Q4 2024 United Maritime Corp Earnings Call
Speaker Change: Thank you for standing by ladies and gentlemen and welcome to the United Maritime Corporation Conference call on the fourth quarter and year end December 31, 2024 financial results.
Speaker Change: We have with us Mr. Stamatis Santannis, Chairman and CEO and Mr. Stavros Gif Takis, Chief Financial Officer of United Maritime Corporation.
Speaker Change: At this time all participants are in a listen only mode. There will be a question and answer session at which time if you would like to ask a question please press star 1-1 on your telephone keypad and you will then hear an automated message advising your hand is raised.
Speaker Change: Please be advised at this conference call is being recorded today, Tuesday, March 18, 2025. The archived webcast of the conference call will soon be made available on the United Maritime website, www.unitedmaritime.gr under the Investors section.
Speaker Change: Many of the remarks today contain forward-looking statements based on current expectations.
Speaker Change: Actual results may differ materially from the results projected from those forward-looking statements.
Speaker Change: Additional information concerning factors that can cause the actual results to differ materially from those in the forward looking statements is contained in the fourth quarter and year end December 31, 2024 earnings release.
Speaker Change: which is available on the United Maritime website again, www.unitedmaritime.gr I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company, Mr. Stamartis Santanis, please go ahead sir.
Speaker Change: Good afternoon. Welcome to United Maritime's conference call to discuss our Q4 and full year 2024 financial results.
Speaker Change: During 2024, we made significant progress in executing our strategic plan to build and operate a high-quality dribble fleet, deflecting our confidence on the sector, particularly in the larger vessel segment.
Speaker Change: After building up our dry bug fleet in 2023, primarily through bare-bought in-stractions with favourable purchase options and other bridge financing
Speaker Change: This year our focus shifted towards securing long-term financing agreements and seamlessly integrating the new vessels into United's fleet and operational framework.
Speaker Change: I would like to remind to everyone in this call that United has completed this second investment cycle without diluting its shareholders.
Speaker Change: Through our financing initiatives, we have successfully addressed all upcoming debt maturities until the fourth quarter of 2026, reinforcing our capital position and our ability to generate attractive returns on capital for our shoulders.
Speaker Change: Following on our commitment to capital attempts, United declared a total of 23.5 cents of dividends per share for 2024, while also repurchased about 2% of the outstanding common shares.
Speaker Change: However, considering the performance of the Panamax Camsar Max Market in the recent months, our board has approved the reduced dividend of one cent per share for the fourth quarter of 2024.
Speaker Change: That being said, since 2023, we have paid approximately a dollar and 60 cents per share in dividends.
Speaker Change: will have also repurchased about 450,000 shares representing approximately 5% of what outstanding common shares.
Speaker Change: At the same time, due to the current undervaluation of our shares, we have extended our share repairs program by 12 months.
Speaker Change: Of the initial three million dollars authorized, 1.9 million remains available, the presenting approximately an additional 11% of our outstanding shares based on the closing price as of March 14, 2025.
Speaker Change: Looking ahead, despite the volatile dry bulk market conditions, would remain optimistic in the market's long-term fundamentals and our ability to create shareholder value.
Speaker Change: Turning to fourth quarter results, our performance was impacted by temporary slowdown in coal and iron ore exports.
which we view as a natural seasonal adjustment.
Speaker Change: Following the elevated export levels in the first three quarters of the year.
Speaker Change: As a result, our net revenue for the fourth quarter of 2024 came in at 10.8 million down from 11.6 million in the same quarter of 2023.
Speaker Change: with a daily time chart equivalent of 14,250 compared to the 15,874 the previous year.
Speaker Change: As Davos will discuss in more detail we are comfortable with our leverage levels and balancing health and we expect to be in good position to execute on our business strategy.
Speaker Change: Turning towards strategic flip developments will continue to optimize our portfolio of assets in 2024.
Speaker Change: During the year, we sold the OAC, a campsar max built in 2010 in China, and were invested in the 2016 built Japanese campsar max Nisi, which was delivered in September and has since been employed on a profitable fixed rate charter.
Speaker Change: Additionally, we recently announced the sale of the Cape size Gloreship at 2004 build ship and the oldest vessel in our fleet. We will continue operating the Gloreship until its anticipated delivery to its new owners in the second quarter of 2025.
