SB - Earnings call transcript Q3 2021

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Operator

Thank you for standing by, ladies and gentlemen. And welcome to the Safe Bulkers conference call to discuss the third quarter 2021 financial results. Today, we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Mr. Polys Hajioannou, President, Dr. Loukas Barmparis and Chief Financial Officer, Mr. Adamopoulos. Konstantinos all a time, mode. are participants this listen-only in At question-and-answer presentation There a by session. will be followed [Operator Instructions] on conference on contact Following this Link the further need Capital conference information any call XXX-XXX-XXXX. or at the please call, presentation, if you this I recorded today. is must conference being advise you,

concerning forward-looking strategy we note and the estimates vessel expects, amended as further Words amended., measures such intended presentation growth to strategy, statements. XXXX, and hopes, XXE of including identify similar as that variations Before and Exchange implement company's time acquisitions contains defined Act expected as as XXXX, such and intends, statements begin, such Act anticipates, events, XXA are Section of words please into and Securities of in believes, of plans, entering of expressions charters. to this the forward-looking future the Securities Section

or and that which the of differ could Although correct. number unknown are are limited can are a no cause are of assurance statements the for States subject company. to in Commission. to reflected prove with based are estimates, differ Securities include, many release with significant risks risks which in listed to the company company's obligations the Dr. control expressly materially circumstances on or from by assumptions may operations publicly undertaking have inherently in Exchange time competitive reflect operates, contingencies, time forward-looking vessels, statement respect that will which to, drybulk market believes expressed with factors the change or in but and known company outside demand materially updates not sir. any events, Actual statements. which any I And United the beyond the results other such or in those Factors Barmparis. thereto disclaims upon associated the and that filings to the to now, reasonable, statements The change expectations or the involve from changes to Please implied forward-looking uncertainties forward-looking and factors of to such given actual the statements in herein be results pass and is expectations any go and based. to such These been contained company's conditions revisions any ahead, floor any in expectations any the company

Loukas Barmparis

all. for financial and Good am call the Loukas Safe President Welcome discuss quarter webcast morning I Barmparis, the of results Bulkers. to our to XXXX. third to of conference

report previous the that compared has third to during XXXX We profitability are our increased to quarter the happy quarter.

As seen healthy targeted fleet renewal that position maintaining move as a our strategy. year liquidity are to we significant progress leverage, on nearing making we and our end, gradually

flows. in earnings our $XX.X million net cash We and have EBITDA also period begun The adjusted million to visibility more per of time provide better slide charters in in four. revenues, share. $X.XX above number future are detail presented of to contracting We reached $XX.X

in XXXX, time, same X, Japanese of to III two at competition. secondhand which about in with And older we the some and to fourth outstanding are that have have first will $XX.X by renew be of time we ahead We while delivered one million with We four be House vessels. to four outstanding CapEx. $X.X delivered able same with process and have eight quarter newbuilds, our compliant of with EEDI sold Green debt. vessels, XXXX, yes At on be NOx-Tier the fleet newbuilds one $XX.X younger Phase vessels of of acquired early sales secondhand, very the with in compliant, believe we million competitive X yet million XXXX outstanding two Gas XXXX substituting seven the two from shipyards at Phase prices deliveries, order which

whole Oct. In as credit facilities, sale of credit expected At million $XXX.X secured a loan well of $XX.X facility undrawn in $XX.X as of and available deleveraging, XXXX a ahead year-end will healthy the $XX.X cash agreements we have commitments and of competition. facility. maintain the decrease terms to same new $XXX.X in million of $XXX.X and position agreed million from $XX.X believe debt credit XXXX. reducing upon financial by preserving XX, million, actions position under incremental revolving of competitiveness, the in to new borrowing these our from million additional company All the million million of we consummation leaseback reducing a flexibility capacity we level time, an revolving

the We show in assets In believe five, that course, asset noting values the are are exceed their considerably. value, book presented, sheet run. long The of values we slide book balance we for presently here analysis. that

on Let's turn slide position. to a market seven charter present to have quick number look

trading As volatile, averaged driving shown at Capes same year-to-date reaching which for The of Similarly, $XX,XXX $XX,XXX We situation, the a day. as year-to-date was XXXX. Building compared and $XX,XXX day currently the on the and period the average as about top are have for crisis the energy market. coal $XX,XXX outperform lately likely been strong graph, restrictions shortage dynamics. remains the COVID-XX period, China $X,XXX to prevailing trading year. same throughout by $XX,XXX to per for in support year-to-date Kamsarmaxes, market per day the average The the twice with coupled continues the close with compared XXXX. $XX,XXX. Capes analyze market for about $XX,XXX o high presently to XXXX of in to at per this a

