Safe Bulkers, Inc. Reports Second Quarter and First Half 2012 Results and Declares Quarterly Dividend
ATHENS, GREECE -- (Marketwire) -- 08/06/12 -- 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 periods ended June 30, 2012. The Company's Board of Directors also declared a quarterly dividend of $0.15 per share for the second quarter of 2012.
Summary of Second Quarter 2012 Results
- Net revenue for the second quarter of 2012 increased by 14% to $47.0 million from $41.2 million during the same period in 2011.
- Net income for the second quarter of 2012 increased by 13% to $21.5 million from $19.1 million during the same period in 2011. Adjusted net income(1) for the second quarter of 2012 decreased by 7% to $23.7 million from $25.5 million, during the same period in 2011.
- EBITDA(2) for the second quarter of 2012 increased by 24% to $31.6 million from $25.5 million during the same period in 2011. Adjusted EBITDA(1) for the second quarter of 2012 increased by 6% to $33.7 million from $31.9 million during the same period in 2011.
- Earnings per share ("EPS") and Adjusted EPS(1) for the second quarter of 2012 was $0.28 and $0.31 respectively, calculated on a weighted average number of shares of 76,653,848, compared to $0.27 and $0.36, respectively, for the same period in 2011, calculated on a weighted average number of shares of 70,116,022.
- The Company's Board of Directors declared a dividend of $0.15 per share for the second quarter of 2012.
Summary of Six Months Ended June 30, 2012 Results
- Net revenue for the first six months of 2012 increased by 9.1% to $91.1 million from $83.5 million during the same period in 2011.
- Net income for the first six months of 2012 decreased by 6.9% to $43.2 million from $46.4 million during the same period in 2011. Adjusted net income for the first six months of 2012 decreased by 12% to $46.5 million from $52.9 million during the same period in 2011.
- EBITDA for the first six months of 2012 increased by 4% to $62.3 million from $59.9 million during the same period in 2011. Adjusted EBITDA for the first six months of 2012 decreased by 1% to $65.6 million from $66.4 million during the same period in 2011.
- EPS and Adjusted EPS for the first six months of 2012 was $0.58 and 0.63, respectively, calculated on a weighted average number of shares of 74,261,399, compared to $0.68 and $0.78 for the same period in 2011, calculated on a weighted average number of shares of 68,010,508.
Fleet and Employment Profile
As of July 31, 2012, the Company's current fleet was comprised of 21 drybulk vessels with an average age of 4.2 years and the Company had contracted to acquire eight newbuild drybulk vessels with deliveries scheduled at various times through 2014.
In May 2012, we took delivery of the vessel Pedhoulas Builder, an 81,600 dwt newbuild Kamsarmax-class vessel.
Set out below is a table showing the Company's current fleet and contracted newbuild vessels and their contracted employment.
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Year Built Country of Charter Rate Charter
Vessel Name DWT (1) construction (2) USD/day Duration (3)
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Current Fleet
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Panamax
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Apr 2011 -
Maria 76,000 2003 Japan 20,250 Apr 2014
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Nov 2008 -
Vassos 76,000 2004 Japan 29,000 Oct 2013
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Feb 2011 -
Katerina 76,000 2004 Japan 20,000 Feb 2014
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Mar 2010 -
Maritsa 76,000 2005 Japan 28,069 Mar 2015
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Jul 2012 -
Efrossini 75,000 2012 Japan 15,700 Oct 2012
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Kamsarmax
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Pedhoulas Aug 2011 -
Merchant 82,300 2006 Japan 18,350 Aug 2013
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Pedhoulas Trader 82,300 2006 Japan 41,850
Aug 2008 -
BPI + Jul 2013
Aug 2013 -
6.5%(4) Jul 2015
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Jun 2012 -
Pedhoulas Leader 82,300 2007 Japan 13,250 May 2014
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Pedhoulas Jun 2012 -
Builder 81,600 2012 China 11,300 Aug 2012
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Post-Panamax
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Mar 2010 -
Stalo 87,000 2006 Japan 34,160 Feb 2015
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Dec 2008 -
Marina 87,000 2006 Japan 41,557 Dec 2013
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Oct 2008 -
Sophia 87,000 2007 Japan 34,720 Sep 2013
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Apr 2010 -
Eleni 87,000 2008 Japan 41,738 Mar 2015
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Feb 2009 -
Martine 87,000 2009 Japan 40,500 Feb 2014
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Jul 2012 -
Andreas K 92,000 2009 South Korea 7,250 Aug 2012
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Jul 2012 -
Panayiota K 92,000 2010 South Korea 15,750 Oct 2012
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Mar 2012 -
Venus Heritage 95,800 2010 Japan 12,250 Oct 2012
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Jul 2012 -
Venus History 95,800 2011 Japan 11,000 Sep 2012
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Jul 2012 -
Venus Horizon 95,800 2012 Japan 10,000 Aug 2012
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Capesize
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Sep 2011 -
Kanaris 178,100 2010 China 25,928 Jun 2031
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Jan 2012 -
Pelopidas 176,000 2011 China 38,000 Dec 2021
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Subtotal 1,968,000
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Newbuilds
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Panamax
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Hull No. 814 75,000 2H 2013 Japan
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Hull No. 1659 76,600 2H 2013 Japan
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Hull No. 1660 76,600 1H 2014 Japan
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Kamsarmax
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Hull No. 617 82,000 2H 2012 China
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Hull No. 631 82,000 2H 2012 China (BPI + 4%)
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Aug 2012 -
-1,000 (5) Jul 2013
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Post-Panamax
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Hull No. 2396 84,000 2H 2014 Japan
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Hull No. 2397 84,000 2H 2014 Japan
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Capesize
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Dec 2012 -
Hull No. 131 180,000 2H 2012 China 24,810 Dec 2022
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Subtotal 740,200
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Total 2,708,200
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(1) For newbuilds, the date shown reflect the expected delivery date.
