Q4 2020 Costamare Inc Earnings Call
welsknight
Snapshot more than forty six years in the shipping industry and interrupted dividend payments is going public.
Strong sponsor support never had to restructure our debt. It's moved at the payment profile fully aligned interests not related by the acquisition study management and ownership wage growth potential with no Legacy. That's restrictions. What was the next light here? You can see the resilience of our business model steady ravings and income in a highly volatile shipping environment.
Which night side you can see the highlights adjustment income for the quarter is 32.5 million and the atrocity is $0.27. Our adjusted net income for 2020 is hundred million and the aps is $1.02. We do maintain a strong balance sheet with liquidity of about ten million dollars book levels or 55% market value based off 37% and no meaningful debt maturities until 2024.
Went to the next light we have charted in total 20 vs during the quarter the new Charters represents an increase of four hundred forty million contractors Avenues and have a weighted average duration with about five years as you can see we have charger for children the forward basis for a ten year period at the rate of $33,000 per day per vessel and the 1996 bit busy for two years at the rate of $31,000.
Slide seven, the target market has continued to rise from the back of positive supply and demand fundamentals time Charter rate increased substantially over the last six months off. The address is 1% and the order book stands at 10% of the existing Fleet, which historically low number as part of our fleeting you our program. We can we continue the sale of all the toilets off over the past quarter. We showed the twenty-one-year-old container ship and have got three younger versions.
The 2004 Grill seven thousand ships are expected to be delivered this month at a point upon delivery will be charged with leading line of company for a period of two years.
Flight eight we will pay our 41st consecutive quarterly dividend in February insiders have been participating in the drip instituted in June 2016. And this is a Thursday at 3 invested in total 95 million dollars.
Flight nine during the fourth quarter The company generated. Let me just under 19 million and adjustment income of thirty three million based on the above. The fourth quarter atrocity is 27% off the exact figures think into consideration. The following items approaches revenues, accounting gains or losses from Master disposers prepared is rentals and other non-cash charges.
Was lighting you can see some where you park at the structure. I will leave it at 6 comfortably below 40% net debt to 12 months trailing if it is 2.4 time and even overnight interest expense is at 5.1 times when our Governors have a minimum requirement of about 2.5 * governance.
What should I have 11:00? We are showing that have been contribution for our Fleet Almost 100% of our gas comes from personal stuff like murders, see everything Costco. We have two day two point four billion contractors Avenues and the remaining times are the duration of about 4.4 years.
Well, the last was lies were discussing the market has really mentioned calculator have significantly improved especially in the second half of two thousand twenty books rates have increased Birth by more than 170% on a yearly basis.
Like Thirteen the admin plate has been reduced to 1% from a high of 11.6% in my in May 2020 the order book starts at 10% as make sure we're well positioned to capitalize on opportunities in this market environment. This concludes our presentation and we can now take questions. Thank you operator. We can take questions now. Thank you as a reminder. If you'd like to ask a question, please press start and one of your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star than to that stars. And one to ask a question is the first question comes from the line and Chris Webber be what city please go ahead.
Hi, this is Liam on for Chris. Thank you for taking my question. I wanted to ask a little bit about your Charter strategy. So it seems that most of the vessels you reach home during the quarter for about one two, three year periods, but there were also four vessels that were put away on 10-year Charters. So I just wanted to ask a little bit of get attached from you guys on what you're you know appetite for longer-term Charters. If you're going to be focusing on those as opposed to more of a shorter-term Charters than kind of making up a little bit, uh a decent size of your book lately.
Yeah, it also has to do with the time Charter date but in today's environment and considering wage, but the rates are I think from my perspective would make sense to lock in a contract with revenues, especially for a first class and birth for a longer period as opposed to chatting SE paper right here for instance, as you can see we started the three $95,000 a month for a period of three years around 40,000 per day we could go for a for a short period but we friends that the 40,000 for the 3-year. Specials would make sense also now specifically for those for eleven thousand ships. These are 2016's.
