Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costa Mare Inc. conference call on the fourth quarter of 2021 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 on your telephone keypad. and wait for your name to be announced. I must advise you that this conference is being recorded today, Thursday, March 10, 2022. 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. Zicos. Please go ahead, sir.

Thank you, and good morning, ladies and gentlemen. 2021 has been a record year for Costa Mare. With a fleet of 123 vessels, including 46 dry park ships, the company generated net income of above $400 million. As of the end of the year, liquidity stood at $550 million. On the container ship side, market conditions remained firm with strong demand and logistical disruptions continuing to impact the sector. We charted in total 35 second-half assets during the year, which added incremental contracted revenues of $1.4 billion. Total contracted revenues amount to $3.3 billion, with a weighted average remaining time-sharded duration of about four years. We have covered substantially all of our container ship open days for 2022. and now we are in the process of arranging employment for the vessels coming off charter next year. At the same time, we agreed to dispose of some older donors with forward year-end deliveries at prices that do reflect today's tight market environment. Regarding our expansion into the dry bulk shipping business, we entered a market with favorable supply and demand dynamics, underpinned by a historically low order book. Our dry ballot fleet is currently trading in the spot market, generating steady returns on the back of timely acquisitions. In light of the above, the company has decided to declare a special dividend of 50 cents per common share. While rewarding our shareholders as a result of increased cash flows and profitability, the payment of that dividend is not expected in any way to affect our capacity to continue growing opportunistically in a volatile market environment. Moving now to the slide presentation. On slide three, you can see the 2021 record results. For the full year, net income was above $400 million, or $3.3 per share. Net income for Q4 21 was above $150 million. Adjusted net income for the last quarter was $0.91 per share. Based on that performance, we have decided to declare a special dividend of $0.50 per share payable with our Q1 2022 dividend. We also initiated the share repassage program of up to $150 million for our common shares and up to $150 million for our preferred stock. On slide four and five, you can see our recent S&P activity. As you can see on slide four, we have agreed to sell five assets with forward deliveries in late 22 and early 23. for total gross proceeds of $333 million. The sale prices of these vessels reflect today's tight market dynamics. We have also been very active on the dry bulk sector, where our fleet now stands at 45 vessels, with one ship to be delivered during Q1 of this year. On slide six, you can see our pictures. Recently, we fixed seven vessels at rates that are on average 80% higher compared to their current rates, adding contracted revenues of 410 million. For 2022, our container ship revenue days are essentially 100% fixed, and for 2023, we are around 90% fixed. Moving to slide seven. On slide seven, you can see an update on our liquidity and current financing arrangements. During Q4, we have concluded around 180 million of financings through three new loan agreements in order to refinance nine tribal vessels and five container ships. We have concluded another hunting license of 100 million that gives us additional firepower and extended the 150 million hunting license facility. At the same time, We continue to maintain a strong balance sheet with liquidity of above $550 million and market value-based leverage at around 26%. Moving to slide 8, the container ship charter market continues to outperform even the highest expectations. The dry bulk market has rebounded from its seasonal lows in February. As already mentioned, we have put together a share repurchase program of up to $150 million for our common shares and $250 million for our preferred shares. We also continue to have strong sponsor support through the DRIP. Slide 9. On this slide, you can see the fourth quarter 2021 results. We had an average of 108.1 vessels during Q4, up 79% year over year, and our adjustment income was $0.91 per share, our best quarter since going public. Our adjusted figures take into consideration the following non-cash items, accrues other revenues, accounting gains from other disposals and other non-cash items. On slide 10, you can see our capital structure and liquidity. Our leverage is at a very conservative 26% based on current market values. And we have ample liquidity of 550 million to continue growing opportunistically in a volatile market environment. On slide 11, we show the contingency market environment where rates remain at historically high levels, and the idle fleet is at 0.5%. Charters continue to look for vessels to fix, and chartering one year in advance has become the norm. On the last slide, we discuss the drivel market. Rates for vessels in our size class remain at healthy levels, up 70% year over year in February. The dry bulk fleet order book is at 6.8%, a historically low level that will keep supply growth in check for the years to come. With that, we can have the call back over to the operator for the Q&A session. Thank you. Operator, we can take questions now.

Thank you. As a reminder, if you'd 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. Let's start with one to ask a question. And your first question today comes from Ben Nolan at Stiefel. Please go ahead.