Q2 2025 Safe Bulkers Inc Earnings Call
Speaker 4: Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers Inc. conference call on the second quarter of 2025 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. 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. Following this conference call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference call is being recorded today. The archived webcast of the conference call will soon be made available on the Safe Bulkers Inc.
Thank you for standing by ladies and gentlemen, and welcome to the safe bulkers conference. Call on the second quarter, 2025 Financial results.
What we have with us: Mr. Polly, as your Chairman and Chief Executive Officer.
Dr. Lucas bomb Parks president and Mr. Constantino's anomalous, Chief Financial Officer of the company.
This time all participants are in a listen-only mode.
They will be 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 on the conference call, or on the presentation, please contact Capital link.
At 212.
6617566.
I must advise you that this conference call is being recorded today.
Speaker 4: website, www.safebulkers.com. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in forward-looking statements is contained in the second quarter 2025 earnings release, which is available on the Safe Bulkers Inc. website. Again, www.safebulkers.com. I would now like to turn the conference call over to one of your speakers, the Chairman and CEO of the company, Mr. Polys Hajioannou. Please go ahead, sir.
The archived webcast of the conference call. Will soon be made available on the safe bulkers website.
Many of their marks at 184, looking statements based on current expectations.
actual results May differ materially from the results projected from those 4 looking statements,
Additional information concerning factors that can cause the actual results to differ materially from those in forward-looking statements is contained in the Q2 2025 earnings release.
Which is available on the safe bulkers website again www.safar.com.
I would now like to turn the conference call over to 1 of your speakers.
The chairman and CEO of the company. Mr. Paulus howo, please go ahead sir.
Loukas Barmparis: Good morning to all. I'm Loukas Barmparis, President of Safe Bulkers Inc., and I will start the speech today. I am welcoming you at our quarterly results. During the second quarter of 2025, we experienced a softer market, which impacted our revenues and profitability. We remain focused on fleet renewal, strong liquidity, comfortable leverage, and long-term value creation. We have declared a dividend of $0.05 per share of common stock, rewarding our shareholders. We took delivery of our 12th newbuild and most recently sold at the targeted price one of our oldest vessels. We remain focused on capital allocation towards our newbuild program, maintaining a strong capital structure, ample liquidity, and a leverage of about 38%. The selling price of our peddler's leader, at $12.5 million compared to recent market levels, indicates a 10% turnaround of assets values and a sediment shift in the drybulk community.
Hey, good morning to all. I'm Lucas Barbounis, President of Sales Market, and I will start.
The speak today and I'm welcoming you at our quarterly results. During the second quarter of 2025, we experienced the softer Market, which impacted our revenues in the capability. We remain focused on filter, renewal strong liquidity, comfortable leverage, and long-term value creation.
We have declared the division of 5 cents per share of common stock. Rewarding, our share of orders.
We took delivery of our 12 new builds and most recently shorter at the targeted price. One of our oldest vessels.
remain focused on Capital, allocation towards our UB program maintained a strong Capital fraction, ample liquidity and The Leverage of about 38%
Loukas Barmparis: Following a comprehensive review of the forward-looking statements, which are presented in slide two, let's proceed to examine the supply-side dynamics in slide number four. The drybulk fleet is projected to grow by about 2.8% on average in 2025 and in 2026 due to stable new deliveries. The order book now stands at about 11% of the current fleet. Asset prices are projected to pick up in line with the current trade market. Recycling volumes are anticipated to rise, though as market conditions prompt the retirement of older vessels, especially in relations to the recent MEPC 83 and the Hong Kong Convention on Recycling. Ship recycling will double to 16,000 ships over the next 10 years versus the previous decade as per Bingo protections.
The selling price of our Pless leader at 12.5 million compared to recent market levels, indicates a 10% turnaround of assets values, and the sediment shift in the dry bar community.
Following comprehensive review of the forward-looking statements which are presented in slide 2. Let's proceed to examine the supply side Dynamics in slide number 4.
stable, new deliveries
the order book now stands at about 11% of the current Fleet,
Asset prices are projected to pick up in line with the current trade market.
