MONACO, Nov. 13, 2024 (GLOBE NEWSWIRE) -- 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 nine month periods ended September 30, 2024. The Board of Directors of the Company also declared a cash dividend of $0.05 per share of outstanding common stock.
| Financial highlights | |||||||
| In million U.S. Dollars except per share data | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Nine Months 2024 | Nine Months 2023 |
| Net revenues | 75.9 | 78.5 | 81.7 | 82.3 | 64.7 | 236.1 | 202.1 |
| Net income | 25.1 | 27.6 | 25.3 | 27.6 | 15.0 | 78.0 | 49.7 |
| Adjusted Net income1 | 19.0 | 20.3 | 24.2 | 29.5 | 11.1 | 63.4 | 40.7 |
| EBITDA2 | 47.4 | 49.2 | 47.9 | 48.8 | 34.8 | 144.5 | 107.4 |
| Adjusted EBITDA2 | 41.3 | 41.8 | 46.8 | 50.7 | 30.9 | 130.0 | 98.3 |
| Earnings per share basic and diluted3 | 0.22 | 0.24 | 0.21 | 0.23 | 0.12 | 0.67 | 0.38 |
| Adjusted earnings per share basic and diluted3 | 0.16 | 0.17 | 0.20 | 0.25 | 0.08 | 0.53 | 0.30 |
| Average daily results in U.S. Dollars | |||||||
| Time charter equivalent rate4 | 17,108 | 18,650 | 18,158 | 18,321 | 14,861 | 17,968 | 15,954 |
| Daily vessel operating expenses5 | 5,311 | 6,254 | 5,442 | 4,642 | 5,357 | 5,665 | 5,794 |
| Daily vessel operating expenses excluding dry-docking and pre-delivery expenses6 | 4,999 | 5,089 | 5,038 | 4,232 | 4,720 | 5,042 | 5,024 |
| Daily general and administrative expenses7 | 1,680 | 1,595 | 1,513 | 1,473 | 1,453 | 1,595 | 1,460 |
| 1 | Adjusted Net income is a non-GAAP measure. Adjusted Net income represents Net income 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 3. |
| 2 | EBITDA is a non-GAAP measure and represents Net income plus net interest expense, tax, depreciation and amortization. See Table 3. 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 3. |
| 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 3. |
| 4 | Time charter equivalent ("TCE") rate represents charter revenues less commissions and voyage expenses divided by the number of available days. See Table 4. |
| 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 4. |
| 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 4. |
| 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 4. |
| Selected financial highlights | |||||
| In million U.S. Dollars | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 |
| Total cash8 | 92.6 | 81.6 | 87.1 | 98.8 | 83.3 |
| Undrawn revolving credit facilities9 | 225.0 | 179.5 | 129.2 | 131.5 | 148.0 |
| Financing commitments10 | - | - | - | 55.5 | 51.0 |
| Unsecured debt11 | 110.2 | 105.6 | 107.9 | 108.6 | 103.8 |
| Secured debt12 | 379.6 | 385.5 | 426.4 | 398.6 | 336.9 |
| Total debt13 | 489.8 | 491.1 | 534.3 | 507.2 | 440.7 |
| Number of vessels at period end | 45 | 45 | 47 | 46 | 45 |
| Average age of fleet | 9.95 | 9.99 | 10.04 | 10.19 | 10.59 |
| Net debt per vessel14 | 8.8 | 9.1 | 9.5 | 8.9 | 7.9 |
Dr. Loukas Barmparis, President of the Company, said: "We had a good quarter compared to the same quarter last year, however the charter market is gradually softening, along with continuing geopolitical uncertainties. We remained focused on capital allocation towards our newbuilds program, on improving our operational efficiency and on rewarding our shareholders with a dividend of five cents per share of common stock."
