Summary of First Quarter 2009 Results
-- Net revenue for the first quarter of 2009 decreased by 4.9% to
$46.9 million from $49.3 million during the same period in 2008. The
Company operated 12.53 vessels on average during the first quarter of
2009 earning a Time Charter Equivalent ("TCE")(1) rate of $41,486
compared to 11 vessels and a TCE rate of $49,692 during the first
quarter of 2008. The decrease in the TCE rate resulted mainly from the
employment of certain of our vessels in long-term time charters
contracted in previous periods, and to a lesser extent from the lower
prevailing charter rates in the spot market.
-- Net income of $62.0 million or earnings per share of $1.14 in the first
quarter of 2009, an increase of 162.7%, from net income of $23.6 million
or earnings per share of $0.43 in the first quarter of 2008. The
increase in net income of $38.4 million is mainly attributable to early
redelivery income of $29.7 million compared to an early redelivery cost
of $0.4 million, a foreign exchange gain of $1.0 million compared to a
foreign exchange loss of $10.2 million and net revenue of $46.9 million
compared to $49.3 million for the relevant quarters in 2009 and 2008,
respectively.
-- EDITDA(2) of $68.5 million for the first quarter of 2009, an increase of
129.1% from $29.9 million in the first quarter of 2008, mainly due to
higher net income as described above.
-- Declaration of a dividend of $0.15 per share for the first quarter
of 2009.
(1) Refer to definition of "TCE" in Note 6 of Fleet Data Table.
(2) EBITDA represents net income before interest, income tax expense,
depreciation and amortization. See "Reconciliation of Net Income to
EBITDA."
Filing of 2008 Annual Report on Form 20-F
The Company announces that its Annual Report on Form 20-F for the fiscal
year ended December 31, 2008 has been filed with the SEC on May 19, 2009.
The Annual Report is available on the SEC's website (www.sec.gov) as well
as on the Company's website (www.safebulkers.com), a hard copy of which can
be mailed upon request.
Fleet and Employment Profile
The Company's operational fleet is comprised of 13 drybulk vessels with an
average age of 3.43 years as of May 15, 2009 and has contracted employment
under period time charters, including the vessels that will be delivered to
us in the future, as follows: 64% of fleet ownership days for 2009, 54% for
2010 and 48% for 2011. Detailed information on our fleet and its employment
as of May 15, 2009 is contained in our Annual Report on Form 20-F for the
fiscal year ended December 31, 2008.
Management Commentary
Polys Hajioannou, Chairman of the Board of Directors and Chief Executive
Officer of the Company said:
"We continue to closely manage our business through the current recession.
We selectively entered into early-termination agreements with respect to
certain of our charters in exchange for compensation from those charterers.
We successfully amended our loan agreements with our lenders to address the
current depressed market values of drybulk vessels and in the second
quarter of 2009 have reduced our capital expenditure exposure through
selective newbuild cancellations. At the same time, we are paying a
dividend of $0.15 per share for the first quarter of 2009, which represents
a portion of our free cash flows."
Conference Call
On Friday, May 22, 2009 at 09:00 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.
A telephonic replay of the conference call will be available until May 29,
2009 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 First Quarter 2009 Results
Net income increased by 162.7% to $62.0 million for the first quarter of
2009, from $23.6 million for the first quarter of 2008. The increase in net
income is attributable to the following factors:
Net revenues: Net revenues were $46.9 million for the first quarter of
2009, a 4.9% decrease compared to $49.3 million for the first quarter of
2008, due to a decrease in TCE rate from $49,692 to $41,486. The decrease
in TCE rate resulted mainly from the employment of certain of our vessels
in long-term time charters contracted in previous periods, and to a lesser
extent from the lower prevailing charter rates in the spot market.
Vessel operating expenses: Vessel operating expenses increased 20% to $4.8
million for the first quarter of 2009, compared to $4.0 million for the
same period in 2008. Daily vessel operating expenses increased to $4,222
for the first quarter of 2009, compared to $3,992 for the first quarter of
2008, an increase of 5.8%. These increases are attributable mainly to crew
wages and expenses, stores, provisions and lubricants, as well as to the
initial supplies relating to the delivery of the newbuild vessel Martine on
February 12, 2009.
Early redelivery (cost)/income: During the first quarter of 2009, we
recorded $29.7 million of early redelivery income relating to the early
termination of period time charters of our vessels Maritsa and Efrossini,
versus $0.4 million expense for the same period in 2008. Maritsa was
redelivered on January 1, 2009, instead of January 13, 2009, for which we
received compensation of $0.6 million. Maritsa has subsequently been
employed on a one year period time charter through until December 2009,
when a five year time charter will commence. Efrossini was redelivered on
March 15, 2009 instead of January 8, 2011, for which we recognised income
of $29.1 million comprising cash compensation received of $25.5 million net
of commissions, and $3.6 million representing the unearned revenue from the
terminated time charter contract as of the redelivery date. Efrossini is
currently employed in the spot market.
Interest expense: Interest expense decreased to $3.7 million in the first
quarter of 2009 from $4.0 million for the same period in 2008, attributable
primarily to a decrease in interest rates, which offsets the effects of
higher outstanding loan balances. The weighted average annual interest rate
charged on loans outstanding was 3.1358% in the first quarter of 2009,
compared to 4.4626% in the first quarter of 2008. The weighted average of
loans outstanding during the first quarter of 2009 amounted to $483.32
million, compared to $357.62 million during the first quarter of 2008. The
higher average indebtedness reflects additional indebtedness to finance
vessel acquisitions, including advances for newbuildings, and indebtedness
used for general corporate purposes, including payment of previous
dividends.
