Q4 2024 Costamare Inc Earnings Call
Thank you for standing by, ladies and gentlemen, and welcome to the Costa Mare, Inc. conference call on the fourth quarter 2024 financial results.
We have with us Mr. Gregory Zikos, Chief Financial Officer of the company.
At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you were to ask a question, please press star, then 1 on your telephone keypad, and wait for your name to be announced.
I must advise you that this conference is being recorded today, Wednesday, February 5th, 2025. We would like to remind you that this conference call contains forward-looking statements. Please take a moment to read slide number two of the presentation, which contains the forward-looking statements. We'll pause one moment.
Speaker Change: Thank you. I will now pass the floor over to your speaker today, Mr. Zikos. Please go ahead, sir.
Speaker Change: Liquidity stands at around 940 million, after repaying during the year a fixed-rate bond of EUR 100 million and also redeeming the Series E preferred stock of 115 million dollars.
Speaker Change: In the containership sector, the energy crisis led to diversions via the much longer Cape of Good Hope route. These diversions, together with strong cargo demand, absorbed the incremental new building capacity.
Speaker Change: The commercial idle fleet remained low during 2024 and at the start of 2025. Should, however, lines gradually return to the Swiss route, the release of tonnage, combined with new building capacity, could potentially distort the current supply and demand dynamics.
Speaker Change: During this quarter we charted on a forward basis 12 containers with an average time charted duration of about 2.5 years and estimated contracted revenues of close to $330 million.
Speaker Change: The condensate fleet employment stands at 96% and 69% for 2025 and 2026 respectively. Total contracted revenues amount to $2.4 billion, with the remaining times at a duration of about 3.4 years.
Speaker Change: On the dry bark market, charter rates dropped to their lowest levels of 2024 during the last quarter and have started 2025 on a similarly soft note. The easing of congestion, along with pressures in the China steel market and less grain-to-mile demand have resulted in tonnage oversupply.
Speaker Change: As per our strategy to renew the own fleet and also increase its average size, during the quarter we concluded the acquisition of one Cape size and two Ultramax vessels, as well as the disposal of one Handysize ship, while we have agreed to sell one Panamax vessel.
Speaker Change: CBI today manages a fleet of 51 ships, the majority of which are on index-linked chartering agreements. As mentioned in the past, we have a long-term commitment to the sector.
Speaker Change: and we view the investor learning and the trading platform as highly complementary activities.
Speaker Change: Finally, with regards to Neptune My Time Leasing, the platform continues to grow with a healthy pipeline, having total investments and commitments exceeding $500 million.
Moving now to the slides presentation.
Speaker Change: On slide 3, you can see our annual results. Net income was above $290 million, or $2.44 per share. Adjustment income was around $330 million, or $2.76 per share. Our liquidity stands above $940 million.
Speaker Change: Slide 4. On the charting side, we have charted on a forward basis 12 container ships with incremental contracted revenues of around 330 million.
Speaker Change: Our revenue days are fixed 96% for 2025 and 69% for 2026, while our contracted revenues are $2.4 billion, with a DU-weighted remaining duration of 3.4 years. As you will notice, we have chartered three 1996-bill vessels for periods at healthy rates.
Speaker Change: Starting to slide 5, regarding our S&P activity, we have concluded the acquisition of one Cape size and two Ultramax dry bulk vessels. In parallel, we have concluded the sale of one Handysize ship and agreed to sell one Banamax vessel.
Speaker Change: Slide 6. We have concluded finances for a total amount of circa 340 million with respect to 36 of the 38 drive-by vessels we currently own. The new financings provide us with improved funding costs and extension of maturities.
Speaker Change: In addition, we have secured a new hunting license of $100 million for financing of the acquisition of dry wild pheasants.
Speaker Change: Slide 7, regarding CBI, we have charted in 51 period vessels, with the majority of the fleet being on index-link agreements. On our Leasing Block Group, we have already invested around $123 million.
Slide 8
Speaker Change: Our liquidity starts above 940 million. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis.
Moving to slide 9.
Speaker Change: Charter rates in the contingency market remain at firm levels. The continued ejection of new building capacity along with the re-routing via the Red Sea and Suez Canal may, however, affect current market dynamics. The idle fleet remains at low levels at around 0.6%.
Speaker Change: And finally on slide 10, you can see the recent dry bud market trends in the SPOT and FORWARD markets.
Speaker Change: Charter rates have extended their peak line from 2024 into the first quarter of 2025.
Speaker Change: The order book starts at around 11% of the total fleet. With that, we can conclude our presentation and we can now take questions. Thank you. We can take questions now.
