Safe Bulkers, Inc. Price & Performance (SB)

This aftermarket weakened during the fourth quarter of twenty twenty four and this impacted our revenues and profitability. In this environment, our company maintains a strong capital structure with required liquidity with the leverage of about 35% and we have declared a $0.05 per share dividend rewarding our common shareholders. Remain focused on capital allocation towards our newbuild program, which on improving operational efficiency and the environmental footprint and all our actions are targeting to increase the growth of our shareholders. [indiscernible] presented in Slide two, let's begin with the market update in Slide four. The Cape market segment has been moving sorry, the Cape Market segment has been moving downwards throughout the quarter. All eight of our Capes are presently period chartered with an average remaining charter duration of of over two years and an average daily charter rate of $22,000 This provides us with a considerable degree of cash flow visibility totaling $145,000,000 in contracted revenue from Capes alone.

On the Panamax front, the charter market stands short at 9,000 with signs of improvement. Moving now to Slide five, we'll present an overview the CRB commodity index fluctuation in basic commodity prices. The rise in tariffs, elevate policy and elevate policy uncertainty and pose a considerable downside risk for global growth and against this inflation. There are rising fears of higher for longer interest rates from central banks and lower investments globally in the context of this policy uncertainty. For all sudden, we anticipate a relatively softer trade market over the following quarters as supply grows faster than demand and we expect an increasing focus on strategic fleet decarbonization and on NEXPs and newbuilds. The decision of the LEC eighty three in April about the global fuel standard and the levy The global GDP growth expectations for 2025 and 2026 as reflected in the IMF's general forecast portfolio growth around 3.3% in the coming years combined by a gradual control of inflationary pressures. According to Bimco, the forecasted global dry bulk demand will form by 1% in 2025 followed by growth of 2.5% in 2026 with minor banks being the best performing sector. China's slower growth may hinder demand for drybulk commodities like iron ore I don't know shipments are estimated to grow slightly, but we [indiscernible] anticipated to restrict growth utilizing the renewable energy in Asia and increased copper production in China and India.

Gain shipments are predicted to rise by 2%, but main supply remains tight, but particularly for Ukraine. Although this might change if this traffic is achieved during 2025. [indiscernible] Safe expected to be a key growth driver The IMF project contains China CDP growth to be 4.6 billion dollars in 2025 and four point five percent in 2026, Signaling a faster than expected slowdown in consumption, and with delayed stabilization in the property market and a persistently low consumer confidence. Also, this projection reflects carryover from 2024 the fiscal package announced in November, we are sharing the negative effect on investment from heightened trade policy uncertainty and property market drag. Trade buyers, tariffs and external presence could limit China's growth potential. Weakness in the steel and construction sector is expected to reduce demand for commodities such as iron ore. Windy, on the other hand, continues to perform as expected. This project is expected to experience the fastest growth among major economies with a forecasted 6.5% CDP increase 2025 and 2026. Increased renewable energy and natural growth will be key drivers for India's economic momentum. Each expanding domestic market and manufacturing sector will continue to contribute positively to the dry bulk demand with infrastructure investments playing a vital role.

Let's proceed now to examine the supply side dynamics in Slide six. Satellite growth is expected to outpace demand, excepting pressure on trade rates. The drybulk fleet is projected to grow by about 2.8% on average in 2025 and in 2026, used stable new deliveries and increased the shopping with Panamax vessels comprising the largest share. The order book now stands at about 10.6% of the current fleet and renewable charters have slowed Asset prices weakened during the second half of twenty twenty four and I've already taken further in the shareholder's ship prices may fall in line with trade markets. Insights in volumes are anticipated to rise as weaker market conditions could prompt the retirement of broader vessels. Only 30% of ships capacity in the capable of using alternative fuels upon delivery. And an additional 40% will be ready for future conversion. Out of the coverable ships, 41% Safe use LNG, 37% methanol and 23% are expected to use ammonia. We believe that energy efficient designs will have an advantage in the coming years. And we expect the environmental emission regulations are going drive 1% fall fluid speed 2025 and in 2026 affecting supply by above the same percentage.

