Polys Hajioannou - Chairman and CEO Loukas Barmparis - President Konstantinos Adamopoulos - CFO.

Jon Chappell - Evercore Ben Nolan - Stifel Fotis Giannakoulis - Morgan Stanley Magnus Fyhr - Seaport Global Randy Giveans - Jefferies James Jang - Maxim Group.

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers conference call to discuss the Fourth Quarter 2017 Financial Results. Today, we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Polys Hajioannou; President, Dr. Loukas Barmparis; Chief Financial Officer, Konstantinos Adamopoulos.

At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] Following this conference call, if you need further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566.

I must advise you that this conference is being recorded today.

And before we begin, please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, concerning future events, the company’s growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters.

Words, such as expects, intends, plans, beliefs, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements.

Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.

These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the company. Actual results may differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for drybulk vessels, competitive factors in the market in which the company operates, risks associated with operations outside the United States and other factors listed from time to time in the company’s filings with Securities and Exchange Commission.

The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

And with that, I would now like to pass the floor to Dr. Barmparis. Please go ahead, sir..

Good morning. I am Loukas Barmparis, President of Safe Bulkers. Welcome to our conference call and webcast to discuss the financial results for the fourth quarter of 2017. Before I start the presentation, I would like to point out that after several quarters, on an adjusted basis, the company is again profitable.

We continue our efforts to grow our capital structure, to convert 20 – we redeem about 20 million of [indiscernible], focus to further reduce our finance costs and lower our breakeven point. Let’s now continue with the developments in our industry. We’ll examine the dynamics of our industry, focusing on supply and demand equilibrium.

Heading into slide 3, we present the supply orderbook for Panamax, Kamsarmax and Post-Panamax vessels. Despite the notable increase of contracting during the recent period, we still see the supply of it as well balanced.

In this segment, the total fleet consists of about 2520 vessels with a total current order book is about 205 vessels or 8% of the total fleet. These orders are evenly spread until 2020. We also note that about 467 vessels which are older than 15 years old.

Taking into account the upcoming regulations for ballast water treatment and NOx and Sox requirements, that will be in force until 2020, scrapping activity might accelerate in the years to come.

Recently, we have entered into an agreement for all our vessels to ensure ballast water treatment over full flow electrolysis system [indiscernible approval certificate.

I think at an early stage provide us with commercial and financial advantages such as unrestricted worldwide trading, selling the stakes, logistical bottlenecks for upgrading, the financial benefits of the quarter. In the next slide 4, we present the dynamics of the market at a macroeconomic level.

After many years, we’re experiencing the positive effect of economy synchronization. Growth is synchronized with all economies currently expanding. As presented on the top graph, for the first time since 2010, IMF is upgrading its growth outlook. Presently, almost all countries of the fund are growing.

On the bottom graph, we present the global PMI and OECD industrial production. It is noted that both industrial production and manufacturing setup are improving steadily since 2016. Globally, in PMI, reached a new second year high in December 2017, facing a macro environment has the direct positive effect in the demand for dry bulk transportation.

Asset values are correlated with certain markets as shown in slide 5, where we present a graph with a historical value since 2011 of the five year Panamax values, comparing it to the freight market. Asset value line has mainly been above the short period line.

Presently, this pattern seems to be the spot, as asset values have been increasing at a slower pace than freight market. Restoration of this pattern is expected to push gradually asset values higher. Key takeaways are presented in slide 6. Order book is evenly split until 2020, as double digit excess supply has reduced to 8% of the existing fleet.

Growth is synchronized as currently almost all economies are expanding. Manufacturing sector improved steadily through 2017. Global PMI reached a new seven year high in 2017 December. Highly sensitive demand supply balance may push charter rates and push the asset values upward.

New regulations in relation to shipping are expected to push scrapping higher. We believe that the process of global growth remain overall positive. In slide, we present some financial data on a quarterly basis. Our quarterly revenues and our adjusted EBITDA have been constantly increasing thus improving our overall financial strength.

