Safe Bulkers (SB) 30 Jul 242024 Q2 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers Conference Call on the Second Quarter 2024 Financial Results.

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. Instructions] [Operator

advise if on further Capital The the (XXX) Safe I www.safebulkers.com. call, conference on Link website, archived need conference Bulkers made XXX-XXXX. or this available conference call presentation, must soon webcast you of this recorded call information any the at is this Following being that will today. be you please the contact on

the may results statements forward-looking from Many of differ on expectations. materially Actual today from statements. the forward-looking based results projected current those contain remarks

information factors to the on in release, in statements Additional concerning the earnings that actual available contained differ the Safe can results Bulkers' is the cause XXXX is those second website, quarter materially again, from which forward-looking www.safebulkers.com.

conference today, Mr. your one the I ahead, call Please to the and company, the would speakers now Polys of Hajioannou. sir. CEO go of to Chairman like turn

to Standards, detailing Good with compared implementation and presentation. new vision Loukas Bulkers. the additional of President do the management of include morning stronger will quarter our of all. I year, for system of in the future. I'm and Phase Sustainability second integrated renewal the previous DryBMS builds practices consistent compliance of with order X fleet XXXX our issuance our the strategy developments Safe the Key ESG our Barmparis, the Report new to market two the our

stock. our capital a the share focused Our strong common remain same with with our liquidity and us allocation, reward $X.XX dividend shareholders flexible comfortable leverage long-term per be and time, value enabled of on of creation at to

market in attention language present transitions Slide forward-looking X. comprehensive a to Slide in statements Following X, of the our update the review

of All our degree us strong $XX,XXX. years a period segment X.X flow This of of throughout are The duration provides with average an the been presently Cape remaining average an cash rate X chartered visibility. has daily of quarter. charter boosting with Capes market considerable

about commodities of in $XX, the regions #X, and XXX. Progressing level an market the landscape our fluctuation in stands geopolitical present Middle Panamax The here of the front, uncertainty. at overview the basic we Slide prices. underscores heightened to as East, Ukraine index global Red Sea the On chartered such retentions the commodity CRB

Consistently with led has the the at become economies central inflation cautious uncertainty in positions of pace easing, around these the about bit quarter. a outlook compared first to banks the Consequently, of policy more with end in in for inflation uncertainty. raising expectations Upside market the the XXXX rates number downward. increased, of [indiscernible] delivered longer of been interest have increased context of higher of prospect risk revised policies policy be have the major

the rates resilient market and energy believe the terms of outpaced dry on bulk demand market demand, has new over on We the one other and the outlook In efficiency been focus on the positive growth. supply supply decarbonization by efforts the a bulk, that short-to-medium period. of enjoy stage for builds additional the as the hand bulk enhances limited gather existing term. all setting prices will medium in dry dry The we of fleet

transition demand levels. despite for side, strong, very starts for commodity iron the remains coal is safe stable on at forecast Overall, energy ore for bulk [indiscernible] grains and

XXXX. forecasted combined stands in which XXXX X.X% for at of XXXX, April bulk expansion to of by According dry and growth global global BIMCO, the X%, IMF for pressures. The increase GDP forecast are inflationary both control demand

renewable which fastest being of first [indiscernible] outpacing the fossil key drives clearly fuels seems of having China X% year-on-year, importer during drivers security with evidenced increased the the significant prioritization way generation [indiscernible] to growth. major XX% by the coal [indiscernible] and the landing the of XXXX, half expansion that of global energy as be a being by market the

almost by coal from XXXX. renewables for demand imports generation X% half stronger been December to rose growth trend we electric forecast year-over-year. the continue [indiscernible] XX% as of mining for second and raised the stabilize [indiscernible] to to in coal not coal has will steel as XXXX. China's coal shipments The due Nevertheless, expect do imports domestic steam in

in is aging continue GDP expected and However, to challenges to growth. term productivity the slowing slow to medium to over from XXXX, X.X% and due an decelerate population

day moderately per in half averaging [ smaller A $XX,XXX Geopolitical quarter. of quarter per picture Canal the from role. dry third market modest with the and with bulk developments, a average year, segments. key the dry $XX,XXX despite from supply long-haul and second is highly has per the box so day demand solid, tight rerouting compared -- this impacting trading on far been averaging growth increased also have Sea iron down the especially [indiscernible] for a commodities, weakening away in second $XX,XXX ore prices. of played bolstered trade course, Panama the and steel in calling first have Red patterns have day, altered the miles the bulk in and global The effects quarter, ]

second So earnings. to looking quarter is the far, third decent the with similar quarter

