Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costumare, Inc. conference call on the fourth quarter 2023 financial results. We have with us Mr. Gregory Zicos, 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, Wednesday, February 7th, 2024. 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, Mr. Zicos. Please go ahead, sir.

Thank you, Ed. Good morning, ladies and gentlemen. 2023 has been a growth year for Costamare. The company had revenues of $1.5 billion and generated net income of about $350 million. Liquidity stood at around $1 billion as of year-end. Following our strategic decision in 2021 to enter into the dry bulk sector at an opportune time in the cycle, we have grown during 2023 our newly established trading platform to an operator managing a fleet of 51 dry bulk vessels. Having invested $200 million in the new venture, 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 throughout 2023, having now concluded leasing transactions for 23 ships with a total value of about $250 million. We are committed to further growing the leasing business on the back of a healthy pipeline extending over the coming quarters. On the owned dry bulk fleet site, we are executing our strategy to renew the dry bulk fleet and increase its average size. During the year, we took the decision to dispose of 12 smaller size vessels and have agreed to acquire a three cape size and one ultra max vessel. Subject to market conditions, our goal is to continue our expansion in the dry market. In the containership market, recent events have been contributing positively to the supply and demand dynamics pushing up box and charter rates. Those recent developments are mitigating the effects of oversupply in the contingency market, as tonnage is expected to remain tight at least until the Chinese New Year. We have, however, proactively secured employment for 95 and 78 percent of our open days for 24 and 25, respectively, putting our contracted revenues for the contingency versus at $2.5 billion, with a remaining time-threatened duration of about 3.6 years. Moving now to the slide presentation. On slide three, you can see our annual results. Net income was about $350 million, or $2.95 per share. Adjustment income was around $250 million, or $2.07 per share. Our year-end liquidity stands at roughly $1 billion. Slide four. Regarding CBI, we have charted in period 51 vessels, with the majority of the fleet being on index link agreements. On our leasing platform, we have already invested around $120 million. Since inception, NML has financed 23 assets through sale and leaseback transactions and has a very healthy pipeline going forward. Slide five. We have now acquired York's equity interest on a feeder container ship and have now agreed to acquire one Cape-sized dry-bark vessel. In parallel, we have concluded the sale of two Supramax and three handy-sized ships, while we have agreed to sell three more handy-sized and one Supramax dry-bark ship. Slide 6. During the fourth quarter, we have financed the acquisition of one dry bulk vessel through a new granting license facility, while we have roughly available $132 million for financing of further vessel acquisitions. We do continue to charter all our dry bulk vessels in the spot market, having entered into more than 40 chartering agreements since our last earnings release. On the container ship side, as already mentioned, our revenue days are fixed 95%. percent for 24 and 78 for 25, while our contracted revenues are $2.5 billion, with a TEU-weighted average remaining duration of 3.6 years. Moving to slide 7, during 2023, we have purchased approximately 6.3 million of common shares for a total consideration of $60 million. In addition, we continue to have a long uninterrupted dividend track record boosted by strong sponsor support. Slide 8. As mentioned already, our liquidity stands at roughly 1 billion. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to slide 9. Charter rates in the contingency market have been rising daily across all segments, having benefited from the Reggie crisis. The idling capacity remains at low levels at 0.8%. And moving to the last slide. On slide 10, you can see the recent dry market trends in the spot and forward market. Charter rates remain volatile, having been corrected from the highs of Q4 2023. Today's order book is at 8.5 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, 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. Again, that's star, 1 to ask a question. Our first question comes from Chris Weatherby with Citigroup. Please go ahead.