Q1 2024 Safe Bulkers Inc Earnings Call

Okay.

Operator: Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers conference call on the first 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. At this time, all participants are in a listen-only mode.

Thank you for standing by ladies and gentlemen, and welcome to the Safe Bulker Conference call on the first quarter 2024 financial results.

Operator: We have us we have with US Mr. Polly However, you want our chairman and Chief Executive Officer, Dr. Lucas Forbearance, President and Mr. Konstantinos, and Douglas Chief Financial Officer of the company.

Operator: At this time all participants are in a 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 one on your telephone keypad and wait for your name to be announced.

Operator: 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. Following this conference call, if you need any further information about the conference call or about the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today, April 30th, 2024. The archived webcast of this conference call will soon be made available on the Safe Bulkers website at www.safebulkers.com.

Operator: Following this conference call if you need any further information on the conference call or on the presentation. Please contact capital link at 212.

Operator: 617566.

Operator: I must advise you that this conference is being recorded today April 30th 'twenty 'twenty four.

Operator: The archived webcast of this conference call will soon be made available on the same focus website at www dot safe Bulker Dot com.

Operator: Many of the remarks today contain forward-looking statements based on current expectations. However, actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause actual results to differ materially from those in the forward-looking statements is contained in the first quarter 2024 earnings release, which is also available on the Safe Bulkers website, again, www.safebulkers.com. I would now like to turn the conference call to one of your speakers today, the president of the company, Dr. Loukas Barmparis. Please go ahead, sir.

Operator: Many of the remarks today contain forward looking statements based on current expectations.

Operator: Actual results may differ materially from the results projected from those forward looking statements additional information concerning factors that could cause the actual results to differ materially from those in the forward looking statements is contained in the first quarter 2024 earnings release, which is also available on the safe Bulker website.

Operator: <unk> Www dot safe Bulker Dot com.

Loukas Barmparis: I would now like to turn the conference call.

Loukas Barmparis: One of your speakers today, the president of the company Dr. Lucas from Baird. Please go ahead Sir.

Loukas Barmparis: Good morning to all. I'm Loukas Barmparis, President of Safe Bulkers. In the first quarter of 2024, we operated within a more robust market in comparison to the previous year. In alignment with our environmental, social, and governance strategy, we ordered one additional Phase III new build. Concurrently, we continue the process of modernizing our fleet by divesting three older vessels. Moreover, we executed a pre-purchase for 4.9 million shares of our common stock while declaring a dividend of 5 cents per share of common stock.

Loukas Barmparis: Good morning to all and we've got some other bodies specially in upstate markets in the first quarter of 'twenty 'twenty four we operated within a more robust market in comparison with the previous year.

Loukas Barmparis: Alignment with our environmental social and governance strategy, we ordered one additional phases.

Loukas Barmparis: Organically, we continue to process of modernizing our fleet by divesting three older vessels.

Loukas Barmparis: The other which he could repurchase four 9 million shares for bulk almost stopped while declaring a dividend of five cents per share of common stock outs.

Loukas Barmparis: Our strategic focus persists on fostering enduring value for our shareholders and upholding a resilient capital structure. This commitment is further evidenced by our efforts towards a young and energy-efficient lead, thereby securing operational excellence in anticipation of forthcoming strategic environmental regulations. We ensure that our capital expenditure is adequately covered by our contracted future revenues, fortifying our balance sheet towards a trajectory of sustainable growth. Subsequent to a comprehensive review of our forward-looking statements, the language presented in slide two, our attention transitions to the market update in slide four.

Loukas Barmparis: Oh synthetic focus will better assist unfortunately enduring value for all shareholders end up holding a resilient capital structure. This commitment is further evidenced by our airports towards a young and energy efficient fleet. They had a basic creating operational excellence in anticipation of forthcoming.

Loukas Barmparis: Mental regulations.

Loukas Barmparis: We ensure that our capital expenditure is adequately gathered by our contract with <unk>.

Loukas Barmparis: Fortifying our balance sheet towards your trajectory of sustainable growth.

Loukas Barmparis: Subsequent to a comprehensive review of our forward looking statements language is they didn't fly to our attention.

Loukas Barmparis: The transition to the market update in slide four.

Loukas Barmparis: Noteworthy is the volatility experienced in the Cape market segment. It is pertinent to highlight that all eight of our caves are presently period chartered, boosting, on average, the remaining chartered duration of exceeding two years with an average daily rate of approximately 24.4 thousand dollars.

Loukas Barmparis: Noteworthy is the volatility experienced in the Cape market segment.

Loukas Barmparis: It is pertinent to highlight it for eight of our Capes are present the period charter.

Loukas Barmparis: Boosting that or not.

Loukas Barmparis: On average remaining charter duration with Oprah exiting two years with it.

Loukas Barmparis: Average daily rate of approximately $24 $4000, which provide us with an appreciable degree of the cash flow visibility not only starting with the prevailing daily market today to date, well below the $19 5000, okay.