So the 10-year charger, which is on a forward page. So the bases will be delivered to the new charger close to me. 2021 that you have a danger the coverage until mid of 2031 53,000 for those is 14 here. I think it is something that you know makes sense. So the long story short in today's Mom. Good, of course, assuming that the charter is offered by the total is we will make sense with in most cases do we would have to go for a longer period month and have incremental contracted revenues rather than go for the short. Even if the charger could be marginally higher.
Got it. So just it also saw you understand on the 10-year Charters cuz I did see that the rates are obviously a little bit lower than what they were previously contracted at. And is that kind of just because you're playing a little bit because you have to like they're not going to be delivered until 2021 and then you guys want to just kind of lock it in at a fairly High rate. Even if it's a little bit lower than what your previous rate was.
Yeah, the previous rate it was in the original forty thousand plus but it was for a year or the year or a year and a half. So at this point in time here or a half ago, we decided that you know, uh, there was no diss availability of the five or ten years Charters. So I mean we decided to go for a short period at the highest rate available. Now off the market fundamentals are shot so that you can find ten years after's for those bases. We decided to go longer for ten years at the 33,000 bed bath. They went off shift were fixed in the past year-and-a-half ago. The market was not there for a five or or potential Charter wage Market fundamentals have improved especially after the second half of 2020.
Got it, and just 1 additional question. So I know your leverage ratios have gone a little bit lower, you know on a historical basis. So I just wanted to ask a little bit about your priorities in terms of your Capital allocation wage. You might leverage your balance sheet. So when you guys think about that, what would your plans be or or thought to be around, you know more aggressively pursuing second-hand vessel Acquisitions or maybe a new builds and then how you kind of compare that to your thoughts about maybe raising the dividend or any other sort of capital allocation priorities?
Yeah, the nevitt we have today on the book basis leaving aside adjustment and market-based. You know by name is 55% If we take the market value of the assets on the charger includes basis as a broker valuations just have to obtain for our financial governance. The levels goes down to 37% So I think that no one would agree that this is a low levels level on top of that. We have gas of of close to two hundred ten million and a very streamlined debt repayment schedule with no meaning of maturity in 2024. So starting from you know, that basis and location question. I think that generally we have been acting job
We are looking both for second-hand places with all with our Charter younger or like all the bases. We don't have a problem with all the vessels as long as the returns justifiable applications. And as long as the physical condition of the basic certified this as well or also you buildings now the dividend and this is a question with a pig receiving quite often. I think that the DVD I mean first of all we all close to 65% of the companies. Do you have a full line of interest between the the sponsors and the rest of the shareholders? We like dividends our goal will be to raise the dividend. However, we wouldn't have first of all the dividend we have to Thursday. It's definitely sustainable and secondly increase dividends should come with increased contracted cash flows going forward coming from like, yep.
So we are not.
Change the dividends but it's a matter of deciding whether we're going to be seeing any new incremental transactions are coming in and what's going to be the issue in the next couple of quarters and whether we're going to be able to secure similar long-term Travelers.
All right, great. Thank you very much for taking my questions. Thank you.
Question today comes from its people, please. Go ahead. Hey, good morning Greg. I've got a handful of a mirror one just for record-keeping purposes modeling purposes last quarter, you talked about the acquisition of 5600 teu container ship 2006 bill. I didn't see anything in the fleet list. Um, could you just update me on the status of that?
Yeah, this is a question that has been bought and that will be delivered over the next month. So I'm sure either upon upon its delivery or the latest. I hope during the next quarterly results. It should appear on our Fleet list during this 5658 2006 built. It has been boarded. It is a matter of the delivery taking place within Q one of this year. Okay, perfect that's helpful. And then with respect to the 2065 shift that you acquired any color on the the price or or maybe a better question is you have a handful of new box deliveries coming how much capex is collectively on the schedule for you know over the next six months or ugh, you know for for twenty twenty effectively.
