Safe Bulkers SB Q4 2025 Earnings Call Transcript

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Date

Thursday, Feb. 19, 2026 at 10 a.m. ET

Call participants

• President — Dr. Loukas Barmparis
• Chief Financial Officer — Konstantinos Adamopoulos

Takeaways

• Adjusted earnings per share -- $0.14, calculated on a weighted average of 102.3 million shares, compared to $0.15 on 106.4 million shares in the same period of 2024.
• Dividend -- $0.05 per common share declared by the Board of Directors.
• Adjusted EBITDA -- $37.4 million, versus $40.7 million in the fourth quarter of 2024.
• Average daily vessel operating expenses -- $5,686, up 13% from $5,047 year over year.
• Cash position -- Approximately $167 million as of Feb. 13, 2026, with an additional $218 million in available revolving credit facilities for total liquidity and capital resources of $385 million.
• Contracted revenue -- $178 million as of the call date.
• Fleet -- 45 vessels operated on average during the quarter, with a focus on maintaining a young, technologically advanced, and predominantly Japanese-built fleet.
• Capesize fleet -- Seven Capesize vessels chartered on period contracts averaging 1.8 years remaining, at an average daily hire of $24,000, representing over $130 million in contracted revenue backlog for this segment.
• Order book -- Eight newbuild Phase II vessels remain for delivery by Q1 2029, with most global shipyard slots fully booked through 2028, requiring orders for 2029 deliveries.
• Time charter market -- Management reported, "There is no interest for 2- or 3-year contracts," and that one-year charters are currently available at rates of $18,000 to $19,000 per day for Kamsarmaxes.
• Asset quality -- 80% of the fleet is Japanese-built, exceeding the roughly 40% global average, emphasizing asset quality and operational efficiency.

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Risks

• Chief Financial Officer Adamopoulos noted a 13% year-over-year increase in daily vessel operating expenses, indicating rising cost pressures.
• President Barmparis cited, "high Chinese port inventories plus 11% year-on-year may soften import demand in first half of 2026," pointing to uncertainty in Chinese import volumes.
• Management highlighted declining coal shipments, with the International Energy Agency expecting global coal demand to fall by 1.4% between 2025 and 2027 and imports to decline by 4%.
• Downside risk remains from Chinese domestic production policy and import substitution strategies, especially in coal and grains, potentially reducing seaborne trade.

Summary

Safe Bulkers (NYSE:SB) reported adjusted earnings per share of $0.14 for the fourth quarter of 2025 and continued its record of dividend payments, supported by a solid $385 million in liquidity and a $178 million contracted revenue base. Cost pressures were evident with a notable year-over-year increase in daily vessel operating expenses. Management emphasized its commitment to a high-quality, technologically advanced, and predominantly Japanese-built fleet, with newbuild delivery slots booked out as far as 2029 due to limited shipyard availability. Charter market trends favor shorter contract durations, as management stated one-year charters for Kamsarmaxes are achievable at $18,000 to $19,000 per day, while appetite for longer-term agreements remains absent.

• President Barmparis highlighted company fleet positioning, stating, "reguls.afleet now counts 2 Phase 3 vessels in the water, all delivered from 2022 onwards," with a further eight Phase II vessels in the pipeline.
• The Capesize segment contributed substantially to the revenue backlog, underpinned by contracted period charters at premium daily rates.
• Management reported that constrained secondhand vessel supply is leading the company to pursue newbuilds exclusively, given the lack of available quality tonnage in the market and full shipyard order books.

Industry glossary

• Kamsarmax: Bulk carrier vessel class with a maximum length of 229 meters, optimized for the port of Kamsar, Guinea.
• Capesize: Largest standard class of dry bulk vessels, unable to pass through the Panama or Suez canals, typically serving long-haul iron ore and coal routes.
• Time charter equivalent (TCE): Industry standard metric expressing voyage revenues on a per-day basis, net of voyage expenses.
• Phase II/Phase III vessels: Compliance designations under IMO emissions frameworks, reflecting advanced energy efficiency and environmental standards.
• OpEx: Operating expenses specific to the vessels’ daily operations, including crew, maintenance, and consumables.

