Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to SafeVolkers conference call for the first quarter 2026 financial results. We have with us today Mr. Paulus Hajiwanu, Chairman and Chief Executive Officer, Dr. Lucas Bamparas, President, and Mr. Constanzos Adamopoulos, 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 call is being recorded today. The archived webcast of the conference call will soon be made available on SafeVolkers' website, www.safevolkers.com. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from results projected from those forward-looking statements. Additional information concerning factors that can cause actual results to differ materially from those in the forward-looking statements is contained in the first quarter 2026 earnings release, which is available on SafeBookers' website, again, at www.safebookers.com. I would now like to turn the conference call over. to one of our speakers today, the chairman and CEO of the company, Mr. Poulos Andriouanou. Please go ahead, sir.

Good morning to all. I will do the and I'm welcoming you all to our quarterly results presentation. During the first quarter of 2026, we operated in an improved shutter market environment, prepared for the same period in 2025. with increased revenues due to higher charter hires and slightly increased earnings from strawberry-peeled vessels. The drive-back market witnessed increased market volatility mainly due to geopolitical reasons. The increase of dividend to 6 cents per common share and the opportunity to access European investors through the parallel listing in the Euro and Estates, the platform of eighths of exchanges in Europe, are the two highlights of the previous period. In the first quarter of 2026, we increased our EPS to $0.18. And from an EPS of $0.05 for the same period in last year, while we declared a $0.06 per share for dividend, we continued the renewal of our fleet with four new boats and the sale of our oldest Kamsamaks and our oldest Old Panamax vessels. Following a comprehensive review of the forward-looking statements language presented in slide 2, let us proceed to examine the supply-side dynamics in slide 4. The dry bark fleet is projected to grow by about 4% in 2026 due to stable new deliveries with fleet growth estimated to be highest for the Panama City. The 30% of the dry bark fleet is over 15 years. Product book now stands at about 30% of the peak. The forecast for dry bike supply, as per BIMCO, is to grow 2% in 2026, in the hoped state of Cornwall scenario, versus 1% growth in case of a closure. For reference, about 1% of dry bike capacity is currently cut in Persian Gulf. Asset prices remain elevated in line with the current freight market. Currently, about 30% of ship capacity in the dry bulk order book will be able to use alternative fuels upon delivery. However, the dual fuel order book remains small in the dry bulk segment. The postponement of the adoption of the global fuel standard by IMO, as well as recent discussions, may move the path of decarbonization towards more pragmatic solutions. In our total order book, in 24 Phase 3 desisters since 2020, we do have two dual-fuel new bricks on order with deliveries in Q1-27, able to operate with fossil fuels until alternative fuels become available and economically viable, chasing for the increased most recent carbon intensity limits of the fuel-EU regulation after 2030 and the potential adoption of new regional or global regulations. South Pakistan now counts the two Phase III vessels on the water, all delivered from 2022 onwards. In addition, 21 vessels have undergone environmental upgrades, and 11 vessels are ECO, incorporating superior fuel efficiency characteristics. Approximately 80% of our fleet is Japanese fleet, compared with a global average of roughly 30%, and there is only now focus on construction quality asset worth durability, ensuring value and fuel efficiency. We also underlined the improved coin-to-gold signage sheets, which incorporate improvements in durability and fuel efficiency. Our average fleet age of 10.5 years, approximately two years younger than the global fleet average of 12.5 years, strengthening our competitive position in terms of operational performance and fuel consumption. Our commercial competitiveness will strengthen as we will be taking delivery of our new motorbook of 11 Phase III vessels. By 2039, same battleships expected to comprise of 45% Phase III vessels, positioning us favorably to compete pace with the fuel efficiency, while the shipbuilding capacity will continue to be constrained even to longer lead times. Moving on to slide 5, we present another view of the demand and basic commodities trade. The global GDP growth expectations from 2026 and 2027, as reflected in the IMF's April forecast, call for a growth around 3% in the coming years, accompanied by gradual control of inflationary pressures. BIPO forecasts a global drive-back demand growth of about 3% in 2026, on open-form new scenario. Type of volumes are projected to expand about 2% in 2026. Iron ore demand expect to grow up