Costamare Inc (CMRE) 2015 Q3 法說會逐字稿

Thank you for standing-by ladies and gentlemen and welcome to the Costamare, Inc. Conference Call on the Third Quarter 2015 Financial Results. We have with us, Mr. Gregory Zikos, 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. (Operator Instructions).

I must advise you that this conference is being recorded today Thursday, October 22, 2015. We would like to remind you this conference call contains forward-looking statements. Please take a moment to read slide 2 of the presentation which contains the forward-looking statements.

And I will now pass the floor to your speaker today Mr. Zikos. Please go ahead, sir.

Thank you and good morning ladies and gentlemen. During the third quarter of the year, the Company continued to deliver positive results. We have opportunistically acquired with equity two secondhand ships with time charter attached. At the same time, we are actively looking for new opportunities, either in the secondhand or in the newbuildings market.

Regarding market conditions, charter rates and asset values have been under pressure, as a result of weak demand. We continue to grow in a low asset value environment, which provides opportunities and upside for healthy and well capitalized players.

And now moving to the slides presentation. On slide 3, we are providing a summary of the recent developments, these includes buying two secondhand vessels together with our partner, York, both ships have been bought with equity that are in time charter. And a dividend on our common stock and also dividends on all three classes of our preferred shares.

Moving to the next slide. On slide 4, we are providing a summary of the chartering arrangements which took place during the quarter.

On slide 5, you can see the third quarter 2015 results versus same period of 2014. During the third quarter of this year, the Company generated revenues of $124 million, EBITDA of $85 income and net income of $30 million. For the same period of last year, the revenues amounted to $125 million and the EBITDA and net income to $94 million and $34 million respectively.

Consistent with our previous press releases, we feel that the EBITDA and net income figures need to be adjusted for the following non-cash items; the accrued charter revenues; the gains or losses from vessel disposals; the gains or losses resulting from derivatives; the amortization of the prepaid lease rentals, which is a non-cash charge and a non-cash G&A expenses. Based on the above, the third quarter EPS amounts to $0.46 and the third quarter EBITDA amounts to $89 million versus $0.38 and $87 million the year before.

Moving on to slide 6. On this slide, we are showing the revenue contribution for our fleet. More than 97% of our contracted cost comes from [short-term] charterers like MSC, Evergreen, Maersk and COSCO. We have close to $2 billion in contracted revenues and the remaining time charter duration of about four years.

Slide 7 shows the timing of the latest fixtures of the ships coming out of charter in 2015 and 2016. As you can see, we have been buying and chartering at the low of the market and the current charter rates of most of the ships are at levels close to today's levels. Buying low and chartering low allows us to minimize our re-chartering risk and provides us with more upside in a good market.

And on the last slide, we're discussing the market. As already mentioned, charter rates and asset values have been under pressure. The number of idle ships has come up to 4%. The order book remains at historically low levels at around 20%. As a company, we are well positioned to continue to grow in such an environment, which provides for opportunities and future upsides.

This concludes our presentation and we can now take questions. Thank you. Operator, we can now take questions.

(Operator Instructions) Ben Nolan, Stifel.

I had a couple of questions. The first relates to some of your newbuilds, specifically the five, I believe it is in the York joint venture being built at Subic Bay. It looks like the schedule has been pushed back a little bit on the delivery, at least further for several of those. First of all, am I correct in that? And then maybe also could you talk me through where you are with respect to chartering those vessels and also procuring financing for them?

Yes, sure. First of all, you're right that the deliveries of those vessels have been pushed back a bit. Two vessels will be delivered as per the latest schedule in May 2016, two in June of the same year and the last one at the end of 2016. Now, we are currently in discussions with the charterers regarding fixing those vessels. We wouldn't like to fix them at a rate with which we don't feel like comfortable. So we're taking our time. There is no pressure. Up to now we have paid 50% of the equity for those newbuildings and the last payment, their delivery payments of the remaining 50% for [its run of] those vessels is up for delivery, the first delivery starts in May. So, I think we have enough time. So I can tell you that from now up until delivery there are no sort of -- there are no other CapEx requirements from our side.