Environmental Investments - Dry-Dockings
The Company is gradually renewing its fleet with newbuilds designed to meet the most recent International Maritime Organization (the "IMO") regulations related to the reduction of greenhouse gas emissions (the "IMO GHG Phase 3") and nitrogen oxides emissions (the "IMO NOx Tier III"), and selectively selling older vessels. As of November 1, 2024, the IMO GHG Phase 3 NOx Tier III newbuild program consisted of 18 vessels in the aggregate, including contracts for two methanol dual-fueled Kamsarmax newbuilds. Eleven of such newbuild vessels have already been delivered to us. The aggregate capital expenditure of the newbuild program is approximately $662.1 million, of which $455.6 million or 69% have already been paid.
Furthermore, the Company is continuing the environmental upgrade program of its existing fleet, targeting increased energy efficiency and lower fuel consumption, which is expected to reduce GHG emissions. As of November 1, 2024, 24 existing vessels have been upgraded. The cost of low friction paint applications that are part of the environmental upgrades is recorded as operating expenses, while the cost of energy saving devices is capitalized and recorded as capital expenditures.
All eight of the Company's Capesize class vessels are equipped with exhaust cleaning devices ("Scrubbers"). During the third quarter of 2024 and as of November 1, 2024, the Company has completed dry dockings, including environmental upgrades on three vessels, namely the Mount Troodos, the Pedhoulas Merchant and the Troodos Air and has initiated dry docking, including environmental upgrades, on one vessel, namely the Venus Heritage, with a total of 25 estimated aggregate down time days.
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| 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 period's end. |
As of November 1, 2024, we had a fleet of 46 vessels consisting of 8 Panamax, 13 Kamsarmax, 17 Post-Panamax and 8 Capesize class vessels, with an aggregate carrying capacity of 4.6 million dwt and an average age of 9.8 years. In our fleet, 11 are IMO GHG Phase 3 - NOx Tier III ships built 2022 onwards and 11 vessels are eco-ships built 2014 onwards. From our remaining existing fleet all but one have already been environmentally upgraded. During the fourth quarter of 2024 we have scheduled to upgrade the remaining vessel.
Orderbook
As of November 1, 2024, we had an orderbook of seven IMO GHG Phase 3 - NOx Tier III Kamsarmax class newbuilds, two of which are methanol dual-fueled, with scheduled deliveries, one in 2025, four in 2026 and two in 2027.
Vessel Sales
In July 2024, the Company delivered to her new owners the Paraskevi 2, a 2011-built, Panamax class, dry-bulk vessel, sold at a gross sale price of $20.3 million, which was purchased in 2021 for $14.1 million.
Newbuild deliveries
In July 2024, the Company took delivery of the Chinese-built Kamsarmax class Pedhoulas Farmer, its tenth IMO GHG Phase 3 - NOx Tier III newbuild, with advanced energy efficiency characteristics resulting in lower fuel consumption.
In October 2024, the Company took delivery of the Chinese-built Kamsarmax class Pedhoulas Fighter, its eleventh IMO GHG Phase 3 - NOx Tier III newbuild, sister to the Pedhoulas Farmer.
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.
During the third quarter of 2024, we operated 45.27 vessels, on average earning a TCE of $17,108, compared to 44.13 vessels earning a TCE of $14,861 during the same period in 2023. As of November 1, 2024, we employed, or had contracted to employ, (i) 15 vessels in the spot time charter market (with up to three months` original duration) and (ii) 32 vessels in the period time charter market (with original duration in excess of three months). Of the vessels chartered in the period time charter market, 12 have an original duration of more than two years. The average remaining charter duration across our fleet was 0.7 years and we had contracted revenue of approximately $232.7 million, net of commissions, from our non-cancellable spot and period time charter contracts excluding the Scrubber benefit.
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| 15 | Safety Management Overseas S.A., Safe Bulkers Management Monaco Inc., and Safe Bulkers Management Limited, each of which is referred to herein as "our Manager" and collectively "our Managers". |
As of November 1, 2024, all eight of our Capesize class vessels have been chartered in period time charters, six of which have remaining charter durations exceeding one year. The average remaining charter duration of our Capesize class vessels was 2.6 years and the average daily charter hire was $23,563, resulting in a contracted revenue of approximately $175.7 million net of commissions, excluding the additional compensation related to the use of Scrubbers.
