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Costamare Inc. (NYSE:CMRE) Q4 2023 Earnings Call Transcript

Costamare Inc. (NYSE:CMRE) Q4 2023 Earnings Call Transcript February 7, 2024

Costamare Inc. beats earnings expectations. Reported EPS is $0.68, expectations were $0.62. CMRE isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for standing by ladies and gentlemen and welcome to the Costamare Inc. Conference Call on the Fourth 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, February 7, 2024. 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, Mr. Zikos. Please go ahead, sir.

Gregory Zikos: Thank you, and good morning, ladies and gentlemen. 2023 has been a growth year for Costamare. The company had revenues of $1.5 billion and generated net income of about $660 million. Liquidity stood at around $1 billion as of yearend. Following our strategic decision in 2021 to enter into the dry bulk segment at an opportune time in the cycle, we have grown during 2023 our newly established trading platform to an operator managing a fleet of 61 dry bulk vessels. Having invested $200 million in the new venture we have a long-term commitment to the sector whose fundamentals we view positively. Regarding Neptune Maritime Leasing, the platform has been steadily growing on a prudent basis throughout 2023 having now concluded leasing transactions for 23 ships with a total value of about $250 million.

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We are committed to fastly growing the leasing business on the back of a healthy pipeline extending over the coming quarters. On the owned dry bulk fleet side, we are executing our strategy to renew the dry bulk fleet and increase its average size. During the year, we took the decision to dispose of 12 smaller size vessels and have agreed to acquire three capesize and two ultramax vessels. Subject to market conditions, our goal is to continue our expansion in the dry market. In the containership market, recent events have been contributing positively to the supply and demand dynamics pushing up box and charter rates. Those recent developments are mitigating the effects of oversupply in the containership market as tonnage is expected to remain tight at least until the Chinese New Year.

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.

We have however proactively secured employment for 95% and 78% of our open days for 2024 and 2025 respectively, putting our contracted revenues for the containership vessels at $2.5 billion with a remaining time charter duration of about 3.6 years. Moving now to the slides presentation. On Slide 3 you can see our annual results. Net income was about $350 million or $2.95 per share. Adjusted net income was around $250 million or $2.07 per share. Our yearend liquidity stands at roughly $1 billion. Slide 4, regarding CBA, - CBI, we have chartered in the periods 51 vessels with a majority of the fleet being on index linked agreements. On our leasing platform, we have already invested around $120 million. Since inception, NML has financed 23 assets through sale and leaseback transactions and has a very healthy pipeline going forward.

Slide 5. We have now acquired York’s equity interest on a fleet of containership at a – containerships and have now agreed to acquire one capesize dry bulk vessels. In parallel, we have concluded the sale of two supramax and three handysize ships while we have agreed to sell three more handysize and two supramax dry bulk ships. Slide 6. During the fourth quarter, we have financed the acquisition of one dry bulk vessel through a new hunting license facility while we have roughly available $132 million for financing of further vessel acquisitions. We do continue to charter all our dry bulk vessels in the spot market, having entered into more than 40 chartering agreements since our last earnings release. On the containership side, as already mentioned, our revenue days are fixed 95% for ‘24 and 78% for ‘25 while our contracted revenues are $2.5 billion with a TEU weighted average remaining duration of 3.6 years.

Moving to Slide 7. During 2023, we have purchased approximately $6.3 million of common shares for a total consideration of $60 million. In addition, we continue to have a long uninterrupted dividend track record boosted by strong sponsor support. Slide 8. As mentioned already, our liquidity stands at roughly $1 billion. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to Slide 9. Charter rates in the containership markets have been rising daily across all segments having benefited from the Red Sea prices. The idle capacity remains at low levels at 0.8%. And moving to the last slide, on Slide 10, you can see the recent dry bulk market trends in the spot and pore up markets. Charter rates remain volatile having deteriorated from the highs of Q4 2023.

Today’s order book is up 8.5 of the total fleets. 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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To continue reading the Q&A session, please click here.