• Net income for the third quarter of 2012 increased by 4.5% to $20.7 million from $19.8 million during the same period in 2011. Adjusted net income1 for the third quarter of 2012 decreased by 12.0% to $22.8 million from $25.9 million during the same period in 2011.
• EBITDA2 for the third quarter of 2012 increased by 18.0% to $31.4 million from $26.6 million during the same period in 2011. Adjusted EBITDA1 for the third quarter of 2012 increased by 1.8% to $33.4 million from $32.8 million during the same period in 2011.
• Earnings per share (“EPS”) and Adjusted EPS1 for the third quarter of 2012 were $0.27 and $0.30, respectively, calculated on a weighted average number of 76,658,865 shares, compared to $0.28 and $0.37, during the same period in 2011, calculated on a weighted average number of 70,889,569 shares.
• The Company’s Board of Directors declared a dividend of $0.05 per share for the third quarter of 2012. Summary of Results for the Nine Months Period Ended September 30, 2012
• Net revenue for the nine-months period ended September 30, 2012 increased by 9.5% to $138.0 million from $126.0 million during the same period in 2011.
• Net income for the nine-months period ended September 30, 2012 decreased by 3.5% to $63.9 million from $66.2 million. Adjusted net income for the nine-months period ended September 30, 2012 decreased by 12.1% to $69.3 million from $78.8 million during the same period in 2011.
• EBITDA for the nine-months period ended September 30, 2012 increased by 8.2% to $93.7 million from $86.6 million during the same period in 2011. Adjusted EBITDA for the ninemonths period ended September 30, 2012 was practically unchanged to $99.1 million from $99.2 million during the same period in 2011.
• EPS and Adjusted EPS for the nine-months period ended September 30, 2012 of $0.85 and $0.92, respectively, calculated on a weighted average number of 75,066,388 shares, compared to $0.96 and $1.14, during the same period in 2011, calculated on a weighted average number of 68,980,741 shares.
Fleet and Employment Profile
In August 2012, we took delivery of our newbuild Pedhoulas Fighter, an 81,600 dwt, Chinese-built, Kamsarmax class vessel. Upon delivery, Pedhoulas Fighter entered into a oneyear period time charter with a daily gross charter rate linked to the Baltic Panamax Index (“BPI”) plus a premium of 4% less $1,000.
In September 2012, we took delivery of our newbuild Pedhoulas Farmer, an 81,600 dwt, Chinese-built, Kamsarmax class vessel. Upon delivery Pedhoulas Farmer entered into a oneyear period time charter at an $8,000 daily gross charter rate.
In November 2012, we acquired a second-hand, 76,900 dwt, Japanese, 2003-built, Panamax class vessel, named Koulitsa, for a purchase price of $14.2 million. Koulitsa has been employed in the spot market.
The Company’s operational fleet, as of November 9, 2012, was comprised of 24 drybulk vessels with an average age of 4.36 years and an aggregate carrying capacity of 2,208,100 dwt and consisted of six Panamax class vessels, six Kamsarmax class vessels, 10 Post- Panamax class vessels and two Capesize class vessels, all built post-2003.
In October 2012, we entered into a shipbuilding contract for the construction of one 181,000 dwt, Japanese-built, Capesize class newbuild vessel at an attractive price with expected delivery in January 2014. This vessel will replace a newbuild Capesize class vessel under construction which is experiencing excessive construction delays, in an existing 10 year period time charter. Such time charter was amended to allow vessel substitution with a later start date in January 2014 at a reduced gross daily charter rate of $23,100 for the first two and a half years. Other material charter party terms including the daily gross charter rate of $24,810 for the final 7.5 years remain unchanged.
In October 2012, we agreed with the relevant shipyard to delay scheduled deliveries of two Post-Panamax class vessels, from the second half of 2014 to the second half of 2015.
The Company, as of November 9, 2012, had contracted to acquire seven newbuild drybulk vessels with scheduled deliveries, at various times through 2015. The orderbook consists of three Panamax class vessels, two Post-Panamax class vessels and two Capesize-class vessels. Set out below is a table showing our existing and newbuild vessels and their contracted employment.
Capital expenditure requirements and liquidity
As of November 9, 2012, the remaining capital expenditure requirements to shipyards or sellers, net of commissions, for the delivery of the seven newbuilds amounted to $199.5 million, of which $22.9 million is scheduled to be paid in 2012, $67.6 million is scheduled to be paid in 2013, $57.8 million is scheduled to be paid in 2014, and $51.2 million is scheduled to be paid in 2015.
As of November 9, 2012, the Company had $125.4 million in cash and short-term time deposits, $5.9 million in long-term restricted cash, and estimated aggregate borrowing capacity of $49.2 million, consisting of $9.2 million available under existing revolving credit facilities and $40.0 million undrawn availability against our $50.0 million floating rate note.
Additionally, the Company utilizes cash flows from operations generated by its contracted period time charters, and has the ability to borrow additional amounts secured by one existing debt-free vessel and seven newbuild vessels upon their delivery to us.
The Company’s Board of Directors declared a cash dividend on the Company’s common stock of $0.05 per share payable on or about November 30, 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 November 26, 2012.
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. The Company had 76,661,451 shares of common stock issued and outstanding as of November 9, 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 might not be paid in the future.
Dr. Loukas Barmparis, President of the Company, said: "Due to prolonged challenging chartering market environment, large industry orderbook through 2013 and unstable global financial conditions, our Board has decided to reduce our quarterly dividend. We have paid a dividend consistently since our initial public offering in 2008, and we remain committed to returning cash to our stockholders. We continue to actively manage our orderbook through selective reductions in newbuild acquisition costs, prolonging existing newbuild deliveries and opportunistically acquiring newbuilds and second hand vessels at attractive prices. We maintain our low financial costs by continuing to make proactive prepayments to our banks in order to ensure compliance with our financial covenants. We have a lean and efficient cost structure in relation to operating expenses, management fees and general and administrative expenses. We believe it is important to preserve liquidity in this environment as we aim to further strengthen our balance sheet and deleverage our company while maintaining the ability to make additional acquisitions in the depressed asset market, timely, for the next upward shipping cycle.''
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.
2 EBITDA represents net income plus interest expense, tax, depreciation and amortization.
Full report at: www.safebulkers.com
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, where it trades under the symbol “SB”. The Company’s current fleet consists of 24 drybulk vessels, all built post-2003, and the Company has contracted to acquire seven additional drybulk newbuild vessels to be delivered at various times through 2015.
Safe Bulkers, Inc. press release