CMRE - Earnings call transcript Q3 2020

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Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Costamare Inc. Conference Call on the Third Quarter 2020 Financial Results.

We have with us Mr. Gregory Zikos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. presentation a a session. be will followed question-and-answer by There this advise being XXXX. [Operator must that conference XX, Instructions] I October you is Wednesday, recorded today, would call this you to forward-looking statements. We conference like remind contains that which moment a number the statements. read Please contains take forward-looking to the two slide of presentation, And I Mr. the your speaker floor will to now today, pass Zikos. sir. ahead, go Please,

Gregory Zikos

you morning, and ladies Thank gentlemen. and good

During the profitability. third quarter its the company continued

initially with to with years renewal out XX-year now of we be sold accepted will younger. which five agreed our vessels acquisitions have our and two on charters. three XX of vessels, funded of fleet the years of program, newbuilding three progressing ships an part second-hand program commenced age is delivery As demolition average we XX,XXX XX larger on Meanwhile acquire we and schedule for average new The TEU equity. have

market On rising total below back during on the the fleet to Charter the XX shrink have containership demand shipping. leverage the chartered continues quarter. in X% we container have rates healthy inactive of ships to for and been

coming debt charter next years XX liquidity and ships well are momentum opportunities, and shareholder above CapEx acquisition With increasing months, no should the off us value the returns. have over market continue. six the of million commitments, we $XXX which maturities We over positions meaningful next favorably minimal three positioned for

acquisitions, debt, and a repayment restrictions. company strong and high-growth to than with management fully to now smooth our More uninterrupted slide public, since the three related Moving interest, snapshot. payments no no profile, never sponsor and going slide presenting presentation. years debt had debt party aligned are shipping dividend steady in we restructure potential ownership XX legacy support, the industry On

Moving to slide. the next

Steady income adjusted and quarter income you $X.XX. slide volumes EPS highlights. you see a model. $XX see volatile shipping our million On the can is net for the resilience in the five environment. high of can the business Here of Adjusted is

net is adjusted $XXX income of and nine no for XX% XXXX. liquidity strong months and year million, first We EPS of maintain $X.XX. with the a debt this until million maturities about approximately sheet Our do of leverage is $XX meaningful balance

Moving to slide. next the

our of older the renewal continue sale part of program, tonnage. As we fleet

Over we age XX with funded two with with three an containerships an the younger past average years be will of age new years. quarter XX vessels replaced sold average of three with them vessels and The equity. initially

ten-year and The We two of containerships commenced have delivery their have have Yang during vessels Ming been to chartered series on Lines. X% seven, the book the is charter the Slide of ships is of TEU demand XX,XXX charter rising X.X% out sister at five a positive total the The idle with vessels. set remain quarter. supply fleet market The has low. and of order XX has back and in dropped to expected we fundamentals. it

continue. XX We which off months, us over six next favorably the have coming should momentum market charter vessels positions

slide, inception since been quarterly Finally, we million. XXXX in quarter in In dividend has our November. DRIP results. the in Insiders invested and see will the you the have pay consecutive total XXth can participating third next $XX

and generated the income million $XX quarter, company of adjusted million. $XXX net this of During revenues

$X.XX. is quarter The third adjusted EPS

items. prepaid structure. we are capital our adjusted other gains or Our figures consideration from non-cash revenues, accrued losses take and items: On accounting lease into rentals X charter Slide following disposals non-cash the the asset discussing

net and XX%. EBITDA at debt where Our XX-month interest is so leverage five at to EBITDA is X.X comfortably below it's X.X times -- Net is times. trailing

for Cosco, showing comes our slide contracted XXX% On charters Evergreen, from and Maersk, the contribution have X.X For of requirement XX, cash like revenue first-hand Hapag-Lloyd. of minimum MSC, non-recurring are a Almost coverage. fleet. times we Yang our Ming,

remaining the size. and revenues XX contracted about billion by shows revenue duration time vessel years. $X.X of the charter have Slide contracted X.X We

of you see above X,XXX which from comes revenues TEUs. are than vessels XX% our contracted more As can

