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 nine month period
ended September 30, 2019.
Summary of Third Quarter 2019 Results |
|
Three-Month Period EndedSeptember
30, |
(In millions except for per share data) |
|
2018 |
2019 |
% |
Net revenues |
$ |
50.1 |
$ |
50.7 |
1 |
% |
Net income |
|
8.1 |
|
5.2 |
(36 |
)% |
Adjusted net income1 |
|
8.2 |
|
5.9 |
(28 |
)% |
EBITDA2 |
|
27.5 |
|
24.5 |
(11 |
)% |
Adjusted EBITDA3 |
|
27.7 |
|
25.1 |
(9 |
)% |
Earnings per share basic and diluted4 |
$ |
0.05 |
$ |
0.02 |
|
Adjusted earnings per share basic and
diluted4 |
$ |
0.05 |
$ |
0.03 |
|
Average Daily results in U.S. Dollars |
|
Time charter equivalent rate5 |
$ |
13,265 |
$ |
13,311 |
- |
|
Daily vessel operating expenses6 |
|
4,151 |
|
4,448 |
7 |
% |
Daily vessel operating expenses excluding dry-docking and
pre-delivery expenses7 |
|
4,022 |
|
4,053 |
1 |
% |
Daily general and administrative expenses8 |
|
1,425 |
|
1,363 |
(4 |
)% |
Summary of Nine-Months Ended September 30, 2019
Results |
|
Nine-Month Period EndedSeptember
30, |
(In millions except for per share data) |
|
2018 |
2019 |
% |
Net revenues |
$ |
140.6 |
$ |
144.5 |
3 |
% |
Net income |
|
18.1 |
|
12.5 |
(31 |
)% |
Adjusted net income |
|
18.7 |
|
13.2 |
(29 |
)% |
EBITDA |
|
73.4 |
|
70.3 |
(4 |
)% |
Adjusted EBITDA |
|
73.9 |
|
71.0 |
(4 |
)% |
Earnings per share basic and diluted |
$ |
0.09 |
$ |
0.04 |
|
Adjusted earnings per share basic and diluted |
$ |
0.10 |
$ |
0.04 |
|
Average Daily results in U.S. Dollars |
|
Time charter equivalent rate |
$ |
12,833 |
$ |
12,513 |
(3 |
)% |
Daily vessel operating expenses |
|
4,362 |
|
4,406 |
1 |
% |
Daily vessel operating expenses excluding dry-docking and
pre-delivery expenses |
|
4,152 |
|
4,162 |
- |
|
Daily general and administrative expenses |
|
1,299 |
|
1,368 |
5 |
% |
Management Commentary
Dr. Loukas Barmparis, President of the Company,
said: “In the third quarter of 2019 we entered into charters at
higher rates than the first half of 2019. As a result we had a
profitable quarter despite the down time of several vessels due to
scrubber retrofitting. We remain focused in implementing our
environmental investments installing scrubbers on approximately
half of our fleet and completing tank cleaning in the other half in
anticipation of the effectiveness of the IMO sulphur cap
regulations in 2020.”
Chartering our fleet
Our vessels are used to transport bulk cargoes,
particularly coal, grain and iron ore, along worldwide shipping
routes. We intend to employ our vessels on both period time
charters and spot time charters, according to our assessment of
market conditions, with some of the world’s largest consumers of
marine drybulk transportation services. The vessels we deploy on
period time charters provide us with relatively stable cash flow
and high utilization rates, while the vessels we deploy in the spot
market allow us to enhance our profitability if we expect
relatively stronger market conditions, or, maintain our flexibility
in relatively low charter market conditions. Our contracted
employment profile is presented in Table 1. Presently, for 2020,
11% of the fleet has contracted employment. Detailed employment
profile is presented in Table 2.
