Safe Bulkers announced its unaudited financial results for the three and twelve months period ended December 31, 2017.
Summary of Fourth Quarter 2017 Results
- Net revenues for the fourth quarter of 2017 increased by 34% to $42.4 million from $31.7 million during the same period in 2016.
- Net loss for the fourth quarter of 2017 was $86.6 million as compared to $4.6 million, during the same period in 2016. Adjusted net income1 for the fourth quarter of 2017 was $5.5 million as compared to Adjusted net loss of $4.1 million, during the same period in 2016.
- EBITDA2 for the fourth quarter of 2017 amounted to loss of $68.1 million as compared to earnings of $13.1 million during the same period in 2016. Adjusted EBITDA3 for the fourth quarter of 2017 increased by 76% to $23.9 million from $13.6 million during the same period in 2016.
- Loss per share4 and Adjusted earnings per share4 for the fourth quarter of 2017 were $0.88 and $0.02 respectively, calculated on a weighted average number of 101,531,352 shares, as compared to a Loss per share of $0.09 and Adjusted loss per share of $0.09 during the same period in 2016, calculated on a weighted average number of 87,364,672 shares.
Summary of Twelve Months Ended December 31, 2017 Results
- Net revenues for the twelve months of 2017 increased by 35% to $148.0 million from $109.8 million during the same period in 2016.
- Net loss for the twelve months of 2017 was $84.7 million as compared $56.0 million, during the same period in 2016. Adjusted net loss for the twelve months of 2017 was $1.7 million as compared to $36.2 million, during the same period in 2016.
- EBITDA for the twelve months of 2017 decreased to loss of $8.4 million as compared to earnings of $15.6 million during the same period in 2016. Adjusted EBITDA for the twelve months of 2017 increased by 110% to $74.7 million as compared to $35.5 million during the same period in 2016.
- Loss per share and Adjusted loss per share for the twelve months of 2017 were $0.98 and $0.16, respectively, calculated on a weighted average number of shares of 100,932,876, as compared to loss per share of $0.83 and Adjusted loss per share of $0.59 during the same period in 2016, calculated on a weighted average number of shares of 84,526,411.
1 Adjusted Net income/(loss) is a non-GAAP measure. Adjusted Net income/(loss) represents Net income/(loss) before loss on sale of assets, gain/(loss) on derivatives, gain on debt extinguishment, early redelivery cost, other operating income/(expense), impairment loss and gain/(loss) on foreign currency. See Table 1.
2 EBITDA is a non-GAAP measure and represents Net income/(loss) plus net interest expense, tax, depreciation and amortization. See Table 1.
3 Adjusted EBITDA is a non-GAAP measure and represents EBITDA before loss on sale of assets, gain/(loss) on derivatives, gain on debt extinguishment, other operating income/(expense), early redelivery cost, impairment loss and gain/(loss) on foreign currency. See Table 1.
4 Earnings/(loss) per share and Adjusted Earnings/(loss) per share represent Net income/(loss) and Adjusted Net income/(loss) less preferred dividend and deemed dividend divided by the weighted average number of shares respectively. See Table 1.
Redemption of Series B Preferred Shares
In January 2018, the Company announced the redemption, on February 20, 2018, of all outstanding 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares“) at redemption price of $25.00 per Series B Preferred Share plus all accumulated and unpaid dividends until the redemption date, (redemption date excluded). There are currently 379,514 issued and outstanding Series B Preferred Shares.
Fleet and Employment Profile
In December 2017, the Company took delivery of Agios Spyridonas, a second-hand, 92,000 dwt, South Korean 2010 built, dry-bulk, Post-Panamax class vessel, sistership of our two existing Post-Panamax class vessels, at an attractive price. The acquisition was financed from cash on hand.
As of February 9, 2018, our operational fleet comprised of 39 drybulk vessels with an average age of 7.6 years and an aggregate carrying capacity of 3.5 million dwt. Our fleet consists of 14 Panamax class vessels, 9 Kamsarmax class vessels, 13 post- Panamax class vessels and 3 Capesize class vessels, all built 2003 onwards. Upon delivery of our last contracted drybulk newbuild Kamsarmax class vessel, scheduled for 2018, and assuming no additional vessel acquisitions or disposals, our fleet will comprise of 40 vessels, 11 of which will be eco-design vessels, with an aggregate carrying capacity of 3.6 million dwt.