(2) Charter rate represents 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 charter rate over the duration of
the applicable charter period or series of charter periods, as
applicable.
(3) The start dates listed reflect either actual start dates or, in the case
of contracted charters that had not commenced as of July 31, 2012,
scheduled start dates. Actual start dates and redelivery dates may
differ from the scheduled start and redelivery dates depending on the
terms of the charter and market conditions.
(4) A period time charter with a forward delivery date in August of 2013 for
a duration of 23 to 25 months, at a gross daily charter rate linked to
the Baltic Panamax Index ("BPI") plus a premium of 6.5%.
(5) A period time charter with a forward delivery date in August of 2012 for
a duration of 10 to 12 months, at a gross daily charter rate linked to
the BPI plus a premium of 4%. Net daily charter rate payable will be
reduced by an amount of $1,000.
The Company's charter coverage(3) for the following periods, based on the Company's best estimates as of July 31, 2012, was:
2012 (remaining) 76%
2012 (full year) 89%
2013 59%
2014 30%
Capital expenditure requirements and liquidity as of July 31, 2012
As of July 31, 2012, the remaining capital expenditure requirements for amounts due to shipyards or sellers of newbuilds, net of commissions, for the delivery of the Company's eight newbuilds amounted to $186.6 million, of which $48.2 million was scheduled to be paid in 2012, $59.6 million in 2013 and $78.8 million in 2014.
As of July 31, 2012, the Company had $11.3 million in cash and short-term time deposits, $5.4 million in long-term restricted cash, and estimated aggregate borrowing capacity of $224.1 million, consisting of $72.0 million in undrawn or committed loan facilities, $112.1 million available under existing revolving credit facilities and $40.0 million undrawn availability against the Company's $50.0 million floating rate note.
Additionally, the Company utilizes cash flow from operations generated by its contracted period time charters and has the option to borrow additional amounts secured by one or more of its seven debt-free newbuilds, upon their delivery to us.
Dividend Declaration
The Company's Board of Directors declared a cash dividend on the Company's common stock of $0.15 per share payable on or about August 31, 2012 to shareholders of record at the close of trading of the Company's common stock on the New York Stock Exchange (the "NYSE") on August 24, 2012.
The Company has 76,656,279 shares of common stock issued and outstanding as of August 6, 2012.
The Board of Directors of the Company is continuing a policy of paying out a portion of the Company's free cash flow at a level it considers prudent in light of the current economic and financial environment. 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 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 financial conditions. Accordingly, dividends might be reduced or not be paid in the future.
Management Commentary
Dr. Loukas Barmparis, President of the Company, said: "Charter market conditions are challenging, while bank financing is generally scarce. Our revenues in the current depressed charter market have been supported by agreements entered into during earlier periods. In this environment, asset prices have dropped significantly offering acquisition opportunities attractive for companies like ours which have managed to avoid financial distress and comply with their debt covenants. Our management team cautiously monitors market conditions. We believe that having a young and modern fleet, which is expected to reach 29 vessels by 2014, will leave us well-positioned for the next shipping cycle.''
Conference Call
On Tuesday, August 7, 2012 at 9:00 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 August 17, 2012 by dialing 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 in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Management Discussion of Second Quarter 2012 Results
Net income increased by 13% to $21.5 million for the second quarter of 2012 from $19.1 million for the second quarter of 2011, mainly due to the following factors:
Net revenues: Net revenues increased by 14% to $47.0 million for the second quarter of 2012, compared to $41.2 million for the same period in 2011, mainly due to an increased number of operating days. The Company owned 20.35 vessels on average during the second quarter of 2012, earning a TCE(4) rate of $24,168, compared to 16 vessels and a TCE rate of $27,921 during the same period in 2011.
