Results

Safe Bulkers Inc.

03/04/2026 | Press release | Distributed by Public on 03/04/2026 07:23

Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)

OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under "Item 3. Key Information-D. Risk Factors" and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see the section "Forward-Looking Statements" at the beginning of this annual report.
Overview
Our business is to provide international marine drybulk transportation services by operating vessels in the drybulk sector of the shipping industry. We deploy our vessels on a mix of period time and spot time charters according to our assessment of market conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flow and high utilization rates associated with period time charters, or to profit from attractive spot time charter rates during periods of strong charter market conditions, or to maintain employment flexibility that the spot market offers during periods of weak time charter market conditions. We believe our customers, some of which have been chartering our vessels for over 27 years, enter into period time and spot time charters with us because of the quality of our modern vessels and our record of safe and efficient operations.
Our Managers
Our operations are managed by our Managers, Safety Management, Safe Bulkers Management Ltd., and Safe Bulkers Management Monaco, under the supervision of our executive officers and our board of directors. Under our Management Agreements, our Managers provide us with technical, administrative and commercial services and our executive management. All three of our Managers are controlled by Polys Hajioannou. See "Item 7. Major Shareholders and Related Party Transactions-B. Related Party Transactions-Management Agreements" for more information.
Selected Financial Data
The following table presents selected consolidated financial and other data of Safe Bulkers, Inc. for each of the five years in the five year period ended December 31, 2025. The selected consolidated financial data of Safe Bulkers, Inc. is a summary of, is derived from, and is qualified by reference to, our audited consolidated financial statements and notes thereto, which have been prepared in accordance with United States (the "U.S.") generally accepted accounting principles ("U.S. GAAP").
Our audited consolidated statements of income, shareholders' equity and cash flows for the years ended December 31, 2023, 2024 and 2025 and the consolidated balance sheets at December 31, 2024 and 2025, together with the notes thereto, are included in "Item 18. Financial Statements" and should be read in their entirety.
The historical results included below and elsewhere in this document are not necessarily indicative of our future performance.
Year Ended December
2021 2022 2023 2024 2025
(in thousands of U.S. dollars except share data)
STATEMENT OF OPERATIONS
Revenues $ 343,475 $ 364,050 $ 295,393 $ 320,679 $ 288,131
Commissions (14,444) (14,332) (10,992) (13,046) (12,394)
Net revenues 329,031 349,718 284,401 307,633 275,737
Voyage expenses (9,753) (9,969) (21,666) (16,728) (19,451)
Vessel operating expenses (72,049) (80,211) (89,201) (92,601) (97,347)
Depreciation and amortization (52,364) (49,518) (54,129) (58,135) (59,878)
General and administrative expenses
Management fee to related parties (19,221) (17,723) (19,199) (21,357) (24,051)
Company administration expenses (3,277) (4,079) (4,564) (5,678) (5,802)
Early redelivery income, net
7,470 - - - -
Other operating costs - (3,570) (1,869) (1,262) (3,837)
Gain on sale of assets 11,579 - 10,375 16,555 4,596
Operating income 191,416 184,648 104,148 128,427 69,967
Interest expense (14,719) (17,138) (24,707) (31,375) (30,343)
Other finance costs (798) (1,353) (756) (618) (712)
Interest income 69 783 2,497 3,396 5,120
Gain/(loss) on derivatives 2,188 8,723 523 (3,670) 7,325
Foreign currency (loss)/gain (910) (1,101) (1,873) 4,172 (10,044)
Amortization and write-off of deferred finance charges (2,898) (2,008) (2,481) (2,956) (2,750)
Net income $ 174,348 $ 172,554 $ 77,351 $ 97,376 $ 38,563
Earnings per share of Common Stock, basic and diluted $ 1.44 $ 1.36 $ 0.61 $ 0.83 $ 0.30
Cash dividends declared per share of Common Stock $ - $ 0.20 $ 0.20 $ 0.20 $ 0.20
Cash dividends declared per share of Preferred C Shares $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00
Cash dividends declared per share of Preferred D Shares $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00
Weighted average number of shares of Common Stock outstanding, basic and diluted 113,716,354 120,653,507 113,619,092 107,576,009 103,038,189
Year Ended December
2021 2022 2023 2024 2025
(in thousands of U.S. dollars)
OTHER FINANCIAL DATA
Net cash provided by operating activities $ 217,208 $ 218,046 $ 122,207 $ 130,458 $ 102,292
Net cash provided by/(used in) investing activities 8,554 (229,404) (151,726) (71,732) 9,700
Net cash (used in)/provided by financing activities (225,906) (40,101) 29,141 (25,858) (52,371)
Net (decrease)/increase in cash, cash equivalents and restricted cash $ (144) $ (51,459) $ (378) $ 32,868 $ 59,621
Year Ended December
2021 2022 2023 2024 2025
(in thousands of U.S. dollars)
BALANCE SHEET DATA
Total current assets $ 124,116 $ 157,701 $ 146,721 $ 165,391 $ 200,601
Total fixed assets 952,813 1,077,400 1,181,221 1,229,522 1,192,883
Other non-current assets 17,391 10,817 11,874 8,183 9,698
Total assets 1,094,320 1,245,918 1,339,816 1,403,096 1,403,182
Total current liabilities 88,692 91,317 55,733 86,472 69,058
Long-term debt, net of current portion and of deferred finance charges 315,796 370,806 482,391 478,450 497,772
Total liabilities 415,080 474,002 547,305 571,478 572,475
Common stock, $0.001 par value
122 119 112 105 102
Total shareholders' equity 679,240 771,916 792,511 831,618 830,707
Total liabilities and shareholders' equity $ 1,094,320 $ 1,245,918 $ 1,339,816 $ 1,403,096 $ 1,403,182
A. Operating Results
Our operating results are largely driven by the following factors:
•Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
•Available days. We define available days (also referred to as voyage days) as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled maintenance, which includes major repairs, drydockings, vessel upgrades or special or intermediate surveys. Available days are used to measure the number of days in a period during which vessels should be capable of generating revenues.
•Operating days. We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, excluding scheduled maintenance. Operating days are used to measure the aggregate number of days in a period during which vessels actually generate revenues.
•Fleet utilization on ownership days. We calculate fleet utilization on ownership days by dividing the number of our operating days during a period by the number of our ownership days during that period. This measure demonstrates the percentage of time in the relevant period our vessels generate revenue. During the three years ended December 31, 2025, our average annual fleet utilization on ownership days rate was approximately 96.9%.
•Fleet utilization on available days. We calculate fleet utilization on available days by dividing the number of operating days by the number of our available days during that period. Fleet utilization is used to measure a company's ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, drydockings or special surveys. During the three years ended December 31, 2025, our average annual fleet utilization on available days rate was approximately 98.8%.
•Time charter equivalent rates. We define time charter equivalent rates ("TCE rates") as our revenues less commissions and voyage expenses during a period divided by the number of our available days during the period. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on period time charters and spot time charters with daily earnings generated by vessels on voyage charters, because charter rates for vessels on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time charters and spot time charters generally are expressed in such amounts. The TCE rate is a non-GAAP measure. We believe the TCE rate provides additional meaningful information because it assists our management in making decisions regarding the deployment and use of our vessels. We use TCE to compare period-to-period changes in our performance despite changes in the mix of charter types and management believes that the TCE rate assists investors and our management in evaluating our financial performance. We have only rarely employed our vessels on voyage charters and, as a result, generally our TCE rates approximate our time charter rates.