Now regarding the financing, which is the second part of the question. Normally we wouldn't proceed with financing the ships or the newbuildings without having a time charter in place, because obviously the financing would be more attractive with a time charter in place. So as we move along and we are discussing the chartering, at the same time, we will be discussing the financing with potential financiers. So I mean, we feel comfortable for those vessels, regarding the size, the specs, their delivery time and we feel that those vessels in the future will be in need. Thank you.

And to just dig in a little bit further on the financing and CapEx. It looks like you've got about $175 million of, call it, unfinanced CapEx remaining, of that, how much would you expect to be taken out by the incremental financing for these, i.e., how much incremental equity do you think you need for the entire balance the newbuild program you guys have remaining?

Well, I think this number $175 million also does include the debt portion for the 5,000 TEUs to 10,000 TEUs which is in place. So I mean, if you take it out, Costamare, our portion of the newbuildings, including our sort of remaining equity commitment for the 5,000 TEUs to 10,000 TEUs would be in the region of $105 million. Out of those $105 million, should we lever those vessels -- at the levers close to what we've done in the past and this is also a function of the tenure of the charter party. I think we might sort of end up with somewhere in the region of $30 million, $40 million remaining sort of equity CapEx from our side. But today we have in Costamare the remaining equity CapEx excluding the debt, which now is committed for the 5,000 TEUs to 10,000 TEUs, it's in the region of $105 million and the $175 million there, this is for sort of a [capital type], which includes a part of the debt which is committed for newbuildings today. So it is an order which makes the -- misguiding you, okay.

Okay. That's helpful. And then my last question relates little bit more to the market. Obviously, as you said, things have softened a bit in idle -- the idle fleet has increased. I was curious, the last time that we saw those happen, some of the more modern, efficient, really larger ships seem to have been relatively immune to any weakness and rates or asset prices, at least certainly relative to the Panamax or those smaller classes of assets. There is not as much liquidity in terms of chartering or sale and purchase activity in that larger category, but are you seeing the same dynamic play out here and that the larger more modern efficient assets have been a bit more insulated from the weakness that we're seeing in market or are they participating in kind?

Look, I think you're right. I mean, first of all, the number of partnerships has come up to 4%, which is a significant increase in our vessels compared to where we were a couple of quarters ago. This is mainly as a result of weak demand. And this 4% also sort of includes around 15, 20 ships of above 7,500 TEU, and this is -- close to 14 vessels in the region of 5,000 TEUs to 7,500 TEUs. So I think the trend you described is correct. We see ships being laid out across the board. And on the other hand, I can tell you that the charter market is relatively weak today for ships in the size range for Panamax, like 4,000 TEUs, 4,500 TEUs, up till 8,500 TEUs to 9,000 TEUs. This is sort of a class of assets that has been particularly under pressure over the last weeks.

Okay. But there is still relatively strong demand and decent charter rates or something over, call it, 10,000, you would say?

Look, there is demand although, but we haven't seen a lot of fixtures, I would say, long-term charters recently. But I can tell you that, for instance, the Panamax vessel, which in the past was using like 15,000, 14,000 per day for, let's say, six months to a year. We've seen the latest fixtures in the region of 8,000 to 9,000. So I mean from that you can assess what's the difference in the dynamics in the chartering market today. And the 6,500 TEUs in the past, you could say them like, 20,000 plus; now you may have fixtures in the region of 12,000, 14,000, so the difference is quite substantial.

Fotis Giannakoulis, Morgan Stanley.

I want to ask about the overall market and about the demand and we have seen that the demand has been weaker than it was expected. It seems that is in the region of around 3.5%. What has gone wrong with containerized demand, given the fact especially with the US economy is doing better, oil prices are low, so basically this should have helped the consumer spending and this should have helped the container ship market.

Yes, I mean we are mainly referring to demand that has to do with Asia. So if you look year-to-date and compare to 2014, sort of intra-Asia trade has been down by close to 5%. Sort of Asia-Europe trade has been down by more or less the same percentage.

On the other hand, the fact that we have a strong dollar means that the Europe-North America trades and presents Latin trades or the trans-Pacific trades have been doing relatively well. Like European to North America, we've seen an increase in the region of 10% year-to-date. And trans-Pacific, meaning Asia to North America, we've seen an increase in the region of 9%. So it's not that the all trades have been performing poorly, but it's mainly sort of Asia-Europe and also intra-Asia, who you know have not met market expectations.

