Q1 2022 Costamare Inc Earnings Call

Thank you for standing by ladies and gentlemen, and.

And welcome to the Costar, Inc Conference call on the first quarter 2022 financial results, we have with US Mr. Gregory <unk>, Chief Financial Officer of the company.

At this time all participants are in a listen only mode.

There will be a presentation, followed by a question and answer session.

At which time if you wish to ask a question. Please press Star then one on your telephone keypad and wait for your name to be announced.

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

2022.

We would like to remind you that this conference call contains forward looking statements.

Please take a moment to read slide number two the presentation, which contains the forward looking statements.

Yeah.

Okay.

And I will now pass the floor over to your speaker today. Mr. Zika is please go ahead, Sir go ahead.

Thank you and good morning dates agenda during the quarter the company delivered strong results.

It was more than doubled to approximately 270 million and net income reached $115 million compared to 60 million for the same period of last year as of quarter end liquidity stood at two seven and $40 million.

On the maintenance of strong charter days, where they put their new market remain unchanged.

Okay.

74 employees during the fleet with no vessels available on short notice.

Congestion shows no signs for easy wire and recent events are in fact selectivity for further increases.

Is that an opportune market environment, we've got cost would have gone up at a low power containership open days for 2022, and we have about 95% confidence for 2023.

Contract with revenues for the Containership fleet in the water amount to 3.3 billion with a remaining time charter duration of four one years.

Well the dry bulk side the market continues to be strong with smaller ships, earning a premium to the larger while also benefiting from container spillover supply.

And demand dynamics, you mentioned LLC.

And by a historically low order.

Moving now to the slide presentation.

On slide three as you can see our first quarter results, which was the best Q honestly is how at least Inc. Net income was $115 million or 92 cents per share adjusted net income was around one 5 million or 88 four cents per share.

Our liquidity is up over $400 million year over year to more than $640 million.

Moving to the next slide for 2020 do a lot of containership at every good data on 100% fixed and for next year, we're about 95% coverage looking at 3.3 billion in contracted revenues over the next four years.

The bottom of the slide you can see some sports features without a dry bulk fleet.

Turning to slide five we continue to be actively defend their buses markets. We took delivery of our last dry bulk vessel Norma and sold one dry bulk ship water shortage brokerage.

We also concluded the sale of the machinery for the capital gain of about 18 million.

On slide six you can see an update on our liquidity and financing arrangements.

During Q1, we concluded two new facilities for over 160 million. We have concluded another categorized yourself on the gentlemen that gives us additional firepower and execute it at 40 million loan to refinance four dry bulk vessels with a leading European bank.

At the same time, we continue to maintain a strong balance sheet with liquidity of over 6000 14 million in market value based leverage at that Australia per cent.

Slide seven the containership charter market continues to perform well the dry bulk market has rebounded from its seasonally low in February and the order book remains low.

We also continue to have a long uninterrupted dividend track record what cause by today's payment of a special dividend a strong sponsor support.

Okay.

Moving onto the next slide.

Looking at our leverage development in more detail on slide eight you can see again, our liquidity continues to trend upwards, while I'll elaborate stretched out as already mentioned.

Several of about 2%.

Yeah.

The next slide you can see our first quarter 2022 snapshot, we've had an average of around 17 vessels during Q1 up eight 7% year over here and there.

Jonathan I think it was 84 per share our best first quarter since going public.

Our adjusted figures take into consideration the following noncash items I've reached out the revenues at all of the gains are a positive for us and other noncash items.

On Slide 10, you can see shop information of the containership market charter rates continue to remain high while the average duration of time charters fixed is also well above historical averages.

Turning to slide 11, you can see that while bulks rates have declined during the seasonally weak first quarter. They do remain chelsey well I think what makes it up with NSE fleet is fully deployed.

Well the last slide slide 12.

Well, we are discussing the dry bulk market where rates have rebounded from the seasonally lowest in February and raised for this high. This opex is we are not up 36% year over here in April .

Finally, the order book remains.

Slightly below 7%, which is expected to reduce fleet growth at least for the next two to three years.

This concludes our presentation and we got nowadays questions. Thank you operator, who got the question Huh.

Thank you.

As a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad and wait for your name to be announced if you wish to cancel your request. Please press Star then two.

That's star then one to ask a question.

And the first question is from Chris Wetherbee with Citi. Please go ahead. Please go ahead.

Thanks, Good morning, guys Eli on for Chris maybe you can just start good morning.

Hey, good morning until your liquidity stepped up leverage goes down five 5%.

What are the plans that you guys see that continued growth with with investment of some of this liquidity going forward.

Okay is there other things that this has to do with the you know more generic app location a question.

