CMRE - Earnings call transcript Q3 2021

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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 2021 Financial Results.

We have with us Mr. Gregory Zikos, Chief Financial Officer of the company. [Operator Instructions] I must advise you that this conference is being recorded today, Wednesday, October 27, 2021. remind this to forward-looking call like statements. would you conference that contains We moment #X read which take to Please a Slide forward-looking contains statements. of the presentation, the to I speaker the now floor will today, pass Mr. your Zikos. sir. ahead, go Please

Gregory Zikos

in tonnage to you, demand of high been that have in has cargo containership is dynamics. high demand of rebound continuing, The stretched good strong container last from congestion shortage strength ships half began ladies gentlemen. availability the that and at Thank The levels exacerbated and overall chartered due equipment. the port by and favorable increasingly thin hire. market drawing been of fixed quarter been second market volumes our has of during and year morning, the All supply container and

bulk we the remaining delivery vessels bulk to be by dry in at have yielding are have healthy and bulk On traditional vessels employed our than duration number stands delivered the vessels, of our years. All XX. more market, of containership the revenues side, ships four $X.X billion us took to dry dry bringing for fleet returns. to reached The time been the very delivered charter that expected three Contracted spot average are XX year-end.

coming continue. spot conditions favorably market market, positioning We end of should by in the current bulk containerships charter strong have next nine dry the our off operating year and vessels XX the company

XXX% third net EPS an the Moving Slide is up adjusted income $X.XX, XXX% $XX third quarter. quarter Net more million is last and is the is increase quarter the the of to Adjusted now you profitable EPS to year very slide income a highlights the presentation. On compared $X.XX. million, and of see of X, than year-over-year. for over can $XXX

the vessels to We have dry the by be delivered year-end. of ships and taken XX delivery expected of remaining three bulk out XX now are

attractive other new at can gains $XX old sold and of of X, selectively some also levels, have million. financing working On interest. our containerships liquidity We you our Slide capital see

financing give capital do million the to dry that have another are cash XXXX. sheet million, we place, additional remaining of market about our our We minor X, maintain bulk license All hunting maturities new We a position. containerships concluded relative firepower. liquidity On of and and debt XX% processes of commitments Slide until balance chartering base have with funding our $XXX in us no strong value meaningful discuss $XXX and arrangements. our leverage

were higher targets of duration. On We have average, levels. extended much a much the of at five higher, new a our entered rate average the vessels longer into X.Xx charters fixed with at

fixture, the a was forward and recent for most Our X.X at day Canyon, years. XXXX, commencing per in $XX,XXX done is fixture Glen QX

can dry X, X. On Moving chartering of vessels. you Slide our to Slide the see

have in We total healthy ships XX levels. chartered at

can You been which fixtures, the see of have a quarter. the concluded some sample of during

Dry fundamentals. drive X.X% the X. Moving the bulk remain market was indicating to for market market. fully a of on contingency Slide commodities since The added XXXX, positive has risk constraints outperform fleet seen supply October, continued demand our supply and in to continues not market. employed has levels and to demand containership The back

quarter capital third will structure. this adjusted other you prepaid of losses generated of slide, fair We in On and pay XXrd rentals On company can The securities. revenues value our the XXXX from have third XXX% and X, dividend and X. you asset million lease income net into up $XX.X EPS adjusted million. the figures gains Slide and The non-cash dividend non-cash following August, quarter the Basically added in is also charter paid we consideration revenues, accounting $XXX Slide $X.XX, the year-over-year. items: XXth changes our accrued equity disposals, November. charges take the in above, results. our can see or of consecutive see

is leverage comfortably on current values. XX% based Our market at

$X.X As XX, Slide our MSC, this containership and you asset can the on contribution revenues. charterers you Ming, slide, contracted like Yang from see from see our revenue the revenues to is market for value slide, Cosco, billion. top come fleet Hapag-Lloyd. our adjusted and Evergreen, The Maersk, equal ZIM

time and We a in have years. billion duration of $X.X contracted charter revenues remaining X.X about weighted