So it's pretty much with the Asia and Europe, do you see any chance of recovery, especially for the European route, because I would expect that the low oil prices should benefit at some point the consumption in Europe.

Yes. You're right. On the other hand, sort of Asia -- or sort of China mainly, Chinese growth has not been as expected. If I tell correctly, the target was in the region of 7% and we are little bit below that. So Asia or China is not performing as expected.

Also the European growth has been relatively weak or unearning until now. Of course you can argue that the way forward, the prospects for European growth may look more promising. But the situation today is that the Asia-Europe trade is not doing well and in that particular trade, we shouldn't forget that all the newbuildings and today's newbuilding order book is as good for the larger vessels, above like 14,000 TEUs, their channels to this particular trade. And this is why we've seen box rate familiar to Europe falling at the historically low levels, to close to $250 per TEUs, which is an extremely low number, bearing in mind where we were last year or a couple of years ago.

Can you also comment on the supply of vessels side? Obviously there are a lot of a -- I believe, these very large containerships going through the European routes that pressure this particular route. But how does this -- the deliveries look going forward. Are we almost done or we still have some time to go?

I think, look, the order book today, it may be in the region for 20%. But this 20% is mainly for 2015 or sort of -- for the remaining 2015 and 2016. So for 2015 the net increase in TEUs must be in the region of 9%; for 2016, this is based on sorts of estimates and taking out and assume scrap rate in the region of 5%, however, order book for 2017 today and for 2018, it's quite seen in the region of 3% to 4%. So assuming that there will be no excessive bordering, which is something that -- probably it is a logical assumption. Today's order book for 2017 and 2018 is relatively low.

And do you see that this ordering activity has stopped? It seems that the last few years has been triggered primarily from a liner operators. Do you see liners willing to order more ships? And what kind of implication it has for your company in terms of new opportunities or in terms of differences in charter rates?

Look, there will be some newbuilding ordering and from our side, we also look actively at newbuildings with a time charter attached. Now, I cannot predict how much the new ordering will be. This is up to liner companies and this is up to the requirements of the alliances. There will be some ordering. But what I can tell you is that the way the order book looks to be shaping now for 2017 and 2018, it is relatively thin. Some ordering will be and will definitely be required by liner companies and we also see opportunities as far as Costamare is concerned, leveraging on our relationships, leveraging on our ability to fund those transactions and to sort of enter into long-term time charters for newbuildings with attractive returns.

And one last question from me. From what I understand from the description that you gave about the market, It's probably going to be a difficult year, but you expect that in 2017 the supply growth is shrinking and hopefully the demand will improve. We see in the next 12 to 18 months, you have some vessels, they are coming out of charters. How does this weak environment impact your profitability or your earnings and what is the re-chartering risk that you see for your company?

Yes, I mean, I'll tell you, look, and we'll have a slide in our presentation, particularly for the re-chartering, which from our side, we don't consider it to be a risk at all. It's quite the opposite, we see it more as an upside compared to being a downside risk. I will explain why, we have a charter coverage in the region of 75% up until the end of -- for the period of January to December 2016.

If you look at today's charter rates of the vessels coming out of charter for the remaining of 2015 and for 2016. Those vessels simply because we bought them in a low market, and since then we've kept chartering and re-chartering them in a low chartering environment. Today's charter rates are that, those vessels are yielding, not much higher from where the market is today. So I don't think that there is any significant downsides from our side, and this is what slide 7 is trying to show.

On the other hand, should we see is small rally in the market like we all witnessed in mid of this year. Then there is definitely substantial upside. Let me also remind you that the backbone of the fleet, all the 6,500 TEU ships we have, the 9,500 TEU ships we have, the 14,000 TEUs newbuildings, they are sort of all coming out of charter from 2018 onwards and we have charter coverage, we have our new beginnings what would become out of charter in 2026. So the backbone of the fleet, these are the assets that are now providing stable cash flows for the years forward.

On the other hand, opportunistically we have both ships with equity at low prices; we keep chartering them at above the breakeven levels. So that chartering of those vessels does not pose as a significant downside risk for us. I would say, quite the opposite and let us not forget that the container shipping has been in a down market for the last six to seven years. So at some point there should be some upside as well.