to 3% in 2026 in open-form new scenario. Lower prices driven by increased export and output effectively stimulates trade and enhance competitiveness, thus a lower grade domestic Chinese supply. However, increased Chinese port inventories may shorten import demand in second half of 2026. Coal shipments are projected to decline by 1-2% in 2026. The International Energy Agency expects global coal demand to fall by 1.5% between 2025 and 2027, with coal imports declining up to 4%. Chinese demand is projected to fall by 1.5%, while Indonesian regions remain global pockets. Thermal coal trade is weakening. Cooking coal remains relatively resilient. Although the growth hormone has reversed short-term, this coal trend and Chinese exports have supported trade. Grains remain the strongest performing major bulk with shipments estimated to grow about 5% in 2036 in the open hormone scenario. From that harvest in the U.S., EU, Argentina, Russia, and Brazil are the big suppliers. However, China policy pushed over the greatest surface efficiency and the use of sugar mill uses presents a downside risk. Myron Bikes' growth in an open formation area is expected to be quite strong for 2026. Energy transition related to the orange remains supportive. peroxide trade growth may moderate due to China's aluminum production gap. Fertilizer demand continues to be a key factor affected by the Hormuz closing. As China remains a central string factor for dry bulk, its broader economic economy, strong exports, offset the quicker domestic demand still being affected by proper peak sector crisis and manufacturing overcapacity. If GDP is is forecasted to grow by 4.4% in 2026. The great tensions between the U.S. and China, although the truce has been reached and recently reaffirmed, remain a key source of global economic uncertainty. Domestic production policy and coal and grain symbol substitution strategies represent downside risks to shipboard trade. India continues to perform a disconcerted performance in 2026. Each expanding domestic market and manufacturing sector may continue to grow with the rise of demand, with infrastructure in business playing a vital role. Following its decisive simple-maturity victory in the February smart elections, the Japanese government has secured a strong political mandate to implement a more proactive fiscal strategy aimed at accelerating Japan's transition and prolong degradation to sustainable growth. This approach includes targeted distal stimulus and public investments to boost demand and sustain economic momentum. Summing up, the supply-demand equilibrium in slide 6, in the open-formation area, the supply-demand is expected to be 2%, versus demand growth of 3% for 2026. The trade market has shown strength during the first quarter of 2016, and Cornelius could be healthy today, with Kip's spot at about 32,000 and Panamax's spot at about 20,000. In relation to our Kip's size-class basis, all seven were charted under period-time status, with an average remaining charted duration of 1.7 years and an average trading charted high of about 24.6 thousand. Topping at $310 million in contract revenue backlog from CASE alone. Moving to slide C8, we are proud that St. Vitus has become the first civil government with common stock trading on both NISA and Euronext. Euronext platform provides access to European capital markets, including Oslo, Milan, Paris, Brussels, Amsterdam, Dublin, Lisbon, and Athens. By lifting our common stock on the main market of the regulated market of European extractors, we aim to broaden and diversify our shareholders' base, expand the pool of institutional and retail investors to European markets, reinforce our long-term strategy, positioning and governance profile, and offer to all European investors direct access to premium and easy-governed blue-chip maritime company. Moving to slide 9, for another year of our quarterly highlights, we need to point out that we have declared our 18th consecutive quarterly dividend and increased it to 6 cents a share, representing a 33.7 dividend yield at current share levels. At the same time, our free cash flows continue to finance our utility program. We maintain our equity and capital resources of about $374 million and comfortable leverage of 34%. We have $74.4 million of net revenues, and we do have an active $10 million share of the business program. Since then, we've placed orders for five Tamsa Max Stage 3 newbies and one K-sized newbie, and we showed how all the sports parliaments love all these Tamsa Max, as well as one of our K-sized class vessels. Lastly, we issued our 2025 ESG report reflecting the company's continued commitment to proactively manage the environmental risks and supporting the communities in which we operate, meeting stakeholders' expectations. In slide 10, we present our return to shareholders of 95 million paid in common dividends and 78 million paid in common shares repurchases. Since 2022, reflecting our consistency, in generating sustainable UTEX across market fluctuations because of our track record, hands-on management, and our