Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the SafeVolkers conference call on the first quarter 2024 financial results. We have with us Mr. Paulis Hagiwano, Chairman and Chief Executive Officer, Dr. Lucas Barberis, President, and Mr. Constantinos Andopoulos, Chief Financial Officer of the company. At this time, all participants are in a 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 212-661-7566. I must advise you that this conference is being recorded today, April 30, 2024. The archived webcast of this conference call will soon be made available on the SafeVolkers website at www.SafeVolkers.com. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statements is contained in the first quarter 2024 earnings release, which is also available on the SafeVolkers website, again, www.SafeVolkers.com. I would now like to turn a conference call to one of your speakers today, the president of the company, Dr. Lucas Barberis.

Please go ahead, sir. Good morning to all. I'm Lucas Barbaris, President of Shade Buckets. In the first quarter of 2024, we operated within a more robust market in comparison to the previous year. In alignment with our environmental, social, and governance strategy, we ordered one additional Phase 3 new build. Concurrently, we continue to process of modernizing our fleet by divesting three other vessels. Moreover, we executed the pre-purchase of 4.9 million shares of our common stock, while declaring a dividend of 5 cents per share of common stock. Our strategic focus persists on fostering enduring value for our shareholders and upholding a resilient capital structure. This commitment is further evidenced by our efforts towards a young and energy-efficient fleet, thereby securing operational excellence in anticipation of forthcoming strict environmental regulations. We ensure that our capital expenditure is adequately covered by our contracted future revenues, fortifying our balance towards a trajectory of sustainable growth. Subsequent to a comprehensive review of our forward-looking statements and language presented in slide 2, our attention transitions to the market update in slide 4. Noteworthy is the volatility experienced in the cave market segment. It is pertinent to highlight that all eight of our CAPEs are presently period charted, boosting on average a remaining charted duration of exceeding two years Average daily rate of approximately $24.4,000. This provides us with an appreciable degree of cash flow visibility, notwithstanding the prevailing daily market rate today of around $19.5,000. On the Panamax front, the market is at about $17.2,000. Progressing to slide five, we present an overview of CRB commodity indexes fluctuation in basic commodities future prices. The geopolitical landscape, with tensions in regions such as the Middle East, the Red Sea, and Ukraine, underscores the heightened level of global uncertainty. The global economic recovery is slow but steady. The dryback market is expected to remain strong in 2024, with a tightening supply and demand balance attributed to increased cargo volumes, particularly in the Cape size segment, driven by higher iron ore shipments from Brazil and China. Rerooting away from the Red Sea and Panama Canal has also bolstered demand in smaller segments. There is expectation of gradual control of inflation. Despite the delay in interest rate cuts, the expectation for global economic resilience remains strong. The IMF April forecast of 3.2% expansion in global GDP for both 2024 and 2025 is accompanied by control of inflationary pressures. According to BIMCO, the forecasted global dry bulk demand growth, standard 3%, increased for 2024. In China, the IMF April projection of GDP growth for 2024 stood at 4.6%. China faces challenges, of course, in growth dynamics driven by internal factors, while the resilience of India's robust domestic demand and sustained infrastructure investments emerges as a stabilizing force amidst the prevailing economic uncertainty. Let us now proceed to examine the supply-side dynamics in slide 6. The drive-by order book remains at single-digit percentages. Our outlook remains optimistic regarding the near-to-medium-term trajectory of the freight market, underscored by the low order book. Approximately 25% of the medium-sized fleet surpasses the 15-year mark, increasing the anticipated impact of fleet aging and certain environmental regulations. Vessels constructed in Japan have superior design efficiencies. 