Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Customary Inc. Conference Call on the Third 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 1. Again, that's star then 1 on your telephone keypad. and wait for your name to be announced. I must advise you that this conference is being recorded today, Wednesday, October 28, 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, Ed. Good morning, ladies and gentlemen. During the third quarter, the company continued its profitability. As part of our free-to-earn program, we sold for demolition two buses with an average age of 23 years, and we agreed to acquire three larger circumstances, on average 11 years younger. The new acquisition would be initially funded with equity. Meanwhile, our new building program is progressing on schedule, and we have now accepted delivery of 3 out of 5 13,000 P.U. passengers, which have commenced their 10-year charters. On the market, the inactive container ship fleet continues to swing to levels below 2% on the back of healthy demand for container shipping. Charter rates have been rising, and we have chartered in total 18 ships during the quarter. We have 14 ships coming off charter over the next six months. which positions us favorably should market momentum continue. With liquidity of about 200 million, no meaningful debt maturities over the next three years, and minimal CapEx commitments, we are well positioned for acquisition opportunities increasing shareholder value and returns. Moving now to the slide presentation. On slide three, we are presenting a company snapshot. More than 45 years in the shipping industry, uninterrupted dividend payments is going public, strong sponsor support, never had to restructure our debt, smooth debt-dependent profile, fully allied interest, no related party acquisitions, steady management and ownership, and high growth potential with no legacy debt restrictions. Moving to the next slide, here you can see the resilience of our business model, steady revenues and income in a highly volatile shifting environment. On slide five, you can see the highlights. Adjustment income for the quarter is 27 million, and the adjusted EPS is 22 cents. Our adjustment income for the first nine months of this year is 91 million, and the EPS is 76 cents. We do maintain a strong balance sheet with liquidity of about 210 million, leverage of approximately 42%, and no meaningful debt maturities until 2024. Moving to the next slide, As part of our fleet renewal program, we continue the sale of all the donuts. Over the past quarter, we sold two container ships with an average age of 23 years and replaced them with three younger vessels with an average age of 12 years. The three new vessels will be initially funded with equity. We have accepted delivery of two 13,000 kg container ships out of a series of five sister vessels. The ships have commenced their 20-year service with landing lines. Slide 7. We have charted in total 13 verses during the quarter. The charter market has been rising on the back of positive supply and demand fundamentals. The idle fleet has dropped to 1.8% and the order group is at 8% and it is expected to remain low. We have 14 verses coming off charter over the next six months, which positions us favorably should market momentum continue. Finally, we will pay our 40th consecutive quarterly dividend in November. Insiders have been participating in the drift and this exception has in total invented 92 million. In the next slide, you can see the third quarter 2020 results. During this quarter, the company generated revenues of 108 million and adjusted net income of 27 million. The third quarter adjusted EPS is 22 cents. Our adjusted figures take into consideration the following non-cash items. account financial losses from massive disposals, prepaid lease rentals, and other non-cast charges. On slide nine, we're discussing our capital structure. Our leverage is comfortably below 45%. Net debt to 12-month trailing EBITDA is 3.3 times, and EBITDA net interest is at 4.5, so it is at five times when our governance have a minimum requirement of 2.5 times coverage. On slide 10, we are showing the revenue contribution for our fleet. Almost 100% of our contracted cost comes from first-touch charters like Maersk, MSC, Evergreen, Costco, Yangming, and Hapagloid. We have 2.1 billion contracted revenues and the remaining time charted duration of about 3.5 years. Slide 11 shows the contractor revenue by vessel size. As you can see, more than 90% of our contracted revenues come from vessels which are above 7,000 euros. On the last two slides, we're discussing the market. As shown on slide 12, charter rates have significantly improved since Q2 2020 across all vessel sizes, but especially for the larger vessels. Box rates have increased by more than 70% on a yearly basis. Slide 13. The iron fleet has been reduced to 1.8% from 7.9% almost three months ago. The order book has fallen to 8% and is expected to remain at low levels. Today, the order book is very thin from 2022 onwards. Our main priority is to cover our downside risk while at the same time looking for opportunities in a favorable market 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. And again, that is star then 1 to ask a question. One moment while we get our roster assembled. Our first question will come from Chris Weatherby of Citi. Please go ahead.