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Costamare Inc. (NYSE:CMRE) Q3 2023 Earnings Call Transcript

Costamare Inc. (NYSE:CMRE) Q3 2023 Earnings Call Transcript November 1, 2023

Costamare Inc. misses on earnings expectations. Reported EPS is $0.46 EPS, expectations were $0.61.

Operator: Thank you for standing by ladies and gentlemen and welcome to the Costamare Inc. Conference Call on the Third Quarter 2023 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 Wednesday, November 01, 2023. We would like to remind you that, this conference call contains forward-looking statements. Please take a moment to read Slide number 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.

Gregory Zikos: Thank you and good morning, ladies and gentlemen. During the third quarter of the year, the company generated net income of about $53 million. As of quarter end, liquidity was close to $1 billion. In the containership sector, larger ships continue to enjoy a tight market, while smaller vessels experienced deteriorating conditions. Overall, the market outlook looks uncertain due to the large order book and the insufficient demolition [ph] On the dry bulk side, as part of our strategy to renew the fleet and increase its average size, we acquired two capesize and to one ultramax vessel and at the same time we disposed of two older supramax ships. Our owned dry bulk vessels continue to trade on a spot basis, while the trading platform has grown to a fleet of 59 vessels.

Having invested $200 million in the dry bulk operating platform, we are long-term committed to the sector whose fundamentals we view positively. Regarding Neptune Maritime Leasing, the platform has been steadily growing on a prudent basis, having concluded leasing transactions for 17 ships in total, which are complemented by a healthy pipeline extending over the coming quarters. Finally, during the quarter, we continued our surpasses program, and we bought $10 million worth of common shares, highlighting our strong belief that the share price is heavily undervalued, considering both the Company's performance and prospects. Moving now to the slide presentation. On Slide 3, you can see our third quarter results. Net income for the quarter was roughly $53 million or $0.45 per share.

A large shipping container vessel with cranes in motion on the open sea.
A large shipping container vessel with cranes in motion on the open sea.

Adjusted net income was around $54 million or $0.46 per share. Our liquidity stands at roughly $1 billion. Slide 4, you can see an update on our share repurchase program. Since our Q2 earnings release, we purchased approximately 900,000 common shares for $10 million worth. In addition, we continue to have a long uninterrupted dividend track record boosted by strong sponsor support. Slide 5. Regarding CBI, we have chartered-in 59 period vessels with the majority of the fleet being on index linked, chartering agreements. On our leasing platform, we have already invested around $74 million. Since inception, NML has financed 17 vessels through sale and leaseback transactions and has a very healthy pipeline. Turning to Slide 6. We have acquired two capesize and to one ultramax dry bulk vessels, while we have agreed to sell two supramax dry bulk ships.

In addition, we have concluded the sale of a 2000-built containership along with the sale of our 49% equity interest on another 1998-built containership vessel. Slide 7. During the quarter, we have financed the acquisition of two dry bulk vessels through an existing hunting license facility, while we have roughly available $144 million for the financing of vessel acquisitions. We continue to charter all our dry bulk vessels in the spot market, having entered into more than 50 charting agreements since our last earnings release. On the containership side, our revenue days are essentially 100% fixed for this year, 87% for '24 and 73% for '25, while our contracted revenues are $2.7 billion with a TEU weighted remaining time duration of 3.7 years.

Slide 8. Our liquidity stands at roughly $1 billion. This liquidity gives us the ability to look for opportunities to grow the company on a prudent basis. Slide 9. Charter rates, the containership market have softened mainly for the smaller sizes remaining though at above pre-COVID levels. The ad capacity remains at low levels of 1.7%. On Slide 10, you can see the recent dry bulk market trends in the spotted forth [ph] markets. Charter rates have strengthened since Q2, although remaining volatile. The order book is at 8.1% of the total fleet. With that, we can conclude our presentation, and we can now take questions. Thank you. Operator, we can take questions now.

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