ATHENS, GREECE -- 08/11/08 --
Safe Bulkers, Inc. (the "Company") (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, 2008 and declared a quarterly dividend of
$0.1461 per share.
Second Quarter 2008 Highlights
-- Net income of $44.5 million, an increase of 28% from $34.8 million in
the second quarter of 2007, and earnings per share of $0.82, an increase of
28% from pro forma earnings per share of $0.64 in the second quarter of
2007.
-- EDITDA(1) of $51.1 million, an increase of 33% from $38.4 million in
the second quarter of 2007.
-- Net revenue for the second quarter 2008 increased by 48% to $51.4
million from $34.7 million during the same period in 2007. An average of 11
vessels were operated during the second quarter of 2008 earning a Time
Charter Equivalent ("TCE")(2) rate of $52,069 compared to an average 10.03
vessels and a TCE rate of $37,924 during the second quarter of 2007.
-- Declaration of a pro-rated dividend of $0.1461 per share for the second
quarter of 2008.
-- In June 2008, completed initial public offering and listing on the New
York Stock Exchange ("NYSE").
First Half 2008 Highlights
-- Net income and earnings per share of $68.1 million and $1.25 per share,
for the six months ended June 30, 2008 compared to $154.8 million and $2.84
per share for the six months ended June 30, 2007, which includes $112.4
million gain on sale of assets in 2007. Net income and earnings per share
excluding gain on sale of assets increased by 60% from $42.5 million or
$0.78 per share in the first half of 2007 to $68.1 million or $1.25 per
share in the first half of 2008.
-- Net revenue for the half year ended June 30, 2008, increased by 55% to
$100.7 million from $65.0 million during the same period in 2007. On
average, 11 vessels operated earning a TCE rate of $50,889 in the first
half of 2008 compared to an average of 10.44 vessels earning a TCE rate of
$34,348 in the same period in 2007.
-- Adjusted EDITDA(3)of $81.0 million, an increase of 63% from $49.6
million in the same period of 2007.
Dividend Declaration
The Company has declared a cash dividend on its common stock of $0.1461 per
share payable on or about August 29, 2008 to shareholders of record at the
close of trading of the Company's common stock on the NYSE on August 22,
2008.
The Company's current expectation is to pay a quarterly dividend of $0.475
per share. The dividend announced by the Company today represents the pro
rata portion of such amount for the period beginning June 3, 2008 (the date
of closing of the Company's initial public offering) through June 30, 2008.
The Company has 54.5 million shares of common stock outstanding.
Fleet Expansion and Employment Profile
-- In July 2008, the Company acquired a high-quality Post-Panamax class
vessel, which, after the delivery of all contracted newbuilds, will
increase the Company's fleet from 11 vessels currently in service to 20
vessels by the second half of 2010.
-- In July 2008, the Company announced that it entered into a 10-year time
charter for a Capesize class vessel with a delivery date during the first
half of 2010, at a gross daily rate of $40,000 less 1.00% total
commissions.
-- In August 2008 the Company announced that it entered into a charter
agreement for a minimum duration of 22 and a maximum duration of 24 months
for a Panamax class vessel, with a delivery date on about April 2009, at a
gross daily rate of $73,000 for the first 12 months of the charter term
followed by $52,500 for the remaining period (an average daily rate of
$63,000) less 1.25% total commissions.
-- Following the above transactions, as of the day of this press release,
the Company's operational fleet is comprised of 11 drybulk vessels with an
average age of 3.23 years. The Company has also contracted for an
additional 9 drybulk carriers with deliveries scheduled between the second
half of 2008 and the second half of 2010.
-- As of July 31, 2008, the contracted employment of the Company's fleet
under period time charters is as follows: 95% of fleet ownership days for
2008, 89% for 2009 and 65% for 2010. This includes vessels which will be
delivered to the Company in the future but have already been chartered-out
as of their delivery date.
Management Commentary
Polys Hajioannou, Chairman of the Board of Directors and Chief Executive
Officer of the Company, said:
"We are very pleased to announce our first results and to declare our first
dividend as a public company. On June 3, 2008, we completed our listing on
the NYSE, whereby our founders sold 10 million shares at $19 per share in
our successful initial public offering, which is a further strategic
milestone in the development of our company.
"During the second quarter 2008, our net income increased by 28% compared
to the same period of 2007 reflecting both higher charter rates and a
larger fleet size.