This part is also demonstrated in slide 8, where we present our adjusted EBITDA per vessel basis. Our strategy of maintaining low cost structure provide us with a very distinct advantage of making profits earlier than our peers. We present in slide 9 our daily free cash flow waterfall for 2017.

During 2017, we have become profitable on an adjusted basis for the first time in several quarters, maintaining one of the most competitive breakeven points in the industry. We have earned 10, 500 and done about 8,500 per day per vessel for all outflows including operating, G&A, interest, preferred dividend and principal repayments.

Our daily free cash flow stood at about 2000 per day per vessel and demonstrates our financial health.

As shown in slide 10, we have only one remaining new building in our order book scheduled to be delivered in 2018, which will be financed through issuance of 16.9 million preferred shares on the owning company of this vessel to an unrelated vessel at the 2.95 dividend.

In total we have 27.1 million in outstanding net CapEx and we need to spend less than 11 million from our liquidity. As of February 9, 2018, our liquidity was 79.5 million. Moving on to slide 11, our effort is to further increase our liquidity and use it to deliver result for the company.

This has not prevented us from acquiring opportunistically on post-Panamax vessels to other vessels. In terms of use of liquidity during 2017, we have bought back 2 vessels, reducing the recorded debt by about 44 million. The related bareboat charter outflow for those was about 4.7 million on an annual basis.

We have reduced our outstanding preferred by about 30 million and the related outflow on an annual basis of about 2.4 million. We have decided to redeem all the remaining outstanding Series B preferred shares on February 20, 2018. We financed the above transactions with cash on hand and new debt at low 200 basis points margin.

In such way, we may further lower our breakeven points and achieve profitability earlier. We will continue to use our cash from operations to further improve our capital structure leverage and create intrinsic value for our common shareholders. Now, our CFO Konstantinos Adamopoulos will present our quarterly financial results..

Thank you, Loukas and good morning to all. Let’s move to slide 12 for our quarterly financial highlights for the fourth quarter of 2017 compared to the same period of 2016. Net revenue increased by 34% to $42.4 million from $31.7 million, reflecting the increase in charter rates.

Our time charter equivalent rate per vessel increased by 34% to $11, 944 per day from $8.936 during the same period in 2016. Daily vessel earning expenses increased by 5% to $3,914 compared to $3,711.

Daily G&A which include daily management fees payable to our managers and daily costs in relation to our operation as a public company increased by 8% to $1,175 for the fourth quarter of 2017 compared to $1,083 for the same period this 2016.

Our adjusted EBITDA for the fourth quarter of 2017 was $23.9 million compared to $13.6 million for the same period in 2016.

Our adjusted earnings per share for the fourth quarter of 2017 was $0.02, calculated on a weighted average number of 101.5 million shares as compared to adjusted loss per share of $0.09 in the same period in 2016, calculated on a weighted average number of 87.4 million shares.

In slide 13, we present our quarterly fleet data and average daily indicators comparing to the same period of 2016. Liquidity in a cyclical industry like ours is key. In the next slide, I will show you what we have achieved in this respect. Slide 14, we focus on our expense side.

The aggregate OpEx and G&A figure for Q4 of 2017 was $5089 from $4794 per day in Q4 of 2016 and $4973 for the whole year versus $4847 for 2016. Our OpEx numbers include all items that drydocking in this year’s supply.

Compared to our peers’ numbers, we have achieved about $1230 in daily savings during 2017 from OpEx and G&A, which represents about $17 million or $0.17 per share of annualized savings. Slide 17, the blue bars show that the effect we have achieved from our by our cost cutting efforts was sustainable during the last two years.

The light blue bars represent our TCE and show our constant improvement from the lows of early 2016. At this point, we would like to emphasize that with a positive operational cash flows of $49.2 million for the year of 2017 as compared 13.5 million for 2016.

Overall, we believe that the company have liquidity of $79.5 million as of February 9, with positive cash from operations and controlled outflows for investing and financing activities is well positioned to take advantage of improved market conditions. Our press release gives us more detail on our financial and operational results.

Thank you for your attention and we are now ready to accept questions..

