Costamare Inc (CMRE) 2024 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, 2024 financial results. We have a we have with us today, Mr Gregory G. 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. At which time. If you wish to ask a question, please press star then 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, November 1st, 2024.

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, 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 generated net income of about $80 million. As of quarter end liquidity was about $1 billion in the containership sector with other vessels of less than 1%. The fleet can still be considered as fully employed. The market is split between the larger sizes which do remain in limited supply, smaller vessels where the availability of donors is greater as the pool of bigger is unable to meet demands. Charters continue to evolve at leverage during the quarter, we have with certain contain six at healthy levels. The new charter agreements are expected to generate incremental contracted revenues of above $165 million.

The co employment starts at 100% and 94% for 2024 and 25 respectively. Total contracted revenues amount to $2.3 billion with the remaining time of the duration of 3.3 years.

On the di side, we are now progressing with our strategy to renew the own fleet and decrease its our size during the quarter. We agreed to acquire 2, 2014 and 2015 built max and 2011 built cape size while at the same time progressing with the disposal of smaller to CB I as a fleet of 56 SS, the majority of which are on index link starting agreements. We have a long term commitment to the sector and we view the best, the best loan at the trading platform as highly complementary activities.

Finally, with regards to next, my time leasing the platform continues to grow with committed funding for 32 shipping assets, reflecting total funding commitments of about $410 billion on the back of a healthy pipeline.

Moving now to the slide presentation on slide 3, you can see our third quarter results net income for the quarter was $75.5 million or 62¢ per share adjusted net income was 81 million or 68¢ per share. Our liquidity stands at over $1 billion turning into slide 4. Regarding our S&P activity, we have agreed to acquire one cape size and two ultramax driver seats in parallel. We have concluded the sale of two Supermax vessels and agreed to sell one on the size slide. Five on the chartering side, we have chartered several contains with incremental contracted revenues of about $65 million.

Our revenue days are 600% for 24 and 94% for 25. While our contracted revenues are $2.3 billion with a weighted remaining duration of 3.3 years.

In parallel, we continue to target all our dral places in the sport market having entered into more than 30 Saturday agreements since our last annual release Light Six. Regarding our financing arrangements, we will fully prepare with cash of $500 million unsecured bond issue by com participations.

In addition, we have agreed to retire our driver fleet without an increase in leverage. This deal is coupled with improvement of cost and taxation of maturities. Finally, we have roughly available $94 million for financing of acquisitions.

Slide 7. Regarding CP I we have charted 56 period pressure with the majority of the fleet being on index linked agreements for now using platform, we have already invested around 201 100 to $23 million.

NML continues to grow with farming for two ships and has a very healthy pipeline on slide 8. For this slide, you can see our liquidity exceeding $1 billion. This gives us the ability to look for opportunities to grow the company on a healthy basis.

Slide 9 Saturday, the continency market continue to evolve at very firm levels, especially in the latter segments. Despite there is a decrease in box rates, the continued injection of new printing capacity though remains the principal of the market. The island fleet remains at low levels of 0.8%.

Moving to the final slide. 10, you can see there is a drive back market trends in the sport and for market the the drive back order book starts at 10.3% of the total fleet with that. We can conclude our presentation and we can now take questions. Thank you.

Make it. We can take questions now.

Thank you as a reminder. If you would like to ask a question, please press star. Then one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star then two that's star then one to ask a question and your first question comes from the line of Omar Nokta with Jeffrey. Please go ahead.

Thank you. Hi, Greg. Thanks for the update. Just a couple of questions from I Yeah, just a couple of questions from my side. Just first on the, on the Greek bond. I think it's a Greek bonds, EUR100 million that you redeemed early. Just wondering, I know those were relatively much lower interest cost. And so I just want to get a sense of what, what drove the early redemption of those, of those bonds? Yes. Yes.

You're right. Yes, this is a bond which was originally during next year and we are like pre paying a year earlier. This was on an ass basis, relatively competitive terms at like a 2.7% cost. The reason being that there are some tax implications which they have to do with pillar two. And for that reason, because this bond was issued by Costa Participation, a Cypriot, meaning European Union subsidiary of ours for tax reasons and for some legal implications, we had to redeem it earlier. However, we did, we did use those funds for close to four years. And as you rightly said that it was in terms of pricing, I think it was competitively priced.

