Safe Bulkers(US:SB)2023-05-11 20:04Financial Data and Key Metrics Changes - The net income for Q1 2023 was $19.3 million, down from $36.4 million in Q1 2022 [54] - Adjusted earnings per share for Q1 2023 was $0.10, compared to $0.24 in the same period of 2022 [28] - The company maintained a cash position of approximately $90.7 million as of May 2023, with total liquidity and capital resources amounting to $351 million [29][48] Business Line Data and Key Metrics Changes - The average time-charter equivalent for Q1 2023 was $15,760, down from $21,354 in Q1 2022 [70] - Daily operating expenses for Q1 2023 were $5,550, compared to $5,722 in the previous year [54] - Adjusted EBITDA for Q1 2023 was $23.1 million, down from $26.1 million in Q1 2022 [55] Market Data and Key Metrics Changes - The global dry bulk demand growth is expected to increase only by 2% in 2023, with a forecasted drop in iron ore demand by 1% [41] - Commodity prices are projected to fall by 21% in 2023 after a 45% increase in 2022 [40] - The World Bank commodity price index declined by 30% as of April 2023 [43] Company Strategy and Development Direction - The company aims to maintain a competitive edge through an extensive environmental upgrade program and a focus on fuel efficiency [19][23] - The company has a cautious outlook on the medium-term freight market due to an aging fleet and regulatory pressures [15] - The strategy includes a balanced approach to capital allocation, focusing on dividends, share buybacks, and potential newbuild investments [81][92] Management's Comments on Operating Environment and Future Outlook - Management noted a gradually weakening charter market environment compared to the same period in 2022 [25] - The company is monitoring the market for potential investment opportunities but remains cautious due to high interest costs and market uncertainties [74][76] - The management expressed confidence in the company's liquidity and ability to navigate market challenges [57][92] Other Important Information - The company has terminated its ATM program, which had been in place since September 2021 [9] - The company has an active share buyback program targeting 10 million shares, with 8.3 million shares repurchased as of May 2023 [50][92] Q&A Session Summary Question: Thoughts on fleet opportunities and newbuilding - Management indicated that the newbuilding market is confusing, with rising prices and unclear future fuel options [32][61] Question: Investment in scrubbers - Management stated that current scrubber spreads are not attractive for new investments, with a threshold of around 150 for viability [64] Question: Capital allocation strategy - Management emphasized a balanced approach to capital allocation, focusing on dividends, buybacks, and maintaining a strong balance sheet [81][82] Question: Plans for older vessels in the fleet - Management plans to upgrade a significant portion of the older fleet to improve efficiency and maintain competitiveness [83][86] Question: Market outlook and pricing - Management noted that despite underperformance in the trade markets, there are signs of increasing prices in other sectors, indicating potential market recovery [87][91]