Vessel operating expenses: Vessel operating expenses increased by 29% to $8.4 million for the second quarter of 2012, compared to $6.5 million for the same period in 2011. The increase in operating expenses is mainly attributable to an increase in ownership days by 27.2% to 1,852 days for the second quarter of 2012 from 1,456 days for the same period in 2011. Daily vessel operating expenses increased by 1% to $4,526 for the second quarter of 2012, compared to $4,479 for the same period in 2011.
Depreciation: Depreciation increased to $7.9 million for the second quarter of 2012, compared to $5.6 million for the same period in 2011, as a result of the increase in the average number of vessels owned by the Company during the second quarter of 2012.
Voyage expenses: Voyage expenses increased to $2.3 million for the second quarter of 2012, compared to $0.8 million for the same period in 2011, as a result of increased vessel repositioning expenses.
Interest expense: Interest expense increased by 133% to $2.1 million in the second quarter of 2012 from $0.9 million for the same period in 2011, mainly due to a higher weighted average loan balance and a higher weighted average interest rate.
Loss on derivatives: Loss on derivatives decreased to $2.1 million in the second quarter of 2012, compared to a loss of $6.1 million for the same period in 2011, as a result of changes in the mark-to-market valuations of the Company's interest rate swap transactions that the Company's employs to manage the risk and interest rate exposure of the Company's loan and credit facilities. These swaps economically hedge the interest rate exposure of the Company's aggregate loans outstanding. The average remaining period of the Company's swap contracts is 2.3 years as of June 30, 2012. The valuation of these interest rate swap transactions at the end of each quarter is affected by the prevailing interest rates at that time.
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 Six-Months Period
Ended Ended
June 30, June 30,
---------------------- ----------------------
2011 2012 2011 2012
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REVENUES:
Revenues 41,974 47,875 85,019 92,679
Commissions (788) (860) (1,559) (1,591)
Net revenues 41,186 47,015 83,460 91,088
EXPENSES:
Voyage expenses (756) (2,255) (807) (3,566)
Vessel operating expenses (6,521) (8,383) (12,266) (16,480)
Depreciation (5,645) (7,898) (11,227) (15,219)
General and administrative
expenses (1,954) (2,469) (3,892) (4,802)
Early redelivery income - - 101 -
Operating income 26,310 26,010 55,369 51,021
OTHER (EXPENSE) / INCOME:
Interest expense (926) (2,071) (2,642) (3,896)
Other finance costs (63) (219) (120) (610)
Interest income 242 272 528 553
Loss on derivatives (6,145) (2,127) (6,151) (3,368)
Foreign currency
(loss)/gain (222) 10 (391) -
Amortization and write-off
of deferred finance
charges (89) (332) (178) (544)
Net income 19,107 21,543 46,415 43,156
Earnings per share 0.27 0.28 0.68 0.58
Weighted average number of
shares 70,116,022 76,653,848 68,010,508 74,261,399
SAFE BULKERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands of U.S. Dollars)
December 31,
2011 June 30, 2012
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ASSETS
Cash, time deposits 28,121 7,964
Other current assets 9,838 12,865
Vessels, net 655,356 762,311
Advances for vessel acquisition and vessels
under construction 122,307 77,721
Restricted cash non-current 5,423 5,423
Long-term investment 50,000 50,000
Other non-current assets 6,226 6,429
Total assets 877,271 922,713
LIABILITIES AND EQUITY
Current portion of long-term debt 18,486 19,196
Other current liabilities 33,187 38,269
Long-term debt, net of current portion 465,805 460,515
Other non-current liabilities 27,951 16,570
Shareholders' equity 331,842 388,163
Total liabilities and equity 877,271 922,713
Fleet Data 2012
Three-Months Six-Months
Period Ended Period Ended
June 30, June 30,
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2011 2012 2011 2012
FLEET DATA
Number of vessels at period's end 16 21 16 21
Average age of fleet (in years) 4.30 4.14 4.30 4.14
Ownership days (1) 1,456 1,852 2,896 3,570
Available days (2) 1,448 1,852 2,888 3,570
Operating days (3) 1,443 1,825 2,883 3,541
Fleet utilization (4) 99.1% 98.5% 99.6% 99.2%
Average number of vessels in the
period (5) 16.00 20.35 16.00 19.62
AVERAGE DAILY RESULTS
Time charter equivalent rate (6) $ 27,921 $ 24,168 $ 28,619 $ 24,516
Daily vessel operating expenses (7) $ 4,479 $ 4,526 $ 4,235 $ 4,616
(1) Ownership days represent the aggregate number of days in a period during
which each vessel in the Company's fleet has been owned by the Company.