The following table reflects our revenues, commissions, voyage expenses, time charter equivalent revenue, available days and time charter equivalent rate for the periods indicated:
Year Ended December 31,
2024 2025
(in thousands of U.S. dollars except available days and
time charter equivalent rate)
Revenues $ 320,679 $ 288,131
Less commissions 13,046 12,394
Less voyage expenses 16,728 19,451
Time charter equivalent revenue $ 290,905 $ 256,286
Available days 16,527 16,523
Time charter equivalent rate $ 17,602 $ 15,511
•Daily vessel operating expenses. We define vessel operating expenses to include the costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys, tonnage taxes and other miscellaneous items. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Our ability to control our fixed and variable expenses, including our daily vessel operating expenses, also affects our financial results. In addition, factors beyond our control can cause our vessel operating expenses to increase, including developments relating to market premiums for insurance, cost of lubricants and changes in the value of the U.S. dollar compared to currencies in which certain of our expenses are denominated, such as certain crew wages.
•Daily vessel operating expenses excluding drydocking and pre-delivery expenses. We calculate daily vessel operating expenses excluding drydocking and pre-delivery expenses by dividing vessel operating expenses excluding drydocking and pre-delivery expenses for the relevant period by ownership days for such period. This measure assists our management and investors by increasing the comparability of our performance from period to period. Drydocking expenses include costs of shipyard, paints and agent expenses, and pre-delivery expenses include initially supplied spare parts, stores, provisions and other miscellaneous items provided to a newbuild or second-hand acquisition prior to their operation, which costs may vary from period to period.
•Daily general and administrative expenses. We define general and administrative expenses to include daily management fees and daily company administration expenses as defined below. Daily vessel general and administrative expenses are calculated by dividing general and administrative expenses by ownership days for the relevant period.
•Daily management fees. We define management fees to include the fees payable to our Managers for managing our fleet. Daily management fees are calculated by dividing management fees by ownership days for the relevant period.
•Daily company administration expenses. We define company administration expenses to include expenses incurred related to the administration of our company such as legal costs, audit fees, independent directors' compensation, listing fees to NYSE and other miscellaneous expenses. Daily company administration expenses are calculated by dividing company administration expenses by ownership days for the relevant period.
The following table reflects our ownership days, available days, operating days, fleet utilization, TCE rates, daily vessel operating expenses, daily vessel operating expenses excluding drydocking and pre-delivery expenses, daily general and administrative expenses and daily management fees for the periods indicated:
Year ended December 31,
2024 2025
Ownership days 16,806 16,814
Available days 16,527 16,523
Operating days 16,255 16,399
Fleet utilization on ownership days 96.72 % 97.53 %
Fleet utilization on available days 98.35 % 99.25 %
TCE rates $ 17,602 $ 15,511
Daily vessel operating expenses $ 5,510 $ 5,790
Daily vessel operating expenses excluding drydocking and pre-delivery expenses $ 4,978 $ 5,317
Daily general and administrative expenses consisting of: $ 1,609 $ 1,775
(a) Daily management fees $ 1,271 $ 1,430
(b) Daily company administration expenses $ 338 $ 345
Revenues
Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and the amount of daily charter rates that our vessels earn under our charters, which, in turn, are affected by a number of factors, including:
•levels of demand and supply in the drybulk shipping industry;
•the age, condition and specifications of our vessels;
•the duration of our charters;
•our decisions relating to vessel acquisitions and disposals;
•the amount of time that we spend positioning our vessels;
•the availability of our vessels, which is related to the amount of time that our vessels spend in dry-dock undergoing repairs and the amount of time required to perform necessary maintenance or upgrade work; and
•other factors affecting charter rates for drybulk vessels.
Revenue is recognized as earned on a straight-line basis over the charter period in respect of charter agreements that provide for varying rates. The difference between the revenue recognized and the actual charter rate is recorded either as unearned revenue or accrued revenue (see "-Unearned Revenue / Accrued Revenue" below). Commissions (address and brokerage), regardless of charter type, are always charged to us and are deferred and amortized over the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompanying consolidated statements of income.
Revenues are generated from time charters, period and spot, and voyage charters. Revenues from our time charters comprised 100.0% of our revenues for the years ended December 31, 2023, 2024 and 2025, from which our period time charters comprised 77.5%, 79.7% and 77.5%, respectively, and our spot time charters comprised 22.5%, 20.3% and 22.5%, respectively, of our revenues for the years ended December 31, 2023, 2024 and 2025. No voyage charters were performed during the years ended December 31, 2023, 2024 and 2025.
Unearned Revenue / Accrued Revenue
Unearned revenue as of December 31, 2025 includes: (i) cash received prior to the balance sheet date relating to services rendered after the balance sheet date amounting to $3.8 million and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for variable charter rates amounting to $3.8 million.
Unearned revenue as of December 31, 2024 includes: (i) cash received prior to the balance sheet date relating to services rendered after the balance sheet date amounting to $3.9 million and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for variable charter rates amounting to $5.3 million.
Accrued revenue as of December 31, 2025 represents revenue in the amount of $0.6 million earned prior to cash being received in respect of charter agreements that provide for variable charter rates.
Accrued revenue as of December 31, 2024 represents revenue in the amount of $0.9 million earned prior to cash being received in respect of charter agreements that provide for variable charter rates.
Commissions
We pay commissions currently reaching up to 5.0% on our period time and spot time charters, to unaffiliated ship brokers, to brokers associated with our charterers and to our charterers. These commissions are directly related to our revenues, from which they are deducted. The amount of our total commissions to unaffiliated ship brokers and other brokers associated with our charterers and to our charterers might grow, as revenues increase due to improving market conditions and delivery of our contracted newbuild vessels, or decrease as a result of deteriorating market conditions. These commissions do not include fees we pay to our Managers, which are described under "Item 4. Information on the Company-B. Business Overview-Management of Our Fleet."
Voyage Expenses
We charter our vessels primarily through period time charters and spot time charters under which the charterer is responsible for most voyage expenses, such as the cost of bunkers, port expenses, agents' fees, canal dues, extra war risks insurance and any other expenses related to the cargo. We are responsible for the remaining voyage expenses such as draft surveys, hold cleaning, bunkers during ballast period or for vessel repositioning, cost of bunkers consumed and paid back by charterers under certain time charters for which we receive variable consideration, courier and other minor miscellaneous expenses related to the voyage, as well as hire expenses of vessel we may charter-in from time to time. We expect that our voyage expenses will decrease in the future if fewer vessels are employed in the spot market, in which case both vessel repositioning costs and quantity of bunkers consumed under certain time charters for which we receive variable consideration based on charterers consumption, should decrease. We generally do not employ our vessels on voyage charters under which we would be responsible for all voyage expenses.