Table 1: Contracted employment profile of
fleet ownership days as of October 18, 2019
2019 (remaining) |
53% |
2019 (full year) |
90% |
2020 |
11% |
2021 |
7% |
Table 2: Detailed fleet and employment
profile as of October 18, 2019
Vessel Name |
DWT |
Year Built |
Country of construction |
Daily Gross Charter Rate1 |
Charter Duration2 |
Panamax |
Maria |
76,000 |
2003 |
Japan |
|
|
|
Koulitsa |
76,900 |
2003 |
Japan |
$10,800 |
May 2019 |
December 2019 |
Paraskevi |
74,300 |
2003 |
Japan |
$15,250 |
September 2019 |
December 2019 |
Vassos |
76,000 |
2004 |
Japan |
$12,900 |
September 2019 |
March 2020 |
Katerina |
76,000 |
2004 |
Japan |
$13,250 |
September 2019 |
November 2019 |
Maritsa |
76,000 |
2005 |
Japan |
$10,325 |
March 2019 |
December 2019 |
Efrossini |
75,000 |
2012 |
Japan |
$14,433 |
August 2019 |
November 2019 |
Zoe |
75,000 |
2013 |
Japan |
$14,500 |
October 2019 |
December 2019 |
Kypros Land |
77,100 |
2014 |
Japan |
$17,750 |
July 2019 |
November 2019 |
Kypros Sea |
77,100 |
2014 |
Japan |
$13,850 |
May 2019 |
February 2020 |
Kypros Bravery |
78,000 |
2015 |
Japan |
$14,615 |
September 2018 |
October 2019 |
Kypros Sky |
77,100 |
2015 |
Japan |
$14,000 |
May 2019 |
February 2020 |
Kypros Loyalty |
78,000 |
2015 |
Japan |
$13,850 |
March 2019 |
February 2020 |
Kypros Spirit |
78,000 |
2016 |
Japan |
$19,904 |
October 2019 |
December 2019 |
Kamsarmax |
Pedhoulas Merchant |
82,300 |
2006 |
Japan |
$11,350 |
March 2019 |
April 2020 |
Pedhoulas Trader |
82,300 |
2006 |
Japan |
$12,000 |
May 2019 |
May 2020 |
Pedhoulas Leader |
82,300 |
2007 |
Japan |
$9,696 |
February 2019 |
October 2019 |
Pedhoulas Commander |
83,700 |
2008 |
Japan |
$10,850 |
April 2019 |
June 2020 |
Pedhoulas Builder |
81,600 |
2012 |
China |
$16,100 |
September 2019 |
October 2019 |
Pedhoulas Fighter |
81,600 |
2012 |
China |
$15,900 |
August 2019 |
October 2019 |
Pedhoulas Farmer 3,6 |
81,600 |
2012 |
China |
|
|
|
Pedhoulas Cherry |
82,000 |
2015 |
China |
$13,650 |
October 2019 |
December 2019 |
Pedhoulas Rose 3 |
82,000 |
2017 |
China |
$13,000 |
October 2019 |
October 2019 |
Pedhoulas Cedrus |
81,800 |
2018 |
Japan |
|
|
|
Post-Panamax |
Marina |
87,000 |
2006 |
Japan |
$15,250 |
September 2019 |
November 2019 |
Xenia |
87,000 |
2006 |
Japan |
$12,500 |
June 2018 |
October 2019 |
Sophia6 |
87,000 |
2007 |
Japan |
|
|
|
Eleni |
87,000 |
2008 |
Japan |
$17,000 |
October 2019 |
November 2019 |
Martine |
87,000 |
2009 |
Japan |
$13,348 |
August 2019 |
October 2019 |
Andreas K |
92,000 |
2009 |
South Korea |
$15,750 |
October 2019 |
November 2019 |
Panayiota K7 |
92,000 |
2010 |
South Korea |
|
|
|
Agios Spyridonas |
92,000 |
2010 |
South Korea |
$17,850 |
September 2019 |
October 2019 |
Venus Heritage7 |
95,800 |
2010 |
Japan |
$18,900 |
October 2019 |
November 2019 |
Venus History |
95,800 |
2011 |
Japan |
$17,563 |
September 2019 |
October 2019 |
Venus Horizon |
95,800 |
2012 |
Japan |
$21,500 |
August 2019 |
November 2019 |
Troodos Sun |
85,000 |
2016 |
Japan |
$15,250 |
September 2019 |
October 2019 |
Troodos Air |
85,000 |
2016 |
Japan |
$23,843 |
October 2019 |
November 2019 |
Capesize |
Mount Troodos |
181,400 |
2009 |
Japan |
$18,000 |
July 2019 |
January 2020 |
Kanaris |
178,100 |
2010 |
China |
$26,5624 |
September 2011 |
June 2031 |
Pelopidas |
176,000 |
2011 |
China |
$38,000 |
January 2012 |
January 2022 |
Lake Despina |
181,400 |
2014 |
Japan |
$24,3765 |
January 2014 |
January 2024 |
Total dwt of existing fleet |
3,777,000 |
|
Orderbook |
TBN |
85,000 |
1H 2020 |
Japan |
|
|
|
- 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
October 18, 2019, 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.
- MV Pedhoulas Farmer and MV Pedhoulas Rose were sold and leased
back, in 2015 and 2017, respectively, 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
favour of the Company after the second year of the bareboat
charter, at annual intervals and predetermined purchase price.
- Charterer agreed to reimburse us for a fixed amount for the
cost of the scrubber and BWTS to be installed on the vessel, which
is recorded by increasing the recognised daily charter rate by $634
over the remaining tenor of the time charter party.
- 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.
- Vessel installing scrubber.
- Vessel installing scrubber and ballast water treatment system
concurrently with dry-docking.