significantly slide, during improve up On by over healthy at XXX% continue to And end the yearly market while June was a Golden that Chinese of vessel supply. sizes, XXX% continue rates remained the discuss containership the over a across since Box have we on next the tight Charter basis. there Week, levels. remain increased all XXXX. dip rates to slight rates

takes vessel Moving and as idle to from long is fleet new X.X% two has over as the utilization on a The or XXXX will quarters. The XX. that full years past the to ordering accelerated to beyond. noted, vessels it newbuilding been be majority and XX% new that be year have at as build of XX%, It high until order a one delivered Slide will risen commercial of ordered however, has not ago. book

On last slide, market. the discuss we bulk dry the

remained charter shown As Slide improved since at have QX healthy on levels. XX, XXXX significantly have rates and

XXXX, upwards charter have Although rates. since the asset trending in they lagged values have been increase late

which favorable time, presentation, exceed at Thank is that especially On the questions. our same we sizes and growth to the concludes can several for can now. last historical expectation book levels, of least the the questions for a over have This decline end remains the At market. continue can we to now take for in Operator, we to you take and growth invested that is you. at growth the fee the factor supply order demand low XXXX. see years, expected slide, next through the creates

Operator

Instructions]. your Chris go question Citi. [Operator comes from first at And ahead. Please Wetherbee today

Unidentified Analyst

view with to the on current now? Are market higher this of [ph] Thanks short-term shifting for in in guys the duration? off to still playing you Hi just rates. Are question. capitalize taking start Eli rates is long-term the I guys in guys, sitting Chris. you for to a terms the want

Gregory Zikos

the containership the I guess? vessels, to referring are dry Or to You bulk?

Unidentified Analyst

the containership side, On yes.

Gregory Zikos

containership On will extent the in obviously, they available we the can the market. rate highest side, go to along the for

that available. the chartered of period a we're starting QX to Hence, the work, Assuming opt the longest for we to XXXX the XX Glen example XX TEU or numbers from which at period Canyon, the XX months going X,XXX vessel, $XX,XXX. of

would for I prepare of that rates think duration. longest we go the at available to level

Unidentified Analyst

smaller some makes are for That have you your as larger it. a likely duration that And you ships but sense. well? Got most see duration increase for the of ships, we longer seeing

Gregory Zikos

trend chartered of been has a seen have generally, that increasing. we duration the Yes, parties

for for fixtures, the of no have Now so of most larger are in fixed a don't available recent ships the vessels, are there them period, because market. we lot simply

X,XXX longest make assuming TEUs, because and environment, ships sense. to However, good charter of yes. smaller TEU feeders longer generally see speaking, average that durations such we in the yes, the become segment, hope of XX,XXX market that that we go available, And or smaller Also that definitely for the we course, time well the applies a a or for also to this normally like longer. period trend numbers up in vessels size, have as ships some

Unidentified Analyst

technology about And in in something fuel ships terms that the for now your thought use sense. evolve? that of turn what focus let's efficiency focusing makes are is then ESG to know newbuilds Are being is right to some to the newbuilds. people of of newbuilds order. the of turning fuel guys and We on or holding terms of That in you wait off to more terms order newbuilds in trend

Gregory Zikos

No. agreed which on Look, well. focus on a back-to-back is will fuel newbuildings, be placed a we regarding a charter, course, our with upon basis, one time, charter the with to order efficiency, and of At this the something same is that long-term of newbuilding priorities. needs the it if specifications as be do is

is our this to priority. the also cater same So the the time, we of will charterer. needs At

Unidentified Analyst

one of those your congestion increasing China Got How with on conversations question. the And out market power to the see constraints. are right more We And your then Thank view customers? congestion is now? it. going their some Chinese of generalized what is due you.