private positive to Global India The in profit for growth play India, XXXX, also grow year, and by seem investments robust reflecting for factor investment The X.X% led especially stabilizing is enhanced set rural easing Indonesia infrastructure demand uncertainty. has increases Australia. sustained a coal the India's the to to effects growth by raised in been for areas. and consumption, domestic and in of resilience forecast X% of [indiscernible] this

order sitting near- thus environmental the on being of remains orders [indiscernible] of become taking and remains phased On which into of the account optimistic about as book market years top when in trajectory space being Currently, out. competitive, less supply availability them that, regulations Let's dry than end technologies. especially proceed gradually forcing medium-term the restraining the about X. are examine to XX% freight that Slide lower offshore at X% decarbonization to fleet vessels efficiency, new existing the side of these the XX now older in dynamics as is

water Phase XXXX, XX the the counts a delivery after with on few now all place ago. fleet vessels taking days last delivered just X Bulker's Safe

X.X of eco-vessels superior global Japanese fleet ] result design average period without sustainable is upgraded of having fleet today more efficiencies. and addition, years fundamentally of surpassing In this our to comprises upgraded a average XX% the years XX competitive vessels, the ESG Overall, have and X.X vessels XX% our old. build commitment of age as XX (sic) commercially implemented business. been fleet than are throughout X underscoring our of [ environmentally ago strategy

compete to within of the at our the -- regulatory [indiscernible] environmental The fleet be years. prevailing regulations next the become book, vessels, order delivered us on X have market anticipated well We market, to position favorably even will impact as more X competitive, to will prices fleet exceed continue below the we framework to we Phase our charter X of environmental-based greenhouse placed have one with commercial and gas more combined ageing targets.

of secondhand vessels, we to the Moving Phase remaining book to of XX be this the of resulting vessels average comprising and strategy an steadfast XX Phase upgraded presenting Slide over [indiscernible] XX-year and our eco having renewal years. top fleet the being being acquisition graph of fleet Phase our with new X a X of X, XX overview vessels, our X, builds fleet and comparison past the delivery divestment present of scheduled more X vessels, order presents to upgrades, exposed environmental green graph right bottom fleets X The X of within advantage, X stable fleet older XX breakdown age XX undergone the year. the the with

sustainability. Slide confirmed As of expansion by testament X, fleet commitment a serves our this as towards adjustment to

we the of such aligned $XXX ample attributes, of XX, backlog comfortable years million. contracted million Safe key the track Slide of XX%, XX%, leverage as management on ownership our liquidity record, $XXX our outstanding present XX Bulkers In our robust significant with

anticipation Our forthcoming Standard by decrease emission in and green management implementation fleet by DryBMS season evidenced advantage system in fleet ESG regulations. AER environmental X.X% of our

quality XX% shareholders competitiveness on dividend resilient in [indiscernible] our true positioned The to our the leverage expand ratio. and is remaining commitment reward of building with fleet by XX% company payout our regulatory a -- about and strategically to

-- is for I compete with not to our is pass CFO, now floor terms quarterly anyone. be only able energy we'll to the efforts financial overview. also yours. but managerially, best have our upgrade company fleet to Adamopoulos Konstantinos quite with the in to to Our floor of have the efficiency, our Konstantinos

for you thank gentlemen, the technical I and apologize difficulties. waiting. Ladies about

return our We will now to regularly conference. scheduled

numbers. Thank make numbers, This I you, everyone. is about the Loukas, good our to Konstantinos and CFO, morning QX a the Adamopoulos, presentation will

rates. of general and As expenses increased the higher to second charter due earnings to the in interest to interest due revenues stronger increased XXXX same a note, period quarter charter from XXXX, we in these higher with vessels market a hires, compared environment during scrubber-fitted operated

We liquidity, in now $XXX leverage XX. our focus million, value comparable cash fleet as of capital million structure, we free about If to on and of maintain a old. our flows $XXX X.X XX%, our is only cash overall our presented remains comfortable years our although around our debt Slide

is X-year at an of for unsecured debt, X.XX% a at interest X.X% Our average XXX rate EUR consolidated stood fixed weighted which million bonds. in

the So far, book. we have for outstanding our or in relation order CapEx XX% paid to $XXX million

management million. stand more the resources of which capital allocation. in contracted million double flexibility revenue makes of and than together a total to at million, of liquidity about provides with $XXX This million, CapEx Our our of around strong $XXX approximately a $XXX $XXX capital is which outstanding

we their sustainable to capital growth. We a existing trajectory our have future new X in our delivery. covered adequately balance relation our fortifying ensure upon by Additionally, vessels unencumbered X ordering is revenues capacity of sheet that builds and towards expenditure contracted

our period quarter on the highlights compared of same of Moving with to for to XXXX XX XXXX. Slide financial second quarterly the