Full Conference Call Transcript

Dr. Loukas Barmparis: Good morning to all. I'm Lucas Para, President of Safe Bulkers, and I'm welcoming you at our quarterly results. During 2025, the dry bulk market witnessed increased market volatility, mainly due to geopolitical reasons. In the fourth quarter of 2025, we achieved $0.14 of adjusted earnings per share, and our Board has declared a $0.05 per share dividend, rewarding our common shareholders. The company maintains a prudent balance between spot and time charter exposure, allowing it to capture market opportunities while preserving cash flow and a strong capital structure, providing flexibility in our capital allocation.

Following a comprehensive review of the forward-looking statements language, which is presented on Slide 2, let's proceed to examine the supply side dynamics in Slide 4. bulk fleet is projected to grow by about 3% in 2026 deliveries with fleet growth estimated to be the highest for the Panamax and Supramax segments. The order book now stands at about 11.4% of the current fleet. The forecast for dry bulk supply to grow by 2.5% in 2026 and by 3% in 2027 as adjusted for the sailing. Asset prices remain elevated in line with the current market. Recycling volumes are anticipated to rise but still remain low compared to historical levels.

1 dry bulk order book alnuelipsan LNG and the remaining ammonia and hydrogen. However, the dual fuel order book remains small in the dry bulk segment. The postpone of the adoption of the global fuel standard by IMO on pragmatic. In total order book of 20 Phase vessels placed in 2020, we do have duelbserver1 2027 to operate with fossil fuels until alternative fuels become available and economic viable hedging more carbon intensity limits of the fuel regulation up to 2030 and the potential adoption of new regional or global reguls.afleet now counts 2 Phase 3 vessels in the water, all delivered from 2022 onwards.

In addition, 26 vessels have ugmentalgrad or fuel character App 80% of our fleet is Japanese built compared to the global average of roughly 40%, underscoring our focus on quality and asset under the improved quality of our ships, which incorporate improvements in fuel effy.verleet age1.5s2.5snger than the global fleet average, which is 2.6sgetli.etitess will strengthen as we will be taking delivery of our remaining order book of 8 Phase II vessels. By Q1 2029leetred position us favorably to compete based on the fuel efficiency of our vessels while the ship leading to longer terms.

When we speak about supply, we need also to highlight not only the scrapping rate but also the aging dry bulk fleet, 5 of which exceeds 15 years of age and the increasing expectation of older vessels, which will be reflected on the increasing inspection of older vessels, which will be reflected on the OpEx. Moving on to Slide 5, we present an overview of the demand -- the global GDP growth expectations for 2026 and 2027 as reflected in the IMF January forecast call for a growth around 3% in the coming years, accompanied by gradual control of inflationary pressures. BIMCO forecasts global dry bulk demand growth of 2% to 3% in 2026.

To volumes are to expand by 1% to 2% in 2026 with average sailing distances increasing by 0.5% to 1.5% annually, supporting ton-mile demand. Iron ore shipments expected to grow up to 1% in 2026 and similarly in 2027. Lower prices driven by increased exports of output and enhance competitiveness versus lower grade domestic Chinese supply. However, high Chinese port inventories plus 11% year-on-year may soften import demand in first half of 2026. Coal shipments are projected to decline by 1% to 2% in 2026. The International Energy Agency expects global coal demand to fall by 1.4% between 2025 and 2027 with coal imports declining by 4%.

Chinese demand is projected to fall by 1.5%, while India and Asian regions remain growth. Thermal coal trade is weakening. -- coking coal remains relatively resilient. Grains remain the strongest performing major bulk with shipments estimated to grow by 5% to 6% in 2026. Strong harvest in the U.S. and EU, Argentina, Russia and Brazil under supply. However, China's policy push towards greater selfufficiency and soy a dow risk. Minor bulk growth is expected at 3.5% to 4.5% in 2026. Energy transition related remain supportive, though bauxite trade growth may moderate due to China's aluminum production. Fertilizer demand continues to expand but at a slower pace. China remains a central swing factor for dry bulk.