Our contracted fleet employment profile as of November 1, 2024, is presented in Table 1 below.
Table 1: Contracted employment profile of fleet ownership days as of November 1, 2024
| 2024 (remaining) | 79% |
| 2024 (full year) | 92% |
| 2025 | 29% |
| 2026 | 9% |
As of September 30, 2024, our consolidated debt before deferred financing costs was $498.7 million, including the €100 million - 2.95% p.a. fixed coupon, non-amortizing, unsecured bond issued in February 2022, maturing in February 2027. Our consolidated leverage16 was approximately 32% and our weighted average interest rate during the three-month period ended September 30, 2024 was 6.35% inclusive of the applicable loan margin. During the three-month period ended September 30, 2024, we made scheduled principal payments of $6.7 million, voluntary principal payments of $14.0 million and drawings of $15.0 million under our existing revolving facilities. The repayment schedule of our debt as of September 30, 2024, is presented in Table 2 below:
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| 16 | Consolidated leverage is a non-GAAP measure and represents total consolidated liabilities divided by total consolidated assets. Total consolidated assets are based on the market value of all vessels, as provided by independent broker valuers on quarter-end, owned or leased on a finance lease taking into account their employment, and the book value of all other assets. This measure assists our management and investors by increasing the comparability of our leverage from period to period. |
(in USD million)
| Ending December 31, | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031-2034 | Total |
| Secured debt | 6.7 | 60.8 | 57.3 | 49.9 | 54.2 | 41.1 | 29.7 | 87.4 | 387.1 |
| Unsecured debt | 0.0 | 0.0 | 0.0 | 111.6 | 0.0 | 0.0 | 0.0 | 0.0 | 111.6 |
| Total debt | 6.7 | 60.8 | 57.3 | 161.5 | 54.2 | 41.1 | 29.7 | 87.4 | 498.7 |
| Fleet scrap value17 | 330.5 | ||||||||
As of September 30, 2024, we had a fleet of 45 vessels and an orderbook of eight newbuilds. In relation to our orderbook, we had paid $94.6 million and had $231.6 million of remaining capital expenditure requirements.
We had $92.6 million in cash, cash equivalents, bank time deposits and restricted cash and $225.0 million in undrawn borrowing capacity available under existing revolving reducing credit facilities. Furthermore, we had contracted revenue of approximately $251.4 million, net of commissions, from our non-cancellable spot and period time charter contracts excluding the Scrubber benefit, and additional borrowing capacity in connection with the financing of one unencumbered vessel and eight newbuilds upon their delivery.
In relation to capital expenditure requirements of the eight newbuilds, the schedule of payments were $25.1 million in the fourth quarter of 2024, $40.1 million in 2025, $109.9 million in 2026 and $56.5 million in 2027.
The scrap value17 of our fleet was $330.5 million and the outstanding consolidated debt before deferred financing costs was $498.7 million, including the unsecured bond.
Liquidity, capital resources, capital expenditure requirements and debt as of November 1, 2024
As of November 1, 2024, we had a fleet of 46 vessels and an orderbook of seven newbuilds. In relation to our orderbook, we have paid $83.9 million and had $206.5 million of remaining capital expenditure requirements.
We had $90.1 million in cash, cash equivalents, bank time deposits, restricted cash and $205.0 million in undrawn borrowing capacity available under existing revolving reducing credit facilities. Furthermore, we had contracted revenue of approximately $232.7 million, net of commissions, from our non-cancellable spot and period time charter contracts excluding the Scrubber benefit, and additional borrowing capacity in connection with the financing of two unencumbered vessels and seven newbuilds upon their delivery.
In relation to capital expenditure requirements of the seven newbuilds, the schedule of payments was $40.1 million in 2025, $109.9 million in 2026 and $56.5 million in 2027.
The scrap value17 of the fleet was $333.2 million and the outstanding consolidated debt before deferred financing costs was $514.5 million, including the unsecured bond.
