Safe Bulkers Inc (SB) 2014 Q3 法說會逐字稿

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers conference call to discuss third quarter 2014 financial results. Today we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Polys Hajioannou; President, Dr. Loukas Barmparis; and Chief Financial Officer, Konstantinos Adamopoulos. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) Following this conference call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today, Thursday, November 6, 2014.

Before we begin, please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended concerning future events. The Company's growth strategy and measures to implement such strategy including expected vessel acquisitions and entering into further time charters. Words such as expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to; changes in demand for drybulk vessels, competitive factors in the market in which the Company operates, risks associated with operations outside the United States, and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto to any change in events, conditions, or circumstances on which any statement is based.

And now I pass the floor to Dr. Barmparis. Please go ahead, sir.

Good morning. I'm Loukas Barmparis, President of Safe Bulkers. Welcome to our conference call and webcast presentation. Let's move to discuss the financial results for the third quarter of 2014, which were announced yesterday after the close of the market in New York. We're in slide 3 where we present a synopsis of main events on the shipping industry. Large order book remains a problem. During the nine months of 2014, order book has grown by 27 million deadweight tons or 3.8%. Order book for the remaining of 2014 is 17.8 million deadweight tons , of which 3.7 million are for Panamaxes and 6.3 million are for Capes. Fleet is expected to grow by 9% in 2015, 6% in 2016, and 1% for 2017. Scrapping activity has slowed down in comparison to 2013, 21.7 million deadweight tons were scrapped. During the nine months period in 2014, 11.8 million deadweight tons were scrapped.

As presented in the graph at the bottom right, Panamax orders are lower at about 8% for 2015 and 5% of 2016. On slide 4, we present a brief outlook of the recent charter market. As presented on the top graph, Capes outperformed 2013 mainly due to a short-lived surge in rates during second quarter of 2014. The average year-to-date is at $13,700 in comparison to $12,600 for the same period in 2013. However, Capes have [sat] for very long periods at an average charter equivalent rate of $29,400. During the second half of the year, anticipated repeat of last year's pick did not materialize. Currently, market volatility has pushed rates out to $26,000 for Capes. The bottom graph represents that of the Panamax vessel market. Average year-to-date is about $7,600 in comparison with $8,800 for the same period in 2013. Despite positive start of the year, Panamax market remained lower in almost all periods up to date.

Present market conditions have pushed rates at the region of about $10,000. Forecasted surge of rates during second half of the year did not materialize. Charter rates on average from September 2014 onwards were about 40% lower to $7,400 from $13,200 in the same period in 2013. Moving on to slide 5, we present certain data which are (inaudible) for our market assessment. Shipping market is currently facing elevated risks; uncertainty coming from China with slowdown of economy, rules for reducing imports of certain grades of coal, imposed taxation on imported goods, et cetera. Large order book in an already oversupplied market. Reduced oil prices, which may eliminate slow steaming directly increasing supply of vessels. Above risks are reflected on the FFA curve for the forward periods of 2015 and 2016, which are [depicted] on the top graph. Reversal of positive sentiment for first half of 2014 when Cal15 and Cal16 were trading up to $14,000.

Presently doubtful market prospects have set the FFA market down to 2014 lows of $8,900 for Cal15 and Cal16. On the bottom graph, we present the asset values of five-year Cape and Panamax assets by Baltic Exchange. Prolonged depression of charter rates and reversal of sentiment has negatively affected asset values. Asset values bottomed in the beginning of 2013. Until the first half of 2014, anticipated recovery increased asset values by around 50% for Panamaxes and about 70% for Capes. Presently loss of steam in the market drops values close to last year's low levels, especially for Panamaxes. Present market conditions create aversion in newbuild orders. Moving on to slide 6. On the graph we present our recent order book. Currently we own a fleet of 32 high specification vessels with an average age of 5.7 years.

