Safe Bulkers shares 3Q18 results

Fleet and employment profile

In August 2018, the company acquired a second hand, Japanese, 181 400 DWT, capesize class dry bulk vessel the Mount Troodos, built in 2009, at what we consider an attractive price. The acquisition was financed from cash on hand and subsequent to quarter end with a new loan facility. Following delivery, the vessel was placed into dry docking upon completion of which in early October, the vessel commenced spot employment at a gross daily charter rate of US$18 000. As of 31 October 2018, the company’s operational fleet comprised of 41 dry bulk vessels, 11 of which are eco-design, with an average age of 8.2 years and an aggregate carrying capacity of 3.8 million DWT. Safe Bulkers’ fleet consists of 14 panamax class vessels, 10 kamsarmax class vessels, 13 post-panamax class vessels and 4 capesize class vessels, all built from 2003 onwards.

Liquidity

As of 31 October 2018, Safe Bulkers had a liquidity of US$64 million, consisting of US$55.4 million in cash and bank time deposits, US$8.6 million in restricted cash. In addition, as of last Wednesday, the company had US$36.3 million of incremental borrowing capacity under offer letters which are subject to completion of loan documentation.

Update on sale and leaseback transactions

In May 2018, the company exercised the option under a sale and leaseback agreement to purchase one kamsarmax class vessel at a predetermined price of US$22.7 million. The transaction consummated in August 2018, and the company financed the acquisition of the vessel through cash on hand. Following the exercise of the purchase option, related deferred finance costs of US$0.5 million were written off. This was the third purchase option the company has exercised out of five sale and lease back arrangements previously entered into by the company.

Update on dry docking schedule, ballast water treatment system and scrubbers installation

As of 30 September 2018, the company has installed a ballast water treatment system (BWTS) in four vessels. Safe Bulkers expect to install a BWTS in four additional vessels during their scheduled dry dockings within the fourth quarter of 2018. The aggregate downtime of these dry dockings is expected to be approximately 90 days out of expected 3772 ownership days this quarter. The company have scheduled to install BWTS in one vessel within the first quarter of 2019 and BWTS and scrubbers in four vessels during the second quarter of 2019, concurrently with scheduled dry dockings.

The anticipated aggregate downtime is approximately 20 days for the first quarter of 2019 and 140 days for the second quarter 2019. All contracted BWTS are International Maritime Organization (IMO) and United States Coast Guard (USCG) compliant.

Update on credit facilities

In October 2018, the company signed an amendment to an existing loan facility of US$32.0 million initially intended for two vessels, upsizing it to a total of US$52.4 million expiring in 2023:

1. Substituting one vessel by the recently acquired capesize class vessel.
2. Refinancing the existing facility for two other vessels.

As a result, the new facility will be secured by four vessels, and the balloon payments for the refinanced two vessels will be pushed back by one year from 2022 to 2023.

In addition, subsequent to 30 September 2018, the company has accepted offer letters, which are subject to completion of loan documentation, to refinance certain loan and credit facilities. The company agreed to amend an existing loan facility of US$90.7 million expiring in 2021 secured by six vessels by extending the tenor by three years, and pushing back balloon payments to 2024. The company agreed to amend and expand existing loan facilities of US$71.3 million expiring in 2022 secured by five vessels to a total of US$101.3 million secured by six vessels, extending the tenor of the initial facilities by two years, and pushing back balloon payments to 2024. Safe Bulkers agreed to refinance an amount of US$47.8 million being part of an existing loan facility expiring in 2022 secured by four vessels by extending the tenor by two years and pushing back balloon payments to 2024.

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/12112018/safe-bulkers-shares-3q18-results/