Safe Bulkers Reports Second Quarter & Six Months 2019 Results

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Safe Bulkers, Inc. (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three and six months period ended June 30, 2019.

Net income for the second quarter of 2019 amounted to $1.8 million compared to $4.1 million during the same period in 2018, mainly due to the following factors:

Net revenues: Net revenues decreased by 3% to $45.5 million for the second quarter of 2019, compared to $47.0 million for the same period in 2018, mainly as a result of the decrease in charter rates due to the weak charter market in the first and second quarter.

The Company operated 41.00 vessels on average during the second quarter of 2019, earning a Time Charter Equivalent (“TCE”) rate, representing charter revenues net of commissions and voyage expenses divided by the number of available days, of $11,970, compared to 39.19 vessels and a TCE rate of $13,225 during the same period in 2018.

Vessel operating expenses: Although the average number of vessels increased to 41.00 for the second quarter of 2019, compared to 39.19 vessels for the same period in 2018, the vessel operating expenses remained almost stable at $17.2 million for the second quarter of 2019 compared to $17.1 million for the same period in 2018, mainly due to a reduction by 9% in maintenance, general stores, and spares costs to $5.3 million for the second quarter of 2019, compared to $5.8 million for the same period in 2018.

The decrease in maintenance, general stores and spares in the second quarter of 2019 was mainly due to the completion of one less dry-docking performed for a 15-year old vessel during this quarter compared to the same period in 2018 and the maintenance works performed concurrently to the dry docking. The Company expenses dry-docking and pre-delivery costs as incurred, which costs may vary from period to period.

Excluding dry-docking and pre-delivery costs of $1.2 and $1.5 million for the second quarter of 2019 and 2018, respectively, vessel operating expenses increased by 3% to $16.0 million for the second quarter of 2019, compared to $15.6 million for the same period in 2018. Dry-docking expense is related to the number of dry-dockings in each period and pre-delivery expenses to the number of vessel deliveries and second hand acquisitions in each period.

Depreciation: Depreciation increased by 5% to $12.4 million for the second quarter of 2019, compared to $11.8 million for the same period in 2018, as a result of the increase in the average number of vessels in our fleet during the second quarter of 2019.

Interest expense: Interest expense increased to $7.0 million in the second quarter of 2019 compared to $6.5 million for the same period in 2018, as a result of the increased USD LIBOR12 affecting the weighted average interest rate of loans and credit facilities and as a result of an increase in our weighted average indebtedness.

Voyage expenses: Voyage expenses increased to $2.1 million for the second quarter of 2019 compared to $1.8 million for the same period in 2018, as a result of increased vessel repositioning expenses.

Daily vessel operating expenses: Daily vessel operating expenses, calculated by dividing the vessel operating expenses by the ownership days of the relevant period, decreased by 4% to $4,615 for the second quarter of 2019 compared to $4,809 for the same period in 2018. Daily vessel operating expenses excluding dry-docking and predelivery expenses decreased by 2% to $4,283 for the second quarter of 2019 compared to $4,392 for the same period in 2018.

Daily general and administrative expenses: Daily general and administrative expenses, which include management fees payable to Managers, increased by 7% to $1,366 for the second quarter of 2019, compared to $1,280 for the same period in 2018, mainly due to increased management fees charged by Managers.

Dr. Loukas Barmparis, President of the Company, said: “In the first half of 2019 the charter market was weak with the BDI9 averaging 895. Since then the BDI has risen to an average of 1,904 for the 3rd quarter to date and as a consequence we are now entering into charters at much higher rates. We are on track with our environmental investments and about 25% of our planned scrubber installations were commissioned.”

Liquidity

As of August 27, 2019, we had liquidity of $97.5 million consisting of $86.8 million in cash and bank time deposits and $10.7 million in restricted cash.

Leverage and repayment profile

As of June 30, 2019, our consolidated leverage10, representing total consolidated liabilities divided by total consolidated assets, was 59% compared to 56% as of December 31, 2018, mainly due to prevailing market conditions affecting vessels’ market values.

Order book

As of August 27, 2019, the remaining order book of the Company consisted of one Post-Panamax class vessel with scheduled delivery date in the first half of 2020.

Capital expenditure and financing requirements related to order book

As of August 27, 2019, the aggregate remaining capital expenditure in relation to the order book was $30.4 million, of which $7.0 million is payable within 2019 and $23.4 million is payable within 2020. The Company has the option to finance up to $13.2 million of the remaining capital expenditure related to the order book through the periodic issuance of the Company’s common stock.

Environmental Social Responsibility – Environmental investments

In the context of the Environmental Social Responsibility policies the Company is undertaking environmental investments mainly in scrubbers and ballast water treatment systems. Our environmental investments as of June 30, 2019, were $20.5 million.

Sea News, September 4