Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costa Mayor Incorporated conference call on the second quarter 2022 financial results. We have with us Mr. Gregory Zico, 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, Thursday, July 28th, 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. Zico. Please go ahead, sir.

Thank you, and good morning, ladies and gentlemen. During the second quarter, revenues reached approximately $290 million, and adjusted net income more than doubled to $119 million, compared to $58 million for the same period of last year. As of quarter end, cash balance stood at around $700 million, and total liquidity, including undrawn credit lines, was above $850 million. Over the last months, we executed on our previously announced share buyback program by $60 million worth of common shares. At the same time, we did conclude a five-year syndicated loan facility of half a billion, proactively refinancing the indebtedness of 16 vessels and significantly reducing our cost of funding at competitive terms. Regarding the market, congestion and pressure supply chains remain challenging as we enter the second half of the year. On the container market, asset values and charter rates remain at healthy and historically high levels, as also evidenced by our latest fixtures. On the dry bulk market, rates have recently been under pressure but still remain at profitable levels, especially for owners who entered the market the year before. We view any potential softening of asset values as a compelling buying opportunity as we feel comfortable with the long-term supply and demand dynamics of the sector. On the part of our increased liquidity, we are actively evaluating new investment opportunities in the shipping sector that have the potential to provide enhanced returns at acceptable risk levels. Turning now to the slide presentation. On slide three, you can see our second quarter results, which was the best Q2 on record since our listing. For the quarter, net income was $114 million, or $0.92 per share. Adopted net income was around $119 million, or $0.95 per share. And our liquidity is up almost $300 million year over year to $854 million. On slide four, you can see an update on our refinancing arrangements. We closed a half a billion facility refinancing 17 vessels with 12 U.S., European, and Asian financing institutions. The new facility increased our liquidity by $200 million, reduced our cost of funding significantly, and extended the maturity of almost all the refinanced vessels while maintaining our corporate leverage at a very low 24%. We also repurchased 4.1 million shares for around $60 million. Slide 5. Our revenue days are 100% fixed for 2022 and over 95% fixed for 2023. We also forward fixed to contemporary vessels at $58,500 per day per vessel for a period of three years, starting in the first half of 2023. We continue to fix on our dry mark vessels in the spot market, fixing 27 vessels since our last release. Finally, we sold on dry bulk version, the standard, for a capital gain of around $3.5 million. Slide six. The container ship charter market remains at very strong levels. The dry bulk market is still at healthy levels, and the order book remains low, as carry rates are well above historical average. Finally, we continue to have a long uninterrupted dividend track record, boosted by strong support. Looking at our leverage and liquidity, our liquidity has increased significantly while our leverage continues to drain down. This liquidity gives us the ability to look for opportunities to grow the company without risking our balance sheet. Slide 8. You can see that our cryptocurrency fleet has a current backlog of 3.3 billion with a duration of four years. We are fully fixed for 2022, 95% fixed for 2023, and 84% for 2020. Revenues come from a diversified list of first-class charters like Maresk MSC, Evergreen, Zim, Costco, Young Wing, and Hapaclone. On slide 9, you can see the second quarter 2022 snapshot. We had an average of 118 vessels during Q2, up 65% year-over-year, and our adjustment income was $119 million, or $0.95 per share. The adjusted figures take into consideration non-cash items like the accrued charter revenues, accounting gains from massive disposals, and other non-recurring items. Turning to slide 10 and the contingency market overview, rates for vessels above 2,500 EU continue to remain at historically high levels. The commercial contingency fleet also remains fully employed. Slide 11. Here we're discussing the dry bulk market, where rates have come up slightly from the seasonal strong first quarter, but do remain well above cash break-even levels. Finally, the dry bulk order book is 7.2%, a very low figure historically, which translates into moderate growth for at least the next two years. With that, we conclude 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 one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star then two. That's star then one to ask a question. Your first question today comes from Omar Nopza with Jofrit. Please go ahead.