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spk01: Thank you for standing by, ladies and gentlemen, and welcome to the United Maritime Corporation conference call on the first quarter ended March 34th, 2023 financial results. We have with us Mr. Stamatis Stantianis, Chairman and CEO, and Mr. Stavros Giftakis, Chief Financial Officer of United Maritime Corporation. At this time, all participants are in a listen-only mode. There will be a question and answer session, at which time, if you would like to ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising that your hand is raised. Please be advised that this conference call is being recorded today, Thursday, May 18th, 2023. The archived webcast of the conference call will soon be made available on the United Maritime website www.unitedmaritime.gr. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statement is contained in the first quarter ended March 31, 2023 earnings release, which is available on the United Maritime website, again, www.unitedmaritime.gr. I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company, Mr. Stamatis Santanis. Please go ahead.
spk02: Good morning or good afternoon.
spk03: I would like to welcome everyone to United Maritime's earnings conference call where we are going to discuss our financial performance for the first quarter of 2023 as well as our main corporate and commercial developments. As a general reminder, United Maritime was established less than a year ago with a main focus to take advantage of market opportunities in the mainstream shipping sectors. We have been very successful in our actions delivering $37 million in profits in 2022 in less than six months of operations. Following the highly profitable sale of three of our tankers by the end of last year, our average fleet size in Q1 2023 was reduced to less than three ships, including our remaining tanker vessel, which underwent its special survey dry dock for most of the first quarter. During this transitional period for our company, our average daily time chart equivalent rate was $10,300, we generated net revenues of $2.8 million and adjusted EBITDA of minus $1.5 million and adjusted net loss of $3.7 million. However, since the beginning of the current quarter, our tanker has resumed its time charter of $40,000 a day, while capesize rates have recovered sharply since March. Despite the temporary weak performance, we are declaring another dividend for the first quarter in continuation of our exceptional shareholder returns since our inception. This will bring the total cash dividends that have been declared in the last six months to $1.15 per share, which represents a cash yield of about 40% compared to the recent closing price of our stock. The total cash dividends amount so far to $8.7 million, which, combined with the $6 million of buybacks of common shares, aggregate to $14.7 million in shareholder rewards, or 62% of our market cap as of May 16, 2023. We have also swiftly executed transactions to regrow our fleet through the acquisition of six drive-out vessels for approximately $126 million. we have fully funded these transactions without diluting our shareholders. On a fully delivered basis, our fleet's market value is estimated at about 185 million versus debt and leasing liabilities of about 90 million, leading to a fleet net asset value of approximately 95 million. Based on our current market capitalization of 25 million, we believe that our shares are significantly undervalued. Moving on, let's share some highlights on corporate developments that have taken place since our last quarterly update, before our CFO Stavros Giftakis discusses our financial results in more details. Firstly, during the first quarter, we took delivery of four newly acquired dry bulk vessels. In February, the goods ship and tradership, both Cape size vessels built in Japan, entered our fleet and continued their employment under their existing floating rate time centers. As a reminder, the vessels were acquired for an aggregate price of $36.25 million and were financed by a $15.2 million loan facility and cash on hand. In March and April, we took delivery of two Kamsar Max vessels, previously agreed to be acquired for a total of $39.2 million. The OAC, a Kamsar Max vessel built in 2010, entered our fleet in March, while the delivery of the 2009-built Cretan Sea was completed in April. Both vessels have entered employment under index-linked time charters for about 12 months. The purchase price was funded using cash on hand and a $24.5 million sale and leaseback structure. Furthermore, in February, we took delivery of the Chris C, a 78,000 deadweight Panamax vessel built in Japan in 2013. We have agreed to charter the vessel under a bare boat agreement for 18 months with a purchase option at the end of the charter period, which brings the total acquisition cost at approximately $23.4 million. Lastly, in April, we agreed to charter in for 12 months one more Panamax bulk carrier built in 2015 under a similar arrangement. The total cost consideration, including the purchase option, is expected to reach approximately $27 million. We expect to take delivery of this Panamax that will be renamed Synthesi during the third quarter of 2023. Finally, on our commercial and fleet updates, our remaining tanker, the Epanastasi, underwent its dry dock survey for most of Q1 and has resumed employment under its time charter at a fixed rate of $40,000 a day. Moving on to our dry bulk fleet, we exercise certain options to convert the floating index-linked rates to fixed-time charters on two vessels. On the Panamax vessel Cree C, we fixed the second quarter of 2023 at a charter rate of $15,500, and on the Cape-sized vessel Glory Ship, we fixed the charter rate until the end of 2023 at a level of daily rate of $17,600. We intend to make use of these options more opportunistically to achieve higher returns on our capital. More specifically, for the second quarter of the year, so far, we have achieved 71% cover of our ownership days at an average TCE of $18,860 per day, so we estimate our daily time charter equivalent to average over $17,900. To put it into perspective, we are talking about a 75% higher average time shutter equivalent rate over a double size of fleet. On that note, I would like to pass the call to Stavros to discuss the financials and it will be transferred back to me for the concluding remarks. So Stavros, please go ahead.