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| 17 | The fleet scrap value is calculated on the basis of fleet aggregate light weight tons ("lwt"), excluding any held for sale vessels, and market scrap rate of $477.5/lwt ton (Clarksons data) on September 30, 2024 and $472.5/lwt ton (Clarksons data) on November 1, 2024. |
On November 13, 2024, the Board of Directors of the Company declared a cash dividend on the Company's common stock of $0.05 per share which is payable on December 17, 2024, to the shareholders of record of the Company's common stock at the close of trading on December 2, 2024. As of November 1, 2024, the Company had 106,777,686 shares of common stock issued and outstanding.
In October 2024, the Board of Directors of the Company declared a cash dividend of $0.50 per share on each of its Series C preferred shares (NYSE: SB.PR.C) and Series D preferred shares (NYSE: SB.PR.D) for the period from July 30, 2024 to October 29, 2024. The dividend was paid on October 30, 2024, to all shareholders of record as of October 18, 2024 of the Series C Preferred Shares and of the Series D Preferred Shares, respectively.
In July 2024, the Board of Directors of the Company declared a cash dividend on the Company's common stock of $0.05 per share which was paid on September 5, 2024, to the shareholders of record of the Company's common stock at the close of trading on August 21, 2024.
In July 2024, the Board of Directors of the Company declared a cash dividend of $0.50 per share on each of its Series C preferred shares (NYSE: SB.PR.C) and Series D preferred shares (NYSE: SB.PR.D) for the period from April 30, 2024 to July 29, 2024. The dividend was paid on July 30, 2024, to all shareholders of record as of July 19, 2024 of the Series C Preferred Shares and of the Series D Preferred Shares, respectively.
The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. There is no guarantee that the Company's Board of Directors will determine to issue cash dividends in the future. The timing and amount of any dividends declared will depend on, among other things: (i) the Company's earnings, fleet employment profile, financial condition and cash requirements and available sources of liquidity; (ii) decisions in relation to the Company's growth, fleet renewal and leverage strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company's existing and future debt instruments; and (v) global economic and financial conditions.
War in Ukraine
As a result of the war between Russia and Ukraine that commenced in February 2022, the US, the EU, the UK, Switzerland and other countries and territories 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 crews, our vessels currently do not sail in the Black Sea and we conduct limited operations in Russia, we will continue to monitor the situation to assess whether the conflict could have any impact on our operations or financial performance.
Trade disruption in the Red Sea and conflicts in Middle East
Following attacks on merchant vessels in the region of the southern end of the Red Sea, there is disruption in the maritime trade and supply chains towards the Mediterranean Sea through the Suez Canal. Since the beginning of this disruption, we have diverted our fleet from sailing in the Red Sea region. The conflicts in the Middle East represent additional geopolitical and economic risks that could increase the volatility of the global economy. While our vessels currently do not sail in the Red Sea, we will continue to monitor the situation to assess whether there will be any impact on our operations which could negatively affect our results of operations and financial condition.
Conference Call
On Thursday, November 14, 2024, at 9:00 A.M. Eastern Time, the Company's management team will host a conference call to discuss the Company's financial results.
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1 877 405 1226 (US Toll-Free Dial In) or +1 201 689 7823 (US and Standard International Dial In), or +0 800 756 3429 (UK Toll-Free Dial In). Please quote "Safe Bulkers” to the operator and/or conference ID 13749644. Click here for additional participant International Toll-Free access numbers.
Alternatively, participants can register for the call using the call me option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the call me option.
Slides and Audio Webcast:
There will also be a live, and then archived, webcast of the conference call and accompanying slides, available through the Company's website. To listen to the archived audio file, visit our website www.safebulkers.com, and click on Events & Presentations. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Management Discussion of Third Quarter 2024 Results
During the third 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 Scrubber fitted vessels and higher interest expenses due to increased interest rates. During the third quarter of 2024, we operated 45.27 vessels on average, earning an average TCE of $17,108 compared to 44.13 vessels earning an average TCE of $14,861 during the same period in 2023. The Company's net income for the third quarter of 2024 was $25.1 million compared to net income of