"We have benefited from a balanced chartering policy which provides us with
a high level of contracted base cash flow, but at the same time allows us
to benefit from a continued strong market. Our most recent period time
charter for one of our Panamax vessels that we announced earlier this
month, at an average daily rate of $63,000 less 1.25% commissions for a
period between 22 and 24 months, with nine months forward delivery,
demonstrates our ability to develop direct business with the industry's
major charterers. It also indicates our commitment to pursue a prudent
chartering strategy, as at this strong average daily rate there would be
rather limited advantage to keep this vessel open, in pursuit of a further
possible spot market upside.
"We have taken advantage of our strong financial position to contract for
the acquisition of a high-quality newbuild Post-Panamax class vessel. This
vessel acquisition, which we announced in July 2008, will increase our
fleet to 20 vessels after the delivery of all contracted newbuilds by the
second half of 2010. Given our young and modern fleet, our strong cash
flow generation and high time charter coverage, we are confident that we
will be able to meet our objectives to profitably grow our business and to
increase our distributable cash flow per share in the coming years."
Conference Call
On Tuesday, August 12, 2008 at 10:00 A.M. EDT, the Company's management
team will host a conference call to discuss the financial results.
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1 (866) 819-7111 (US Toll Free Dial In),
0(800) 953-0329 (UK Toll Free Dial In) or +44 (0)1452-542-301 (Standard
International Dial In). Please quote "Safe Bulkers" to the operator.
In case of any problem with the above numbers, please dial 1 (866) 223-0615
(US Toll Free Dial In), 0(800) 694-1503 (UK Toll Free Dial In) or +44
(0)1452 586-513 (Standard International Dial In). Please quote "Safe
Bulkers" to the operator.
A telephonic replay of the conference call will be available until August
19, 2008 by dialling 1 (866) 247-4222 (US Toll Free Dial In), 0(800)
953-1533 (UK Toll Free Dial In) or +44 (0)1452 550-000 (Standard
International Dial In). Access Code: 1859591#
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the conference
call, available through the Company's website (www.safebulkers.com).
Participants to the live webcast should register on the website
approximately 10 minutes prior to the start of the webcast.
Management Discussion of Second Quarter 2008 Results
Net income increased 28% to $44.5 million for the second quarter of 2008
from $34.8 million of the second quarter of 2007. This increase is
attributable to the following factors:
Net revenues: Net revenues were $51.4 million for the second quarter of
2008, a 48% increase compared to $34.7 million for the second quarter in
2007 due to an increase both in prevailing charter rates from a TCE of
$37,924 to $52,069 and operating days from 913 to 986 for this period. Net
revenues for the second quarter 2008 compared to the first quarter 2008
increased by 4% from $49.3 to $51.4 million.
Vessel operating expenses: Vessel operating expenses increased to $4.8
million for the second quarter of 2008, a 50% increase compared to $3.2
million for the same period in 2007. This increase is attributable mainly
to:
-- two scheduled dry-dockings undertaken in the second quarter of 2008,
compared to none in the second quarter of 2007;
-- increased crew wages;
-- an increase in ownership days; and
-- increased insurance cost due to increase of vessels' insured values.
The daily vessel operating expenses increased to $4,826 for the second
quarter 2008, compared to $3,541 for the second quarter of 2007. Daily
vessel operating expenses are influenced considerably by the number of dry
dockings during the reported period as the cost of dry dockings is recorded
as an expense in the period incurred. During 2008 four dry-dockings are
scheduled three of which have already been completed in the first half of
2008 and a fourth is expected to be undertaken in the second half of 2008.
General and administrative expenses: General and administrative expenses
increased to $2.5 million for the second quarter of 2008, compared to $0.3
million for the second quarter of 2007, primarily attributable to $1.4
million of largely one-time expenses related to the Company's initial
public offering and $0.8 million related to the implementation of new
management agreement terms effective on January 1, 2008.
Interest expense: Interest expense increased to $4.2 million in the second
quarter of 2008 from $1.6 million for the same period in 2007, attributable
primarily to additional indebtedness and conversion of certain existing
loans into U.S. dollar currency ("USD"). The weighted average interest
rate was 4.165% in the second quarter of 2008, compared to 2.894% in the
second quarter of 2007. The weighted average of loans outstanding during
the second quarter of 2008 was $401.9 million, compared to $221.9 million
during the second quarter of 2007. The higher average indebtedness
reflects additional indebtedness to finance vessel acquisitions (including
advances for newbuildings) and indebtedness used for general corporate
purposes, including dividends.