Order book
As of October 18, 2019, the remaining order
book of the Company consisted of one Post-Panamax class vessel with
scheduled delivery date in the first half of 2020.
Capital expenditure and financing
requirements related to order book
As of October 18, 2019, the aggregate
remaining capital expenditure in relation to the order book was
$30.1 million, of which $6.6 million is payable within 2019 and
$23.5 million is payable within 2020. The Company has the option to
finance up to $13.2 million of the remaining capital expenditure
related to the order book through the periodic issuance of the
Company’s common stock.
Liquidity
As of October 18, 2019, we had liquidity of
$92.8 million consisting of $82.1 million in cash and bank time
deposits and $10.7 million in restricted cash. In addition, we have
secured a commitment from a bank for the post-delivery financing of
our newbuild Post-Panamax class vessel in an amount of up to $26.4
million.
Leverage and repayment
profile
As of September 30, 2019, our consolidated
leverage9, representing total consolidated liabilities divided by
total consolidated assets, was 59%, compared to 56% as of December
31, 2018, mainly due to prevailing market conditions affecting
vessels’ market values. The repayment schedule of our total debt is
presented in Table 3.
Table 3: Repayment Schedule as of
September 30, 2019, on an annual basis($ in
millions)
|
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
2027 |
TOTAL |
Repayment schedule |
5.0 |
65.0 |
90.7 |
89.0 |
73.7 |
196.2 |
32.9 |
1.3 |
14.4 |
568.2 |
Environmental Social Responsibility - Environmental
investments
In the context of our Environmental Social Responsibility
policies the Company is undertaking environmental investments
mainly by retrofitting scrubbers in 20 vessels and ballast water
treatment systems (‘BWTS’) in 38 vessels in total, the progress of
which is presented below in Table 4. The aggregate cost of our
environmental investments is expected to be in the region of $70
million, having incurred and capitalized $35.5 million as of
September 30, 2019.
Table 4: Environmental investments
progress and schedule
|
Expected installations by October 31, 2019 |
Remaining expected installations within 2019 |
BWTS |
16 |
3 |
Scrubbers |
9* |
6 |
* MV Martine, MV Venus Horizon, MV Venus History, MV Andreas K,
MV Pedhoulas Cherry, MV Eleni, MV Pedhoulas Farmer, MV Venus
Heritage, MV Panayiota K.
The expected scheduled scrubber installations
until the completion of the project and the expected down time is
shown in Table 5 on quarterly basis.
Table 5: Expected Scrubber Installation
and related down time per quarter
Scrubbers |
Q4 2019 |
Q1 2020 |
Total Scheduled installations |
9 |
5 |
Expected down time in days** |
315 |
175 |
** Down time includes scheduled dry-docking or special surveys
for 9 vessels to be performed concurrently with their scrubber
installation.
Dividend Policy
The Company has not declared a dividend on the
Company’s common stock for the third quarter of 2019. The Company
had 101,287,990 shares of common stock issued and outstanding as of
October 18, 2019.
The Company declared a cash dividend of $0.50
per share on each of its 8.00% Series C Cumulative Redeemable
Perpetual Preferred Shares (NYSE: SB.PR.C) and 8.00% Series D
Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.D)
for the period from July 30, 2019 to October 29, 2019, payable on
October 30, 2019 to the respective shareholders of record as of
October 22, 2019.
A Company’s subsidiary declares a cash dividend
on a quarterly basis on each of such subsidiary’s 2.95% Series A
Cumulative Redeemable Perpetual Preferred Shares (‘Series A
shares’) to the respective shareholders of record, presented under
the caption “Mezzanine Equity” in the condensed consolidated
balance sheets. The aggregate cash dividend declared for the Series
A shares for the period from July 1, 2019 to September 30, 2019,
which was paid on September 30, 2019, was $0.1 million. The
aggregate cash dividend declared for the Series A shares for the
period from October 1, 2019 to December 31, 2019, payable on
December 31, 2019, is $0.1 million.
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.
Conference Call
On Friday, October 25, 2019 at 8:30 A.M.
Eastern Time, the Company’s management team will host a conference
call to discuss the Company’s financial results.
Participants should dial into the call 10
minutes before the scheduled time using the following numbers: 1
(877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll
Free Dial In) or +44 (0) 2071 928592 (Standard International Dial
In). Please quote Safe Bulkers to the
operator.