We have contracted substantial expansion for the next years with an order book of 12 eco-design and newbuild vessels, mainly from top quality shipyards in Japan. We will deliver six in 2015, five in 2016, and one in 2017. By 2017, one-third of our fleet is expected to be comprised of eco-ships. Turning to slide 7, we evaluate the performance of our chartering policy against the spot market, which we outperformed most of the time as presented on the bottom graph. The open days for our fleet including existing fleet and newbuilds are 27% of anticipated ownership days for the remainder of 2014, 77% in 2015, and 90% in 2016. We have a number of vessels opening in the next period and we should employ them basically in the spot market, which currently has shown some strength. Turning to slide 8, we present on the bottom graph our daily operating and general and administrative expenses.

In G&A, we include public company and management fee expenses. In total we paid daily $5,745 to run our vessels in our Company. This figure includes all costs except depreciation and financial expenses. This is amongst the lowest in the industry and contribute significantly at a low breakeven point, which is very important especially during weak markets. On the top graph, we present average interest rate of 1.685% including the margin for all bank loans and credit facilities during the first nine months of 2014 maintaining low financing cost and preserving our financial flexibility. We comply with our covenants. On slide 9 in the bottom graph, we present our net debt per vessel ratio at $8.6 million in Q3 2014 to deliver the fleet expansion. Our intention is to maintain comfortable leverage on a net debt per vessel basis in compliance with our financial covenants.

The average age of our fleet is [5.7] years while currently the value of five-year old Panamax is about $22.7 million as per the Baltic Exchange Sale & Purchase Assessment Index. On the top graph, we present our liquidity and our financial capital expense required. As of September 30, 2014 our liquidity was $523 million while our capital expenditure requirements were $325.6 million. We have not included additional building capacity for our intended newbuild vessel and our contracted revenues till 2017 providing us with total financial flexibility. Moving on to slide 10, our Board has declared a dividend of $0.04 per common share. After the low prevailing capital market conditions during this year, our Board considered it prudent to adapt a dividend policy to lower levels, which will further strengthen our liquidity and balance sheet. Safe Bulkers has paid over $200 million in consecutive quarterly dividends since the Company's IPO in 2008, in line with our policy to reward our shareholders by maintaining a meaningful dividend.

Our Chief Financial Officer, Konstantinos Adamopoulos, will now present our financial results.

Thank you, Loukas, and good morning to all. On slide 12, we present select financial highlights for the third quarter of 2014 compared to the same period of 2013. Net revenues decreased by 13% to $36.5 million from $41.9 million mainly due to the decrease in charter rates. Daily running expenses increased by 7% to $4,542 compared to $4,249 for the same period in 2013 mainly due to the drydocking of two vessels in the third quarter of 2014 compared to none for the same period in 2013. Interest expense decreased to $2 million or 5% in the third quarter of 2014 from $2.1 million for the same period in 2013 as a result of the decrease in the average outstanding amount of loans and credit facilities and in the weighted average interest rate of such loans and credit facilities. Net income decreased by 87% to $1.5 million from $11.6 million in the same period of 2013.

Adjusted net income decreased by 92% to $1 million from $13.1 million. EBITDA decreased by 38% to $14.4 million from $23.4 million in the same period in 2013. Adjusted EBITDA decreased by 44% to $13.9 million in the third quarter of 2014 from $24.8 million during the same period in 2013. Loss per share and adjusted loss per share were $0.02 and $0.03 respectively compared to earnings per share and adjusted earnings per share of $0.14 and $0.16 respectively in the third quarter of 2013 calculated on the weighted average number of 83,448,120 and 76,684,316 shares respectively. Moving on to slide 13, we present definition and reconciliation of our financial fundamentals for the third quarter of 2014 compared with the same period of 2013. On slide 14, we present selected operational highlights for the third quarter of 2014 compared to the same period of last year.

Ownership, available, and operating days increased by approximately 13%. We owned and operated an average of 31.05 vessels and achieved a utilization rate of 99.1% compared to an average of 27.43 vessels at a utilization rate of 99.3%. The average daily time charter equivalent per vessel was $10,736 compared to $15,264. Moving on to slide 15, we present definitions and reconciliation of our operational fundamentals for third quarter and first nine months of 2014 compared to the same period of 2013. As presented in slide 16, our Board of Directors declared for the third quarter of 2014 a cash dividend of $0.04 per common share payable on or about December 5, 2014 to shareholders of record at the close of trading on November 21, 2014. We have declared and paid dividends consecutively in all 26 quarters since our Company's IPO more than six years ago and will continue to be prudent taking into account market conditions and prospects going forward.