$XX.X $XX.X for EBITDA XXXX. same stood XXXX adjusted the the million quarter compared second for million of to in period at Our

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

of Slide same of period of to XXXX. our second we In operational compared XX, the an for quarter 'XX highlights quarterly present the overview

During an compared earning of period XXXX. average TCE vessels of in of the vessels, operated on second TCE $XX,XXX the XX.XX XX.XX quarter same adding to $XX,XXX average XXXX, we during a

net quarter year. million during compared The the company's income of net XXXX income million $XX.X period for was the second of to same $XX.X last

of company's XXXX liquidity million. $XXX dividend and credit a to out as Board as capital financial a that for held cash revolving common Directors maintaining the Concluding emphasize well our our XX, about share. vessel, company common million combined of another sale our per healthy July declared like presentation, that available dividend position $X.XX is as X% for on from $XXX point per share Would would million a the of $XX million in facilities of $XX resources and another performance, -- we based to like

builds contracted period are our existing liquidity and have now for revenue upon of [indiscernible] Thank $XXX enable expand while commissions X delivery. borrowing our the of million, new from we our noncancelable Q&A before revenue chartered strong Furthermore, net and you relation and and additional understanding, for we capacity comfortable sport We us still in and your their unencumbered contracts scrubber to time believe and vessels rewarding shareholders. session. our fleet ready the will to

[Operator Jefferies. from Instructions] Our first comes from Nokta Omar

obviously, been the ask, to dynamic very years. wanted X-plus for Just past here you've the fleet, maybe on

adding the dual-fuel Kamsarmax been you've eco these modern ships. been You've older new super perhaps buildings, selling

delivering a -- next these X have series here new X You years. the buildings of over new

going perhaps place and your here something just you is in that to wanted further that maybe in and this the general, Cape in low Cape to about broader you're you all Kamsarmax what that have at investing buildings? the on fleet of Obviously, the ships. new look free order the seeing fitted thoughts But as in on we're given forward, think cash continuing versus and market, fleet terms point? book investing considering Just at ask, in scrubber contracts are

You in Capesize. mean investing

Yes.

Look, of we the will cannot current as relation maybe are we such at proceed buildings, the levels, time, but of new some question over are million future long remain Capesize hovering interest out moment, easing a Japan. Yes. at interest And that renewal. always Maybe revisit see case, investment. rates $XX as at they really rates, prices the in fleet we may time, the with to year's in in

have would all sell Capesize to we a newer the So to one. buy

time interest of touch So want for rates. to because the being don't high we

X would has expanded last the been substantially. like years, out point that I that fleet to

we now, So X in about have we right past, the and had Capes, X.

So very our invest this prices movement the market before the from in a proactive Capesize high reach shows to side levels. this

market a there on good point. and guess ratio. of that on that's at Yes, as you're But to perhaps quite mentioning, Capes a well, the it wanted yes, the order been book part because I returns low buildings. ask aren't year least has this And obviously, done I them new that's the that's

mentioned, acquisitive You to, is midsized is say, were the there kind the expensive relative -- Or -- secondhand Capes look interesting? returns you just look there of the on segments? as board are too are Kamsarmax it across that there

Yes.

think Capesize board they from expensive, $XX I X-year-old million you are an across yard. so buy to the too a good need

us at point. is good investment not a for So this

a While [indiscernible] would now, wait we to different have for But that been proposal. want time. right

Obviously, Okay. seems dry supply you that's good. think has things a they've sector perhaps it is maybe a we weakness healthy, bulk, board a Do steel the perhaps more way dry bit it its prices market Capes that's eased you here color do on eventually we're guess, year. -- here still tight bulk perhaps about been it picture maybe make will last generally seeing has but give And very just general. of about much though Or this some think just Capes follow-up, the even to bulk recently? for pressure. the globally, have better a insulated steel market thinking have dry than Any weakness softer able the as in overall held been think, recently, you're the rates, year complex, and rates not markets? in been We've just from I driving but this dynamic, under what's are it. and into of across market kind The obviously, up, in very tougher that seen China,

in in Right we and of the And year. improvement little summer weaker Yes. we what now, bit weak traditional is it very cargos bit need market little Far the market the Maxmarket. autumn the East. months, a fourth Atlantic market starts, a the in pick on And expect a Atlantic. the we up is side of Atlantic in We will and months to this of we of October seen the enter and seen in have not September, any And the And as from least as real Europe is in congestion generally, we have areas the backhaul the not weak period comes lift a tonnage. loading also, last major this that believe on will market. bit -- few the for bulk lift have we in or charging to that always at a stronger seen quarter dry

