Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers Conference call on the second quarter 2026 financial results. We have with us Mr. Polys Hajioannou, Chairman and Chief Executive Officer, Dr. Loukas Barmparis, President, Mr. Konstantinos Adamopoulos, Chief Financial Officer of the company, and Ioannis Foteinos, Chief Operating Officer. 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 would like 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 the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today. The archived webcast of the conference call will soon be made available on the Safe Bulkers website, www.safebulkers.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 second quarter 2026 earnings release, which is available on the Safe Bulkers website. Again, www.safebulkers.com. I would now like to turn the conference call over to one of your speakers today, Dr. Loukas Barmparis, President. Please go ahead, sir.

Good morning to all. I'm Loukas Barmparis, President of SafeBudgets, and I'm welcoming you at our quarterly and half-year results. In line with our financial performance in the second quarter of 2026, which was supported by a relatively strong chapter market, we increased our quarterly dividend for the second consecutive quarter to 7.5 cents per share. The basic components of our policies, which include a strong balance sheet, liquidity and capital resources, conservative leverage and fleet renewal with new builds replacing older tonnage, reflect our ability to operate a continuously upgraded modern fleet with improved competitive characteristics, means we have the financial resources to invest when required and also reward our shareholders. Following a comprehensive review of the forward-looking statements presented in slide 2, we will start our presentation with drive-back fundamentals and let's proceed to examine the supply-side dynamics in slide 4. We present two scenarios of ship supply growth, with Straits of Hormuz closed and Straits of Hormuz open. The order book now stands at about 13% of the flick. The focus for dry bulk suppliers per BIMCO is to grow by 2% in 2026 in open states versus about 1% growth if the states are closed. For reference, about 1% of dry bulk capacity is currently within the present gulf. Asset prices remain elevated in line with the current rate market. Currently, about 10% 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. It is important to note that 30% of the dry bulk fleet is above 15 years old, which means these vessels will face increased repairs and maintenance expenses. The increasing age of a vessel, above 10 years especially, is also related to additional inspection, restrictions and Let me point out in our total order book of 24 phase 3 vessels placed since 2021, we have two dual-fuel new builds on order with delivery the first quarter of 2027, able to operate with fossil fuels until alternative fuels become available and economically viable. Hedging for the future carbon intensity related to environmental schemes. Shade Bulkers fleet now counts 14 phase 3 vessels from the water, all delivered from 2022 onwards. Our average fleet age of 10.3 years is approximately 2 years younger than the global fleet, average of 12.5 years, strengthening our competitive position in terms of operational performance and fuel consumption. Moving on to slide 5, we present an overview of demand and basic drive-back commodities trade. The global GDP growth expectations for 2026 and 2027, as reflected in the IMF's forecast, call for a growth of about 3% in the coming years, accompanied by persistent inflationary pressures. BIMCO forecasts a global drive-back demand growth of about 3% in 2026. In the open trade scenario, cargo volumes are projected to expand about by 2% in 2026. Iron ore demand is expected to grow up to 3% in 2026, in open form scenario. However, increased Chinese inventories may soften. Coal shipments were projected to decline by 1-2% in 2036. Thermal coal trade seems weakening, caulking coal remains relatively resilient. However, the closed Hormuz has reversed short-term this coal trend and Chinese imports have significantly supported the trade. Grains remain a strong-performing major bulk, with seedlings estimated to grow about 5% in 2026 in the open-hormone scenario. Sloan can harvest in the U.S., EU, Argentina, Russia, and Brazil under pin supply. However, China's policy pushed toward greater self-sufficiency and reduced soy mill usage presents a down risk. Minor bulk growth in an open Hormuz scenario is expected to be quite strong for the rest of 2026. Energy transition-related ores remain supportive. Fertilizer demand continues to be a key factor, affected also by the Hormuz closing. As China remains the central swing factor for dry bulk, its broader economy's strong exports upset good domestic demand still being affected by property sector crisis and manufacturing overcapacity. Its GDP is forecasted to grow by 4.4% in 2026. The trade tensions between the US and China, although truce has been reached, remain a key source of global economic uncertainty. India, with a forecasted 6.5% GDP increase in 2026, continues to perform, and is projected to experience the fastest growth among major economies. Each expanding domestic market with infrastructure investments playing a vital role in the manufacturing sector continues to contribute positively to the drive-back demand. Japan's transition from prolonged deflation to sustainable growth includes targeted fiscal stimulus and public investment to boost demand and sustain economic momentum. Summing up the