Safe Bulkers, Inc.

Saif Balkas Conference call to discuss the fourth quarter and full year 2021 financial results. Today we have with us from Saif Balkas Chairman and Chief Executive Officer Mr. Paulus Hachioano, President Dr. Lucas Barmparis, and Chief Financial Officer Mr. Konstantinos Adamopoulos. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. for the auto message advising your line is open. Following this conference call, if you need any further information on the conference call or the presentation, please contact Capitalink at 212-661-7566. I must advise you that this conference is being recorded today. Before we begin, please note that this presentation contains forward-looking statements as defined in Section of the Security Exchange Act of 1934, as amended, concerning future events the Company's growth strategy and measures to implement such strategies, including expected vessel acquisition and entering into further charters. Words such as expect, intents, plans, beliefs, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements, Although the company believes that these expectations reflect and such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results are different materially include but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which a company operates, risks associated with operations outside the United States, and other factors listed from time to time in the company's filings with the Security and Exchange Commission. The company expressly disclaims any obligations or undertakings to release publicly any updates or revisions to any in the company's expectations with respect thereto or any changes in events, conditions, or circumstances on which any statement is based. And now I pass the floor to Dr. Barbaris. Please go ahead, sir.

Good morning. I'm Lucas Barbaris, president of SafeBikers. Welcome to our conference call and webcast to discuss the financial results for the fourth quarter and the full year of 2021. We will start our presentation in slide three. We are deeply concerned about the Russian-Ukraine conflict, which, against international laws and logic, has outbroken, and we hope that it will end soon, avoiding further bloodshed in Ukraine. and we don't have any vessels currently sailing in the Black Sea. We intend to comply with the sanctions imposed and we will continue to monitor closely the situation to assess the impact of the war on the global economy and on the dry bark city. As we can see from the slide, major commodity trades will be affected. In slide number four, we present a synopsis of our quarter results. 2021 was a very good year for our companies. We were able to renew our fleet with environmentally advanced vessels, enter into several thermal time chapters, substantially deliverance, and improve our liquidity. As a result of our strong performance, the company is declaring a 5-cent dividend per share. In terms of profitability, we reached $92.4 million. 4 million of EBITDA and 39 cents of adjusted earnings per share. In terms of performance, we reached a time cycle equivalent rate of 26,180, aggregate daily OPEX and GNA of 6.6 thousand. In terms of liquidity and capital resources, we have about 388 million as of March 4, 2022, of which 194 million is in cash. Furthermore, we have additional borrowing capacity in relation to four unencumbered vessels and seven mubilates upon their delivery. Further to that, we have additional borrowing capacity in relation to four existing unencumbered vessels and seven mubilates upon their delivery. Most recently, in February, we have successfully issued €100 million five-year unsecured non-amortizing bond at a coupon of 2.95% per annum. Our secured debt stood at $329.4 million as of March 4, 2022. And we paid $125.3 million for the five second-hand vessels with 8.8 years average age. And we collected $109.8 million for the seven vessels we sold with 14.3 years average age, effectively renewing our fleet with younger and more sufficient vessels. Finally, we declared a dividend of 5 cents per share, noting that at the same time, we are renewing our fleet with second-hand and phase 3 new builds ahead of the competition, and that during 2021, we have successfully delivered our company. Allow me now to guide you through the company's key investment highlights, as presented in slide 5. 3 buckets is top. heritage of 60-plus years of track record, experience, and hands-on management led by police IQR. With strong company-balanced fundamentals, ample liquidity, low leverage, secured cash flows from reliable counterparties, we have secured with nine pay streets here, three new builds, and the replacement of five second-hand vessels. on 2023 onwards. We have an additional revenue yearly capacity of about 20 million plus to our 17 scrubber fitted vessels due to the indicated fuel price differential. Our 40 vessels fleet is 80% comprised of Japanese vessels with superior specifications and commercial and operational upgrades, which call the substantial premium both in shattering and resale value. The order book remains at 20 years low, and market fundamentals are positive for 2022. We believe the campaign is well positioned for the long run, with an environmental-based advantage. Moving on to slide seven, we present the development of a CRB commodity index, which currently stands at a five-year high, with further upside potential. The index reflects basic commodity future prices, for example, energy, agriculture, trade, the board during 2021, and the rapid surge in prices further amplified during 2022, as a result of the ongoing Ukrainian conflict. The general forecast of IMF before the Ukrainian conflict set the global GDP is expected to increase by 2.2% in 2022, supported by recovery-related industrial materials like iron ore, coal, and agriculture, while the expected dry bark feed growth stands at 2% for 2022, which means that the squeeze in the supply of esses may well be a realistic scenario. That is to that, the USA have allocated about $1 trillion of stimulus While China spends yearly about $120 billion on similar infrastructure projects, achieving 8.1% GDP growth in 2021, the best growth pace in a decade. IMF forecasts a 4.8% GDP growth for 2022 and 5.2% for 2023. Lastly, the EU overall recovery package of $2.4 billion for the period of 2021 to 2027 is a further boost for global demand. Let's turn to slide 8 to have a quick look on present charter market conditions. As shown on the top graph, the CAPES market for the year to date continues to be healthy. CAPES lately have been volatile, driven by commodities, commodity dynamics, which we analyzed. The forward trade agreements here present in red color. is about 30,000 to 35,000 for 2022. Similarly, for Panama access, as seen on the bottom graph, the FFA care is about 30,000 to 35,000 for 2022. The prevailing commodities market coupled with strong supply fundamentals are likely to support the freight market throughout 2022. In slide nine, we present our suggested order book deliveries. In this posted expected charter market environment, we have two deliveries in 2022. hiring in 2023 and doing the first quarter of 2024. Our first new-build delivery is in May. In the same slide, in the bottom graph, we also present a record-low order book for the forward years for caves in Panama, Texas. Then, in slide 10, we touch upon the card market valuation of our second-hand acquisitions and of our order book. During the business cycle, as part of our fleet renewal strategy, we have invested in nine new build vessels of the newest design, complying with recent IMO regulations for NOx emissions. Further, we have acquired three Panamats and two Cakes, second-hand vessels, of modern design built in Japanese shipyards. The average acquisition price of our nine new builds was about $32.5 million, as compared with our current average market value, which is about $41.3 million. For the five second hands, the average price was 25.1 million as compared with the current average market value of 28.2 million. This timely stream of investments has created at present an inflated wealth to our shareholders of close to 100 million. Further, the company has previously invested in established technology to 17 of its vessels. versus HFO differential at high levels, which is translated to increase revenues for the scrubber-fitted vessels. Recently, High Five in Singapore stands at about $280 per ton, and according to the future market, the balance for 2022 stands at about $190 per ton. The scrubber-fitted Post Panamax burns about 7,500 metric tons per year, pushing the implied scrubber gain return of about $25 million per ton. All in all, our fleet renewable strategy represents a significant increase of the intrinsic value of our company of about 120 million. Now let me pass the floor to our CFO, Konstantinos Adamopoulos, for our financial overview. Thank you, Lucas, and good morning to everyone.