A telephonic replay of the conference call will
be available until October 31, 2019 by dialing 1 (866) 331-1332 (US
Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or
+44 (0) 3333 009785 (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 in the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
Management Discussion of Third Quarter
2019 Results
Net income for the third quarter of 2019
amounted to $5.2 million compared to $8.1 million during the same
period in 2018, mainly due to the following factors:
Net revenues: Net revenues increased by 1% to
$50.7 million for the third quarter of 2019, compared to $50.1
million for the same period in 2018, mainly as a result of a
marginal increase in charter rates, despite the decrease in
operating days. The Company operated 41.00 vessels on average
during the third quarter of 2019, earning a Time Charter Equivalent
(“TCE”) rate10 of $13,311, compared to 40.43 vessels and a TCE rate
of $13,265 during the same period in 2018.
Vessel operating expenses: Vessel operating
expenses increased by 9% to $16.8 million for the third quarter of
2019 compared to $15.4 million for the same period in 2018, mainly
as a result of dry docking expense related to four dry dockings
completed and another three dry dockings initiated with aggregate
expenses of $1.5 million for the third quarter of 2019, compared to
two dry-dockings partly completed with aggregate expenses of $0.3
million for the same period of 2018. Pre-delivery expenses
were zero for the third quarter of 2019 compared to $0.2 million
for the same period in 2018 related to the acquisition of MV Mount
Troodos. The Company expenses dry-docking and pre-delivery costs as
incurred, which costs may vary from period to period.
Excluding dry-docking and pre-delivery costs of $1.5 million and
$0.5 million for the third quarter of 2019 and 2018 respectively,
vessel operating expenses increased marginally by 3% to $15.3
million for the third quarter of 2019, compared to $14.9 million
for the same period in 2018. Dry-docking expense is related to the
number of dry-dockings in each period and pre-delivery expenses to
the number of vessel deliveries and second hand acquisitions in
each period. Certain other shipping companies may defer and
amortize dry-docking expense and many do not include dry-docking
expenses within vessel operating expenses costs and present these
separately.
Depreciation: Depreciation increased by 4% to
$12.7 million for the third quarter of 2019, compared to $12.2
million for the same period in 2018, as a result of the
commencement of depreciation of environmental investments that were
completed during the third quarter of 2019 and due to the increase
in the average number of vessels operated by the Company during the
third quarter of 2019.
Voyage expenses: Voyage expenses increased to
$3.6 million for the third quarter of 2019 compared to $1.6 million
for the same period in 2018, mainly as a result of increased vessel
repositioning expenses.
Daily vessel operating expenses11: Daily vessel
operating expenses, calculated by dividing vessel operating
expenses by the ownership days of the relevant period, increased by
7% to $4,448 for the third quarter of 2019 compared to $4,151 for
the same period in 2018. Daily vessel operating expenses excluding
dry-docking and pre-delivery expenses increased by 1% to $4,053 for
the third quarter of 2019 compared to $4,022 for the same period in
2018.
Daily general and administrative expenses12:
Daily general and administrative expenses, which include management
fees payable to our Managers13, decreased by 4% to $1,363 for the
third quarter of 2019, compared to $1,425 for the same period in
2018, mainly due to the favourable movement in the exchange rate of
Euro versus United States Dollar, as the majority of our management
fee expenses in 2019 are denominated in Euros versus 2018 where
part of our management fee expense was denominated in Euros and due
to the decreased company administration expenses.
Unaudited Interim Financial Information
and Other Data
SAFE BULKERS,
INC.CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)(In thousands of