Mark Suarez, Euro Pacific Capitals.

Good morning Greg. Thanks for taking my questions here. Just to stay on the macro line of question here. Obviously, you mentioned that Asia-Europe has been weak. We have seen those numbers. Idle shift is, like you said, around 4%. I'm wondering, and maybe we can shift our attention to the trans-Pacific trade. How do you see coverage for those Panamax up to the 8,000 TEU level trending, specifically in the trans-Pacific route, given how strong the US dollar is. China devalued their currency and of course, considering the delivery schedules for the larger 10,000 TEU plus vessels coming over the next 12 months?

Look, the Panamax vessels will probably, we shouldn't bring them directly to the trans-Pacific trade. But the Panamax vessels today, I think, the charter rates based on the latest fixtures, they are in the region of close to $8,000 per day, which of course, if you look at these rates historically, it's an extremely low rate, which you know it may be covering operating expenses, but I'm not sure that it fully covers debt service requirements, especially if the vessel was bought at a high price, right, back in 2006, 2007 or 2008. Some months ago, we saw especially partly as a result of the congestion in the US West Coast that will continue with Panamax vessels, trading and yielding in the range of $14,000 to $15,000 per day.

Let me remind you that, back, 2007-2008, with Panamax vessels, at some point moving in Panamaxes, they were getting close to $25,000, $30,000 per day. So this $8,000 per day, it's an extremely low rate and this shows the lack of demand for that particular asset sides.

Now if you want to discuss more specifically about the Panamax vessels, we have some ships opening at the Costamare, Inc. level, we've three ships chartered to ZIM, which are now opening in 2016. However, for two out of those three ships specifically, Costamare has a put option to continue chartering those ships to ZIM at market rate, whatever the market will be, plus $1,100 per day per ship. So for those vessels for those ZIM ships, which are Panamax that are coming out of charter within 2016, we feel quite comfortable regarding their future chartering, especially because we have those owner's options.

Got you. That makes sense. And then, maybe we can turn to the latest transaction here. I know you went to some of the older Panamax vessels. It seems to me that your team is going to look at all segments, assuming you have charter attached contracts, assuming you have the returns you want. My question is basically, going forward, how should we think about that capital deployment strategy? Should we look -- should we expect more of the same JV framework in terms of additional charter attached secondhand, potentially some newbuilds or could we see the form or the room for additional secondhand acquisitions outside of the JV framework here?

Look, regarding the JV, up till now pretty much everything we've done, we've done it together with our partners, York Capital. Also, as you rightly mentioned, the latest two acquisitions of those secondhand vessels, there is an exclusivity. We are sourcing the transaction we discussed with York. If York does not want to participate, then we have the right to move ahead and proceed on a standalone basis at the Costamare, Inc. level, but up till now York -- and we are very happy that this relationship is proceeding so well. York has agreed to participate in almost sort of literally all the transactions we've done up to now. So going forward, I would say that we feel that there are sort of a lot of opportunities that we're not going to be doing together with York.

Now regarding the capital deployment and asset allocations, we are looking both at secondhand ship, like the latest two transactions we did, which [as an absolute note], but they are sort of in the region of $12 million to $15 million, the two ships together. On the other hand, we feel that on a return basis, those are transactions that definitely make sense for our shareholders.

Then on the other hand, we are looking at newbuildings with time charter attached. I would say very, very actively and this is another area where Costamare in the past or over the last three, has done substantial transactions. So, let me remind you that this is going probably from the end of 2010. We have ordered 10 plus 10, close to 20 newbuildings over the last four, five years. So this is definitely an area where we have a lot of interest.

Okay, and as you see, as you form a very attractive newbuild growth here, as you take delivery of these newbuilds, but at the same time charter rates are beginning to be biased on the downward as opposed to the upward like what we talked about six to nine months ago. How should we think about the dividend policy? Or you think that maybe as you go into Board meetings there is a bias now to keep the dividend rate constant or there are potential here as you take delivery of these vessels to maybe increase the dividends?

First of all, I have to remind you that we've raised the dividend three times over the last five years. Now the dividend is something we all lye, including the Costamare main shareholders, because the founding family has a 65% interest in Costamare without any other shipping activities outside of this Company. The dividends should be growing, and will be growing.