(Loss) / Gain on derivatives: Gain on derivatives increased to $7.2 million
in the second quarter of 2008 compared to a loss of $0.5 million for the
same period of 2007, as a result of the mark-to-market valuation of certain
interest rate swap transactions. At the end of the second quarter of 2008
there were seven interest rate swap transactions outstanding, while none
were outstanding at the end of the second quarter of 2007. Through these
interest rate swaps, the Company has effectively hedged the interest rate
exposure of approximately 66% of its aggregate loans outstanding. The
valuation of these interest rate swap transactions at the end of each
quarter is affected by the prevailing long term interest rates at that
time.
Foreign currency gain / (loss): The effect of foreign currency exchange
differences on loans denominated in foreign currencies was diminished in
the second quarter of 2008 as most loans have been converted to USD.
(1) EBITDA represents net income plus interest expense, tax, depreciation
and amortization. See "EBITDA Reconciliation."
(2) Refer to definition of "TCE" in Note 6 of Fleet Data Table.
(3) Adjusted EBITDA represents EBITDA after giving effect to the removal of
the gain on sale of assets of $112.4 million for the six months ended June
30, 2007. See "EBITDA Reconciliation."
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE PERIODS ENDED JUNE 30, 2007 AND 2008
Three Months Period Six Months Period
Ended Ended
---------------------- ----------------------
(In thousands of U.S.
Dollars except for share June 30, June 30, June 30, June 30,
and per share data) 2007 2008 2007 2008
---------- ---------- ---------- ----------
REVENUES:
Revenues 36,069 53,388 67,524 104,639
Commissions (1,331) (1,990) (2,499) (3,914)
Net revenues 34,738 51,398 65,025 100,725
EXPENSES:
Voyage expenses (113) (58) (106) (117)
Vessel operating expenses (3,233) (4,832) (5,925) (8,827)
Depreciation (2,280) (2,585) (4,357) (5,170)
General and administrative
expenses - Management
fee to related party (260) (2,511) (513) (4,717)
Early redelivery cost - (197) (14,882) (565)
Gain on sale of assets - - 112,360 -
Operating income 28,852 41,215 151,602 81,329
OTHER (EXPENSE) / INCOME:
Interest expense (1,626) (4,239) (3,270) (8,273)
Other finance costs (27) (77) (81) (160)
Interest income 340 205 551 582
(Loss) / gain on
derivatives (525) 7,160 (484) 4,568
Foreign currency gain /
(loss) 7,825 234 6,575 (9,925)
Amortization and write-off
of deferred finance charges (19) (18) (81) (44)
Net income 34,820 44,480 154,812 68,077
Pro form earnings per share 0.64 - 2.84 -
Pro forma weighted average
number of shares(4) 54,500,000 - 54,500,000 -
Earnings per share - 0.82 - 1.25
Weighted average number of
shares - 54,500,000 - 54,500,000
(4) Gives retroactive effect to the shares issued to Vorini Holdings Inc.
in connection with our initial public offering.
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF DECEMBER 31, 2007 AND JUNE 30, 2008
December 31, June 30,
(In thousands of U.S. Dollars) 2007 2008
------------ -----------
ASSETS
Total current assets 98,883 26,024
Total fixed assets 308,340 347,080
Other noncurrent assets 434 8,165
Total assets 407,657 381,269
LIABILITIES AND EQUITY
Current portion of long-term debt 16,620 18,328
Long-term debt, net of current portion 306,267 388,096
Other liabilities 30,372 27,705
Shareholders equity/(deficit) 54,398 (52,860)
Total liabilities and equity 407,657 381,269
Fleet Data
Three Months Ended Six Months Ended
June 30, June 30,
2007 2008 2007 2008
-------- -------- -------- --------
FLEET DATA
Number of vessels at period's end 11.00 11.00 11.00 11.00
Weighted average age of fleet (in
years) 2.11 3.12 2.11 3.12
Ownership days (1) 913 1,001 1,890 2,002
Available days (2) 913 986 1,890 1,977
Operating days (3) 913 986 1,890 1,970
Fleet utilization (4) 100.0% 98.5% 100.0% 98.4%
Average number of vessels in the
period (5) 10.03 11.00 10.44 11.00
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 37,924 $ 52,069 $ 34,348 $ 50,889
Daily vessel operating expenses (7) $ 3,541 $ 4,826 $ 3,135 $ 4,409
(1) Ownership days represent the aggregate number of days in a period
during which each vessel in our fleet has been owned by us.
