Globus Maritime Limited (“Globus,” the “Company,” “we,” or “our”)
(NASDAQ: GLBS), a dry bulk shipping company, today reported its
unaudited consolidated operating and financial results for the
six-month period ended June 30, 2020.
Financial Highlights
|
Three months ended |
|
|
Six months ended |
|
|
|
|
June 30, |
|
|
June 30, |
|
(Expressed in thousands of U.S dollars except for daily rates and
per share data) |
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
Total revenues |
2,299 |
|
3,399 |
|
|
4,589 |
|
6,942 |
|
Adjusted EBITDA (1) |
(783 |
) |
110 |
|
|
(2,447 |
) |
485 |
|
Total comprehensive loss |
(4,197 |
) |
(3,001 |
) |
|
(13,199 |
) |
(3,473 |
) |
Basic loss per share (2) |
(0.39 |
) |
(0.74 |
) |
|
(1.58 |
) |
(0.95 |
) |
Daily Time charter equivalent
rate (TCE) (3) |
3,778 |
|
5,985 |
|
|
3,016 |
|
6,358 |
|
Average operating expenses per
vessel per day |
4,353 |
|
4,898 |
|
|
4,437 |
|
4,767 |
|
Average number of vessels |
5.0 |
|
5.0 |
|
|
5.0 |
|
5.0 |
|
(1) |
Adjusted
EBITDA is a measure not in accordance with generally accepted
accounting principles (“GAAP”). See a later section of this press
release for a reconciliation of Adjusted EBITDA to total
comprehensive loss and net cash (used in)/ generated from operating
activities, which are the most directly comparable financial
measures calculated and presented in accordance with the GAAP
measures. |
(2) |
The weighted average number of shares for the six-month period
ended June 30, 2020 was 8,339,137 compared to 3,642,256 shares for
the six-month period ended June 30, 2019. The weighted average
number of shares for the three-month period ended June 30, 2020 was
10,861,371 compared to 4,070,153 shares for the three-month period
ended June 30, 2019. |
(3) |
Daily Time charter equivalent rate (TCE) is a measure not in
accordance with generally accepted accounting principles (“GAAP”).
See a later section of this press release for a reconciliation of
Daily TCE to Voyage revenues. |
Current Fleet ProfileAs of the
date of this press release, Globus’ subsidiaries own and operate
five dry bulk carriers, consisting of four Supramax and one
Panamax.
Vessel |
|
Year Built |
|
Yard |
|
Type |
|
Month/Year Delivered |
|
DWT |
|
Flag |
Moon Globe |
|
2005 |
|
Hudong-Zhonghua |
|
Panamax |
|
June 2011 |
|
74,432 |
|
Marshall Is. |
Sun Globe |
|
2007 |
|
Tsuneishi Cebu |
|
Supramax |
|
Sept 2011 |
|
58,790 |
|
Malta |
River Globe |
|
2007 |
|
Yangzhou Dayang |
|
Supramax |
|
Dec 2007 |
|
53,627 |
|
Marshall Is. |
Sky Globe |
|
2009 |
|
Taizhou Kouan |
|
Supramax |
|
May 2010 |
|
56,855 |
|
Marshall Is. |
Star Globe |
|
2010 |
|
Taizhou Kouan |
|
Supramax |
|
May 2010 |
|
56,867 |
|
Marshall Is. |
Weighted Average Age: 12.3 Years as of June 30, 2020 |
|
|
300,571 |
|
|
Current Fleet Deployment
All our vessels are currently operating on
short-term time charters (“on spot”).
Management CommentaryThe first
half of 2020 was a challenging period because the Company
experienced a weak spot market due to a mixture of seasonal
weakness as well as the effects of the coronavirus pandemic that
affected the shipping industry. The dry bulk market started
improving in later part of the second quarter of 2020 from the lows
we saw earlier in the year.