supply-demand equilibrium in slide 6, in the open Hormuz scenario, the supply growth is expected to be 2% versus demand growth of 3% for 2026. The freight market has shown strength during the first half of 2026 and continues to be healthy to date with Cape Spot at about 38,000 and Kamsar Maxpot at about 18,000. In relation to our Cape-sized class vessels, All seven were chartered under period-time charters, with an average remaining charter duration of 1.7 years, with an average daily charter hire of 24.6 thousand, topping 105 million in contracted revenue backlog from CAPES alone. Moving to our company section now, in slide 8, we always make reference to our track record. Shade Bulkers relies on experience built through many market cycles of uninterrupted presence in the dry bulk sector and with a full alignment of interest with public shareholders through management's ownership. We are a pure-play dry bulk shipping company providing worldwide seaborn transportation of major bulks, iron ore, coal, and grain, and minor bulks for some of the world's largest chappers. We have consistent fleet growth since our IPO, and as shown in slide 9, for the last 5 years, we have taken delivery of 14 phase 3 new builds, bringing our fleet size to 46 vessels. Key points are the extensive fleet growth plan of 10 more new builds on order until 2029, and a young modern fleet of 10.3 years average age, while maintaining aid stability through the fleet renewal program. Our net debt per vessel stands comfortably at 8 million per vessel. Let's focus now on our operational advantage as shown in slide 10. On the top graph, we present our daily time charter equivalent rate. which has been improving, versus our daily operating expenses which have been in the region of 5.5 to 6.5 thousand. The variability is mainly due to the dry dockings which are expensed as in burn. This is a result of our hands-on management and of our focus on constant improvement in our operations for our world-class clients, testament of which was the successful completion of designated owners and operators of audit process related to dry BMS, which is an advanced management system required by specific charters. Shade Buckers was among the very few companies worldwide to have reached this level of operational standard of excellence, being the first in Greece and the sixth globally. At the same time, and during the last five years, we have 26 vessels which have undergone environmental upgrades, 11 vessels being ECO, incorporating superior fuel efficiency characteristics. Two fleet renewal and environmental upgrades, we have achieved a 22% reduction in our fleet's carbon intensity as a result of improved fuel efficiency, which increases our financial results. Key points is our CII rating of zero pressures on the rating E category, which would require additional . As reflected in slide 11, We have been consistent in our asset strategy. Noting that the price and the specification for a vessel are substantially agreed some months prior to the contract signing, which is shown as green boxes in the figure, we can conclude about the timing of placing the orders. The majority of orders have been done early in the cycle, at favorable prices, and new bills were delivered to us timely for the upside of the market. Furthermore, we sold all the tonnets, red boxes, and acquired a few younger second-hand vessels, gradually renewing our fleet ahead of high-chatter markets. As a result, Seribagas today is a fundamentally better-positioned company than five years ago, moving ahead of peers, increasing its resiliency in accordance with our business model. We have built a resilient company, as seen in slide 12, with a comfortable leverage ratio starting at 30% as of quarter end, backed by $143 million in total cash and cash equivalents, bank deposits and restricted cash, and $200 million available under revolving credit facilities, totaling a significant firepower of $343 million. Our capital allocation framework, reflected in slide 13, is comfortably balancing our CAPEX of $277 million against our additional borrowing capacity of over $200 million and our contracted backlog of $154 million, which we have already paid $92 million for the new-built CAPEX. Moving on to our debt profile and financial health as presented in slide 14, We stand strong with a total liquidity, capital resources and revenue backlog just shy of 500 million for a 519 million debt including our unsecured 100 million euro bond. Our revenue generation, as seen in slide 15, is reflected in our robust 169 million in revenues for the first half of 2026, being a foundation for our strategic growth plans and fleet models. Let's focus on the reward for our shareholders as we move to slide 16. We have declared our 19th consecutive quarterly dividend and increased it to 7.5 cents representing a healthy 4% dividend yield at current share levels. At the same time, our free cash flows continue to finance our UBIC program, and we do have an active 10 million share red prices program. The returns to shareholders include 101 million paid in common dividends and 78 million and Yannis Foteinos. Our board has decided to reward our shareholders in line with our financial Bulkers, Inc., Polys Hajioannou, Ioannis Foteinos, Loukas Barmparis, Konstantinos Adamopoulos We continue, as we also did in the past, to direct a substantial portion of our cash flows to our renewable program, which is the basis of our operational competitiveness. I now pass the floor to our CFO, Konstantinos Adamopoulos, for our quarterly financial review. Konstantinos, the floor is yours.

