Safe Bulkers, Inc.

Ladies and gentlemen, and welcome to the Safe Bunkers conference call to discuss the first quarter 2022 financial results. Today we have with us from Safe Bunkers, Chairman and Chief Executive Officer, Mr. Polis Hagiwano, President Dr. Lucas Bamparas, 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. to ask a question, please press star 1 on your telephone keypad and wait for the 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 Capital Link at 212-661-7566. I must advise you that this conference is being recorded today. Before we begin, please note that this presentation as amended, and Section 21E of the Securities Exchange Act of 1934 as amended concerning future events, the company's growth strategy, and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risk 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 to differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitive factors in the market in which risks associated with operations outside the United States, and other factors listed from time to time in the company's filings with the Securities and Exchange Commission. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with respect thereto or any change in events. conditions or circumstances on which any statement is based. And now I pass the floor to Dr. Baramparas. Please go ahead, sir.

Dr. Good morning. I'm Lucas Barbaris, President of St. Bacchus. Welcome to our conference call and webcast to discuss the financial results for the first quarter of 2022. Let's start our presentation in slide three. of 2021 profitability by 15 million, reaching a net revenue of 77.7 million and a net income of 36.4 million. We delivered our balance sheet year over year by more than €200 million, reducing our debt to comparable levels to our flip-strapped value. We issued and listed €100 million five-year unsecured non-amortizing bond with a fixed coupon of €295 million and maintained significant liquidity and capital resources of €298 million. We have redeemed in April 2022 more than a quarter of our 8% preferred shares, improving our weighted average cost of capital. Furthermore, we have a significant cash flow visibility with over 400 million of these other contracts. At the same time, we continue to focus on fleet renewal and expansion with eight Phase III new builds on order and 42 versions on the water with an average fleet age of 10.4 years. In May, we took delivery of our first Phase 3 Gamsermas-class MV Vassos and have also expanded our cape-sized fleet to seven vessels. Our financial strength enables us to declare a dividend of 5 cents per common share, noting that at the same time we are renewing our fleet with second-hand and Phase 3 newbies ahead of the competition. Allow me now to guide you through the company's key investment highlights. Sheik Barker is a top 10 pure dry bulk vessel owner in Panama segment with a heritage of 60 years plus and a track record experience and hands-on management led by Boris Vihadzioan. With a strong company balance sheet, fundamentals, ample liquidity, leverage at comparable levels to flip-stop value, and secure cash flows from reliable counterparts, with eight phase three tier three newbies. Our fleet expansion and you are ahead of peer competition and ahead of the expansion We have 463 million contract revenues. 25% of our fleet is contracted for more than one year. Our fleet average charter period duration is about 1.2 years. And we have an additional yearly revenue capacity of about 20 million plus. with superior modifications and commercial and operational upgrades, which call the substantial premium both in shuttering and resale value. The order book remains at 20 years low, and market fundamentals are positive for the remaining of 2022. We believe that the company is well positioned for the long run, with an environmental-based advantage. Moving to slide 5, we highlight certain key figures in sales budgets. All numbers presented are as of Q8, and more specifically, our liquidity and capital resources are $359 million, consisting of $166 million in cash and $193 million in undrawn available revolving reducing credit passivities and secure commitments. Furthermore, we have contracted revenue of $426 million, head of commissions, from our non-cancellable spot and period time charter contracts. Our capex were €243 million in relation to these nine Phase III new builds, the first of which we took delivery a few days ago. And we had €409 million of outstanding consolidated debt, including our €100 million unsecured bond issued in February 2022. Our fleet scrap value of 395 million is presented in the last column on the right, and it's calculated in the base of our fleet aggregate lightweight tons and scrap rate of 662 per lightweight ton, again, ask of quarter end. On top of our liquidated and capital resources, we had ask of quarter end and additional borrowing capacity in relation to five unencumbered vessels and seven new builds upon their delivery. Moving on to slide seven, and the dry bark market, we present the development of the CRB Commodity Index, which currently stands at a five-year high with further upside potential. The index reflects basic commodities future prices, for example, energy, agriculture, precious metals, and industrial materials, which represent limited indicators for shipping. As a result of the ongoing Russian-Ukraine war, we have witnessed a rapid surge in prices during 2022. The updated forecast of IMF in April following the Russian-Ukraine war sets the global GDP previously, and at 3.6% for 2023, which is again lower from 3.8% previously. In addition, the global projections for inflation started at 5.7% in advanced economies and 8.7% in energy. lockdowns and the Russia-Ukraine war. The