Gregory Zikos

lot West extensive, a and but over is a how not of be effort. to the something of U.S. it's companies to But how there states, attention been lot ease is think this sure yet. ease, But I'm is can't long within whether to well think have the I the months. definitely that have cannot months. in last. And can I'm going This that that this Look, afraid something they order I that in quite predict take seen common is within we definitely or condition efforts knowledge go of I weeks easily Coast haven't want to as congestion, as especially I going fixed the seen something the predict we which it's it's liner not next of

Unidentified Analyst

course, And Of guess in increase rates? just customers then across How a board your has this interaction at with the of quarter given the communication the from there. last course. higher congestion changed follow-up quarter, to I the

Gregory Zikos

No. companies. liner Look, our customers are the

been dynamics. fixing demand We have based vessels and on supply

the it Now especially the the substantial one supply trade. demand there know we again, the demand is is factors congestion, as affecting ships. on that that of and we of there, Trans-Pacific speak, it is is The

just I much They same used is buying themselves. in something type ships So vessels. don't it. we have. we changed. has This pretty still fundamentals still they companies, been today. is in the for have are that market the I tight very market also mean, a we of that are are have Liner communication chartering It think to

So communication. has I think line Nothing the same it is changed. of

Unidentified Analyst

appreciated. quarter. I on Congrats Greg the Thanks.

Gregory Zikos

a lot. Thanks you. Thank

Operator

Ladies ahead. comes with go and Ben from Please gentlemen, question Stifel. next Nolan our

Ben Nolan

Thanks.

start couple with Greg. dry for got side. you, I So I'll bulk a the

the waiting asset vessels and that You license, additional or a you are fleet you Are of of attractiveness adding the here? to bit? but haven't any the bulk for dry acquired hunting so. things thinking June since market, you about kind have this How normalize new to prices

Gregory Zikos

I with hunting we time. now, Look, this is some mean but license the for discussing lender something announced place. put this we quite have this we in were

is bulk this $XXX for So vessels. dry million

it that place, we it asset prices the will in when however, We have sense. think we use only make

because or like think predict or conditions I to the be to a it's months. price in a committed and to is going going market Panamax But bulk felt like XX-year we XX place, old evolve vessels in cannot couple amplified it, to the for what's or XX- I place have have we So we how good dry it Supramax. when it of that within market

that I doesn't So at going cannot and in earnings predict cannot additional that how at the this the we this situation sense, afraid commercial to numbers tool, it, what can to that make we with but more prices, say plus to I are we two we to should months have it but All will assets utilize debt we I to any afraid think specific. feel going will case, market. be we be sense, over we it. equity, bank access because is look is we play have I makes the look mean We're quarters. of it I'm proceed, debt. have if the bank cannot going And one have cannot the have out. commercial facility we're to I'm predict these next

Ben Nolan

buy? do Yes. asset too I'm are guys expensive you are to not prices you to saying for you for just predict I'm Or now, enough right they think you buy? that to attractive asking it,

Gregory Zikos

Supramax prices we Definitely, for at buying may today, those started prices some since moved XX-year there But definitely, the we since our up old have values opportunities. up. we been or May, asset asset and dry X- sizes, vessels Look, those bulk be in And acquisitions still and ships. Kamsarmax. have moved have handysize however, bought

the exactly future. same be there the not some not it But mean opportunities doesn't it's So may in that environment.

Ben Nolan

as a Okay. sort or is not pretty strategy decent little a for have of that's pretty And if It's view My if equity. you position next maybe the there? bit talk Can life you altering but long-term question, the position. what about you in that company, the not? decent position -- still a through

Gregory Zikos

Yes.

ZIM, the on if based You're million have recall correctly, right, shares price, be should of slightly I $XX it above which million. we X.X latest

the received So was this paid. We dividend is evaluating. that something we are currently latest

are this of kind evaluating. So we of sort

not We are act. time. a high our We to take in

amount. on the depends about the right, I going something be of quarters. market, liner sizable you're is million that markets cannot over ignored. forward our still this So $XX couple this But equity, as next companies a is the it mean, view

at I much So this point. more time, internally. there, and are say we take we evaluating I'm our afraid cannot

were sales there. You that results still in our latest the saw

Ben Nolan

And your Yes. market. being or using lastly, are that Are ordinarily for have you would containers. to ways any vessels them seeing ships? Or carry some would put primarily to like that potential are people more often in and gone vessels trying that? ordinarily not then into smaller ship? for of something used to customers Are carrying dry that be those the containers in about is that freight containers the heard a curious things handysize we've your I'm spot find especially you bulk on

