Q1 2024 Costamare Inc Earnings Call

David Brown: [music].

Yeah.

Thank you for standing by ladies and gentlemen, and welcome to the Coast Tomorrow, Inc. Conference call on the first quarter 'twenty 'twenty four financial results, we have with US Mr. Gregory Z Goss 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 one on your telephone keypad and wait for your name to be announced.

I must advise you that this conference is being recorded today Friday May 10 2024.

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

Let's take a moment to read slide number two of the presentation, which contains the forward looking statements.

Okay.

And I will now pass the floor to your speaker today, Mr. Xie Gus. Please go ahead Sir.

Thank you and good morning, ladies and gentlemen, during the first quarter of the year. The company generated net income of about 94 million as of quarter end like we did do was close to one point drop video.

But then as object to the term charter rates haven't seen a significant improvement from the end of last year.

Malaysia has fallen to levels below what was experienced during the first quarter of 2023.

Although cargo volumes have generally improved.

Disruption in Red is the main reason for the improved charter market.

We have proactively secured deployment for $97 80 per cent of particle partnership late for 2024 and 2002 five respectively.

With record revenues of 2.3 billion with a remaining time charter duration of three four years.

Well the dry bulk side as part of our strategy to renew the fleet and increase its average size. We have agreed to acquire two more capesize vessels and accepted delivery of 400 people as I see it.

In total we have acquired five capesize vessels with an average age of about weapon to have years and disposed off it doesn't look that in smaller size ships with an average age of 14 years.

Our old dry bulk vessels continue to trade on a spot basis widened the trading platform misquote myself the main living a fleet of 54 ships.

As I mentioned in the past, we have a long technical and referring to the dry bulk sector, which has been a strategic decision for us.

Regarding NAV to Maritime do you think the platform has been steadily growing category with the leasing transactions for 24 ships in total on the back of a healthy pipeline extending over the coming quarters.

Moving now to the slide presentation.

On slide three you can see our first quarter results net income for the quarter was 94 million or 79 cents per share.

Net income was about $75 or 63 cents per share.

Our liquidity stands at about $1.1 billion.

Slide four well the containership side, our revenue days have fixed 97% for 24 and 80% for 25, while our contracted revenues are two points that have been done with it do you weighted remaining duration of three four in four years.

In parallel we continued with the rollout of that both branches of the sport market, having entered into more than 30 to charter agreements since our last earnings release.

Slide five we do execute on our strategy to renew our fleet and increase of choice. During the last quarters. We have acquired five capesize and two I will tell them, except with an average age of 12 years.

And we also have disposal Spanish more of a base that's not what it is.

So 14 years.

Slide six shows you in more detail I shouldn't be activity since our last earnings release.

Yeah.

Slide five regarding she'd be I, we haven't started for 54 periods versus with the majority of the fleet being called index linked agreements.

Our leasing platform, we have already invested around $120 million since inception, and then that's fine that's 24 assets through sale leaseback transactions.

It's a very healthy pipeline going forward.

Moving to slide eight we do have rapidly available have the 16 million for financing acquisitions through hunting licenses.

We continue to have a long uninterrupted dividend track records bolstered by strong sponsor support.

Moving to slide nine.

Our liquidity stands at about 1.1 billion. This liquidity gives us the ability to look for opportunities to grow the company. When he has he basis.

Moving to slide 10 charter rates, the containership markets have been rising lately across all segments, having benefited from there etsy disruption.

Capacity remains at low levels due to a 46%.

Moving to slide 11, the final slide you can see the recent dry bulk market rents in the sporting fourth market charter rates remain volatile, however, 30 higher than the first quarter of last year.

Order book is up about 9% of the total fleet.

With that we conclude our presentation and we can now.

Thank you operator, we could take questions now.

Thank you Sir as a reminder, if you would like to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel your request. Please press star two I got that star one to ask a question.

Your first question comes from the line of Ben Nolan with Stifel. Please go ahead.

Hi, guys its actually prunella I'm on for Ben but thanks for taking my question.

I wanted to ask what the expectation is going forward for putting additional capital into NAV to leasing.

Yeah I mean.

So naturally we have.

