Safe Bulkers, Inc.

Thank you for standing by ladies and gentlemen, and welcome to the safe focus conference call and fourth quarter, 2024 financial results. We have Mr. Polis, Haji Awanu, chairman and chief executive officer, Dr. Lucas Bumpadis, president and Mr. Constantinos, Adam Oopolis, chief financial officer of the company. At this time, our participants are in a listen only mode. There will be a presentation followed by question answer session, at which time, if you would like to ask a question, please press star one 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 the presentation, please contact capital link at -661-7566. I must advise you that this conference is being recorded today. The archive webcast of the conference call will soon be made available on the safe focus website at .safefocus.com. At this time, I'd like to turn the conference over to Dr. Lucas Bumpadis. Please go ahead, sir.

Good morning to all. I'm Lucas Bumpadis, president of Safe Bunkers and I'm welcoming you to our quarterly financial results. We are bringing shatter rates for environmentally upgraded vessels and our phase three new builds and benefiting from our caves that have period time shatters. It seems that our policy for renewing our fleet and upgrading the existing vessel works and offers additional operational financial advantages. The shatter market weakened during the fourth quarter of 2024 and this impacted our revenues and profitability. In this environment, our company maintains a strong capital structure with required liquidity with a leverage of about 35% and we have declared a five cents per share dividend rewarding our common shareholders. We remain focused on capital allocation, to which our new build program on improving operational efficiency and the environmental footprint and all our actions are targeting to increase the wealth of our shareholders. Following the conversation, you have the forward looking statements presented in slide two. Let's begin with a market update in slide four. The cave market segment has been moving down, sorry, the cave market segment has been moving downwards throughout the quarter. All eight of our caves are presently period shattered with an average remaining shattered duration of over two years and another daily shatter rate of $22,000. This provides us with a considerable degree of cash flow visibility, topping 145 million in contracted revenue from caves alone. On the Panama front, the shattered market stands soft at 9,000 with signs of improvement. Moving now to slide five, we will present an overview of the CRD commodity index fluctuation in basic commodity prices. The rising tariffs elevate policy uncertainty and pose a considerable downside for global growth and against disinflation. The rising fears of higher for longer interest rates from central banks and lower investments globally in the context of this policy uncertainty. For our segment, we anticipate a relatively softer freight market over the following quarters as supply grows faster than demand and we expect an increasing focus on increasing decarbonization and on energy efficient new builds. The decision of the MBC83 in April about the global fuel standard and the levy will detect the pace towards decarbonization. The global GDP growth expectations for 2025 and 2026 as reflected in the IMF's January forecast call for a growth around .3% in the coming years, accompanied by a gradual control of inflationary pressures. According to BIMCO, the forecasted global dry bulk demand will fall by 1% in 2025, followed by growth of .5% in 2026, with minor bulk being the best performing sector. China's slower growth may hinder demand for dry bulk commodities like iron ore and coal. Iron ore shipments are estimated to grow slightly, but with Chinese demand and increased recycle steel usage, are anticipated to restrict growth. Coal shipments may drop by about .5% due to rising renewable energy in Asia and increased coal production in China and India. Grain shipments are predicted to rise by 2%, but main supply remains tight, particularly for Ukraine, although this might change if a peace treaty is effective during 2025. Minor bulk shipments, including bauxite, are expected to be a key growth driver as demand increases due to the area's transition. The IMF project projects China's GDP growth to be .6% in 2025 and .5% in 2026, signaling a faster than expected slowdown in consumption amid delayed stabilization in the property market and persistently low consumer confidence. Also, this projection reflects carryover from 2024, and the fiscal package announced in November largely offsetting the negative effect on investment from heightened trade policy uncertainty and property market drag. Trade