20-F: Safe Bulkers Reports Lower 2025 Earnings Amid Market Volatility

Safe Bulkers, Inc. reported a significant decrease in net income and revenues for the fiscal year ended December 31, 2025, while continuing its fleet renewal and environmental upgrade strategy.

Summary

• Net income for the fiscal year ended December 31, 2025, decreased by 60.4% to $38.563 million, compared to $97.376 million in 2024.
• Revenues declined by 10.1% to $288.1 million in 2025 from $320.7 million in 2024, primarily due to lower market rates.
• Earnings per share (basic and diluted) fell to $0.30 in 2025 from $0.83 in 2024.
• The company maintained its quarterly cash dividend of $0.05 per common share and $2.00 per preferred share.
• As of February 20, 2026, the fleet comprised 45 drybulk vessels with an average age of 10.5 years and an aggregate capacity of 4.6 million dwt.
• The orderbook includes eight newbuilds compliant with IMO GHG Phase 3 NOx Tier III regulations, with two being methanol dual-fueled, scheduled for delivery between 2026 and 2029.
• Liquidity as of December 31, 2025, stood at $382.3 million, consisting of $162.8 million in cash and equivalents and $219.5 million available under revolving credit facilities.
• The company sold two vessels in 2025, generating a gain of $4.6 million, compared to four vessels and $16.6 million gain in 2024.
• Daily vessel operating expenses increased by 5.1% to $5,790 in 2025 from $5,510 in 2024, driven by higher crew wages, spare parts, and maintenance costs.
• Interest expense decreased by 3.3% to $30.3 million in 2025, reflecting a lower weighted average interest rate of 5.615% p.a. compared to 6.358% p.a. in 2024.
• A foreign currency loss of $10.044 million was recorded in 2025, a significant shift from a $4.172 million gain in 2024.
• The company repurchased and canceled 3,000,000 common shares in February 2025 and authorized a new program for up to 10,000,000 shares in December 2025.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with a cautious sentiment. While the company demonstrates a proactive strategy in fleet modernization and environmental compliance, the significant decline in net income and revenues for 2025, coupled with persistent market volatility and geopolitical risks, indicates a challenging operating environment. The long-term risks associated with declining coal demand and regulatory uncertainties around alternative fuels also weigh on the outlook.

Positives

• Maintained consistent quarterly cash dividends of $0.05 per common share and $2.00 per preferred share.
• Strong liquidity position with $382.3 million as of December 31, 2025, including $162.8 million in cash and equivalents and $219.5 million in available revolving credit facilities.
• Continued fleet renewal strategy with eight environmentally advanced newbuilds on order, including two methanol dual-fueled vessels, enhancing future competitiveness and environmental compliance.
• Successfully completed environmental upgrades on 26 existing vessels, including scrubber installations on 21 vessels, which have recovered their total cost of $57.7 million through additional earnings.
• Secured new sustainability-linked financing of $75 million for six vessels and amended an existing $100 million financing to include similar terms, aligning with corporate sustainability goals.
• Improved net cash provided by investing activities to $9.7 million in 2025 from a use of $71.7 million in 2024.
• Effective hedging of interest rate exposure for 12.26% of outstanding loans as of December 31, 2025, and positive gain on derivatives of $7.325 million in 2025.
• All vessels are ISM Code-certified and the company has voluntarily implemented an Integrated Management System (IMS) in compliance with DryBMS standards, focusing on safety, crew welfare, and operational efficiency.

Negatives

• Net income decreased significantly by 60.4% to $38.563 million in 2025 from $97.376 million in 2024.
• Revenues decreased by 10.1% to $288.1 million in 2025 from $320.7 million in 2024, mainly due to lower market rates.
• Time Charter Equivalent (TCE) rates decreased to $15,511 in 2025 from $17,602 in 2024, reflecting increased exposure to volatile spot market conditions.
• Daily vessel operating expenses increased by 5.1% to $5,790 in 2025, driven by higher crew wages, spare parts, and maintenance costs.
• Voyage expenses increased by 16.3% to $19.5 million in 2025, mainly due to increased bunker consumption costs for scrubber-fitted vessels under variable consideration charter agreements.
• General and administrative expenses increased by 10.4% to $29.9 million in 2025, primarily due to higher management fees and environmental, social, and governance expenses.
• Experienced a significant foreign currency loss of $10.044 million in 2025, compared to a gain of $4.172 million in 2024.
• Gain on sale of assets decreased to $4.6 million in 2025 from $16.6 million in 2024, indicating fewer profitable vessel sales.