spk04: Thank you Stamati and welcome everyone to our earnings call. Let us start by reviewing the main highlights of our financial statements for the first quarter of 2023. Net revenue for the quarter was equal to $2.8 million while we recorded a negative adjusted EBITDA of $1.5 million and an adjusted net loss of $3.7 million. These figures reflect our decreased TCE for the quarter which stood at $10,300. The key causes behind this, as Tamatis mentioned earlier, was the significant softening of the Cape size market, which averaged at around 9,000 during the quarter, and the dry dock survey of our only tanker, the Epanastasi, which kept her out of service for approximately 50 days in the quarter. Based on the recent improvement in the dry bulk market, the epanastasy resuming service and the full integration of our new vessels, we anticipate returning to profitability in the next quarter. With regards to our balance sheet, we ended the first quarter of 2023 with 20 million of cash and cash equivalent and 69.5 million in senior debt and lease liabilities. The reduction in our cash came mainly as a result of our fleet growth strategy through acquisitions which have already proven to be accretive and will allow us to retain our shareholder rewarding initiatives going forward. Most importantly, our growth has to date been funded without resorting to dilutive equity raisings. As of March 31, 2023, shareholders' equity was $62 million, while the book value of our fleet stood at $117 million, including the advance paid for the acquisition of the Cretancy, which was delivered in the second quarter. On the debt front, we have retained our leverage in modest levels this quarter, despite the significant growth of our fleet, with loan-to-value at the end of the quarter standing at 50%. This ratio includes our liabilities under the bare-bottom-in vessels, i.e., the remaining bare-bottom payments and the purchase option amount. Taking into consideration the current appreciation of the vessel values in the dry-bag segment, we expect leverage ratios to remain at similar levels, if not decrease in the next quarter. As regards to new financings, we entered into a 24.5 million salary leaseback transaction provided by European Lessor to finance part of the acquisition cost of the two councilments. The financing amount for each vessel is 12.25 million, with the first advance drawn at the end of the first quarter and the second one in April. The financing bears an interest rate of 4.25% over SOFR. We have the option to repurchase the vessels at any time during their respective bare-boat periods and a purchase obligation at a price of 6.4 million per vessel at maturity. Moreover, I would like to add some more details on the bare-boat charter agreement for the synthesis mentioned earlier by Stamatis. The bare-boat charter is for 12 months. and the structure of the bare boat agreement is similar to that of the HRISI and features a down payment of 7 million advanced in two installments the first at signing which already took place and the second one at the delivery of the vessel which is estimated to be within the third quarter of the year a daily bare boat rate of 8,000 and a final payment of 17.1 million if we choose to exercise the purchase option Given our prudent financing strategy, we have achieved to retain our cash break-even at relatively moderate levels. Our daily debt service rate for the rest of the year is estimated at approximately 8,000. Here, it will be insightful to remind that the Panastasy is earning 40,000 per day, while we have also fixed the Gloriouship for the rest of the year at 17,600 per day and the HRISI at 15,500 per day for the second quarter. Therefore, we are confident that we are well positioned to cover our obligations in any market environment and able to take advantage of any opportunity that may arise going forward. This concludes my review. I would now turn the call back to Stamatis for his concluding remarks. Stamati?
spk03: Thank you, Stavros. After a successful turnover of our initial fleet that has generated tremendous returns to our shareholders, we have now regrown our fleet without diluting our shareholders. We have an optimum position to take advantage of another rising market cycle, deriving from a strong demand for raw materials over the historically low investment in new vessels. Closing this call, I would like to say once again that United Maritime will continue to be a unique value play in the public shipping space, aiming high and immediate shareholder returns through well-timed transactions. From here, I would like to send the call over to the operator, and Stavros and I will be available to answer any questions you may have. So, operator, please take the call.
spk01: Certainly. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. As a reminder, to ask the question, you will need to press star 11 on your telephone and wait for your name to be announced. One moment for questions.
spk02: And I'm showing no questions from the phone lines at this time.
spk01: I would like to turn the call back to management.
spk03: Thank you, operator. Once again, I would like to thank everyone for participating in our call and looking forward to providing some additional updates and news in the next few weeks. So thanks very much, everyone. Have a great day. Thank you.