(2) Available days represent the total number of days in a period during
which each vessel in our fleet was in our possession net of off-hire days
associated with scheduled maintenance, which includes major repairs,
drydockings, vessel upgrades or special or intermediate surveys.
(3) Operating days represent the number of our available days in a period
less the aggregate number of days that our vessels are off-hire due to any
reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of our operating
days during a period by the number of our ownership days during that
period.
(5) Average number of vessels in the period is calculated by dividing
ownership days in the period by the number of days in that period.
(6) Time charter equivalent rates, or TCE rates, represent our charter
revenues less commissions and voyage expenses during a period divided by
the number of our available days during the period.
(7) Daily vessel operating expenses include the costs for crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance, statutory and classification expense, drydocking, intermediate
and special surveys and other miscellaneous items. Daily vessel operating
expenses are calculated by dividing vessel operating expenses by ownership
days for the relevant period.
EBITDA AND ADJUSTED EBITDA RECONCILIATION
(In thousands of U.S. Dollars)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2008 2007 2008
------- ------- ------- -------
Net Income 34,820 44,480 154,812 68,077
Plus Net Interest Expense 1,287 4,034 2,719 7,691
Plus Depreciation 2,280 2,585 4,357 5,170
Plus Amortization 19 18 81 44
EBITDA 38,406 51,117 161,969 80,982
Less Gain from Sale of Assets - - (112,360) -
Adjusted EBITDA 38,406 51,117 49,609 80,982
EBITDA represents net income plus net interest expense, tax, depreciation
and amortization. The Company's management uses EBITDA as a performance
measure. The Company believes that EBITDA is useful to investors, because
the shipping industry is capital intensive and may involve significant
financing costs.
Adjusted EBITDA represents our EBITDA after giving effect to the removal of
the gain on sale of assets for the relevant periods. Adjusted EBITDA
assists our management and investors by increasing the comparability of our
fundamental performance with respect to our vessel operation, without
including the gains we have received through the sale of assets during the
relevant periods. We believe that this removal of the gain on sale of
assets allows us to better illustrate the operating results of our vessels
for the periods indicated.
EBITDA and Adjusted EBITDA is not an item recognized by GAAP and should not
be considered as an alternative to net income, operating income or any
other indicator of a Company's operating performance required by GAAP. The
Company's definition of EBITDA and Adjusted EBITDA may not be the same as
that used by other companies in the shipping or other industries. The
Company excluded gain on sale of assets to derive an adjusted EBITDA figure
as gain on sale is a non-recurring item.
Fleet Employment Profile as of July 31, 2008
Set out below is a table showing our vessels and their contracted
employment. The contracted charter coverage based on the Company's best
estimate with respect to charter duration as of July 31, 2008 is:
2008 95%
2009 89%
2010 65%
This includes vessels that will be delivered to us in the future but have
already been chartered-out as of their delivery date.