barriers, tariffs, and external pressures could limit China's growth potential. The weakness in the steel and construction sector is expected to reduce demand for key commodities such as iron ore. India, on the other hand, continues to perform as expected, this projection to experience the fastest growth among major economies with a forecasted .5% GDP increase in 2025 and 2026. Increased renewable energy and industrial growth will be key drivers for India's economic momentum. Each expanding domestic market and manufacturing sector may continue to contribute positively to the drive back demand, with infrastructure investments playing a vital role. Let's proceed now to examine the supply side dynamics in slide 6. Supply growth is expected to outpace demand, exerting pressure on trade trades. The drive back fleet is projected to grow by about .8% on average in 2025 and 2026, due to stable new deliverance and increased recycling with Panama's vessels comprising the largest share. The order book now stands at about .6% of the current fleet and the new bridge orders have slowed. Asset prices weakened during the second half of 2024 and are projected to weaken further and the secondary ship prices may fall in line with freight market. Recycling volumes are anticipated to rise as weaker market conditions could prompt the retirement of older vessels. Only 13% of ship's capacity in the order book will be capable of using alternative fuels upon delivery, and an additional 14% will be ready for future conversion. Out of the capable ships, 41% may use LNG, 37% methanol, and 23% are expected to use ammonia. We believe that energy efficient designs will have an abundance in the coming years, and we expect that environmental emissions regulations are going to drive 1% fall in fleet speed in 2025 and 2026, affecting supply by about the same percentage. Currently, about 25% of existing global fleet is older than 15 years. Saint Barthes fleet now counts .3% of the water, all delivered after 2022. In addition, we have 11 eco ships which have superior design efficiencies compared to the past. 80% of our fleet comprises of Japanese-built vessels, surpassing the global average of 40% with our average fleet aging about 10 years old. We will continue to become even more commercially competitive as we have an order book of seven more phase III vessels placed at prices well below the prevailing market to be delivered to us within the next two years. Overall, our fleet today is fundamentally upgraded and commercially more competitive than two years ago, underscoring our commitment to sustainable business. The increasing impact of fleet aging and -never-ending regulations will position our fleet favorably to compete within the season greenhouse gas targets. Moving to slide 8 for our company update, we will present an overview of our green fleet abundance. The breakdown is presented in the top right half, comprising of 46 vessels with 24 having undergone environmental upgrades, 11 being phase III vessels, and 11 being eco vessels. The bottom graph presents our fleet renewal strategy with the investment of 14 older vessels, acquisition of seven second-hand vessels, delivery of 11 phase III nubes, and an order book comprising of seven more phase III nubes, resulting to a relatively stable 10-year average fleet age over the past four years, as we are representing slide 9, a trajectory of fleet expansion serving as a testament to our commitment towards sustainability. In slide 10, we present a safe-backed debt profile for the next couple of years, which stands at very comfortable levels throughout that period with adequate room for our cap spending. As of December 31, 2024, our consolidated debt before deferred financing costs stood at 545 million, including the 100 million euros unsecured bond 295 fixed coupon maturing in February 2027. Our consolidated leverage stands at a comfortable 35%, with our next debt per vessel stood just below 9 million dollars for another age-age fleet of just 10 years old. Concluding the company update in slide 11, we present safe-backed skid attributes such as our sterling 65-year track record, robust management ownership alignment, comfortable leverage of 35%, our ample liquidity of 276 million, our significant contracted backlog of 205 million, our green fleet abundance evidenced by .4% decrease in fleet AER. ZHG emissions and by outright BMS standards management system implementation. We remain true in our commitment to expand by building a resilient company, owing equality and competitive fleet strategically positioned to leverage on the regulatory landscape and create long-term wealth for our shareholders. I now pass the floor to our CFO, Mr. Darmopoulos, for our quarterly financial overview.