At the same time, we've increased cash flows. So let sort of the newbuildings hit the water, and then at any given time and our consideration is whether there is sort of any other opportunities in order to invest further. So the dividend will increase with incremental cash flows from new business, but always considering the circumstances and while they will fell that there is room for additional investments where part of those sort of increased cash flows will be used.

Shawn Collins, Bank of America

So in the quarter you bought a minority stake in two ships kind of smaller size for your portfolio, for about $13 million. Can you just talk a bit about what made these two ships attractive?

Yes. First of all, let me start by saying that it is a minority stake, because it's less than 50%, but it's 49%. So I have to make a statement here that in this JV with York, Costamare is participating with a substantial amount of -- which may be ranging from like 25% to 49% or even higher. So, the 49%, it is a minority stake, but simply we have like one out of the two ships in [secured debt].

Now regarding the vessels. The first one, it is a 2001-built 1,500 TEU ship. We bought it out to a closer to $6 million, the vessel has a time charter for two years of around $10,500 per day. I think that we are considering our sort of equity at risk or the expiry of the charter party, also making some calculations regarding the scrap value of the vessel and also considering that the vessel is likely a 2001-built, so it's like 14 years, 15 years old today and those ships have a 30-years for life.

So by factoring in all those parameters, we feel that both fit transactions. And the sort of second one, the Helgoland Trader, and based on the same assumptions, we feel that it is something that makes sense, because the first cover our downside to the extent we can and then there is definitely significant more upsides for our shareholders.

Okay. Great. Is that that's helpful color. And then Craig, the second ship, the Helgoland Trader did delivered in -- which will be delivered in April 2016.

Yes.

Currently on charter with Maersk, when you get the ship will it still be on charter?

Well, we have sort of in discussions and we are going to make sure that when the ship is delivered, we will have a charter in place. However, it's not something we can sort of announce today, but that hopefully in the next quarter you will see this vessel chartered for an addition period of time. This is what we have in mind. Correct.

Gregory Lewis, Credit Suisse.

You mentioned real briefly your scrapping assumptions on those two vessels that you picked up from what's, $5 million, $6 million. Are we thinking 20%, 30% of the purchase price we could maybe get back in scrap, is that sort of a fair way to think about it?

Look, we are assuming a relatively low scrap price in order to be conservative, but yes, a 20% to 30% out of the acquisition cost could be the scrap value for those ships, right. However, so I mean there is also a time element, because Costamare as an operator, we are used to also running older vessels as opposed to sort of a newbuildings. We have ships which are like 20 years, 25 years or even 30 years old that are still trading. So, as long as we feel comfortable with the physical condition of the vessel, I think -- and as long as it can be chartered, of course we're going to be increasing our returns by sort of employing these vessels the longer we can.

And just given the size of the vessels, the intermediate or sub-Panamax depending on what you want with your fleet or depending on how you want to think about it, what do you think that the daily OpEx could get to on those types of vessels?

It could be like a $4,000-$5,000 per day.

Okay, perfect. And then just shifting gears a little bit. I mean, I know we've been hearing for years about banks on [wide mean] and looking to cut down their portfolios, I guess, more recently, it looks like HSH is going to be pulling back from their maritime book. Do you have any sense -- could we see them get more aggressive and putting more secondhand containership tonnage on the market and over the next 12 months to 18 months, is that something we should be thinking about and what else can -- how do you think Costamare's position is to take advantage of those potential vessel sales that are coming to market?

Yes. Now regarding distress sales coming out of banks, especially from European banks, this is something that has been extensively discussed over the last years, I would say, two years to three years or even more than that. Now of course there are news regarding German banks and sort of by the way forward. But I have to tell you that up to now we haven't seen any meaningful size of transactions coming out of financial institutions. There have been some deals, but they are nowhere close the size, the sort of actual size of those loan portfolios.

On the other hand, this doesn't mean that there may not be opportunities and of course it's our job to make sure that whatever transactions are available in the market, we see them and we are sort of as competitive as we can, always covering our downside to participate. So this is something we definitely look at. We have a close eye on those deals, however, up to now we haven't seen a tremendous amount of transactions coming out of distressed loan portfolios.