The broader economy continues to face headwinds from a weak property sector, elevated inventories in key commodities, iron ore, coal policy industrial adjustment and increasing trade barriers and the export license controls. Steel demand in China is expected to weaken though exports remain elevated despite tighter regulation. Domestic production policy and import substitution strategies, particularly in coal and grains represent key downside risk to seaborne trade. Trade tensions between the U.S. and China, although has been reached, remain a key source of global economic uncertainty. India continues to perform and is projected to experience the fastest growth among major economies with a forecast of 6.4% in GDP increasing in 2026.

This expanding domestic market and manufacturing sector may continue to contribute positively to the dry bulk demand with infrastructure investments playing a vital role. In Japan, following a decisive superjorityict in February Snap elect, Japanese government now holds significant political capital to advance a responsible and proactive fiscal policy aimed at transitioning the economy from prolonged deflation towards a phase of sustainable growth widely referred to as economics, emphasizing aggressive fiscal stimulus toalzomestic demand and reinforce economic momentum. Summing up the supply equilibrium Slide supply growth is expected to match demand for 2026. The freight market has shown strength during the fourth quarter of 2025 and continues to be healthy in early 2026.

In relation to our Capesize class vessels, 7 were chartered under period time charters with an average remaining charter duration of 1.8 years and an average daily charter hire of $24,000, topping $130 million in contracted revenue backlog from Capes alone. Moving to Slide 8, we present an overview of our quarterly highlights. Looking at our 17th consecutive quarter our free cash flow new [indiscernible], we present return $89 million paid in common dividends and $75 million paid in common reflecting our consistency in generating sustainable returns across in sustainable events across market fluctuations because of our track record, as management and our overall business model. . Concluding the company update on Slide 10, will be seen strong fundamentals.

Safe Bulkers company with $628 million market cap as water, 274 million value. SP1 We maintain significant fire power with EUR 163 million cash, EUR 220 million in undrawn RCF and EUR 182 million borrowing capacity against our significant order book of 8 new builds, mainly in Japanese CPS. . We focus on our maturity Japanese book other branded, complete energy efficiency and lower shetaxation reflected in our CII rating share of vessels on the bottom that egos. We maintain a young technologically advanced fleet, strong balance sheet, comfortable leverage and low net debt per vessel of EUR 8.4 million for a 10.4-year fleet.

We have a big a resilient business model with cash flow visibility EUR 164 million in revenue but healthy expansion for a sizable fleet that achieves stay in the meaningful 3.3% annualized dividend position lower on HL efficiency. I now pass the flat our CFO Cuadradamopulos, for to your financial the Trish lows.

Konstantinos Adamopoulos: Thank you, Lucas, and good morning to everyone. During the fourth quarter of 2025, we operated in a slightly improved charter market environment compared to the same period in 2024 with increased revenues due to higher charter hires and slightly increased earnings from stratified vessels. Moving on to Slide 12 with our quarterly financial highlights for the fourth quarter of 2025 compared to the same period of 2024. Our adjusted EBITDA for the fourth quarter of 2025 stood at $37.4 million compared to $40.7 million for the same period in 2024.

Our adjusted earnings per share for the third quarter of 2025 was $0.14 calculated on a weighted average number of $102.3 million compared to $0.15 during the same period in 2024, calculated on a weighted average number of 106.4 million shares. On the top graph, during the fourth quarter of 2025 were operating 45 vessels on average, ending an average time target with [ $750 ] compared to 45.9 meters on average, earning a TCE of $6,521 during the same period in 2024. We -- our daily vessel operating expenses increased by 13% to $5,686 for the fourth quarter of 2025 compared to $5.047 for the same period in 2024.

Daily vessel OpEx, excluding write-off delivery expenses, increased by 6% to $557 an for the fourth quarter of 2025 compared to $4,787for the same period in 2024. Slide 13 with a quick overview of our quarterly operational highlights for the fourth quarter of 2025, which compared to the same period of 2024. Now let's continue to Slide 14, where we present our balance sheet analysis, noting that assets are presented in their book value. Slow liquidity and double cash reserves provide significant financial flexibility to navigate market volatility -- the company maintains a healthy balance sheet supported by a robust equity base and conservative leverage levels. Our capital structure positions the company for sustainable long-term growth in Brazilians.