resilient business model. Concluding the company update in slide 11, we present our fundamentals. Safe backers, the drive-by company with 657 million market cap, 35 vessels on the water, having 300 million staff value. We mean with 167 million gas, 208 million in andromed RCS, and 240 million boiling capacity, I guess our significant order book, of the other new bits, mainly in Japanese chikyas. We focus on our majority in Japanese big fleet of banners, on heat energy efficiency and lower CO2 taxation, reflected in our CII rating of 0% on the bottom rating of E category. We maintain a young, technologically advanced fleet, strong balances, comfortable leverage, and low net debt per vessel of 8.1 million for a 10.5-year-old modern fleet. We have built a resilient business model with cash flow visibility of 161 million in revenue backlog, health expansion for a sizable fleet that exceeds scale, and a health 3.7% annualized limit and yield position to leverage on its fuel efficiency. I now pass the floor to our CFO, Konstantinos Adamopoulos, for our Confident Financial Overview. Konstantinos, the floor is yours. Thank you, Lucas, and good morning to everyone. During the first quarter of 2026, we operated in an improved charter market environment. Compared to the same period in 2025, we decreased revenues due to higher charter hires and slightly increased earnings from scrapped fitted vessels. Moving on to slide 13, we have quarterly financial highlights for the first quarter of 2026 and compared to the same period of 2025. Our adjusted EBITDA for the first quarter of 2026 stood at $40.7 million compared to $29.4 million for the same period in 2025. Our adjusted ETS for the first quarter of 2026 was $0.18, calculated an awaited average number of 100.2 million shares, compared to 5 cents during the same period in 2025, calculated an awaited average number of 105.1 million shares. On the top graph, during the first quarter of 2026, we operated 45 vessels on average, earning an average TCE of $17,095, compared to the operation of 46 vessels earning an average PCE of $14,655 during the same period last year. And the universal OPEX decreased by 9% to $5,223 for the first quarter of 2026, compared to $5,765. The universal operating expenses, excluding dry docking and pre-derivery expenses, did also decrease by 7%, to $5,147 for the first quarter of 2026, compared to $5,546 for the same period in 2025. Moving to slide 14 with a quick overview of our quarterly operational highlights for the first quarter of 2026, compared to the same period of 2025. Now let's continue to slide 15, where we present our balance sheet analysis, noting that assets are presented in the book value. Strong liquidity and ample cash reserves provide significant financial flexibility to navigate market volatility. The company maintains a healthy balance sheet, supported by robust equity base and conservative leverage levels. Our capital structure positions the company for sustainable long-term growth and resilience. which now focus on our liquidity, our cash flows, and our capital structure as they are presented in slide 16. We maintain a confident leverage of 34%. Our debt remains comparable to our fleet's cap value, although our fleet is just 10.5 years old on average. Our weighted average interest rate stood at 5.15% for our consolidated debt, with a portion of 100 million euros being fixed at 2.95% coupon in an unsecured five-year bond. We have paid a considerable part of our capex in relation to our outstanding order book. Our liquidity and capital resources stand strong at approximately $374 million, which together with the contracted revenue of about $164 million gives a total of $5,038 million, and this is more than double our outstanding capex. This provides flexibility to our management in capital allocation. Furthermore, we have additional borrowing capacity in relation to one existing unencumbered vessel and 10 new bills upon their delivery. We ensure that our capital expenditure is adequately covered by our contracted future revenues, fortifying our balance sheet towards a trajectory of sustainable growth. Completing our presentation in slide 17, we present our daily free cash flow for the first few months of 2026, illustrating the company's ability to generate free cash flows, highlighting discipline, cost control, and efficient investment operations. We would like to highlight that based on our financial performance, the company's board of directors declared an increased 6% dividend per common share. The company is maintaining a healthy cash position of about $167 million as of June 12, and another $208 million in reward-required facilities, a combined liquidity and capital resources of $375 million, and a contracted revenue of $161 million. These underscore are capacity to support debt service, reinvestment, and shareholder returns at the same time, which enables us to expand the fleet, build a resilient company, and create long-term prosperity for our shareholders. Thank you for your attention, and we are now ready for the Q&A session.