Okay. So it sounds like if it happens great, but it doesn't sound like we're going to -- we'll hit a point where we can actually start to see the banks get a little bit more aggressive on selling. It doesn't sound like you are too optimistic on that.

Well, this may happen. But I cannot say that this is something that we feel is going not going to be happening over the next two months or three months or sort of two or three quarters, because there is a lot of parameters involve -- there is sort of factors involved. So, this is something that may be happening, but it would be difficult to sort of determine the exact timing and scale to be honest.

Charles Rupinski, Global Hunter Securities

I just had a -- I appreciate all the color on the macro and most of my questions have been answered, but I did have one thing I wanted to ask you about, which was a recent article about some of the faster services, for example, APL and ZIM and it's been out there in the press, but maybe this is something that could, if it catches on affect the whole slow steaming vessels. I just wanted to maybe get your take on that if that's a real issue or something that could impact the industry in terms of how much capacity is going to be out there, if the slow steaming does end of speeding up?

Okay. First of all, this is something that has mainly to do with the liner companies, regarding the speed of the vessels and whether they are slow steaming. It's something that it's going to enlarging or whether it's going to be reduced. Up to now, I can tell you that from our side to the extent we are -- we have this information, up to now we haven't seen any substantial sort of -- or any meaningful increase in the speed of the vessels. But it's up to the liner companies to determine what is the real sort of capacity, that's sort of has to be in the market. Also bearing in mind where box rates today are and what is the expected demand. But the thing that is in question that first needs to be addressed to the liner companies.

Amit Mehrotra, Deutsche Bank.

I just had one question on the overall market vis-a-vis the liner companies. We've seen them downsize a little or maybe the right word is, optimize their service routes and that has led to some reduction in demand for ships. Can you just talk about that? What do you think the impact of that has been, if anything, on the most recent rate weakness and where we are in that cycle sort of playing out in terms of its impact to the charter market?

Look, we've seen some consolidations in some specific trade routes or sort of we've seen liner companies taking out vessels of specific strings. And the fact that the demand is not sufficient to absorb today's capacity, it's also leading to re-deliveries when the vessel is coming out of charter. And then the re-chartering most of the times can be a couple of months extension of the previous charter contract.

So, for reasons, there is a lot of supply today, as we speak, there is a lot of supply for ships in the region of 5,000 TEUs to 6,500 TEUs or even up to 9,000 TEUs. The demand is not there. Ships are being laid up and this is the reason we've seen the percentage of other ships climbing from sort of a below 3% to 4%. Now what is the way forward and where we are going to be in a couple of quarters or so -- by the end of 2016, I wouldn't like to enter into any forecast here.

I can tell you that from our side, the way that Costamare is being managed, we make sure that our ships coming out of charter are not going to have a significant downside simply because we booked most of them in a low asset value environment that the amount of cash they are sort of yielding today is close to where that market is. And the backbone of the fleet has been chartered out long. The [debt] service is being serviced prudently, meaning that we sort of amortize our debt quite clearly, we never had any grace periods. So, where the market will be in some quarters, I'm afraid I cannot predict, but I can tell you that, as we already pointed out, the demand is not enough to absorb capacity and the ships have been laid up. And those are charters having a lot of pressure.

Yes. I'm not trying to imply that this has an impact on Costamare. But given that, in shipping, a lot of the trends in the overall market tend to impact all the companies in unison. I think it's a little bit important to understand sort of how the liner companies are running their business. So I just want to make sure I understand what you're saying. And so you think this consolidation of some of the routes is more cyclical, not structural, it's really a function of demand and it's not liner companies sort of rethinking how to run their business more optimally. Is that an accurate statement?

Well, this question needs to be addressed to the liner companies. But if I have to say something, I would say that this is a reaction to weak demand.

David Starkey, Morgan Stanley

Hi guys, you were talking about the demand from China and that area of the world being lower, but still, I guess, with respect to the up 7%. So how could it be lower -- don't you mean just a lower growth rate over there?

I think, yes, I mean, correct. If you look at the demand like year-to-date 2015 versus year-to-date 2014, the demand has been lower. The growth has been less, correct.