Loukas Barmparis: This provides us with an appreciable degree of cash flow visibility, notwithstanding the prevailing daily market rate today of around 19.5 thousand. On the Panama front, the charter market is at about 17.2 thousand. Progressing to slide 5, we present an overview of CRB commodity indexes, the fluctuation in basic commodities future prices. The geopolitical landscape, with tensions in regions such as the Middle East, the Red Sea, and Ukraine, underscores the heightened level of global uncertainty.

Loukas Barmparis: In the Panamax school gets up it might give you said about 17 2000.

Loukas Barmparis: The good progression to slide five we present, an overview of our CRB commodity indexes fluctuation in basic commodities future prices.

Loukas Barmparis: The geopolitical landscape with Sanchez in regions, such as middle East that Etsy, and grain underscores the heightened level of global uncertainty.

Loukas Barmparis: COUGH COUGH, The global economic recovery is slow but steady. The dry bulk market is expected to remain strong in 2024, with a tightening supply and demand balance attributed to increased cargo volumes, particularly in the Cape Size segment, driven by higher iron ore shipments from Brazil to China. Rerouting away from the Red Sea and the Panama Canal has also bolstered demand in smaller segments. There is an expectation of gradual control of inflation. Nevertheless, despite the delay in interest rate cuts, the expectation of global economic resilience remains strong.

Loukas Barmparis: [laughter].

Loukas Barmparis: The global economic recovery is slow but steady.

Loukas Barmparis: But the market is expected to remain strong increasing 24 with the tightening supply and demand balance attributed to increased cargo volumes, particularly in the Capesize segment, driven by higher iron ore shipments from Brazil to China and China.

Loukas Barmparis: Rooting away from the Red Sea in Panama Canal is also bolstering demand in smaller segments.

Loukas Barmparis: There is expectation of virtual control of inflation.

Loukas Barmparis: The delay in English they got to the expectation for global economy.

Loukas Barmparis: The global economic resilience remains strong.

Loukas Barmparis: The IMF April forecast of 3.2% expansion in global GDP for both 2024 and 2025 is accompanied by control of inflationary pressure. According to BIMCO, the forecasted global dry bulk demand growth is a 3% increase for 2024. In China, the IMF April projection of GDP growth for 2024 stood at 4.6%.

Loukas Barmparis: Yeah, Yeah mess April forecast of three 2% expansion in global GDP for both 2024 and 2025 is a combined by control over inflationary pressures.

Loukas Barmparis: According to the forecast at the global dry bulk demand growth stands at 3% increase for 2024 in China. They missed every projection of GDP growth for <unk> stood at four 6%.

Loukas Barmparis: China faces challenges, of course, in growth dynamics driven by internal factors, while the resilience of India's robust domestic demand and sustained infrastructure investments emerges as a stabilizing force amidst the prevailing economic uncertainty. Let us now proceed to examine the supply-side dynamics in slide 6. The dry bulk order book remains at a single-digit percentage.

Loukas Barmparis: China faces challenges of course and growth dynamics, even the binder internal factors one the resilience of indias robust domestic demand and sustaining infrastructure investments in major such a stabilizing force amidst the prevailing economic uncertainty.

Loukas Barmparis: Let us now proceed to examine the supply side dynamics in slide six the dry bulk order book remains our single digit percentages.

Loukas Barmparis: Our outlook remains optimistic regarding the near-to-medium-term trajectory of the freight market, underscored by the low order price. Approximately 25% of the medium-sized fleet surpasses the 15-year mark, increasing the anticipated impact of fleet aging and threatened environmental regulations. Vessels constructed in Japan have superior design efficiency. 85% of our company's fleet consists of Japanese-built vessels, surpassing the global average of 40%.

Loukas Barmparis: The outlook remains optimistic regarding the near to medium term trajectory of the freight market underscored by the lowered to.

Loukas Barmparis: Approximately 25% of the medium sized fleets so.

Loukas Barmparis: Buses, the 15 year, Mark increasing the anticipated impact fleet aging in season environment.

Loukas Barmparis: <unk>.

Loukas Barmparis: Vessels constructing Japan subsidiary PTO design efficiencies, 85% of our company split compression Japanese built vessels self bussing, the global average of 40%.

Loukas Barmparis: The strategic advantage positions our fleet favorable to compete within the environmental-based chatter market. As one of the few drive bulk companies with a substantial phase 3 order book, strategically positioned below prevailing market valuations, it underlines our commitment to compete on the basis of operational environmental excellence. Fleets comprising efficient Japanese vessels and vessels delivered post-2014 will be able to remain relevant and compete within the three regulatory frameworks and greenhouse gas targets. A number of our recent developments are presented in slide 8.

Loukas Barmparis: This strategic advantage positions, our fleet, but favorable to compete we've seen developmental based southern market.

Loukas Barmparis: One of the few dry bulk companies with a substantial phase three older book, that's people shouldn't below prevailing market valuations underscore our commitment to compete on the basis of operational environmental excellence.

Loukas Barmparis: Fleets compressing more efficient ship on these vessels and the vessels they leave it.

Loukas Barmparis: 'twenty 'twenty 14, we will be able to remain relevant and competing with indices, our regulatory frameworks and brick house.

Loukas Barmparis: And nobody knew about recent developments as presented in slide eight. These include the declaration of a 5% or five sensor dividends per common share based on the ability of the vessels the deliverability of to face the new boots, alongside the initiation or borders or two additional phases.

