Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Costamare Inc (CMRE, Financial) generated a net income of about $91 million for the second quarter of 2024.
- The company has a strong liquidity position with over $1.1 billion available.
- New charter agreements for seven containerships are expected to generate incremental contracted revenues of above $220 million.
- Fleet employment stands at 100% for 2024 and 88% for 2025, with total contracted revenues amounting to $2.4 billion.
- The company has a long-term commitment to the dry bulk sector and is strategically renewing its fleet by acquiring larger vessels.
Negative Points
- The continuous injection of new building capacity remains a principal threat to the containership market.
- Dry bulk purchase activity has slowed, indicating potential market uncertainties.
- The company has not disclosed specific charter rates for the new containership charters, which may lack transparency for investors.
- There is uncertainty regarding the redemption of additional preferred stock or prepayment of debt, which could affect future cash flow management.
- The company is price-sensitive and may delay acquisitions if market conditions are not favorable, potentially missing out on growth opportunities.
Q & A Highlights
Highlights from Costamare Inc (CMRE) Q2 2024 Earnings Call
Q: Can you provide context on the rate levels for the seven new containership charters mentioned in your press release?
A: These ships were chartered on a forward basis, including a 2000-built vessel, which is 24 years old. Although we don't announce specific charter rates, these ships have been chartered at a very healthy rate amounting to the mid-30s. - Gregory Zikos, Chief Financial Officer
Q: Could you add some color on why dry bulk purchase activity has slowed and your outlook for the rest of the year?
A: We have been buying larger vessels like Capesizes, acquiring six in total. We are price-sensitive and dispose of smaller vessels when market conditions are favorable. We take our time to ensure purchases are made at attractive prices and have the ability to execute quickly based on our cash balances and access to commercial bank debt. - Gregory Zikos, Chief Financial Officer
Q: Could you provide insight on the strategy for the CBI segment, particularly the increase in fixed contracts?
A: The slight increase in fixed-rate chartered vessels is due to specific market deals, not a directional bet. We remain flexible and may adjust based on market conditions. We also use FFAs as a hedging tool for capes and Panamaxes. - Gregory Zikos, Chief Financial Officer
Q: Is there any appetite to redeem additional preferred shares or prepay debt given your large cash position?
A: We redeemed the Series E Preferred Stock, which was the most expensive at 8.875%, saving over $10 million annually. Future redemptions, such as Series D, will depend on capital allocation decisions at the Board level, considering market opportunities and equity utilization. - Gregory Zikos, Chief Financial Officer
Q: What is your perspective on the current containership market and charter rates?
A: Charter rates have increased across all segments since the beginning of the year and have remained stable recently. However, the continuous injection of new building capacity remains a principal threat to the market. - Gregory Zikos, Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