Speaker Change: We will now begin the question and answer session. As a reminder, if you would like to ask a question, please press star then 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star then 2. We will pause momentarily to assemble our roster.
Speaker Change: Our first question today comes from Ben Nolan of Stiefel. Please go ahead.
Thank you, operator. Good morning, Greg, or afternoon. Good morning.
Speaker Change: I wanted to ask really maybe a couple questions about CBI really and it's first of all can you give any sense as to what the contribution
Speaker Change: was in the fourth quarter from CBI and then maybe more importantly as we look forward given where the dry bulk market is at the moment given sort of where the forward curve is.
Speaker Change: Any sense as to sort of what you would imagine the profit or the contribution from that business would be like in the, you know, should the market remain sort of soft as it is at the moment over the course of the year?
Speaker Change: take some positions, either short or long, depending on the circumstances.
Speaker Change: We view it as a complementary activity to the owning side. We don't aim, going forward, we don't aim to take big positions at the CBI level.
Speaker Change: except when we have a conviction where the conditions justify those big positions. Otherwise, we will be taking a view of the market. However, it's going to be on a more balanced approach.
As you've seen, by default, as mentioned, we are long.
Speaker Change: We are selling all the ships and smaller vessels, and we are focusing on larger assets, especially capes, and depending on the market conditions, we may continue doing so.
Speaker Change: buying, hopefully, at low market levels, younger ships with larger tonnage.
Speaker Change: Regarding the contribution of CBI and the same applies for the dry bulk bone fleet and for the containers, I'm afraid you will have to wait in our segmental reporting in the 6K.
Speaker Change: This is something that we will be providing some information there relatively soon. So if you bear with me, the full information available will be there, if that's okay with you.
Speaker Change: And just to clarify, for 2025, you expect the CBI chartered infleet to be roughly net neutral.
Speaker Change: there's no, there's no sort of, currently there's no position either long or short.
Speaker Change: Today we have a position, we have a position and as we move ahead those positions we may close them depending on market conditions. We do have a position now, but I mean in general our goal is first to have a balanced book and then...
Speaker Change: justify those bets. So compared to how CBI was operating at initiation a couple of years ago, going forward we would expect this to have a much more balanced approach, which makes sense.
Speaker Change: yeah okay and you said you had a position at the moment it's it's a net long or short
Speaker Change: Depending for Capes and Panamaxes, it's long, but this is a position which, I mean, it is a long position, but it goes for periods. So it's something that we cannot work on over the next quarters.
All right. I appreciate it. Thank you, Greg.
Thank you.
Thank you for watching!
Clement Mullins: Our next question comes from Clement Mullins of Value Investors Edge. Please go ahead.
Good afternoon. Thank you for taking my questions.
Clement Mullins: I wanted to start by asking about how chartering discussions have evolved on the container ship side over the past few weeks.
Clement Mullins: as the normalization of the Red Sea seems closer. Some liners have announced they do not plan to return to the Red Sea in the near term. But have you seen an effect on rates and durations when discussing potential contracts?
Clement Mullins: Discussions took place some months ago, before the announcement of the ceasefire.
Clement Mullins: Up to now, and it is a bit premature, I would say, we don't see any pressure in charter rates.
Not at all.
Clement Mullins: So, and the normalization of the trade routes through the Suez Canal, it may take some time. So, we will just sit and wait. I cannot predict.
Clement Mullins: similar to the levels we saw some months or some quarters ago.
Speaker Change: That's helpful. Thank you. I also wanted to ask about Neptune Maritime Leasing.
Clement Mullins: Your investment in the company has been stable over the past few quarters. Could you talk a bit about the pipeline Neptune has and whether you plan additional investments over the coming quarters?
Clement Mullins: NEPTUNE will be receiving, whether the NEPTUNE funding is going to be 100% with equity from the shareholders and or with back levers from other financial institutions, which is something we take it on a case-by-case basis.
Clement Mullins: additional equity as shareholders we're going to be putting to Neptune which depends on the leverage we're going to be getting. But there is a pipeline, there are currently deals
Clement Mullins: returns with additional back leverage, this is something we will consider as well.
Speaker Change: Makes sense. Thanks for the cover. That's all from me. Thank you for taking my questions.
Thank you.
Speaker Change: This concludes our question and answer session. I would like to hand things back over to Mr. Zikos for any closing remarks.
Speaker Change: Thank you all for dialing in today's call. We are looking forward to speaking with you again in the next quarterly results call. Thank you.