Speaker Change: We're pleased with our fleet composition which consists of exclusively high-quality Japanese build vessels.
Speaker Change: Our ongoing investments ensure that our fleet remains compliant with the evolving environmental regulations and possibly the evolving tariff regulations while maintaining their commercial competitiveness.
Speaker Change: As regards our fleets, commercial utilization, two-world Panamax vessels remain fixed rates out there until June and July , respectively, at the Navarez daily rate of about 14,200. While the Gloryship will earn a daily TCE of approximately $18,000 until it is expected to deliver which new owners in the third quarter.
Speaker Change: Additionally, one of our Cape-sized vessels will learn at daily times at about $22,000 for the second and third quarters before returning to index-link daily earnings.
The rest of our fleet currently operates on index-linked charters.
Speaker Change: While we're comfortable with our market exposure, we remain open to securing fixed rates for select vessels at attractive levels.
Speaker Change: For our first quarter 2025 T.C. guidance, we expect to be approximately $10,300 based on prevailing FFA rates with 94% over operating days already invoiced.
Speaker Change: We are encouraged to see the drabalc market rebounding from its seasonal slowdown and we expect to see higher TCE rates for the following three quarters of 2025.
Speaker Change: Additionally, I would like to take a time to discuss our recent entry into the offshore market.
Speaker Change: In the third quarter of 2024, we acquired an equity stake in an energy construction vessel new building.
Speaker Change: With a project having an expect completion in 2027, we are pleased to see this gas plant and the company is actively exploring employment opportunities for the vessel which is designed to serve all major subsea market segments including the newables and oil and gas.
Speaker Change: Benefitting from a limited vessel or the book, strong demand for offshore infrastructure are positive, where confident that the vessel will find compelling charter opportunities.
Industry Overview
Speaker Change: On a brief overview of the dribbled market, capesize and Panamak satirates softened as we ended the first quarter of 2025, in line with a regular seasonality around the Chinese New Year.
Speaker Change: Additionally, dry bulk imports by China in the first 9 months of 2024 led to high inventory levels and reduced the urgency of new imports towards the end of the year.
Speaker Change: Declined was most pronounced in the KHS segment while Palomax rates were pressured by 3 key factors.
Speaker Change: A slowdown in China grain imports and slower pace of Latin America grain exports due to floodings. Lower coal imports volumes as China's high activity in the first 9 months of 2024 resulted in fuller inventories.
Speaker Change: and winding of congestion the lead to higher pressure availability. In the capesize market, rates came under pressure as weaker market conditions in the Panamack sector made it more economical to split large-scale cargoes into smaller Panamack shipments.
Speaker Change: This was particularly evident in the rising share of coal-cargos carried on Panamaxiops.
Speaker Change: Furthermore, slower Australian, Brazilian, and Colombian Cape size exports in the first quarter of 2025 reduced vessel demand as increased rainfall and cyclones affected cargo output.
Speaker Change: Encouragingly, as weather conditions improved and cargo activity resumed, Cape size rates rebounded swiftly to profitable levels. Looking ahead, we remain very optimistic about Cape size markets' long-term fundamentals.
Speaker Change: Economic trends in China indicate to an emerging recovery in steel production, while Aronol producers are committed to supply with high quality Aronol volumes.
Speaker Change: Production, originating in the Atlantic Basin, is projected to rise by about 170 million tons over the next two years, mainly in West Africa and Brazil, which paints a positive picture for Kate's eyes on Mount Demand.
Speaker Change: Additionally, West African Box Site Volumes are surging a January and February export rose by an impressive 41% compared to the first two months of 2024.
Speaker Change: Boxite's share of total capes as cargo is almost as high as coal which has traditionally been the second largest source of Cape demand after iron ore. The current capes as order book remains at historical low levels.
Speaker Change: As a rough indication, it is estimated that the total K-Porder book is insufficient to service the planned expansion of Atlantic-based aerononic sports alone, even before factoring in the replacement needs of aging vessels amid tightening environmental regulations.
As regards to the Panamaksis
Speaker Change: Latin American grain exports look very encouraging for the current year, especially as congestion rises back again to levels more consistent with historical averages.
