Safe Bulkers, Inc. Q1 FY2026 earnings call

• Corporate Milestones & Capital Returns

  • Declared 18th consecutive quarterly dividend, increased to $0.06 per common share, representing a 3.7% annualized dividend yield at current share prices
  • Completed a parallel listing of common stock on Euronext Athens, gaining access to pan-European institutional and retail investors to diversify the shareholder base
  • Maintained an active $10 million share repurchase program; has returned $95 million in common dividends and $78 million in share repurchases to shareholders since 2022
  • Ended the period with $374 million in total liquidity (composed of $167 million in cash and $208 million in undrawn revolving credit facilities), 34% leverage, a 5.15% weighted average interest rate on consolidated debt, and low net debt of $8.1 million per vessel

• Fleet Strategy & ESG/Decarbonization Progress

  • Currently operates 45 vessels on the water, with 11 additional Phase 3 newbuilds on order (including 5 new Kamsarmax and 1 new Capesize ordered since January 2026)
  • Sold 3 older vessels during the period: the oldest Kamsarmax, oldest Post-Panamax, and one Capesize vessel to continue fleet renewal
  • Average fleet age is 10.5 years, 2 years younger than the global dry bulk fleet average of 12.5 years; 80% of the fleet is Japanese-built, above the global average of 40%, supporting better fuel efficiency, durability, and resale value
  • 13 Phase 3 vessels are already in operation, 21 vessels have completed environmental upgrades, and 11 vessels are classified as Eco with high fuel efficiency; no vessels hold the lowest E-category CII rating
  • Has 2 dual-fuel newbuilds on order for delivery in Q1 2027, to hedge against increasingly strict decarbonization regulations post-2030; the IMO's postponement of new global fuel standard adoption is expected to lead to more pragmatic decarbonization policy

• Market Fundamentals Overview

  • Dry bulk market conditions improved in Q1 2026 compared to Q1 2025, with higher charter rates driving increased revenue, though market volatility has risen due to geopolitical factors
  • Global dry bulk fleet is projected to grow ~4% in 2026, with the highest growth in the Panamax segment; 30% of the global fleet is over 15 years old, and the total order book equals 13% of current fleet capacity
  • BIMCO projects 2% global dry bulk supply growth and 3% demand growth under the open Hormuz Strait scenario, resulting in a balanced, supportive market; current spot rates are healthy at ~$32,000/day for Capesize and ~$20,000/day for Panamax

The company operates a single core dry bulk shipping segment, with performance broken out by vessel class:

• Capesize: All 7 vessels are fixed on period time charters, with an average remaining charter duration of 1.7 years, an average daily charter hire of $24,600, and a contracted revenue backlog of $110 million from this vessel class, accounting for approximately 68% of the company's total $161 million contracted revenue backlog. No separate financial performance data is provided for other vessel classes (Kamsarmax, Post-Panamax, Panamax, Handysize, Supramax/Ultramax) in absolute or percentage contribution terms. Aggregate Q1 2026 company-wide financial results are: net revenue of $74.4 million, adjusted EBITDA of $40.7 million, adjusted EPS of $0.18, average time charter equivalent (TCE) of $17,095 per vessel per day, and average daily operating expense of $5,223, down 9% year-over-year.

• Global dry bulk demand growth is projected at 3% in 2026 under the open Hormuz Strait scenario (with 1% supply growth in the closed Hormuz scenario, compared to 2% supply growth in the open scenario)
• Commodity-specific demand projections: Iron ore demand growth of up to 3% in 2026; coal shipments projected to decline 1%-2% in 2026; grain shipments projected to grow ~5% in 2026; minor bulks (including energy transition-related ores) are expected to see strong growth in 2026
• IMF projects global GDP growth of ~3% for 2026 and 2027, with China projected at 4.4% GDP growth and India projected at 6.5% GDP growth (the fastest among major economies)
• By 2029, 45% of Safe Bulkers' total fleet will be composed of fuel-efficient Phase 3 vessels, strengthening the company's competitive positioning for decarbonization regulations

• Geopolitical instability (including the status of the Strait of Hormuz, U.S.-China trade tensions, and Middle East conflict) is the primary driver of current dry bulk market volatility; approximately 1% of global dry bulk capacity is currently trapped in the Persian Gulf
• Chinese economic weakness: the property sector crisis and manufacturing overcapacity continue to weigh on domestic demand; Chinese import substitution policies for coal and grain represent a downside risk to global seaborne dry bulk trade; high Chinese port iron ore inventories may soften import demand in H2 2026
• Chinese policy shifts toward greater agricultural self-sufficiency and reduced soya meal usage present downside risk to projected grain trade growth
• Uncertainty remains around the details of any Iran sanctions relief and the scope of reconstruction activity that will materialize post-conflict
• Decarbonization regulation remains a source of long-term uncertainty, even with the recent IMO postponement of new fuel standards; unanticipated tightening of regional or global carbon emissions rules could raise operating costs for less efficient vessels

Q: The analyst asks whether Safe Bulkers' current fixed charter coverage for the remainder of 2026 is at management's desired level, or if further changes or increases to coverage are expected. / A: Management states that chartering strategy adjusts to current market conditions. The company has increased the share of vessels operating in the spot market to capitalize on the current strong market and rate squeeze. The company plans to lock in longer-term contracts (12 months for Kamsarmaxes, 24-36 months for Capesizes) in future quarters, particularly towards Q4 2026.

Q: The analyst asks whether the disruption of 17% of Qatar's LNG export capacity from Iranian attacks will support steam coal trade through 2026 and 2027. / A: Management confirms this assumption is fair, noting that increased Australian and Indonesian coal cargoes to the Far East have already supported Pacific market rates of $20,000-$22,000 per day. Even if conflict eases, some LNG capacity will remain offline for multiple quarters to two years, so sustained elevated coal demand is expected over that period.

Q: The analyst asks for comment on potential dry bulk demand benefits from post-conflict reconstruction activity in Iran. / A: Management explains reconstruction will primarily benefit smaller Handysize, Supramax, and Ultramax vessels, though healthy demand for smaller vessels indirectly supports Kamsarmax rates by pulling smaller vessels away from Kamsarmax-sized cargoes. Stuck fertilizer cargoes exiting the Persian Gulf would also add demand for both Kamsarmax and Ultramax vessels. Management notes that benefits depend on the final terms of the U.S.-Iran agreement, particularly the extent of sanctions relief that allows foreign flag vessels to participate in Iranian trade.