Safe Bulkers(SB) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's EPS reached $0.40 per share, with a maintained dividend policy of $0.05 per share [8][51] - Net revenues for Q2 2022 were $91.6 million, up from $81.6 million in the same period of 2021, representing a 12% increase [46] - Net income for Q2 2022 was $50.3 million, compared to $32.4 million in Q2 2021 [47] - Adjusted EBITDA increased to $66.5 million from $54.1 million year-over-year [49] Business Line Data and Key Metrics Changes - Daily time charter equivalent increased to $25,050 from $21,098 in 2021 [46] - Daily operating expenses were $4,981, slightly up from $4,874 in the previous year [48] - The company redeemed $37.3 million in preferred dividends, saving 8% annually [14] Market Data and Key Metrics Changes - The CRB commodity index is at a five-year high, reflecting significant price increases due to the ongoing Russian-Ukrainian war [30] - Global inflation is projected to reach 6.6% in advanced economies and 9.5% in emerging markets due to war-induced commodity price increases [33] Company Strategy and Development Direction - The company is focused on fleet expansion with 11 newbuilds compliant with environmental regulations, aiming to create intrinsic value [9][12] - Investments in scrubber technology are expected to enhance earnings capabilities, with scrubbers installed on 18 vessels [40] - The company maintains a cautious optimism regarding future market conditions despite global instability [21] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of maintaining liquidity and capital resources, which stood at $294.8 million [12] - The company is well-prepared for stringent environmental regulations and believes it will continue to find opportunities in operations and profitability [43] - Management expressed concerns about the future of alternative fuels and the timeline for their adoption [90] Other Important Information - The company has a significant cash position of about $167 million and additional revolving credits of $140.4 million [52] - The average age of the fleet has stabilized at about 10.5 years due to the renewal strategy [12] Q&A Session Summary Question: Thoughts on the buyback program - Management confirmed the buyback program of up to $5 million is ongoing and will be executed opportunistically when the stock is undervalued [56][57] Question: Dividend policy and potential changes - Management indicated a desire for a steady dividend but emphasized the importance of investing in newbuilds and maintaining a strong company [58][60] Question: Mechanics of Capesize time charters and scrubber benefits - Management explained that scrubber benefits are significant, with expected revenues of $5-6 million over three years from scrubber-fitted vessels [64][66] Question: Installation timeline for scrubbers on remaining vessels - Management stated that one scrubber installation is expected before year-end, with additional installations planned for early 2023 [82][84] Question: Future fleet expansion and treatment of older vessels - Management confirmed a focus on acquiring younger vessels and monitoring the oldest vessels in the fleet, with a strategy centered on Phase 3 vessels [85][89]