Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the SafePolkers conference call to discuss the first quarter 2023 financial results. Today we have with us Mr. Paulus Hadjianou, Chairman and Chief Executive Officer, Dr. Lucas Fompras, President, and Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. Following this call, if you need any further information on the conference call or on the presentation, please contact Capital Inc. 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 27A of the Securities Act of 1933 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 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 to differ materially include, but are not limited to, changes in the demand for dry bulk vessels, competitor factors in the market in which the 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 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'll pass the floor to Dr. Barampas. Please go ahead, sir.

Good morning. I'm Lucas Barbaris, president of SafeBuyGas. Welcome to our conference call and the opportunity to discuss the financial gaps for the first quarter of 2023. During the first quarter of 2023, we operated in a relatively weak market compared to the previous year. Having comfortable liquidity and leverage, we terminated the APM program, which has not been in use since September 2021. We have continued our buyback program, targeting 10 million shares, our weekly repurchase, and we collect a dividend of 5 cents per share of common stock. Our balance sheet is strong with significant cuts in development capacity. Our capital requirements are substantially covered by our conducted future revenues, and our capital structure is conservative. Now, let's start with the market update in slide three. We present on the graphs the current status of the market. Capes have recovered from their recent loge and drive-back freight markets. Overall, they recovered with China's easing zero-COVID policy and limited active supply in New Zealand. Ferry congestion has declined with lower import demand and the easing of supply chain issues. In the Panamax, the prevailing commodities market is likely to provide support to the freight market throughout the second half of this year. It's worth noting that all our grapes are pre-extracted at an average daily rate of $24,000. Moving on to slide four, we present the development of our CRD commodity index reflecting the basic commodity features of future prices, for example, energy, agriculture, precious metals, and industrial metals, which represent leading indicators for shipping. Also, the index... Currently priced at high levels, commodity prices declined sharply over the past six months, following the posted record high levels of last year's historical taking in June 2022. After rising by 45% in 2022, commodity prices are projected to fall by 21% in 2023. We continue to wait for the rise in several bank interest rates as currency majors are and to fight inflation and national war consequences. The policy is expected to affect the global output. The April caucus of IMF said the expected growth of global GDP to 2.8% for 2023, as global inflation projection for 2023 stands at 7%, means that there is use of broadly priced futures and food and energy prices, and because the leading supply-demand imbalances. In this environment, the forecasted global drive-back demand growth is expected to increase only by 2% in 2023, with the forecasted growth in iron ore by 1%. Asset obstruction activity remains muted, with an expected drop in coal import demand as a result of higher connected mining in India and China. Again, the failure of this outlook for demand remains frosty. growth affected the wheat and maize harvests in major exporting countries like USA and Argentina. In China, there is less air protection growth in 2023, back at 5.2%, with nature global in dry pastures still on this. Yield to growth regarded to 4.5% year-on-year in P1-2023, compared to 9% in P4-2022. This was a serious lead recovery, as sales contributed by 3.1% to growth, whereas the industry contribution accounted for 1.2%. In March, the normal production of BMI rose to 58.2%, the highest level in other industries, and the manufacturing BMI to 51.9%. Metal prices fell by 3% in March in the search of a less metal intensive recovery in China. India's emergence The global economy is shocked and perplexed quickly on the course of the war in Ukraine, and the president preferred pandemic-related supply-side disruptions to exactly China. The World Bank Commodity Price Index declined by 32% after the World Bank's early 2023 projection, surpassing a 31% rise in commodities for the fall of 2023. On the supply side, as you can see on slide 5, the total drive-by orders have fallen a single bit. For this reason, we remain cautious about the median prospects of the trade market, because for more than 25% of the median side flip is further than 15 years, but scrapping is expected to accelerate as a combined effect of the COVID-19 and other regulations kicking in from the 1st of January 2023. It is worth noting that Japanese ships have more efficient design compared to Chinese. 80% of our fleet in Japan is built by 30% of the global fleet, which means that our fleet consists of more efficient vessels compared to the market average and can compete better in the new environment. Furthermore, we have one of the very low very few global companies, with such an extensive orderly set of ideas. However, the invention remains exactly a new athlete, and compete on the basis of operational and environmental performance. As you can see, the majority of global fleet is out of airfares. Only about 10% of the drive-by fleet is expected to come out of the EXI, without requiring modification air upgrades. So, that is only the day optical vessels have strike airships built after 2015, and the trips in order to strike the PS3 units, several of which we have been delivered by the end of 2023, and at the same time, a major ongoing environmental upgrade program, increasing the energy efficiency, and that is giving us CO2 emissions in our grid, completing our breaks in 20 vessels by the end of 2023. while the most advantage is using combined time-tied fields and monitoring the development of organic fields. Continuing our market view in slide 7, during M2023, there has been an increase in industry-wide productivity driven by geopolitical disruptions and tight monetary policy. Development-based developmental regulations and hearings become increasingly important in the data space, and as a result, the market's technological efficiency creates opportunities for those willing to invest as soon as the market has done. Such environmental-efficient fleets may affect company valuations, and you need to put your market with preferential engineering capacity for such vessels. Furthermore, the combined effect of the aging of the fleets, the low order book, and the new regulations will favor fleets with more efficient Japanese vessels and vessels delivered after 2014. limiting the benefits applied, and bettering the market even further. In this market of increased environmental-based competition, let me present slide 8, second of our two characteristics, which differentiate us from our peers. The strong alignment