Safe Bulkers, Inc. Reports Second Quarter and Six Months 2022 Results and Declares Dividend on Common Stock

Monaco - July 27, 2022

Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three and six month periods ended June 30, 2022.

The Board of Directors of the Company also declared a cash dividend of $0.05 per share of outstanding common stock.

Financial highlights


Selected Financial highlights


Management Commentary






Dr. Loukas Barmparis, President of the Company, said: "Key highlights of the second quarter, were a very satisfactory financial performance of $0.40 per share and the delivery of our first Kamsarmax newbuild. We believe that this newbuild with the addition of the others we have on order, will provide us with substantial operational and commercial advantages coupled with a reduction of CO2 emissions per vessel. We believe, our strong liquidity and relatively low leverage will enable us to be flexible with our capital, while still rewarding our shareholders."

Update on COVID-19, company's actions and status
The COVID-19 pandemic has had a significant impact on the shipping industry and seafarers in general, as port lockdowns and travel restrictions were imposed globally during 2020 and 2021 and continue in 2022. The Company has worked extensively to find solutions focusing on effectively managing crew changes despite such ongoing port lockdowns and travel restrictions. The Company has also taken measures to protect its seafarers' and shore employees' health and well-being, keep its vessels sailing with minimal disruption to their trading ability, service its charterers, continue vessels' maintenance and dry-dockings and mitigate and address the risks, effects and impact of COVID-19 on its operations and financial performance.

There has been a negative effect from the COVID-19 pandemic on the Company's results of operations and financial condition during the second quarter of 2022, due to crew repatriation and related costs of about $0.5 million compared to pre-COVID-19 period. Certain delays are also expected in relation to dry-docking durations and schedules due to restrictions imposed in China. Any future impact of COVID-19 on the Company’s results of operations and financial condition and any long-term impact of the pandemic on the dry bulk industry, will depend on future developments, which could impact world trade and global growth.

Conflict in Ukraine
As a result of the conflict between Russia and Ukraine which commenced in February 2022, the US, the EU, the UK, Switzerland and others have announced unprecedented levels of sanctions and other measures against Russia and certain Russian entities and nationals. We intend on complying with these requirements and addressing their potential consequences. While we do not have any Ukrainian or Russian crew, our vessels currently do not sail in tea and we otherwise conduct limited operations in Russia and Ukraine, we will continue to monitor the situation to assess whether the conflict could have any impact on our operations or financial performance.

At-the-market equity offering program
In August 2020, the Company filed a prospectus supplement with the Securities and Exchange Commission (“SEC”), under which it could offer and sell shares of its common stock (“Shares”) from time to time up to aggregate sales proceeds of $23.5 million through an “at-the-market” equity offering program (the “ATM Program”). In May 2021, the Company filed a supplement to its prospectus supplement to increase the capacity under the ATM Program to allow for sales of Shares for aggregate gross offering proceeds of up to $100.0 million.

Since September 27, 2021 the Company has not sold any shares of common stock under the ATM Program. Since the inception of the ATM Program the Company had sold 19,417,280 shares of common stock under the ATM Program with aggregate net offering proceeds to the Company of $71.5 million. Shares of common stock with aggregate sales proceeds of up to $28.5 million remain available for sale. Presently, the ATM Program is inactive.

Redemption of Series C Preferred Shares
On March 30, 2022, the Company issued a notice of redemption of 1,492,554 Series C Preferred Shares representing approximately 65% of the outstanding Series C Preferred Shares. The redemption was completed on April 29, 2022, at a redemption price of $25.00 per Series C Preferred Share, plus all accumulated and unpaid dividends to, but excluding, the redemption date, in the aggregate amount of $38.1 million. Following this redemption, there are 804,950 Series C Preferred Shares outstanding.

Common Stock Repurchase Program
In June 2022, the Company authorized a program under which it may from time to time in the future purchase up to 5,000,000 shares of its common stock. As of July 22, 2022, 1,000,000 shares of common stock had been repurchased and cancelled under the repurchase program.

