Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costa Marie, Inc. conference call on the second quarter 2023 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 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, Friday, July 28, 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 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. During the second quarter of the year, the company generated net income of about $69 million. As of quarter end, liquidity was $1 billion. In the container ship sector, the charter market has been softening, although rates still remain at healthy levels. The order book, however, remains the principal threat to the market. On the dry bulk side, our own dry bulk vessels continue to trade on a spot basis, while the trading platform has grown to a fleet of 56 ships. Having invested $200 million in the dry public operating platform, we have a long-term commitment to the sector whose fundamentals we view positively. Regarding Neptune Maritime Leasing, the platform has been steadily growing on a prudent basis, having concluded in total leasing transactions worth of $120 million, which are complemented by a healthy pipeline extending over the coming quarters. Finally, during the quarter, we proceeded with our share buyback program, and we have bought $50 million worth of common shares, highlighting our strong belief that the share price is heavily undervalued, considering both the company's performance and prospects. Moving now to the slide presentation. On slide three, you can see our second quarter results. Net income for the quarter was roughly $63 million, or $0.52 per share. Adjusted net income was around 69 million, or 56 cents per share. Our liquidity stands at over $1 billion. On slide 4, you can see an update on our share repurchase program. Since the beginning of Q2, we purchased approximately 5.4 million common shares for $50 million worth. Slide 5. As far as CPI is concerned, we have chartered in 56 period vessels, with the majority of the fleet being on index-linked chartering agreements. Fifty-three of those vessels have been already delivered and are running. Regarding our leasing platform, we have already invested around $50 million. Since inception, NML has financed 12 shifts through sale and leaseback transactions. Slide six. Our financing arrangements amounted roughly to $175 million without an increase in leverage. Those deals were coupled with extension of maturities and improvement on funding costs. We continue to charter all our dry bulk purchases in the spot market, having entered into more than 50 chartering agreements since our last earnings release. On the contingency side, our revenue dates are essentially 100% fixed for 2023 and 87% fixed for 2024. while our contracted revenues are 2.9 billion, with the TU-weighted remaining time charted duration of about 3.9 years. Slide 7. We have sold one dry bulk vessel and have agreed to acquire two Cape-sized dry bulk ships. Both vessels will be purchased with cash on hand. In addition, we have concluded concurrent SAP transactions with your capital, for two container ship vessels while we have agreed to sell another container ship where we own a 49% equity interest. Moving to slide eight, the container ship charter market has been softening although rates remain at healthy levels. Tribal market remains volatile while for the remainder of 2023 the FFA market indicates signs of recovery in Q3 and further strengthening in Q4. Finally, we continue to have a long uninterrupted dividend track record boosted by strong sponsor support. On slide 9, our liquidity has increased significantly over the year, starting at above $1 billion. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to slide 10. Chartered rates in the contingency market have softened, remaining though at healthy levels. Adult capacity remains at historically low levels of about 1%. And finally, on slide 11, you can see the recent dry bulk market trends in the spotting forward market. Order book is at 7.4% of the total fleet. 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 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star 2. That's star 1 to ask a question. The first question comes from the line of Mr. Omar Nocta from Jefferies. Please go ahead.