That would mean shrinkage though, not growth over there. So that would mean maybe things are worse than what the media seems to be saying over in that area, but isn't -- so your European operations from shifting from a stronger economy in the US is not offsetting that to the extent that, that means your growth rate is a little bit lower than expected.

Look, I was referring to the trade routes as Europe. If you're referring to sort of a to trans-Atlantic or trans-Pacific, there in both of those trade routes we have growth and we have growth especially on the routes to the US because of the strong dollar, we have more imports.

Do you guys have any way of measuring how full the ships are as they're shipping?

You are referring to the loading factor. The loading factor, we get information from the liner companies, but again, this is something that has to be addressed initially to the liner companies, we are just following the instructions. We have information regarding BTUs or the boxes that are being shipped from sort of XYZ either to Europe, trans-Pacific, trans-Atlantic and Middle East et cetera.

Does that have more of a direct correlation to the charter rates that are the spot rates?

No. Look, this has to do mainly with the box rates. The box rates are the rates that the liner companies are charging shippers who are shipping goods, for instance, from Asia to Europe. Box rates are differently correlated with demand and supply of how many vessels the liner companies have available in order to carry those goods. And box rates, if you look at the graphs, it has been substantially down. Charter rates, which are the rates we have been charging the liner companies, has to do with the supply and demand of ships, meaning how many ships a liner company needs and what is the number of ships that are today idle and this is the 4% figure we were referring earlier.

Okay. Are you guys have been -- I've been following the company for a couple years and I have investors in the stock and I just -- you've always been consistent and even beaten expectations so over the last year or two. Is there a way for your story, which is kind of uniquely strong to me to get you guys to get that word out a little bit better to the investment community. It seems you're just kind of lumped in with the MLP groups and the container groups and there's not really a distinguishing buy about there with the investment community, you just kind of go down the same with all the others. But yet you do seemingly better.

I agree with you. Look, what I have to say is this, look, it's -- you're right that the MLPs, energy related companies, especially have been trading down. Investors are asking for a high yield and also sort of our dividend yield that has come up as well. In the past Costamare was trading at 4% to 5% yield. Now we are trading, I think, it range in the region of 7.5% to 8% or north of that.

What I can say is that, today the sort of 8% yield that Costamare is proposing is quite attractive. It's quite attractive because it is coming from long-term cash flows, with a very secure and stronger counterparties.

And as you mentioned, I do not think we have ever missed analyst estimates, not over the last couple of years, since going public, I would say. And we never had to restructure our debt, capital dividends whatever. So, today this 8% dividend yield, it is quite attractive and we have also a track record as a public company. We are growing selectively. The platform is there, because the Company is well capitalized, hopefully over the next quarters we're going to be able to announce more transactions, both in the secondhand and in the newbuilding sector.

But this is what we can do. Investors after some point, they don't differentiate within different sectors in shipping or they may not even differentiate between the MLPs and the container shipping company and energy related companies. We are patient. As you know, we were patient when we went public for the first time in 2010. But we feel this 8% yield, it's quite an attractive proposal.

Just the possibility of getting the word out a little bit better. I know there is a registration statement on file for a potential offering at some point, if I'm sure market prices were better, but that seems to have been on file for a long time now and I know there are some difficulties in getting some of that information out to clients. When that's the case, is there a possibility that the Board would consider just getting something -- making that -- streamline that process a little bit, so that we can kind of gets some more information out there.

So you're referring to the filing regarding selling of shares or the sort of MLP. Look, the file is there, but I can tell you that today there is no intention at all today to sort of offer common stock. The file is there.

Let that filing go and then reinstate it later in a more appropriate time.

I think it's common practice to have this sort of a shelf there, but it doesn't mean that we would have to today issue common shares. First of all, because we don't it, we have cash on balance sheet of [$107 million] plus, we have close to 10 debt free assets. So we definitely don't need it. It's there, but it is common practice for a lot of elicit companies, so I don't think we are sort of any different than the others on that.

(Operating Instructions). This concludes our question and answer session. I'd like to turn the floor back over to Mr. Zikos for any closing remarks.

Thank you very much for being here with us today. We are looking forward to speaking to you again during the next quarterly results call. Thank you.

Thank you, sir. That does conclude our conference for today. Thank you all for participating. You may now disconnect.