[Operator Instructions] And your first question comes from Jon Chappell from Evercore..

First question I want to ask was about strategy, the liquidity number is pretty compelling, especially given your capital commitments and then the fact that it’s risen so much just in the first 40 days of this month clearly shows that you’re continuing to generate good cash from the fleet.

You’re kind of mixing a couple of different uses of cash here. You bought a share opportunistically, but you’ve also been redeeming the Series B and essentially wiping those out. How do you think about the liquidity that you have going forward and then next steps.

You clearly still have a Series C and Series D preferreds, but it’s also if we look at the outlook for the market, it may still be a good time to buy ships.

So how do you kind of balance fleet with the capital structure?.

Look, we are focused a lot in our capital structure, which means that everything at this stage, as the market improves, is most important and key element for us.

Of course, we have proven that during last year by doing this preferred exchange and right now, the call of preferred B and the acquisition of the two out of five vessels that were under sale and leaseback agreements, which reduces our cash outflows and reduces our breakeven point.

We will continue to do that in this separate environment and however it hasn’t prevented us to acquire a second 100 vessel when we found the opportunity. So we cannot say exactly what we’re doing, but the most important thing is to improve our capital structure in this present stage of the market..

Second question, I think you guys are the only at least public firm that’s been so upfront about a full ballast water treatment initiative for your entire fleet, can you tell us how much is that going to cost, what’s the off hire time associated with that or is it just a function of normal kind of special survey costs and schedules?.

Look, it was quite clear, it is quite clear to us that the regulation is a regulation and ballast water treatment is fully implemented. So companies which will delay to install ballast water treatment in 2019, we believe after 2019, we will face problems in trading with United States.

So, this is very important for us and we wanted to do the installation. We have examined all the alternatives and we have found the best technical and economical and financially sound solution for the installation. Now, how this thing will go is that our plan is us versus special, their drydocking, we will install it.

So expect that this year we will install about 8 to 9 vessels and subsequently this will happen in the following years. We overall expect that this cost will not influence a lot our financials. It’s quite low and will be distributed within a period of 4 to 5 years.

This is very important for us, because from all oldest and youngest ships, our company will be fully compliant with a new regulation..

Okay. Final one. And I don’t want to misinterpret it, but you have the best cost structure in the industry.

I think that’s known, but the 5% increase in OpEx in the fourth quarter, 8% in G&A, just wondering, was the market so that a couple of years ago, that you really went down the hatches and went kind of on a barebones budget and we should expect some kind of catchup on cost inflation over the next couple of years or was that a timing thing and we should think about the recent run rate as being the run rate going forward?.

Look, first of all, I need to say that there is always a variation on OpEx between quarter and quarter. Whatever we have a drydocking and you may have increased the number and when you have lower number of dry dockings you may have a decreased number.

The second point is that we all expected that an increase of that type and still I think it’s quite successful result compared to all our peers and substantially lower than the market because we still have in place several agreements from the past. Okay.

Although everybody can understand that right now the market increases, lubricants gradually will increase and so we expect something, look some influence in our OpEx from there. However, we are trying our best and we will continue to be the leanest operator.

You know that even in the past, before the previous crisis, we had, compared to all the others, one of the best operating expenses and we did the same thing, we did cost cutting during the crisis and right now, we still maintain a very low relatively low figure..

And your next question comes from Chris Wetherbee from Citi..

Hi, Jason coming in for Chris. Thank you for taking my call. Actually, I was wondering if you could provide some commentary on what you see in rates so far and sort of what your outlook for rates is across the rest of the year..

Yes. Hi, Chris. Polys speaking. So market is gradually improving and as usual we achieved a profitable saving in the fourth quarter. The fixing that we did in the fourth quarter are still over in Q1. So, it looks like the Q1 rate will be even higher than the Q4. So, we see right now the Chinese New Year at full costs, this week and part of next week.

I already have the impression that as soon as the Chinese part are on their desks, things will start moving in a positive way. This result is also reflected in the FFA market. So we are optimistic but we are particularly optimistic for the second half of this year.