of slide shipping. pricing the the commodities, for eight. indicators development leading on which the are to certain We Turning present

driven as the left, coal, prices is initially been a evident by market. in of the XXXX in have line correction followed prices correction. by board rapid during stockpile followed the ore, demand a in the strong at iron of case from the increase the in to presented strong in surge the demand commodity a while for which deferred prices, recent and excessive is recent and commodities We are fall seen top for market the across the is prices. of trading effort the shipping case a by has now the In raise with expectation. an of raised resulting In traders need coal cheaper with Presently, control prices buying rates until term seasonal and until short in the shortage the lately easing China,

industrial the for However, connection Northern robust. demand the continued in keep forthcoming winter to is expected hemisphere in coal with production

which Soybeans relevant quarter first to XXXX XX-day picking normally but are subdued this each first year. presently the is of seasonality of and half trade after is this the of

the post-pandemic of near in presented right bottom for which price copper five-year growth an highs in is plans. period graph remained the resulted recovery has backed what that has economic the Lastly, is by vessel its noteworthy extended

nine, the On of in the fleet supply. the we slide status and terms of present values future

and Baltic On present of assessed five-year the Capes old Panamaxes top by as values the exchange. we graph,

the the During increase sharp last a vessel month, been has values of evident.

Japanese assessment $XX.X period The achieve since course, For increased Capes per is and can vessel. built for in big million XX% lows lows. $XX high vessels average vessels, same have period surged in gained Baltic-type have gained million values and have even the particular, Panamaxes, than XXXX. and XXXX higher XX% of the indicative of per increased at above XXXX value. specifications the about have about Similarly, for more since the in about vessel since the have five-years demand values same XXXX since the

Our fleet specifications operational many and mainly Japanese and vessels of high consists big commercial with upgrades.

is range and the in at Panamaxes total of XXXX. growth for the the the the is orderbook on of spread we X.X% bottom fleet both of graph, Looking of case existing the minor. is which Capes evenly Capes, fleet the note that In until orderbook

up XXXX. majority significantly orderbook For the ship delivered Under XXXX do delivery expect building the current the total increase at we both Japan upcoming energy carbon of saving the vessels X.X%, to retrofitting in comply intensity EEXI next and devices. regulation, minimal techniques to thereafter. propulsion of the occupied which action orderbook are drybulk present there to and not Panamax, the the of stands by of and years. with next the that goal in as to to with or condition IMO such regulation the the or age no shipyards reducing with controlling orderbook innovative the couple has such for next the for be The green decade as From is XX, the we from may China, study at vessel's NK, energy profile in efficiency. in sectors vast combination market for further unlikely the forthcoming orders In next orders two house of additional recent slide a the earlier especially XX% and drybulk retrofitting than set no there drybulk classification speed reduce space fleet Therefore shipyards for orders. IMO XXXX. within with under for some drybulk number and require is container availability the years. Presently, would newbuild is the XX% slide, kind emissions other increase tankers or gas vessels about

the the remaining [indiscernible] than of years XX% of graph, of about regulations, the and years implementation with of and left is half IMO in above the Capes Capesize of the of XX vessels. XX% XX By comparable fleet can and presented viable age. the non-commercially as higher As Panamax top of time Panamaxes be full age

scenario. Excluding vessels the an of be supply interesting needed will

Gas outlook EEDI having we obtained you X, NOx-Tier times Phase remind Japanese that with III me House having ordered newbuilds Let at competitive this Green XXXX. until excellent compliant delivery eight point have

fuel touch status levels of per which is of of driver day to during period pricing. XX, prices, barrel. the past the reaching upon we slide the main has surged number Brent, current and Turning fuel $XX

recovery metric $XXX markets, ton. about post-Panamax the the per very in example, very through about has According mobility a of prices This HiX, fitted which in restoration sustainable economies, to by the sulfur HiX to oil, oil ships crude for of the XXXX higher, the translated to for on our HiX fuel of cleaning tons. fuel being be low the oil per wider The for global the the region $XXX shown Presently, instead day. burns called vessels. low fitted with high technology, so high $X,XXX of scrubbers differential X,XXX or gas is fuel sulfur Our even lead The a per scrubber and emissions compliant recovery metric fuel in price to to sulfur regulations may between are future invested The these IMO sulfur XXXX allows scrubber sulfur oil metric as $XXX,XXX is the prices about differential. fitted about starts at comply company of scrubbers in even IMO bottom, Singapore, graph revenues the and burning oil. gain ton. fuel, with in which exhaust about year to

summarize key the in slide me number Let takeaways market XX.