forecasted global dry bulk tonne mild demand is expected to increase by 2.2% in 2022, supported by the industrial materials like iron ore, coal, and agricultural, while the expected dry bulk net fleet growth stands at 2.1% for 2022, which means that a squeeze in the supply of vessels may well be a realistic scenario. Let's go to the As shown on the top graph, the CAPE market for the year to date continues to be healthy. CAPE lately has been volatile, driven by the commodities dynamics which have analyzed. forward freight agreement curve, which is in red color, is about 30,000 to 35,000 for 2022. Similarly for Panamax, in the lower part of the graph, the FFA curve is about 25,000 to 30,000 for 2022. The prevailing commodities market, coupled with strong supply fundamentals, are likely to support the freight market throughout 2022. In slide nine, we'll present our scheduled order book deliveries. In this post-discharge market environment, we have one more delivery in 2022 following the delivery of our first phase, our first Tapsa Maxingubil vessel a few days ago, five in 2023, and two in the first quarter of 2022. In the same slide in the bottom graph, we also present a record low order book for the forward years for cakes and paramount vessels. The supply fundamentals are strong, as we witness a historically low order book and a shortage in city capacity, which is mainly covered by other sectors, orders, mainly container ships and tankers. Then in slide number 10, we focus on increasing value of which is about $150 million. Before this business cycle, as part of our fleet renewal strategy, we have invested in nine new builds of the newest design, combined with the IMO regulation for CO2 and NOx emissions. Thirdly, we have acquired three Panamax and three Gates second-hand letters, built in Japanese secret. The average acquisition price of our nine new bits was about $32.5 million, as compared with the current average market value of about $42.5 million. For the six second-hand vessels, the average price was $25.9 million, as compared with the current average market value of $31.9 million. This timely stream of investments has appreciated by about $125 million. Furthermore, the company has previously invested in scrubber technology for 17 of its vessels. The surge in fuel prices in the last months, which is more evident in today's market, has pushed very low sulfur fuel oil versus high sulfur fuel oil differential at high levels. The high five in Singapore stands at about $280 per ton. And according to the future markets, the balance for 2022 stands at about $190 per ton. A scrubber-fitted post-Panama expense of about 7,500 metric tons per year, pushing the implied scrubber gain potential to about 24 million per annum in aggregate for our company's 17 scrubber-fitted vessels. As a result, this intrinsic value of the company is calculated at 150 million approximately. Let's summarize companies' and market takeaways in slide 11. Safe Balkans has a strong upside with new the expansion, and strong balance sheet with leverage comparable to flip-scrap value, future visibility of contracted cash flows. We reward our shareholders with a sustainable dividend policy coupled with our clear renewal strategy. At the same time, the market has strong fundamentals. With limited dry bulk fleet expansion for the next couple of years, and new and forthcoming environmental legislation that sets new standards for shipping, we believe that safe values will be in the forefront of environmental-based competitiveness, with new builds ahead of competition, upgrades in existing fleet, use of biofuels, and research for alternative fuels. 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 in strike 13. During the first quarter of 2022, we operated in an improved charter market environment compared to the same period of 2021, with lower interest expense and increased revenues, which also include an Net revenues increased by 24% compared to the same period in 2021, mainly due to the increased TCE rate as a result of the improved market, which was also assisted by the additional revenues earned by our scrap refitted vessels. We had a TCE of $21,352 compared to a TCE of $15,567 during the same period in 2021. 21.3 million during the same period of 2021. A daily OPEX stood at $5,722 compared to $4,702 last year. A daily OPEX excluding dry docking and pre-delivery expenses stood at $4,923 versus $4,350 last year. Vessel operating expenses increased mainly due to the COVID-19 pandemic. The aggregate figure for OPEX and GNA for the first quarter of 2022 was $7,242. This includes all dry docking and pre-delivery expenses and all director and officers' compensation. Our adjusted EBITDA for the first quarter of 2022 increased to $46.9 million compared to $34.6 million for the same period of 2021. million shares, compared to 14 cents during the same period in 2021, calculated on a weighted average number of 103.4 million shares. Let's conclude our presentation on slide 14 with our quarterly operational highlights for the first quarter of 2022, compared to the same period of 2021. We were able to enter into several favorable time charters, substantially delivering As a result of our performance, the Company's Board of Directors decided to declare a 5-cent dividend per common share. position of around $141.5 million as of May 22, and an additional $156.6 million in RCF and secure commitments, combined liquidity of less than $300 million, provides us with significant firepower. Furthermore, An additional borrowing capacity in relation to seven new builds upon their delivery and six existing debt-free vessels. Our present list presents in more detail our financial and operational results, and now we are ready to take your questions.