U.S. Dollars except for share and per share data)
|
Three-Months Period Ended September 30, |
|
Nine-Months Period Ended September 30, |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
REVENUES: |
|
|
|
|
|
|
|
Revenues |
52,212 |
|
|
52,927 |
|
|
146,602 |
|
|
150,971 |
|
Commissions |
(2,114 |
) |
|
(2,213 |
) |
|
(5,984 |
) |
|
(6,457 |
) |
Net revenues |
50,098 |
|
|
50,714 |
|
|
140,618 |
|
|
144,514 |
|
EXPENSES: |
|
|
|
|
|
|
|
Voyage expenses |
(1,613 |
) |
|
(3,581 |
) |
|
(4,920 |
) |
|
(8,664 |
) |
Vessel operating expenses |
(15,442 |
) |
|
(16,776 |
) |
|
(47,094 |
) |
|
(49,320 |
) |
Depreciation |
(12,164 |
) |
|
(12,669 |
) |
|
(35,549 |
) |
|
(37,375 |
) |
General and administrative expenses |
(5,300 |
) |
|
(5,140 |
) |
|
(14,021 |
) |
|
(15,307 |
) |
Loss on inventory valuation |
— |
|
|
(348 |
) |
|
— |
|
|
(348 |
) |
Early redelivery cost |
(35 |
) |
|
(63 |
) |
|
(105 |
) |
|
(63 |
) |
Operating income |
15,544 |
|
|
12,137 |
|
|
38,929 |
|
|
33,437 |
|
OTHER (EXPENSE) /
INCOME: |
|
|
|
|
|
|
|
Interest expense |
(6,759 |
) |
|
(6,634 |
) |
|
(19,033 |
) |
|
(20,641 |
) |
Other finance cost |
(90 |
) |
|
(95 |
) |
|
(636 |
) |
|
(212 |
) |
Interest income |
261 |
|
|
410 |
|
|
693 |
|
|
1,230 |
|
Gain on derivatives |
8 |
|
|
— |
|
|
18 |
|
|
— |
|
Foreign currency loss |
(87 |
) |
|
(213 |
) |
|
(457 |
) |
|
(295 |
) |
Amortization and write-off of deferred finance charges |
(798 |
) |
|
(358 |
) |
|
(1,367 |
) |
|
(1,035 |
) |
Net income |
8,079 |
|
|
5,247 |
|
|
18,147 |
|
|
12,484 |
|
Less Preferred dividend |
2,874 |
|
|
2,875 |
|
|
8,511 |
|
|
8,620 |
|
Less Mezzanine equity measurement |
— |
|
|
— |
|
|
— |
|
|
304 |
|
Net income available to common shareholders |
5,205 |
|
|
2,372 |
|
|
9,636 |
|
|
3,560 |
|
Earnings per share basic and diluted |
0.05 |
|
|
0.02 |
|
|
0.09 |
|
|
0.04 |
|
Weighted average number of shares |
101,559,492 |
|
|
101,279,564 |
|
|
101,550,099 |
|
|
101,367,866 |
|
|
|
Nine-Months Period Ended September 30, |
|
|
2018 |
|
2019 |
(In millions of
U.S. Dollars) |
|
|
|
|
CASH FLOW
DATA |
|
|
|
|
Net cash provided by operating
activities |
|
58.8 |
|
|
39.9 |
|
Net cash (used in)/provided by
investing activities |
|
(33.3 |
) |
|
1.4 |
|
Net cash used in financing
activities |
|
(35.0 |
) |
|
(23.6 |
) |
Net (decrease)/increase in
cash and cash equivalents |
|
(9.5 |
) |
|
17.7 |
|
SAFE BULKERS,
INC.CONDENSED CONSOLIDATED
BALANCE SHEETS (UNAUDITED)(In thousands of U.S.
Dollars)
|
|
December 31, 2018 |
|
September 30, 2019 |
ASSETS |
|
|
|
|
Cash, time deposits, and restricted cash |
|
82,084 |
|
|
76,321 |
|
Other current assets |
|
19,178 |
|
|
27,039 |
|
Vessels, net |
|
955,291 |
|
|
932,404 |
|
Advances for vessels |
|
8,596 |
|
|
21,623 |
|
Restricted cash non-current |
|
10,401 |
|
|
10,700 |
|
Other non-current assets |
|
649 |
|
|
752 |
|
Total assets |
|
1,076,199 |
|
|
1,068,839 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current portion of long-term debt |
|
36,185 |
|
|
56,188 |
|
Other current liabilities |
|
18,421 |
|
|
20,494 |
|
Long-term debt, net of current portion |
|
538,508 |
|
|
507,586 |
|
Other non-current liabilities |
|
253 |
|
|
330 |
|
Mezzanine equity |
|
16,998 |
|
|
17,176 |
|
Shareholders’ equity |
|
465,834 |
|
|
467,065 |
|
Total liabilities and equity |
|
1,076,199 |
|
|
1,068,839 |
|
TABLE 6RECONCILIATION OF
ADJUSTED NET INCOME, EBITDA, ADJUSTED EBITDA AND ADJUSTED EARNINGS
PER SHARE
|
|
Three-Months Period Ended September 30, |
|
Nine-Months Period Ended September 30, |
(In thousands of U.S. Dollars
except for share and per share data) |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
Net Income - Adjusted Net
Income |
|
|
|
|
|
|
|
|
Net Income |
|
8,079 |
|
|
5,247 |
|
|
18,147 |
|
|
12,484 |
|
Less Gain on derivatives |
|
(8 |
) |
|
— |
|
|
(18 |
) |
|
— |
|
Plus Foreign currency loss |
|
87 |
|
|
213 |
|
|
457 |
|
|
295 |
|
Plus Early redelivery cost |
|
35 |
|
|
63 |
|
|
105 |
|
|
63 |
|
Plus Loss on inventory
valuation |
|
— |
|
|
348 |
|
|
— |
|
|
348 |
|
Adjusted Net
income |
|
8,193 |
|
|
5,871 |
|
|
18,691 |
|
|
13,190 |
|
EBITDA - Adjusted
EBITDA |
|
|
|
|
|
|
|
|
Net income |
|
8,079 |
|
|
