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In this episode of Capital Link's Trending News Webinar Series, Dr. Loukas Barmparis, President of Safe Bulkers (NYSE:SB), offered updates on the company's strategy amid ongoing dry bulk market volatility, accelerating regulatory pressure, shifting global trade flows, and initiatives to renew and decarbonize its fleet.
To watch the full webinar, please visit the link:
Signs of structural recovery are emerging in the dry bulk market. According to the IMF, global GDP is projected to expand by 3.0% in 2025 and 3.1% in 2026, led by India's robust 6.4% growth. While China's growth is moderating to 4.8%, its energy transition and shift toward long-haul commodity sources—particularly from Brazil—are reshaping trade lanes in a way that increases voyage lengths and boosts ton-mile demand.
Safe Bulkers' larger, fuel-efficient vessels remain in high demand. Its Capesize ships are earning average period charter rates of $24,500/day, backed by $135 million in contracted revenues (excluding scrubber premiums)—demonstrating strong forward visibility and rate premiums relative to the index.
On the supply side, the global dry bulk orderbook represents 10.3% of the active fleet—relatively low by historical standards. However, only ~9% of the orderbook is alternative fuel–ready, with just 23% ammonia-, 35% methanol-, and 37% LNG-capable. Shipyard capacity remains constrained, leading to long lead times and limited slots for new bulk carrier construction.
Compounding this, 25% of the global dry bulk fleet is over 15 years old, placing a large portion at risk as the result of regulatory obsolescence. Safe Bulkers expects regulatory pressure—including the IMO's CII and EEXI ratings and the recently ratified Hong Kong Convention—to catalyze a new scrapping cycle. BIMCO estimates as many as 16,000 ships could be recycled over the next decade, double the previous ten-year period.
The IMO's upcoming Global Fuel Standard (GFS) is expected to be finalized in October 2025. This regulation, which will take full effect after 2028, will mandate significant reductions in carbon emissions, forcing shipowners to either retrofit their fleets or face steep penalties.
According to Dr. Barmparis, Safe Bulkers is preparing for this by investing in two dual-fuel methanol vessels, set for delivery in 2026 and 2027. These ships will not only comply with future regulations but will also allow the company to participate in emissions pooling a mechanism that may help avoid penalties under the new framework.
Already, Safe Bulkers has taken delivery of 12 Phase 3 ships—vessels that consume 30% less fuel than pre-2008 designs—and expects six more to follow. These vessels command a premium in the charter market, earning roughly $2,500 more per day than conventional ships.
Despite these aggressive fleet renewal efforts, Safe Bulkers maintains a relatively conservative financial strategy. The company's net leverage stands at a comfortable 38%, with $125 million in cash and $188 million in undrawn revolving credit, bringing total liquidity above $300 million as of June 30, 2025. With net debt of just $9.1 million per vessel and a market capitalization of $431 million, Safe Bulkers continues to operate with one of the most conservatively financed balance sheets in the sector.
It has also secured $159 million in contracted revenues, providing near-term earnings visibility amid market fluctuations. The company estimates its fleet scrap value at approximately $312 million—providing substantial asset coverage and balance sheet flexibility.
In Q2 2025, Safe Bulkers declared its 15th consecutive quarterly dividend of $0.05 per share, representing a 4.7% annualized yield —reflecting management's commitment to consistent shareholder returns through market cycles. With approximately 48% ownership, management is, according to Dr. Barmparis, strongly aligned with public shareholders, reinforcing disciplined capital allocation and long-term value creation.
Since 2022, Safe Bulkers has repurchased 19.5 million shares—approximately 16% of its outstanding share count—returning $74.9 million to shareholders through buybacks alone. Combined with $78.7 million in dividends over the same period, total capital returns since 2022 now exceed $150 million. While buybacks are not currently active, they remain a strategic tool that can be reactivated when valuation is compelling.
Disclosure: Capital Link is the investor relations advisor to Safe Bulkers (NYSE:SB). This content is for informational purposes only and not intended to be investing advice. We would like to highlight that this is not a Capital Link article with our own editorial on the company. It is a company management interview. Thus, all comments in the article are theirs.
Posted In: SB