spk01: And this concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by. you Thank you. Thank you. Thank you. Bye. Thank you for standing by, ladies and gentlemen, and welcome to the United Maritime Corporation conference call on the first quarter ended March 34th, 2023 financial results. We have with us Mr. Stamatis Stantianis, Chairman and CEO, and Mr. Stavros Giftakis, Chief Financial Officer of United Maritime Corporation. At this time, all participants are in a listen-only mode. There will be a question and answer session, at which time, if you would like to ask a question, please press star 11 on your telephone keypad. You will then hear an automated message advising that your hand is raised. Please be advised that this conference call is being recorded today, Thursday, May 18th, 2023. The archived webcast of the conference call will soon be made available on the United Maritime website www.unitedmaritime.gr. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statement is contained in the first quarter ended March 31, 2023 earnings release, which is available on the United Maritime website, again, www.unitedmaritime.gr. I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company, Mr. Stamatis Santanis. Please go ahead.
spk02: Good morning or good afternoon.
spk03: I would like to welcome everyone to United Maritime's earnings conference call where we are going to discuss our financial performance for the first quarter of 2023 as well as our main corporate and commercial developments. As a general reminder, United Maritime was established less than a year ago with a main focus to take advantage of market opportunities in the mainstream shipping sectors. We have been very successful in our actions delivering $37 million in profits in 2022 in less than six months of operations. Following the highly profitable sale of three of our tankers by the end of last year, our average fleet size in Q1 2023 was reduced to less than three ships, including our remaining tanker vessel, which underwent its special survey dry dock for most of the first quarter. During this transitional period for our company, our average daily time chart equivalent rate was $10,300, we generated net revenues of $2.8 million and adjusted EBITDA of minus $1.5 million and adjusted net loss of $3.7 million. However, since the beginning of the current quarter, our tanker has resumed its time charter of $40,000 a day, while capesize rates have recovered sharply since March. Despite the temporary weak performance, we are declaring another dividend for the first quarter in continuation of our exceptional shareholder returns since our inception. This will bring the total cash dividends that have been declared in the last six months to $1.15 per share, which represents a cash yield of about 40% compared to the recent closing price of our stock. The total cash dividends amount so far to $8.7 million, which, combined with the $6 million of buybacks of common shares, aggregate to $14.7 million in shareholder rewards, or 62% of our market cap as of May 16, 2023. We have also swiftly executed transactions to regrow our fleet through the acquisition of six drive-out vessels for approximately $126 million. we have fully funded these transactions without diluting our shareholders. On a fully delivered basis, our fleet's market value is estimated at about 185 million versus debt and leasing liabilities of about 90 million, leading to a fleet net asset value of approximately 95 million. Based on our current market capitalization of 25 million, we believe that our shares are significantly undervalued. Moving on, let's share some highlights on corporate developments that have taken place since our last quarterly update before our CFO Stavros Giftakis discusses our financial results in more details. Firstly, during the first quarter, we took delivery of four newly acquired dry bulk vessels. In February, the goodship and tradership, both Cape size vessels built in Japan, entered our fleet and continued their employment under their existing floating rate time centers. As a reminder, the vessels were acquired for an aggregate price of $36.25 million and were financed by a $15.2 million loan facility and cash on hand. In March and April, we took delivery of two Kamsar Max vessels, previously agreed to be acquired for a total of $39.2 million. The OAC, a Kamsar Max vessel built in 2010, entered our fleet in March, while the delivery of the 2009-built Cretan Sea was completed in April. Both vessels have entered employment under index-linked time-chartes for about 12 months. The purchase price was funded using cash on hand and a 24.5 million shale and east-back structure. Furthermore, in February, we took delivery of the Chris C, a 78,000 deadweight Panamax vessel built in Japan in 2013. We have agreed to charter the vessel under a bare boat agreement for 18 months with a purchase option at the end of the charter period, which brings the total acquisition cost at approximately $23.4 million. Lastly, in April, we agreed to charter in for 12 months one more Panamax bulk carrier built in 2015 under a similar arrangement. The total cost consideration, including the purchase option, is expected to reach approximately $27 million. We expect to take delivery of this Panamax that will be renamed Synthesi during the third quarter of 2023. Finally, on our commercial and fleet updates, our remaining tanker, the Epanastasi, underwent its dry dock survey for most of Q1 and has resumed employment under its time charter at a fixed rate of $40,000 a day. Moving on to our dry bulk fleet, we exercise certain options to convert the floating index-linked rates to fixed-time charters on two vessels. On the Panamax vessel Cree C, we fixed the second quarter of 2023 at a charter rate of $15,500, and on the Cape-sized vessel Glory Ship, we fixed the charter rate until the end of 2023 at a daily rate of $17,600. We intend to make use of these options more opportunistically to achieve higher returns on our capital. More specifically, for the second quarter of the year, so far, we have achieved 71% cover of our ownership days at an average TCE of $18,860 per day, so we estimate our daily time charter equivalent to average over $17,900. To put it into perspective, we are talking about a 75% higher average time shutter equivalent rate over a double size of fleet. On that note, I would like to pass the call to Stavros to discuss the financials and it will be transferred back to me for the concluding remarks. So Stavros, please go ahead.