Year Shipyard Charter Time Charter
Vessel Name Dwt Built(a)(Country) Rate(b) Duration(c)
------- ------- --------- ----------- -----------------
($/day)
Panamax class
MV Efrossini 76,000 2003 Japan 69,600(1st)Feb 2008-Feb 2011
59,600(2nd)
49,600(3rd)
MV Maria 76,000 2003 Japan 67,000(1st)Feb 2008-Feb 2011
46,000(2nd)
46,000(3rd)
MV Vassos 76,000 2004 Japan 43,000 Oct 2007-Nov 2008
OPEN(g) Dec 2008
29,000 Jan 2009-Jan 2014
MV Katerina 76,000 2004 Japan 62,000 Feb 2008-Mar 2009
73,000 Apr 2009-Mar 2010
52,500 Apr 2010-Feb 2011
MV Maritsa 76,000 2005 Japan 53,500 Jan 2008-Feb 2009
OPEN(g) Mar 2009-Jan 2010
28,000(d) Feb 2010-Feb 2015
Kamsarmax class
MV Pedhoulas
Merchant 82,300 2006 Japan 38,500 Nov 2007-Nov 2008
75,000(e) Nov 2008-Nov 2009
MV Pedhoulas Trader 82,300 2006 Japan 76,500 June2008-July2008
69,000(1st)July2008-July2013
56,500(2nd)
42,000(3rd)
20,000(4th)
20,000(5th)
MV Pedhoulas Leader 82,300 2007 Japan 36,750 Dec 2007-Dec 2009
Post-Panamax class
MV Stalo 87,000 2006 Japan 48,500 July2007-Aug 2009
OPEN(g) Sept2009-Mar 2010
34,160 Apr 2010-Mar 2015
MV Marina 87,000 2006 Japan 72,200 June2008-Aug 2008
OPEN(g) Sept2008-Nov 2008
61,500(1st)Dec 2008-Dec 2013
51,500(2nd)
41,500(3rd)
31,500(4th)
21,500(5th)
MV Sophia 87,000 2007 Japan 89,500 July2008-Aug 2008
OPEN(g) Sept2008-Oct 2008
34,720 Nov 2008-Nov 2013
NEWBUILDS
Kamsarmax class
Hull no. 2054 81,000 Q1,2010 Korea OPEN(g)
Hull no. 2055 81,000 Q2,2010 Korea OPEN(g)
Post-Panamax class
MV Eleni 87,000 Nov 08 Japan 70,000 Nov 2008-Oct 2009
66,400 Oct 2009-Mar 2010
34,160 Mar 2010-Mar 2015
MV Martine 87,000 Jan 09 Japan 40,500 Jan 2009-Jan 2014
Hull no. 1039 92,000 Q3,2009 Korea OPEN(g)
Hull no. 1050 92,000 Q1,2010 Korea OPEN(g)
[TBD] (f) 90,000+ H2,2010 (f) OPEN(g)
Capesize class
MV Pelopidas 176,000 Q1,2010 China 40,000 H1 2010-H1 2020
MV Kanaris 176,000 Q1,2010 China OPEN(g) Q1 2010-Oct 2011
25,928 Nov 2011-Nov 2031
(a) For newbuilds, the dates shown reflect the expected delivery dates. Q
and H followed by a number denote the relevant quarter or half year
respectively.
(b) Numerical notation adjacent to the charter rate denotes the year in
which this is applicable.
(c) Stated delivery / redelivery dates could alter according to charter
contract and reflect company's best estimate as of July 31, 2008.
(d) Average rate quoted among various options which could alternatively be
exercised.
(e) Charterer holds option to extend charter duration to five years, in
which case the average rate will be $45.000.
(f) Information not disclosed.
(g) Vessel is available for new charter party contracts either in the spot
or in the period time charter market.
About Safe Bulkers, Inc.
The Company is an international provider of marine drybulk transportation
services, transporting bulk cargoes, particularly grain, iron ore and coal,
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
fleet consists of 11 drybulk vessels, all built post 2003, and the Company
has contracted to acquire an additional nine drybulk newbuild vessels to be
delivered at various times beginning in the second half of 2008 through
2010.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in
Section 27A of the Securities Exchange Act of 1933, as amended, and in
Section 21E of the Securities Act of 1934, as amended) concerning future
events, the Company's growth strategy and measures to implement such
strategy; including expected vessel acquisitions and entering into further
time charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates," and variations of such words and
similar expressions are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove to have been correct. These statements involve
known and unknown risks and are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties and
contingencies, many of which are beyond the control of the Company. Actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to the ability to satisfy
the closing conditions of the acquisition, changes in the demand for dry
bulk vessels, competitive factors in the market in which the Company
operates; risks associated with operations outside the United States; and
other factors listed from time to time in the Company's filings with the
Securities and Exchange Commission. The Company expressly disclaims any
obligations or undertaking to release publicly any updates or revisions to
any forward-looking statements contained herein to reflect any change in
the Company's expectations with respect thereto or any change in events,
conditions or circumstances on which any statement is based.
For further information please contact:
Company Contact:
Dr. Loukas Barmparis
President
Safe Bulkers, Inc.
Athens, Greece
Telephone: +30 (210) 895-7070
Investor Relations / Media Contact:
Ramnique Grewal
Vice President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, N.Y. 10169
Tel.: (212) 661-7566
Fax: (212) 661-7526
E-Mail: safebulkers@capitallink.com