$XX,XXX or But we of $XX,XXX as a $XX,XXX still the is as course, day, to concerned. even market, healthy far at $XX,XXX a market spot are

So really about we complain it. don't

a trading the the dry closure, week, Sea it the to by the good which this Sea a Red not the canal, and Red don't at the And bulk stay part closure longer exist it. Panama bit and number for Canal, levels. the maybe X of or to that since Canal the any key see but every show X and course, Of Sea this of moment, is months, that's January, Red Panama of will restriction passing think of will and I about We that but vessels continue February will be guarantee to year, this a market case. at to all

pay planning are is basis, [indiscernible], it European which ships on for the a XX%, paying for about try we market the to of Atlantic extra continent for close would business In don't important approaching make continent Pacific, old. in are welcome, we are getting simply, Pacific. the from was not was XX% older will environmental we [indiscernible] the [indiscernible] trade tougher the -- the for is will these borders they if the the This basis. to pay the fee. old not Xst It's years a ships are this will a to to quarter-by-quarter be January, the they have they find trading long Atlantic all company or business that long-term traditionally XX posting the ships. And are for on [indiscernible] younger we very the business, are or that especially demand years comfortable And costs of What XX it Australia, because fact over in U.S. penalty year. hence, because us plan into for will from a cargo find as in the run you regulations most a

will head those not not Pacific they yard. and ships the the So able to in able the of will trade to trade scrap will Atlantic. to in They some be

X harm Phase ships X in a So are a [indiscernible] economic next delivered X through not and very years. know, bit are as the weak you do of coming on vessels, any will us market already another because,

are the next X into years what looking next than or we will more So the months. few X happen rather in

And the detail. That sense. and the I appreciate Yes. deep insight makes

Molins Our next Climent from question comes Investors. from Value

by start asking are you've on fleet. secondly, provide you returns And existing environmental the the what some some initiatives and Could these upgrades to done? kind wanted commentary of I you've about on your generating? returns pursued the investment of

now, still of Yes. it's around a we a and the an off is paid profit is scrubber scrubbers The income in scrubber. $XX, -- we'll investment, extra on a the annual the been company level, Look, spread is all, not result. year. started the which start This whatever million XXXX, $XX is generated and but on those very at $XX XXXX. earning now Right numbers, good in by we already, has the with first completed

of environmental ships. them money existing dockings and older of them dry even upgrading fleet So on after we we take on that, by on all on this our the them draw investment

paints Kamsarmax on low build the improvements hull. X drydocking and now friction we So other that we just finish applied

XX ships of those tons. to We have XX X from by consumption tons tons, down reduced the

XX-year-old better XX-year-old doing the better is is ship -- ship BKI doing is it's a XX points. average, which consumption than So

$X,XXX paid rates this doing savings, with have are higher. charter ships saving this the of more So And existing improvement, $XXXX fleet. carry day will year the the a on around we investment because on we

ships. the we take scrubber revenue, and we on basically, remaining the it So back put

pretty Following upgrades? the the to XXXX you holding has the Omar's some after up XXXX, Considering asset on these the of fleet on Or past we question Post-Panamax. especially you a your for should that over positioning, and expect few done of them built recent pricing Kamsarmax on disposal are have year, still forward? foreseeable future, going comfortable well

twofolds first the twofold. earn is is works can one an -- Yes, there whilst operation. is income, -- upgrade the remain company's The extra company in the that ships under they

You have new as buildings, are XX we to remember ago. XX, these ships, years contracted

very well are kept, after. they So looked

Of right buyer market at we price, over we sell. we because a the premium, right course, get is not the price. the ships rates can selling believe When premium worth at we company any the receive and are the

in hurry all not are sell to them. course, Of we a of

We every time are selling delivered one ship in the because to X new of ship fleet. we one for get have months -- order allow the to buildings

will we recent of achieve course, like condition -- investments ships last drydockings, we the can and have be periods will if the it a X the going the done we will the have of pay on or find in we done. the -- X be good of for the that we to years deals appreciate the next right at prices buyer process So to the when sell that market that of and

not but it in be are it we a to X ships complete will next slow the some months. in older hurry of process, the time, So a take the sale will and

the back for like Loukas the I This question-and-answer Dr. floor comments. Instructions] concludes to Barmparis would over closing [Operator turn to session.

our we're -- with a being have morning, very very again this wish much And you forward you in and much. pleasant call you Thank for Thank hearing with our we and quarter presentation. you looking discuss us summer, having next meeting. to to this for

Thank you.

concludes today's This teleconference.

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