So it’s all looking positive, because in shipping, nothing must be taken for granted, but it looks positive..

And an important thing here is to note that to share our breakeven point, because right now, we are profitable and we see that our breakeven point is below 12,000, substantially below 12,000..

And also you’ve done a lot of work on your capital structure and like with that in mind, I wonder sort of get your thought on the dividend and possibly what we might have to see further before that could possibly be resumed?.

Dividend is something that all common shareholders would like to have of course and especially that.

Our first priority at this stage of a steady market is to continue to deal with deleveraging, which is very important for the long term prospects of the company and the interest of all common shareholders and you’ve seen that we’ve done certain exchanges, we will and the most important thing is we try to create intrinsic value for our common shareholders.

This is a keyword right now. I think dividend discussions should come in a later stage after having substantial knowledge and the prospect of a good capital market. So, right now, I think everybody is enjoying from the profits that the company gets through increase of intrinsic value..

And then one quick question, you took an impairment change, I was wondering if you could provide some more color around what that was related to..

Look, impairment charges, we took them this quarter, we had a – we are doing impairment test every quarter as we understand and the decision was based on the part that 2008 which was, we based our impairment test on assumptions so for 10-year average, which included 2008 and was a very extremely high year.

So in the next period, which 2008 will be removed in 2018 and so this according to our methodology will reduce the average charger higher, with which we do our calculations and I think that because according to our assumptions, the possibility of having similar rates like 2008 and even 2007 in the future is quite remote.

We believe and the cycle is wide to smooth, increases smoothly. We believe that the most and the best thing to do is get impairment charges now according to our methodology..

Your next question comes from Ben Nolan from Stifel..

Yeah. Thanks. Actually just following up on that a little bit since you brought it up, it’s been I think in the release that there were four vessels that had impairment charges on it.

I assume that you looked across the entire fleet and is it fair to assume that there wouldn’t – there is unlike any more of that type of charge going forward?.

It’s a fair assumption. We did the impairment test in all of our vessels and this four which were actually the most expensive vessels, we had to take impairment test. We think that the based on the present market conditions and according to the present tests, we don’t believe at this stage, there will be another impairment in the near future. Okay.

This always depends on the assumptions in the market, because we revisit our assumptions every reporting period..

Okay. That’s helpful.

And just for modeling purposes on that, how should we think about the impact on depreciation going forward after the impairment is taken out?.

Obviously, the depreciation, I mean by doing the impairment, the net asset value of our fleet, the book value of our fleet is reduced. So, this will influence somehow the depreciation expense by a little I guess, very little..

Okay.

You don’t have the number off hand though, I guess at the moment, right?.

Maybe, $0.02 or $0.04, something like that..

Okay.

And then as it relates to just the more I guess broader strategic view of the business, you’ve been buying or did buy relatively modern asset, you do still have a handful of specific Panamaxes that are now 15 years or approximately that age, although the Japanese build, it looks like you guys are still getting pretty good contracts on those vessels and I know they’re pretty high quality vessels.

How do you think about some of those older or vessels that are getting a little bit older in terms of the fleet, is it getting to the point where you can think about high grading and may be swapping a newer ship for an older ship or are those still right in the center of kind of the strategy given the high quality of the asset?.

Yes. There will be an asset there for certain point.

The prices are still not at the level of that is worth pursuing this policy, but we believe when the freight market moves to the next level and improves from the $12,000 a day to maybe $16,000 a day, I think those ships will appreciate in value and one of the options would be to consider replacing them with younger ships.

The practice of the company has decided this is the so called ships to be kept in still condition, in top condition to go through any new regulation that comes, like ballast water treatment, natural 15 ballast water treatment from our fleet. So, 16 ships new coming during next month for special survey.

So we will have all those ships in top condition and considering that, those ships will actually build to high specification for our own accounts, 15 by top Japanese guys.

We believe that will be ships that will have the opportunity to achieve probably a very good sale, if and when the market develops, most likely in the second half of this year or early next year. So we’re open on all strategies, it all depends on the prices..

