Costamare, Inc. Q3 FY2024 earnings call

• Third quarter net income was $75.5 million or $0.62 per share, adjusted net income was $81 million or $0.68 per share. Liquidity stands at over $1 billion.
• Agreed to acquire one Cape size and two Ultramax dry bulk ships, and concluded the sale of two Supramax vessels and agreed to sell one Handysize ship.
• Chartered seven containerships with incremental contracted revenues above $165 million; revenue days fixed 100% for 2024 and 94% for 2025, contracted revenues $2.3 billion with a TEU-weighted remaining duration of 3.3 years.
• Continued chartering dry bulk vessels in the spot market with over 30 chartering agreements since last earnings release.
• Will fully prepare with cash on $100 million unsecured bonds, refinanced dry bulk fleet without increasing leverage, and have roughly $94 million available for vessel acquisitions.
• CBI has chartered 56 period vessels, majority on index-linked agreements; leasing platform invested around $123 million; NML continues to grow with complete funding for 32 ships and healthy pipeline.

In the containership sector, during the third quarter, the company chartered seven containerships with incremental contracted revenues above $165 million. The containership fleet employment stands at 100% for 2024 and 94% for 2025, with total contracted revenues amounting to $2.3 billion and a remaining time charter duration of 3.3 years. On the dry bulk side, the company agreed to acquire two 2014/2015 built Ultramax vessels and a 2011 built Capesize ship, while progressing with the disposal of smaller tonnages. CBI manages a fleet of 56 ships, mostly on index-linked charter agreements. Next-in-my-time leasing has committed funding for 32 shipping assets with total funding commitments above $410 million.

• Dividend is a board decision; policy is flexible and can be revised, but no specific indication of immediate dividend increase at this time.

• Continued injection of new building capacity in the containership market remains a principal threat.
• Dry bulk asset pricing may be overpriced considering current chartering capacity and FFA curve.

Q: What drove the early redemption of the €100 million Greek bonds?

A: Tax implications related to pillar 2 and legal implications for the Cypriot subsidiary, Costamare participation, led to early redemption.

Q: How is the dry bulk trading platform viewed going forward?

A: It's a long-term business, highly complementary to vessel owning, with no intention to scale back; CBI commercially manages loans to 56 vessels plus 37 owned by dry bulk business.

Q: Any thoughts on moving the dividend higher from $11.5 per quarter?

A: Dividend is a board decision, flexible policy allows for revision, but no specific color on immediate increase at this time.

Q: View on current asset pricing on the dry side and preference for cape exposure going forward?

A: Asset prices for capes may be high; no need to grow fleet further as it's big enough; more opportunistic approach to buying based on market conditions.

Q: Appetite for acquiring modern containership tonnage going forward?

A: No new building commitments as asset prices for new or near-new containerships are extremely high, posing residual value risk; will be cautious and look at opportunities.