Overview: Maintaining a perfect, modern, and young fleet size

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Safe Bulkers’ fleet size

Currently, Safe Bulkers (SB) has a fleet size of ten Panamax, seven Kamsarmax, 11 Post-Panamax, and three Capes. It has a total fleet of 31 with an average fleet age of 5.4 years. SB has come a long way, in 2008 it had 11 vessels and an average fleet age of 3.3 with 0.9 million tons deadweight (or dwt). It has grown to 5.4 average fleet age and 2.9 million dwt indicated a compound annual growth rate (or CAGR) of 23% based on dwt.  For 2017, total fleet is forecasted at 43, fleet age is estimated an average 6.1 with 3.9 million dwt.

SB has paid six additional new eco-design newbuild vessels on order—three Japanese newbuild vessels, one Cape with a ten-year time charter contracted upon delivery, and two new eco-design Panamaxes class vessels which were employed in the spot market.

None of the company peers—Diana Shipping Inc. (DSX), DryShips (DRYS), Navios Maritime Holdings (NM) and Navios Maritime Partners (NMM)—have any eco design newbuild vessels in its fleet profile. The Guggenheim Shipping ETF (SEA) tracks the shipping companies.

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In addition, the company had recapitulation agreements for three new eco-design newbuild vessels, comprised of one Japanese Post-Panamax class vessel at the stage of contract signing, and two Japanese Kamsarmax class vessels at the stage of finalization of contractual terms and upgrading of technical specifications.

Fleet expansion

For the next three years, SB has competitive substantial expansion with an order book of 13 new eco-design newbuild dry bulk vessels through 2017 with an average price of $31.1 million. Being a spot market player, SB has 64% open days for 2014 offering substantial upside potential for revenue.

Upon delivery of all of the newbuilds, assuming SB doesn’t acquire any additional vessels or dispose of any of the existing vessels, total fleet of the company will be comprised of 44 vessels, 15 of which will be new eco-design vessels, having an aggregate carrying capacity of 3.9 million dwt and average age of 6.1 years.

Meanwhile, in compliance with their loan covenants, SB has countable leverage, net debt per vessel being recorded at 12.5 million in 1Q14.

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