Your next question comes from Fotis Giannakoulis from Morgan Stanley..

Polys, I want to ask you about how you view the demand going forward and at what point shall we start worrying about the big gap in new building orders and if you can comment about the appetite for ship owners to continue to place orders and availability of capital that is out there?.

Yes. Look, the ship owners always will be placing orders, especially when the market is improving. The thing is that we are against new building orders for this year. We believe new building orders companies above when it has decent profits, we should be placing it.

At least to my mind, all my career, I was doing newbuilding orders to replace my existing fleet. I was doing it always when I had big profits. I was never after newbuilding out of low seasonal small profits. So the replacement stops when you have a bit of.

So, but generally, it’s a little bit disappointing, but I’m hearing some owners thinking to place orders because the price achieved now and they believe that in two years’ time, this should be well 2 million or 3 million or 4 million more and they could make a big profit at the time of delivery.

This should not be the approach because this ship will rebuild and will stay to compete with the rest of this fleet for 20 years. So it’s really disappointing when you hear owners of big fleets having this strategy. And so it’s undoubtful that the order book will exist, undoubtful.

We just hope that it doesn’t increase more than 120 million, 130 million of that. Right now, it’s around 80 and the lowest point it reached in July of 2017 was 60 million.

So I think if the order book stays up to 120 million, we should be okay in the long run and the recovery will bear the fruits, but even if there is more ramp up and because sometimes, if rates shoot up in 2018 second half and into 2019, you would see more people rushing for it.

At least, we will think that we will have at least two to three years of good market before all these new ships hit the market. And the other thing I really worry is about the owners of the ships of lower quality and lower specs and old regulations.

You cannot order a ship for the next 20 years when you’re not getting at least tier 3 engines on that ship. So, this is really disappointing, because it would come at a point of time that those ships will need to be upgraded to another standard to be able to compete in the market.

So, yes, ships are cheap now and newbuilding are cheap, but owners have to worry and why are they guys selling those ships cheap, because they sell them based on the old regulations..

Also in addition to that, we all know that by 2020, when all the additional regulation will be implemented, all the vessels will, at a certain point of time, will face the reality, whether they need or they not need to be scrapped and of course lesser quality vessels of the past, I mean, the previous, that were built before 2010 and there’s a lot of respectable yards.

They may take additional problems in continuing their operations. So this is also another thing that can expand this full year or previous period that Polys has mentioned just before..

Can you remind us what is the fuel cost differential between your ships, the majority of which are Japanese built vessels and or let’s say, around 10-year old Chinese built ship and what would be the impact of the low sulfur regulation in terms of time charter equivalent?.

Look, the difference is around $5 to $6. It’s in good quality in Japanese vessel compared with five year old Chinese big vessel. So if you take that, fuel oil is $400, so $2000 a day differential.

If you take what would be a period of planning that ships may be acquired to fund loss differential, when the new regulation comes in place and before no one will be ready to install scrap during the next 22 months in the next 21 months, but fuel oil, a lot of sulfur and drydock cost, anything between $600 to $700 in differential is increasing to $3,500 of newer ships and better quality ships.

So even with this point, we have to do this, companies are, Japanese built ships will have a serious advantage on the earning capability of its fleet in comparison to overall Chinese built ships..

And also in addition to that, don’t consider that all six MCO, marine vessel will be there, because you need to have a specific qualities about the lubricity of the fuel.

So for example if let’s say, the maintenance question, in terms of construction, how it was, we may see in the future, so the problems with their operations and maybe substantially for a profit in a few million. They won’t be in that vessel.

For example, this is not our case, but it will be the case for other ships holding up and some question about construction.

So another issue that you may consider is that the vessels we need to install balanced for the, at least in the next years, they will spend more time in this and this will take out some portion of the supply of the prices in the market..

Thank you both for this answer.

I want to ask you about the acquisition of the latest post-Panamax vessel, without having to confirm the reports that we’re talking about $15 million which seems to be considerably higher than the current market, I want to ask, are there any additions or repair that you need to make on this vessel or this vessel is ready to sell and also are there other opportunities, this type of auctions that you can pick up some tonnage?.