Yeah, those guys I'm saying the message that we're going to be buying we're going to deliver them. So I mean and assuming 11:00. It's between 6 to 70% not have that. I think the sort of equity that will be required. It's going to be minimal you talk about something but nothing like nothing special and the sort of and plus the new physics that we still have to accept delivery of the tools 60,000. You suck. The two young men that will be delivered within the first half of this year the Carfax commitment. There are our sort of em with the commitment because these are the things are fully funded. It would be nice to know twelve million or so twelve to thirteen million. So in total together with a second car trips, I think we wouldn't be north of like twenty-five Thirty million bucks.
Okay, that sounds good. Right and then unless you said yeah, and then and then including the debt gets you to sort of what they all in capex off the in the last like it's sort of circling back to question that you talk a little bit about, you know, the possibility of acquiring ships and looking at second-hand shops. And obviously you've done a few of those in the last quarter but asset prices have really come up a lot as you would expect with longer contracts and higher Charter rate at what point do you start to, you know, prefer to Simply Bank the cash as opposed to you know, I'm actually taking an increased level of residual risk with acid values if the market should stop in at some point in the next couple of years.
yeah, I normally
When we buy a visit the second ship, we have a pretty good understanding of its chartering arrangements. So and am considering that today for a second can see if you can get a two or three or four or five-year Charter commitment. We would buy them on the back of a commitment for a minimum videos so that we would make sure that today's acquisition price combined with the charter commitment for a minimum fixed rate wage would make sense. Otherwise buying something at the price which you can argue that it's high or it's higher than compared to what it used to be a year ago with our understanding of the of the chartering Arrangements that you can put in place. These only we wouldn't do
So whatever we buy we have a pretty good understanding of how much we can start it. And for how long and we make sure that we fill the comfortable with the residual value risk for this secondhand pressure off position. Right? Well and and maybe the inverse of that question is, you know, obviously quite a number of the big miners have been actually buying ships themselves as opposed to locking in charge or commitments and pay premium values for those ships. Are you in the market potentially walk through sell maybe some of your assets in order to take advantage of the higher prices and further, you know strengthen the balance sheet position yourself to be counter-cyclical requires of assets, possibly. Yeah, and we solved we solved one vessel this court. I think it's the Halifax expressed is something we mention in the bath.
Press release so we are doing this as well. And of course in the future, we may decide to dispose of more presents. And as you may recall from you know from the back of the previous years. We normally don't sell and we normally tend to buy them and hold them in one of them for. But this ship because of market conditions we decided to sell it and the equity released to be put in other person's so I mean, we would definitely consider selling additional ships long. It would take the view that that that the cars received can be a credible more creative in other Acquisitions, or if it could be used in order to age renew, definite. Yes.
Okay, perfect. And and then last for me as you mentioned obviously cash flows a lot better. Some of those preferreds are callable. I suspect that that's still a pretty valuable part of your capital structure. But any thoughts about potentially calling back any of the
Yeah, we did buy some prefer to I mean the most to be good last year when the repairs were trading that much below-par due to a lot of legal restrictions do more than what we did. I know that the this preferred they have a deal with this on the high side we pay for that because it's off to only preferreds instruments with no options. And so and to Perpetual this is something to consider as well life guarding our Capital allocation. So it could be the preferreds or most probably it could be new acquisitions. If we don't find any then Thursdays is a preferred is the dividends. It's survived box. It's a lot of things that you know, we can do but they preferred it's definitely one of the options I have to say. Yep.
Remember that all these are both decisions. So, uh, and these are these are not the issues that have been I mean the dividend the divorce and they're raising all the preferred by package know something that you know was discussed in the latest board meeting, but generally these are thoughts that have to do with how we use our cars going forward in order. We don't find any new a new transactions. But but today I would say as you can see per mile, press this we're generally active and I think that the transaction say we do together with the time Charters. We attached to those vessels to make sense.
Okay. All right. Perfect. I appreciate it. Thanks, right.
This is Jennifer as a reminder.
Question, please. Press star the
roster
And this is Alison who's the question answer session? I'd like to turn the conference back over to mr. Thank you for dialing in today and for your interesting customary. We are looking forward to speaking with you again at our next quarterly results call. Thank you. Thank you that does conclude our conference for today. Thank you all for participating you may now disconnect.