Q1 2023 Safe Bulkers Inc Earnings Call

Speaker 1: Whoa. What I saw. I said find someone. Uhh...

Speaker 2: Today we have with us Mr. Paulus Hadjianu, Chairman and Chief Executive Officer, Dr. Lucas Barmpus, President, and Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. During this call, if you need any further information on the conference call or on the presentation, please contact Capital Swanson at 212- formulatedfors hair Ep Veh.

Speaker 2: six six one seven 5, six six

Speaker 2: I must advise you that this conference is being recorded today.

Speaker 2: Before we begin, please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended concerning future events, the company's growth strategy, and measures to implement such strategy.

Speaker 2: including expected vessel acquisitions and entering into further time charters.

Speaker 2: Words such as expect, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements.

Speaker 2: Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties.

Speaker 2: and contingencies, many of which are beyond the control of the company.

Speaker 2: Actual results may differ materially from those expressed or implied by such forward-looking statements.

Speaker 2: Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitive factors in the market in which the company operates, and the

Speaker 2: risks associated with operations outside the United States, and other factors listed from time to time in the company's filings with the Securities and Exchange Commission.

And now, I will pass the floor to Dr. Barampas. Please go ahead, sir. Good morning. I'm Lucas Barapares, President of South Bicus. Welcome to our conference call. We ask to discuss the financial effects of the first quarter of 2023. During the first quarter of 2023, we were targeted in a relatively weak market compared to the previous year. Having covered the liquidity and the financial effects of the first quarter of 2023.

We have continued our buyback program targeting 10 million shares and we have created a 5 cents share of common stock. Our balance sheet. We have continued our buyback program targeting 10 million shares and we have created a 5 cents share of common stock.

In strong with significant cuts in the developed capacity, our capital requirements are substantially covered by our contracted future. Revolution of capital structure is conservative. Now let's start with this market update in slide three. With the change on the graphs, the current coverage of the market. Gates have recovered from the recent lows and drive back freight markets. Overall, they recovered with China's E-ZERO COVID policy and use the package for flying newbies.

10 congestion has declined with lower input demand and the usage of supply chain issues. On the final market, the prevailing commodities market is likely to provide support to the market throughout the second quarter of this year.

What we don't see like for the present the development of our CRB commodity index reflecting the basic commodity features of future prices. For example, energy, agricultural, business metals and industrial metals. We could again leave it in the data for shooting.

The results slide 4 represent the development of a CRB commodity index reflecting the basic commodity features of future prices. For example, energy, agricultural, business, metals, and industrial metals, which represent leading indicators for shipping. The results slide 5 represent the development of a CRB commodity index reflecting the basic commodity features of future prices.

The current response at high levels, commercial prices declined sharply over the past six months following the...

I also play to high levels of last year's historic state in June 2022.

After rising by 45% in 2022, commodity prices are projected to fall.

by 2021 percent in 2023. We continue to witness the rise in several bank and email upgrades as policy makers aim to fight inflation and national war consequences, the policy which is expected to help the global out.

The every focus of IMF except the extended growth of global GDP of 58% for 2023 has global inflation projection for 2023 down to 7% during the war induced the border price purchase and food and energy prices and because the leading supply demand imbalances.

In this environment, the forecasted global drive back demand growth is expected to increase only by 2% in 2028. With the forecasted growth in iron ore by 1%, asset construction activity remains muted. As an expected growth in coal, the import demand also results in higher demand in the median time. The forecasted growth in iron ore by 1% in 2028.

Then to F a top for demand remains sourty. Us is more effectively the main tiget meated for the plantes like the same as Gina.

In China, they met 8% projection growth between 23.5% and 22%. With nature globally, dry bark has few owners. We did the growth in the other two, 4.5% year on year in 2021-23, and we completed 29% in 2014-22.