Loukas Barmparis: These include the declaration of a 5 cents dividend per common share, divestment of 3 older vessels, and the delivery of 2 phase 3 new builds alongside the initiation of orders for 2 additional phase 3 vessels. In slide 9, we present Safe Bulkers' key attributes, such as our robust management ownership, alignment, comfortable leverage, ample liquidity, contracted revenues, a sterling track record, and the quality and competitiveness of our fleet, strategically positioned to leverage the regulatory landscape, remaining true to our commitment to expand by building a resilient company and rewarding our shareholders.

Loukas Barmparis: Tracy vessels.

Loukas Barmparis: Slide nine represents a bug you say key attributes such as Oh robust management ownership alignment comfortable leverage ample liquidity contracted today. The news is sterling track record and the quality and compete and competitiveness of our fleet, so that the position to leverage that.

Loukas Barmparis: Embedded gladly landscape remaining through email.

Loukas Barmparis: In our commitment to expand by building, a resilient company and reward our shareholders.

Loukas Barmparis: Moving to slide 10, we present an insight into the abundance of our green fleet. The breakdown presented in the top right graph underscores the environmental credentials of our fleet, comprising 46 vessels today, with 20 vessels having undergone environmental upgrades, 9 being Phase III and 11 being Eco, and the remaining 6 scheduled to be upgraded within this year. The bottom graph represents our fleet renewal strategy, with divestment of 12 older vessels, acquisition of 7 second-hand vessels, and a steadfast ordering comprising 7 plus 1 phase renewables, resulting in a stable 10-year average fleet age over the past 4 years, as confirmed by slide 11. This trajectory of fleet expansion shows us a path to our commitment towards sustainability. I now pass the floor to our CFO, Konstantinos... Adamopoulos, for our quarterly financial overview.

Loukas Barmparis: Moving to slide 10, we present, an insight into the advantage of our Green fleet. The breakdown presented in the top right graph undisclosed environment.

Konstantinos Adamopoulos: She also about fleet comprising today of 46 vessels with 20 vessels, having undergone environmental upgrades nine being phase three and 11 being equal and the remaining six scheduled to be upgraded within this year.

Konstantinos Adamopoulos: The bottom graph represents our fleet renewal strategy, we've seen with the divestment of 12, all the vessels.

Konstantinos Adamopoulos: As Sean said in second half this is a.

Konstantinos Adamopoulos: Steadfast ordering comprising of seven flushed one face the newbuild is that going to stable 10 year average fleet age over the past four years as confirmed by slight 11. This is a sector of your fleet expansion since that's a testament to our commitment towards sustainability.

Konstantinos Adamopoulos: I now pass the floor to shift focus.

Konstantinos Adamopoulos: The more bullish for our quarterly financial overview.

Konstantinos Adamopoulos: Thank you, Loukas, and good morning to everyone. As a general note, during the first quarter of 2024, we operated in a stronger charter market environment compared to the same period in 2023, with increased revenues due to higher charter hires, increased earnings from SCARB-affiliated vessels, increased operating expenses, and higher interest expenses due to increased interest rates. Let us focus now on our liquidity, our cash flows, and our capital structure, as presented in slide 13.

Speaker Change: Thank you Luc questions good morning to everyone.

Konstantinos Adamopoulos: Of note during the first quarter of 202 and before we open it isn't a stronger charter market environment compared to the same period implemented two efficacy with increased revenues due to higher charter hire this earnings from scrubber fitted vessels increased operating expenses and higher interest expenses due to increased interest rates.

Konstantinos Adamopoulos: It is focused on our liquidity or cash flows.

Konstantinos Adamopoulos: Capital structure as presented in slide 16.

Konstantinos Adamopoulos: Maintaining a comfortable level of 234% our.

Konstantinos Adamopoulos: Our debt of $534 million remains comparable to our fleets got value of $358 million.

Konstantinos Adamopoulos: We are maintaining a comfortable leverage of 34%. Our debt of $534 million remains comparable to our fleet's current value of $338 million, although our fleet is about 10 years old. Our weighted average in the States stood at 6.51% for our consolidated debt, with a portion of 100 million euros being fixed at 2.95% coupon on an unsecured five-year bond.

Konstantinos Adamopoulos: Our fleet is about 10 years or so.

Konstantinos Adamopoulos: Our weighted average interest rate stood at $6 51 per cent for our consolidated debt.

Konstantinos Adamopoulos: A portion of 100 million euros being fixed.

Speaker Change: Oh, it's 95% coupon.

Konstantinos Adamopoulos: In unsecured five year boom.

Konstantinos Adamopoulos: We have paid 79 million of our capital expenditure requirements in relation to our existing order book, the remaining capital expenditure of $201 million.

Konstantinos Adamopoulos: Liquidity and capital resources.

Konstantinos Adamopoulos: At approximately $216 million.

Konstantinos Adamopoulos: We have paid $79 million of our capital expenditure requirements in relation to our existing order book. The remaining capital expenditures are 201 million. Our liquidity and capital resources stand strong at approximately $213 million, which together with the contracted revenue of about $276 million provides flexibility to our management in capital allocation. Furthermore, we have additional boarding capacity in relation to seven existing unincorporated vessels and 8 new builds upon their delivery.