(2) Available days represent the total number of days in a period during
which each vessel in the Company's fleet was in the Company's 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 the Company's available days in a
period less the aggregate number of days that the Company's vessels are
off-hire due to any reason, excluding scheduled maintenance.
(4) Fleet utilization is calculated by dividing the number of the Company's
operating days during a period by the number of the Company's 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 the Company's
charter revenues less commissions and voyage expenses during a period
divided by the number of the Company's available days during that
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 calculated by dividing vessel operating
expenses by ownership days for the relevant period.
TABLE 1
RECONCILIATION OF ADJUSTED NET INCOME, EBITDA, ADJUSTED EBITDA AND ADJUSTED
EPS
Three-Months Six-Months
Period Ended June 30, Period Ended June 30,
----------------------- -----------------------
(In thousands of U.S.
Dollars except for share
and per share data) 2011 2012 2011 2012
----------- ----------- ---------- -----------
Net Income - Adjusted Net
Income
Net Income 19,107 21,543 46,415 43,156
Less Gain on Sale of Assets - - - -
Less Early Redelivery
Income - - (101) -
Plus Loss on Derivatives 6,145 2,127 6,151 3,368
Plus Foreign Currency
Loss/(gain) 222 (10) 391 -
Adjusted Net Income 25,474 23,660 52,856 46,524
EBITDA - Adjusted EBITDA
Net Income 19,107 21,543 46,415 43,156
Plus Net Interest Expense 684 1,799 2,114 3,343
Plus Depreciation 5,645 7,898 11,227 15,219
Plus Amortization 89 332 178 544
EBITDA 25,525 31,572 59,934 62,262
Less Gain on Sale of Assets - - - -
Less Early Redelivery
Income - - (101) -
Plus Loss on Derivatives 6,145 2,127 6,151 3,368
Plus Foreign Currency
Loss/(gain) 222 (10) 391 -
ADJUSTED EBITDA 31,892 33,689 66,375 65,630
EPS - Adjusted EPS
Net Income 19,107 21,543 46,415 43,156
Adjusted Net Income 25,474 23,660 52,856 46,524
Weighted average number of
shares 70,116,022 76,653,848 68,010,508 74,261,399
EPS 0.27 0.28 0.68 0.58
Adjusted EPS 0.36 0.31 0.78 0.63
EBITDA represents net income before interest, income tax expense, depreciation and amortization. Adjusted EBITDA represents EBITDA before gain/(loss) on sale of assets, early redelivery income/(cost) and gain/(loss) on derivatives and foreign currency. EBITDA and adjusted EBITDA are not recognized measurements under US GAAP. EBITDA and adjusted EBITDA assist 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 and adjusted EBITDA information. The Company believes that EBITDA and adjusted EBITDA are 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 and the calculation of adjusted EBITDA generally further eliminates the effects from gain/(loss) on sale of assets, early redelivery income/(cost) and gain/(loss) on derivatives and foreign currency, items which may vary for different companies for reasons unrelated to overall operating performance.
EBITDA, adjusted EBITDA, Adjusted Net Income and Adjusted EPS 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 and adjusted EBITDA 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 are frequently used as measures of operating results and performance, are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
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 is listed on the NYSE (NYX), where it trades under the symbol "SB". The Company's current fleet consists of 21 drybulk vessels, all built post-2003, and the Company has contracted to acquire eight additional drybulk newbuild vessels to be delivered at various times through 2014.
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 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.
(1) Adjusted net income, Adjusted EPS and Adjusted EBITDA represent Net Income, EPS and EBITDA before gain/(loss) on sale of assets, early redelivery income/(cost) and gain/(loss) on derivatives and foreign currency respectively. See Table 1.
(2) EBITDA represents net income plus interest expense, tax, depreciation and amortization. See Table 1.
(3) Charter coverage is determined, for the referenced period, by dividing the total number of contracted days by the total number of ownership days for existing vessels and for newbuild vessels upon their delivery to us.
(4) Time charter equivalent rates, or TCE rates, represent the Company's charter revenues less commissions and voyage expenses during a period divided by the number of our available days during the period.
For further information please contact: Company Contact: Dr. Loukas Barmparis President Safe Bulkers, Inc. 30-32 Karamanli Avenue Voula, 166 05 Athens, Greece Tel.: +30 (210) 899-4980 Fax: +30 (210) 895-4159 E-Mail: directors@safebulkers.com Investor Relations / Media Contact: Nicolas Bornozis 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
Source: Safe Bulkers, Inc.
