United Maritime Corporation

Thank you for standing by, ladies and gentlemen, and welcome to the United Maritime Corporation Conference call on the fourth quarter and year end December 31, 2024 financial results. We have with us Mr. Stamatis Santanis, Chairman and CEO, and Mr. Stavros Givtakis, Chief Financial Officer of United Maritime Corporation. At this time, all participants are in a listen-only There will be a question and answer session at which time, if you would like to ask a question, please press star 1 1 on your telephone keypad and you will then hear an automated message advising your hand is raised. Please be advised that this conference call is being recorded today, Tuesday, March 18, 2025. The archived webcast of the conference call will soon be made available on the United Maritime website, .unitedmaritime.gr under the Investors section. 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 statements is contained in the fourth quarter and year-end, December 31, 2024, earnings release, which is available on the United Maritime website, again, .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, sir.

Good afternoon. Welcome to United Maritime's conference call to discuss our Q4 and full year 2024 financial results. During 2024, we made significant progress in executing our strategic plan to build and operate a high-quality dry bulk fleet, reflecting our confidence on the sector, particularly in the larger vessel segment. After building up our dry bulk fleet in 2023, primarily through -bolt-in structures with favorable purchase options and other bridge financing structures, this year our focus shifted towards securing long-term financing agreements and seamlessly integrating the new vessels into United's fleet and operational framework. I would like to remind everyone in this call that United has completed this second investment cycle without diluting its shareholders. Through our financing initiatives, we have successfully addressed all upcoming debt maturities until the fourth quarter of 2026, reinforcing our capital position and our ability to generate attractive returns on capital for our shareholders. Following on our commitment to capital returns, United declared a total of 23.5 cents of dividends per share for 2024, while also repurchased about 2% of the outstanding common shares. However, considering the performance of the -Campstall-Max market in the recent months, our board has approved a reduced dividend of 1 cent per share for the fourth quarter of 2024. That being said, since 2023, we have paid approximately $1.60 per share in dividends, a figure not far from our current share price, while have also repurchased about 450,000 shares, representing approximately 5% of our outstanding common shares. At the same time, due to the current undervaluation of our shares, we have extended our share repurchase program by 12 months. Of the initial $3 million authorized, $1.9 million remains available, representing approximately an additional 11% of our outstanding shares based on the closing price as of March 14, 2025. Looking ahead, despite the volatile dry bulk market conditions, we remain optimistic in the market's long-term fundamentals and our ability to create shareholder value. Turning to fourth quarter results, our performance was impacted by a temporary slowdown in coal and iron ore exports, which we view as a natural seasonal adjustment following the elevated export levels in the first three quarters of the year. As a result, our net revenue for the fourth quarter of 2024 came in at $10.8 million, down from $11.6 million in the same quarter of 2023, with a daily time chart equivalent of $14,250 compared to a $15,874 the previous year. As Tabros will discuss in more detail, we are comfortable with our leverage levels and balance sheet health and we expect to be in good position to execute on our business strategy. Turning to our strategic fleet developments, we continue to optimize our portfolio of assets in 2024. During the year, we sold the OAC, a CampsarMax built in 2010 in China, and reinvested in the 2016-built Japanese CampsarMax Nishi, which was delivered in September and has since been employed on a profitable fixed rate charter. Additionally, we recently announced the sale of the Cape Size Glory ship, a 2004-built ship, and the oldest vessel in our fleet. We will continue operating the Glory ship until its anticipated delivery to its new owners in the second quarter of 2025. We are pleased with our fleet composition, which consists of exclusively high-quality Japanese-built vessels. Our ongoing investments ensure that our fleet remains compliant with the evolving environmental regulations and possibly the evolving tariff regulations, while maintaining their commercial competitiveness. As regards our fleet's commercial utilization, two of our Panamax vessels remain fixed rate charters until June and July respectively, at an average daily rate of about $14,200, while the Glory ship will earn a daily TCE of approximately $18,000 until its expected delivery to its new owners in the third quarter. Additionally, one of our Cape Size vessels will earn a daily timesata of about $22,000 for the second and third quarters before reverting to index-link daily earnings. The rest of our fleet currently operates on index-link charters. While we are comfortable with our market exposure, we remain open to securing fixed rates for select vessels at attractive levels. For our first quarter 2025 TCE guidance, we expect to be approximately at $10,300, based on prevailing FFA rates, with 94% of our operating days already invoiced. We are encouraged to see the dry bulk market rebounding from its seasonal slowdown, and we expect to see higher TCE rates for the following three quarters of 2025. Additionally, I would like to take the time to discuss our recent entry into the offshore market. In the third quarter of 2024, we acquired an equity stake in an energy construction vessel, New Building, with the project having an expected completion in 2027. We are pleased to see this go as planned and the company is actively exploring employment opportunities for the vessel, which is designed to serve all major subsea market segments, including renewables and oil and gas. Benefiting from a limited vessel order book, strong demand for offshore infrastructure are positive. We are confident that the vessel will find compelling charter opportunities. Industry overview. On a brief overview of the dry bulk market, Cape size and Panama chatter rates softened as we entered the first quarter of 2025, in line with the regular seasonality around the Chinese New Year. Additionally, dry bulk imports by China in the first nine months of 2024 led to high inventory levels and reduced the urgency of new imports towards the end of the year. Decline was most pronounced in the Cape size segment while Panama's rates were pressured by three key factors. A slowdown in China grain imports and slower pace of Latin America grain exports due to floodings. Lower coal imports volumes as China's high activity in the first nine months of 2024 resulted in fuller inventories and a winding of congestion that led to higher vessel availability. In the Cape size market, rates came under pressure as weaker market conditions in the Panama sector made it more economical to split large Cape cargoes into smaller Panama shipments. This was particularly evident in the rising share of coal cargoes carried on Panama ships. Furthermore, slower Australian, Brazilian and Colombian Cape size exports in the first quarter of 2025 reduced vessel demand as increased rainfall and cyclones affected cargo output. Encouragingly, as weather conditions improved and cargo activity resumed, Cape size rates rebounded swiftly to profitable levels. Looking ahead, we remain very optimistic about Cape size markets long term fundamentals. Economic trends in China indicate an emerging recovery in steel production while iron ore producers are committed to supply it with high quality iron ore volumes. Production originating in the Atlantic Basin is projected to rise by about 170 million tons over the next two years, mainly in West Africa and Brazil, which paints a positive picture for Cape size demand. Additionally, West African Bokside volumes are surging as January and February exports rose by an impressive 41% compared to the first two months of 2024. Bokside's share of total Cape size cargoes is almost as high as coal, which has traditionally been the second largest source of Cape demand after iron ore. The current Cape size order book remains at historical low levels. As mentioned before, we are largely concerned that the planned expansion of Atlantic-based iron ore exports alone, even before factoring in the replacement needs of aging vessels, amid tightening environmental regulations. As regards to the Panamax, the Latin American grain exports look very encouraging for the current year, especially as congestion rises back again to levels more consistent with historical averages. As the inventory cycle In the short term, we expect to see higher volume of seaborne coal trading. In addition, coal-fired power plants under construction in China points to a 30% rise from existing levels, while global coal consumption is not showing any signs of slowdown. Longer term, large portion of the existing fleet is above 20 years old and likely to see a restricted trading over the next years as environmental regulations make it harder for inefficiencies to compete. Lastly, based on the latest developments, we are pleased to see that the ceasefire in Ukraine seems increasingly likely. Apart from the obvious humanitarian aspect, that is of primary importance of course, such a development could also have a positive impact on cargo demand for all sub-caped sectors, including Panamaxes. More broadly, when looking beyond the direct effects in terms of increased grain and iron exports, we would expect that halting hostilities would have several microeconomic benefits that would ultimately prove to be positive for the vessel's demand. As a result, we believe that the dry bulk market should remain on a positive trend over the next years and United is very well positioned to capitalize on these opportunities. I would now like to pass the call to Stavros, who will fill you in with our financial information for the quarter and the full year, as well as discussing our balance sheet and debt refinancings. Stavros, please go ahead.