Konstantinos Adamopoulos: Which together with the contracted revenue of about $276 million provides flexibility to our management and capital allocation.

Konstantinos Adamopoulos: Furthermore, we have additional onboarding capacity relation for seven existing unencumbered vessels.

Konstantinos Adamopoulos: Eight new builds upon their delivery.

Konstantinos Adamopoulos: Moving on to slide 14, with our corporate and financial highlights for the third quarter of 2024.

Konstantinos Adamopoulos: Well for the San Diego.

Konstantinos Adamopoulos: Our adjusted EBITDA for the first part that over this year, so the $46 million.

Konstantinos Adamopoulos: Compared with $83 1 million afforded a champion.

Konstantinos Adamopoulos: 23.

Konstantinos Adamopoulos: Our adjusted earnings per share for the first quarter of pulling through the night before it was 10%.

Konstantinos Adamopoulos: Based on a weighted average number of 104 million shares.

Konstantinos Adamopoulos: Moving on to slide 14, with our quarterly financial highlights for the first quarter of 2024, compared to the same period of 2023. Our adjusted EBITDA for the first quarter of this year stood at $46.8 million, compared to $33.1 million for the same period of 2023. Our adjusted earnings per share for the first quarter of 2024 was $0.20, calculated on a weighted average number of 100.4 million shares, compared to $0.10 during the same period in 2023, calculated on a weighted average number of 118.4 million shares.

Konstantinos Adamopoulos: 10 cents during the same period in 2023 calculated on a weighted average number of $118 4 million shares.

Konstantinos Adamopoulos: On slide 15, we present, our quarterly operational highlights for the first quarter of 2024, even combined as one for the same thing.

Konstantinos Adamopoulos: <unk> you.

Konstantinos Adamopoulos: During the first quarter of this year, we operated 47.08 vessels on average, earning a D C of O.

Konstantinos Adamopoulos: On average of $18158.

Konstantinos Adamopoulos: Compared to 43, 3%.

Konstantinos Adamopoulos: And on average you see often.

Konstantinos Adamopoulos: <unk> thousand $760.

Konstantinos Adamopoulos: In the same period in 2020.

Konstantinos Adamopoulos: The company's net income for the first of all going up.

Konstantinos Adamopoulos: It was $25 $3 million.

Konstantinos Adamopoulos: Compared to net income of $19 $3 million during the same period in 2023.

Konstantinos Adamopoulos: Slide 15 will present our quarterly operational highlights for the first quarter of 2024 in comparison to the same period of 2023. During the first quarter of this year, we operated 47.08 vessels on average, earning a DCE of on average of $18,158, while earning on average PCE of $10,760 during the same period of 2023. The company's net income for the first quarter of 2024 was $25.3 million, compared to net income of $19.3 million during the same period in 2023. Concluding on slide 16, we present the list of our phase 3, The global economy is experiencing multiple challenges. Resistant inflation, Tight Financial Conditions, Russian invasion in Ukraine, Middle East crisis, all affect the market outlook.

Konstantinos Adamopoulos: Including in slide 16, it represent the least Nevada.

Konstantinos Adamopoulos: Three.

Konstantinos Adamopoulos: My sense of that already in our fleet.

Konstantinos Adamopoulos: Global economies experiencing multiple challenges.

Konstantinos Adamopoulos: She said inflation I'd financial conditions.

Konstantinos Adamopoulos: Russia is invasion, Ukraine middle of this crisis, all weigh on the market.

Konstantinos Adamopoulos: Based on our financial performance the company's board of directors declared a 5% dividend per common share.

Speaker Change: I would like to emphasize that the company is maintaining a healthy cash position of about $82 million or so.

Konstantinos Adamopoulos: 2019 2024.

Konstantinos Adamopoulos: 164 million available in the revolving credit facilities.

Konstantinos Adamopoulos: Overall, the combined liquidity and capital resources of $246 million.

Konstantinos Adamopoulos: Furthermore, we have contracted.

Konstantinos Adamopoulos: Unquestionably spot and period time charter contracts of $274 million net.

Konstantinos Adamopoulos: Net of commissions and before scribe.

Konstantinos Adamopoulos: As well as additional important capacity in relation to seven unencumbered existing ships and eight new builds upon their delivery.

Konstantinos Adamopoulos: We believe our strong liquidity and our comfortable leverage will enable us to expand the private fleet, while still rewarding our shareholders.

Konstantinos Adamopoulos: Based on its financial performance, the company's board of directors declared a 5 cent dividend per common share. We would like to emphasize that the company is maintaining a healthy cash position of about $82 million as of April 19, 2024, and another $164 million available in the World Bank Credit Facility. Overall, we have combined liquidity and capital resources of $246 million. Furthermore, we have contracted a non-cashable spot-and-period-time-chartered contract of $274 million. Net of commissions, and the 4th Scrabble revenue, as well as additional boarding capacity in relation to 7 unencumbered existing ships and 8 new builds upon their delivery. We believe our strong liquidity and our comfortable leverage will enable us to expand our trade further while still rewarding our shareholders. This concludes our presentation; we are now ready for the Q&A session.