Foreign currency (loss)/gain: Foreign currency exchange differences
amounted to a $1.0 million gain in the first quarter of 2009 compared to a
$10.2 million loss for the same period in 2008. The effect of foreign
currency exchange differences from loans denominated in foreign currencies
was diminished in the first quarter of 2009, as during this quarter the one
loan that was denominated in a foreign currency was converted into U.S.
dollars.
Cash, time deposits & restricted cash: Cash, time deposits & restricted
cash as of March 31, 2009 include cash and cash equivalents and short-term
bank deposits amounting to $25.0 million, and restricted cash of $120.6
million. The restricted cash represents collateral in favour of our banks
in connection with performance guarantees issued on our behalf for payments
to shipyards due in 2009 totalling $32.6 million and cash pledged in favour
of our lenders of $87.9 million as a result of our supplemental agreements.
Cash, time deposits & restricted cash as of December 31, 2008 include cash
and cash equivalents and short-term bank deposits amounting to $49.0
million, and restricted cash of $32.6 million. The restricted cash
represents collateral in favour of our banks in connection with performance
guarantees issued on our behalf for payments to shipyards due in 2009.
Detailed information on the supplemental agreements is contained in our
Annual Report on Form 20-F for the fiscal year ended December 31, 2008.
Unaudited Interim Financial Information and Other Data
SAFE BULKERS, INC.
CONDENSED COMBINED AND CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIODS ENDED MARCH 31, 2008 AND 2009
Three Month Period Ended
-------------------------
(In thousands of U.S. Dollars except for March 31, March 31,
share and per share data) 2008 2009
---------- ----------
REVENUES:
Revenues 51,251 47,959
Commissions (1,924) (1,099)
Net revenues 49,327 46,860
EXPENSES:
Voyage expenses (59) (67)
Vessel operating expenses (3,996) (4,762)
Depreciation (2,585) (3,179)
General and administrative expenses (2,206) (1,847)
Early redelivery (cost)/income (367) 29,686
Operating income 40,114 66,691
OTHER (EXPENSE) / INCOME:
Interest expense (4,034) (3,730)
Other finance costs (83) (177)
Interest income 378 457
Loss on derivatives (2,592) (2,226)
Foreign currency (loss)/gain (10,159) 987
Amortization and write-off of deferred
finance charges (26) (27)
Net income 23,598 61,975
Earnings per share 0.43 1.14
Weighted average number of shares 54,500,000(3) 54,506,448
(3) 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, 2008 AND MARCH 31, 2009
December 31, March 31,
(In thousands of U.S. Dollars) 2008 2009
---------- ----------
ASSETS
Cash, time deposits & restricted cash 81,605 145,570
Other current assets 6,481 5,026
Total fixed assets 387,296 412,554
Other non current assets 6,900 7,024
Total assets 482,282 570,174
LIABILITIES AND EQUITY
Current portion of long-term debt 54,807 50,454
Other current liabilities 16,056 17,296
Long-term debt, net of current portion 413,483 446,884
Other non-current liabilities 33,481 37,271
Shareholders (deficit)/equity (35,545) 18,269
Total liabilities and equity 482,282 570,174
Fleet Data
Three Months Ended
March 31,
2008 2009
-------- --------
FLEET DATA
Number of vessels at period end 11.00 13.00
Average age of fleet (in years) at period end 2.87 3.31
Ownership days (1) 1,001 1,128
Available days (2) 991 1,128
Operating days (3) 985 1,127
Fleet utilization (4) 98.4% 99.9%
Average number of vessels in the period (5) 11.00 12.53
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 49,692 $ 41,486
Daily vessel operating expenses (7) $ 3,992 $ 4,222
(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 the 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.
RECONCILIATION OF NET INCOME TO EBITDA
(In thousands of U.S. Dollars)
Three Months Ended
March 31,
2008 2009
Net Income 23,598 61,975
Plus Net Interest Expense 3,656 3,273
Plus Depreciation 2,585 3,179
Plus Amortization 26 27
EBITDA 29,865 68,454
EBITDA represents net income before interest, income tax expense,
depreciation and amortization. EBITDA is not a recognized measurement under
US GAAP. EBITDA assists the Company's management and investors by
increasing the comparability of the Company's fundamental performance from
period to period and against the fundamental performance of other companies
in the Company's industry that provide EBITDA information. The Company
believes that EBITDA is useful in evaluating the Company's operating
performance compared to that of other companies in the Company's industry
because the calculation of EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of capital expenditures
and acquisitions, items which may vary for different companies for reasons
unrelated to overall operating performance.
EBITDA has limitations as an analytical tool, and should not be considered
in isolation, or as a substitute for analysis of the Company's results as
reported under US GAAP. EBITDA should not be considered a substitute for
net income and other operations data prepared in accordance with US GAAP or
as a measure of profitability. While EBITDA is frequently used as a measure
of operating results and performance, it is not necessarily comparable to
other similarly titled captions of other companies due to differences in
methods of calculation.
About Safe Bulkers, Inc.
The Company's subsidiaries provide 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 such
services. The Company's common stock is listed on the NYSE where it trades
under the symbol "SB." The Company's subsidiaries currently own 13
Japanese-built drybulk vessels, all built post 2003, and have contracted to
acquire additional drybulk newbuild vessels to be delivered at various
times through 2010.
Forward-Looking Statements
This press release contains forward-looking statements (as defined in
Section 27A of the of the Securities Exchange Act of 1933, as amended, and
in Section 21E of the Securities Exchange 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 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.
Contact Information: For further information please contact: Company Contact: Dr. Loukas Barmparis President Safe Bulkers, Inc. Athens, Greece Telephone: +30 (210) 899-4980 Fax: +30 (210) 895-4159 E-Mail: directors@safebulkers.com 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