This was the series of recovery as studies contributed by people in antacentric growth were at the index of the distribution accounted for 120%. In March, the number of people in BMI was 58.2.

the highest level in mobile education and the unfortunate BMI to 61.9

Metal prices fell by 3% in March and in the search for less metal in terms of recovery time.

India's emergence and expectations will vary by day, and the IMF's April projections are 5.9%, in Greece, with a dip of 10.3%.

Local investments in renewable electricity are actually in continued rise.

The global economy has shifted in the first place, particularly on the course of the war in Ukraine, because of the pandemic related supply side disruption for a juggling time.

The World Bank Commodity Price Index declined by 30% after the World Bank's APK-P projection the papers appear on the screen.

When the supply side se like high rep dri alfor front see would be the.

For this reason, we remain cautiously optimistic about the need for the process of the trade market. Because the model of 25% of the medium-sized fleet is older than 15 years, the cost of scrapping is expected to accelerate as a combined effect of the T-18 and the NMR regulations.

kicking in from the first of January 2023. It is worth noting that the Anit ships have more efficient design compared to Chinese. 8% of our fleet of the Anits give very close to 40% of the global fleet, which means that our fleet consists of more efficient vessels compared to the market average and can compete better with the new environment.

Furthermore, we have one of the very few global companies which has an expensive order book capable of E vaccines.

All other intention remains detected when you are complete and complete on the basis of frizo and spectacular performance.

As Slide six and I feel year about keep is out of 8, only about fifpercent the bri eight with expected toprobabity. Excited about the valriing, the difification updates.

So what is holding today? All the professors have scaled their partnerships, big after 2015, and the teams in order to prepare for year three new groups. Seven of these have been developed by then in 2013. The change time is made to ongoing environmental update.

program in case you don't have your PNC and that will give you a share of your information.

in our group, completing our breaks in 20 versus by June 2023.

that they will also back its inclusion from time to time by a field for mentoring the development of their benefit fields. Concluding our market view of slide 7, June end, 2023, there has been an increased industry-wide variability in the lots of markets. A major

Then I think the environmental regulations and fields becomes increasingly better in the right way. And that's a result of the technological efficiency rate of opportunities for those willing to invest as the budget has done.

Such environmental efficient leads may affect company valuations and lead to future market with differential demand capacity of such doses. Furthermore, the combined effects of the aging of the fleet, the low order book and the new exaggerations, which favor feats, have more efficient ofSw

limiting the basis of life and tightening the market even further. In this market of increased environmental-based competition, let me pretend that Flight 8, second of all, see characteristics with different shaders from all tiers. The strong alignment of the industries with cross-dip percent management and ownership participation, the low level of the safety-dip percent, the comfort of liquidity and contract stability.

Our track record, the creation of invasive value through an extensive heat expansion program, with 12 phase pre-lubits and environmental upgrading our existing heat including insulation and new scrabble. All course and code that is now in the ballot for the heating sequence.

All of our groups will have service by the end of 2024, and 20,000 in the environment will be upgraded by the end of this year. We are taking delivery of three phase 3 units already, which have the best reporting basis on the way this way in the drive back market globally.

We intend to compete on the base of lower fuel consumption and environmental performance within years.

Let's now focus on our liquidity. I'll catch the launch and I'll test the fracture at the women's flight 9.

For maintaining a comfortable leverage of 33%, our debt of $430.2 million is comparable to our fleet scrap value, which presently is $389.4 million, although our grid is 10.6 years old. Our daily average interest rate is $4.63.

changes are still considered to be 5 million negative.

are the co-editing in terms of the short distance of the $359.9 million, $355.9 million, together with a contract rate of $emaker.1 million provided to be our management in capitalization. Thank you for your attention.

in relation to certain existence and in terms of basis, in five units upon their delivery. Moving to our dividend poll in slide 10, we declared the dividend of $0.05 per share over the last six consecutive quarters regarding our shared profits. At the same time, we have an active common share buyback program. Thanks for joining me today at the Delay

under the week, we have already reported 8.3 million shares such as May 2023, how the Deputy Attorney General finally authorized under the purpose of trial.