Risks

• Cyclicality and volatility of the dry bulk shipping industry, leading to reductions in charter rates, vessel values, and earnings.
• Negative changes in global economic and macroeconomic factors, particularly in Asia (China, Japan, India), could reduce dry bulk trade and demand.
• Oversupply of drybulk vessel capacity, with a significant orderbook (14.6% for Panamax/Post-Panamax, 12.5% for Capesize), potentially leading to reduced charter rates.
• High volatility in the market value of drybulk vessels, which could lead to impairment losses or breaches of loan covenants.
• Intense competition within the dry bulk industry from established operators and new entrants with potentially greater resources.
• Complex and increasingly stringent environmental regulations (GHG emissions, carbon taxes, FuelEU Maritime, IMO Global Fuel Standard) may increase operational costs, impose financial restrictions, and make older vessels obsolete.
• Long-term global shift to renewable energy and net-zero commitments could lead to declining global coal demand, a major dry bulk commodity, impacting freight volumes and profitability.
• Limited production and adoption of maritime alternative fuels, creating uncertainty and potential delays in meeting decarbonization targets, increasing environmental costs and penalties.
• Evolving ESG expectations from financial stakeholders, leading to increased scrutiny and potential impact on access to capital and reputation.
• Exposure to operational risks such as mechanical failure, collision, piracy, terrorist attacks, and cyber-attacks, which may not be adequately covered by insurance.
• Geopolitical risks, including the war between Russia and Ukraine, conflicts in the Middle East, ongoing instability in Venezuela, and Red Sea trade disruptions, could negatively affect operations and financial condition.
• Potential reimposition of retaliatory port fees between the U.S. and China, which could increase expenses and adversely affect business.
• Outbreaks of public health threats and epidemics/pandemics could disrupt the international shipping industry and delay newbuild deliveries.
• Dependence on a limited number of customers for a large part of revenues, with the loss of one or more key customers having a material adverse effect.
• Difficulty in properly managing planned growth through acquisitions of additional vessels, including potential delays in newbuild deliveries or failure to obtain financing.
• Aging fleet (11 vessels over 15 years, 2 reaching 20 years) may face decreased demand, increased operating costs, and stricter regulations.
• Lack of vessel diversification, making the company highly susceptible to adverse market developments in the dry bulk sector.
• Exposure to floating interest rates (SOFR) and potential losses from interest rate derivative contracts.
• Foreign currency exchange risk due to revenues primarily in USD but significant expenses and a bond denominated in other currencies (Euro, Japanese Yen).
• Restrictive covenants and cross-default provisions in existing and future financing agreements, with potential for acceleration of indebtedness and foreclosure on vessels if breached.
• The declaration and payment of dividends are subject to the discretion of the board of directors and various factors, with no guarantee of future payments.
• Reliance on subsidiaries to distribute funds for dividend payments, which could be affected by third-party claims or regulatory restrictions.
• Dependence on Managers (controlled by CEO Polys Hajioannou) for business operations, creating potential conflicts of interest and risks if Managers fail to perform satisfactorily.
• Marshall Islands incorporation, which has a less developed body of corporate law compared to U.S. jurisdictions, potentially making it harder for shareholders to protect their interests.
• Potential for U.S. tax authorities to treat the company as a passive foreign investment company (PFIC), leading to adverse U.S. federal income tax consequences for U.S. investors.
• Regulatory and legal risks from global operations, including international labor laws, anti-corruption laws, and data privacy requirements, potentially leading to fines or reputational damage.
• Polys Hajioannou's significant influence (47.32% ownership) on shareholder votes, with interests potentially differing from other shareholders.
• Foreign private issuer status exempts the company from certain SEC and NYSE requirements, potentially offering fewer protections to shareholders compared to U.S. companies.
• Future sales of common stock could cause market price decline and significant dilution for existing shareholders.
• Shareholders rights plan could make it more difficult for a third-party to acquire the company without board approval.