Set out below is a table showing the Company’s existing and newbuild vessels and their contracted employment as of February 9, 2018:
|Vessel Name||DWT||Year Built||Country of
|Maria||76,000||2003||Japan||11,900||Feb 2018- Mar 2018|
|Koulitsa||76,900||2003||Japan||9,000||Jan 2018 – Apr 2019|
|Paraskevi||74,300||2003||Japan||7,400||Apr 2017 – Jun 2018|
|Vassos||76,000||2004||Japan||13,350||Jan 2018 – May 2018|
|Katerina||76,000||2004||Japan||7,500||Apr 2017 – Jun 2018|
|Maritsa||76,000||2005||Japan||10,100||Sep 2017 – Dec 2018|
|Efrossini||75,000||2012||Japan||12,940||Jan 2018 – April 2018|
|Zoe||75,000||2013||Japan||8,200||Nov 2017 – Mar 2019|
|Kypros Land||77,100||2014||Japan||14,000||Jan 2018 – Mar 2018|
|Kypros Sea||77,100||2014||Japan||11,250||Jul 2017 – May 2018|
|Kypros Bravery||78,000||2015||Japan||7,500||Sep 2016 – May 2018|
|Kypros Loyalty||78,000||2015||Japan||12,850||Jan 2018 – Dec 2018|
|Kypros Spirit||78,000||2016||Japan||11,800||Dec 2017 – Feb 2018|
|Pedhoulas Merchant||82,300||2006||Japan||13,850||Sep 2017 – Feb 2018|
|Pedhoulas Trader||82,300||2006||Japan||11,600||Sep 2017 – Jul 2018|
|Pedhoulas Leader||82,300||2007||Japan||13,250||Jan 2018 – Sep 2018|
|Pedhoulas Commander||83,700||2008||Japan||10,150||Jun 2017 – May 2018|
|Apr 2017 – Jun 2018
Jun 2018 – Aug 2019
|Pedhoulas Fighter||81,600||2012||China||12,650||Dec 2017 – Mar 2018|
|Pedhoulas Farmer 3||81,600||2012||China||12,600||Jan 2018 – Aug 2018|
|Pedhoulas Cherry 3||82,000||2015||China||6,600||Apr 2017 – Oct 2018|
|Pedhoulas Rose 3||82,000||2017||China||8,500
|Jan 2017 – Mar 2018
Mar 2018 – May 2019
|Marina||87,000||2006||Japan||10,600||Jul 2017 – May 2018|
|Feb 2017 – Jun 2018
Jun 2018 – Nov 2019
|Sophia||87,000||2007||Japan||7,250||Apr 2016 – Nov 2018|
|Eleni||87,000||2008||Japan||14,250||Jan 2018 – Feb 2018|
|Martine||87,000||2009||Japan||11,500||Aug 2017 – May 2018|
|Andreas K||92,000||2009||South Korea||13,000||Nov 2017 – Feb 2018|
|Panayiota K||92,000||2010||South Korea||11,250||Feb 2018 – Mar 2018|
|Agios Spyridonas||92,000||2010||South Korea||11,500||Jan 2018 – Mar 2018|
|Venus Heritage||95,800||2010||Japan||13,200||Nov 2017 – Mar 2019|
|Venus History||95,800||2011||Japan||14,750||Jan 2018 – Jan 2019|
|Venus Horizon||95,800||2012||Japan||13,950||Jan 2018 – Dec 2018|
|Troodos Sun||85,000||2016||Japan||15,950||Dec 2017 – Feb 2018|
|Mar 2017 – May 2018
May 2018 – Sep 2019
|Kanaris||178,100||2010||China||25,928||Sep 2011 – Jun 2031|
|Pelopidas||176,000||2011||China||38,000||Feb 2012 – Dec 2021|
|Lake Despina||181,400||2014||Japan||24,376 4||Jan 2014 – Jan 2024|
|Total dwt of existing fleet||3,513,800|
|Hull 1552||81,600||H1 2018||Japan|
|Total dwt of orderbook||81,600|
- Charter rate is the recognized gross daily charter rate. For charter parties with variable rates among periods or consecutive charter parties with the same charterer, the recognized gross daily charter rate represents the weighted average gross daily charter rate over the duration of the applicable charter period or series of charter periods, as applicable. In case a charter agreement provides for additional payments, namely ballast bonus to compensate for vessel repositioning, the gross daily charter rate presented has been adjusted to reflect estimated vessel repositioning expenses. In case of voyage charters the charter rate represents revenue recognized on a pro-rata basis over the duration of the voyage from load to discharge port less related voyage expenses.
