Safe Bulkers, Inc., an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three-month periods ended March 31, 2025. The Board of Directors (“the Board”) of the Company also declared a cash dividend of $0.05 per share of outstanding common stock.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: “During the first quarter of 2025, we faced softer charter markets due to seasonality and geopolitical uncertainties. We maintained our strong balance sheet and took delivery of our twelfth newbuild. In this volatile environment we continue to renew our fleet focusing on operational excellence, environmental performance in relation to IMO regulations and the creation of long term value for our shareholders.”
Common Stock Repurchase Program
In February 2025, the Company authorized a program under which it might from time to time purchase up to 3,000,000 shares of the Company’s common stock. The Company purchased and cancelled the maximum number of 3,000,000 shares of the Company’s common stock under the aforementioned program representing approximately 2.8% of the Company’s common stock outstanding and 5.4% of the Company’s public float. All purchases were funded using the Company’s existing cash resources, were made in the open market in compliance with applicable laws and regulations, and conducted within the safe harbor provisions of Regulation 10b-18 under the Securities Exchange Act of 1934, as amended.
New credit facility
In April 2025, the Company entered into a new credit facility of up to $84.3 million with a financial institution to be consummated in the third quarter of 2025. The facility will be used to finance the purchase of four vessels currently under sale and leaseback financings, the relevant purchase options of which were exercised during 2024, and to refinance an existing credit facility with the same financial institution secured by three vessels. The new facility will be secured by the aforementioned seven vessels and will mature in 2030. The credit facility agreement contains financial covenants in line with the existing loan and credit facilities of the Company.
Environmental Investments – Dry-Dockings
The Company is gradually renewing its fleet with newbuilds designed to meet the International Maritime Organization (the “IMO”) regulations related to the Phase 3 reduction of greenhouse gas emissions (the “IMO GHG Phase 3”) and nitrogen oxides emissions (the “IMO NOx Tier III”) and selectively selling older vessels. As of May 9, 2025, the IMO GHG Phase 3 NOx Tier III newbuild program consisted of 18 vessels in the aggregate, including contracts for two methanol dual-fueled Kamsarmax newbuilds. Twelve of such newbuild vessels have already been delivered to the Company. The aggregate capital expenditure of the newbuild program is approximately $662.1 million, of which $486.2 million, or 73%, has already been paid.
Furthermore, the Company is continuing the environmental upgrade program of its existing fleet, targeting increased energy efficiency and lower fuel consumption, which is expected to reduce GHG emissions. As of May 9, 2025, 25 existing vessels have been upgraded. The cost of low friction paint applications that are part of the environmental upgrades is recorded as operating expenses, while the cost of energy saving devices is capitalized and recorded as capital expenditures.
As of May 9, 2025, the Company expects down time for scheduled dry-dockings of 96 days for the second quarter of 2025 and of 21 days for the third quarter of 2025.
Fleet Update
As of May 9, 2025, we had a fleet of 47 vessels consisting of 8 Panamax, 14 Kamsarmax, 17 Post-Panamax and 8 Capesize class vessels, with an aggregate carrying capacity of 4.7 million dwt and an average age of 10.1 years. In our fleet, 12 are IMO GHG Phase 3 – NOx Tier III ships built 2022 onwards and 11 vessels are eco-ships built 2014 onwards. Furthermore, we have 21 vessels equipped with exhaust gas cleaning devices (“Scrubbers”), including all of our Capesize class vessels, which generate additional earnings under charter agreements, providing for variable consideration based on bunker consumption.
Orderbook
As of May 9, 2025, we had an orderbook of six IMO GHG Phase 3 – NOx Tier III Kamsarmax class newbuilds, two of which are methanol dual-fueled. The scheduled delivery of these vessels is four vessels in 2026 and two vessels in 2027. As of May 9, 2025, the aggregate capital expenditure of our orderbook was approximately $252.4 million, of which $76.5 million had already been paid and $175.9 million remains outstanding.
Newbuild deliveries
In April 2025, the Company took delivery of the Japanese-built Kamsarmax class Efrossini, its twelfth IMO GHG Phase 3 – NOx Tier III newbuild.
Chartering our Fleet
Our vessels are used to transport bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes. We intend to employ our vessels on both period time charters and spot time charters, according to our assessment of market conditions. Our customers represent some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period time charters provide us with visible and relatively stable cash flows, while the vessels we deploy in the spot market allow us to maintain our flexibility in low charter market conditions as well as provide an opportunity for a potential upside in our revenue when charter market conditions improve. The chartering of our vessels is arranged by our Managers14 without any management commission.
