Costamare Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Costa Mare Inc. conference call on the fourth quarter 2024 financial results. We have with us Mr. Gregory Zekos, Chief Financial Officer of the company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you were 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 5, 2025. 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. We'll pause one moment. Thank you. I will now pass the floor over to your speaker today, Mr. Zicos. Please go ahead, sir.

Thank you, and good morning, ladies and gentlemen. During the fourth quarter of the year, the company generated an adjusted net income of about 82 million. Our liquidity stands at around 940 million after repaying during the year a fixed rate bond of Euro 100 million and also redeeming the Series E prefer stock of 115 million dollars. In the container ship sector, the crisis led to diversions via the much longer Cape of Hood haul route. These diversions, together with strong cargo demand, absorb the incremental new building capacity. The commercial idle fleet remained low during 2024 and at the start of 2025. Should, however, Linus gradually return to the Swiss route, the release of tonnage combined with new building capacity could potentially distort the current supply and demand dynamics. During this quarter, we charted on a forward basis 12 containers with an average time charted duration of about two and a half years. and estimated contracted revenues of close to $330 million. The contingency fleet employment stands at 96% and 69% for 2025 and 2026, respectively. Total contracted revenues amount to $2.4 billion, with a remaining time charted duration of about 3.4 years. On the direct market, charter rates dropped to their lowest levels of 2024 during the last quarter, and have started 2025 on a similarly soft note. The easing of congestion, along with pressures in the China steel market and less grain tonne mild demand have resulted in tonnage oversupply. As per our strategy to renew the own fleet and also increase its average size, during the quarter we concluded the acquisition of one Cape size and two Ultramax vessels, as well as the disposal of one 100 size ship, while we have agreed to sell one Panamax vessel. CBI today manages a fleet of 51 ships, the majority of which are on index-linked chartering agreements. As mentioned in the past, we have a long-term commitment to the sector, and we view the vessel loaning and the trading platform as highly complementary activities. Finally, with regards to Neptune maritime leasing, the platform continues to grow with a healthy pipeline, having total investments and commitments exceeding $500 million. Moving now to the slides presentation. On slide 3, you can see our annual results. Net income was above $290 million, or $2.44 per share. Adopted net income was around $330 million, or $2.76 per share. Our liquidity stands above $940 million. Slide 4, on the charting side, we have charted on a forward basis 12 containerships with incremental contracted revenues of around $330 million. Our revenue days are fixed 96 percent for 25 and 69 for 26, while our contracted revenues are 2.4 billion, with a DU weight at remaining duration of 3.4 years. As you will notice, we have charted three 1996 bridge vessels for a period of healthy rates. Turning to slide five, regarding our S&P activity, we have concluded the acquisition of one Cape size and one ultra-max dry bulk, and two ultra-max dry bulk vessels. In parallel, we have concluded the sale of one hand-sized ship and agreed to sell one Panamax vessel. Slide 6. We have concluded finances for a total amount of circa $340 million with respect to 36 of the 38 dry park vessels we currently own. The new financing provides us with improved funding costs and the extension of maturities. In addition, we have secured a new hunting license of $100 million. for financing of the acquisition of drive-out vessels. Slide 7, regarding CBI, we have started in 51 period vessels with the majority of the fleet being on index link agreements. On our leasing platform, we have already invested around $123 million. Slide 8, our liquidity starts above $940 million. This liquidity gives us the ability to look for opportunities to grow the company on a healthy basis. Moving to slide 9, chart rates in the contingency market remain at firm levels. The continued ejection of new building capacity along with the rerouting via the Red Sea and Suez Canal may, however, affect current market dynamics. The idle fleet remains at low levels at around 0.6 percent. And finally, on slide 10, you can see the recent drive-by market trends in the spot and forward markets. Charter rates have extended their big line from 2024 into the first quarter of 2025. The order book starts at around 11% of the total fleet. With that, we can conclude our presentation, and we can now take questions. Thank you. We can take questions now.

We will now begin the question and answer session. 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. We will pause momentarily to assemble our roster. Our first question today comes from Ben Nolan of Stiefel. Please go ahead.

Thank you, operator. Good morning, Greg, or afternoon. Good morning. Yeah. I wanted to ask really maybe a couple questions about CBI, really. And it's, first of all, can you give any sense as to what the contribution was in the fourth quarter from CBI? And then maybe more importantly, as we look forward, given where the dry bulk market is at the moment, given sort of where the forward curve is, any sense as to sort of how what you would imagine the contribution from that business would be like should the market remain sort of soft as it is at the moment over the course of the year?

