Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costomer, Inc. conference call on the fourth quarter 2022 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, Wednesday, February 8th, 2023. 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 statement. 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. 2022 has been a record year for Costa Mare. With a fleet of 107 vessels, including 45 framework ships, the company generated net income of about $520 million. As of the end of the year, liquidity stood at around $970 million. On the container ship side, 2022 was a unique year, with the first half growing up on favorable market conditions with strong demand and logistical disruptions continuing to impact the sector, while during the second half, charter rates and asset prices normalized as a result of reduced cargo demand and the return of capacity previously tied up by congestion. We charted a total of 16 second-hand containers during the year, which added incremental contracted revenues of more than $550 million. Total contracted revenues amount to 3.2 billion, with a weighted average remaining time charge duration of about 4.2 years. We are above 95% covered for 2023, and we have proactively arranged long-term employment on a forward basis for a number of conveniences coming off-charter between 2023 and 2025. At the same time, we are in the process of disposing of some older donors at prices fixed during a tight modern environment. On the dry bulk side, the new dry bulk operating platform previously announced commenced operation during the quarter. With an equity commitment of up to $200 million, our goal is to grow the business on a prudent basis, realizing healthy returns for our shareholders. On the back of our increased liquidity and containers at the cupboards, we are actively pursuing new investment opportunities in the shipping sector that have the potential to provide enhanced returns at acceptable risk levels. Moving now to the slide presentation. On slide three, you can see our annual results. 2022 was the best year since our listing. For the year ended, net income was above $520 million or $4.3 per share, while adjusted net income was around $400 million or $3.3 per share. Our year-end liquidity is up by almost $420 million year-over-year to roughly $970 million. Slide 4. During the previous quarter, we announced the setup of a new venture at the Costa Mare Basque Sting. CBI will charter in and out drywall pressures, enter into COAs and trade FFAs and bankers swaps. Up to now, we have already invested $100 million with a commitment for another $100. Over the last month, we fixed 23 pressures and entered into numerous COAs and FFAs. On slide 5. you can see an update on our financing arrangements which amounted roughly to $560 million without any material increase in leverage. Most of them were coupled with significant improvement of the funding cost and the extension of maturities. Our corporate leverage remains below 35% and we continue to maintain a strong balance sheet. Slide 6. We continue to charter all our drive-by buses in the sport market, charging 37 ships since our last earnings release. On the container side, our revenues days are 96% fixed for 23 and 85% for 24, while our contracted revenues are up to 3.2 billion with a DEU-weighted remaining time charge duration of about four years. Lastly, we fixed 16 containers with incremental contracted revenues of more than half a billion dollars. Slide seven. The container ship charter market has normalized in the second half of the year mostly due to reduced cargo demand and the return of capacity previously tied up by congestion. The dry bulk market has also weakened and the FFA market indicates significant threatening signs, especially from Q2 2023 onwards. Finally, we continue to have a long uninterrupted dividend track record boosted by strong support. On slide eight, our liquidity has increased significantly year over year starting at around $970 million. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to the next slide. Here you can see a snapshot of our fourth quarter 2002 results. We had an average of 115 investments and our adjusted ending of about $75 million, or $0.61 per share. Our adjusted figures take into consideration the following items, the accrued target revenues, accounting gains or losses from massive disposals, impairments, and other non-recurring or non-cash items. On the last two slides, we're discussing the market. Moving to slide 10, box rates have normalized from historically high levels. The latest contingency fixtures that have been concluded have been for shorter periods and are lower rates. The idle capacity has reached 0.6%. On slide 11, you can see the recent dry bulk market rates, where rates have been under pressure. The order book is a 7.5% of the total fleet and new ordering continues to be subdued. With that, we can 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 one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star two. That's star one to ask a question. And your first question comes from the line of Chris Weatherby from Citigroup. Please go ahead.