Furthermore, we have terminated the JTMA to program under which the last sale had occurred in September 2021. The focal point in this uncertainty of the capital markets and the world economy is that we continue to direct a portion of our previous flows to commentize the reach of our first mobile program.

that will provide us with competitive advantage in terms of fuel consumption and environmental performance while maintaining our re-edits at relatively low levels.

Now let me summarize the investment action of safe barges in Flight 11. We believe that safe barges from fundamental or that can also be believed to reflect might challenges in the shape of humans.

Safe bodies with each other do. It's among those common to be navigated by the medical challenges of the end of the condition that they aid in dry-bar sleep and tackle the global uncertainties by utilizing the injected causes of each sleep and the efficiencies of each large scale environmental problem.

In part of the Cantonese expansion, we also have meaningful deals. We have a long run, with an environmental base for diamonds.

With our strong balances, our utility leverage, our comparable energy food scrap value, secure cash flows from reliable counter parties, realty-focused food expansion with self-paid 3 million buyers. So, with our peer participation and with our environmental relations, the company experienced magnificence through its infrastructure

As a general note, the English quarter will operate in a gradually weakened market environment compared to the same period in 2022. The decreased revenue will be lower highs, increased payments from started feeder vessels, increased providing expenses and higher interest expenses due to increased interest rates.

In flight 12, we present a swam chart in the form of an example of our management alignment.

We had a fine charted equivalent of $3,760 compared to $21,352 during the same period of that period.

Net income for the first quarter of 2023 is $19.3 million compared to net income of $36.4 million in the 10 years in 2024.

Our daily running expenses is $5,550.

That is $5,732 last year. While daily earning expenses excluding by documenting pre-delivered expenses.

It's $5,132. That is $4,923 for the Q1 of 2022.

Our rolling OpEx on GMA is 2.1.23, which we believe is one of the most competitive compared to our peers.

So that's seven thousand forty three dollars and we know that this is all our drug development in between anything we do deliver expenses as well as whole animation.

Moving on to slide 15, we have popular financial highlights for the first quarter of 2023 compared to the same period in 2022.

I've adjusted every doubt for the first quarter of 2023 since I paid the 3.1 million dollars.

compared to $46.1 million for the sale period in 2022. On the date of the share for the first quarter of 2023 was 10 cents, calculated on the way to double the number of 118.4 million shares.

compared to 24 cents during the same period in 2022, translated in a weighted average number of 121.6 million shares.

We present the slides that we are quarterly operational highlights for the first quarter of 2023 compared to the same period of 2023.

We operate for 43.83% on average.

I mean, I will point out that this one is $15,760,000.

compared to 39.54% earning an average time target of 21,000.

We found that they were told us in the same period in 2022.

On slide 15, we present our low break-even point for Q123, which we believe is one of the lowest meaning of Q123.

The global economy is experiencing multiple challenges. Inflation is higher than seen in several decades. iconic financial conditions in most regions. Russia continues to Chevy S

That's our main purpose is green operations and this is a inflationary environment.

Based on our satisfactory financial performance, the company is born to directors with nearly 5 cent dividends per commissary. We would like to emphasize that the company has been obtaining a head cast position of about 90.7 million as of May 2023.

Another 119 million revolved repair velocities.

An additional 148.2 million in a bone-boring capacity.

For my liquidity in capital resources of $351 billion, it provides us with significant firepower.

Additionally, we have contracted revenue from our non-consularly-prespoding field grant charge offenders in excess of $285 million in net emissions and excluding staff revenue for certain vessels, as well as additional borrowing capacity in relation to saving and probabilitykid investors

and tried new things upon their delivery.

We believe that a friendly community and relative with low laborers will enable us to be flexible with our capital, function, expandively while still evolving until our holders and taking advantage of the opportunities that arise.