5,247 |
|
|
18,147 |
|
|
12,484 |
|
Plus Net Interest expense |
|
6,498 |
|
|
6,224 |
|
|
18,340 |
|
|
19,411 |
|
Plus Depreciation |
|
12,164 |
|
|
12,669 |
|
|
35,549 |
|
|
37,375 |
|
Plus Amortization |
|
798 |
|
|
358 |
|
|
1,367 |
|
|
1,035 |
|
EBITDA |
|
27,539 |
|
|
24,498 |
|
|
73,403 |
|
|
70,305 |
|
Plus Early Redelivery
cost |
|
35 |
|
|
63 |
|
|
105 |
|
|
63 |
|
Plus Loss on inventory
valuation |
|
— |
|
|
348 |
|
|
— |
|
|
348 |
|
Less Gain on derivatives |
|
(8 |
) |
|
— |
|
|
(18 |
) |
|
— |
|
Plus Foreign currency
loss |
|
87 |
|
|
213 |
|
|
457 |
|
|
295 |
|
ADJUSTED
EBITDA |
|
27,653 |
|
|
25,122 |
|
|
73,947 |
|
|
71,011 |
|
Earnings per share |
|
|
|
|
|
|
|
|
Net income |
|
8,079 |
|
|
5,247 |
|
|
18,147 |
|
|
12,484 |
|
Less Preferred dividend |
|
2,874 |
|
|
2,875 |
|
|
8,511 |
|
|
8,620 |
|
Less Mezzanine equity
measurement |
|
— |
|
|
— |
|
|
— |
|
|
304 |
|
Net income available to common
shareholders |
|
5,205 |
|
|
2,372 |
|
|
9,636 |
|
|
3,560 |
|
Weighted average number of
shares |
|
101,559,492 |
|
|
101,279,564 |
|
|
101,550,099 |
|
|
101,367,866 |
|
Earnings per
share |
|
0.05 |
|
|
0.02 |
|
|
0.09 |
|
|
0.04 |
|
Adjusted Earnings per
share |
|
|
|
|
|
|
|
|
Adjusted Net
Income |
|
8,193 |
|
|
5,871 |
|
|
18,691 |
|
|
13,190 |
|
Less Preferred dividend |
|
2,874 |
|
|
2,875 |
|
|
8,511 |
|
|
8,620 |
|
Less Mezzanine equity
measurement |
|
— |
|
|
— |
|
|
— |
|
|
304 |
|
Adjusted Net income available
to common shareholders |
|
5,319 |
|
|
2,996 |
|
|
10,180 |
|
|
4,266 |
|
Weighted average number of
shares |
|
101,559,492 |
|
|
101,279,564 |
|
|
101,550,099 |
|
|
101,367,866 |
|
Adjusted Earnings per
share |
|
0.05 |
|
|
0.03 |
|
|
0.10 |
|
|
0.04 |
|
EBITDA, Adjusted EBITDA, Adjusted Net income and
Adjusted earnings per share are not recognized measurements under
US GAAP.
- EBITDA represents Net income before interest,
income tax expense, depreciation and amortization.
- Adjusted EBITDA represents EBITDA before gain
on derivatives, early redelivery cost, loss on inventory valuation
and loss on foreign currency.
- Adjusted Net income represents Net income
before gain on derivatives, early redelivery cost, loss on
inventory valuation and loss on foreign currency.- Adjusted
earnings per share represents Adjusted Net income less preferred
dividend and mezzanine equity measurement divided by the weighted
average number of shares.
EBITDA, Adjusted EBITDA, Adjusted Net income and
Adjusted earnings per share are used as supplemental financial
measures by management and external users of financial statements,
such as investors, to assess our financial and operating
performance. The Company believes that these non-GAAP financial
measures assist our management and investors by increasing the
comparability of our performance from period to period. The Company
believes that including these supplemental financial measures
assists our management and investors in (i) understanding and
analyzing the results of our operating and business performance,
(ii) selecting between investing in us and other investment
alternatives and (iii) monitoring our financial and operational
performance in assessing whether to continue investing in us. The
Company believes that EBITDA, Adjusted EBITDA, Adjusted Net income
and Adjusted earnings per share are useful in evaluating the
Company’s operating performance from period to period because the
calculation of EBITDA generally eliminates the effects of
financings, income taxes and the accounting effects of capital
expenditures and acquisitions, the calculation of Adjusted EBITDA
generally further eliminates the effects from gain on derivatives,
early redelivery cost, loss on inventory valuation and loss on
foreign currency, items which may vary from year to year and for
different companies for reasons unrelated to overall operating
performance. Furthermore, the calculation of Adjusted Net income
generally eliminates the effects of gain on derivatives, early
redelivery cost, loss on inventory valuation and loss on foreign
currency, items which may vary from year to year and for different
companies for reasons unrelated to overall operating performance.