On last the the two slides, we're market. discussing

As since rates across is to fleet is low XXXX shown X% especially the larger have charter book remain but X.X% idle order book the fallen XX, Today onwards. basis. has ago. vessels. reduced sizes, has Slide been at more very Box have almost XX% on the QX from a X.X% three XXXX for rates to levels. all months from significantly The increased the order to slide than improved XX, and by thin yearly expected on

in now. the can Our presentation main now can market opportunities environment. questions. questions we looking you. priority take same This is to for downside concludes Thank risk at take favorable time while our we a cover our Operator and

Operator

Instructions] [Operator you. Please Chris come Wetherbee go Citi. will Our ahead. of from first Thank question

James Yoon

which little Hey a the of wanted actually morning. here. Good James for Chris. -- some I first guess incremental guys. to given environment declined chartering on the bit sequentially so on I the is sequentially but was touch up surprising. OpEx Revenue

fourth of sequentially the of from just to going was that we recognizing down. Should probably maybe you get thinking incurred in actually from you vessel side into also was is relatively increase but just there OpEx TCE that if count on quarter. XQ So, wanted were want Just what of understanding here? some and any kind expense in in quarter rate yet there revenue to the that was voyage OpEx revenue third then flat, from sort know have expect might an the to about I there XQ? the been And deferred

So, just puts and the trying to understand there. takes

Gregory Zikos

Yes.

day with power quarters, this reason whole and repatriation something this has that expenses they it's day. something In This of going the to you programing $X,XXX that that to forward to do will the was next per are over you had for I normalized. per mentioned is close OpEx with sort is fleet The it we the First crew previous do quarter, close incremental or to quarter. of of $X,XXX all, of ships. some the expected slightly think be higher right below that. regarding average On slightly are as

So, for probably this you of it type item. one-off treat quarter, can as a

this next the and regarding second quarter for question. forward of moving the was part the revenues Now, the

off ships close for As we to months mentioned, the for have today receiving especially it And larger they market today. the ships coming is higher XX vessels. the the charter over vessels to are next we those charters six compared like

same So, if normally we of vessels a QX situation and those quarter expect will for chartering generally, would revenues first remain the coming in environment assume XXXX, increase. rising for we the and that from generally to the

much XX to for our for We for $XX,XXX fixtures. chartered, these If XX we per latest X,XXX, vessel -- X,XXX so like higher day. to a months, X,XXX $XX,XXX about you for at latest XXXX-built rates instance, TEU chartered per fixtures, And the for look close day. are vessels

So, I continue, this generally should there's upside. think strength

the of charter Now see have in rates picking during regarding after the revenues ships been rates Charter quarter this up this pick this chartered revenues some up. and of quarter June, of that environment, year of you quarter. did this second not started first In where year. market a July

this concluded the April, into lower May of levels. compared year pre-COVID the levels So at first or to quarter like fixtures

James Yoon

Got it.

that. incremental quick on the much crew follow-up caught so expense think the one I And expense? was How I don't just side.

quantify... so we can Just

Gregory Zikos

at are close the having to on day. whole average and on Generally, ships quarter look fleet previous our if our average per $X,XXX the you before, for ships the quarter

or per to close were we $X,XXX quarter This day so.

expect that couple normalized this So be will I would next that over of is something the quarters.

be in day we $X,XXX on should $X,XXX the quarter. So of the region per average for

James Yoon

vessels first and the terms ahead just what Got the it. then likely I'll of ships the due market coming – relative rechartering. hand some have a you quarter like – for get in over. would into looking you or the Is quarter, think rate – due fourth that's seems like premium? And current those how it to And to it there and you're about then coming

Gregory Zikos

give Look you we I will specific have example. Yes. a –

per two visited X,XXX sister have Cosco TEU below as $XX,XXX around opening day. rate months of the over quarter We been vessels. like are getting have $XX,XXX, the ships at next they this six in a chartered now Today ships