Last month our Board of Directors declared a cash dividend of $0.50 per share on our 8% Series B Preferred Shares, a cash dividend of $0.50 per share on our 8% Series C Preferred Shares, and a cash dividend of $0.66667 per share on our 8% Series D Preferred Shares. Each dividend was paid on October 30 to shareholders of record as of October 24 of the Series B, Series C, and Series D Preferred Shares respectively. Summing up our presentation. As the market outlook is still challenging, we are prepared as a long-term oriented company. We have been in shipping for more than [15] years with an outstanding track record and reputation. We maintain low financial costs as a result of our growth spreads and our prudent leverage in compliance with our financial covenants. We remain committed to further dividend policy to reward shareholders and at the same time, ensure future expansion and deleveraging.

You may find our contact details in slide 17. Thank you all for listening and we are now ready to accept questions.

Thank you, sir. (Operator Instructions) Chris Wetherbee.

This is Alex Hahn in for Chris. So seeing that the majority of the charters are set to expire soon, do you guys feel that long-term charters can be locked in or is it something you'd consider further down the road?

And at the moment the spot market is improving, but we cannot see meaningful improvement in the period market basically because FFA category is very weak for next year and is not meaningful even for one-year charter to book right now let alone for long-term charter. So, it's something we have to wait during a better environment and it doesn't look like right now we are able to secure long-term charters at any meaningful rate. So, we prepare to work short period on the spot market until the sentiment changes.

And just piggybacking on the previous question, are there any indications in terms of demand or even slippage that speak to near-term rate improvement? I mean there was a recent surge, we are just wondering if you think that this is like sustainable or can you also speak to like the favorable market conditions that you guys talked about in the presentation?

Presently the market in the last 10 days is improving after the surge of Capesize rates to $25,000, $26,000 a day and Panamaxes are reaching around $10,000 a day on the spot market. There are opportunities in certain areas like the Far East that you can find for Panamaxes even rates up to $13,000 or $14,000; but this is for trips of two months, 50 days, 60 days, that sort of duration. So yes, it's improving, but we want to see how big this improvement will be and if it will last. I mean the market lacks confidence so it depends how long this surge stays in order to know that we are seeing better freight rates. So at the moment, it's still too early to judge.

Okay. That's all I had. I'll turn it over.

Jon Chappell.

Loukas or Polys, could you provide a little bit more information on the thought process around the dividend? Obviously the market hasn't played out the way anybody expected it to. However, you have a significant amount of liquidity above and beyond your capital commitments. Why pull the trigger now instead of maybe wait through the winter and then see if the market could turn up?

We always adapt the dividend. We visit out dividend policy quarterly and as we said, we adapt it to the market conditions. Last year when we had seen a good market, we adopt a higher dividend policy which stayed for a certain period of time. Recently we've seen we have I mean basically three quarters of the year substantially low rates and so it's the first time that we had also very minor losses and we felt that it's prudent to adopt the policy despite the (inaudible) financial strength of the Company. I think that we all want to see a strong company as we go ahead and we know that there's something very dramatic or drastic. We want to adopt gradually whatever it is needed so in the long run we have the financial strength to consider our commitments and to be able to be flexible as we have done over the past years. And of course the other milestone of our policy to pay a dividend, which we have done from 2008 until now and we have maintained the dividend despite a very low market.

And then you noted in one of the slides that the asset values have turned down pretty significantly, I think you said the Panamax is getting close to last year's lows. Does that kind of change your view on secondhand acquisitions? Are you in the market trying to use your liquidity to add assets or right now is there just too much uncertainty in the market that you're going to continue to take delivery of the newbuilds and kind of hang back?