Yeah, a couple of things. First of all, let me start from the latter regarding the weak market where it is today. It is weak today. I mean, it started from Q4 of 2024, and this is the case for Q25. At the same time, there is some seasonality built in there. of which it remains to be seen. The forward curve, they are pointing to a better market going forward. However, CBI can also take long and short positions. I mean, we are by default long in the owning of the vessels, of the 38 dry bulk ships we own. So CBI can either be long or sort of it can be short. depending on the circumstances. The goal for CPI, because by default this business is very volatile, is to have a balance book, at the same time take some positions, either short or long, depending on the circumstances. And we, as mentioned in my presentation, we view it as a complementary activity to the owning side. We don't aim, going forward, we don't aim to take big positions at the CPI level, except when, like, we have a conviction where the conditions justify those big positions. Otherwise, we will be taking a view of the market. However, it's going to be on a more balanced approach. For the owning vessels, As you've seen, by default, as mentioned, we are long. We do have, we are selling all the ships and smaller vessels, and we are focusing on large assets, especially capes. And depending on the market conditions, we may continue doing so. The goal is that whatever equity we are releasing from the vessels we dispose of, buying hopefully at low market levels younger ships with larger tonnage. Now, regarding the contribution of CBI and the same applies for the dry bulk owned fleet and for the containers, I'm afraid you will have to wait in our segmental reporting in the 6K. This is something that we will be providing some information on. there relatively soon. So if you bear with me, the full information available will be there if that's okay with you.

Okay. Yeah, no, that's helpful. And just to clarify, for 2025, you expect the CBI chartered in fleet to be roughly net neutral. So there's no sort of, currently there's no position, either long or short,

Today we have a position. We have a position and as we move ahead those positions we may close them depending on market conditions. We do have a position now but I mean in general our goal is first to have a balanced book and then going forward maintain that balanced book and of course take some positions because this is part of the business but those positions are going to be on a more balanced approach. It could be shorter. And we wouldn't expect to take long positions without having, as mentioned, a conviction that conditions justify those bets. So compared to how CBI was operating at initiation a couple of years ago, going forward we would expect this to have a much more balanced approach, which makes sense.

Okay. And you said you had a position. At the moment, it's a net long or short?

In the moment, it's long. I mean, depending for caves and for Panamaxes, it's long, but this is a position which, I mean, it is a long position, but it goes for a period. So it's something that we cannot work on over the next quarters.

Okay. All right. I appreciate it. Thank you, Greg.

Thank you.

Our next question comes from Clement Mullins of Value Investors Edge. Please go ahead.

Good afternoon. Thank you for taking my questions. I wanted to start by asking about how chartering discussions have evolved on the container ship side over the past few weeks as the normalization of the Red Sea seems closer. Some liners have announced they do not plan to return to the Red Sea in the near term. But have you seen an effect on rates and durations when discussing potential contracts?

Thank you for the question. First of all, the 12 chartering agreements we have now disclosed, discussions took place some months ago before the announcement of the ceasefire. So this is something which, you know, those deals, it takes time to conclude. So these were discussed two to three months ago. However, coming to where we are today, up to now, and it is a bit premature, I would say, we don't see any pressure in charter aids. Not at all. So, and the normalization of the trade routes through the Suez Canal, it may take some time. So we will just sit and wait. I cannot predict when we are going to be back to normality, whether it's going to be over the next two, three, four quarters, sooner or later. It is quite a fragile situation. So for the time being, charter rates and asset values hold at levels. similar to the levels we saw some months or some quarters ago.

That's helpful. Thank you. I also wanted to ask about Neptune Maritime Leasing. Your investment in the company has been stable over the past few quarters. Could you talk a bit about the pipeline Neptune has and whether you plan additional investments over the coming quarters?

Yeah, there is a pipeline. As I said, it has a pipeline, I mean, current financing with future commitments, it is in total close to half a billion dollars. Now, our cash outflow or our investment to Neptune, it's also a function of what levels of back leverage Neptune will be receiving, whether the Neptune funding is going to be 100 percent with equity from the shareholders and or with back levers from other financial institutions, which is something we take it on a case-by-case basis. So I'm afraid I cannot provide with any prediction about how much additional equity as shareholders we're going to be putting to Neptune, which depends on the levels we're going to be getting. But there is a pipeline. There are currently deals not yet committed, but under discussion. And whenever we feel that transactions make sense, we are more than willing to utilize our equity. And if we can optimize our returns with additional back leverage, this is something we will consider as well.

Makes sense. Thanks for the call, Lord. That's all from me. Thank you for taking my questions.

Thank you.

This concludes our question and answer session. I would like to hand things back over to Mr. Zikos for any closing remarks.

Thank you all for dialing in today's call. We're looking forward to speaking with you again in the next quarterly results call. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.