Yes. And we will ship considerably lower, you said lower, but it’s considerably lower from the prevailing market. We pay in the region of high 15s or that shift at that time and there was a local competition on that ship.

Had we knew that there was bids in that auction, as we land after the event, had we knew from the beginning that there would be bids on that ship, we will have put at least 1 million more on the tracks to make sure that we get it.

We wanted to get it, because it was a good ship, it was in good condition, it was a sister ship with two other post-Panamax and was from the same yard. So it was an opportunity for us to have all three ships together. We have taken a decision to spend maybe around $400,000 to $500,000 on the ship.

So it still will be costing low 16 and the reason we do it is because we want to be able to trade the ship for grains and for growing more stuff, which require very clean cargo holes, which was not the case of the ship. But we’re very happy because still we’ll be the course for us in the low 16s.

Once market value is around 19 to 20, so it was a very good acquisition and we were very likely to have a bid that also have dollars above the second bidder. So we are very happy with that acquisition.

On spot cargo, for 60 days, $11,500 a day to position to China and do here this un-blasting of the holes, trading up for $14,000, $15,000 a day without problem..

One last question. Grain season in South America is ready to start in few weeks.

Can you give us your view, how do you expect this to develop and what would that mean for the chartering market?.

There is big volume from South America. There was some problem with some cargos in Argentina delaying through some strikes, but now they’re over. And those should do, because the market was in the New Year, little bit slack in January and many should start balancing in the south, that was affected the market.

But as the Chinese are coming back, we are expecting the market from next week to start picking up. In December, we will have ships to leave South American cargos on delivery basis, India or around $14,500 a day, South America to Far East. At current rates, around 12.5 because of the reasons I just mentioned.

So I think that as we enter, as we get out of the Chinese New Year, end of February, March and April, we expect these rates to reach levels of $15,000, $16,000 or $17,000 a day based on delivery in India. It has happened last year, will happen this year as well and where volume of cargo is fixed.

So we’re very optimistic that the seasonal boost, which we experienced almost every year will happen again in 2018..

Your next question comes from Magnus Fyhr from Seaport Global..

Just a question on the coal market, the Indian production has been a little bit disappointing in the year and I don’t know if you get any first read here if you see incremental demand or imports going to on the coal side, surprising here over the next couple of months?.

Yes. Whole market, I mean, it is a major fuel boat for India and China. There may be times that they don’t import as much and they, but at the same time, they deplete their stocks, India, in order they are running on a very low basis. So we see that lot of cargos coming in the market from Australia, Indonesia, South Africa to India.

As we talk, we make around 10 cargos in the market from this three loading areas into India. Also we have ships carrying cargo to India from US these days. So we’re currently having to ship, so at least doing cargoes from US to India.

So I think that they buy as they need and then, I mean, the outlook is optimistic, it will not decrease, especially in India. Now China, China again, it’s – the quality of the AR and pollution measures will dictate that there should be more import substation. There will be more cargo, better quality coming from Australia.

Also, we’re reading reports that Indonesia may be imposing some restrictions and reducing their exports of coal in order to use more of their domestic production for their own electricity needs. This also will be increasing at our mines, because the cargo will come from South Africa or from Australia. So there are positive signs.

When coal is a big question mark in the long run after 20, 30 years, but I mean for the immediate next five to 10 years, I don’t see volumes will be reducing or not on the coal movement..

What do you think about some of the other commodities that you transport that potentially could surprise on the upside in 2018?.

Yes. We are very positive, because of steel demand and steel prices in China and we’ve seen that new production from Brazil is coming in to play, which increases that a lot. And we are very positive also on other cargoes like grains.

And overall, the demand should be the same at the stated numbers, 4% to 5%, maybe up high 4s and at the same time, when supply would be 1.5% to maximum 2% in its supply. So this gives us optimism for capacity utilization to increase and freight rates to increase even more. So we’re in for a good year I believe..