Vessel Operating Expenses
Vessel operating expenses include costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys, tonnage taxes and other minor miscellaneous items. We expect that our vessel operating expenses will slowly increase in the future as our fleet grows. Our crewing costs, which are a significant part of our vessel operating expenses, may increase in the future due to the limited supply and increase in demand for well-qualified crew. Furthermore, we expect that insurance costs, drydocking, maintenance, spare parts and stores costs will increase from the levels achieved in 2025 as our vessels age. A portion of our vessel operating expenses including crew wages paid to our Greek crew members are in currencies other than the U.S. dollar. These expenses may increase or decrease as a result of fluctuation of the U.S. dollar against these currencies.
Depreciation
We depreciate our drybulk vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. Second-hand vessels are depreciated from the date of their acquisition through their remaining estimated useful life. Furthermore, we estimate the residual value of our vessels is equal to the product of its lightweight tonnage and estimated scrap rate, which we previously estimated to be $182 per light-weight ton. Effective January 1, 2022, we changed the estimate of vessels' residual value, from a scrap rate of $182 per light weight ton to $375 per light weight ton.
Vessels, Net
Vessels are stated at their historical cost, which consists of the contracted purchase price and any direct material expenses incurred upon acquisition (including improvements, on-site supervision expenses incurred during the construction period if the vessels are newbuilds, commissions paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage), less accumulated depreciation and impairment charges, if any. Financing costs incurred during the construction period of the vessels if the vessels are newbuilds are capitalized and included in the vessels' cost. Certain subsequent expenditures for conversions and major improvements are also capitalized, if it is determined that they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels.
As of December 31, 2024 and 2025, we capitalized interest amounting to $1,636 thousand and $725 thousand, respectively.
General and Administrative Expenses
General and administrative expenses consist of management fees paid to our Managers and expenses incurred relating to the administration of the Company.
Management fees paid to our Managers include services offered to us for managing our vessels (i.e., chartering, operations, technical, supply, crewing and accounting services), the services provided to us by our executive officers as well as the preparation of disclosure documents and the preparation for compliance with the Sarbanes-Oxley Act. Pursuant to the terms of the Management Agreements with our Managers, for the provision of such services, we pay a daily ship management fee of €950 per vessel and pay Safe Bulkers Management Monaco an annual ship management fee of €5.0 million.
Expenses related to the administration of our company primarily include legal costs, audit fees, independent directors' compensation, listing fees to the NYSE and other miscellaneous expenses such as director and officer liability insurance costs and public relations expenses.
Interest Expense and Other Finance Costs
We incur interest expense on outstanding indebtedness under our existing loan and credit facilities, which we include in interest expense. We also incurred financing costs in connection with establishing those facilities, which are deferred and amortized over the period of the facility. The amortization of the finance costs is included in amortization and write-off of deferred finance charges. We will incur additional interest expense in the future on our outstanding borrowings and under future borrowings.
Inflation
Inflation is expected to have a notable effect on our expenses given current economic conditions. In the event that significant global inflationary pressures persist, these pressures would increase our financing expenses, operating, voyage and administrative expenses.
Results of Operations
Year ended December 31, 2025 compared to year ended December 31, 2024
During the year ended December 31, 2025, we had an average of 46.1 drybulk vessels in our fleet. During the year ended December 31, 2024, we had an average of 45.9 drybulk vessels in our fleet.
During the year ended December 31, 2025, we acquired the newbuild Kamsarmax vessel Efrossini and sold the Kamsarmax vessels Pedhoulas Leader,built 2007 and Pedhoulas Merchant, built 2006.
During the year ended December 31, 2024, we acquired the newbuild Kamsarmax vessels Ammoxostos, Kerynia, Pedhoulas Farmer andPedhoulas Fighter and sold the Panamax vessels Maritsabuilt 2005 and Paraskevi 2, built 2011, the Kamsarmax vessel Pedhoulas Cherry, built 2015,and the Post-Panamax vessel Panayiota K,built 2010.
Revenues
Revenues decreased by 10.1%, or $32.6 million, to $288.1 million during the year ended December 31, 2025 from $320.7 million during the year ended December 31, 2024, mainly due to lower market rates.
Commissions
Commissions to unaffiliated ship brokers, other brokers associated with our charterers and our charterers during the year ended December 31, 2025 amounted to $12.4 million, a decrease of $0.6 million, or 5.0%, compared to $13.0 million during the year ended December 31, 2024. Commissions as a percentage of revenues increased to 4.3% of revenues during the year ended December 31, 2025 compared to 4.1% of revenues for the year ended December 31, 2024.
Voyage expenses
During the year ended December 31, 2025, we recorded voyage expenses of $19.5 million, compared to $16.7 million during the year ended December 31, 2024, an increase of 16.3%, or $2.8 million mainlydue to increased bunker consumption costs for scrubber fitted vessels under charter agreements, which provide for variable consideration based on the bunker consumption.
Vessel operating expenses
Vessel operating expenses increased by 5.1% to $97.3 million during the year ended December 31, 2025 from $92.6 million during the year ended December 31, 2024. Ownership days in 2025 were 16,814 compared to 16,806 in 2024. Daily operating expenses increased by 5.1% to $5,790 during the year ended December 31, 2025 from $5,510 during the year ended December 31, 2024.
Vessel operating expenses increased as a net result of the following:
(i) the increase in crew wages, repatriation and related crew costs expenses by 4.3% to $42.7 million in 2025, compared to $40.9 million in 2024, due to increased crew remunerations;
(ii) the increase in cost of spares, stores and provisions by 11.7% to $23.1 million in 2025 compared to $20.7 million in 2024, primary due to increased spare parts used during vessels drydockings and unscheduled repairs;
(iii) the increase in repairs, maintenance and drydocking costs by 4.3% to $16.9 million in 2025, compared to $16.2 million in 2024, primarily due to unscheduled repairs, regulatory compliance work, and additional inspection requirements during 2025;
(iv) the decrease in insurance costs by 4.2% to $5.4 million in 2025, compared to $5.7 million in 2024, due to reduction in insurance expenses reflecting long-term policy retention.
Other factors influencing vessel operating expenses, such as taxes and other miscellaneous expenses, had a minor effect on the increased operating expenses.
The Company expenses drydocking and pre-delivery costs as incurred, which costs may vary from period to period. Vessel operating expenses excluding vessel drydocking and pre-delivery costs increased by 6.9% to $89.4 million in 2025, compared to $83.7 million in 2024, primarilydue to increased crew wages, spares, stores and provisions and repairs and maintenance. Drydocking expense is related to the number of drydockings in each period and pre-delivery expense is related to the number of newbuild deliveries and second-hand acquisitions in each period. Certain other shipping companies may defer and amortize drydocking expense. Daily operating expenses, excluding vessel drydocking and pre-delivery costs, increased by 6.8% to $5,317 during the year ended December 31, 2025 from $4,978 during the year ended December 31, 2024.
Gain on sale of assets
Gain on sale of assets amounted to $4.6 million during the year ended December 31, 2025, compared to $16.6 million during the year ended December 31, 2024, as a result of gain on the sale of two of our vessels in 2025 compared to four in 2024.
