In an exclusive interview with The Shipping Herald, Safe Bulkers CEO, Chairman of the Board and Director, Polys Hajioannou analyses the company’s prospects in the current market as well as it’s newbuilding program and access to capital markets at difficult times. He also evaluates the possibility of more Greek companies going public in the near future and gives us his view of Greece’s ongoing debt crisis.
Q: How does the current market affect the Safe Bulkers newbuilding program?
Presently, market is at a difficult point with charter rates and vessels values at rather low levels. Safebulkers is a company with strong balance sheet and solid fundamentals, having adopted long term strategies of expanding and renewing its fleet with modern and energy efficient vessels which are ahead of the competition. Â Safebulkers is in a position to take advantage of the opportunities arising in the currently depressed shipbuilding market.
Q: Many Owners seem to show a preference in smaller size classes. Should we expect Safe Bulkers to move in this direction too?
Under current market conditions smaller size class vessels have been recently performing relatively better in comparison to bigger size class vessels mainly due to their cargo trading versatility. Safebulkers has a long history in owning and managing vessels of Panamax size upwards. During these years we have accumulated expertise in operating vessels in this sector and we have invested in establishing strong business relationships with the most important charterers of this sector. Through these years we have been enjoying the added value of this cooperation and therefore will continue to focus on this size vessels rather than moving to smaller sizes.
Q: Safe Bulkers has consistently declared consecutive dividends since its IPO. Are you confident that the company could continue this run.
Safebulkers has declared 15 consecutive dividends since its IPO in June 2008. Our current dividend policy is to use a portion of our free cash to pay dividends to our shareholders. The timing and amount of any dividends will always be subject to the discretion of our board of directors.
Q: What will your chartering strategy be in the current market?
We have been very closely monitoring global markets and developments which are highly correlated with the chartering market. At the moment under current depressed market conditions with period time charter rates being at low levels it makes no sense to target long period charters.
Q: Will you choose a period charter or keep the vessels spot?
As mentioned above market conditions do not favor long period time charters and until market improves our policy is to fix our open position to spot market or maximum up to short period (3-5 months).
Q: Are you planning expansion into other sectors? Do you see opportunities worth taking the near future?
We have been in the dry bulk market for more than 50 years and have been enjoying an excellent track record over a number of business cycles of the market. Although, by diversifying in other sectors a company may enjoy the benefits of minimizing the industry risk, in reality is very difficult to achieve a high operational standard being required to monitor the fundamentals of many different markets at the same time. Perhaps, for private companies diversification is an easier task because accountability is lower, but for a dry bulk listed company we plan to stick on what we know best providing our stockholders the added value of operational excellence.
Q: Analysts agree that capital markets are closed to most shipping issuers. Do you share this view?
There are significant barriers especially under current market to access capital markets but some companies with strong fundamentals, competitive management with long term approach towards their investors are still able to do so. Even lately, during March 2012, Safebulkers completed with success an additional offering raising approximately USD37 million demonstrating its ability to access capital markets even at difficult times.
Q: Do you expect to see newcomers from Greece in the NYSE?
Recently Livanos family entered the NYSE with Gaslog and there are several other companies especially in the GAS carrier sector which are in the process of going public in NYSE. If market improves there are several other well established Greek private companies both in tankers and dry bulk which would be looking of going public and enjoy the advantage of accessing capital via the financial markets.
Q: What is your view of Greeceâ€™s debt crisis? The government has time and time again called on Greek ship owners to aid the effort by exploring privatization opportunities. Is that something you are open to?
Debt crisis has been troubling Greece and Eurozone over the past couple of years but seems to be deescalated through the completion of PSI which on the other hand has resulted substantial losses for the private sector especially in Greece. In this respect Greek government along with European Union needs to take actions to help the private sector to recover part of those losses. Going forward Greece needs to spend substantial effort to overcome the crisis through a combination of controlling public sector expenditure and boosting growth encouraging investments in Greece adopting a series of measures such as easing of taxation, elimination of bureaucracy and stable investment framework which will provide assurance and incentives to new investors. Even in these doubtful times, we are investing in Greece on the private side in areas like the renewable energy sector but we believe shipping companies in general have not the in house expertise required to participate in large scale privatization projects.
Polys Hajioannou is Chief Executive Officer, Chairman of the board and Director of Safe Bulkers.
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for some of the world’s largest users of marine drybulk transportation services. The Company’s common stock is listed on the NYSE, where it trades under the symbol “SB.” The Company’s current fleet consists of 20 drybulk vessels, all built post-2003, and the Company has contracted to acquire nine additional drybulk newbuild vessels to be delivered at various times through 2014.