Thank you and we are now ready for the Q&A session.

At this time we'll be conducting a question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad, and the confirmation tone will indicate your line is in the question queue.

You may press star 2 if you are late to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment please while we poll for questions. I'm just going to ask Star 1. Thank you.

Thank you.

Thank you and our first question is from the line of Chris Weatherby with Citigroup. Please proceed with your questions.

Thanks, good afternoon guys.

Maybe I can start on the fleet and curious how you guys think about fleet opportunities from here. Obviously a pretty tight order book relative to what we've seen over the past. And so I'm curious how you guys think about approaching it. Are there going to be new building opportunities for you that you'd like to execute on at this point? Does secondhand make more sense or given where vessel values does it make sense just to stand pat and see how...

Okay.

Right now I think the new big market is a little bit confusing.

because we see prices rising because of demand created from other sectors.

enter...

and we don't have a clear path.

What will be the next fuel available?

for new builds. Since we have still eight versions, nine versions to deliver, we are now existing the new building program in phase three.

low consumption new buildings. We are not rushing to making some investment.

in real fuel ships because simply we don't have a clear view. We know we are trying to moniker the market but we don't have a clear view. So I think like us, there are many people with the same confusion at the moment, at least in the dry bulk sector.

I think for now the container ships are more clear. They have more options there. But in dry-ball we don't have that many options. So at the moment you will see very small order for 2025 and the yards are almost full.

And if someone wants to consider designs of the DLQ

The availability is late 26th and 27th, so it's very, very far away.

So also for that delivery positions, you have to bear in mind the high-interest cost of the delivery installments.

So right now I don't think that the market will see many more new buildings. So unless I can do the way to have more crystallized.

designs in front of them.

Um, scrubbers in particular, I know you've highlighted some of the.

hurdles and opportunities, I guess, as well, in terms of emissions and how much the fleet meets in the current and future emissions standards. I guess as you think about your approach to that market and then maybe scrubbers in particular.

Is that still an investment that is worthwhile? So I guess two questions on existing vessels. Is there a desire or an idea that you might do more of that? And number two, the vessels that you have the scrubbers on, do you feel like they're earning a reasonable return? That probably some of those were or most of those were underwritten.

to remember at the same time almost.

are making environmental investments and they are reducing 10% of consumption of essence.

So we will see scrubber spread going in the future above 150, then we may see more scrubbers.

I'll say that we have done, we have all the struggles.

all our capes, by the end of the year all of them will have their scrubbers. Capes are burning around 45 to 40 pounds a day. So there it's more viable.

But smaller ships I don't think anymore is viable to...

to install Scrabble, so I think that the paid back time is much longer than what used to be. Okay, all right. That's helpful. Thanks very much. Having said that, companies like Inverse have established in 20...

2019, 2018, 2019, and they have been working them after the middle of 2020. I think they made money back then.

Okay, yeah, that's a fair point. Great. Well, thanks very much for the time. I appreciate it. Thank you. As a reminder, to ask a question today, you may press star 1 from your telephone keypad. Our next question is from the line of Omar Nocta with Jefferies. Please proceed with your questions. Thank you. Hey guys, good afternoon.

Just want to maybe touch a little bit on capital allocation. Obviously your strategy there has been fairly balanced You've got the dividend the buyback which is fairly active recently acquisitions with the new buildings and Focusing on the balance sheet and making sure that that is getting paid down Just wanted to ask about how you are thinking about the fleet as it is going forward you

sort of that existing fleet today that isn't mentioned as being in the eco portion of the business. So basically call it 20-25 vessels that make up your older age fleet. What's your plan with those especially as you start taking delivery of the new building?