Fleet update
As of July 22, 2022, we had a fleet of 42 vessels, consisting of 12 Panamax, 8 Kamsarmax, 15 Post-Panamax and 7 Capes with an aggregate capacity of 4.2 million dwt and average age of 10.5 years, having taken delivery of one newbuild Kamsarmax class and one second-hand Capesize class vessel during the second quarter of 2022. In addition, during the second quarter of 2022 we have agreed to acquire one second-hand Capesize class vessel and in the aggregate we have on order 10 newbuilds.

Newbuild deliveries
In May 2022, the Company acquired the first of its 11 ultra eco newbuilds on order, the MV Vassos, a Japanese IMO GHG -EEDI Phase 3, NOx-Tier III, Kamsarmax class vessel. Upon its delivery MV Vassos was sold to a third party and leased back on a bareboat charter basis, for a period of 10 years with a purchase obligation at the end of the 10th year and purchase options after the third year of the bareboat charter, at predetermined purchase prices. In view of the repurchase obligation, the Company has assessed that the transaction be recorded as financing transaction.

Second-hand acquisitions
In April 2022, the Company agreed to purchase the MV Michalis H, a 2012-built, Chinese, dry-bulk, 180,400 dwt, Capesize class vessel for $30.0 million before commissions. The vessel was delivered to the Company in May 2022, and the purchase was funded from the cash reserves of the Company.

In May 2022, the Company agreed to purchase a 2012-built, Chinese, dry-bulk, 176,000 dwt, Capesize class vessel, to be named MV Aghia Sofia, for $31.75 million before commissions. The vessel is expected to be delivered to the Company in August 2022, upon completion of its scheduled dry docking by its current owners, which includes ballast water treatment installation, sandblasting and painting of cargo holds and environmental upgrading with ultra-low friction paints, as per our requirements. The vessel's purchase will also be funded from the cash reserves of the Company.

Newbuild orders
As of July 22, 2022, the orderbook of the Company, having been increased by two newbuilds in May 2022, consisted in the aggregate of 10 ultra eco, dry-bulk newbuilds, of which seven were Kamsarmax class vessels and three were Post-Panamax class vessels, with scheduled deliveries of one in July 2022 (the Post-Panamax class MV Climate Respect), five in 2023, three in 2024 and one in 2025. All newbuilds on the Company's orderbook are designed to meet the Phase 3 requirements of Energy Efficiency Design Index related to the reduction of green house gas emissions (''GHG -EEDI Phase 3'') as adopted by the International Maritime Organization, ("IMO") and also comply with the latest NOx emissions regulation, NOx-Tier III (IMO, MARPOL Annex VI, reg. 13).

Chartering our fleet
Our vessels are used to transport bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes. We intend to employ our vessels on both period time charters and spot time charters, according to our assessment of market conditions. Our customers represent some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period time charters provide us with visible and relatively stable cash flow, while the vessels we deploy in the spot market allow us to maintain our flexibility in low charter market conditions and provide an opportunity for a potential upside in our revenue when charter market conditions improve. The chartering of our vessels is managed by our Managers15 without management commission. The average total chartering commission including 3rd party brokers was approximately 4% during the second quarter of 2022; lower than the standard industry average of 5%, as a result of our Managers' relations forged over the years with our Managers' counterparts.

As of July 22, 2022, we employed, or had contracted to employ, 9 vessels in the spot time charter market (with up to 3 months original duration) and 33 vessels in the period time charter (with original duration in excess of 3 months), 12 of which have original duration of more than 1 year, and 11 have original duration of more than 2 years. As of July 22, 2022, the average remaining charter duration across our fleet was 1.1 years.

