Safe Bulkers, an international provider of marine drybulk transportation services, announced its unaudited financial results for the three month period ended March 31, 2018.
Summary of First Quarter 2018 Results
- Net revenues for the first quarter of 2018 increased by 31% to $43.5 million from $33.3 million during the same period in 2017.
- Net income for the first quarter of 2018 was $6.0 million as compared to a net loss of $3.3 million, during the same period in 2017. Adjusted net income1 for the first quarter of 2018 was $5.7 million as compared to an Adjusted net loss of $3.4 million, during the same period in 2017.
- EBITDA2 for the first quarter of 2018 increased by 53% to $23.5 million compared to $15.4 million during the same period in 2017. Adjusted EBITDA3 for the first quarter of 2018 increased by 53% to $23.2 million from $15.2 million during the same period in 2017.
- Earnings per share4 and Adjusted earnings per share4 for the first quarter of 2018 were $0.03, calculated on a weighted average number of 101,540,728 shares, compared to a Loss per share and Adjusted loss per share of $0.07 during the same period in 2017, calculated on a weighted average number of 99,284,181 shares.
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 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 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 divided by the weighted average number of shares respectively. See Table 1.
Redemption of Series B Preferred Shares
On February 20, 2018, we completed the previously announced redemption of 379,514 outstanding 8.00% Series B Cumulative Redeemable Perpetual Preferred Shares (the “Series B Preferred Shares“) at a redemption price of $25.00 per Series B Preferred Share plus all accumulated and unpaid dividends. There are currently no issued and outstanding Series B Preferred Shares.
Fleet and Employment Profile
As of May 24, 2018, our operational fleet comprised of 39 drybulk vessels with an average age of 7.9 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 delivery in June 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 May 24, 2018:
|Vessel Name||DWT||Year Built||Country of construction||Gross Charter Rate [USD/day]1||Charter Duration2|
|Paraskevi||74,300||2003||Japan||7,400||Apr 2017 – Jun 2018|
|Vassos||76,000||2004||Japan||13,350||Jan 2018 – Sept 2018|
|Katerina||76,000||2004||Japan||9,000||May 2018 – Apr 2019|
|Maritsa||76,000||2005||Japan||10,100||Sep 2017 – Dec 2018|
|Efrossini||75,000||2012||Japan||12,000||May 2018 – Jul 2018|
|Zoe||75,000||2013||Japan||8,200||Nov 2017 – Mar 2019|
|Kypros Land||77,100||2014||Japan||13,000||Apr 2018 – Jun 2018|
|Kypros Sea||77,100||2014||Japan||11,250||Jul 2017 – Aug 2018|
|Kypros Bravery||78,000||2015||Japan||14,400||Apr 2018 – Aug 2018|
|May 2018 – May 2018
Jun 2018 – Oct 2018
|Kypros Loyalty||78,000||2015||Japan||12,850||Jan 2018 – Dec 2018|
|Feb 2018 – May 2018
May 2018 – Oct 2018
|Pedhoulas Merchant||82,300||2006||Japan||14,500||Apr 2018 – Mar 2019|
|Pedhoulas Trader||82,300||2006||Japan||11,600||Sep 2017 – Aug2018|
|Pedhoulas Leader||82,300||2007||Japan||13,250||Jan 2018 – May 2018|
|Apr 2017 – Jun 2018
Jun 2018 – Aug 2019
|Pedhoulas Fighter||81,600||2012||China||14,850||Mar 2018– Jul 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||10,000||Mar 2018 – May 2019|
|Apr 2018 – May 2018
May 2018 – Jul 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||12,400||Apr 2018 – Jun 2018|
|Martine||87,000||2009||Japan||12,700||May 2018 – Jun 2018|
|Andreas K||92,000||2009||South Korea||14,250||Mar 2018 – Jun 2018|
|Panayiota K||92,000||2010||South Korea||13,000||May 2018 – Jun 2018|
|Agios Spyridonas||92,000||2010||South Korea||12,500||May 2018 – Jun 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||Mar 2018 – Feb 2019|
|Troodos Air||85,000||2016||Japan||12,500||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 Number||DWT||Expected delivery||Country of construction||Gross Charter Rate [USD/day]||Charter Duration1|
|Hull 1552||81,600||H1 2018||Japan||15,500||Jun 2018 – May 2019|
|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 May 24, 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 May 24, 2018, was:
|2018 (full year)||74||%|
Order book, capital expenditure requirements and liquidity as of May 24, 2018
The remaining order book of the Company consisted of one newbuild vessel, Hull No. 1552, with scheduled delivery date in June 2018.
The aggregate remaining capital expenditure, relating to the purchase consideration of the newbuild, amounted to $21.6 million payable within 2018.
We have agreed to finance Hull No. 1552 by one of our wholly-owned subsidiaries issuing $16.9 million of preferred equity to an unaffiliated investor in 2018.
We had liquidity of $105.0 million consisting of $69.4 million in cash and bank time deposits, $9.8 million in restricted cash and $25.8 million net available under committed loan facilities in addition to $16.9 million of preferred equity and the capacity to borrow against one unencumbered vessel.
Refinancing of credit facilities
As of May 24, 2018, the Company has agreed: i) to finance the recently acquired second hand vessel, which was paid from cash from operations, by increasing an existing credit facility of $36.7 million secured by three vessels to $54.0 million which will be secured by the four vessels after the increase; the relevant tranche of the loan will have a 6 year term and ii) to finance an unencumbered vessel and refinance another existing facility of $23.5 million with a new 5 year term loan of $32.0 million. Both loan facilities contain financial covenants consistent with the existing loan and credit facilities of the Company.
The Board of Directors of the Company has not declared a dividend to its common stock holders for the first quarter of 2018. The Company had 101,545,460 shares of common stock issued and outstanding as of May 24, 2018.
The Company declared in April a cash dividend of $0.50 per share 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 January 30, 2018 to April 29, 2018, which was paid on April 30, 2018 to the respective shareholders of record as of April 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: “Our revenues continued to improve supporting gradual increase in our profitability. We intend to continue to use our cash from operations to further improve our capital structure and deleverage in forthcoming quarters.”