Speaker Change: This concludes our presentation, we're now ready for the Q&A session.

Speaker Change: Thank you, ladies and gentlemen at this time well be conducting a question and answer session. If.

Speaker Change: If you'd like to ask a question you May press star one on your telephone keypad.

Konstantinos Adamopoulos: Confirmation tone will indicate your line is another question too.

Konstantinos Adamopoulos: Press Star two if you would like to remove your question from the queue poor.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star kit.

Konstantinos Adamopoulos: Our first question comes from the line of Omar <unk> with Jefferies. Please proceed with your question.

Speaker Change: Hi, guys. Thank you and good afternoon.

Speaker Change: A couple of questions for me, maybe just first off perhaps on the you know the term charter market.

Speaker Change: Noticed you fixed the Maria for four to five years that just under 26000 that shifts it looks like a standard capes 10 years old.

Operator: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you'd like to ask a question, you may press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. Our first question comes from the line of Omar Nokta with Jefferies. Please proceed with your question.

Omar Mostafa Nokta: It is pretty the rates pretty high relative to you know clearly market averages in recent years and also even just Ford assessments, whether it's the FSA or the one year three year five year charter market assessments and theirs.

Omar Mostafa Nokta: Specific on the charter or a ship or is there anything specific on the ship that gives us the type of premium or is it simply the going rate now for four to five year contract.

Omar Mostafa Nokta: Yes this vessel.

Operator: Warsaw.

Omar Mostafa Nokta: With a specific chart on index linked and the awesome other market.

Omar Mostafa Nokta: Hi guys. Thank you. Good afternoon. I have a couple questions for you.

Omar Mostafa Nokta: Rising in Q1.

Omar Mostafa Nokta: Wanted to to change it into long into long term video jobs that'll fix rate. So the company took advantage of above the requirement.

Omar Mostafa Nokta: Maybe just first off, perhaps on the term charter market. I noticed you fixed the Maria for four to five years at just under $26,000. That shift looks like a standard CAPE, 10 years old, but the rate is pretty high relative to clearly market averages in recent years and also even just forward assessments, whether it's the FFAs or the one-year, three-year, five-year charter market assessment. Is there something specific about the charter or is there anything specific about the shift that gives us this type of premium, or is this simply the going rate now for a four to five-

Omar Mostafa Nokta: And converted this four year charter, which I've just said is above the current market, even though the vessels.

Speaker Change: Japan is vital.

Omar Mostafa Nokta: Vital mentally upgrades is that with the various fixtures that have improved recently shelf consumption. So we manage slot what bloodstream for yes minimum falling yes. So all 25950 per day, which is a very healthy rate.

Speaker Change: So the company long enough.

Omar Mostafa Nokta: But most of the same time.

Omar Mostafa Nokta: We had the another vessel.

Omar Mostafa Nokta: Our 2012, which we fixed four all told anybody in September of this year.

Konstantinos Adamopoulos: Yes, this vessel was... with a specific charter on Index Link, and as the market was rising in Q1, the charter wanted to change it into a long-term period charter of fixed rates, so the company took advantage of that requirement and converted this to a 4-year charter, which, as you said, is above the current market, given that the vessel is... Japanese built and environmentally upgraded with various fixtures that have recently improved hair consumption. So we managed to achieve for four years, minimum four years, $25,950 per day, which is a very healthy rate, and the company was locked in at that time.

Konstantinos Adamopoulos: <unk> to 24 months.

Konstantinos Adamopoulos: 6000 tons on a state which is also a very healthy rate given the picture of this on the fourth day. So that once this spot of opportunity and a we had the we have the right vessels something that I time available and we managed to secure all this long charters, which are.

Konstantinos Adamopoulos: Usually typically all available law in hot markets of Capesize vessels.

Konstantinos Adamopoulos: Yeah.

Speaker Change: Yeah, Yeah, and you know obviously the market's eased a bit it's still obviously very solid generally speaking.

Speaker Change: But what do you how would you characterize the liquidity now and me in the term market would you be able to repeat that type of duration you know going out 12 to 18 months are four years could you do that obviously the rate may have come down but is there enough liquidity is still to be able to secure that type of.

Konstantinos Adamopoulos: Also, at the same time... We had another version. A 2012 build, which we fixed forward for delivery in September of this year, for 18 to 24 months at $26,000 a day, which is also a very healthy rate, given that the fixture is on forward days. So there was this spot of opportunity, and we had the right vessels at the right time available, and we managed to secure these long charters which are typically, usually are available in hot markets for capsized vessels.

Konstantinos Adamopoulos: Visibility.

Konstantinos Adamopoulos: And look this this sort of sharpness come our spots, where when you have a very hostile okay.

Konstantinos Adamopoulos: What market so the spot market is 40000 vulnerable going.

Konstantinos Adamopoulos: Even higher than post 2000, and all of our charters.

Konstantinos Adamopoulos: The current book of contracts cannot cover in the futures market that Exposal and tragedy Lasalle available. So long as you have the right vessel available up there right.