healthy of market for strong volumes of in lead have start strong developed and coal together commodities first as been minimal coal with is a has ore, orderbook until congestion environmental of XXXX new grain. Coal with in COVID-XX efficient and Legacy We designs. restrictions Panamax Demand preoccupied and expected crisis to decarburization the discussions with shipyards and orders. quarter. suggests experienced discharge Energy have XXXX volumes market market. only sustain charter Most maintain robust robust a tanker are iron levels. exceptionally The to China levels containers favor is shortages during orders shipyards sustainability ports. of not few

stimulus We have greening of global both organic the on spending governments the continuing and seen economy. increased programs

ton. today which and brent of may HiX the of We increased recovery, emissions restrictions lastly, may wider aging And even have lead of per fleet environmental the that where enhance prices activity. differential scrapping spreads about $XXX experienced than

pass me let the overview. Now Konstantinos our our for CFO, Adamopoulos, floor to financial

Konstantinos Adamopoulos

everyone. good Loukas morning to and you Thank

XX, stood versus we Let me our where PCE, slide OpEx per $XX,XXX day at which $X,XXX day. our quarterly quarterly stood start with which performance a present at in chartering our

pre-delivery all OpEx all the we not our $X,XXX, present if which the slide of fees industry's number drydocking and OpEx figure that quarterly of G&A, and this expenses stood given average on The one [indiscernible]. compensation lean for that XXXX our expenses QX operations. and include at was We G&A, and and fact management Moving in on related OpEx and is lowest, administration $X,XXX. believe demonstrating our to our in to our our officer our daily our lowest, directors the of and G&A XX, for daily both $X,XXX we quarterly focus

Moving seen to as our XX, in XX. present schedule repayment debt September XXXX. of slide We as profile,

six relation by to and backed for of cash, cash sale date, $XX.X committed not facilities in Furthermore, schedule the slide secured $XXX.X in have million deposits As two equivalents their borrowing delivered fleet. capacity to vessels vessels our value we and additional undrawn sale, in commitments in amortization and available two revolving XX, cash we agreements debt-free leaseback that scrap borrowing our upon under the have yet, the for existing had that three present reducing we $XX.X restricted relation capacity and excluding credit debt newbuild million loan are In which be of and delivery. newbuilds million in versus and vessels.

We gradually the smooth following debt the made payment have previous have for quarters. considerable we next years, debt a in profile company deleveraging our two repayments

with Let's move now for our of XXXX quarter compared the slide to the last same financial of XX quarterly to third highlights year. period

result fitted million third while quarter increased the second $XX.X During rate compared quarter the reached first The in compared quarters reduced The XXXX. time was to Net revenues revenues this operated the $X.X increased to for decreased improved to increased OpEx of $X,XXX. of compared COVID-XX vessels. income period net for third period market pre-delivery by XX% a XXXX, as revenues XXXX, year. expenses the for assisted compared revenues vessel by an X% X% and the in of and sales, to drydocking million interest million third the the and expenses XXXX, OpEx during increased the with improved from quarter expenses to $XX,XXX no the to X% and same expenses As to $XX.X by vessel Daily days we the by to charter and during from repatriation and our of by charter period the a voyage market XXXX due reduced further million to general $XX,XXX $XX.X mainly last and quarter due by we equivalent crew were period $XX.X to fitted drydockings by our XXXX, compared XXXX also earnings in last of note, XXXX million net rate $X,XXX charter year. scrubber compared that the of lower scrubbers third of to the additional third affected quarter year by vessels same the expenses ownership of increased in a had same to time during same the $XX.X Daily pandemic. during due compared excluding of of $X,XXX million $XXXX to equivalent

compared the of quarter third increased in XXXX $XX.X to for XXXX. $XX.X period the for million EBITDA to million, adjusted Our same

renewal to of us Our XXX.X progress and $X.XX, on period position average time same strategy of charter XXXX cash like emphasize fleet provide adjusted show a the million XXX.X slide We move our zero October maintaining a weighted to average EPS we would fleet daily to we calculated number shares. healthy $XX.X for on our million the on third of end number year-end nearing of visibility data compared to to as period our quarter to the quarterly of that making year. compared future was shares, company Closing our weighted cash during will our same presentation million the of period calculated XXXX in indicators provide flows. last and average significant XX, is in better levels flexibility a targeted as with contracting XXXX,

press release to your Our We and our more in financial operational wish detail presents questions. now results. take