Depreciation and amortization
Depreciation and amortization expense increased by 3.0% to $59.9 million during the year ended December 31, 2025, compared to $58.1 million during the year ended December 31, 2024, as a result of the increased average number of vessels during 2025 and the effect of fleet renewal activities, including the sale of older vessels and the acquisition of newbuild ones.
General and administrative expenses
General and administrative expenses increased by 10.4% to $29.9 million during the year ended December 31, 2025, compared to $27.0 million during the year ended December 31, 2024. The increase of $2.8 million is mainly due to the increase by $2.7 million in the management fees charged by our Managers of $24.1 million in 2025 from $21.4 million in 2024. Management fees which are denominated in Euros increased in 2025 compared to 2024 mainly due to the strengthening of the exchange rate of Euro against the USD during 2025. Company administration expenses increased by $0.1 million to $5.8 million in 2025 from $5.7 million during 2024 due to increased environmental, social and governance expenses.
As a result:
•Daily general and administrative expenses which consist of daily management fees and daily company administration expenses, increased by 10.4% to $1,775 during the year ended December 31, 2025, from $1,609 during the year ended December 31, 2024;
•Daily management fees increased by 12.6% to $1,430 during the year ended December 31, 2025, from $1,271 during the year ended December 31, 2024; and
•Daily company administration expenses increased by 2.1% to $345 during the year ended December 31, 2025, from $338during the year ended December 31, 2024.
Interest expense
Interest expense decreased by 3.3% to $30.3 million during the year ended December 31, 2025, compared to $31.4 million, during the year ended December 31, 2024. This was the combined effect of: i) the decrease in the weighted average interest rate of our outstanding indebtedness of 5.615% per annum ("p.a.") for the year ended December 31, 2025, compared to the weighted average interest rate of our outstanding indebtedness of 6.358% p.a. for the year ended December 31, 2024 reflecting the decreasing interest rate environment, and ii) the increase in average loans outstanding of $545.7 million during the year ended December 31, 2025, compared to the average loans outstanding of $510.6 million during the year ended December 31, 2024. The total principal amount of loans outstanding as of December 31, 2025 was $548.6 million, compared to $545.6 million as of December 31, 2024.
The discussion relating to the year ended December 31, 2024 compared to year ended December 31, 2023, can be found in the Company's 20-F for the year ended December 31, 2024 filed with the SEC on March 10, 2025, under ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS - Year ended December 31, 2024 compared to year ended December 31, 2023.
B. Liquidity and Capital Resources
As of December 31, 2025, we had liquidity of $382.3 million consisting of $162.8 million in cash, cash equivalents, bank time deposits and restricted cash and of $219.5 million available under our revolving credit facilities. We had an existing fleet of 45 vessels, and six newbuild vessels in our orderbook. Our contracted revenue was approximately $164.2 million, net of commissions, from our non-cancellable spot and period time charter contracts, including contracted revenue linked to the BPI and BCI index, calculated as of December 31, 2025, which does not include the Scrubber benefit. Furthermore, we had additional borrowing capacity in relation to six newbuilds upon their delivery.
As of February 20, 2026, we had liquidity of $381.0 million consisting of $160.9 million in cash, cash equivalents, bank time deposits and restricted cash and of $220.1 million available under the revolving credit facilities. We had an existing fleet
of 45 vessels, one of which was held for sale, and eight newbuild vessels in our orderbook. The gross sale proceeds of our held for sale vessel amount to $35.2million. Our contracted revenue was approximately $184.8 million, net of commissions, from our non-cancellable spot and period time charter contracts, including contracted revenue linked to the BPI and BCI index, calculated as of February 20, 2026, which does not include the Scrubber benefit. Furthermore, we had additional borrowing capacity in relation to eight newbuilds upon their delivery.
Our aggregate remaining contractual obligations as of December 31, 2025 were $839.3 million of which $208.2 million payable in 2026, $368.8 million payable in 2027 and 2028, $127.8 million payable in 2029 and 2030 and $134.5 million payable 2031 onwards. The aggregate remaining contractual obligations as of December 31, 2025, consist of:
i) $548.6 million of aggregate debt outstanding of which $44.8 million relates to the current portion of long term debt payable within 2026;
ii) $161.2 million of remaining capital expenditure requirements relating to the purchase consideration of the six newbuilds, of which $110.1 million payable in 2026;
iii) $40.8 million of payments to our Managers which represent the daily and annual ship management fees, the acquisition fees and the supervision fees, of which $28.5 million payable in 2026; and
iv) $88.7 million of loan and swap interest and bond coupon payments, of which $24.8 million payable in 2026, consisting of estimated interest payments we expect to make with respect to our long-term debt obligations and interest rate swap agreements, reflecting an assumed Term SOFR-based applicable interest rate of 3.652% (using the three-month SOFR rate as of December 31, 2025) plus the relevant margin of the applicable credit facility.
Our primary liquidity needs are to fund debt repayment, capital expenditures in relation to vessel acquisitions and vessel improvements, vessel operating expenses, general and administrative expenses, financing expenses and potential redemption of preferred shares, repurchase of common stock and dividend payments to our shareholders. 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. However, we may seek and refinance our debt which may result in additional indebtedness and/or deferring repayments to later periods, and/or lower interest rates to maintain a strong cash position. Future needs in relation to financing and investing activities may involve equity issuance or refinancing of existing debt and financing of any future fleet replacement and expansion program or fleet upgrades and improvements, in addition to use of our existing cash and operating cash surplus. Our ability to obtain bank financing or to access the capital markets for future offerings may be limited by our financial condition at the time of any such financing or offering, including the actual or perceived credit quality of our charterers and the market value of our fleet, as well as by adverse market conditions resulting from, among other things, general economic conditions, weakness in the financial and equity markets and contingencies and uncertainties that are beyond our control. To the extent that market conditions deteriorate, charterers may default or seek to renegotiate charter contracts, and vessel valuations may decrease, resulting in a breach of our debt covenants. In addition, refinancing of our existing debt in the future may be difficult. Our contracted revenues may decrease and we may be required to make additional prepayments under existing loan facilities, resulting in additional financing needs.
A failure to fulfill our capital expenditures commitments generally results in a forfeiture of advances paid with respect to the contracted newbuild vessel and a write-off of capitalized expenses. In addition, we may also be liable for other damages for breach of contract. A failure to satisfy our financial commitments could result in the acceleration of our indebtedness and foreclosure on our vessels. Such events could adversely impact the dividends we intend to pay, and could have a material adverse effect on our business, financial condition and results of operation.
We paid dividends to our common shareholders each quarter between the date of our initial public offering in June 2008 and the second quarter of 2015. In March 2022, we re-established paying dividends to our common shareholders and have since paid another 15 quarterly consecutive dividends of $0.05 per common share, totaling $88.9million. In February 2026, we declared a dividend on the Company's common stock of $0.05per share, totaling $5.1 million, payable on or about March 18, 2026, to shareholders of record at the close of trading of the Company's common stock on the NYSE on March 2, 2026.
During 2025, we declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, totaling $1.6 million, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6.4 million. In January 2026, we declared and paid a quarterly dividend of $0.50 per share, of Series C Preferred Shares, totaling $0.4million, and of Series D Preferred Shares, totaling $1.6million.