We'll conclude our presentation in Slide 13, where we present our daily free cash flow for the 12 months of 2025 illustrating the company's ability to generate free cash flow, highlighting disciplined cost control and efficient vessel operations. We'd like to highlight that based on financial performance, the company's Board of Directors declared a $0.05 dividend per common share -- the company is maintaining a healthy cash position of about $167 million as of February 13, another $218 million available in the revolving credit facilities giving a combined liquidity and capital resources of $385 million -- we also we should also add the contracted revenue of $178 million.

This underscores our capacity to support their service, investment and shareholder returns at the same time we enable to expand the fleet to reline company and create long-term prostate for our shareholders. Thank you, and we are now ready for your questions.

Operator: [Operator Instructions] Our first question is from Kam Moylan with Value Investors Edge.

Unknown Analyst: You've made a lot of way on the fleet renewal front in recent years, putting special emphasis on Kamsarmax newbuilds. -- when looking at your overall fleet pro forma for the newbuild additions, the Cape side does smatter, -- is there any appetite for new going forward? Or is now well on secondhand pricing difficult to justify based on your expectations?

Dr. Loukas Barmparis: Yes. to you. The second branches right now, they are getting higher, but the problem is that lack of setup available tenets for sale. So there is no quality tonnage in secondhand market available for sale on Japan is built vessels or even Chinese more than vessels available for sales. And the reason being that market prospects look quite positive. We have a very sort and now very strong Q1. And people are getting hold of their assets to drive the improved market. So the only option you have a company, at least like ours that we need to have quality tonnage, and we need to have a sustainable program for the future is to look into shipyards.

Also there, the task is not easy, but because most of the shipyards are fully booked for 2028. So we have to go into 2029 for deliveries. And basically, this is what we have done in the last quarter.

Unknown Analyst: Yes, that's helpful. I also wanted to ask about the time charter market. Have you seen increasing appetite from charterers for 2 to 3-year contracts on cancer maxes -- and secondly, based on current quotes, would you favor index-linked exposure or fixed coverage?

Unknown Executive: Yes. There is no interest for 2- or 3-year contracts. The market is just starting its improvement over the last couple of quarters. You have to remember last year was a very difficult year, especially in the first half, which was all the talk of tariffs and it started from September '24, ended last up to July of 2025, when we show up from administration was starting settling some of those issues within a few countries. So there were a good 10 months of depression in the market, stories start changing from second half of 2025, when we start seeing improvement. I mean, the momentum has to gather pace, which is doing right now.

We started now seeing better freight rates. And right now, we could say that many charters can take 12-month period charters. In order to see 2 or 3 years, we need to have more of this visibility we have to have this going to 2 or 3 quarters before charters appear for longer term. So at the moment, I would say that you could easily fix 6 to 12 months after, but the longer charters would come only after we see sustained strength of the market. So the inflation about the index of fixed rate, aisle prefer a fixed rate. And sometimes we do index use on a rising market, charters try to avoid index, referred fixed rate.

We don't mind securing a good return with the fixed rates. Right now, there are 1-year deal, so 1-year deals in the market approaching $18,000 or $19,000 a day. So -- this is a group of a good level to start looking in a few ships.

Unknown Analyst: The '18 201,000 per day would be for ECO and scrubber, right?

Unknown Executive: No, no club. It will be for cameras for Casas they don't use any acutes. The scrubber, you find us on Capesize bulk carry on vessels they are bending over 25 tonnes to make Welten the investment. So again, 1 of the 14 or 15 tons, they don't you-- it's not viable to fit scrubber on both and very small consumption.

Operator: [Operator Instructions] With no further questions, I would like to hand the conference back over to management for closing remarks.

Dr. Loukas Barmparis: Thank you very much for attending this conference call above the first -- the last quarter of financial results of 2025, and we are looking forward to discuss again with you in our next quarter results. Thank you very much, and have a good day.

Operator: Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

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