Mr. Darmopoulos,

the

floor is yours. Thank you, Lucas, and good morning to everyone. During the fourth quarter of 2024, we operated in a weaker charter market environment compared to the same period in 2023. We decreased revenues due to lower charter highs, decreased earnings from standard-fitted vessels, and increased operating expenses. Let us focus now on our liquidity, cash flows, and our capital structure as presented in slide 13. We maintain a comfortable leverage of 35%, our debt of $545 million remains comparable to our flip-strap value of $331 million, although our debt is just 10 years old. Our weighted average interest rate of our debt stood at .12% for our consolidated debt, with a portion of 100 million euros being fixed at .95% coupon in an unsecured five-year bond. We have already paid 84 million or 29% for our capex in relation to our outstanding order book. Our liquidity and capital resources stand strong at approximately $276 million, which together with a contracted revenue of about $205 million makes a total of $481 million, and this is more than double our outstanding capex of $206 million in new builds, providing flexibility to our management in capital allocation. Furthermore, we have additional borrowing capacity in relation to those seven new builds upon their delivery. We strive to ensure that our capital expenditure is adequately covered by our contracted future revenues, fortifying our balance sheet towards a trajectory of sustainable growth. Moving on to slide 14, with our quarterly financial highlights for the fourth quarter of 2024 compared to the same period of 2023. Our adjusted debit for the fourth quarter of 2024 was $40.7 million compared to $50.7 million for the same period of 2023. Our adjusted earnings per share for the fourth quarter of 2024 was $0.15. This calculated on a weighted average number of 106.4 million shares. In comparison to $0.25 during the same period in 2023, that calculated on a weighted average number of 111.6 million shares. In slide 15, we present an overview of our quarterly operational highlights for the fourth quarter of 2024 compared to the same period of 2023. During that quarter, we operated 45.9 vessels on average, earning an average TCE of $16,521. In comparison to 45.93 vessels, earning an average TCE of $18,321. A company's net income for the fourth quarter of 2024 was $19.4 million compared to net income of $27.6 million during the same period in 2023. Concluding our presentation, we would like to highlight that based on our financial performance, the company's Porto directors declared a 5 cent dividend per commercial. We would like to emphasize that the company is maintaining a healthy cash position of about $130 million as of February 14, 2025. Another $165 million in available rewarding credit facilities. A combined liquidity and capital resources of $295 million. Furthermore, we have contracted revenue from our non-consumerable sport and period-time charter records of almost $200 million net of commission and before scrubber revenue. And additional borrowing capacity in relation to serving new bids upon their delivery. We believe our strong liquidity and our comfortable leverage will enable us to expand the fleet, build a resilient company and create long-term prosperity for our shareholders. This concludes our presentation. We are now ready for the Q&A session.

Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove yourself from the queue. For participants using secret equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 at this time. One moment while we pull for our first question. Our first question comes from Omar Nakhda with Jeffreys. Please proceed.

Thank you. Hey guys, good afternoon. Thank you for the update. I guess just a couple questions on my end and maybe just perhaps first on the shared buyback. You announced the 5 million program in November. You went to work fairly quickly buying 1.5 million, but in December you went ahead and terminated it. So I just want to get a sense, was there a trigger maybe that kickstarted the buyback program and was there something that caused you to terminate it outright? Or is it just the way safe brokers tend to do it's shared buyback?

Look, from time to time we are doing buyback programs, especially when we feel that our market, the price of the stock market is very low. And we execute always a portion of it. So this has happened in the past, it can happen again in the future. We believe really that the asset, the valuation of our company is quite low compared to the net asset value. Especially because we have made all these investments since the last two years. We have upgraded our fleet, we have renewed our fleet, we have new builds. And we offer to our shareholders a solution where when they invest on us, they have the ability to invest in a company which basically has a better operation in financial prospects with the same number of ships. Because they run with a lower fuel consumption and advanced energy efficiency. Actually, if I may add what Luca said, sometimes a company evaluates a program also related to the current trade market. If the company feels that the current trade market is not performing or it's too much weaker than what we thought it would be, we may slow it down or we may stop it for a quarter and continue later. The purpose of all these parameters is on a daily basis as the program develops and as the market develops. When we have a more clear sight of the market, the program can always be re-insured in

the next quarter.

When you have a trade market approaching or reaching all its expenses, like in late December, and you consider the buyback program, it could wait for a couple of months.

Maybe just a follow-up, in terms of the underlying NAP itself and what we've been seeing in asset values, can you give a sense from your perspective, it feels that even though the freight market has softened the past two or three months, asset values, at least from what we're seeing quoted by the various brokers, seem elevated? Would you say that the values are firm or is there just simply not enough business being transacted to have a good sense?

I think that all the ships have been affected by as much as 25%, while younger ships are around 15%. But at the same time, there are many, many orders that have made a lot of money, especially in other categories like tankers or container ships, but they're always looking to buy in a cheaper sector, which is at the moment the dry bank sector. So I don't think that the prices have a long way to go unless the trade market continues to slide. So if the freight market stabilizes, as it has been in the last few weeks, I don't think that the prices will have a great deal of way to go down, maybe another 5-10%. And at the same time, when buying powers around, especially in the Greek market, I believe that prices will strengthen in the second half of this year, not a lot, but on the current levels.

Thank you. At this time, I would like to turn the call back over to management for closing comments.

Okay, thank you very much for attending this conference call that we had today for the Q4 and the year-end financial results. And we are looking forward to discuss again with you in the following quarter. Thank you very much.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.