Recycling volumes are anticipated to rise.
Though, as market conditions prompt, the retirement of older vessels, especially in relation to the recent MEP 63 and the Hong Kong Convention on recycling.
With double to 16,000 ships over the next 10 years.
Loukas Barmparis: Only 9% of the ship capacity in the drybulk order book will be fuel ready to use alternative fuels upon delivery, and out of those ships, 37% will be burning LNG, 35% methanol, and 23% ammonia. However, the dual fuel order book is minimal on drybulk segments. We do have two dual fuel vessels on order with deliveries in Q1 2027. Currently, about 25% of the existing global fleet is older than 15 years. Safe Bulkers Inc. fleet now counts 12 Phase III vessels on the water, all delivered 2022 onwards. On top of that, 24 vessels, which have been upgraded, environmentally. We have 11 ships on eco-vessels having superior design efficiencies. 80% of our fleet comprises of Japanese-built vessels, surpassing the global average of 40%, while our average fleet age being just 10.3 years versus a global average of 12.6 years.
The reverse of the previous decade as per Bingo projections.
Only 9% of the ship capacity in the dry bulk order book will be fuel-ready to use alternative fuels upon delivery, and out of those ships, 37% will be burning LNG, 35% decanol, and 23% ammonia.
However, the dual fuel order book is minimal on dryback segments.
We do have a 2 dual fuel vessels on order with deliveries in a q127.
Currently about 25% of the existing Global fit is older than 15 years.
Safe bag is Fleet now counts, 12 phase 3 vessels in the water. All delivered 2022 onwards on top of that.
20 4 vess, which have been upgraded environmentally? We have 11, 11 ships and Echo vessels. Having Superior design efficiencies
Loukas Barmparis: We believe we will become even more commercially competitive as we have on our order six more Phase III vessels, two of them dual fuel methanol, positioning us favorably to compete within the global standard targets recently adopted by MEPC 83 and expected to be ratified this autumn. The global implementation of GFS, the global fuel standard, if ratified, will penalize the excess fuel carbon intensity compared to specific predetermined using limits and broadens the scope of the regional fuel E.U. regulation, substantially affecting readability. Moving on to slide five, we present an overview of the demand and basic commodities trade. The combination of a trade war, as expressed through tariffs and persisting geopolitical tensions, elevates policy uncertainty and poses a considerable down risk for global growth and against disinflation.
80% of our Fleet comprises of Japanese built vessels surpassing the global average of 40% while our our average Fleet age being just 10.3 years versus a global average of 12.6 years.
We believe we look, we will become even more commercially competitive. As we have on our orders six phase 3 vessels, two of them are dual fuel methanol, positioning us favorably to compete within the global standard targets recently adopted by MEPC 83, and expected to be that defined, this author.
The global implementation of a GSS. The global 12 standard is a if if ratified will penalize the excess fuel carbon in density compared to specific predetermined using limits
And broadens the scope of the regional regulatory framework, substantially affecting tradability.
Moving on to slide 5, we present an overview of the demand and basic commodity strain.
Loukas Barmparis: For our segment, we anticipate an improving trade rate with a market with an increasing focus on the existing fleet decarbonization and energy-efficient new bids. The global GDP growth expectations for 2025 and 2026, as reflected in the I.M.F.'s July forecast, call for a growth of about 3% in the coming years, accompanied by gradual control of inflationary pressure. According to Bingo, the forecasted global dry bulk demand will be from minus 0.5% to plus 0.5% in 2025, followed by growth of 1.5% to 2.5% in 2026, with grains and mineral bulks being the best-performing sectors. China and India are gradually boosting domestic coal production, reducing import demand. China, in particular, has been rapidly phasing out fossil fuels from electricity generation, boosting renewables, reducing impact and import dependence. The increase in import tariffs led to a 57% year-on-year drop in U.S.
