Q3 2023 United Maritime Corp Earnings Call

Okay.

Thank you for standing by ladies and gentlemen, and welcome to the United Marine Corporation Conference call on third quarter ended September 32023.

Financial results, we have with US it was just a modest and tennis chairman and CEO and Mr. Stavros get pockets, Chief Financial Officer Officer of United Marine Corporation.

At this time all participants are in a listen only mode there'll be a question and answer session at which time, if you would like to ask a question. Please press star 11.

On your telephone keypad and you hear the on automated message advising your hand is raised.

Please be advised that this conference call is being recorded today Wednesday November 15 2023.

The archived webcast of the conference call will soon be made available on United Marine website.

Www dot United Marine time, Dot G or under the investors section.

Many of the remarks today contain forward looking statements based on current expectations.

Actual results may differ materially from results projected from those forward looking statements.

Information concerning factors that could cause the actual results to differ materially from those in the forward looking statements is contained in the third quarter ended 30 of 2020 earnings release, which is available on United Marines website, again, Www Dot United Marine time, Todd G. R. I would like to turn the conference over to one of you.

Because today, the chairman and CEO of the company with just a modest and tennis. Please go ahead.

Good afternoon.

I would like to welcome everyone to United Maritimes Earnings Conference call, where we're going to discuss our financial performance for the third quarter of 2023 as well as our main corporate and commercial developers.

Starting with some financial highlights in the third quarter of 2023, we recorded a very strong net profit of $8 9 million or 91 per share or whatever.

While the company's fleet and a daily time charter equivalent rate of $16200.

During the third quarter, we completed the delivery of our last electric tanker to its new owners after agreeing to sell it earlier in the year.

Lighted the quality gain of $11 million on this transaction, yielding next our Canadian 10 on our initial equity investment of about 300%.

Furthermore, during the quarter. We also completed the delivery of all previously acquired dry bulk vessels.

Fourth quarter of 2023 will be the first period with a full dry bulk fleet, consisting now three cape sizes to come sort of Max's and three panamax vessels that will be operating on a fully delivered basis.

It is important to note that this $144 million investment in 2023 has been financed using cash on hand and debt without resorting to any dilutive capital raising transactions.

Unite my time has not done any public equity offering since its IPO in July 2022.

Consistent with our stated dividend policy for the third quarter. Our board of directors has approved another cash distribution of $7.05 per share.

One thing to an annualized yield of about 14%. During 2023, we have paid out $1.50 per share cash dividend, which represents approximately 63% of our current trading price.

Additionally, since the end of the second quarter, we have completed share repurchases for an aggregate amount of about $400000 at an average price of $2 $4 per share. This is almost the maximum amount of shares we can buy under there.

Relevant market rules.

In aggregate since starting our share buybacks in September 2022.

Have repurchased three 5 million common shares or 30% of our shares outstanding at an average price of $1 87 per share.

I'm very glad that we have managed to create significant value for our shareholders since our launch in June of 2022.

Panelists point is interesting to note that those who participated in our only equity public offering and our IPO in July 2022 at a price of three and a quarter $3 on a quarter per share the market value of their investment has incurred games.

Now, let's take a few minutes to expand on United developments since our last quarterly update.

In August 2023, we took delivery of the excel exceed at Panamax vessel built in Japan in 2011.

We acquired the vessel for $17 8 million.

Funded through a secured loan facility and our cash on hand.

The vessel has since been charter to Cargill for a period of 11% to 14 months, earning an index link daily rate.

In August we took delivery of the 2015 built Japanese panamax vessel seem to see that.

Verbal charter will have a duration of 12 months and a purchase option at the end of the charter, which if exercised would bring the total acquisition cost of about $27 million, including all scheduled payments.

Since its delivery the same casino has been charter to Cargill on an index linked time charter for about one five years.

As regards our commercial update two of our Capesize vessels commenced employment under new time charter agreements.

September the good ship entered a new time charter duration of 11 to 13 months.

Furthermore, in October the trader ship started its employment that the extension of its previous time charter duration of 11% to 15 months also index linked.

Entering the fourth quarter, we have converted our index linked time charters to fixed on all five of our Panamax and capesize vessels as well as on one capesize, which leaves two capesize vessels open at the market, which has improved considerably.

Moving on to our fourth quarter guidance, taking into consideration. These conversions United has now fixed approximately 87% of its operating days at an estimated rate of $14400 per day.

We expect this to improve slightly to an average of $14500 per day on average Tc.

Now for a brief market comment the dry bulk market in 2023 has outperformed as initially anticipated. Despite the strong demand for seaborne transportation of iron ore coal and bauxite in the first nine months of the year congestion stood at historically low levels coupled.

Coupled with the unwinding of the Green corridor of vessels in the Black Sea the effective vessel oversupply put severe pressure on the spot market.

As congestion in various areas starting to grow we have seen significant improvement in most dry bulk market since September while in the Panamax segment, we have seen strong demand driven by healthy grain trade and an increase in congestion related to the Panama Canal.

Looking ahead in the next two years demand growth is expected to surpass politte growth, suggesting that we should see a strong market environment. As a result, we firmly believe in the strong market outlook for the sector and we believe that we have done our best to position ourselves accordingly.

Concludes my summary of the third quarter developments and I'm now going to pass the floor to establish for a more detailed update on the financials of the company and I will come back for the conclusions.

Thank you so market.

