Monaco - May 10, 2023
Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three month period ended March 31, 2023. The Board of Directors of the Company also declared a cash dividend of $0.05 per share of outstanding common stock.
2 EBITDA is a non-GAAP measure and represents Net income 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 per share ("EPS") and Adjusted EPS represent Net Income and Adjusted Net income less preferred dividend divided by the weighted average number of shares respectively. See Table 4.
4 Time charter equivalent ("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 the number of 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 the number of 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 the number of ownership days for such period. See Table 5
Appointments to the Board of Directors
In March 2023, on the recommendation of the Corporate Governance, Nominating and Compensation Committee, the Board of Directors of the Company (the “Board”) voted to expand the size of the Board from seven directors to nine directors and to elect Kristin H. Holth and Marina Hajioannou to fill the new positions. The Board determined that Ms. Holth is independent for purposes of the NYSE independence standards and appointed Ms. Holth to serve on the Corporate Governance, Nominating and Compensation Committee and the Audit Committee.
Environmental Social Governance and Responsibility - Environmental investments - Dry-dockings
The Company is continuing the environmental upgrade program of its existing fleet in relation to International Maritime Organization ("IMO") greenhouse gas ("GHG") emission regulations. As of May 5, 2023, 10 vessels in total have been upgraded, with 10 more vessels targeted for upgrade by the end of 2023. The low friction paint applications that are part of the environmental upgrades are recorded as operating expenses, while energy saving devices are capitalized and recorded as capital expenditures.
During the first quarter of 2023, the Company made environmental upgrades for two Capesize class vessels including scrubber installation, namely the MVs Maria and Michalis H. As of May 5, 2023, the Company has further upgraded three vessels, namely the MVs Koulitsa 2, Maritsa and Kanaris. During the second quarter of 2023, the Company has scheduled two more scrubber installations in Capesize class vessels and in total nine dry-dockings with an estimated aggregate number of 270 down-time days. The Company continues to use biofuels in certain voyages targeting a lower carbon factor and lower environmental impact through the consumption of less fossil fuel.
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. Furthermore, the Company has an extensive newbuild program of 12 vessels designed to meet the IMO regulations related to the reduction of GHG and NOx emissions (the ''IMO GHG Phase 3 - NOx Tier III''), of which three have already been delivered, renewing and expanding its fleet with vessels of the most efficient existing designs. The aggregate capital expenditure of the newbuild program is approximately $409.6 million.
As of May 5, 2023, we had a fleet of 44 vessels, consisting of 12 Panamax, 7 Kamsarmax, 17 Post-Panamax and 8 Capesize vessels. Twelve vessels in our fleet are eco-ships built after 2014 and three vessels are IMO GHG Phase 3 -NOx Tier III ships built 2022 onwards, with an aggregate capacity of 4.5 million dwt and an average age of 10.7 years.
As of May 5, 2023, we had an orderbook of nine IMO GHG Phase 3 - NOx Tier III newbuilds, eight of which are Kamsarmax class vessels and one is a Post-Panamax class vessel, with four scheduled deliveries in 2023, three in 2024 and two in the first half of 2025.
In January 2023, the Company took delivery of the Post-Panamax class vessel MV Climate Ethics, its third IMO GHG Phase 3 - NOx Tier III, Japanese newbuild.
In February 2023, the Company entered into an agreement for the acquisition of an IMO GHG Phase 3 - NOx Tier III, Japanese, 82,000 dwt, dry-bulk, newbuild Kamsarmax class vessel with a scheduled delivery date in the second quarter of 2025. This vessel is sister to a number of newbuilds in the Company's orderbook with advanced energy efficiency characteristics and lower fuel consumption.
In September 2022, the Company entered into an agreement for the sale of MV Pedhoulas Trader, a 2006 Japanese-built, Kamsarmax class vessel at a gross sale price of $15.9 million to an unaffiliated third party. The sale was consummated in January 2023.
In March 2023, the Company entered into an agreement for the sale of MV Efrossini, a 2012 Japanese-built, Panamax class vessel to an unaffiliated third party at a gross sale price of $22.5 million and with a forward delivery date for June 2023. Upon delivery to new owners, the vessel will be chartered back by the Company at a gross daily charter rate of $16,050 for a period of ten to fourteen months.
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 flows, while the vessels we deploy in the spot market allow us to maintain our flexibility in low charter market conditions as well as provide an opportunity for a potential upside in our revenue when charter market conditions improve. The chartering of our vessels is arranged by our Managers15 without any management commission. As of May 5, 2023, we employed, or had contracted to employ, (i) 11 vessels in the spot time charter market (with up to three months original duration) and (ii) 34 vessels in the period time charter market, including one for a vessel scheduled to be delivered in the second quarter of 2023 (with original duration in excess of three months). Of these vessels 11 have an original duration of more than two years and four have an original duration of more than one year. As of May 5, 2023, the average remaining charter duration across our fleet was 0.9 years.
As of May 5, 2023, we had contracted revenue of approximately $285.1 million, net of commissions, from our non-cancellable spot and period time charter contracts excluding the Scrubber benefit. Given the volatility associated with the Capesize charter market, as of May 5, 2023, all eight of our Capesize class vessels have been chartered in period time charters, five of which have remaining charter durations exceeding one year. As of May 5, 2023, the average remaining charter duration of our Capesize class vessels was 2.6 years and the average daily charter hire was $24,021, resulting in a contracted revenue of approximately $179.6 million net of commissions, excluding the additional compensation related to the use of Scrubbers. During the first quarter of 2023, we operated 43.83 vessels, on average earning a TCE of $15,760 compared to 39.54 vessels earning a TCE of $21,352 during the same period in 2022. Our contracted fleet employment profile as of May 5, 2023, is presented in Table 1.
Table 1: Contracted employment profile of fleet ownership days as of May 5, 2023
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 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