EBITDA, Adjusted EBITDA, Adjusted Net income and Adjusted earnings
per share have limitations as analytical tools, and should not be
considered in isolation, or as a substitute for analysis of the
Company’s results as reported under US GAAP. EBITDA, Adjusted
EBITDA, Adjusted Net income should not be considered as substitutes
for net income and other operations data prepared in accordance
with US GAAP or as a measure of profitability. While EBITDA and
Adjusted EBITDA, Adjusted Net income and Adjusted earnings per
share, are frequently used as measures of operating results and
performance, they are not necessarily comparable to other similarly
titled captions of other companies due to differences in methods of
calculation. In evaluating Adjusted EBITDA, Adjusted Net income and
Adjusted earnings per share, you should be aware that in the future
we may incur expenses that are the same as or similar to some of
the adjustments in this presentation. Our presentation of Adjusted
EBITDA, Adjusted Net income and Adjusted earnings per share should
not be construed as an inference that our future results will be
unaffected by the excluded items.
TABLE 7: FLEET DATA AND AVERAGE DAILY
INDICATORS
|
Three-Months Period Ended September 30, |
|
Nine-Months Period Ended September 30, |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
FLEET DATA |
|
|
|
|
|
|
|
Number of vessels at period’s end |
41 |
|
|
41 |
|
|
41 |
|
|
41 |
|
Average age of fleet (in years) |
8.08 |
|
|
9.08 |
|
|
8.08 |
|
|
9.08 |
|
Ownership days (1) |
3,720 |
|
|
3,772 |
|
|
10,796 |
|
|
11,193 |
|
Available days (2) |
3,655 |
|
|
3,541 |
|
|
10,574 |
|
|
10,857 |
|
Operating days (3) |
3,628 |
|
|
3,447 |
|
|
10,433 |
|
|
10,605 |
|
Fleet utilization on ownership days (4) |
97.5 |
% |
|
91.4 |
% |
|
96.6 |
% |
|
94.7 |
% |
Fleet utilization on available days (5) |
99.3 |
% |
|
97.3 |
% |
|
98.7 |
% |
|
97.7 |
% |
Average number of vessels in the period (6) |
40.43 |
|
|
41.00 |
|
|
39.55 |
|
|
41.00 |
|
AVERAGE DAILY RESULTS |
|
|
|
|
|
|
|
Time charter equivalent rate (7) |
$ |
13,265 |
|
|
$ |
13,311 |
|
|
$ |
12,833 |
|
|
$ |
12,513 |
|
Daily vessel operating expenses (8) |
$ |
4,151 |
|
|
$ |
4,448 |
|
|
$ |
4,362 |
|
|
$ |
4,406 |
|
Daily vessel operating expenses excluding dry-docking and
pre-delivery expenses (9) |
$ |
4,022 |
|
|
$ |
4,053 |
|
|
$ |
4,152 |
|
|
$ |
4,162 |
|
Daily general and administrative expenses (10) |
$ |
1,425 |
|
|
$ |
1,363 |
|
|
$ |
1,299 |
|
|
$ |
1,368 |
|
TIME CHARTER EQUIVALENT RATE RECONCILIATION |
|
|
|
|
|
|
|
(In thousands of U.S. Dollars except for available days and
Time charter equivalent rate) |
|
|
|
|
|
|
|
Revenues |
$ |
52,212 |
|
|
$ |
52,927 |
|
|
$ |
146,602 |
|
|
$ |
150,971 |
|
Less commissions |
(2,114 |
) |
|
(2,213 |
) |
|
(5,984 |
) |
|
(6,457 |
) |
Less voyage expenses |
(1,613 |
) |
|
(3,581 |
) |
|
(4,920 |
) |
|
(8,664 |
) |
Time charter equivalent revenue |
$ |
48,485 |
|
|
$ |
47,133 |
|
|
$ |
135,698 |
|
|
$ |
135,850 |
|
Available days (2) |
3,655 |
|
|
3,541 |
|
|
10,574 |
|
|
10,857 |
|
Time charter equivalent rate (7) |
$ |
13,265 |
|
|
$ |
13, 311 |
|
|
$ |
12,833 |
|
|
$ |
12,513 |
|
_____________
- Ownership days represents the aggregate number of days in a
period during which each vessel in our fleet has been owned by
us.
- Available days represents 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, dry-dockings, vessel upgrades or special or
intermediate surveys.
- Operating days represents the number of our available days in a
period less the aggregate number of days that our vessels are
offhire due to any reason, excluding scheduled maintenance.
- Fleet utilization on ownership days is calculated by dividing
the number of operating days by the number of ownership days for
the relevant period, representing a shipping industry performance
measure. This measure demonstrates the percentage of time in the
relevant period our vessels generate revenue.