As I told you that we have a substantial program of expansion and so by 2017 we will reach 44 vessels, of which 15 vessels will be eco-ships or new technology. We have done that in the past, it doesn't mean that we will do it again. We want to see what is the development of the market. I think the most important issue of the Company right now is we are very focused on the chartering operations because we have seen this improvement in the spot rates and we want to see whether this will be followed by an improvement in the period rates, which could facilitate the Company and for the sentiment of the Company about the market conditions. Also I mean the global development of the economy in China et cetera, we'll monitor all these things so to deal with (inaudible) and react in time.

Fair enough. That makes sense. Thank you, Loukas.

Fotis Giannakoulis.

You mentioned earlier about the Panamax market being at around $9,000, $10,000, if you can differentiate to us the different type of vessels that you have. You have some Panamaxes, which are a little bit larger than the normal vessel. What kind of premium if any these vessels can earn? And also given the fact that you had some recharterings this quarter, but at the same time the quarter showed some small improvement versus Q3. So far have you been in a better average rate compared to the previous quarter and what do you expect the fourth quarter to be regarding our earnings?

The quarter is improving from the previous quarter, there's no doubt about it. Of course we had a good first half of September and then a drop of the market. For the last two weeks, the market started improving again so at the moment there are ships in the fleet being fixed anything between $11,000, $12,000, $13,000 a day on the spot market. So, it's improving. Roughly the Post-Panamaxes are benefiting more because of the Cape surge and we are seeing numbers so of course we have a fleet to fix in the next few days. We're seeing proposals in the spot market again for rates up to $14,000 a day, $14,500 even we have seen; but these are as you understand trips of 40 days, 50 days, 60 days. So all these will improve, the fourth quarter definitely looks like it will be an improved quarter. But is not yet a quarter that we feel we could sign the sort of charters that we could say we can lock in a profitable rate for one year for example. So since we have rates below our breakeven for long-term charters, we have to continue fixing ships in the spot market at whatever premium the spot market is offering.

And regarding the different type of vessels, what is the rate that a normal Panamax 75,000 deadweight can get versus Kamsarmaxes and Post-Panamaxes? And is there any differentiation in the age of the vessels?

Yes, there is difference. As the market improves, there is difference. The Kamsarmaxes definitely are doing around 5%, 6% more than the Panamaxes and in an improving market, Post-Panamax are doing around 10% more than the Panamaxes. In the low market like we have in the summer, the Panamax and Post-Panamax, they all are around the same levels in the very low market. But right now, we start seeing some differentiations, some 10% improvement on the Post-Panamaxes than the other ships. And this is I mean down to Capes, the improvement in the Capesize.

One important also thing that we want to focus is that with this substantially low market, we have let's say very minor losses and this is because of our extremely lean (inaudible) in the Asian operations in the low breakeven point. At the same time in this market, we are seeing that there is an aversion towards ordering additional vessels, which will benefit the market overall in the future. For example this is a benefit that we can stay even in the low market marginally sometimes profitable or making very minor losses while I mean the risk for additional investment is not there and we may see a better market in the forward periods when the supply and demand we find an equality.

Because you have to bear in mind the last two quarters have been exceptionally low with average rates of DPI and BCI on the scale, pro rata for all our fleet segments has been around $7,000 per day for the second and the third quarter. So, this was extreme quarters to our mind.

You mentioned earlier about asset values softening, can you give us a sense of where asset values are for standard vessels and for Japanese built vessels? And based on this estimates, where do you estimate your NAV on a charter adjusted basis that it is right now? And also if you can comment about the decline of the yen and if this has any impact on newbuilding prices for Japanese build vessels that will make it attractive for you to order additional ships?

I will start with the second part regarding the Japanese yen, of course this is a big favor today to the Japanese shipbuilders. It means they will be making more profits as they deliver ships now that they contracted in dollars and they will sell them and receive higher yen equivalent so it's in their favor. Now if this will induce them to sell ships for 2017 or 2018, of course this is the sort of deliveries they have in the books. This remains to be seen. We are no hurry to order a shortfall and definitely when the time comes, the softer translate the negotiations. That is not something for the next quarter or so, I think it will be next year. Regarding the first part, I think you remind me what you asked the first part. I forgot already.

If you can give us your estimate about asset values for newbuilding Panamaxes or resale Panamaxes and your estimate for your charter adjusted NAV?