Our future liquidity needs will impact our dividend policy. The declaration and payment of dividends, if any, will always be subject to the discretion of the board of directors of the Company. There is no guarantee that the Company's board of directors will determine to issue cash dividends in the future. The timing and amount of any dividends declared will depend on, among other things: (i) the Company's earnings, fleet employment profile, financial condition and cash requirements and available sources of liquidity; (ii) decisions in relation to the Company's growth, fleet renewal and leverage strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company's existing and future debt instruments; and (v) global economic and financial conditions. In addition, cash dividends on our Common Stock are subject to the priority of dividends on our Preferred Shares.
In 2020 and 2021, the Company sold its Common Stock through an ATM program, which was terminated by the Company on May 8, 2023. In August 2024, the Company filed a Registration Statement on Form F-3 with the SEC. The Company does not presently have an ATM program, however, our board of directors could adopt an ATM program in the future dependent upon market conditions.
In June 2022, we authorized a program under which we may from time to time purchase up to 5,000,000 shares of our common stock. In March 2023, the Company announced an increase of the June 2022 share repurchase program, authorizing the Company to purchase up to a total of 10,000,000 shares of the Company's Common Stock. All shares of Common Stock repurchased under the June 2022 and March 2023 share repurchase programs have been canceled. In May 2023 we announced a new share repurchase program. In July 2023, the Company terminated the program, having repurchased and canceled 139,891 shares of Common Stock. In November 2023, we authorizeda share repurchase program under which we may from time to time purchase up to 5,000,000shares of common stock. In April 2024, the Company terminated the program, having repurchased and canceled an amount of 4,860,953shares of Common Stock. In November 2024, we authorized an additional repurchase program for up to 5,000,000shares of Common Stock. In December 2024, the Company terminated the program, having repurchased and canceled an amount of 1,488,690shares of Common Stock. In February 2025, we authorized a repurchase program for up to 3,000,000 shares of Common Stock, all of which had been repurchased and canceled. In December 2025, we authorized a new repurchase program for up to 10,000,000 shares of Common Stock, which supersedes any prior repurchase program of the Company. As of February 20, 2026, the Company had repurchased and cancelled an amount of 91,443 shares of Common Stock under this repurchase program.
In February 2022, our wholly owned subsidiary Safe Bulkers Participations successfully completed a public offer in Greece of €100,000,000 of an unsecured bond that was admitted for trading in the Athens Exchange under the ticker symbol SBB1. The Bond is guaranteed by the Company, is non-amortizing, matures in February 2027, and carries a coupon of 2.95% payable semi-annually. It may be redeemed early by the Company in part or in full after February 2024, subject to the payment of premium ranging from 1.5% to 0.5% of the redeemed amount depending on the timing of the redemption. The net proceeds of the offering were used for the acquisition of vessels. One of the independent members of the board of directors of the Company currently serves as the Chief Executive Officer of the financial institution that was the adviser and one of the lead underwriters in the public offer of the Bond. The transaction was evaluated and approved by the board of directors of the Company excluding that independent member of the board of directors of the Company.
As of December 31, 2025, and as of December 31, 2024, we did not have any off-balance sheet arrangements.
Cash Flows
Cash and cash equivalents increased to $141.6 million as of December 31, 2025, compared to $81.1 million as of December 31, 2024. We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents were primarily held in U.S. dollars, Euros and Japanese Yen.
Net Cash Provided by Operating Activities
Net cash provided by operating activities amounted to $102.3 million in 2025 and $130.5 million in 2024, consisting of net income after non-cash items of $106.7 million and $140.5 million respectively plus a decrease in working capital of $4.4 million and $10.0 million during 2025 and 2024, respectively.
The major drivers of the change of net cash provided by operating activities are the decreased inflows related to net revenues of $31.9 million in 2025 compared to 2024, the increased outflows related to vessel voyage expenses of $2.8 million in 2025 compared to 2024, the decreased outflows related to interest expense of $1.0 million in 2025 compared to 2024, the increased outflows related to the operating expenses of $4.8 million in 2025 compared to 2024 and the increased outflows
related to general and administrative expense of $2.8 million in 2025 compared to 2024. The major drivers of the cash outflow of the working capital during 2025 are the increased inventories of $8.0 million due to the increased number of vessels in the spot market and the decreasedunearned revenue of $1.6million as a result of the timing of revenue collection, and the recognition of straight line revenue for charter parties we entered in prior years partially offset by the decreased receivables of $4.5 million compared to 2024, as a result of the decreased outstanding bunker settlement from charterers due to decreased number of vessels on period time charters, where the bunkers on board the vessels upon delivery are sold to the charterers.
Net Cash Provided by/(Used in) Investing Activities
Net cash flows provided by investing activities were $9.7 million for the year ended December 31, 2025 compared to cash flows used in investing activities of $71.7 million for the year ended December 31, 2024. The increase in cash flows provided by investing activities of $81.4 million from 2024 is mainly attributable to the following factors: (i) a decrease of $102.8 million in payments for vessel acquisitions, advances for vessels under construction and major improvements during the year ended December 31, 2025 compared to the same period of 2024, (ii) a decrease of $54.6 million in proceeds from sale of assets during the year ended December 31, 2025 compared to the same period of 2024, (iii) an increase of $4.8 million in short term investment during the year ended December 31, 2025 compared to the same period of 2024 and (iv) a net decrease of $33.1 million in time deposits during the year ended December 31, 2025, compared to a net increase of $4.9 million during the same period of 2024.
Net Cash Used in Financing Activities
Net cash flows used in financing activities were $52.4 million for the year ended December 31, 2025, compared to $25.9 million for the year ended December 31, 2024. This increase in cash flows used in financing activities of $26.5 million, compared to the year ended December 31, 2024, is mainly attributable to an increase of $13.3 million in long term debt principal payments, a decrease in proceeds from long-term debt by $33.4 million, offset by a decrease in repurchases of common stock by $17.9 million, a decrease of $0.9 million in dividend payments, a decrease of $0.6 million in payments of deferred financing costs and a decrease of $0.8 million in the payment of other financing liability payments compared to the year ended December 31, 2024.
The discussion relating to the cash flows for the year ended December 31, 2024 compared to year ended December 31, 2023, can be found in the Company's 20-F for the year ended December 31, 2024 filed with the SEC on March 10, 2025, under ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS - B. Liquidity and Capital Resources.
Credit Facilities
We operate in a capital intensive industry which requires significant amounts of investment, and we fund a portion of this investment through long-term debt. We or our subsidiaries have generally entered into financing arrangements in order to finance the acquisition of our vessels, to refinance existing indebtedness and for general corporate purposes. In 2025 (a) seven of our subsidiaries entered into a credit facility, secured by the vessels owned by them, the proceeds of which were used to purchase back four of those vessels previously financed under sale and leaseback agreements and refinance an existing credit facility secured by the other three vessels, (b) one of our subsidiaries entered into a reducing revolving credit facility, used for general corporate purposes, (c) we entered into a reducing revolving credit facility, secured by six of our vessels, used to refinance an existing revolving credit facility, secured by those six vessels, and for general corporate purposes and (d) we amended the terms of an existing facility to incorporate a mechanism that adjusts the interest margin based on independently verified performance related to fleet carbon intensity index, measured against annual sustainability performance targets.