It was at this time that we successfully
tapped the capital markets and completed offerings and private
placements, raising significant capital. We also
initiated discussions for debt financing to support potential
vessel acquisitions, when and if we wanted to do so. As of today,
we have enough cash and believe that we have debt financing support
to be able to acquire additional vessels, if we choose. After
completion of the capital markets activities, we inspected the
technical and commercial capabilities of about half a dozen vessels
in order to ascertain whether any of them would be appropriate to
acquire but determined not to move forward with any of them.
We are inspecting vessels, however, there can be no assurance that
any of the acquisitions we have been considering or will consider
will occur.
When deciding whether to purchase a vessel, we
make a financial and commercial analysis of the potential
acquisition; we do not just buy a vessel only to increase the
number of vessels on the water we own and operate. If we
believe a vessel has the right technical and commercial aspects and
we expect that the market (in addition to a calculated residual
value) can support certain returns we target, then we will
consider such acquisition.
Additionally, the company also elected to lower and pay off some
of our high-interest and convertible debt as we move forward with a
stronger balance sheet.
We are pleased that the company today is
financially strong, with cash on hand, and we look into the
future with resolve to thrive and potentially expand.
We have been fortunate to have good onboard
personnel. Our focus and concentrated operational efforts are
towards them. Due to the coronavirus pandemic and the associated
travel restrictions and quarantines, it is very difficult
for seafarers to embark and disembark from vessels. This has kept a
lot of them away from their families and loved ones. We realize
that it is an industrywide problem, which we hope will be
resolved soon with the intervention of governments and regulators.
In the meantime, we are doing our best to support our onboard
personnel and look after their wellbeing and safety with all means
we have available.
Management Discussion and Analysis of
the Results of
Operations
Recent Developments
Convertible Note
On March 13, 2020, Company and the holder of the
Convertible Note entered into a waiver regarding the Convertible
Note (the “Waiver”). The Waiver waived the Company’s obligation to
repay the Convertible Note on the existing maturity date of March
13, 2020 and did not require the Company to repay the Convertible
Note until March 13, 2021. The Convertible Note was fully repaid in
June 2020.
Firment Shipping
Inc.
On May 8, 2020, the Company and Firment Shipping
Inc. agreed to enter into an amended and restated agreement. The
final maturity of the Firment Shipping Credit Facility was extended
to October 31, 2021 and the available amount to be drawn under this
Facility increased to $14.2 million. The outstanding amount under
the Firment Shipping Credit Facility was fully repaid on July 27,
2020.
Receipt of
Nasdaq Notice of Deficiency
On March 6, 2020, the Company received written
notification from The Nasdaq Stock Market dated March 2, 2020,
indicating that because the closing bid price of our common stock
for the last 30 consecutive business days was below $1.00 per
share, we no longer meet the minimum bid price continued listing
requirement for the Nasdaq Capital Market, as set forth in Nasdaq
Listing Rule 5450(a)(1). Pursuant to Nasdaq Listing Rules, the
applicable grace period to regain compliance was 180 days, or until
August 31, 2020, but citing extraordinary market conditions, Nasdaq
filed an immediately effective rule change with the Securities and
Exchange Commission which, with effect from April 16, 2020, tolled
the listing process until July 1, 2020. Consequently, the Company’s
compliance period has effectively been extended until November 12,
2020. The Company intends to monitor the closing bid price of its
common stock between now and November 12, 2020 and is considering
its options, including a potential reverse stock split, in order to
regain compliance with the Nasdaq Capital Market minimum bid price
requirement. The Company can cure this deficiency if the closing
bid price of its common stock is $1.00 per share or higher for at
least ten consecutive business days during the grace period. In the
event the Company does not regain compliance within the 180-day
grace period, and it meets all other listing standards and
requirements it may be eligible for an additional 180-day grace
period. The Company intends to cure the deficiency within the
prescribed grace period. During this time, the Company’s common
stock will continue to be listed and trade on the Nasdaq Capital
Market.
Issuance of the Series B preferred
shares
On June 12, 2020, the Company entered into a stock
purchase agreement and issued 5,000 of our newly-designated Series
B Preferred Shares, par value $0.001 per share, to Goldenmare
Limited, a company controlled by our Chief Executive Officer,
Athanasios Feidakis, in return for $150,000, which amount was
settled by reducing, on a dollar-for-dollar basis, the amount
payable as executive compensation by the Company to Goldenmare
Limited pursuant to a consultancy agreement.