Also have seen see we have, are the that they we you for higher the market for standard be today But Panamax those XX mean, $XXXXX vessels I like to time. compared up the much where it's difference. vessels I predict to TEU quarter next Panamax adding cannot fixtures. today two can vessels to months, quarters' traditional the nine market I rates $XXXXX, X,XXX you So the I for tell or in will latest vessel. don't a the day can know per

six year We first $X,XXX are over the the vessels vessels have quarter are to day. getting those and months. chartered Panamax And going opening next of below during slightly nine to be per this now

where type $X,XXX per rate, charter the the I you don't the mean, were difference back level in we in products getting can market go Panamax COVID below the to the see vessels that So assuming day. of

the should I important. think in still difference the continue. It's upside quite

James Yoon

Got the to vessels you do expiration be date? able QX, probably closer to QX recharter you Panamax it. in those would is And or think it or

Gregory Zikos

two there's tell like the vessels, the be those not market predict a market. cannot lot opening you that. and can are cannot the the and I demand above of today companies. tell there where Look, X,XXX And all today in will line for I of from time. I – do are tonnage will I quarters' ships – most them that being ships are you out TEUs, sold

estimation. However, there is I first quarter by trades to our same in decrease contraction we which latest to first for during one estimates. better predictions to remind dynamics, is the anticipated. market brokers much to are to on on this not based TEU today the XX% basis, the were environment this the that estimates where X% year. smaller Container assuming close the compared of have These year a to much are go whole the but analyst a initially we in container year that trade these you are would of were analyst by down and going quarter the compared XX% Initially

we rates to regards positive. to people quite thought And They to have the the market both a of much there's compared So be with market and charter to supply beginning dynamic the demand seem box now up in a seen at fundamentals. rates better year. and in container the shipping, to

James Yoon

Thank you.

Gregory Zikos

question. last a take Okay,

Operator

Our next with question Stifel. from come will Nolan Ben

Ben Nolan

you you're thing tenures that lower sort? what be the in beginning on of mean dig we've every or to outlook telling would not a of tenures The XX they're utilization Greg, at in is that higher XX increasingly Hey to all which and the Obviously afternoon. are to for out think would to good bit were really pressing it months contract market. more in XX little strength I mystery one the months want seen seems if the and anybody. obviously that's starting lengthen. stretching lot seeing months higher little a day is that liners or and see a bit like In sort rates I Are the see contract you in discussions anything that are from all? with continued your demand confident to a

Gregory Zikos

we've can day. our you're that. the seen TEU York And XXXX the per for Yes earlier features Yes is ship XXXX was Yes. right. I you this instance to that build. latest referred see $XX,XXX in And one now a Ben, also it getting vessel

a is period. for a vessel. a months fixture was now $XX,XXX for previous shorter The of for And XX old XX-year-old XX this period per to this a fixed So vessel. was at day X,XXX

is There So is example. is an trend. there a trend. a This just

nine that you we for $X,XXX So instance And they charged Cosco than been for also between have a $X,XXX tell year. the to have can longer vessels months. Panamax of getting seen vessels periods we I the for chartered to that six traditional

the issue. have until charter of the the years the two case until XXXX. for months up is for which XXXX. And Now we have have we more not tenures And or for years. period will quarter extended that we give that. example last XX,XXX XX an like north period TEU rate X-year the And Initially we have This one an up is seen of have I $XX,XXX. we two like vessel the extended during is charter

would tendency a periods that is for there also a awarded generally, So shorter longer extension yes and tendency say I charterers. options to for the

would charter have when extension I is market respect it's And up. to the shorter moving So the see longer with that tightening. that common periods rates options from been say

Ben Nolan

Yes. Sure.

would go topics an anticipation to something there this less that liners maybe just low is tonnage. Although changing bit. they seasonal was if little maybe on of bit a or again, a little the The that be -- apt

There's virtually bit. you been been low. had maybe order guys in that's all hasn't you been much. of up of As picking which year. there size There's mentioned some a rumors The little no some that book involved have been ordering is including

market been all, the in or one if in said are impact the be return at your terms of able profile? looking are has ships? or you on might moment. right buildings the of ordering any for But know there secondly, publicly of First change on that new that availability biggest you the return whatever had competitors the impact I types has really the rate they're be capital of of or But sort to any not of new build? has had to get any returns the

Gregory Zikos

Yes.