Accommodation of a trade War as expressed through tariffs and persisting, geopolitical tensions, elevated policy, uncertainty and policy considerable down risk, uh, for, uh, Global growth and against this inflation.
For our segment, we anticipate and improving trade trade.
With the market with an increase in focus on the existing critical organization and energy, efficient new bits.
The global GDP growth expectations for 2025 and 2026 as reflected in the IMF said July forecast. Call for a growth of about 3% in the coming years and combined a compounded by gradual control of inflationary pressure.
According to bimco the forecasted Global drive back. Demand will be from minus uh 0.5% to plus 0.5% in 2025, followed by growth to of 1.5 to 2.5% in 2026, with grains and milder bulks being the best performing sectors.
Loukas Barmparis: grain volumes to China, as they are expected to continue favoring Brazilian cargos bolstered by Brazil's growing production. India continues to perform and is projected to experience the fastest growth among major economies, with a forecast of 6.4% GDP increase in 2025 and 2026. Its expanding domestic market and manufacturing sector may continue to contribute positively to the dry bulk demand, with infrastructure investments playing a vital role. Summing up the supply-demand equilibrium on slide six, the supply growth is expected to continue to outpace demand. The trade market has rebounded recently during the start of the third quarter. Seven of our Capesize class vessels are presently period-charted, with an average remaining charter duration of almost two years and an average daily charter rate of $24.5 thousand, providing us visibility of cash flows topping $135 million in contracted revenue backlog from Capesize class vessels alone.
China and India are gradually boosting domestic oil production reducing import demand China. In particular has been rapidly facing out fossil fuels from electricity generation boosting Renewables, reducing impact Imports, dependents, the increase in import tariffs led to a 57% year-on-year. Drop in US, crane volume of China as they are expected to continue. Favoring Brazilian carros bed. By Brazil's growing production.
In India, continues to perform and is projected to experience. The fastest growth among major economies with a forecast 6.4% in the GDP, increase in 2025 and 2026.
It's expanding domestic market and manufacturer sector. May continue to contribute positively to the dryback demand with infrastructure Investments, playing a vital role.
Loukas Barmparis: Moving to slide eight, we present an overview of our quarterly highlights. We have declared our 15th consecutive quarterly dividend of $0.05, representing 4.7% dividend yield. At the same time, our free cash flow financed our new build program. We maintain ample liquidity, profitability, and capital resources of $313 million at a comfortable leverage of 38%. We achieved zero vessels in D and E carbon intensity CII rating for 2024, as described in our 2024 sustainability report. Lastly, we took delivery of our 12th Phase III new build, and most recently, we sold one of our oldest vessels in our fleet in line with our fleet renewal strategy. In slide nine, we present our returns to shareholders of $17.7 million paid in common dividends and $74.9 million paid in common shares and purchases since 2022.
Has rebounded recently during the start of the third quarter, 7 of our capes are presently period. Started with an average remaining status duration of almost 2 years and an average daily Charter rate of 24.5 thousand dollars. Providing providing us visibility of cash flows, topping 135 million in contracted Revenue. Backlog from capes alone
Moving to slide 8 to present another view of our quarterly highlights.
We have declared our 15th consecutive quarterly dividend of 5 cents. Representing 4.7% dividend yield
at the same time, our free cash flow Finance, our new program, we maintain ample liquidity, profitability and capital uses of 313 million at the comfortable, leverage of 38%.
We achieved the zero vessels in D and E. Carbon intensity, CI, rating for 2024 as described in our 2024 sustainability report.
Lastly, we took delivery of our 12th, phase 3, new build the most recently. We showed 1 of our oldest races in our Fleet in line with our Fleet.
