Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costa Mare, Inc. conference call on the first quarter 2020 financial results. We have with us Mr. Gregory Zekos, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star then one on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, Wednesday, April 29, 2020. We would like to remind you that this conference call contains forward-looking statements. Please take a moment to read slide number two of the presentation, which contains the forward-looking statements. And I will now pass the floor to your speaker today, Mr. Zikos. Please go ahead, sir.

Thank you, and good morning, ladies and gentlemen. COVID-19 presents the largest shock in the global economy since the 2008-2009 crisis. The supply of containerized goods has experienced a rare episode of disruption, and the industry must now contend with the consequences of reduced demand. Determining the timing and shape of the recovery is a challenge, Yet, it is worth noting that the protective measures adopted across the world are intended to be temporary, and we believe that the restrictions enforced are also creating a deferred built-in demand. In this environment, the safety of our vessel crews as well as of our onshore employees remains our top priority. We have taken steps in order to protect our employees as well as to ensure uninterrupted service to our clients. For the first quarter, the company delivered profitable results. Liquidity increased to $268 million. We have contracted revenues of 2.1 billion, continued access to commercial bank debt, a smooth debt repayment schedule, and minimal CAPEX requirements. During the quarter, we charted in total 12 ships, including three 11,000 EU vessels, which were charted for periods ranging from one to three years. We recently declared our 38 dividends is going public. As has always been the case, but especially during today's unprecedented times, our top priority is to cover our downside. Building upon that, we will continue to monitor the market and assess new initiatives in order to bolster our balance sheet and liquidity position, while at the same time evaluating new opportunities in a volatile market environment. Moving now to the slides presentation. On slide 3 you can see the highlights. Net income rose by approximately 35 million in Q1 compared to last year. The adjusted EPS is 27 cents, a 140% increase to Q1 2019. We do maintain a strong balance sheet with liquidity close to 270 million, leverage of approximately 40% and no meaningful debt maturities over the next 12 months. Moving to slide 4. We have concluded three separate fundings with European financial institutions for a total amount of $165 million and maturities ranging from four to five years. Regarding operational performance, during the previous quarter we achieved utilization rates of close to 100% and very competitive operating expenses of below $5,100 per day per vessel. Slide five. During Q1, in a volatile environment, we have charged 12 vessels, including the three 11,000s, charged for periods ranging from one to three years. The contingency market has been negatively affected by the COVID outbreak. At the same time, the island fleet, as that of professors undergoing scrubber retrofits and blank sailings, own Python as providers, stands at 1.2%, while the order book has remained at levels close to 10% and is expected to remain low. We will pay our 38th consecutive quarterly dividend in February. Insiders have been participating in the DRIP and since inception have reinvested in total $87 million. Moving to the next slide, you can see the first quarter 2020 results. During the first quarter of this year, the company generated revenues of $121 million and adjusted an income of $33 million. Based on the above, the first quarter EPS comes at $0.27, more than double on a year-to-year basis. Our adjusted figures take into consideration the following non-cash items, accrued charter revenues, accounting gains or losses from massive disposals, and other non-cash charges. On slide 7, we are discussing our capital structure. As already mentioned, there are no substantial balloon payments due over the next 12 months. Our leverage is comfortably below 50%. Net debt to 12-month trailing EBITDA is 3.4 times. And EBITDA over net interest is at 4.9 times when our financial covenants have a minimum requirement of at least 2.5 times covenants. On slide 8, we are showing the revenue contribution for our fleet. 99% of our contracted cash comes from first-class charters like Maersk, MSC, Evergreen, Costco, Young Ming, and Hub at Lloyd. We have today 2.1 billion in contracted revenues and the remaining time charted duration of about 3.4 years. On the last two slides, we're discussing the market. As shown on slide 9, charter rates have fallen in the first quarter as a result of reduced demand. Initial blank tailings were followed by substantial capacity reductions in all major trades. Box rates have been under pressure for most of Q1. They stand, however, at levels close to those a year ago. Slide 10. The agri-fleet is shown at 10.2%. However, the number of ships on Python as providers that are today available for charter is only 1.2% of the total capacity. The order book is slightly higher than 10%, and it is expected to remain at low levels. As already mentioned, our main priority is to cover our downside risk, while at the same time looking for opportunities in such a volatile shipping environment. This concludes our presentation, and we can now take questions. Thank you. Operator, we can take questions now.

Thank you. As a reminder, if you would like to ask a question, please press star then 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star then 2. Again, that's star 1 to ask a question. And your first question comes from the line of Chris Weatherby of Citi. Please go ahead.