Konstantinos Adamopoulos: Yeah, yeah. And, you know, obviously, the market's eased a bit. It's still obviously very solid, generally speaking. How would you characterize the liquidity now in the term market? Would you be able to repeat, say, that type of duration, you know, going out 12 to 18 months or four years? Could you do that? Obviously, the rate may have come down, but is there enough liquidity still to be able to secure that type of visibility?

Konstantinos Adamopoulos: Woman most of our Capesize almost all of them they are on period charters.

Konstantinos Adamopoulos: Some of them they expire in 'twenty five some in 'twenty six.

Konstantinos Adamopoulos: Market, let's assume we have a hot market in the second half of the year.

Konstantinos Adamopoulos: What's the opportunity there one childhood wants to extend one year like hit those time, one of the other vessels since the switch and existing chocolate into something longer and began to show all the scenarios.

Konstantinos Adamopoulos: Look, these sort of charters come at the right times when you have a very hot spot market. So if the spot market is $40,000 or going even higher than $40,000, charters can book contracts, can cover in the futures market their exposure, and such deals are available so long as you have the right vessel available at the right moment. Most of our cape-size vessels, almost all of them, are on period charters. Some of them expire in 2025, some in 2026.

Konstantinos Adamopoulos: We're very hands on or what's going on in the in the freight market.

Konstantinos Adamopoulos: Well.

Konstantinos Adamopoulos: Uh huh.

Konstantinos Adamopoulos: Working.

Konstantinos Adamopoulos: In houses all our chartering.

Konstantinos Adamopoulos: If it is.

Konstantinos Adamopoulos: And so when the opportunity arises we try to make our the Epsilon digital such a requirement on the on the comps on MX <unk> vessels of course, all the charter duration, so I'm not sure that'll be causal because the pole categories not moving he was on the hotspot awesome with a K a.

Konstantinos Adamopoulos: Besides rates.

Konstantinos Adamopoulos: But in a hot market, let's assume we have a hot market in the second half of the year, there could be opportunity. If one charter wants to extend one year ahead of time, one of the other vessels could switch an existing charter into something longer and bigger. So in all these scenarios, we are very hands-on with what is going on in the freight market as we work in-house all our chartering activities. And when the opportunity arises, we try to take advantage of such requirements.

Konstantinos Adamopoulos: Those won the charters are more like a one one the yellow or whatnot or having your observation.

Speaker Change: Okay. Thanks for that color and then just kind of separate topic just on the capital allocation.

Speaker Change: Wanted to ask what you're thinking in terms of the buyback going forward.

Konstantinos Adamopoulos: You bought a good amount of stock obviously under the 5 million share authorization from late last year.

Konstantinos Adamopoulos: You did cancel it just before finishing the full $5 million you effectively got close to it but you didn't do the all of it but you wouldn't had a terminated it just wanted to get a sense any any reason why you cancel that with a little bit left to go.

Konstantinos Adamopoulos: On the Camsa Max vessels, of course, the charter durations are much shorter because the forward curve is not usually moving as fast as with the cape size rates. And on those ones, the charters are more like one year or one and a half year duration.

Konstantinos Adamopoulos: Any thoughts on you know a.

Konstantinos Adamopoulos: A new one and then also it.

Omar Mostafa Nokta: Okay, thanks for that color. And then, kind of a separate topic, just on capital allocation. I just wanted to ask what you're thinking in terms of the buyback going forward. You bought a good amount of stock, obviously, under the 5 million share authorization from late last year. You did cancel it just before finishing the full 5 million. You effectively got close to it, but you didn't do all of it.

Speaker Change: Is it just simply you know the stock performance being so strong and that's why you backed off in the buyback recently.

Omar Mostafa Nokta: Okay.

Omar Mostafa Nokta: About capital allocation.

Omar Mostafa Nokta: As you are aware we.

Omar Mostafa Nokta: I mean are we.

Omar Mostafa Nokta: We push our admin accept from operation shut doors at new investments, because it's very important to renew the fleet and to be competitive.

Omar Mostafa Nokta: In the following years, because the new regulations will.

Omar Mostafa Nokta: We have a substantial that will be a substantial problem school ships that cannot perform.

Speaker Change: And we don't want to elaborate.

Omar Mostafa Nokta: But you went ahead and terminated it. I just wanted to get a sense, any reason why you canceled it with a little bit left to go? Any thoughts on a new one? And then also, is it just simply the stock performance being so strong as a reason you backed off from the buyback lease?

Omar Mostafa Nokta: I want to point out that.

Omar Mostafa Nokta: The leverage today is this quarter was 34%.

Omar Mostafa Nokta: In terms of the buyback program.

Omar Mostafa Nokta: But the program almost.

Omar Mostafa Nokta: Exhausted, but we will.

Omar Mostafa Nokta: He will be leaving the company that the and the price our above store close.

Konstantinos Adamopoulos: About capital allocation, as you are aware, we push our earnings from operations towards the new investments because it's very important to renew the fleet and to be competitive in the following years because the new regulations will create substantial problems to ships And the other point is that at the same time, we reward our shareholders with a steady dividend until now, 5 cents per share, which is also, I think, reasonable on the basis also of the capital increases, because we expect that the stock price of our stock, the increasing stock price of our stock, will increase as the new regulations will come and play a major role in the charter market.

