Costamare Inc.

Good day and welcome to the Costa Mare third quarter 2025 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Gregory Zikos, CFO. Please go ahead.

Thank you, and good morning, ladies and gentlemen. During the third quarter of the year, the company generated net income of about $99 million. After the spinoff of Costamare Barclays Holdings Limited, Costamare Inc. remains the sole shareholder of 69 container ships, as well as the controlling shareholder of Neptune Maritime Leasing. In September, following up from our previously announced order of four 3,100-EU capacity container ships, we exercised our option for two more sister ships to be delivered in Q1 2028. Upon delivery, they will also commence an eight-year time charter with a first-class liner company. Since last quarter, we have also fixed eight vessels with a forward start for periods ranging from 12 to 38 months. These transactions resulted in increased contracted revenues of about $310 billion. Our fleet employment stands at 100% and 80% for 2025 and 2026, respectively. Total contracted revenues amount to $2.6 billion, with the remaining time traded duration of about 3.2 years. Regarding the market, the positive outcome from the latest trade discussion between the U.S. and China and the delay in the implementation of port fees should positively contribute to global increased trade flows. Without a fleet of less than 1%, the charter market remains strong, with rates fixed at healthy and stable levels, on the back of a shortage and steady demand. Finally, with regards to Nexo Maritime Leasing, the growing leasing platform, 50 shipping assets have been funded or are committed and total investments and commitments are exceeding $650 million. Moving now to the slide presentation. On slide 3, you can see our third quarter results. Adopted net income was $98 million or $0.81 per share. Net income for the quarter was around $93 million or $0.77 per share. Our liquidity stands at above $560 million. Slide 4. We have concluded new building contracts for another two 3,100 EU container ships with expected delivery in Q1-28, bringing the total number of new building orders to six. Upon delivery, each vessel will commence an eight-year charter with a leading liner company. On the employment side, we have increased our contracted revenues through new chartering agreements by more than $310 million. In addition, our revenue days are 100% fixed for 2025 and 80% for 2026, while our contracted revenues are $2.6 billion, with an evaluated remaining duration of 3.2 years. Moving to slide 5, regarding our financing arrangements, we have agreed to the pre- and post-delivery financing of our four new buildings. We have no major maturities till 2027. On the SAP side, we have concluded the acquisition of one 6500 TU container version. Slide 6. On our leasing platform, we have invested around 180 million. NML has funded or committed to fund 50 shipping assets for a total amount of more than 650 million dollars. Finally, we continue to have a long uninterrupted dividend track record. Moving to slide seven, the last slide, charter rates in the contingency market remain at firm levels. The idle fleet remains at low levels, at about 0.9%, indicating a fully employed market. With that, we can conclude our presentation, and we can now take questions. Thank you. Operator, we can take questions now.

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Omar Nocata. with Jefferies. Please go ahead.

Thank you. Hi, Greg. Good afternoon. Good morning.

Hi there. Yeah, just a couple from me. You know, obviously, just looking at your chartering activity, you've been able to add a good amount of visibility forward fixing several ships. Looks like maybe an average of at least two years or so from where they were before. But just wanted to get your sense in terms of how has chartering activity in general sort of developed here over the past maybe couple of months? Because You've had, obviously, a very volatile year for, say, the underlying freight market, where there's been huge swings upwards and downwards for freight rates. They bottomed about a month ago. Now they've jumped. Just want to get a sense from you, given just how active you are in the chartering markets, have you noticed any shift in line or appetite? Have things changed here over the past several weeks? Any kind of color you can give on developments on chartering would be great. Thank you.