- The start date represents either the actual start date or, in the case of a contracted charter that had not commenced as of February 9, 2018, the scheduled start date. The actual start date and redelivery date may differ from the referenced scheduled start and redelivery dates depending on the terms of the charter and market conditions and does not reflect the options to extend the period time charter.
- Vessel sold and leased back on a net daily bareboat charter rate of $6,500 for a period of 10 years, with a purchase obligation at the end of the 10th year and purchase options in favor of the Company after the second year of the bareboat charter, at annual intervals and predetermined purchase prices.
- A period time charter of ten years at a gross daily charter rate of $23,100 for the first two and a half years and of $24,810 for the remaining period. In January 2017, the period time charter was amended to reflect substitution of the initial charterer with its subsidiary guaranteed by the initial charterer and changes in payment terms; all other charter terms remained unchanged. The charter agreement grants the charterer an option to purchase the vessel at any time beginning at the end of the seventh year of the charter, at a price of $39 million less a 1.00% commission, decreasing thereafter on a pro-rated basis by $1.5 million per year. The Company holds a right of first refusal to buy back the vessel in the event that the charterer exercises its option to purchase the vessel and subsequently offers to sell such vessel to a third party. The charter agreement also grants the charterer the option to extend the period time charter for an additional twelve months at a time at a gross daily charter rate of $26,330, less 1.25% total commissions, which option may be exercised by the charterer a maximum of two times.
The contracted employment of fleet ownership days as of February 9, 2018, was:
|2018 (full year)||58||%|
Order book, newbuilds capital expenditure requirements and liquidity
As of December 31, 2017, the remaining order book of the Company consisted of one newbuild vessel; our wholly-owned subsidiary Pinewood Shipping Corporation has contracted to acquire Hull No. 1552, with scheduled delivery date in June 2018.
As of December 31, 2017, the aggregate remaining capital expenditure, relating to the purchase consideration of newbuilds, amounted to $27.6 million payable within 2018.
As of December 31, 2017, we had secured $16.9 million of preferred equity financing for Hull 1552 and had the capacity to borrow against two unencumbered vessels.
As of December 31, 2017, we had liquidity of $68.7 million consisting of $58.4 million in cash and bank time deposits and $10.3 million in restricted cash.
As of February 9, 2018, the aggregate remaining capital expenditure, relating to the purchase consideration of newbuilds, amounted to $27.1 million payable within 2018.
As of February 9, 2018, we had liquidity of $79.5 million consisting of $70.9 million in cash and bank time deposits and $8.6 million in restricted cash, in addition to $16.9 million of financing arrangements, and the capacity to borrow against two unencumbered vessels.
The Board of Directors of the Company has not declared a dividend to its common stock holders for the fourth quarter of 2017. The Company had 101,535,996 shares of common stock issued and outstanding as of February 9, 2018.
The Company declared in January a cash dividend of $0.50 per share on its 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares (NYSE:SB.PR.B), on its 8.00% Series C Cumulative Redeemable Perpetual Preferred Shares (NYSE:SB.PR.C) and on its 8.00% Series D Cumulative Redeemable Perpetual Preferred Shares (NYSE:SB.PR.D) for the period from October 30, 2017 to January 29, 2018 payable on January 30, 2018 to the respective shareholders of record as of January 23, 2018.
The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) the Company’s earnings, financial condition and cash requirements and available sources of liquidity; (ii) decisions in relation to the Company’s growth and leverage strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future debt instruments; and (v) global economic and financial conditions.
Dr. Loukas Barmparis, President of the Company, said: “Safe Bulkers Inc., has become profitable on adjusted basis for the first time after several quarters, and we believe has one of the most competitive break-even points in the industry. We continue to use our cash from operations to further improve our capital structure, while in parallel we have invested in one second hand vessel creating intrinsic value for our common shareholders.”