Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the SafeVolkers conference call to discuss the third quarter 2023 financial results. Today, we have with us Mr. Paulus Kajiwano, Chairman and Chief Executive Officer, Dr. Lucas Bamparas, President, Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company, and Mr. Thanasis Antonakis, Assistant Chief Financial Officer. 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 conference call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 312-661-7566. 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 estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond to control 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 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 released publicly any updates or revisions to any poor-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 will pass it forward to Dr. Bamparas.

Please go ahead, sir. Good morning. I'm Lucas Barbares, president of SEIC Bargas. Welcome to our conference call and webcast to discuss the financial results for the third quarter of 2023. During the third quarter, our financial performance was weaker, aligned with the charter market, as a result of global economic growth in the 70s. Our new-builds order book, with more efficient basis in our environmental upgrades program on our existing fleet, was complemented with the orders for two methanol dual-fuel new-builds for the fourth quarter of 2026 and for the first quarter of 2027, marking a significant step towards decarbonization. At the same time, we took delivery of our fifth and sixth new builds and rewarded our shareholders with a dividend of five cents per share of common stock. Our capital structure is conservative with significant cash and revolver capacity. Our capex requirements are adequately covered by our contracted future revenues, and our balance sheet is strong. After reviewing the forward-looking statement language in slide two, we may move to slide three. There has been significant volatility in the CAPE market It's worth noting that all our eight capes are period charted with an average remaining charted duration of above two years and an average daily rate of about $23,500, with the market currently at about $18,500. On the Panamax, with the charted market remains somewhat stable. Moving on to slide four, we present the development of the CRB Commodity Index, reflecting the basic commodities, future prices, which represent the leading indicators for shipping, including energy, agriculture, precious metals, and industrial metals. Commodity prices declined sharply over the past months, according to the World Bank Energy Price Index, led by coal minus 12.5 percent, oil minus 3.4 percent, and metal We continue to witness the rise of geoeconomic fragmentation, intensification of geopolitical tensions, noting the Middle East region and increase of interest rates as policymakers aim to fight global inflation. Global headwinds will continue to persist and intensify due to the high global interest rates, geopolitical tensions, and sluggish global demand. As a result, global economic growth is also set to slow down over the medium term against a background of these combined factors. The resilience that global economy or economic activity exhibited earlier this year might fade. raised marginally projected global GDP growth for 2023 to 3% from 2.8% in April, as global inflation projections for 2023 stand at 6.9% due to the war-induced prices, pressures on food and energy prices, and the supply-demand imbalances. According to BIMCO, the forecasted global dry-bulk demand growth stands at 3% increase in 2023. A slowdown is especially concentrated in advanced economies, where high inflation receded, soft landing, expectation of world economy. Growth is emerging in emerging markets, and developing economies remain stable at 4% for 2023, 4.1% for 2024. Battle against inflation is not yet won, with inflation expectations well anchored in major economies. In China, the IMF October projection for GDP growth was 5.1%, even though there are signs that the consumption-led recovery could slow. China recovery seems to be losing steam due to persistent domestic difficulties, such as the elevated debt, weakness in property sector, structural factors such as aging, which weigh on growth, with a Chinese GDP estimation for 2024 to stand at 4.4%, leading to weaker demand. On the other hand, India's growth is set to remain resilient, despite global challenges underpinned by robust domestic demand, strong public infrastructure investments, and a strengthening financial sector, as reflected in IMF's October projection for a 6.3% increase in GDP for 2023. Let's move now to the supply side, as presented in slide 5. The total dry bulk order book stands at single digits. We remain cautiously optimistic about the medium term to prospects of the freight market for the coming years due to the relatively low order book. About 25% of the medium-sized fleet is older than 15 years. Thus, the effect of fleet aging and environmental regulations are expected to accelerate the scrapping. Japanese-built vessels have more efficient designs. 