Sure. First of all, regarding the box rates, you are right. Last week and last month in general, box rates have been up, especially on the U.S. West Coast trade route. Now, regarding the charter market, there is a shortage of ships, especially larger vessels. So, I mean, whichever ships come out, There are definitely candidates to have them chartered in. So still the market remains at very healthy levels. There is demand. And ships are easily absorbed. And I think the main indicator someone needs to look at is the idle vessels where if you any dry dockings or sort of technical issues. This is less than 1 percent. So less than 1 percent idle fleet means that practically we have a fully employed market. So in charter rates in general they are holding up very well. Now whether this will continue or not and for how long it's hard to say because we have a series of geopolitical events that might affect it. But for the time being it is a healthy market. Liners are generally eager to charter investors. Now you can argue that probably they may not want to go for longer periods in general compared to the past. But still, you still see like a two or three year time charter for secondhand vessels. on a forward basis. So, in that respect, I think that the fundamentals, as they stand today, considering that the supply of vessels is quite thin, the fundamentals are quite tight and quite positive, I would say.

Thanks, Greg. And then maybe just a follow-up. I wanted to ask about the second-hand acquisition you mentioned. You bought the 06 built, you know, 6,000 TEU vessel. That looks like it's on contract to Merisk. Is that Can you maybe talk about kind of how that came about? Was this a direct acquisition from Maersk with a charter back to them? Are there more opportunities like that, do you think, in the sale and purchase?

Yes, I think this vessel has been chartered back to Maersk. This is a structure sale and lease back deal. There may be more opportunities like that in the future. I mean, we haven't come across anything like that that probably would make sense. But definitely there may be. And as you've seen, we have been focusing on the new buildings. For the 3,100 EU ships, we had concluded four previously announced in the Q2 results. We have added two more options now. Those are going to be delivered at Q1-28. On a back-to-back basis, we have pretty much arranged the financing for the first four, and we are... closing the commitment of the financing for the last two, which is something that also makes sense. And we are generally active. So as a second hand or even new buildings, assuming that we feel comfortable with residual value risk of our equity, I think we will be quite active.

Great. Thanks, Greg. Very helpful. I'll pass it back.

The next question is from Clement Mullins with Value Investors. Please go ahead.

Hi, good afternoon, and thank you for taking my questions. Following up on Omar's question on the first one, could you talk a bit about whether you believe the recent increase in freight rates is sustainable? It seems it was mostly a function of front running as tensions between the US and China increased, but those have been lowered since. So how do you think about the trade-off of having more visibility versus the front running?

Yeah, for the freight rates, I mean the box rates, this is something that could also be directly addressed to the liners who sort of may have a better visibility. I agree with you that last week and last month... freight rate push has been because of front running. It may have to do with the pushback of the port fish, etc., rearrangement of schedules of the liner companies. Now, to what extent they are sort of medium or long-term sustainable, I cannot comment on that. they are sort of, because if you look historically at the three or six month or like one year box rates, they have been on a negative trend. But I'm afraid I cannot forecast where box rates are going to be starting from today over the next three to six months. To some extent, this is something that also liner companies. I think they do have a greater visibility on that.

Yeah, makes sense. No one can really forecast that. And also following up on Omar's second question, it seems the Maersk Pueblo is fully committed until next October, but Maersk has options to extend employment until 2031. Could you talk about how likely those are to be exercised, given the rate?

Okay, I'm afraid these are chartered options, so as mentioned, it's up to the charterer. to have them exercised. So again, I cannot forecast what a third party will be doing. So I think market levels will dictate whether the Charter will take those options or not. But on a committed basis, you are right, this is a one-year Charter. And from our side, we have run the numbers so that being conservative... we have been factoring in this one here, time charter period. After that, it's up to the charter to decide based on its needs, based on market rates, based on the cargo demand, to see whether those options, one by one, are going to be subsequently exercised.

That's helpful. Thank you for taking my questions.

Thank you.

This concludes our Q&A or question and answer session. I would like to turn the conference back over to Gregory Zicos for any closing remarks.

Yeah, thank you for dialing in today and for your interest in Costa Mare, Inc. We are looking forward to speaking with you again during the Q4 and year-end results call. Thank you. Operator, I think we have concluded.

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

Thank you.