Renewal strategy.
this slide 9, we present our returns to shareholders of a 17.7 million paid in common dividends
Loukas Barmparis: We have been consistent in generating sustainable returns across market fluctuations as a result of our track record, hands-on management, and our overall business model. Concluding the company update in slide 10, we present our strong fundamentals. Safe Bulkers Inc. is a drybulk company with $430 million market cap, 47 vessels on the water, having $312 million scrap value. We maintain significant firepower with $125 million cash and $188 million in undrawn RCFs, and $176 million borrowing capacity against our significant order book of six new builds, mainly in Japanese shipyards. We focus on our majority Japanese-built fleet advantage on energy efficiency and lower CO2 taxation, reflected in our CII rating of zero vessels on the bottom rating of DMV or 2020 core. We maintain a young, technologically advanced fleet, strong balance sheet, comfortable leverage, and low net debt per vessel of $9.1 million for a 10-year-old fleet.
and the $74.9 million paid in common shares purchases since 2022.
We have been consistent in generating sustainable in across Market fluctuations, as a result of our track record hand management.
And our overall business model.
Concluding the company update in slide 10. We present our strong fundamentals.
Safe markets is a drive B company with 430 million market cap, 47 ventures, in the water. Having 312 million scrap value.
We maintain significant 5 power with 125 million cash.
and 188 million in a drone RCS and 176 million borrowing capacity against our significant other book of 6, new books, mainly in Japanese CPS,
We focus on our majority. Japanese big Twitter accounts on Energy Efficiency and lower CO2, taxation or reflected in our CI rating of zero vessels on the bottom rating of the ND 42024.
Loukas Barmparis: We have built a resilient business model with cash flow visibility of $159 million in revenue backlog, healthy expansion for sizable fleet that achieves scale, and a meaningful 4.7% annualized dividend yield, positioned to leverage on the environmental regulatory landscape. I now pass the floor to our CFO, Konstantinos Adamopoulos, for our quarterly financial overview. Konstantinos, the floor is yours.
We maintain a young technologically advanced ski, strong balance sheet, comfortable leverage and low, net debt per vessel of 9.1 million for a 10 year old fee.
We have built a resilient business model with cash flow visibility of $159 million in revenue backlog.
Health expansion for a sizable clip that achieves scale.
At a meaningful 47.7 million and 4.7% annualized dividend yield position to leverage on the environmental regulatory landscape.
I now pass the clock to our Focus, for our quarterly Financial overview.
Konstantinos Adamopoulos: Thank you, Loukas Barmparis, and good morning to everyone. During the second quarter of 2025, we operated in a weaker charter market environment compared to the same period in 2024, with decreased revenues due to lower charter hires, decreased earnings from scrap-filled vessels, and increased operating expenses. In slide 12, we show our quarterly financial highlights for the second quarter of 2025 and compare them to the same period of 2024. Our adjusted EBITDA for the second quarter of 2025 stood at $25.5 million compared to $41.8 million for the same period in 2024. Our adjusted earnings per share for the second quarter of 2025 was $0.01, calculated on a weighted average number of 102.5 million shares, compared to $0.17 during the same period of 2024, calculated on a weighted average number of 106.8 million shares.
The floor is yours. Thank you, Lucas, and good morning to everyone during the second quarter of 2025, we operated in a weekly Charter Market environment.
Compared to the same period in 2024, we experienced decreased revenues due to lower charges at the highest levels.
Decreased earnings from Scarlet field, that vessels, and increased operating expenses.
July 12th. We show our quarterly financial highlights for the second quarter of 2025 and compare them to the same period of 2024.
Our adjusted deida for the second quarter of 2025, we stood that 25 and a half million dollars compared to 41.8 million for the same period in 2024.
Our adjusted earnings per share for the second quarter of 2025 was 1 cent.
Calculated in a way, the average number of 100.
And 2.5 million shares.
Compared to 17 cents during the same period of 2024.
Calculated on the weight, average number of 106.8 million shares.
Konstantinos Adamopoulos: On the top graph, during the second quarter of 2025, we operated an average of 46.75 vessels, earning an average time charter equivalent of $14,857 compared to 45.43 vessels, earning an average of time charter equivalent of $18,650 during the same period in 2024. Our daily vessel operating expenses increased by 6% to $6,607 for the second quarter of 2025, compared to $6,254 for the same period in 2024. Daily vessel operating expenses, excluding dry docking and fleet delivery expenses, increased by 10% to $5,604 for the second quarter of 2025, compared to $5,089 for the same period in 2024. In conclusion of our presentation, we show in slide two a quick overview of our quarterly operational highlights for the second quarter of 2025. We would like to highlight that based on financial performance, the company's board of directors declared a $0.05 dividend per common share.