The charter values have adjusted half way through the gain that we saw in the second half of 2013 so half of that gain has been extinguished, the other half remains so we have not reached the low levels of December 2012, but we are halfway between the peak of March last year and where it is now. Of course as for the market improving, we will see a small improvement of asset values. I feel the present value of the Company, it's well above what is the stock price today. I think the charted adjusted NAV with figures of ships as we had in the end of September at least when we checked some valuations, that rate was well (inaudible) charter adjusted NAV according to our calculation. But the market is generally undervaluing shipping stocks and especially dry bulk stocks so I mean our Company cannot be an exception this time.

And one last question and I'll hand it over. There is still some optimism about the Capesize market despite the weakness of the previous few months and this is mainly driven by the Brazilian exports that are expected next year. Even with the very high dependency with the Panamax market to the coal trade, which is currently very weak; what would be the cap release that would drive the Panamax rate higher and help this segment of the market recover?

The cap release I think is improving order book and reducing number of new ships. I mean we technically see no ordering of Panamax or Kamsarmax in the last six months. So if this continues for another six months, it will be very good news for the long run because I think that Panamax, Kamsarmax order book is in better shape than Capes or Supramaxes. So, I think there will come a point that the reduced order book will help demand to catch up. I think the iron ore exports of Brazil, we saw the exports in September doing highest monthly exports of 33 million tons of iron ore from Brazil, which is the highest since December 2011.

We know in the third quarter of 2014 the iron ore production in Ovale was highest in their history, 86 million tons and we know from the Ovale plants that in the next three years, they will increase production by about total of 130 million tons. So, all these are good news for (inaudible). If Capesizes are doing well, the sentiment changes and this is affecting Post-Panamaxes to start with and later on Panamaxes. So, this will definitely help I mean the sentiment of the market and maybe Capesize improve to a higher level. But as you have seen recently also, Panamaxes are responding to an increase of Capesize market so it's good when this is happening.

Thank you very much.

Shawn Collins.

So obviously the overall market is very weak, can you just touch upon your observations or the trends that you're observing with tradeflows of the different products; coal, iron ore, grain? And specifically on grain, the record grain crop in the US, are you seeing that translate into more flows?

This is happening and we see demand from US Gulf and from US West Coast for more grain cargoes. This has lifted rates for grain business out of Seattle and the other ports on the West Coast. We've seen ships fixing around $12,000 to $15,000 in the spot market to do such cargoes and also we have seen the equivalent of $17,000, $18,000 being paid on Continent US Gulf parties for wheat grain. So, this is definitely helping the market. We need to see a little bit how the weather conditions develop in the North Hemisphere in the winter. Last year we had a very soft winter in Europe and very soft imports of coal. Let's see if this changes this year, it will help also the coal movement in the North Atlantic, which is important to maintain a strong sentiment after the grain export season of the US Gulf finishes by the end of the year. So at the time, the grain is helping a lot the market, yes. It's helped improve from dismal rates $5,000 a day in the summer months, it's now market trading $11,000, $12,000 a day.

Do you mind just briefly touching upon coal which is obviously pretty weak and also on iron ore and what you're seeing in each of those two products and the flows resulting from them?

Coal is a major commodity for Panamax like it is the grains and like also in a smaller degree the iron ore. We see a lot of coal movement, but the main problem I think with the coal is not that China is not importing coal. This is coming from places like Indonesia and this is shortening the ton miles. I mean that we have many large ships in the coal business and I think this will continue. A lot of it depends on the weather conditions and how much they need for electricity in their factories, the Chinese. So yes, there has been a sharp drop between January and August. We feel now what we see enough coal movement and I don't know the latest figures, I don't have them handy, but I get the feeling that is improving from the low figures we had in August. The iron ore, I think the ton miles will drive the iron ore freight and this is all happening on Capes.