Speaker Change: As inventory cycle turns, we expect to see fire volume of seaborn coal trading. In addition coal-fired, parklands under construction in China, points to a 30% rise from the existing levels, while global coal consumption is not showing any signs of slowdown.
Speaker Change: Longer term, large portion of the existing fleet is above 20 years old.
Speaker Change: and likely to see at a strictly trading over the next years as environmental regulations make it harder for inefficiency to compete. Lastly, based on the latest developments we are pleased to see that the ceasefire in Ukraine seems increasingly likely.
Speaker Change: Apart from the obvious humanitarian aspect, that is of primary importance of course, such a development could also have a positive impact on cargo demand for all sub-cape sectors including paramedics.
Speaker Change: More broadly, when looking beyond the direct effects in terms of increased grain and iron ore exports, we'd expect that halting hostilities would have several macroeconomic benefits that would ultimately prove to be positive for the vessel's demand.
Speaker Change: As a result, we believe that the dry bulk market should remain on a positive trend over the next few years, and United is very well positioned to capitalize on these opportunities.
Speaker Change: of now like the past call to Stavros who will fill you in with our financial information for the quarter in the full year as well as discussing our balance sheet and debt refinancing. Stavros, please go ahead.
Stavros Giftakis: Thank you Samadhi, welcome everyone to our earning school. Let us start by reviewing the main highlights of financial statements for the fourth quarter in the full year ending December 31st, 2024.
Stavros Giftakis: Our net revenue of the fourth quarter reached 10.8 million, slightly below the prior year, primarily due to the weaker earnings environment in the Panama market.
Stavros Giftakis: However, our adjusted EBDA for the fourth quarter was 5.1 million and 11% increased compared to 2023, reflecting our continuous efforts to improve our operating leverage.
Stavros Giftakis: At the same time, we recorded a net loss of 1.8 million compared to net loss of 0.7 million last year.
Stavros Giftakis: On a full-year basis, our net revenues was 45.4 million, significantly higher than last year, reflecting both the increase in operating days and our improved average time chart, if we will not rate.
Our adjust TV DA also grew to 20.3 million
compared to 18.9 million LaFier.
Stavros Giftakis: noting however that the bottom line of the previous year included 11.8 million profits from Western sales versus only 1.4 million in 2024.
Stavros Giftakis: On the expense side, we successfully reduce daily operating expenses per vessel to 6,600, as well as keeping in check our total general administrative expenses despite inflationary pressures.
Stavros Giftakis: Overall, a wilder profitability was impacted this year by the software Panama SmartGET. We continue to optimize our fleet on the back of very well-time, sales purchase activities.
Stavros Giftakis: Astamatic reiterated earlier, we remain confident in our outlook both for dry bulk and our
Stavros Giftakis: Turning to a balance sheet, our cost position at the end stood at $6.8 million, reflecting the significant CAPEX program on the taking throughout 2024, particularly in the first half, as well as the payments towards our participation in the offshore project.
Stavros Giftakis: In the fourth quarter, we agreed to sell our oldest vessel, the Gloryship, for a net sell price of 15 million. This expected to have a minimal impact on our PNL at the time of the delivery to the buyers, which is estimated towards the end of the second quarter of 2025.
That being said, the cost-floor effect.
Stavros Giftakis: will be positive and enhancing our task position by approximately seven million for the year.
Stavros Giftakis: Our total assets at the end of 2024 reached 153 million, while so-called the record is to the 60.1 million.
Stavros Giftakis: Outstanding debt, which includes liabilities for more Barbodine transactions, suit at 99.4 million, implying a loan to fleet valuation of approximately 60%.
Stavros Giftakis: During the year, the successful secured 48.3 million in debt financing.
Stavros Giftakis: Briefly, I would like to remind you that we completed two selling list of agreements of 31.8 million agreed late.
Stavros Giftakis: The proceeds from disagreements were utilized for the exercise of the pretisoption of the sinficine.
Stavros Giftakis: and the refinancing of previous indebtedness over the exalibacy on overall improved terms. Additionally, we secured a $16.5 million loan facility with a prominent Taiwanese lender to finance the $12.4 million purchase option for free fee.
Stavros Giftakis: As a result, we entered 2025 with a solid capital structure and known immediate dead materialities.