Your next question comes from Randy Giveans from Jefferies..

Just two quick questions here.

Looking at returning I guess, improving your capital structure and I say switching more into free cash, is that more of just debt repayments or would we be repurchasing some of the preferreds back as well?.

At least, the priority is debt repayments..

Then one more question on the fleet, knowing that you’ve recently got this Panamax kind of second hand, any thoughts on expanding your cape sized fleet, at this point in the cycle?.

Cape size fleet, we have three cape size against long term charger. We’re not nearly a cape size player or a player that will buy cape size to run the support market. So it’s not on the cards that we will be looking to do a cape size. So we prefer to concentrate on the category of ships we have in Panamax, Kamsarmax and Post-Panamaxes.

Our fleet is evenly divided in those three areas.

Our post-Panamaxes are getting benefit when cape size rates moving up, because so they can take a split cape size cargoes when that market is overheating, we’ve done in the past, and at a time when cape size market is strong, where post-Panamax is and then maybe 30% more or 25% more on the Kamsarmax vessels.

So we have a strong fleet of post-Panamax vessels and I’m very optimistic about this type of vessels. We fit all of them going to drydocks to be suitable for new Panama Canal. We already have ships trading in Panama Canal on our, because already 60% of our post-Panamax are fixed for new Panama Canal and we get better in terms of more ships.

If you see more recently, fixed at one of our post-Panamaxes, at 14,750 for a year. That ship will start in the Panama Canal [indiscernible].

So your next and final question comes from James Jang from Maxim Group..

Just a couple of quick ones.

But what is the drydock schedule for ’18 and ’19?.

Are there any other questions?.

Yes. So.

Can you just go over the drydock schedule that’s planned for ’18 and ’19?.

The drydock schedule. It’s about 8 ships this year and higher than 6 next year..

And I know that with the [indiscernible] schedule, I know you mentioned that you guys are starting to implementing over the next couple of years.

So what can we look for in terms of near term in ’18 for the installation of the systems?.

Look, we will issue shortly in a couple of weeks’ time the annual report and we will present all the information there..

And just one last one is, so I know that the not a lot of yours is still building post-Panamaxes.

Do you know how many are still actively marketing post-Panamax newbuilds?.

Yeah. There are very few. We have some of the derived. So I think this type of questions from good yards would be very precious.

So they’re not many yards that want to dig them, because the cost is much more than the Kamsarmax vessels and the yards, they are not keen to build that and the owners are not keen to pay the extra 5 million that you need to build post-Panamax.

So it’s very important that post-Panamax that we have is very important in top condition to be able to earn higher period rates on those ships when the market improves..

Also the design of the ships is superior to the standard post-Panamax, good consumption..

And so, last question, just if you guys are looking for additional fleet renewals expansion, would it be fair to say that you would first look for the post-Panamax segment or are you happy with regular Panamax?.

That’s the one we will look for good quality and that is not Kamsarmax vessel, it will be a Kamsarmax vessel. It comes on post-Panamax, it will be a post-Panamax. But when it comes on a Panamax vessel, we’re not afraid to treat Panamax vessel.

So we need to find the good quality second hand vessels because as we told you before, we don’t plan to place any orders this year or next year if we have big profits, we will consider replacing the ships that we will probably sell to replace them with newbuildings as a replacement with a couple of orders at the time.

So for us, we’re in all three sectors of the Panamax, Kamsarmax and post-Panamax, evenly balanced and those are three sectors. We’re quite happy and important to find good quality Japanese built ships, not only at good yard is important, but also if the – for which owner the ship was built and if it was through higher spec.

So it’s not an easy process to find the quality of the ship. And it looks similar to our type of ships that we already, we will invest in second hand..

There are no more further questions. Please do continue..

So thank you very much for attending our conference call and we expect to share our annual shareholders report – annual report probably by the end of this month and we’re looking forward to discuss again with you in next conference call for the results of the first quarter. Thank you very much..

Thank you, gentlemen and thank you, ladies and gentlemen for participating in this conference today. You may all disconnect..