Omar Mostafa Nokta: Repeating into all belief and is quite low compared to the day asset values. So from time to time, we may take advantage of the opportunity too.

Konstantinos Adamopoulos: To initiate an additional.

Konstantinos Adamopoulos: But the problem, although a discussion that's been get decided.

Konstantinos Adamopoulos: And the other form you said at the same time, we will reward our shareholders with a steady.

Konstantinos Adamopoulos: A dividend until now five cents per share.

Konstantinos Adamopoulos: <unk>, which is also I think a reasonable a on the basis also capital.

Konstantinos Adamopoulos: Increases because we expect that the.

Konstantinos Adamopoulos: The stock price is at the branch level stope, increasing scope will increase.

Konstantinos Adamopoulos: The new regulation Sho.

Konstantinos Adamopoulos: I'm.

Konstantinos Adamopoulos: And play a major role in the charter market.

Omar Mostafa Nokta: Thank you. That makes sense. I appreciate it. That's it for me.

Speaker Change: Thank you.

Omar Mostafa Nokta: Makes sense appreciate it that's it for me thank you.

Omar Mostafa Nokta: Okay.

Operator: Our next question comes from the line of Climent Molins with Value Investors Edge. Please answer your question.

Quebec Marlins: Our next question comes from a line of Quebec Marlins with value Investor's edge. Please proceed with your question.

Climent Molins: Good afternoon. Thank you for taking my question. Following up on Omar's question on the repurchases, could you provide some commentary on the average price paid per share and on the amount that was spent post-quarter end?

Climent Molins: With us Turner and thank you for taking my questions.

Climent Molins: Following up on Omar question on the repurchases could you provide some commentary on the average price paid for sure.

Climent Molins: And on the amount that was spent post quarter end.

Speaker Change: Oh, yes, that's for sure.

Konstantinos Adamopoulos: We don't declare exact prices, but what we can say is that we have almost exhausted the existing buy-back program. Any decision in the future will depend on the capital allocation that we think is better. So we can, for example, I could say that we moved towards an acquisition of a new big vessel, as you are aware. So this played an important role.

Speaker Change: We don't we don't declare.

Konstantinos Adamopoulos: Exact prices.

Konstantinos Adamopoulos: But what we can say is that we have almost exhausted.

Konstantinos Adamopoulos: The existing.

Konstantinos Adamopoulos: Buyback program and any decision in the future will depend on the capital allocation because we think it's better so we can for.

Konstantinos Adamopoulos: For example, I would say that we would move toward reaching our position our renewal when youll be vessel as you are aware. So this played an important role so we <unk>.

Konstantinos Adamopoulos: So we are targeting the new big market, and, of course, but still, we believe that our price is quite low compared to the net asset value of our fleet. Of course, if I may add, you may see that in the last quarter, the stock price was between $4 and $5. So you have a low price on the bottom part and then the upper part. So it was in that range.

Konstantinos Adamopoulos: We're targeting also <unk>.

Konstantinos Adamopoulos: The newbuild market.

Konstantinos Adamopoulos: And of course, we believe that the old price is quite low compared to the net asset value of our.

Konstantinos Adamopoulos: Although our fleet of course, if I may ask you may see that last quarter. The stock price was between four and five so not so sure.

Konstantinos Adamopoulos: You'll have a lot a lot.

Konstantinos Adamopoulos: And last week at low or no.

Konstantinos Adamopoulos: Price on the low on the bottom bottom in the upper part so it wasn't that the range there.

Konstantinos Adamopoulos: The Purchases was in the market range. What I may add more, what's happening right now in the market, and it's the most important thing to take note of, we have second-hand prices rising the last two quarters, especially in the first quarter of this year with the strong trade market, and we see this on all type of vessels, on all the spectrum, from Ultramax, Kamsa Max, KXIs, all of second-hand price vessels are rising by 3 and 4 million dollars, the last quarter or so, and the company is also using, some of its older ships, as you have noticed, as cash, discussing on those all the ships to finance new acquisitions, namely on new technology phase 3, IMO phase 3 vessels.

Konstantinos Adamopoulos: The purchase was watching the market.

Konstantinos Adamopoulos: <unk>.

Speaker Change: Oh, well, if I may add more what's happening right now in the market.

Konstantinos Adamopoulos: It's the most important thing to take note of.

Konstantinos Adamopoulos: We have a child or second.

Konstantinos Adamopoulos: Second hand prices are rising in the last two quarters.

Konstantinos Adamopoulos: Suddenly in the first quarter of this year with a strong freight market and we see this on all type of questions on all of the spectrum from Dropbox.

Konstantinos Adamopoulos: Come some marks a cape size all of secondhand prices specials horizon, three and $4 million, the last quarter or so and the company's social using a.

Konstantinos Adamopoulos: Some of its older ships as you have noticed.

Konstantinos Adamopoulos:

Konstantinos Adamopoulos: Gosh.

Konstantinos Adamopoulos: Discussion on both shoulders ships to finance new acquisitions, namely on all on all new technology Phase III I am more phase III vessels.