Operator

Instructions]. [Operator

We of now the from line Please question. is Wetherbee Citi. take go ahead. This will Chris the fast from

James Monigan

morning. Good guys. for on Hi Monigan, Chris. James

Loukas Barmparis

Hi. morning. Good

Konstantinos Adamopoulos

Hi.

James Monigan

rate I and around your just wanted the view also a better sustainability understanding at of values. current vessel

values off the Just that much -- bottom. up just is obviously do have of you driven think vessel the how But come by

Loukas Barmparis

bit go slower? you Can

James Monigan

I am sorry guys.

Loukas Barmparis

better. Yes,

James Monigan

you to values. think is off first to driven stronger sentiment versus you that the -- term up am is moment? where sort at like the of ask of I think obviously prices market in understanding longer the sort just your to wanted good much have about like just of the see. But vessel bottom the outlook. around trying do your long of long term the [indiscernible] how input by The get of market off I which term Yes. perception come

Loukas Barmparis

very sound is The bad. Yes.

long anyway, didn't are you get of presume asking markets? question. we the the But term about So I prospects the

James Monigan

values reflected essentially pricing or And in at moment. the reflects in vessel just commodity value it vessel the the get

Loukas Barmparis

see Look, commodities for reasons recent. prices the to that are cool drops We the in government last price seen the market. coal environment output slowed is have we before of intervention Olympics. with prices there down ore have for the that part And because of two months the commodity as only iron down recently steel demand Chinese reducing because well in

Handysize vessels well commodities, of enjoyed being demand strong. the smaller for overall minor the is as is rates from we ones are very this that the very Panamaxes think it since, but size demand by I and that healthy. especially the And as see Supramaxes

believe And So commodities, strong at including also most further. oil, kept increase we likely only will be will levels. prices

James Monigan

of Got sort the given it seems strength the market, aren't it. that just necessarily of But the -- values vessel reflecting

Loukas Barmparis

in is There difficult. makes [indiscernible] is sorry. sound Please, very your which

speak please slowly. So

James Monigan

ask I will call turn call. and the follow-up that the over someone separately I so questions turn given else the can will just difficulty.

Operator

you. Thank

question. will Wainwright. the Fyhr from next from ahead. Please go We to move the Magnus the of line next H.C. And is

Magnus Fyhr

Yes. Magnus Good afternoon. H.C. This is Wainwright. from Fyhr

the been some also you the in Just last charters and secured here active you market. time have S&P pretty in year

With potentially Or opportunities more charters do for you to going the see opportunities? and acquisitions? secure uncertainty created you less you or volatility the do some forward, think time potentially volatility current make has

Loukas Barmparis

of the has Look, lately. weeks, the been a very strong couple market last

a from Capesize We $XXX,XXX increase day. big have rates of seen resulted big volatility which approaching also

is been looking has as a that there correction So huge.

say can that fairly exclude Of of the $XX,XXX spot for all $XX,XXX, class enjoy market, we achieved of the course, in because the we Capes correction on vessels. two day rates still of has after $XX,XXX weeks three around market, a the or we stable on extra would if the these rest been

market is us, it is good we when and reaches correction have a market healthy day. this that it correction and a the we call So for a $XX,XXX

to this ship last it sector of reasons. they prices volatility by are because because going owners nine low to they not right rates up have have affected I in going you that make be So seen freight are you which other many they for months. don't the what can earnings expect now let see them very prices vessels, cheaply, And ship

of sectors. is One other one change in is that steel prices the and market them will the expectations other

happening is are strong. container healthy what step We and surprises is have opportunities there don't quarter the expect in I and to XXXX. in marked the in correct the containerships Also really give seen to on drybulk like first very market. buying to vessels us of

I So it down. guess go to don't I them higher go but may not expect

Magnus Fyhr

Okay.