85% of our company's fleet comprises Japanese-built vessels, surpassing the global average of 40%. The strategic advantage positions our fleet are favorable to compete within the environmental-based charter market. As one of the few drivable companies with a substantial Phase III order book, strategically positioned below prevailing market valuations, underscore our commitment to compete on the basis of operational environmental excellence. Fleets comprising our efficient Japanese vessels and vessels delivered post-2014 will be able to remain relevant and compete within the season regulatory frameworks and greenhouse gas targets. Another group of our recent developments is presented in slide 8. These include the declaration of $0.05 dividend per common share, divestment of three older vessels, the delivery of two Phase III units, alongside the initiation of orders for two additional Phase III vessels. In slide 9, we present a key attributes such as our robust management ownership alignment, comfortable leverage, ample liquidity, contracted revenues, a steady track record, and the quality and competitiveness of our fleet, strategically positioned to leverage on the regulatory landscape, remaining true in our commitment to expand by building a resilient company and reward our shareholders. Moving to slide 10, we present an insight into the advantage of our green fleet. The breakdown presented in the top right graph underscores the environmental credentials of our fleet, comprising today 46 vessels, with 20 vessels having undergone environmental upgrades, 9 being Phase III and 11 being ECO, and the remaining 6 scheduled to be upgraded within this year. The bottom graph represents our fleet renewal strategy, with a divestment of 12 older vessels, acquisition of seven second-hand vessels, a steadfast ordering comprising of seven plus one phase renewables, resulting to a stable 10-year average fleet age over the past four years, as confirmed by slide 11. This trajectory of fleet expansion serves as a technique to our commitment towards sustainability. I now pass the floor to our CEO, Focus Adinos. Ramopoulos for our quarterly financial overview.

Thank you, Lucas, and good morning to everyone. As a general note, during the first quarter of 2024, we operated in a stronger charter market environment compared to the same period in 2023, with increased revenues due to higher Let us focus now on our liquidity, our cash flows, and our capital structure, as presented in slide 13. We are maintaining a comfortable leverage of 34%. Our debt of $534 million remains comparable to our fleet's value of $338 million, although our fleet is about 10 years old. Our weighted average in the States with a portion of €100 million being fixed at 2.95% coupon in an unsecured five-year bond. We have paid €79 million of our capital expenditure requirement in relation to our existing order book, and the remaining capital expenditure at €201 million. Our liquidity and capital resources stand strong at approximately $215 million, which together with the contracted revenue $76 million provides flexibility to our management in capital allocation. Furthermore, we have additional boarding capacity in relation to seven existing unencumbered vessels and eight new builds upon their delivery. Moving on to slide 14. Our adjusted EBITDA for the first quarter of this year stood at $46.8 million, compared to $33.1 million for the same period in 2023. Our adjusted earnings per share for the first quarter of 2024 was 20 cents, calculated on a weighted average number of 100.4 million shares, compared to 10 cents during the same period in 2023, calculated on a weighted average number of 118.4 million shares. In slide 15, we present our quarterly operational highlights for the first quarter of 2024 in comparison to the same period of 2023. During the first quarter of this year, we operated 47.08 vessels on average, earning a TCE of on average of $18,158, compared to 43.3% earning on average of $18,760 during the same period in 2023. The company's net income for the first quarter of 2024 was $25.3 million, compared to net income of $19.3 million during the same period in 2023. Concluding in slide 16, we present a list of our phase 3 vessels already in our fleet. The global economy is experiencing multiple challenges. Persistent inflation, tight financial conditions, Russian invasion in Ukraine, Middle East crisis all weigh on the market output. Based on financial performance, the company's board of directors declared a 5 cent dividend per common share. We'd like to emphasize that the company is maintaining a healthy cash position of about $82 million as of April 19, 2024. Another $164 million available in the volume credit facilities. Overall, a combined liquidity and capital resources of $246 million. Furthermore, we have contracted non-fasciable spot and period time charter contracts of $274 million. net of commissions, and before scrubbed revenue, as well as additional foreign capacity in relation to seven unencumbered existing ships and eight new builds upon their delivery. We believe our strong liquidity and our comfortable leverage will enable us to expand further and treat while still rewarding our shareholders. This concludes our presentation. We are now ready for the Q&A session.