Konstantinos Adamopoulos: On the other hand, we have to say that the opportunity for fleet renewal is not unlimited, given the fact that most of the shipyards are now quoting births in the second half of 27 or even first half 28. So the opportunities are becoming less and fewer and fewer. So you may find the old birth if you have good relations with yards in Japan, the old birth every now and then.

Konstantinos Adamopoulos: On the other half would have to say that the opportunity for literally nuance.

Konstantinos Adamopoulos: It's not unlimited given the fact that most of the shipyards.

Konstantinos Adamopoulos: Now quoting both seen a several half 'twenty seven or even first half 'twenty eight.

Konstantinos Adamopoulos: Petroleum to start, becoming a less and fewer and fewer.

Konstantinos Adamopoulos: So you may find the old, but if you have a group of national chains.

Konstantinos Adamopoulos: Yachts and jump on your class every now and then and this is your opportunity one should not be losing when such benefits available.

Konstantinos Adamopoulos: And this is the opportunity one should not be losing when such a birth is available, to take advantage and book the bet. That's why we need liquidity, not only for share repurchase but also to take advantage of those opportunities when they arise. And I don't think in the next six to nine months anything will change. To the contrary, we believe that We are entering into a tighter market. We know that the latest data from the Suez Canal shows that passages are 66% lower now than they were at the end of November when the crisis began.

Konstantinos Adamopoulos: To take advantage and a bulk of that but that's why we need we need the liquidity and not only for share repurchase but also to take advantage of those opportunities when are they allies and I don't think in the next six to nine months something will change to the contrary.

Konstantinos Adamopoulos: Believe it or not.

Konstantinos Adamopoulos: We are entering into a tight market.

Konstantinos Adamopoulos: We know that the latest data from choice cannot lose that.

Konstantinos Adamopoulos: Passages of six 6% lower than <unk>.

Konstantinos Adamopoulos: Now than they were in <unk>.

Konstantinos Adamopoulos: End of November when the crisis began become which is off to the strikes on the match on shipping.

Konstantinos Adamopoulos: We see that the strikes on merchant shipping by the Yemeni rebels are continuing, so we don't expect this to change any time soon, which will add fuel to the present trade market. So the company must be ready to make use of its liquidity, not only on share repurchase but on other opportunities as they arise before all these opportunities are gone. Because we cannot order a new build for 2028 delivery, you can understand. It's four years ahead, it's too far away, and the cost of pre-delivery installments is very high. So when the opportunity arises for early births, we should be able to move quickly.

Konstantinos Adamopoulos: By the by the Yemen ramp is continuing so we don't expect this this.

Konstantinos Adamopoulos: To change anytime soon.

Konstantinos Adamopoulos: Which will not go into the.

Konstantinos Adamopoulos: So that presents a great market.

Konstantinos Adamopoulos: The company must be that is to make our usual, which liquidity not only on share repurchase but on other opportunities as they arise before this oh this opportunity to shop.

Konstantinos Adamopoulos: All alcohol, because we cannot talk about it and you build for 2028 anybody who can understand there's four yes Fort worth is a is a coupon outweighing. The postal delivery installments is very high so when the opportunity arrives early bets, we should be able to move quickly.

Konstantinos Adamopoulos: Yeah.

Climent Molins: Thanks for the overview. I also wanted to ask about operating expenses, which increased quarter over quarter, although from a very low starting point. Could you provide some commentary on the forecasts you have for operating expenses for the remainder of the year?

Speaker Change: Thanks for the color I also wanted to ask about the operating expenses, which increased quarter over quarter, although from a very low starting point could you provide some commentary on the forecasts you have broke breaking expenses for the remainder of the year.

Konstantinos Adamopoulos: Usually, the operating expenses that we see... In the first quarter, a little bit more, a little bit increased. And the reason is that there are substantial supplies of spares that will be used for the dry dockings. And so, you may see if you compare the last quarter of the year and the first quarter of this year, you will see that it's a substantial increase. However, we don't expect it to have a substantially different figure annually.

Speaker Change: Usually the operating expenses that we see.

Konstantinos Adamopoulos: In the first quarter, a little bit more and even increased and the reason is that because there are substantial a supply issue.

Konstantinos Adamopoulos: Spanish debt will be used for the dry dockings and so you may see if you compare.

Konstantinos Adamopoulos: In the last quarter of the year and especially this year you will see that it is a substantial increase however, we don't expect that and they are usually have a substantially different figure.

Climent Molins: Makes sense. That's all from me. Thank you for taking my questions and congratulations on the quarter.

Speaker Change: Makes sense that's all for me. Thank you for taking my questions and congratulations for the quarter.

Speaker Change: Thank you.

Operator: There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

Speaker Change: There are no further questions in the queue I'd like to hand, the call back to management for closing remarks.

Konstantinos Adamopoulos: Thank you very much for attending this quarter's results webcast, and we're looking forward to discussing it again with you in the next quarter. Have a nice day.

Speaker Change: Thank you very much for attending this quarter our quarter results webcast and say, we're looking for we'll discuss again with you in the next quarter or the next day.

Operator: Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

Speaker Change: Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.