We have announced that they're going to be investing up to 200 million that we'll take with you. The figure we have in our present, so far down kind of 20 million of equity already invested excludes back leverage with like and we're gonna be receiving over the next months show the net amount acura.

Really invested after the pack labor that is gonna be for me to see it's actually lower so from an equity perspective, I can say that we could definitely.

650 million more Oh, beckwith tea and subject to our back limits our strategy and commitment.

Round could even go higher now.

D is that it seems that it makes sense from that is can return perspective.

A portion of course, extending our liquidity with what they have a problem are pretty amazing things. This figure in case, we would like to go north of that however, this is basically my true now as of today I think we have more than enough capacity.

To grandfather, the SAP platform.

To provide the returns that make sense or so of course, they think are the risk involved.

Okay.

Great. Thank you so much.

Thank you.

Thank you.

Monday to ask a question you May Press Star then what the next question is from climate Mullins with value Investor's edge. Please go ahead.

Yeah.

Good afternoon. Thank you for taking my questions I wanted to start by asking about the dry bulk fleet over the past year, you focused on expanding Europe capesize exposure, while divesting some smaller vessels.

Asset values have increased significantly lately, but should we expect additional acquisitions going forward.

Look we.

We have bought up to now five capesize vessels into an ultra Max.

Haven't bought more vessel exactly for the Asian Dragon measure that for US. It's about I just have been going up and the same applies for new buildings. So we are very sensitive it regarding the acquisition price inflation.

If there's a correction in the market, most probably you're going to see us.

Entering into more S&P transactions, otherwise, we will see the way. They are we don't have to Patty and there is no reason for us to grow based on the ideas that cannot be justified.

On the numbers so it depends on market conditions, but there is no pre determined growth today that we need to to meet quite the opposite our goal is to enter.

Does that make sense at that they do cover out downside.

Of course, leaving some upside for our shareholders as well.

Thanks for the color.

Is it fair to assume that most of that dry vessels are currently operated in the spot market.

For the time being yes.

Talk about our own dry bulk ships I mean after notices have been operating in the spot market. However, I gave it to subject to market conditions. It would take the view for like a period.

It makes sense to lock some of them are.

In like at fixed rates.

This is something we could consider there's no pre determined tool we are flexible and this is subject to market circumstances also those vessels, but both of them most of them or the majority of the dry bulk fleet was bought in.

In the summer of 2021, where prices were much lower so by default those ships they have low leverage.

And our breakeven levels are quite low so are there I noticed the circumstances. There are no requirements from our lender so like for my cash breakeven perspective.

To charter the ships at the minimum rate, we'd have the flexibility and you've seen it doesn't have the liquidity. So there would not be opportunistic if it makes sense, yes. Some of the ships in the future.

It might be chartered out for a period.

Appreciate it.

Right.

At this point I cannot forecast.

The market is going to go and what our decision is gonna be.

Thanks for the color and final question for me on the containership side.

Are you currently seeing any opportunities or do you believe asset value still remains somewhat elevated relative to underlying fundamentals.

I think that Oh, they contact us if you look at Europe, we can drive a set of things that I've seen that the high level nuclear I think historically.

Good day for those prices to the prices, we got or the new buildings. Some years ago also for secondhand ships. You guys said, we don't see a lot of opportunities and of course, you didn't go where asset values are I think it may take some time until until after.

Alright, antibodies, which are correlated see sunlight or action.

So we don't see something that doesn't make sense right.

Right now for US, which is building a leased.

At least could award.

So there we see which is the way to what we have been doing as already mentioned, we have variety of neat chartered on a forward basis.

Most of our fleet.

We say that very shortly to charter coverage for like a 24 were in literally all of our fleet is.

Charter close and died seven which is actually.

100 per cent and are.

The 80% for next year, which provides us with great visibility.

Going for us.

Makes sense that's all for me. Thank you for taking my questions.

Thank you again to ask a question you May Press Star then one.

Speaker Change: Seeing no further questions at this time I would like to pass the call back over to Mr. Jacobs for his closing remarks.

Speaker Change: [laughter].

Thank you very much for your interest in cause tomorrow and for dialing in today.

I hope it does.

Wouldn't that speak again soon Julien our next.

Going for this results call and thank you very much.

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

Okay.

[music].