Safe Bulkers(SB) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.41 for Q3 2022, maintaining a dividend policy of $0.05 per share [6][31] - Net income for Q3 2022 was $51 million, down from $55.4 million in the same period of 2021 [25] - Adjusted EBITDA for Q3 2022 stood at $66.9 million, slightly down from $67.7 million in Q3 2021 [30] Business Line Data and Key Metrics Changes - Daily time charter equivalent decreased to $23,403 from $24,427 in the same period last year [25] - Daily operating expenses (OpEx) increased to $4,949 from $4,608 in the previous year, while all-in OpEx and G&A stood at $6,309 [26] Market Data and Key Metrics Changes - The Baltic Capesize Index 5TC currently stands at $12,400 per day, with 7 out of 8 Capesize vessels chartered under period charters at an average daily charter rate of $22,700 [11] - The global dry bulk demand growth is expected to increase only by 1% in 2022, with headwinds for the macro outlook [19][20] Company Strategy and Development Direction - The company is focusing on fleet quality and environmental investments, with plans to have all 44 vessels equipped with ballast water treatment systems by the end of 2022 [8] - The company aims to expand its fleet with 11 Phase III newbuilds, enhancing its competitive edge in terms of fuel consumption and environmental performance [14][22] Management's Comments on Operating Environment and Future Outlook - Management noted a gradually weakening charter market environment compared to the previous quarter, but emphasized strong liquidity and capital resources [6][24] - The company is optimistic about its ability to navigate challenges related to the energy transition and the aging dry bulk fleet [14] Other Important Information - The company has maintained a strong liquidity position of $266 million and contracted revenue of $327 million [11][31] - The company plans to increase dry-dockings in 2023 to enhance environmental upgrades and fleet competitiveness [39] Q&A Session Summary Question: Impact of Chinese COVID lockdowns on bulk shipments - Management indicated that while the situation in China remains uncertain due to low vaccination rates, trade has normalized in most countries, including major hubs [36] Question: Fleet sizing and newbuilds - Management confirmed that five new ships will be delivered in 2023, with four expected in the first half and one in the second half [41] Question: Treatment of gains or losses from retiring vessels - Management clarified that proceeds from older vessels are not recorded as operating income but are considered for liquidity creation for new technology investments [50]