Thank you, Stamatis. Welcome everyone to our earnings call. Let us start by reviewing the main highlights of our financial statements for the fourth quarter and the full year ending December 31, 2024. Our net revenue in the fourth quarter reached 10.8 million, slightly below the prior year, primarily due to the weaker earnings environment in the Panamax market. However, our adjusted EBITDA for the fourth quarter was 5.1 million, an 11% increase compared to 2023, reflecting our continuous efforts to improve our operating leverage. At the same time, we recorded a net loss of 1.8 million compared to a net loss of 0.7 million last year. On a full year basis, our net revenues was 45.4 million, significantly higher than last year, reflecting both the increase in our operating days and our improved average time chart at equivalent rate. Our adjusted EBITDA also grew to 20.3 million compared to 18.9 million last year. Net income for the year was a loss of 3.4 million versus a net profit of 200,000 in 2023, noting however that the bottom line of the previous year included 11.8 million profits from vessel sales versus only 1.4 million in 2024. On the expense side, we successfully reduced daily operating expenses per vessel to 6,600, as well as keeping in check our total general and administrative expenses despite inflationary pressures. Overall, while our profitability was impacted this year by the softer Panama's market, we continue to optimize our fleet on the back of very well-timed, self-purchase activities. As Tamatis reiterated earlier, we remain confident in our outlook both for dry bulk and our offshore investment. Turning to our balance sheet, our cash position at year-end stood at 6.8 million, reflecting the significant capex program undertaking throughout 2024, particularly in the first half, as well as the payments towards our participation in the offshore project. In the fourth quarter, we agreed to sell our oldest vessel, the Glorious Ship, for a net sale price of 15 million. This is expected to have a minimal impact on our P&L at the time of her delivery to the buyers, which is estimated towards the end of the second quarter of 2025. That being said, the cash flow effect will be positive, enhancing our cash position by approximately 7 million for the year. Our total assets at the end of 2024 reached 153 million, while stockholder equities stood at 60.1 million. Outstanding debt, which includes liabilities from our bergbotin transactions, stood at 99.4 million, implying a -to-flip value ratio of approximately 60%. During the year, we successfully secured 48.3 million in debt financing. Briefly, I would like to remind you that we completed two selling lease-pack agreements of 31.8 million in aggregate. The proceeds from these agreements were utilized for the exercise of the purchase option of the E-Sense Seed and the refinancing of previous indebtedness over the Exelix Seed on overall improved terms. Additionally, we secured a 16.5 million loan facility with a prominent Taiwanese lender to finance the 12.4 million purchase option for Hrisi. As a result, we entered 2025 with a solid capital structure and no immediate debt maturities. In terms of our investment in the offshore sector, United has already deployed approximately 3.5 million with another 4.5 million committed and expected to be called in two separate installments within 2025. This schedule aligns with the vessel's construction milestones. Now, before returning a call to Stamatis, I would like to reiterate our optimism about the company's future profitability. United, in its short three-year history, has created a strong track record of well-timed shipping investments and remains true in its commitment to prioritize shareholder rewards in any market environment. I will now turn the call back to Stamatis for his concluding remarks. Stamatis?