Let me start with our quarterly financial highlights shown in slide 12. During the first quarter, the fourth quarter of 2021, we operated in a significantly improved charter market, Lower interest expenses, reduced mortgage expenses, and increased revenues also include earnings from scrubber-fitted vessels. Accordingly, net revenues stood at $92.4 million versus $52.2 million last year. Net revenues increased by 77% compared to the same period in 2020, mainly due to the increased time chart equivalent rate as a result of the improved market, assisted by the additional revenues earned by scrubber-fitted vessels. We had a TCE of $26,180 compared to a TCE of $12,390 during the same period in 2020. The net income for the fourth quarter of 2021 reached $65.2 million compared to net income of $7.6 million during the same period in 2020. Our daily time charter. A daily OPEX stood at $5,149 versus $3,978, and a daily OPEX excluding dry docking and Invention operating expenses increased mainly affected by increased dry docking expenses, increased spare parts, stores and provisions related to works performed due to dry dockings, increased provisions of technical services and increased crew and battalion expenses due to COVID-19. The aggregate figure for both OPEX and GNA for the last quarter of 2021 was $6,183, demonstrating our focus on lean operations. We believe this number for both OPEX and GNA is one of the industry's lower as we include in OPEX all our dry dockings and pre-delivery expenses and in our GNA our management fees, directors and offices compensation as well as all expenses related to the administration of our company. Our adjusted EBITDA for the fourth quarter of 2021 Our adjusted earnings per share for the fourth quarter of 2021 was 39 cents, calculated on a weighted average number of 121.6 million shares, compared to 4 cents during the same period in 2020, calculated on a weighted average number of 102.2 million shares. Let's conclude our presentation in slide 13. the same period of 2020. As a general note, 2021 was a very good year for our company. We were able to place orders, renew our fleet with environmentally advanced vessels, enter into several favorable time charters, substantially leverage and improve our liquidity. As a result of our performance, the company's board of directors has decided to declare a five-cent dividend to the common share. In addition, in February of last month, we have successfully issued a five-year unsecured bond in the amount of 100 million euros, guaranteed by safe markets, with a coupon of 2.95% due semi-annually. We would like to emphasize that the company is maintaining a healthy liquidity position of about 194 million as of March 4, and another 194 million of RCF, and secure commitments, resulting in a combined liquidity of about $388 million that provides us with significant power. Our present list presents in more detail our financial and operational results, and now we are ready to take your questions.