Thank you, Loukas, and good morning to everyone. During the second quarter of 2026, we operated in an improved charter market environment compared to the same period in 2025, with increased revenues due to higher charter hires and increased earnings from strapper fitted vessels. On slide 19, we show our quarterly financial highlights for the second quarter of 2026 compared to the same period of 2025. Our adjusted EBITDA for the second quarter of 2026 stood at $50.3 million, compared to $25.5 million for the same period in 2025. Our adjusted earnings per share for the second quarter of 2026 was 28 cents, calculated at an avoided average number of 101.8 million shares, compared to 1 cent during the same period in 2025, calculated at an avoided average number of 102.5 million shares. In the graph on the top of the table, during the second quarter of 2026, We operated 45.13 vessels on average, earning an average time charter equivalent of $20,642, compared to 46.75 vessels on average, earning an average time charter equivalent of $14,875 during the same period in 2025. A daily vessel of ailing expenses decreased by 6% to $6,207 for the second quarter of 2026, compared to $6,607 for the same period in 2025. Daily running expenses excluding dry docking and free delivery expenses decreased by 3% to $5,435 for the second quarter of 2026, compared to $5,435 . Slide 20 shows a quick overview of our quarterly operating highlights for the second quarter and the first half of 2026, compared to the same period of 2025. Now let's continue to slide 21, where we present a balanced analysis noting that assets are presented in the book value. A company maintains a healthy balance sheet supported by a robust equity base and conservative leverage. Our capital structure positions the company for sustainable long-term growth and resilience. Strong liquidity and upward cash reserves provide significant financial flexibility to navigate market volatility. Let's focus now a bit on our liquidity, our cash flows, and our capital structure as the We are maintaining a comfortable leverage of 30%. Our debt remains comparable to our fleet's scrap value, although our fleet is just 10.3 years old. Our weighted average interest rate of our debt stood at 5.10% for our consolidated debt, with a portion of 100 million euros being fixed at 2.95% coupon. who have paid a considerable part of our capex in relation to our standing order book. Our liquidity and capital resources stand strong at approximately 343 million, which together with the contracted revenue of about 154 million from our vessels is under $500 million, and this is more adequate for our standing capex. It provides flexibility to our management in capital allocation. Furthermore, we have additional borrowing capacity in relation to our nine new builds 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. This underscores our capacity to support debt service, reinvestment and shareholder returns at the same time. This 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 ready for the Q&A session.

We will now be conducting 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 to remove your question from the queue. For participants 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. Thank you. Our first question is from Peter Nelson with Citi Group. Hello, Peter, is your line on mute?

We don't hear you.

Hello, do you hear us? Hello, Peter, is your line on mute? Thank you. At this time, there are no questions coming through. I'd like to hand the floor back over to management for any closing remarks.

Thank you very much for attending our half-year results. We're looking forward to discuss again with you the following quarter. Thank you.