On couple the a new of there's build, things.

generally But COVID But discussions. some new we there been the generally potential about some I that site put which of situation. projects of whole the in a the over First the and and projects new ordering yes sector. liner were on that building are we seen the of these something the positive ship-owners have last all quarters all all have discipline just are shown companies say building which because would for have lot is

Now and deals building second-hand we new traditionally are doing concerned, we as as have both far been transactions.

our be more is far couple next us same. of we have strategy the delivered within it business. buildings the concerned, of quarters. are is this as two new our We case And as In to any to part

us a try First And upside The the our course some concerned. that make same book a And, two is risk not the it of equity. of -- assumed we is that fast take order do of solid our containership looking same. is cover both changed it far sure all, the not and secondhand are tolerance downside that within we residual a and profile in something changed needs lot and very dealers as new This takes risk the value fact the there to almost very for that it to and however, end have XXXX today is exactly like build it some to risk risk there strategy in fundamentals course it by which the is our that return be thin the ships on like of that discipline we to vessel. of our low with past especially of as is change for at are levels. the has it has buildings years

Ben Nolan

quickly last with not few what part Almost Okay. solely the you've that we're To been incrementally adding on And stand-alone of venture. has effectively looking that the in joint everything just to on that you're follow-up part we is years a that. extent that done forward should basis of the Costamare? your York expect

Gregory Zikos

stand-alone with you're ships X,XXX right last were the did, transaction basis. Yang the XX,XXX yes, Ming, Look, we TEU on a to they

relationship matter with we continues. However, excellent an is have York, a discussion. do this of still the which And subject and

our been with has York We've together So York. lot a partner. of your done this

five TEU the in instance past vessels. XX,XXX the For did York with we

ship We to chartered Maersk. have done buildings new two X,XXX TEU

be that with is York. depends the it something This So done could circumstances. on

want However, to to do if on have do means we of not York course, stand-alone participate, a does it basis. the

this is is I did in level the we but deal do option XXX% mean additional table, at not past. an it that we that doesn't the the the in may like Costamare think

Ben Nolan

is on first walk new my for modeling -- CapEx what remaining fourth then the quarter And Okay. half for the buildings? just purposes, maybe XXXX can the through last and you then the for of

Gregory Zikos

a perspective will close commitment the for the committed year. Yeah, debt $XX next ships funded because have -- fully XX,XXX accept equity The quarter TEU those second remaining the new equity two buildings, for to delivery which CapEx the be are from Costamare CapEx latest remaining still delivered is million. within of the to we of

CapEx this lucrative why So mentioned is we a this that very [ph], minimal like is and have we commitments.

we sorry? -- said many So too

Ben Nolan

What debt, and is debt it though? Sorry just including all-in equity?

Gregory Zikos

seem the a have this we reason Look, is the you And those vessels. acquisition price not disclosed bit skeptical. for

I'm mainly discussing new $XX in of for aggregate million the it's remaining CapEx equity So commitments why two our buildings.

and million like balance. nothing cash is our of per the vessel, for it's the size company for So $X which

Ben Nolan

Greg. Okay. That’s it. Thanks,

Gregory Zikos

Thank you. Thanks, Ben.

Operator

our [Operator I At this session. I'm conference further showing over this remarks. to to no like Instructions] questions, Q&A conclude would the Zikos for Mr. will so hand closing time,

Gregory Zikos

much Thank for Costamare. for and today interest dialing in very in you your

We fourth with looking again are the during quarter speaking you you. forward to results call. Thank XXXX

Operator

The conference has today's now concluded. Thank presentation. you for attending

may You now disconnect.

Costamare (CMRE) 28 Oct 202020 Q3 Earnings call transcript