The term of our 19 financing arrangements outstanding as of December 31, 2025, ranged from five to 10 years. They are repaid by monthly or, quarterly principal installments and a balloon payment due on maturity. We generally pay interest at SOFR plus a margin, plus a credit adjustment spread on facilities that had originally been contracted based on LIBOR, except for one facility which is deemed to bear interest at a fixed rate, and another facility, where a portion of the principal amounts is deemed to bear interest at a fixed rate.
The obligations under our financing arrangements are secured by, among other types of security, first priority mortgages over the vessels owned by the respective borrower subsidiaries, first priority assignments of all insurances and earnings of the mortgaged vessels or ownership of the vessels under sale and leaseback financing and guarantees by us.
Covenants Under Credit Facilities
The credit facilities impose operating and financial restrictions on us. These restrictions in our existing credit facilities generally limit our subsidiaries' ability to, among other things, and subject to exceptions set forth in such credit facilities:
•pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends;
•enter into certain long-term charters without the lenders' consent;
•incur additional indebtedness, including through the issuance of guarantees;
•change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel;
•create liens on their assets;
•make loans;
•make investments;
•make capital expenditures;
•undergo a change in ownership or control or permit a change in ownership and control of our Managers;
•sell the vessel mortgaged under such facility; and
•change our chief executive officer.
Our credit facilities also require certain of our subsidiaries to maintain financial ratios and satisfy financial covenants. Depending on the credit facility, certain of our subsidiaries are subject to financial ratios and covenants requiring that these subsidiaries:
•meet the Minimum Value Covenant of 105%, 112%, 120%, 125%or 135%, as the case may be, for credit facilities outstanding;
•maintain a minimum cash balance per vessel from $200,000 to $500,000 as the case may be; and
•ensure that we comply with certain financial covenants under the guarantees described below.
In addition, under guarantees we have entered into with respect to certain of our subsidiaries' existing credit facilities, we are subject to financial covenants. Depending on the facility, these financial covenants include the following:
•under the Consolidated Leverage Covenant, our total consolidated liabilities divided by our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) must not exceed 85%;
•under the Net Worth Covenant, our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less our total consolidated liabilities must not be less than $150 million ;
•under the EBITDA Covenant, the ratio of our EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months' basis;
•under the Control Covenant, a minimum of 30% or 35%, as the case may be, of our shares shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and, in the case of one facility, Polys Hajioannou, is required to beneficially hold a minimum of 20% of the voting and ownership rights; and
•payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends.
The Minimum Value Covenant, Consolidated Leverage Covenant, EBITDA Covenant, Net Worth Covenant and Control Covenant do not apply to the Pinewood, Shikokuepta, Agros, Kyotofriendo One, Yasudyo, Shimaeight and Shimasix financing agreements. The EBITDA Covenant does not apply to the Monagrouli, Shimafive and Shimaseven loan facilities. The Minimum Value Covenant does not apply to the Maxtessera financing agreements.
As of December 31, 2025, the Company was in compliance with all debt covenants that were in effect with respect to its loan and credit facilities.
Bond
The Bond is not secured by any of our vessels or any other assets, is guaranteed by us and pays a coupon of 2.95% on a semi-annual basis. It matures in February 2027, has no principal payments during its tenor and may be redeemed at our option in part or in full after February 2024, subject to the payment of a premium ranging from 1.5% to 0.5% of the redeemed amount depending on the timing of the redemption.
Covenants Under the Bond
Under the Bond, we are subject to financial covenants, including the following:
•under the Consolidated Leverage Covenant, our total consolidated liabilities divided by our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) must not exceed 85%;
•under the Net Worth Covenant, our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less our total consolidated liabilities must not be less than $150 million ;
•under the EBITDA Covenant, the ratio of our EBITDA over consolidated net interest expense must not be less than 2.0:1, on a trailing 12 months' basis;
•payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends;
•a minimum of 30% of its voting and ownership rights shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the Bond.
As of December 31, 2025, the Company was in compliance with all covenants that were in effect with respect to the bond.
During 2025, we received proceeds of $215.0 million under our credit and financing facilities and we repaid $225.5 million of our indebtedness. As of December 31, 2025, we had 19 outstanding financing arrangements and the Bond with a combined outstanding balance of $548.6 million. These debt facilities had maturity dates between 2025 and 2034. During 2026, we are scheduled to repay $44.8 million of our long-term debt outstanding as of December 31, 2025.
For a description of our debt facilities as of December 31, 2025, please see Note 6 of the consolidated financial statements included elsewhere in this annual report.
C. Research and Development, Patents and Licenses
We have not incurred expenditures relating to research and development, patents or licenses for the last three years.
D. Trend Information
Our results of operations depend primarily on the charter hire rates that we are able to realize, and the demand for drybulk vessel services. During 2019, 2020, 2021, 2022, 2023 and 2024, the BDI, an index published by the Baltic Exchange of shipping charter rates for key dry bulk routes, remained volatile, reaching an annual low of 595on February 11, 2019and a high of 2,518on September 4, 2019for 2019, an annual low of 393 on May 14, 2020and an annual high of 2,097 on October 6, 2020for 2021, an annual low of 1,303 on February 10, 2021and an annual high of 5,650 on October 7, 2021for 2022, an annual low of 965 on August 31, 2022and an annual high of 3,369 on May 23, 2022 for 2023, an annual low of 530 on February 16, 2023 and an annual high of3,346 on December 4, 2023 for 2023, an annual low of 976 on December 19, 2024 and an annual high of 2,419 on March 18, 2024 for 2024, and an annual low of 715 on January 30, 2025, and an annual high of 2,845 on December 3, 2025 for 2025, and a low of 1,532 on January 15, 2026 and a high of 2,148 on January 30, 2026, from January 1, to February 20, 2026.
Global growth is projected to remain resilient at an estimated rate of 3.3% in 2026, and at 3.2% in 2027, according to recent forecasts from the IMF in January 2026 World Economic Outlook (''IMF Jan 2026 WEO''). Global economic prospects for 2026 and 2027 as per the IMF Jan 2026 WEO latest projections indicate a gradual normalization of inflation from an estimated 6.8% in 2023 (annual average), 5.8% in 2024 to 4.1% in 2025 and 3.8% in 2026, and further to 3.4% in 2027, as forecasted in the IMF Jan 2026 WEO. As of February 20, 2026, the BDI was 2,043, as a result of the continuing effects of the geopolitical conditions and the usual seasonality of the charter market during the first quarter of each year.