During the first quarter of 2025, we operated 46.00 vessels on average, earning a TCE of $14,655, compared to 47.08 vessels earning a TCE of $18,158 during the same period in 2024. As of May 9, 2025, we employed, or had contracted to employ: (i) 8 vessels in the spot time charter market (with up to three months` original duration) and (ii) 40 vessels in the period time charter market (with original duration in excess of three months). Of the vessels chartered in the period time charter market, 12 have an original duration of more than two years. As of May 9, 2025, the average remaining charter duration across our fleet was 0.5 years and we had contracted revenue of approximately $178.7 million, net of commissions, from our non-cancellable spot and period time charter contracts excluding the Scrubber benefit.
As of May 9, 2025, all eight of our Capesize class vessels have been chartered in period time charters, six of which have remaining charter durations exceeding one year. The average remaining charter duration of our Capesize class vessels was 2.0 years and the average daily charter hire was $23,317, resulting in a contracted revenue of approximately $137.2 million net of commissions, excluding the additional compensation related to the use of Scrubbers.
War in Ukraine
As a result of the war between Russia and Ukraine that commenced in February 2022, the US, the EU, the UK, Switzerland and other countries have announced unprecedented levels of sanctions and other measures against Russia and certain Russian entities and nationals. We intend to comply with these requirements and will address their potential consequences. While we do not have any Ukrainian or Russian crews, our vessels currently do not sail in the Black Sea and we conduct limited operations in Russia, we will continue to monitor the situation to assess whether the conflict could have any impact on our operations or financial performance.
Trade disruption in the Red Sea and conflicts in Middle East
Following attacks on merchant vessels in the region of the southern end of the Red Sea, there is disruption in the maritime trade and supply chains towards the Mediterranean Sea through the Suez Canal. Since the beginning of this disruption, we have diverted our fleet from sailing in the Red Sea region. The conflicts in the Middle East represent additional geopolitical and economic risks that could increase the volatility of the global economy. While our vessels currently do not sail in the Red Sea, we will continue to monitor the situation to assess whether there will be any impact on our operations.
Management Discussion of First Quarter 2025 Results
During the first quarter of 2025, we operated in a weaker charter market environment compared to the same period in 2024, with decreased revenues due to lower charter hires, decreased earnings from scrubber-fitted vessels and increased operating expenses. During the first quarter of 2025, we operated 46.00 vessels on average, earning an average TCE of $14,655 compared to 47.08 vessels earning an average TCE of $18,158 during the same period in 2024. The Company’s net income for the first quarter of 2025 was $7.2 million compared to $25.3 million during the same period in 2024. The main factors driving the change in net income are as follows:
Net revenues: Net revenues decreased by 21% to $64.3 million for the first quarter of 2025, compared to $81.7 million for the same period in 2024. This is due to lower revenues from charter hires and decreased revenues earned by our scrubber-fitted vessels.
Vessel operating expenses: Vessel operating expenses increased by 2% to $23.9 million for the first quarter of 2025 compared to $23.3 million for the same period in 2024 mainly due to the following factors: (i) spare parts, stores and provisions increased to $6.8 million for the first quarter of 2025, compared to $5.9 million for the same period in 2024 as a result of the increased supplies during the first quarter of 2025 for upcoming dry-dockings; (ii) crew wages and crew expenses increased to $10.5 million for the first quarter of 2025, compared to $10.3 million for the same period in 2024, mainly due to increased crew changes during the first quarter of 2025; and (iii) dry-docking expenses decreased to $0.9 million, related to one fully completed dry-docking during the first quarter of 2025, compared to $1.4 million related to one fully completed and one partially completed dry-dockings for the same period in 2024. The Company expenses dry-docking and pre-delivery costs as incurred, which vary from period to period. Excluding dry-docking costs and pre-delivery expenses of $0.9 million and $1.7 million for the first quarter of 2025 and 2024, respectively, vessel operating expenses increased by 6% to $23.0 million during the first quarter of 2025 in comparison to $21.6 million during the same period of 2024. Dry-docking expenses are related to the number of dry-dockings in each period and pre-delivery expenses are related to the number of newbuild deliveries and second-hand acquisitions in each period. Other shipping companies may defer and amortize dry-docking expenses, while many do not include dry-docking expenses within vessel operating expenses costs but present these separately.
Source: Safe Bulkers Inc.