Currently, about 25% of the existing global fleet is older than fifteen years. Safe Bites fleet now accounts Northern Phase III vessels on the water all delivered after twenty twenty two. In addition, we have 11 ECHO ships which have a superior design efficiencies. Compared to the past. 80% of our fleet compressors of Japan means big diversions surpassing the global average of 40% with our average fleet aging about ten years old.

We will continue to become even more commercially competitive as we have an order book of seven more Phase three vessels placed the prices well below the prevailing market to be delivered to us within the next two years. Overall, our fleet today is fundamentally upgraded and commercially more competitive than two years ago. Understanding our commitment to sustainable business. Increasing impact of fleet aging and switching environmental regulations will position our fleet favorably to compete within the stringent greenhouse gas target. Moving to Slide eight for our company update. We represent an overview of our green fleet advantage. The fleet breakdown is presented in the top right chart comprising of 46 vessels with 24 having undergone environmental upgrades, 11 being phased training vessels and 11 being Eco vessels. The bottom graph presents our fleet renewal strategy with the investment of 14 older vessels, acquisition of seven secondhand vessels delivery of 11 Phase three newbuilds, and then an order book comprising of seven more Phase three newbuilds Resulting to a relatively stable ten year average fleet age over the past four years as we are presenting Slide nine. A trajectory of our fleet expansion serving as a testament to our commitment towards sustainability.

In Slide 10, [indiscernible] the next couple of years, which stands at very comfortable levels throughout that period, we study the program for our CapEx spending. As of 12/31/2024, our consolidated debt before deferred financing costs stood at €545,000,000 including the €100,000,000 unsecured bond, 2.95% fixed coupon, by trading in February 2027. Our consolidated leverage stands at a comfortable 35% without net debt per vessel stood just below $99,000,000 for an average age fleet of just ten years short Concluding the company update in Slide 11, we present a basket attributes. Such as our spelling sixty five year track record, a robust management ownership alignment, comfortable leverage of 35% our ample liquidity of $276,000,000 our significant contracted backlog of $2.00 $5,000,000 our greenfield advantage evidenced by 7.4% decrease in fleet AER GHG emissions and by outright BMS Standard Management System implementation. We remain true in our commitment to expand by building a resilient company owning a quality and competitive fleet strategically positioned to leverage on the regulatory landscape and create long term wealth for our shareholders.

I now pass the floor to our quarterly financial overview. During the fourth quarter of twenty twenty four, we were operating in a weaker charter We decreased revenues due to lower rates are the highest, decreased damage from starter feeder vessels and increased operating expenses Let us focus now on our liquidity and cash flows and our capital structure as presented in Slide 13. We maintain the comfortable level to 35% Our debt of $545,000,000 remains comparable to our fixed cap value of $331,000,000 Although our view is just ten years old, Our weighted average interest rates of our debt is 2006.1% for our consolidated debt, a portion of €100,000,000 being fixed at 2.95% coupon.

An unsecured five year bond.

We have already paid $84,000,000 or 29% for our CapEx in relation to to our outstanding order book. High liquidity and capital resources stands strong at approximately $276,000,000 which together with a contracted revenue of about $2.00 5,000,000 a total of $481,000,000 and this is more than double our outstanding CapEx of €2,000,000 of new builds.

Providing flexibility to our management in capital allocation, Fenimore will have additional borrowing capacity in relation to those seven new bids upon delivery.

We strive to ensure that our capital expenditures is adequately covered by our contracted fortifying our balance sheet towards the trajectory of sustainable growth. Moving on to Slide 14, With our quarterly financial highlights for the fourth quarter of twenty twenty four, compared to the same period of 2023. Our adjusted EBITDA for the fourth quarter of twenty twenty four was $40,700,000 compared with $50,700,000 for the same period of 2023.