According to the IMF Jan 2026 WEO, China's economy, a major driver of dry bulk market, is expected to grow at 4.5% in 2026 and 4.0% in 2027, with continued regulatory frameworks focusing on property sector stabilization and domestic consumption growth, while Japan's projected growth remains modest at 0.7% in 2026 and 0.6% in 2027, supported by monetary policy and structural reforms which the recent bond weakening shock in January 2026, might accelerate. China's economic outlook improved amid an easing in US tariffs on Chinese goods and due to an increase in stimulus measures. Deflation has been a persistent challenge for China in recent years, prompting the government to implement measures aimed at stimulating domestic demand and addressing industrial overcapacity. After introducing stimulus policies to encourage household goods
purchases, authorities are now extending consumption subsidies to the services sector. In parallel, efforts to curb overcapacity include the withdrawal of subsidies for solar panel and battery manufacturing, the removal of electric vehicles from the list of strategic industries, and tighter regulatory oversight of coal mining and the steel sector to support pricing. Inflation in China is expected to gradually pick up, reversing the country's recent deflationary trend. India stands out with robust growth projections of 6.4% for both 2026 and 2027, driven by infrastructure development and manufacturing sector expansion, though regulatory changes in environmental compliance could impact industrial output. The United States economy is forecast to grow at 2.4% in 2026 and 2.0% in 2027, with inflation expected to stabilize around 2.3%,while the European Union projects growth of 1.3% in 2026 and 1.4% in 2027, supported by recovering domestic demand. According to the Dry Bulk Shipping Market Overview & Outlook of BIMCO in January 2026 (''BIMCO Jan 2026 DBO''), the dry bulk supply-demand balance will remain stable in 2026 and weaken in 2027. Ship demand is forecast to grow 2-3% in 2026 and 1-2% in 2027, while ship supply is expected to grow 2.5% in 2026 and 3% in 2027, driven by positive developments including stronger investment in technology and AI, stimulus policies and an easing in tariffs between the US and China, despite potential headwinds from China's property sector adjustment. As forecasted in BIMCO Jan 2026 DBO, demand growth is being driven by stronger grain and minor bulk shipments and by longer ton mile distances which mostly benefit the Capesize vessels. Minor bulk cargoes and grains are expected to grow 6.5-7.5% between 2025 and 2027, driving cargo demand growth. The grain supply outlook for the current marketing year is constructive, supported by strong recent harvests among key exporters and a favorable outlook for upcoming Southern Hemisphere crops. In particular, higher wheat production in the EU, Argentina, and Russia is underpinning the first projected annual increase in global wheat inventories in six years. However, headwinds are forecasted by a weak outlook for iron ore and coal volumes. Iron ore shipments are forecast to grow up to 1.0% in both 2026 and 2027. A drop in iron ore prices, due to increased production in exporters may support shipments. Global steel demand is projected to continue expanding, supported by stronger consumption across most emerging and developing economies outside China, alongside a recovery in European demand. In contrast, Chinese steel demand is expected to soften amid ongoing weakness in the property sector, while demand in Japan and South Korea-two other major iron ore importers in Asia-is anticipated to remain broadly stable. Coal shipments are forecasted to fall 1-2% in 2026 and 2-3% in 2027. While import demand is expected to grow in India and ASEAN, it is forecast to decline in China and in advanced economies. On the supply side,the expansion of dry bulk supply is primarily driven by accelerated fleet growth, reflecting elevated newbuilding deliveries, particularly in the Panamax and Supramax segments. As forecasted in BIMCO Jan 2026 DBO, the dry bulk fleet is forecast to grow 3% in 2026 and 3.5% in 2027, with Panamax and Supramax expected to be the fastest growing segments. Of the current orderbook, approximately 11% is capable of using alternative fuels upon delivery, while a further 25% has been designed to allow for future retrofitting. Although ship recycling activity is increasing, it is expected to remain subdued relative to historical norms. Effective supply growth is therefore projected to be up to 1% lower than nominal fleet growth in both 2026 and 2027, largely due to anticipated reductions in average sailing speeds. See also "Item 3. Key Information-D. Risks Inherent in Our Industry and Our Business-The international drybulk shipping industry is cyclical and volatile, having reached historical highs in 2008 and historical lows in 2016. Charter rates decreased during 2023 remained volatile during 2024, have decreased during 2025 and remain volatile more recently in 2026. Cyclicality and volatility may lead to reductions in the charter rates we are able to obtain, in vessel values and in our earnings, results of operations and available cash flow."
As of February 20, 2026, 14 of our 45 vessels are employed or scheduled to be employed in period time charters with outstanding duration of more than three months, three of which include daily charter rates linked to the BDI. We have pursued a fleet renewal strategy having entered into memoranda of agreement or contracts for the acquisition of 20 in total environmentally advanced dry-bulk GHG-EEDI Phase 3 NOx-Tier III compliant newbuilds, including two methanol dual fueled, with 12 already been delivered to us, four scheduled to be delivered in the remainder of 2026, two in 2027, one in 2028 and one in 2029. Additionally, we believe we have structured our capital expenditure requirements, debt commitments and liquidity resources in a way that will provide us with financial flexibility (see "Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources" for more information).
Our TCE rate for the periods ended December 31, 2023, 2024 and 2025 was $16,579, $17,602 and $15,511 respectively, as a result of our increasing exposure to prevailing spot market conditions. During 2025, ADM International SARLaccounted for 16.46% and no other charterer accounted for more than 10% of our revenues.
During 2025, 13.0% of our revenue was derived from four Capesize class vessels with long period time charters, contracted in previous years with original durations of three to 20 years and with a weighted average TCE rate of $25,325. The remaining 87.0% of our revenue was derived from the employment of our remaining vessels, under spot and period time charters with original durations up to 5 years with a TCE rate of $14,597.
During 2024, 19.0% of our revenue was derived from six Capesize class vessels with long period time charters, contracted in previous years with original durations of three to 20 years and with a weighted average TCE rate of $27,031. The remaining 81.0% of our revenue was derived from the employment of our remaining vessels, under spot and period time charters with original durations up to 5 years with a TCE rate of $16,187.
As of February 20, 2026, we had a total of 45 vessels in our fleet, one of which was held for sale. As of February 20, 2026, we have contracted 38% of our expected ownership days for the remainder of 2026. Our contracted TCE rate for the remainder of 2026, calculated on the basis of all existing contracts, including contracted revenue linked to the BPI and BCI index calculated as of February 20, 2026, and customary assumptions in relation to voyage expenses, as of February 20, 2026, was $18,799.
Our employment profile as of February 20, 2026, included one period time charter contract, contracted in previous years with original duration of 20 years, with an expected remaining charter duration of 5.6 years and with an expected TCE rate for the remainder of 2026 of $25,102, two period time charter contracts contracted in 2024 with original durations of four years, with an average expected remaining charter duration of 2.2years and with an expected TCE rate for the remainder of 2026 of $23,698and 42 spot and period time charters with an expected average remaining charter duration of 0.3 months, and an expected TCE rate of $17,649. Vessels whose charters expire or are early redelivered or terminated within 2026 will be chartered at prevailing charter market conditions, which may substantially influence our revenues, the valuation of our vessels, our results of operations and our dividend distributions.
E. Critical Accounting Estimates
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations of the registrant.
We prepared our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. We base these estimates on the information currently available to us and on various other assumptions we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Following is a discussion of the accounting policies that involve a high degree of judgment and the methods of their application. For a further description of our material accounting policies, please read Note 2 of the consolidated financial statements included elsewhere in this annual report.