A warm welcome to everyone also from my side, let's start by reviewing the main highlights of our financial statements net revenue in the third quarter was equal to 11 7 million without PC, reaching 16200 per day net revenue for the nine months period was equal to $24.

$5 million, while PC was 15000 and $100.

Adjusted EBITDA was also improved this past quarter, reaching $13 8 million, including the $11 8 million gain from the sale of our last tankers.

Just briefly remind you our lost time gives the panel was sold for $37 5 million, representing a return on our equity investment of approximately 300%.

At the same time, we monetary reduction in operating expenses. During this nine months period with Opex per vessel falling year on year by 9%.

Moving onto our balance sheet, we increased our cash position during the third quarter to $14 3 million, while enrolling our second investment psyche.

We have taken delivery of two more panamax dry bulk vessels at Asia with book value of the fleet to $155 5 million debt outstanding which includes liabilities under our debut transaction stood at $94 3 million as of September 30.

During the quarter as Marcus mentioned, we entered into a 12 months bareboat charter agreements for this interesting.

According to this agreement following a total payment of $5 million, United will be paying a daily rate of $8000 of charter hire while we have the option to purchase the vessel at the end of the charter period for a price of $17 1 million.

The aggregate acquisition costs for the vessel following the exercise of a purchase option will be approximately $27 million.

Another debt related update following the delivery of <unk> will replace the collateral underpinned trust brands previously she could may be upon us.

<unk> newly delivered vessels via.

The amended loan clients has an outstanding balance of $14 5 million and unless installment of one and a half million payable in December 2023, before week 13 million balloon, which is payable in March 2024. Meanwhile, we have agreed to enter 30 million refinancing for the Capesize vessels of our fleet.

With a reputable Chinese lessor and we expect to complete this transaction relatively soon refi.

The financing will be split into three individual sale and leaseback agreements of 10 million per vessel on practically identical terms.

Proceeds of these transactions will be used to repay balloon performance was $22 2 million deal within the first quarter of 2024 and will add an extra liquidity caution, which will allow us to be prepared for any market volatility in the coming quarters.

Finally, as regards to shareholders' equity this was equal to $67 4 million, we consider our Sarah undervalued and considerably below our net asset value on that basis and before concluding my review I would like to state once again that we remain committed to our shareholders with rewards program through both the.

Submission of dividends as well as share buybacks I would now turn the call back to the market, which concluding remarks some IP.

Thanks Pavel.

After successfully completing our first investment cycle, which was very very profitable and delivering strong returns for our shareholders. We have now grown our fleet without resorting to anti dilutive capital Raisings.

So far we have paid total cash dividends of $1.30 per share or $10 million since November 2022, representing a massive cash yield of 6% to 3%.

We have not made any public equity offering since our IPO and not only that but we've made aggressive stock buyback for approximately $3 5 million common shares at an average price of $1 87, since Q3 of 2020, so creating a significant accretion for our shareholders.

We have placed the company in an optimal position to take advantage of another rising market cycle deriving from a strong demand for our materials and the lowest order book in many years.

From here I would like to turn the call over to the operator and answer any questions. You may have operator, please take the call.

And thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star. One again, please standby will be compile the Q&A roster and one moment for your first question.

Okay.

And our first question comes from Tate Sullivan from Maxim Group.

Line is now open.

Hi, Hi.

Can you both against today.

Do you currently have a share repurchase authorization in place.

And do you mean that Youre limited based on the daily trading volume in the stock from <unk>.

And as much as you want to or I'm, just looking at the statements in the press release.

Good morning, Tate the answer is yes.

Unfortunately, we are bound by the liquidity of the stock we're doing in many days the maximum amount of shares that we can repurchase.

Obviously now due to the financial results, we have blackout, but the intention is to continue at a certain point aggressively again as much as we can to repurchase stock as much as possible.

We hope that in the coming weeks and months that the liquidity is going to pick up and we can do more and more buybacks, but for the time being we are restricted by the volume.

It also though so we cannot overcome that.

And.

Average diluted shares were up nine 4 million, it's outstanding common shares much much below that in case, you have that figure handy here or can you share.

I don't know establish is going to give you a very small staff.

Yes.

Thank you Enrique.

Yes, yes, yes, the diluted number of shares as you said.

Seven three.

3 million diluted basis, including all of the outstanding warrants.

Okay.

Okay. Thank you and then with the remaining use of cash I mean.

Pro forma for the bareboat charter charter $14 million of cash are continuing to consider acquisitions or happy with the fleets setup going into 2024.

Right now we are quite content.

Having done bigger.

Big amount of transactions. This year, we sold and bought so many ships. So total investment of more than $140 million all organic no equity dilution. So the answer is that we will continue we're seeking to grow the company on a very very.

Collective basis, and if we can do more the bareboat deals like we've done so far we will continue doing so so far.

First and most cautious.

In our minds.

The diluted.

Therefore, the benefit that we can make with them.

Issuing stock right now given that were trading at a discount to NAV.

And for the time being we will grow the fleet. If we can through similar transactions that we've done so far.

Okay. Thank you both have a great rest of the day. Thank you to you too.

Thank you.

I am showing no further questions I would now like to turn the call back over to Martin for closing remarks.

Thank you Justin once again I would like to thank everyone for attending our attending our call today.

Look forward to catching up.

Again in the near future. Thank you very much once again.

You may now disconnect your lines.

This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.

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