Our adjusted earnings per share for the fourth quarter of twenty twenty four was $0.15 This calculated on a weighted average number of 106,400,000.0 shares in comparison to $0.25 during the same period in 2023, that calculated on a weighted average number of 111,600,000.0 shares. In Slide 15, we present an overview of our quarterly operational highlights for the fourth quarter of twenty twenty. Four compared to the same period of 2023, During that quarter, we operated 45.9 vessels on average, ending an average PCE of $16,521 In comparison to 45.93 vessels, ending an average of TCE of $18,321 The company's net income for the fourth quarter of twenty twenty four was $19,400,000 compared to net income of $27,600,000 during the same period in 2023. Concluding our presentation, we would like to highlight that based on our financial performance, the company's Board of Directors declared a $0.05 dividend per common share.

We'd like to emphasize that the company is maintaining a healthy cash position of about $130,000,000 as of 02/14/2025 another $165,000,000 in available debottlenecking facilities The combined liquidity and capital resources of $2.92 $95,000,000 Furthermore, we have contracted revenue from our non cancellable spot in period end [indiscernible] of almost $200,000,000 net of commissions and deferred revenue and additional borrowing capacity in relation to seven new bids upon delivery. We believe our strong liquidity and our comfort of Zevrience will enable us to expand the fleet We have a resilient company and create long term prosperity for our shareholders. Based on good presentation, we are now ready for the Q and A session.

Thank you. We will now conduct a question and answer session. Our first question comes from Omar Nachta with Jefferies. Please proceed. Thank you.

Hey, guys. Good afternoon. Thank you for the update. I guess just a couple of questions on my end and maybe just perhaps first on the share buyback. Announced the $5,000,000 program in November. Went to work fairly quickly buying $1,500,000 But in the December, went ahead and terminated it. So just want to get a sense is there a trigger maybe that kick started the buyback program and then was there something that caused you to terminate it outright? Or is it just a way safe brokers tend to do its share buyback?

Hey, Luca, from time to time, we are we are doing buyback programs especially when we feel that our market either the price of the stock market is very low And And we execute always a portion of it So this has happened in the past. It can happen again in the future. We believe really that the assets the valuation of our covenant is quite low compared to net asset value. Especially because we have made all these investments since the last two years. We have upgraded our fleet, we have renewed our fleet, we have new bids, and we offer to our shareholders a solution where when they invest on us, they have the ability to invest in a company, which basically has a better operational and financial pro prospects with the same number of ships because they run a with a lower fuel consumption and advanced energy efficiency. What Luca said sometimes the company evaluates a program Also, related to the [indiscernible] feels that the current trade market is not performing or it's too much weaker than what we thought it would be. We may slow it down or we may stop it. For the quarter and continue later. [indiscernible] assessed on daily basis as the program develops.

And as the market develops, when we have more clear sight of market, the program can always be reinstated. [indiscernible] Okay. So that that makes sense then in terms of looking at the share price versus NAV at a vacuum isn't the only decision. If the freight market is there and supports positive cash flow, then that would be a trigger given the market is softer so far? Okay. [indiscernible] approaching or reaching OpEx expenses like it did late in December, And you've considered a buyback program, but it could wait for a couple of months.

Got it. That's clear. [indiscernible] And maybe just a follow-up just in terms of kind of the underlying NAV itself and what we've been seeing in asset values. Can you give just a sense from your perspective It feels that even though the freight market has has softened here the past Safe or three months, Asset values at least from what we're seeing quoted by the various brokers team elevated. There hasn't really been much [indiscernible] would you say that the values are firm or is there just simply not business being transacted to have a good sense Yes. Look, the market has dropped a lot in December and January. Prices have definitely been affected We can say that all the ships have been affected by as much as 25%, whilst the other ships are 15%. But at the same time, there are many Many [indiscernible] or on vessels. But they're always looking to buy in a cheaper sector. Which is at the moment the dry van. Sector. So I don't think that the price is have a long way to go. Unless the market the trade market continues to slide. So if the trade market stabilizes, as it is during the last two weeks.

I don't think that the party will have a credit of way to go down, maybe another 5%, 10%. And at the same time, when buying power and around, especially in the grid market, I believe that our prices will strengthen in the second half of this year. On the current levels, Okay, very good. Well, thank you. That's it for me.

Thank you. At this time, I would like to turn the call back over to management for closing comments. Okay.

Thank you very much for this conference call that we have today for the Q4 and year end financial results. And we are looking forward to discuss again with you in the following quarter.

Conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.