Impairment of Vessels, net
The Company's fixed assets comprise its owned vessels.
The Company reviews for impairment its vessels held and used whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use of our vessel is less than its carrying amount, we are required to evaluate the vessel for an impairment loss. Measurement of the impairment loss is based on the fair value of the vessel.
The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuilds. Historically, both charter rates and vessel values tend to be cyclical. Declines in the fair market value of vessels, prevailing market charter rates, vessel sale and purchase considerations, regulatory changes in drybulk shipping industry, changes in business plans or changes in overall market conditions that may adversely affect cash flows are considered as potential impairment indicators. In the event the independent fair market value of a vessel is lower than its carrying value, we determine undiscounted projected net operating cash flow for such vessel and compare it to the vessel carrying value.
The undiscounted projected net operating cash flows for each vessel are determined by considering the charter revenues from existing time charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days, using the twelve month budgeted rates for the unchartered period of the first twelve months, the Forward Freight Agreement ("FFA") rates for the unchartered period of the second twelve months and the most recent historical 10-year average daily rates of similar size vessels thereafter, until the end of the remaining estimated useful life of the asset, adding an estimated premium on future daily charter rates for vessels with installed Scrubbers based on an estimated price difference between the bunker fuel types, until the end of the remaining useful life of the asset, net of brokerage commissions; expected outflows for vessel operating expenses which include drydocking costs, voyage expenses and management fees. The undiscounted cash flows incorporate various factors, such as estimated future charter rates, estimated vessel operating costs, estimated vessel utilization rates, estimated remaining lives of the vessels (assumed to be 25 years from the initial delivery of each vessel from the shipyard) and estimated salvage value of the vessels based on period end ten-year historical average demolition prices per light-weight ton. In addition, the undiscounted cash flow estimates incorporate a probability weighted approach for developing
estimates of future cash flows for specific vessels when alternative courses of action, including the likelihood of sale, are under consideration.
Historically, a full shipping cycle has variable duration. Since 2008, when we identified impairment indications for the first time, we have used the ten-year average of the one-year time charter rate for the computation of an estimated daily time charter rate for the unfixed days for each of our vessel types. We use the historical ten-year average, as we believe it captures on average the highs and lows of a full shipping cycle, and therefore, is considered a reasonable estimation of expected future time charter rates over the remaining useful life of our vessels.
These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.
Our impairment test as of December 31, 2025, on our vessels held and used, which also involved sensitivity tests on the future time charter rates, (which is the input that is most sensitive to variations), allowing for variances of up to 16.0% with the exception of one vessel allowing for variances of up to 7.1%, depending on the vessel type on time charter rates from our base scenario, indicated no impairment on any of our vessels. As of February 20, 2026, our contracted TCE rate for the remainder of 2026, calculated on the basis of all existing contracts and customary assumptions in relation to voyage expenses, was $18,799, as compared to the TCE for 2023, 2024 and 2025 of $16,579, $17,602 and $15,511, respectively. The ten-year average historic rate we have used is lower than the 3, 5 and higher than the 15-year historical averages.
Our analysis for the year ended December 31, 2024, on our vessels held and used, which also involved sensitivity tests on the future time charter rates, (which is the input that is most sensitive to variations), allowing for variances of up to 18.3%, depending on the vessel type on time charter rates from our base scenario, indicated no impairment on any of our vessels that were held and used.
Our comparison of the actual 2025 net receipts to the forecasted net receipts used in the impairment test performed for the year ended December 31, 2024 indicated a negative variance of 24.3%, between actual net receipts during 2025 and net receipts forecast by the Company for the same period primarily attributable to unanticipated geopolitical tensions that adversely affected dry bulk market rates during 2025, as well as unforeseen unscheduled repairs, regulatory compliance work, and additional inspection requirements incurred during the year. Our comparison of the actual 2024 net receipts to the forecast net receipts used in the impairment test performed for the year ended December 31, 2023 indicated a favorable variance of 5.2%, between actual net receipts during 2024 and net receipts forecast by the Company for the same period.
To assist investors in evaluating the possible impact on future results of operations, the following table shows the effect on the Company's impairment analysis of using the 3-year, 5-year and 15-year historical average daily rates as of December 31, 2025, as opposed to using the 10-year historical average daily rates.
10-Year 3-Year Impairment
Charge 		5-Year Impairment
Charge 		15-Year Impairment
Charge
Historical
Average
Daily Rates 		Historical
Average
Daily Rates 		(in USD
million) 		Historical
Average
Daily Rates 		(in USD
million) 		Historical
Average
Daily Rates 		(in USD
million)
Panamax Class Vessels $ 13,596 $ 13,759 - $ 16,719 - $ 12,669 -
Kamsarmax Class Vessels $ 14,412 $ 14,585 - $ 17,723 - $ 13,429 -
Post-Panamax Class Vessels $ 15,228 $ 15,410 - $ 18,726 - $ 14,190 -
Capesize Class Vessels $ 17,517 $ 20,482 - $ 21,105 - $ 16,892 -
Total - - -
The Company assesses the assumptions used for performing its impairment analysis, and considers the appropriate duration of historical average charter rates to be used.
While the Company intends to continue to hold and operate its vessels as of December 31, 2025, to assist investors in evaluating the possible impact on future results of operations, the following table shows the number of vessels whose estimated basic market value, exceeded their carrying value and their aggregate carrying value in each case, as of December 31, 2024 and December 31, 2025, respectively. For purposes of this calculation, we have assumed that the vessels would be sold at a price that reflects our estimate of their current basic market values. Our estimate of basic market values is determined based on valuations received from third-party independent ship brokers, approved by our banks, who determine the fair value based on recent vessel sales and purchase activity which take into account relevant sales and negotiations in progress, newbuilding prices, demolition prices, rates and trends in relevant sectors, vessel specifications and yards. The carrying value of each of our vessel's does not necessarily represent its fair market value or the amount that could be obtained if the vessel was sold. The
Company's estimates of basic market values assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without recommendations of any kind. In addition, because vessel market values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record impairment for any of its vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel's carrying value is not recoverable.
As of December 31, 2024 As of December 31, 2025
Number of vessels Aggregate Carrying
Value 		Number of vessels Aggregate Carrying
Value
($ US Million) ($ US Million)
Vessels whose fair market value was below their carrying value 7 (1) $ 204.9 5 (2) $ 129.6
Vessels whose fair market value, exceeded their carrying value 39 939.4 40 976
Total Vessels 46 $ 1,144.3 45 $ 1,105.6
(1)As of December 31, 2024, the aggregate carrying value of these 7 vessels was $36.9 million more than their fair market value, based on broker quotes.
(2)As of December 31, 2025, the aggregate carrying value of these 5 vessels was $19.3 million more than their fair market value, based on broker quotes.
The decrease in the number of vessels and thus the decrease of $17.6 million in the difference between the fair market value and the aggregate carrying value of the vessels whose fair market value was below their carrying value as of December 31, 2025, as compared to December 31, 2024, reflects the seasonality of the drybulk trade.
Recent accounting pronouncements
Refer to Note 2 of the consolidated financial statements included elsewhere in this annual report.
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