And if Capes reach $30,000 or $35,000 a day in the next few months, this will definitely mean that there will be split of cargoes and Panamaxes cannot stay at $10,000 a day, it will improve to more meaningful rates. Right now we're seeing very few Cape cargoes being split into Post-Panamaxes, but I mean the magic number is $30,000. I think when we see this on the spot market of the Capesizes, right now the market is around $25,000, $26,000. When we see $30,000, definitely we will start seeing cargoes being split into Post-Panamax like we saw in the second half of last year. September, October of last year Capes was doing $35,000, $40,000 and Post-Panamaxes were being fixed at $20,000 in the spot market. So, this is something that may happen again if there is some further improvement on the Capesize market, which we think it will gradually happen.

Okay, great. That's very helpful, very insightful. Thank you for the time, I appreciate it.

(Operator Instructions) (inaudible).

When looking at your presentation three months ago, the first slide on supply said order book declining in 2014 onwards and now it says that the order book remains a problem. I'm wondering why your spin on the order book has changed so much in three months?

I don't have the last presentation, I don't think it has changed anything because we have not seen many additions in the order book since last March so maybe it would have been better clarified by some additions. As the year passes, it becomes more clear how many deliveries has been going on and how many contracts of those reported in previous months have actually been materialized. We're hearing some shipyards in China, they are having certain problems in delivering refund guarantees. As a consequence, many owners that have placed ships there, they are not reluctant to wait too long for refund guarantees because the market is what it is. They feel they can get better deals elsewhere so many of these contracts we thought that were placed or should have been placed according to Sale & Purchase reports failed to materialize. So, maybe that is one of the reasons why specific order book has been adjusted.

We take these figures from the same sources you are taking them and the same presentations you are monitoring and likewise what other people will monitor. The good thing is what we see in the market like we saw a very hectic ordering period between September 2013 and March 2014, the period between April 2014 and now has been very, very quiet and this at least as Loukas said and as we put in our commentary, I think at least this is an encouraging sign. I mean it may sound naive what I would say, but I mean even in the next six months of low market will not do us too harm at all in that respect. But of course I mean we want better market and of course when the better market comes, people will again consider newbuildings. So, it's like again that your market price to balance always between the appetite for ordering and the actual demand.

In addition sometimes for example, I mean we just also read as Poly said all the important additions sometimes, you may see that in a period you may have let's say a little bit less of deliveries and maybe some other orders have pushed in another period. So let's say this number could be inflated gradually. It's not additional orders, it's just let's say how we are reporting and how they are pushed here or there based on the guy who did the report.

Okay. So for 2015, 2016, how do you currently see the supply growth versus demand growth playing out? Do you see it as a headwind or a tailwind for the Industry?

Look, I think that is improving. As I told you in the last six months, we have seen no orders (inaudible). We have not seen any early orders and in 2014 we had a lot of external factors affecting the market, whether that was the nickel ore export ban from Indonesia or whether it was the shadow banking unwinding of China or whether it was Argentina going almost bankrupt and having the problems with the devaluation of the currency or whether it was Ukraine or Middle East, all these things that were happening and distorting the market extremely. I mean things like that should normalize out in the course of the next year. I mean we expect every year to have one or two events, but couldn't expect like 2014 to have seven or eight distorting events happening at the same time in the market. So, we make calculations according to our analysts.

There was an effect of 3.3% on annualized demand because of all these anomalies that were created and that was what really affected the market in the period between March and September. So I mean of course the markets are finally balanced and even a 1% change of supply or demand affects the market by a certain multiple according to the world economies. We expect first normalization of demand and this is what will drive freight rates. If normalization of demand does not materialize, we have to wait a bit longer maybe an extra year because there will be no orders by owners and market will sort out itself a year later. I mean that's what's going to happen, but we expect that there should be normalization on the demand side to drive the market. I'm not so much worried about the Panamax or the (inaudible). Having said that, we don't want another public company going out and getting 50 or 60 ships in one go.

Okay. That makes sense. Is it fair to say based on your previous comments the $8 per share NAV that at under $5 a share right now, your stock seems pretty cheap and the math of the return there seems pretty good. Why don't you guys use some cash to buy back shares?

