US-listed Safe Bulkers has seen its profit surge in the first quarter of the year on the back of rising freight rates.
The Limassol and Athens-based company reported net income of $21.3m for the first three months of 2021, compared with a $9.9m loss in the same period of the previous year.
This is the company’s best quarterly performance since the first three months of 2014.
The improvement is mostly due to surging revenues as a result of benevolent market conditions.
Time-charter-equivalent rates rose by 71% year-on-year to $15,567 per day. As a result, net revenue rose at an annual pace of 37% to $62.5m — the company's highest quarterly reading in at least eight years, according to available figures.
Safe Bulkers also benefited from reduced voyage expenses and a one-off $7.6m payment in compensation for the early redelivery of one of its vessels.
Revenue got a further boost from scrubber-fitted vessels. Safe Bulkers is installing scrubbers on 21 of its 42 ships, the size of which ranges between panamax and capesize.
The company said in an earnings release that it plans to continue its strategy of mixing period charters with spot employment. According to its earnings release on Wednesday, Safe Bulkers has 22 vessels in the spot market and the rest on period charters.
Rising profits helped boost the company’s liquidity to $191m at the end of March — up by about $20m quarter-on-quarter.
The company plans to use its rising cash stash conservatively. Safe Bulkers stuck to its policy of not distributing a dividend on common stock.
The company will continue to deleverage and to gradually renew its fleet “through selective sales of older vessels and new acquisitions", chairman Loukas Barmparis said in the press release.
As part of its fleet renewal, Safe Bulkers agreed during the first quarter to spend $14.1m on the 75,000-dwt Fortune Daisy (built 2011), which has been renamed Paraskevi 2.
On the other hand, it sold the 74,300-dwt Paraskevi (built 2003) for $7.3m and the 76,000-dwt Vasos (built 2004) for $8.7m.
The company also has two kamsarmax newbuildings under construction at Oshima Shipbuilding in Japan, which are due for delivery in 2022.