80% of our fleet is Japanese-built versus 40% of the global fleet, which means that our fleet can compete better in the forthcoming environmental-based charter market. We are one of the very few dry bulk companies with a Phase 3 order book ahead of our peers, timely placed at lower prices than the present values in the market, signifying our intention to compete on the basis of operational and environmental performance. As presented in slide 6, we recently took an additional significant step towards decarbonization with a contract for two methanol dual-fuel new builds. These vessels, when powered by green methanol, will be able to produce close to zero greenhouse gas emissions based on a life cycle assessment methodology well to propeller. Following the extensive order book for 12 phase 3 vessels, which were placed timely at relatively low prices, and the environmental upgrade of the existing fleet, we set a clear path towards the decarbonization of our fleet by placing these two additional orders for methanol dual fuel vessels. We believe that the company will have one of the most environmentally competitive fleets the following years. Concluding our market view, in slide 7, there has been an increased industry-wide volatility driven by tight monetary policies, rising fears of geoeconomic fragmentation, and growing signs of global economic losing momentum. Demand for technological efficiency creates opportunities for those willing to invest, as SafeBudgets has done. Such environmental-efficient cleats may lead to a two-tier market with differential in earnings capacity of such cleats. We believe that the combined effect of the aging of the cleat The low water book, lower selling speeds, and the new regulations and the greenhouse gas targets will favor cleats comprising of efficient Japanese vessels and vessels delivered after 2014 tightening the market. We have, as we said already, about 14 new-built vessels that will be brand-new Phase III vessels that will be able to compete with any vessel out there. It is evident that ESG adherence becomes increasingly important for the years to come. Let me now present in brief in slide 8 our recent developments, which include the declaration of a five-cent dividend per common share from the Board, the election of three directors during our annual shareholders' meeting and the delivery of two Phase III new builds, as well as the order of two dual-fuel vessels. In slide 9, we present certain of our key characteristics, which differentiate us from our peers. The key fundamentals and our strong alignment of interests With a significant percentage of management ownership, the comfortable leverage, the ample liquidity and contract revenues, our track record, and of course, the quality and competitiveness of our fleet. Let's focus now on our liquidity, our cash flows, and our capital structure, as presented in slide 10. We are maintaining a comfortable leverage of 35%. Our debt of €449 million remains comparable to our fleet's scrap value of €355 million, although our fleet is only 10.6 years old. Our weighted average interest rate stood at 6.24% for our consolidated debt, with a portion of €100 million being fixed and a 2.95% coupon in an unsecured five-year bond. We have paid $71 million for our capital expense requirements in relation to our order book of eight new builds, and the remaining capital expenditure are $233 million, including the recent order of the dual fuel vessels. Our liquidity and capital resources stand strong at approximately $280 million, which together with a contracted revenue of about $250 million, provide flexibility to our management in capital allocation. Furthermore, we have additional borrowing capacity in relation to eight existing unencumbered vessels and six new builds upon their delivery. Before passing the floor to all Assistant CFOs and ISA donates for our financial review, Let me make a note about our strategy of directing cash flows to finance our new build program, which will provide us with a distinct commercial competitive advantage in terms of fuel consumption and environmental performance. We expect that by maintaining a comfortable leverage and a strong balance sheet, this creates the basis for rewarding our shareholders and position-shaped balkes among those companies that will successfully navigate the environmental challenges of the energy transition and of the aging of the dry-balk fleet. Tanasis, the floor is yours.

Thank you, Lucas, and good morning to everyone. As a general note, during the third quarter of 2023, we operated in a weaker charter market environment compared to the same period in 2022. with decreased revenues due to lower hires, decreased earnings from scrabble-free diversions, increased operating expenses, and higher interest rates due to increasing interest rates. Moving on to slide 11, with our quarterly financial highlights for the third quarter of 2023 compared to the same period of 2022. Our adjusted EBITDA for the third quarter of 2023 stood at 30.9 million, compared to 66.9 million for the same period in 2022. Our adjusted earnings per share for the third quarter of 2023 was 8 cents, calculated on a weighted average number of 111.6 million shares, compared to 39 cents during the same period in 2022, calculated on a weighted average number of 120.4 million shares. We present in slide 12 our quarterly operational highlights for the third quarter of 2023 compared to the same period of 2022. During the third quarter of 2023, we operated 44.13 vessels on average, earning a TCE of $14,861 compared to 43.25 vessels, earning an average TCE of $23,400. in 2022. The company's net income for the third quarter of 2023 was 15 million, compared to net income of 51 million during the same period in 2022. Concluding on slide 13, we present our break-even point for Q3 2023. It is evident that the global economy is experiencing multiple challenges. Inflation, higher than seen in several decades, tightening financial conditions in most regions, Russian invasion in Ukraine and the crisis in the Middle East, all weighed heavily on the market outlook. Based on our financial performance, the company's board of directors declared a $0.05 dividend per common share. We would like to emphasize that the company is maintaining a healthy cash position of about $67 million as of November 3, 2023, and another $158 million in RCFs and $53.5 million in undrawn boring capacity, a combined liquidity and capital resources of $278.6 million. Furthermore, we have contracted revenue from our non-custodial spot and period time shutter contracts of $233 million, net of commissions and before strawberry revenue, and additional boring capacity in relation to eight unencumbered existing vessels and six new digs upon their delivery. We believe our strong liquidity and our comfortable leverage will enable us to expand the fleet while still rewarding our shareholders. We are ready now for your questions. Thank you.