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• EBITDA2 was $37.1 million, a decrease of 45.8% from $68.5 million in the first quarter of 2009, resulting mainly from the decrease in net income. • A dividend of $0.15 per share was declared for the first quarter of 2010. See “Dividend Declaration” below. Dividend Declaration The Company declared a cash dividend on its common stock of $0.15 per share payable on or about May 28, 2010 to shareholders of record at the close of trading of the Company’s common stock on the New York Stock Exchange (“NYSE”) on May 21, 2010. The Company has 65,868,451 shares of common stock outstanding as of today. The Board of Directors of the Company is continuing a policy of paying out a portion of the Company’s free cash flow at a level it considers prudent in light of the current economic and financial environment. The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) our earnings, financial condition and cash requirements and availability, (ii) our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy, (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends, (iv) restrictive covenants in our existing and future debt instruments and (v) global financial conditions. We can give no assurance that dividends will be paid in the future. Company Update In March 2010, we successfully sold 11,350,000 shares of our common stock in a public offering and a concurrent private placement, at a price to the public of $7.00 per share, raising approximately $74.8 million in net proceeds. In March 2010, we took delivery of Kanaris, our first 177,000 dwt newbuild Capesize class vessel and in April 2010, we took delivery of Panayiota K, a 92,000 dwt newbuild Post- Panamax class vessel. In April 2010, we entered into shipbuilding contracts for the construction of two 82,000 dwt, Kamsarmax-class, Chinese-built vessels at a price of $32.2 million each, with expected delivery dates in the fourth quarter of 2011 and the first quarter of 2012, respectively. The Company’s operational fleet as of April 30, 2010 was comprised of 15 drybulk vessels with an average age of 3.4 years. The Company has contracted for six additional drybulk newbuild vessels with deliveries scheduled at various times through the first quarter of 2012, of which three are Post-Panamax, two are Kamsarmax and one is Capesize. The contracted employment of the Company’s fleet under period time charters, as of April 30, 2010, is 92% of fleet ownership days for the remainder of 2010, 61% for 2011 and 53% for 2012. The contracted employment includes vessels which will be delivered to us in the future. Management Commentary Dr. Loukas Barmparis, President of the Company, said: “During the first months of 2010, we took delivery of two newbuild vessels which we believe will be accretive to our earnings, we successfully concluded our equity offerings, which brought us approximately $74.8 million in net proceeds, and further increased our cash position, and we have ordered two additional newbuilds at attractive prices as we closely monitor markets for selective acquisitions. At the same time we have maintained our dividend policy at $0.15 per share for the first quarter of 2010 by paying out a portion of our free cash flows.” Net Income Net income decreased by 48.2% to $32.1 million for the first quarter of 2010 from $62.0 million for the first quarter of 2009. Net income was affected by the following factors: Net revenues: Net revenues were $34.3 million for the first quarter of 2010, a 26.9% decrease compared to $46.9 million for the first quarter of 2009, due to lower period time charter rates earned during the first quarter of 2010, compared to same period in 2009. Vessel operating expenses: Vessel operating expenses increased by 4.2% to $5.0 million for the first quarter of 2010, compared to $4.8 million for the same period in 2009, mainly due to increased ownership days at 1,178 in the first quarter of 2010 compared to 1,128 in the first quarter of 2009. Daily vessel operating expenses rose slightly to $4,232 for the first quarter of 2010, compared to $4,222 for the first quarter of 2009. Early redelivery income/cost: During the first quarter of 2010 we incurred early redelivery costs of $1.5 million for the early termination of the period time charter of our vessel Katerina. In the first quarter of 2009, we recognised early redelivery income of $29.7 million in relation to the early termination of the period time charter of our vessels Efrossini and Maritsa. Interest expense: Interest expense decreased by 59.5% to $1.5 million in the first quarter of 2010 from $3.7 million in the same period in 2009, attributable primarily to a decrease in interest rates and to a lesser extent to the reduction of our average loans outstanding. The weighted average interest rate charged on loans outstanding was 1.268% p.a. in the first quarter of 2010, compared to 3.136% p.a. in the first quarter of 2009. The weighted average of loans outstanding during the first quarter of 2010 amounted to $458.2 million, compared to $483.3 million during the first quarter of 2009. Gain on sale of asset: Gain on sale of asset was $15.2 million during the first quarter of 2010, compared to none in the same period of 2009. This amount represents the gain from the sale of Efrossini, which was sold on January 7, 2010 for gross consideration of $33.0 million. Loss on derivatives: Loss on derivatives increased to $4.2 million for the first quarter of 2010, compared to a loss of $2.2 million for the same period in 2009, largely as a result of the mark-to-market valuation of the Company’s interest rate swap transactions, which were entered into to manage the Company’s risk and interest rate exposure from loan and credit facilities. These swaps economically hedged the interest rate exposure of 97.4% of the Company’s aggregate loans outstanding as of March 31, 2010. The valuation of these interest rate swap transactions at the end of each quarter is affected by the prevailing interest rates at that time. Cash, Time Deposits, Restricted Cash and Investments As of March 31, 2010, we had $152.7 million in cash, short-term time deposits and shortterm restricted cash, $4.9 million in long-term restricted cash and $50.0 million in a long-term floating rate note. About Safe Bulkers, Inc. The Company’s subsidiaries provide marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for some of the world’s largest users of such services. The Company’s common stock is listed on the NYSE where it trades under the symbol “SB”. The Company’s subsidiaries currently own 15 drybulk vessels, all built post 2003, and have contracted to acquire six additional drybulk newbuild vessels to be delivered at various times through the first quarter of 2012. ____________________ 1 Refer to definition of “TCE” in Note 6 of Fleet Data Table. 2 EBITDA represents net income plus net interest expense, income tax, depreciation and amortization. See “EBITDA Reconciliation”. Safe Bulkers, Inc. |
Safe Bulkers, Inc. Reports First Quarter 2010 Results and Declares Quarterly Dividend of $0.15 per Share