Gregory Zikos

Yes, you're as to right. those ships, first not our we for that are tell of in be and can Look, used I using supposed containers. ships all, are you

not in we dry course, something of have using heard Now about This of is to bulk vessels discussions internally. we've containers. a done lot order carry

is studies. ship to supply and don't containerships this of at some Still, owners for all. demand I that this dynamics is the may Now commissioned exclude cannot I some something that that have sort something think going change they that is

that I'm don't X,XXX deadweights. say much that We something like case, we capes. our any this have that. have In I have XX-XX tell afraid any with So our average to is that is more ship you from done. side, can not

know. for been have with at those So containers some lot the think of a least fundamentals, There where I been you. But But today has discussions. don't There I that don't market issues. agree press is. I also about

Ben Nolan

more going slip Perfect. to Well, and I'm one in.

no after lot highest How just as XXXX flow, that three you you period of You've cash cash free you to bit of of would to it say, of of about the there whole that or going are of the have, delivery been use let's that you maintenance quite can't over capital to ships of and the again, in? bulk a predict course are thinking a types be more from especially probably where the of little contracts not signing But whatever. sort time you're best of you've newbuildings are appreciate comes sit that that, today, envision guys there really going the got signing. lot dry should outside we're going take market of I where take a CapEx, you flow sort

Gregory Zikos

commitments, bulk commitments the we be bulk place. million to have in $XX also more you Because three delivered rates already to containership And fleet. much Yes. the the one vessels the ship. our the to charter funding remaining In dry region the right. you delivered. be three And million. You're see shorter It's offer secondhand containership be $XX although of rates, CapEx in because today, they total, see nature our for in the for like remaining vessels is dry equity to delivered

minimal the pretty of is company. this So

So excessive the to be is question the happening what's with flows. cash going

is this First of all, to discuss. good a topic

perspective are and discuss ways perspective. which a are as cash chartering use We flexible. I they very low. from exclude, could earlier, at I Now wouldn't subject again, the expensive buybacks. same that a the may relatively as sense. of that mentioned additional is, the assuming, discussed leverage capital the more prices we allocations I looking we to capital, I bulk it's source be we future, we makes at containerships dry still although mean feel is mean, again, secondhand price the find a of you make a We vessels, share And some In for we sense. feel sense increases. or to preferred, could dividend time redeeming containerships. assuming other look discuss something debt transactions Then the it that in the from mean, repayment, know, at for obviously, also although our numbers makes newbuildings to

have upon do and alternatives. agreed being at levels. we those All both are discussed So

of how that So this of I now. off And of been consider at to still, going from containerships XXXX, proceed. there yet charter is can that than flows we're no is long-term off issues, not it's something most is ships, going have still now, well. discussed, this are X,XXX I coming those commit We These have as they that vessels have end some contracted coming if we year to we're something understand a those vessels TEU some charter. the more although cash although conclusion

afraid cannot clear topic of a discussion good give I This do a have. answer. is have you So We I'm alternatives. to

newbuilding vessels how go now second-hand for asset Let's see in prices both sectors and containers we are for both in.

I can of lot think tell as in we we'll we at look both we But I you sectors. generally, speak, a see. that are active things

Ben Nolan

the time. appreciate perfect. Okay I

Gregory Zikos

Thank you. lot. a Thanks

Operator

Ladies Instructions] to and back Gregory to remarks. conference this Zikos session. I'd [Operator turn the gentlemen, over concludes any question-and-answer for the closing like

Gregory Zikos

to dialing for Thank our looking at call. today. in results forward you you. with quarterly again We're speaking next Thank you

Operator

you. today's presentation. thank call. you This We concludes Thank all today's conference for attending

may your You lines. disconnect now

Costamare (CMRE) 27 Oct 212021 Q3 Earnings call transcript