Okay. Got it. Thank you for that. And then just, you know, we've talked about this in the past, but just on the, on the dry bulk business with the CB I and there's been, you know, reports and shipping circles of changes happening there at, at the personnel level just in general wanted to ask, how are you thinking about that platform? And clearly you've been investing in the actual dry bulk ownership platform with the cave acquisitions. But just in general about the trading business, how are you thinking about that going forward? Is it, you know, still you know, still a main piece of the pie or are you looking to scale that back?

No First of all, thank you for that question because you are right that there were like a report loss and the trade wins and rightfully, so a lot of people ask the same question. You are asking a couple of points. Do support CB I, this is a long term business for us. As I mentioned in my commentary, we consider the tribal own own side together with the trading platform of CB I as highly complementary activities and there is absolutely no thought to scale it back quite the opposite. The personnel changes, they were affected for various reasons, but they have absolutely nothing to do with our intention to continue investing in the tribal business, including the trading platform. So today CB I commercially manages close to 56 vessels plus 37 ships owned by the Dral Business. So we're going to be getting close to hundreds of ships. And this is quite a substantial business of operation which I think we should consider this internally as one business as one entity. So, going forward, our goal is to stay there and to continue investing.

Okay. All right. Thank you, Greg. That's it for me. I'll turn.

It over. Yeah. Thank you. Thanks.

The next question comes from the line of Ben Nolan with Stifel. Please go ahead.

Hi. This is Pernilla on Trin, but thanks for taking my question. I wanted to ask with the announced time charters giving some better cash flow visibility and the strengthening balance sheet. Any thoughts on moving the dividend higher from the 11.5¢ per quarter?

Okay. Now the dividend is like, yes, as you said, the 11.5 46 send like per year, couple of point. First of all, this is a board decision and I'm not authorized now to sort of speak on behalf of of the boards. We have a dividend policy which is flexible and they can be revised and of course, I cannot exclude the possibility of like one of dividend payments or of increasing the dividend steadily per quarter. In the past, we have done both. And also in the past, we use a share buy back.

But I'm afraid that at this moment I cannot give any call on that. This is something which is, which is not for me to say right now. But definitely in the past, we have done, and one of dividend payments, we have not sort of increase the dividend and we have also done, you know, buybacks and also prefer to buy backs. Probably this is not the case now for the preferred stock, but this is something for the board to to decide.

All right, appreciate it. Thank you.

Thank you.

The next question comes from the line of Clement Mullins with value investor's edge. Please go ahead.

Good morning. Thank you for taking my questions.

Most has already been covered, but I wanted to touch upon your sale and purchase activity over the past year. You've acquired some capes while also shedding some older tonnage. And I was wondering what's your b one current asset pricing on the dry side?

And secondly, going forward, do you have a preference to continue building your cape exposure or are you comfortable at this?

Yeah, for, I mean, what we have been traditionally doing all like over the last year or a year and a half, we have been buying caps opportunistically and disposing of a smaller donut. Now, we have been quite careful on how much we buy and how much we sell. And where like asset prices are today. For caves, for example, let's take the new buildings, I think they are at levels which we would consider high in order to put a new building order for a cave.

Also, I'm not sure today where asset values for the caves represent the today's chartering capacity of those vessels and the car going forward. So, there may be a bit overpriced. So, I mean, we don't have a reason to buy something, we feel it is expensive, and we can see the way our fleet is a big enough. So there is no need to grow it further.

So asset prices are today, we are more opportunistic rather than buying and block V where especially considering 24 for the caves. It hasn't been a great market as of now.

So I mean, we're going to be more careful and take it as we go.

That's very helpful. Thank you. And on the containership side, you've taken a fairly conservative approach to fleet renewal, basically focusing on generating cash flow from existing assets.

Is there maybe any appetite to going forward acquire some modern tonnage or is the pricing is still too high?

Look, we haven't, we don't have any new buildings, any new building commitments today because had we any new buildings delivered today or like next year? I think asset prices for the containers of new buildings have been extremely high from a historical perspective.

So either the new buildings for like a 35 year old donors in containers today, I think the prices are high, irrespective of the chartering market. So I think we would be assuming excessive residual value risk. And this is the reason that we haven't done it. Now, of course, there may be opportunities we look at the market but we are extremely cautious.

Makes sense. Thanks for the color and congratulations for the quarter.

Okay, thank you.

This concludes our question-and-answer session. I would like to turn the call to turn the conference back over to Mr Zikos for any closing remarks.

Yes. Thank you very much for your interest cost. AMA and for dialing in today. We're looking forward to speaking with you again during the next quarterly results call. Thank you.

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