On the top graph. During the second quarter of 2025 will be operated and average of 46.75 vessels ending, an average times are the equivalent of 14,857.
Compared to 45.43 vessels.
Ending an average of time Charter, equivalent of 18,650 during the same period in 2024.
Our daily vessel operating expenses.
This by 6% to 6,667 for the second quarter of 2025.
2024.
Daily version operating expenses excluding like talking to delivery expenses increased by 10% to 5,604 for the second quarter of 2025 compared to 5,089.
For the same period implemented 24.
In conclusion of our presentation, we show in slide 2. A quick overview of our quarterly operational highlights for the second quarter 2025
We would like to highlight that based on financial performance, the company's board of directors declared the 5% dividend per share.
Konstantinos Adamopoulos: Emphasis we place on maintaining a healthy cash position of about $104 million as of July 18, 2025, another $240 million in available revolving credit facilities, giving us a combined liquidity and capital resources of $243 million. Furthermore, we have contracted revenue from our non-calculable spot and period-time chartered contracts of $171 million, net of commissions and default scrubber revenue, and also additional borrowing capacity in relation to six new builds upon the delivery, as well as one existing unencumbered vessel. We believe a strong liquidity and a comfortable leverage provide liquid flexibility to our management in capital allocation, and this will enable us to further expand the fleet, build a resilient company, and create long-term prosperity for our shareholders. This concludes our presentation. We are now ready for the Q&A session.
emphasis we place on maintaining a healthy cash position of about 104 million as of July 18th, 2025,
Another 240 million in available revolving, credit facilities, giving us a combined liquidity and capital resources of 343 million.
Furthermore, we have contracted the revenue from our non-cultural Sport and period of time Charters contracts.
Of 171 million.
net of commissions and before scrubber Revenue,
And also additional boarding capacity in relation to 6. New builds upon the delivery as well as in 1 exists and encumbered vessel
We believe that strong liquidity and comfortable leverage provide liquid flexibility to our management in capital allocation.
And this will enable us to further expand the fleet, build the resilient company, and create long-term prosperity for our shareholders.
This concludes our presentation. We are now ready for the Q&A session.
Speaker 4: Thank you. We'll now be conducting the Q&A question-and-answer session. If you'd like to ask a question at this time, please press star one from your telephone keypad and a confirmation tone to indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants 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. Once again, that's star one. Thank you. Once again, if you have a question at this time, you may press star one from your telephone keypad. This is another reminder. If you'd like to ask a question, please press star one at this time. Thank you. Thank you. At this time, I'd like to turn the floor back to management for closing remarks.
Thank you. Well, we'll navigate that in the Q&A session. If you would like to ask a question at this time, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue.
Let me first start too. If you like to withdraw your question from the queue.
For participation in using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
1 moment, please let me pull for questions once again at Star 1. Thank you.
Once again, if you have a question at this time, you may press star 1 from your telephone keypad.
This is another reminder for you to ask a question. Please press star 1 at this time. Thank you.
Thank you at this time. I'd like to turn a floor back to management for closing remarks.
Loukas Barmparis: Thank you very much for attending this quarterly presentation about the financial results for the second quarter and up here in 2025. We are looking forward to discussing again with you in the next quarter. Thank you very much, and have a nice day.
Well, thank you very much for attending this quarterly representation of our prime minister results for the
Second quarter and half year 2025, and we're looking forward. We discussed again with you.
In the next quarter. Thank you very much. Have a nice day.
Speaker 4: This will conclude today's conference. We may disconnect your lines at this time. Thank you for your participation.
This will conclude today's conference. You may disconnect your line at this time. Thank you for your participation.