of interest, with 30% management and honest participation, the low leverage of 33%, the comfortable liquidity and competitive leverage, our track record, the creation of inclusive value through an extensive fleet expansion program, with four-phase 3D lubricants, and we are upgrading all of these equipment, including installation of new scrubs. All of our equipment will have scrubs by the end of 2024, and 20 of these will be environmentally upgraded by the end of this year. We are taking delivery of three-phase 3D lubricants already, which are the best-performing devices on the market globally. We intend to compete on the basis of low fuel consumption and environmental performance in the following years. Let's now focus on our liquidity, our cash flows, and our factor structure, as we will in Flight 9. By maintaining a comfortable leverage of 33%, our debt of $430.2 million is comparable to our fleet's graph value, which presently is $389.4 million, although our producer, to 10.6 U.S. shares. Our rated average interest rate stood at 4.63% for our consolidated debt, with a proportion of 100 million euros fixed at a 2.95 coupon in an instituted high-tier bank. We have paid 72.8 million for our capital exchange requirements in relation to our overdue of 9 million, and the remaining capital exchanges are 234.5 million in overdue. I will be concluding In terms of research, it starts at $359.9 million, $659.9 million, which, together with a contract revenue of $282.1 million, provides an extraordinary margin in capital allocation. First of all, we have additional bearing capacity in relation to certain existing and intended sources, and five units are going to be needed. Moving to our dividend point in slide 10, we declared a dividend of $0.05 per share over the last six consecutive quarters, rewarding our share holders. At the same time, we had an active common share buyback program. Under which, we have already repurchased 8.3 million shares as of May 2023, out of the total of 10 million shares currently authorized under the repurchased program. Furthermore, we have terminated the AT&T drop-in program. Under which, the last sale had occurred in September 2021. The focal point in this uncertainty of the capital markets and the world economy is that we continue to direct a portion of our free cash flows to current size unique among peers using the program that will provide us with competitive abundance in terms of fuel consumption and environmental performance while maintaining our leverage at relatively low levels. Now let me summarize the investment rationale of Save Bibles in slide 11. We believe that safe values from common members offer an answer that you need to reflect market challenges and their short opportunities. Safe values with each other book is among those elements that navigate environmental challenges of limited condition that they aid in dry, dry bodies and tackle the global uncertainties by utilizing the integrated qualities of its fleet and the efficiencies of its large scale environmental available programs. In part of the company's expansion, we offer a meaningful deal because we believe we are efficient for the long run with an environmental-based advantage. With our strong balances, our individuality, leverage, and comparable level of food scrap value, secure cash flows from reliable kinds of parties, we have deep-focused food expansion with 10.3 million dollars. As part of our PSF position and as part of our environmental relations, the company experienced management teams In that position, I get market scientists and funds ready to take advantage of market opportunities. Now, let me pass the floor to our CEO, Kostas Aguilar-Satanopoulos, for our financial overview. Thank you, Lucas, and good morning to all of you. On a general note, during this quarter, we operated in a gradually weakened insider market environment compared to the same period in 2022. We've decreased revenue due to lower highs, increased earnings from started field investments, increased operating expenses, and higher interest expenses due to increased interest rates. In slide 12, we present a strong chartering performance as an example of our management alignment. We had a fine chartering equivalent of $3,760 compared to $21,352 during the same period in 2032. Net income for the first quarter of 2023 is $19.3 million, compared to net income of $36.4 million during the same period in 2022. Our daily running expenses stood at $5,550, which is $5,722 last year, while our daily running expenses, excluding white documents, stood at $5,132, That is $4,923 for the Q1 of 2022. Our only NOPEX and GMA for Q1 2023, which we believe is one of the most competitive compared to our peers, is still at $7,043. And we know that this includes all our driving documents, we believe, and expenses, as well as all our director and officer's commentations. Moving on to slide 17, we have properly financed a highlight for the first quarter of 2023 compared to the same period in 2022. Our adjusted revenue for the first quarter of 2023 stood at $83.1 million, compared to $46.1 million for the same period in 2022. Our adjusted earnings per share for the first quarter of 2023 was $0.10, calculated on the weighted average number of 18.4 million shares, compared to 24 cents during the same period in 2022, calculated in a weighted average number of 121.6 million shares. The presented slide contains our quarterly operational highlights for the first quarter of 2023, compared to the same period of 2022. We operated for 43.83 percent on average earning an average time charge of $15,760, compared to 39.54 vessels, earning an average time charge of $21,350 in the same period in 2022. On slide 15, we present our low procurement points for Q1-23, which we believe is one of the lowest in England. The global economy is experiencing multiple challenges. Inflation is higher than seen in several decades. Highly financial conditions in most regions. And Russia's continued war in Ukraine weighs heavily on the market value. Russia's main focus is lean operations based on inflationary environment. Based on a satisfactory financial performance, The company is funded by a record $5 trillion per commons year. We would like to emphasize that the company is maintaining a hedged-cash position of about $90.7 million as of May 2022, another $119 million in regulatory facilities, an additional $148.2 million in unbound borrowing capacity, We have a high liquidity in capital resources of $351 million that provides us with significant credit and power. Additionally, we have contracted revenue from our non-cancelable spending period and target standards in the case of $285 million in other commissions and excluding standard revenue for certain vessels, as well as additional borrowing capacity in relation to certain and in-campus existing vessels Thank you, and we are now ready for the Q&A session. Thank you. At this time, we'll be conducting a question and answer session.

If you would like to ask a question today, please press star 1 from your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Let's get a star 1. Thank you. Thank you, and our first question is from the line of Chris Weatherby with Citigroup. Please proceed with your questions. Hey, thanks.