Future Outlook

Global GDP growth is projected to remain resilient at 3.3% in 2026 and 3.2% in 2027, with inflation gradually normalizing. China's economy is expected to grow at 4.5% in 2026 and 4.0% in 2027, while India shows robust growth projections of 6.4% for both years. The dry bulk supply-demand balance is expected to remain stable in 2026 and weaken in 2027, with ship demand growing 2-3% in 2026 and 1-2% in 2027, and ship supply growing 2.5% in 2026 and 3% in 2027. Demand growth is anticipated from stronger grain and minor bulk shipments and longer ton-mile distances, benefiting Capesize vessels. However, headwinds are expected from a weak outlook for iron ore and coal volumes, with coal shipments forecasted to fall 1-2% in 2026 and 2-3% in 2027. The company expects increasingly stringent environmental regulations to have a material adverse effect on its business, financial condition, and results of operations.

Management Comments

• We believe that integrating ESG at the very heart of our corporate strategy, will enable us to continue to have access to capital, enjoy existing and future investors' trust, reduce our fleets' carbon footprint and remain competitive in the dry bulk market.
• Our environmental strategy is founded on responsible fleet renewal, regulatory compliance, and continuous energy efficiency upgrades aimed at reducing the Company’s environmental footprint.
• We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scraping of older vessels throughout the dry bulk shipping industry.
• We anticipate that our primary sources of funds will be existing cash and cash equivalents and bank time deposits, cash generated from operations, available amounts under our revolving credit facilities and, possibly, other future equity or debt financing.
• In our opinion, the contracted cash flow from operations, the committed borrowing capacity and the existing cash and cash equivalents will be sufficient to fund the operations of our fleet and any other present financial requirements of the Company, including our working capital requirements, and our capital expenditure requirements at least through the end of the first quarter of 2027.

Industry Context

StockSavvy.ai notes that the dry bulk shipping industry continues to face significant cyclicality and volatility, as evidenced by the fluctuating Baltic Dry Index (BDI) which saw an annual low of 715 and a high of 2,845 in 2025. While global GDP growth is projected to remain resilient in 2026 and 2027, driven by Asian economies like China and India, the dry bulk supply-demand balance is expected to weaken in 2027 due to accelerated fleet growth. The long-term shift towards renewable energy and stricter environmental regulations, particularly concerning coal demand, poses a material risk to the sector. Geopolitical tensions and trade disruptions, such as those in the Red Sea, continue to impact global shipping routes and supply chains, adding layers of uncertainty to freight prices and operational costs. The industry is also grappling with the limited availability and high cost of alternative fuels, creating challenges for decarbonization efforts.

Comparison to Industry Standards

• The company's fleet average age of 10.5 years is competitive within the dry bulk sector, especially with 12 vessels built 2022 onwards meeting IMO GHG Phase 3 NOx Tier III regulations, positioning it favorably against older, less efficient fleets.
• The orderbook of eight newbuilds, including two methanol dual-fueled Kamsarmax vessels, demonstrates an early-mover advantage in adopting advanced, environmentally compliant technology, which is critical given the EU FuelEU Maritime Regulation effective from 2025 and the IMO's Net-Zero Framework.
• The company's average annual fleet utilization on ownership days (96.9%) and available days (98.8%) over the last three years indicates efficient employment of its vessels, which is a strong operational performance in a volatile market.
• The decline in the Baltic Dry Index (BDI) from a high of 5,650 in October 2021 to a high of 2,845 in December 2025, and a low of 715 in January 2025, reflects the broader industry's struggle with market volatility, which the company's lower TCE rates ($15,511 in 2025) are consistent with.
• The company's reliance on coal transportation, a major dry bulk commodity, faces significant long-term risk as the International Energy Agency (IEA) forecasts a substantial decline in global coal demand by 2050 under net-zero scenarios, necessitating the company's strategic pivot towards ESG and fleet modernization to maintain competitiveness.

Corporate Governance

Legal Proceedings

• The company is not involved in any legal proceedings which may have, or have had, a significant effect on its business, financial position, results of operations or liquidity.
• The company is not aware of any other proceedings that are pending or threatened which may have a significant effect on its business, financial position, results of operations or liquidity.
• The nature of the business exposes the company to the risk of lawsuits for damages or penalties relating to personal injury, property casualty, and environmental contamination, which are expected to be covered by insurance, subject to customary deductibles.