Stavros Giftakis: In terms of our investment, the offshore sector united has already deployed approximately 3.5 million, with another 4.5 million committed and expected to be called into separate installments within 2025. This schedule aligns with a vessel's construction milestones.
Stavros Giftakis: Now before we turn to your cold stomachs, I would like to reiterate our optimism about the company's future profitability.
Stavros Giftakis: United in its short three-year history has created a strong track record of world-time shipping investments and remained true in its commitment to prioritize all the rewards in any market environment.
Stamatis: I would now turn the call back to Samatis, which is concluding remarks. Samatis?
Stamatis: Thank you, Savro. Following our successful tanker investment cycle that was concluded in Q3-223,
Stamatis: with delivered strong returns for ourselves, we now operate an exclusively Japanese built tribal fleet.
Stamatis: We're very proud of our progress so far being successful in building a quality fleet with strong prospects.
Stamatis: without the resorting in any dilution of the shareholders that have supported us at our last and only couple raising years ago. On top of that, since 2023, we have paid total cast dividends of about $1.60 per share, representing a very significant portion of our current share price.
Stamatis: Additionally, we have engaged in extensive saidy purchases amounting to $7.1 million at an average price of $1.90.
Stamatis: United Maritime is well positioned to benefit from positive direct market trends due to index-link time-shutters that provide direct exposure to capesize and Panamax market upside potential.
Stamatis: A healthy balance sheet that allows for leveraged exposure to the sector and the potential for high retention captain.
Stamatis: A proven commitment to rewarding our shareholders through substantial capital returns resulting in a high dividend yield.
Stamatis: Lastly, I am confident in a recent offshore sector investment which I believe will also generate higher returns for our company and shareholders.
Stamatis: On that note, I would like to pass the call back to the operator and respond to any questions you may have. So operator, please take the call. Thank you.
Speaker Change: Thank you. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster.
Speaker Change: Thank you. Well, now take our first question. This is from Tate Sullivan from Maxim Group. Please go ahead.
Tate Sullivan: I thank you and good day. Great to hear from you and to start to start with you. Ended your comments talking about offshore markets. Can you review when is the scheduled delivery of the offshore vessel and and what are the remaining capital commitments on investment? Please make.
Tate Sullivan: Yeah, the scheduled delivery is in the first quarter of 2027, although there are discussions that might bring the rest a little bit forward like the fourth quarter of 2026, but for the time being in the first quarter.
Tate Sullivan: 24% of the total project, there is a three and a half million have been already paid and there's...
Tate Sullivan: finalized as of now. So, but the equity commitment for the project is two more installments of four and a half million in total due within this year.
Okay, thank you. And then. Bye.
Speaker Change: Stamatis, you mentioned, can you review your comments on the U.S. missile strikes on the Houthi? What is the potential link to the dry bulk market?
Hello.
Speaker Change: Well, the Red Sea remains closed and I don't see the Red Sea reopening any time soon. I believe that there will be continuous disruption on that trade route. One of the positive things that I want to mention is that, assuming there's going to be some sort of a ceasefire,
Speaker Change: in Ukraine and Russia, that could reopen the Grain Corridor and could have more ships waiting to load the cargoes back and forth to the Ukrainian port. So that could be super positive for the Panama-Kamchatka segment.
Speaker Change: but that remains to be seen. I don't really believe that anything's gonna happen within Q2 of 2025, but the positive effects will likely take place from the second half of the year.
Speaker Change: Thank you and one more for me on the cape size sale I did you mention a 15 million sales price just to make sure I have it right with us it doesn't imply a gain on that sale of 7 million based on the increasing cash or is that correct
Thank you. Sorry, Ted. Can you repeat yourself?
Speaker Change: You said the sale of the older cape-sized ship will enhance cash by $7 million, so is that the dignified gain on the sale?
Speaker Change: Yeah, the outstanding loan is around seven and a half and as you know United's paying 1% of its sale price
Speaker Change: two synergies based on the management agreements between the two companies, so basically the net amount after the sale for United on a free cash flow basis will be around 7 million.
Great. Thank you very much. Great to hear from you.
Excellent, Tate. Have a great day. Thank you.
You, too. Bye.
Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers please stand by.
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