Thank you, Savros. Following our successful tanker investment cycle that was concluded in Q3 2023, which delivered strong returns for our shareholders, we now operate an exclusively Japanese-built travel fleet. We're very proud of our progress so far, being successful in building a quality fleet with strong prospects without resorting in any dilution of the shareholders that have supported us at our last and only capital raising years ago. On top of that, since 2023, we have paid total cash dividends of about $1.60 per share, representing a very significant portion of our current share price. Additionally, we have engaged in extensive share repurchases amounting to $7.1 million at an average price of $1.90. United Maritime is well positioned to benefit from positive dry bulk market trends due to index-linked time charters that provide direct exposure to Cape size and Panama's market upside potential, a healthy balance sheet that allows for leveraged exposure to the sector and the potential for high returns on capital, a proven commitment to the future of the sector, a commitment to rewarding our shareholders through substantial capital returns resulting in a high dividend yield. Lastly, I'm confident in our recent offshore sector investment, which I believe will also generate high returns for our company and shareholders. On that note, I would like to pass the call back to the operator and respond to any questions you may have. So, operator, please take the call. Thank you.

Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Thank you. We'll now take our first question. This is from Tate Sullivan from Maxim Group. Please go ahead.

Thank you, and good day. Great to hear from you. And to start with, you ended your comments talking about the offshore market. Can you review when is the scheduled delivery of the offshore vessel and what are the remaining capital commitments on that investment,

please? Yeah, the scheduled delivery is in the first quarter of 2027, although there are discussions that might bring the vessel a bit forward, like the fourth quarter of 2026, but for the time being, in the first quarter of 2027. From United's part, which is around 24% of the total project, there is 3.5 million have been already paid, and there's another 4.5 million committed and that will be called in two separate trances within 2025. After that, we are done with the equity installments, and then there is also debt, which has been negotiated but has not been finalized as of now. But the equity commitment for the project is two more installments of 4.5 million in total due within this year.

Okay, thank you. And then, Stamatis, you mentioned, can you review your comments on the US missile strikes on the Houthi? What is the potential link to the dry bulk market?

Well, the Red Sea remains closed and I don't see the Red Sea reopening anytime soon. I believe there will be continuous disruption on that trade route. One of the positive things that I want to mention is that, assuming there's going to be some sort of a ceasefire in Ukraine and Russia, that could reopen the grain corridor and could have more ships waiting to load the cargoes back and forth to the Ukrainian port. So that could be super positive for the Panama-Campstarmag segment, but that remains to be seen. I don't really believe that anything is going to happen within Q2 of 2025, but the positive effects will likely take place from the second half of the year.

Thank you, and one more for me. On the Cape size sale, you mentioned a 15 million sales price, just to make sure I have it right. Does it imply a gain on that sale of 7 million based on the increase in cash, or is that correct?

Sorry, Tate, can you repeat?

You said? You said the sale of the older Cape size ships will enhance cash by 7 million dollars, so is that the big implied gain on the sale?

Yeah, the outstanding loan is around 7.5, and as you know, United is paying 1% of its sale price to Synergy based on the management agreements between the two companies. So basically the net amount after the sale for United on a free cash flow base will be around 7 million.

Great.

Thank you very much. Great to hear from

you. Excellent, Tate. Have a great day. Thank you. You too.

Bye. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.