Related Party Transactions

• Polys Hajioannou, the Chief Executive Officer and Chairman, controls the company's Managers (Safety Management Overseas S.A., Safe Bulkers Management Limited, and Safe Bulkers Management Monaco Inc.) and a company that leases office space to Safe Bulkers.
• Management fees paid to Managers in 2025 amounted to $24.051 million, an increase from $21.357 million in 2024, primarily due to the strengthening of the Euro against the USD.
• Supervision fees of $825,000 were paid to Managers in 2025 for newbuild supervision.
• Commissions of $610,000 were paid to Managers in 2025 for vessel sales and purchases.
• The company leases its principal executive office space from a company controlled by Polys Hajioannou, with an annual lease payment of €86,400 (equivalent to $101,000 as of December 31, 2025).
• One independent board member serves as the Chief Executive Officer of a financial institution that provided a credit facility to certain subsidiaries and was an adviser/underwriter for the unsecured Euro bond. These transactions were approved by the board, excluding that independent member.
• Restrictive covenant agreements are in place with Polys Hajioannou and affiliated entities, limiting their ability to compete with Safe Bulkers in the dry bulk sector, subject to certain exceptions including ownership of a maximum of eight drybulk vessels for estate/family planning and permitted acquisitions.

Stakeholder Impact

• Shareholders: Experience reduced earnings per share and net income, but consistent dividend payments. Common shareholders face potential dilution from future equity offerings and the anti-takeover effects of the shareholders rights plan. Preferred shareholders maintain their dividend priority.
• Employees/Crew: Increased crew wages and related costs contribute to higher vessel operating expenses, suggesting improved compensation or increased demand for qualified seafarers. The implementation of DryBMS standards focuses on crew welfare.
• Customers/Charterers: The company's fleet renewal and environmental upgrades aim to provide modern, energy-efficient vessels, which could be attractive to charterers facing stricter environmental regulations. However, declining coal demand and market volatility may impact charter rates and contract terms.
• Lenders/Creditors: The company maintains compliance with all debt covenants, and its liquidity position is deemed sufficient through Q1 2027, providing comfort to creditors. Sustainability-linked financing demonstrates alignment with ESG criteria, potentially influencing future financing terms.
• Suppliers: Increased costs for spare parts, stores, and provisions indicate higher demand or inflationary pressures affecting suppliers to the shipping industry.

Next Steps

• Deliver four newbuild vessels in the remainder of 2026, two in 2027, one in 2028, and one in 2029.
• Monitor the situation in the Red Sea to assess potential impacts on operations or financial performance.
• Continue to evaluate EUA procurement strategies, timing considerations, and hedging opportunities to manage exposure and mitigate the financial impact of EU ETS related volatility.
• Undertake further energy-saving retrofits planned for 2026 on existing vessels.
• Enter into new management agreements with the Managers upon the expiration of current agreements on May 29, 2027.
• Continue to monitor economic sanctions in Syria following the recent collapse of Bashar al-Assad's regime.
• Continue to monitor compliance with applicable rules and regulations to avoid vessels being listed for intensified monitoring and inspection by the China MSA.
• Seek and refinance debt to maintain a strong cash position, potentially resulting in additional indebtedness and/or deferring repayments to later periods, and/or lower interest rates.
• Continue to implement additional internal controls, monitoring systems, policies, and procedures to comply with SEC rules on cybersecurity disclosure.

Key Dates

Recommendation

The company is navigating a challenging dry bulk market, as evidenced by the significant decline in net income and revenues in 2025. While the proactive fleet renewal strategy, including investments in methanol dual-fueled newbuilds and environmental upgrades, positions the company well for future decarbonization trends, the immediate financial performance is weak. The consistent dividend payments and strong liquidity provide some stability, but persistent geopolitical risks, market volatility, and the long-term decline in coal demand create headwinds. The stock is a 'hold' as the long-term strategic investments are promising, but current market conditions and financial results warrant caution rather than an aggressive 'buy' or 'sell' stance.

Keywords

Dry Bulk Shipping, SEC Filing, 20-F, Safe Bulkers, SB, Financial Results, Fleet Renewal, Newbuilds, Methanol Dual-Fuel, ESG, Environmental Regulations, IMO GHG Phase 3, NOx Tier III, TCE Rates, Operating Expenses, Net Income, Dividends, Liquidity, Debt Covenants, Market Volatility, Geopolitical Risks, Share Repurchase, Corporate Governance, Marshall Islands, NYSE