In May 2022, the Company entered into a long-term period time charter for the Capesize class vessel MV Pelopidas, with forward delivery date in June 2022, for duration of 3 years at a gross daily charter rate of $25,250 plus compensation for the use of the exhaust gas cleaning device ("Scrubber"). The charter agreement also grants the charterer an option to extend the period time charter for an additional year at the same gross daily charter rate. This employment is anticipated to generate approximately US$27.6 million of gross revenue from charter hire and about $5.4 million from scrubber use assuming a $220 spread per metric ton, for the minimum scheduled 3 year period of the time charter.

In June 2022, the Company entered into a long-term period time charter for the Capesize class vessel MV Michalis H, with forward delivery date in September 2022, for a minimum duration of 3 years at a gross daily charter rate of $23,000 plus compensation for the use of the Scrubber. The charter agreement also grants the charterer an option to extend the period time charter for an additional year at the same gross daily charter rate. This employment is anticipated to generate approximately US$25.2 million of gross revenue from charter hire for the minimum duration of 3 years and about $5.4 million from scrubber use assuming a $220 spread per metric ton, for the minimum scheduled 3 year period of the time charter.

During the second quarter of 2022, we operated 41.04 vessels on average earning a TCE of $25,050 compared to 41.49 vessels earning a TCE of $21,098 during the same period in 2021. Our contracted employment profile is presented below in Table 1.

Table 1: Contracted employment profile of fleet ownership days as of July 22, 2022



Full report

1. Adjusted Net income/(loss) is a non-GAAP measure. Adjusted Net income/(loss) represents Net income/(loss) before impairment and loss on vessels held for sale, gain/(loss) on sale of assets ,gain/(loss) on derivatives, early redelivery income/(cost), other operating expense and gain/(loss) on foreign currency. See Table 4.

2. EBITDA is a non-GAAP measure and represents Net income/(loss) plus net interest expense, tax, depreciation and amortization. See Table 4. Adjusted EBITDA is a non-GAAP measure and represents EBITDA before gain/(loss) on derivatives, early redelivery income/(cost), other operating expenses and gain/(loss) on foreign currency. See Table 4.

3. Earnings/(loss) per share ("EPS") and Adjusted Earnings/(loss) per share represent Net Income/(loss) and Adjusted Net income/(loss) less preferred dividend and mezzanine equity measurement divided by the weighted average number of shares respectively. See Table 4.

4. Time charter equivalent rate, or TCE rate, represents charter revenues less commissions and voyage expenses divided by the number of available days. See Table 5.

5. Daily vessel operating expenses are calculated by dividing vessel operating expenses for the relevant period by ownership days for such period. See Table 5.

6. Daily vessel operating expenses excluding dry-docking and pre-delivery expenses are calculated by dividing vessel operating expenses excluding dry-docking and pre-delivery expenses for the relevant period by ownership days for such period. See Table 5.

7. Daily general and administrative expenses are calculated by dividing general and administrative expenses for the relevant period by ownership days for such period. See Table 5.

8. Total Cash represents Cash and cash equivalents plus Time deposits and Restricted cash.

9. Undrawn borrowing capacity under revolving reducing credit facilities.

10. Secured financing commitments for loan and sale and lease back financings.

11. Unsecured debt represents the five year tenor unsecured non-amortizing bond, net of deferred financing costs, maturing in February 2027.

12. Secured debt represents Long-term debt plus current portion of long-term debt, net of deferred financing costs.

13. Total Debt represents Unsecured debt plus Secured debt.

14. Net debt per vessel represents Total Debt less Total Cash divided by the number of vessels at periods end.

15. Safety Management Overseas S.A., Safe Bulkers Management Monaco Inc., and Safe Bulkers Management limited, each of which is a referred to in this press release as "our Manager" and collectively "our Managers.


About Safe Bulkers, Inc.
The Company is an international provider of 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 marine drybulk transportation services.

The Company’s common stock, series B preferred stock, series C preferred stock and series D preferred stock are listed on the NYSE, and trade under the symbols “SB”, “SB.PR.C”, and “SB.PR.D”, respectively.

Safe Bulkers, Inc. press release