a your looks allocation from balance So good. sheet capital standpoint, very

to flow potentially You of market stock are is the going dividend cash or going buyback current at kind debt generate shareholders? to priority here a forward? Reduce or lot What rates. some of

Konstantinos Adamopoulos

projection the the the If on the the deleveraging exactly for XX, put be will we will go policy, year end for page And couple principal following deleveraging yes. debt we of see almost of formal ended the our that to we of then and yea shows by the policy, which repayments.

what is some completed that of ordered do. renewal having makes So be according Having and the the what what is very next about of most leverage today pricing there debt terms of debt terms we vessels, done which value company could that vessel. we might the the the This sale in reflects us $XXX million of still. comfortable in to also million to of value secondhand compared the the be And have opportunities scrubbed ordering, of about the because the we $XXX will to the fee fleet. year per vessels have basically strategy

However the done we have volume. big

and CapEx of terms lower. in terms becoming are priorities in think of leverage I

cash I able the new will So generated year be give also our to in is that the reward to think in next opportunities future, the shareholders.

to the point which comfortable through say, to to out established let's and We two continued markets need to today. we want be in we is, to be be our as levels it cash flows time things. However want charter building can

Magnus Fyhr

Okay.

those So from appetite you charters. Is from of there three-year the for your have more side a charter and side? of couple there done an

Loukas Barmparis

available in per were October on the when market hitting freight was charters $XX,XXX these of early $XX,XXX, Look, the Capes. day levels

secure along with considered at it time. business came that prudent with charters So charters. these We to this proposals these

in the So that see because weeks. things come last the settle right charters now, when volatility available we market sure But the recent of of down. this don't am I three-year will back

said $XX,XXX next not before, of is around all wish As market n I of And an we sectors for stays uncertain this whole spot market. the year.

Magnus Fyhr

Thanks I That's too. so my answering had. I hope Yes. questions. all for

Loukas Barmparis

Thank you.

Konstantinos Adamopoulos

you. Thank

Operator

Thank you.

is Please now go We the Jeffries. from Randy the of This will ahead. line take question. from next Giveans

Randy Giveans

Hello gentlemen. How is it going?

Loukas Barmparis

fine. am I Hi.

Randy Giveans

All right.

just expected debt guess average year I recent on amort your of maybe weighted interest following is and now rate So then up of for and kind XXXX? the some what expense your for refinancings, interest next

Konstantinos Adamopoulos

are amortization, on number rates. Debt have Basically, I XX. we low very we think, interest showing slide

As have levels, you we kept short XX% good debt. all of almost it know, very at of our

immune a are increase we of So interest against rates. probable

XX% up We some maturing of on telematics that to have XXXX.

is So XXXX very principal that comfortable I $XX in numbers next million. repayment think The year. is the increased are million which to $XX only for

that comfortable of understand the we numbers very So company. are these

the exact follow-up if XX, this calculation, to you can we call. So numbers. On XX, it you you page page send see the after can

Randy Giveans

Got it.

it ATM? think $XX.X on on would you plan that there's for how the of a Is remaining. of ATM, What execute And not to I to Okay. is that decision further the using Do NAV then made? million remainder And reason be basis? kind just eminently? or based this

Konstantinos Adamopoulos

from the do at time. execute ATM we Look, to We any continuously don't necessarily ATM time or the price.

see in us some the market and coming out sell So portion. may you

We the the executed. know we last because the rush and pricing cash how don't year execute conditions have is continuation And and perform, the and the market in amount reserve. liquidity cash based feel We said, and well don't figure the about have price. stock we to really of we as on at substantial we ATM have of, this a any million started you $XX which exactly, ATM not

Randy Giveans

me. for Thanks so that's it much. Well, it. Got

Loukas Barmparis

Thank you.

Operator

through, further are Instructions]. Thank coming you. There questions [Operator sir. no

question. moment, one One please. have We

questions I Thank Our case, been further are there back now. to In the withdrawn. question has hand no will you. speakers that and

A -Loukas Barmparis

to And very are you Thank Thank again have we are forward and quarter in more And for day. we our discuss results. discuss nice all. with you once again a you next today. happy to our looking to

Operator

you. you may disconnect. participating for Thank does you Thank and conclude now That the for today. conference

Safe Bulkers (SB) 5 Nov 212021 Q3 Earnings call transcript