Thank you. 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 your questions from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Elias Papachaiso with Pariah Securities. Please proceed.

Hi, thank you. Hi, everyone, and congrats on a great quarter. I wanted to ask you about your fixed charter coverage. Are you close to where you would like to be for the remainder of 2026, or should we expect any further increases or changes in charter coverage?

Yes, look, the chartering of the vessels is done in a way that accommodates market conditions. So we have been experiencing a very strong quarter as we talk in the second quarter. The number of spot vessels have been increasing to take advantage of the current squeeze. In future quarters, especially towards the last quarter of 2026, the company will be looking to lock in on... On longer term contracts, usually on our type of vessels, those are around 12 months on the capsule maxis and around 24 or 36 months on the cage sizes. So for the time being, we try to enjoy the positive stock market.

Absolutely. My next question is about the LNG facility disruptions in Qatar. Back in March, Iranian attacks knocked out 17% of Qatar's LNG export capacity for over two years. As a result, we would expect to see some solid support to steam coal trade in both 2026 and 2027. Is this fair to assume?

I think it's fair to assume we already see, especially from Australia and Indonesia, the amount of cargo we have seen in the last two to three months has been substantial. And this is helping... the market in the Pacific reaches levels in the BKI average of around $20,000 to $22,000 a day. Of course, there will be volatility on those numbers, but there is a lot of cold cargo in the Far East for the reason you mentioned. Now, if this... After a few weeks or a couple of months, things get normalized. Still, we expect that LNG will start coming out, but in a smaller quantity than the one before the war started. So some of that capacity will be lost for a number of quarters or for a couple of years. So we expect that coal will be in demand in the subsequent couple of years.

Great. And one last question. We, if everything goes as planned, I mean, we should see substantial benefit from reconstruction activity in Iran. It's probably too early to tell, but if you could make a comment about it, it would be really helpful.

Yes, I think this will be particularly positive for handy size and supra-max vessels, ultra-max vessels. It's not so much affecting the cancer max or panamax vessels, but of course when you see supra-max levels at healthy levels, Supermax and Ultramax is one type of cargo that is eating part of the cargoes of Tamsa Maxis when the market is not good. So when they have their own extra demand, this will be keeping them busy on that front. Also, we expect a rush with a lot of fertilizer cartos out of the Persian Gulf, but they have been stuck there for the last three or four months. This will help also the cancer max market, as well as the ultra max market. So if we see the scholarships improving and getting more cartos, this can only be good also for the cancer max market. If you see right now, They are all earning about the same, around $20,000 a day, comfortably on the spot market. Maybe the modern ultra-machines are earning around $25,000 a day, and the modern candies are earning around $18,000 a day. So these are very healthy levels, and we expect that any sort of reconstruction in Iran will boost that growth. that trade. Of course, it remains to be seen the details of the agreement reached between the United States and Iran, how much the sanctions will be removed, and how much of foreign flag vessels will be allowed to get involved in this trade with Iran. But I think that maybe this will be part of the agreement that has been reached, but we don't know the exact details of it. Right. Thanks a lot. Thank you.

As a reminder, this is Star 1 on your telephone keypad. If you would like to ask a question, we will pause for a brief moment to see if there's any final questions. There are no further questions at this time. I would like to hand the conference back over for closing remarks.

Thank you very much for attending our presentation for the first quarter of 2026 results, and we're looking forward to discussing it with you the next quarter. Have a nice day.

Bye. Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.