- Fleet utilization on available days is calculated by dividing
the number of operating days by the number of available days during
the same period representing a shipping industry performance
measure used to measure the ability of the Company to find suitable
employment for its vessels and minimize the off- hire days for
reasons other than scheduled maintenance, repairs, dry-dockings,
vessel upgrades and special or intermediate surveys.
- Average number of vessels in the period is calculated by
dividing ownership days in the period by the number of days in that
period.
- Time charter equivalent rate, or TCE rate, represents our
charter revenues less commissions and voyage expenses during a
period divided by the number of available days during such period.
TCE rate is a standard shipping industry performance measure used
primarily to compare daily earnings generated by vessels on period
time charters and spot time charters with daily earnings generated
by vessels on voyage charters, because charter rates for vessels on
voyage charters are generally not expressed in per day amounts,
while charter rates for vessels on period time charters and spot
time charters generally are expressed in such amounts. We have only
rarely employed our vessels on voyage charters and, as a result,
generally our TCE rates approximate our time charter rates.
- Daily vessel operating expenses are calculated by dividing
vessel operating expenses for the relevant period by ownership days
for such period. Vessel operating expenses include crewing,
insurance, lubricants, spare parts, provisions, stores, repairs,
maintenance including dry-docking, statutory and classification
expenses and other miscellaneous items.
- Daily vessel operating expenses excluding dry-docking and
pre-delivery expenses are calculated by dividing vessel operating
expenses excluding dry-docking and pre-delivery expenses for the
relevant period by ownership days for such period. Dry-docking
expenses include costs of shipyard, paints and agent expenses and
pre-delivery expenses include initially supplied spare parts,
stores, provisions and other miscellaneous items provided to a
newbuild or second hand acquisition prior to their operation.
- Daily general and administrative expenses are calculated by
dividing general and administrative expenses for the relevant
period by ownership days for such period. Daily general and
administrative expenses include daily management fees payable to
our Managers and daily company administration expenses.
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, series C
preferred stock and series D preferred stock are listed on the
NYSE, and trade under the symbols “SB”, “SB.PR.C”, and “SB.PR.D”,
respectively.
Forward-Looking Statements
This press release contains forward-looking
statements (as defined in Section 27A of the Securities Exchange
Act of 1934, as amended, and in Section 21E of the Securities Act
of 1933, 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 that 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 drybulk 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 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
BarmparisPresidentSafe Bulkers, Inc.Tel.: +30 21 11888400+357 25
887200E-Mail:directors@safebulkers.com
Investor Relations / Media
Contact:Judit Csepregi, Investor Relations AdvisorCapital
Link, Inc.230 Park Avenue, Suite 1536New York, N.Y. 10169Tel.:
(212) 661-7566Fax: (212) 661-7526
E-Mail:safebulkers@capitallink.com
1 Adjusted Net income is a non-GAAP measure.
Adjusted Net income represents Net income before gain on
derivatives, early redelivery cost, loss on inventory valuation and
loss on foreign currency. See Table 6.
2 EBITDA is a non-GAAP measure and represents
Net income plus net interest expense, tax, depreciation and
amortization. See Table 6.
3 Adjusted EBITDA is a non-GAAP measure and
represents EBITDA before gain on derivatives, early redelivery
cost, loss on inventory valuation and loss on foreign currency. See
Table 6.
4 Earnings per share and Adjusted Earnings per
share represent Net Income and Adjusted Net income less preferred
dividend and mezzanine equity measurement divided by the weighted
average number of shares respectively. See Table 6.
5 Time charter equivalent rate, or TCE rate,
represents our charter revenues less commissions and voyage
expenses during a period divided by the number of available days
during such period. See Table 7.
6 Daily vessel operating expenses are calculated
by dividing vessel operating expenses for the relevant period by
ownership days for such period. See Table 7.
7 Daily vessel operating expenses excluding
dry-docking and pre-delivery expenses are calculated by dividing
vessel operating expenses excluding dry-docking and pre-delivery
expenses for the relevant period by ownership days for such period.
See Table 7.
8 Daily general and administrative expenses are
calculated by dividing general and administrative expenses for the
relevant period by ownership days for such period. See Table 7.
9 Consolidated leverage is a non-GAAP measure
and represents total consolidated liabilities divided by total
consolidated assets. Total consolidated assets are based on the
market value of all fleet vessels (before scrubber installation)
and the book value of all other assets. This measure assists our
management and investors by increasing the comparability of our
leverage from period to period.
10 TCE represents charter revenues net of commissions and voyage
expenses divided by the number of available days. See Table 3.
11 See Table 2.
12 See Table 2.
13 Safety Management Overseas S.A. and Safe Bulkers Management
Limited, each of which is a related party that is referred to in
this press release as “our Manager” and collectively “our
Managers’’.
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