Depending on market conditions, and we tried to be counter cyclical.

We are assuming that we feel that the asset prices make sense.

We will continue.

Bonding of our fleet base. However, as you have noticed for the time being we haven't done recently any transactions.

And container ships.

And also we have.

You know both in the dry bulk vessels of course.

As mentioned subject to market conditions, we have the liquidity.

Without access to commercial bank debt.

Hunting license as mentioned.

And should we feel that the prices are justified.

He may very well continue to expanding the fleet at prices that we'd been makes sense now apart from that.

Uh huh.

In the previous quarters.

We authorized a share buyback program.

That we'd say can be utilized.

And paying back more debt.

In today's market, we have a 20% level, which is generally low end.

Dry bulk vessels, which are on our support.

Trading they have leverage below 50% and so I'm not sure whether these it will be optimized to further reduce.

Commercial by the day, so it's gonna be either expansion assuming market conditions justify that a share buyback.

And they wouldn't see the.

Debt repayment is also an option, but it might not be the optimal one today.

That makes sense. Thank you.

So I guess, one more on rates and understanding you don't have a crystal ball, but.

The congestion out of out of Shanghai, and East Asia, and the flow back over to the West coast the United States.

What is the cadence of that in your view right now out through the year into 'twenty, three and how does that relate to that the rate expectations. Understandably you guys are saying that they're going to be high but what does that look like from your seat.

Look at.

Generally we don't predict the market you're right that we don't want to sell.

And generally we are very cautious in predicting the market.

We know that the condition. It's still the case are there are some concerns.

Regarding labor negotiation coming up at the West coast of the U S.

Ah but.

We cannot possibly tell.

Tell you that the charter rates for Panamax in a year's time or end of this year is gonna be.

Those levers.

I can tell you that now we have less fixtures.

Compared to the fixture that we used to have of course, because it functions that are less ships available for prompt delivery.

However, some charterers are now they may be adopting a wait and see approach.

Which I pulled out from the outside it makes sense.

So some owners are maybe adopting a similar approach so I'm afraid I cannot tell you more than that simply because we never predict the market, but today the latest fixtures, we've seen especially for the larger vessels.

Reflect a charter age which are definitely at a historically high levels.

Okay. Thank you.

And again as a reminder, if you'd like to ask a question. Please press Star then one.

The next question is from Ben Nolan with Stifel. Please go ahead.

Hi, Good morning. This is John Mccain Rogers times are bad Ah Congrats on the quarter and thanks for taking our questions.

Hi, Andrew.

Thanks on the container side.

Would you be able to provide any color around the two container ship orders that were canceled and if theres any chance that they might be reinstated at some point down the road.

Who I'm afraid this is something.

I'm afraid that I cannot comment on that.

And as.

My prediction is even more difficult I think we have a in our filing of ours. We have stated the reasons that those have been canceled.

And this is something we're currently working on but I cannot say something more than that I'm afraid.

Sure. Thank you that makes sense and if I could maybe just squeeze in one more on that note I'm kind of piggybacking off that drybulk assets and maybe some capital allocation plans, you mentioned kind of maybe waiting for asset prices to get a bit cheaper. That's we're buying more on the dry bulk side.

Could you maybe provide any insight about how youre thinking about what might be an acceptably cheaper range.

Look it's difficult for me to do numbers for you know that type of vessel that amongst the test that because it depends on the vessel specifications.

Delivery dates are a lot of things, but as you know last year beginning from the second quarter of 2022, and we started buying dry bulk ships in total we bought airports six vessels, mainly these are two panamax.

But mainly smaller vessels.

Since then the market has improved a lot.

Advisors have they moved up so all of those acquisitions today.

One by one they're all in the money I cannot provide specific figures, but as mentioned earlier, we try to be counter cyclical.

And seeing as its value said today, we have.

Wait and see approach of course, there's always opportunities are we do inspect vessels we are active.

But this.

This is something that Oh, we're thinking twice, so I'm not saying that we're not gonna be expanding all I'm, saying that.

We definitely want to make sure that our the equity report.

It's gonna be invested in assets.

Who's behind US today makes sense is pretty much it but I cannot I cannot make any predictions and he would find it I don't think that still today, we feel it makes sense of course, we're going to go for that the same applies for the container ship, but they were identified this out today for the container ships I think it would have been very difficult to find deals that you know we feel.

Do make sense.

Great. Thank you and congrats again on the quarter.

Thank you.

Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Mr. <unk> for any closing remarks.

Thank you for your interest in cost of motto and for dialing in today and we're looking forward to say speaking with you again you wouldn't go over next quarterly who is high school. Thank you.

Thank you Sir that does conclude our conference for today. Thank you all for participating you may now disconnect.

Okay.

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