spk04: Thank you Stamati and welcome everyone to our earnings call. Let us start by reviewing the main highlights of our financial statements for the first quarter of 2023. Net revenue for the quarter was equal to $2.8 million while we recorded a negative adjusted EBITDA of $1.5 million and an adjusted net loss of $3.7 million. These figures reflect our decreased TCE for the quarter which stood at $10,300. The key causes behind this, as Tamatis mentioned earlier, was the significant softening of the cape size market, which averaged at around 9,000 during the quarter, and the dry dock survey of our only tanker, the Epanastasi, which kept her out of service for approximately 50 days in the quarter. Based on the recent improvement in the dry bulk market, the Epanastasi resuming service and the full integration of our new vessels, we anticipate returning to profitability in the next quarter. With regards to our balance sheet, we ended the first quarter of 2023 with 20 million of cash and cash equivalent and 69.5 million in senior debt and lease liabilities. The reduction in our cash came mainly as a result of our fleet growth strategy through acquisitions which have already proven to be accretive and will allow us to retain our shareholder rewarding initiatives going forward. Most importantly, our growth has to date been funded without resorting to dilutive equity raisings. As of March 31, 2023, shareholders' equity was $62 million, while the book value of our fleet stood at $117 million, including the advance paid for the acquisition of the Cretancy, which was delivered in the second quarter. On the debt front, we have retained our leverage in modest levels this quarter, despite the significant growth of our fleet, with loan-to-value at the end of the quarter standing at 50%. This ratio includes our liabilities under the bare-bottom investments, i.e., the remaining bare-bottom payments and the purchase option amount. Taking into consideration the current appreciation of the vessel values in the dry bag segment, we expect leverage ratios to remain at similar levels, if not decrease, in the next quarter. As regards to new financings, we entered into a 24.5 million sale and lease bag transaction, provided by European Lesor, to finance part of the acquisition cost of the two camsermarks. The financing amount for each vessel is 12.25 million, with the first advance drawn at the end of the first quarter and the second one in April. The financing bears an interest rate of 4.25% over SOFR. We have the option to repurchase the vessels at any time during their respective bear boat periods and a purchase obligation at a price of 6.4 million per vessel at maturity. Moreover, I would like to add some more details on the bear boat charter agreement for the synthesis mentioned earlier by Stamatis. The bear boat charter is for 12 months. and the structure of the bare boat agreement is similar to that of the HREC and features a down payment of 7 million, advanced in two installments, the first at signing which already took place and the second one at the delivery of the vessel which is estimated to be within the third quarter of the year, a daily bare boat rate of 8,000 and a final payment of 17.1 million if we choose to exercise the purchase option. Given our prudent financing strategy, we have achieved to retain our cash break-even at relatively moderate levels. Our daily debt service rate for the rest of the year is estimated at approximately 8,000. Here, it will be insightful to remind that the Panastasy is earning 40,000 per day, while we have also fixed the Gloriouship for the rest of the year at 17,600 per day and the Chrissy at 15,500 per day for the second quarter. Therefore, we are confident that we are well positioned to cover our obligations in any market environment and able to take advantage of any opportunity that may arise going forward. This concludes my review. I would now turn the call back to Stamatis for his concluding remarks. Stamati?
spk03: Thank you, Stavros. After a successful turnover of our initial fleet that has generated tremendous returns to our shareholders, We have now regrown our fleet without diluting our shareholders. We have an optimum position to take advantage of another rising market cycle, deriving from a strong demand for raw materials over the historically low investment in new vessels. Closing this call, I would like to say once again that United Maritime will continue to be a unique value play in the public shipping space, aiming high and immediate shareholder returns through well-timed transactions. From here, I would like to send the call over to the operator, and Stavros and I will be available to answer any questions you may have. So, operator, please take the call.
spk01: Certainly. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. As a reminder, to ask the question, you will need to press star 11 on your telephone and wait for your name to be announced. One moment for questions.
spk02: And I'm showing no questions from the phone lines at this time.
spk01: I would like to turn the call back to management.
spk03: Thank you, operator. Once again, I would like to thank everyone for participating in our call. I'm looking forward to providing some additional updates and news in the next few weeks. So thanks very much, everyone. Have a great day. Thank you.
spk01: And this concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.
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