Okay, first of all I will say a few things about our capital allocation. So basically at the early stage when we decided about the dividend, we thought of a meaningful dividendbackground SLIDE.

reasonable proportion of our Cricas-Clorich-Stowall's investment in new bits. So our level of our long-term value will not be better in the following years. So we want to see something like the age of 30-35% or so.

long-term value which we feel very comfortable. The second point of our policy is that we have a substantially contracted revenue so we have visibility in order to support our diligence. And we also have a

in order to be able to take actionable things that they arise in the market. Now in terms of our fleet, you can see that by the end of 2025, half of the fleet basically will be either air-to-ship or air-to-veter, this could be??

I think a very impressive figure. The other cup is probably consisted of 25 vessels. Can sense of it in the….

20 of them will be upgraded to the 2023, which means that in the efficiency range of 10 percent will be there.

And also the other part is that our ships are Japanese built, which are inherently more efficient than the other, I mean the most of the remaining global data which is by about 50% Chinese and generally is more fake.

So I think that the company will very comfortably be able to compete in the basis of fuel performance, having about half of the fleet new builds, so phase 3 and echo. We have upgraded fleets which basically are based on a British or a Japanese build.

Okay, that's a very good overview. Appreciate that. You know, I think in earlier in the – I think it was in response to Chris' question about new buildings and you highlighted the – you know, you'd have to go out to 26 or 27 to take delivery. And again, there's uncertainty on propulsion.

Earlier this year you had added to your cancer max, I believe, Tally, with a 25 delivery. If I remember, it was the first half of 25. If you guys were to place an order, is that achievable again to be able to get something in the first half of 25, or is it basically now the window has passed?

and we're looking at 26 27. In Japan, in Japan is very hard to find the new builds in 2025. It's 26 onwards.

If you go also to see the iron, you are clearly possibilities.

At the moment you have to go to late 26th, 27th and even there we don't know if the designs are viable and if the designs, the shipyards are really worked well by the yards and they are at the very primary stage.

the thing is, she promised in general, a very skeptical in which part to pull it. For us, I'll please look at another ongoing program of nine ships into the delivery. So we don't have a real, a real anxiety to do some of the most, some very simple, with the forty-carbon socialist law.

our fleet with the addition of the partnerships joining the fleet.

which is also we are all at a very good price, no price before, during the start of the Covid. So from our point of view, we can hope to wait another 6 to 12 months before we make a move. Thank you.

And we have a clear sign that we are open to coming. I am to Paul

some more <expletive> , but I don't see any...

actually they can rate the dollar at 5% like the margin of the banks another 2%, 7%. I don't see actual conditions for 10% sooner.

You know, it's too far away and they can afford it and so too much so we prepare to wait for later on.

Now we will be selectively sending out all the sheets or…

She's been over 15 years old, or around 15 years old. Since we already have the replacement coming in. And we wait and see how the market determines. The interest in things.

Despite the trade market has been underperforming the first five months of this year in the country, the market has been underperforming the first five months of this year in the

single prices are increasing. single home prices are increasing.

So either the market has to go up or the supply chain will have to come down. So there will be plenty of opportunity to gain one way or another. So we don't need to make more moves at the moment simply because we have a very well place.

investment of using modern ships under the under 786 range.

So we have to take our time and see how things move.

Thank you. Yes, actually, that was just going to be a – I was going to have a follow-up on that topic. At the same time, it defined me up at the same time.

We have seen that our NAV is trading at 50% of the value of the clip. If prices continue to go up in our NAV this topic, it's much healthier to invest shareholder money in the buyback of all stock, which lately we have...

As you have seen, we have stepped up a bit on that front. So this program may continue. We'll see how things develop. We don't see appreciation of bowel sharpness. We'll continue.

And as the prices keep improving, we will continue investing in all shares. That sounds good and it's very clear. That's it for me. Thank you..

Thank you. At this time there are no additional questions. Please return to your seats.

Thank you very much for attending this conference call. Our first quarter are financial results and we are looking forward to discuss again with you in the next quarter. Thank you to all.

Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.