Maybe you deserve to seat on the Board. Maybe that's not a bad idea, I don't know. We'll see. I mean if the Company has financial flexibility, certain things will come up in our mind in the next few weeks if things prevail to be as they are. And me personally, I'm seeing the market and the Company is extremely cheap. Of course you may counter argue that there are companies out there that are also extremely cheap in the dry bulk space so I wouldn't disagree with that. I wouldn't disagree with that that there are other companies. It's a matter of sentiment what investors are doing across the Company. We will evaluate in the next few weeks all options that we have in front of us. One of the good things of having liquidity is that definitely you can do certain things when your stock is so much undervalued.

That makes sense and you'd have my vote for that. And I guess this year two of your peers, Knightsbridge and Star Bulk, have both participated in some transformative deals. What's your thoughts or appetites on participating in that type of activity?

I mean we are a more family orientated business that we want to try and run the business in a more controlled way and do as much as we can and do it gradually. Over the years, we've grown our fleet at a certain rate and there comes a point that the management team can control so much and do it efficiently and do it profitably. We've demonstrated over the years that our model is a profitable model and even this quarter with a terrible spot market, operationally we had a profit. We didn't have a loss even in this quarter. So, we believe that every company must find an optimum level of where and how they can run a business. It's not the solution to do what other people are doing because I mean they may have different priorities, they may have different organizations, they may be outsourcing a lot of things to third parties and this is normally raising costs.

And we don't want to do it that way because profits are marginal most of the times and we have to have even profits in the low market and most of the time the market is surprisingly low so we will continue. We have a track record and we have an order book growth and now a fleet growth in our books, another 12 ships to come in. I think we'll be busy in the next two years. That doesn't mean that we won't see a good deal and we won't buy an extra couple of ships or sell one of the older ships or do something more to realize value in the Company. But whilst we admire what Star Bulk is doing and of course I don't know the other company very well, you said Knightsbridge, we cannot all do the same thing. Star Bulk is a company is controlled by big private equity fund, they have other priorities. So, I mean each company has different horizons.

Okay, that's fine. Thanks. That's all from me.

(Operator Instructions) Mitchell Kramer.

This is Mitchell Kramer. I am an investor only. Our family has owned stock and we own about 8,000 or 9,000 shares of your stock and have for many, many years. We are looking forward to long-term growth. We're not interested in short-term fixes or your buying back shares of stock so that the stock can go up in the short term. We're looking for the Company to be a long-term investment and to be a successful investment. And frankly, I congratulate you on the conservative way you seem to be running your business. My question was given the problems in the market, how do you see your market share developing over the next number of years or several years?

We are also a family focused on Safe Bulkers is our shipping company, we own 57% of the Company as a family. So, you understand that we are interested in the long-term profitability and the long-term paying back of dividends to the shareholders and this is our business. We are nothing business for a sport. We're in business to make money, but to make money sustainably and over the long run. And as Loukas said before, of course sometime they said that Company delivers in the past six years over $200 million of dividend. So I mean depending on what are the freight conditions, we will expect the Company to do very well over the shipping cycles. But the most important thing is to have a company that is able to do even some profits or do better than others when the market is low because in the low market you are judged if you are a well run company and if you can deliver even a small profit.

In a good market I guess everybody is smiling and everybody looks clever and everybody can deliver results. So, we are fully focused on being a company that can run profitably and meaningfully even in the low market. And we have a hands-on approach and this is our management team myself personally is what we are dealing with every day and every day we try to improve operationally on what we are doing. Sometimes of course you can't achieve the best picture of the market, but we have a platform with best ships and Japanese built ships on the best [jobs]. But when the market changes we will be among the top two or three companies to win the meaningful contracts because we will have more efficient and more economic ships than the competitors. And you have to remember that most of our competitor have ordered ships in China not in Japanese shipyards. So, it's a completely different model of company here. Of course I mean a low market is a low market for everybody, but I mean we are here to keep trying and deliver better results overall.

Sir, there are no further questions at this time.

So, thank you very much. We were able to (inaudible) before. We would like to thank you once more for attending our conference call and we're looking forward to discussing again with you in our next quarter results. Thank you.

Thank you, sir. That does conclude our conference for today. Thanks for participating, you may all disconnect.