonderful your this may Thank you disconnect time. your lines