The issuance of the Series B preferred shares to
Goldenmare Limited was approved by an independent committee of the
Board of Directors of the Company, which received a fairness
opinion from an independent financial advisor that the transaction
was for a fair value.
Each Series B preferred share entitles the holder
thereof to 25,000 votes per share on all matters submitted to a
vote of the shareholders of the Company, provided however, that no
holder of Series B preferred shares may exercise voting rights
pursuant to Series B preferred shares that would result in the
aggregate voting power of any beneficial owner of such shares and
its affiliates(whether pursuant to ownership of Series B preferred
shares, common shares or otherwise) to exceed 49.0% of the total
number of votes eligible to be cast on any matter submitted to a
vote of shareholders of the Company. To the fullest extent
permitted by law, the holders of Series B preferred shares shall
have no special voting or consent rights and shall vote together as
one class with the holders of the common shares on all matters put
before the shareholders. The Series B preferred shares are not
convertible into common shares or any other security. They are not
redeemable and have no dividend rights. Upon any liquidation,
dissolution or winding up of the Company, the Series B preferred
shares are entitled to receive a payment with priority over the
common shareholders equal to the par value of $0.001 per share. The
Series B preferred shareholder has no other rights to distributions
upon any liquidation, dissolution or winding up of the Company. All
issued and outstanding Series B preferred shares must be held of
record by one holder, and the Series B preferred shares shall not
be transferred without the prior approval of our Board of
Directors. Finally, in the event the Company (i) declares any
dividend on its common shares, payable in common shares, (ii)
subdivides the outstanding common shares or (iii) combines the
outstanding common shares into a smaller number of shares, there
shall be a proportional adjustment to the number of outstanding
Series B preferred shares.
In July 2020, we issued an additional 25,000 of
our Series B preferred shares to Goldenmare Limited in return for
$150,000. The $150,000 was paid by reducing, on a dollar for dollar
basis, the amount payable as compensation by the Company to
Goldenmare Limited pursuant to a consultancy agreement.
In addition, we increased the maximum voting
rights under the Series B preferred shares from 49.0% to 49.99%.
The issuance of the Series B preferred shares to Goldenmare Limited
was approved by an independent committee of the Board of Directors
of the Company, which received a fairness opinion from an
independent financial advisor that the transaction was for a fair
value.
Public Offerings
On June 22, 2020, the Company issued 34,285,714
units in an underwritten public offering at a price of $0.35 per
unit. Each unit consisted of one common share and one Class A
warrant to purchase one common share (a “Class A Warrant”) and
immediately separated upon issuance. In addition, the Company
granted to Maxim Group LLC a 45-day option to purchase up to an
additional 5,142,857 common shares (or prefunded warrants in lieu
thereof) and up to 5,142,857 Class A warrants. At the time of the
closing, the underwriters exercised and closed on part of their
overallotment option and purchased an additional 5,139,286 Common
Shares and 5,139,286 Class A Warrants.
The prefunded warrants are exercisable at any
time after their original issuance until exercised in full. The
Class A Warrants are exercisable at any time after their original
issuance up to the date that is (a) five years after their original
issuance. Each of the prefunded warrants and the Class A Warrants
will be exercisable, in whole or in part by delivering to us a duly
executed exercise notice and, at any time a registration statement
registering the issuance of the common shares underlying the
warrants under the Securities Act is effective and available for
the issuance of such shares, by payment in full in immediately
available funds for the number of common shares purchased upon such
exercise. If a registration statement registering the issuance of
the common shares underlying the warrants under the Securities Act
is not effective or available, the holder may, in its sole
discretion, elect to exercise the warrant through a cashless
exercise, in which case the holder would receive upon such exercise
the net number of common shares determined according to the formula
set forth in the warrant. The Company may be required to pay
certain amounts as liquidated damages as specified in the warrants
in the event it does not deliver common shares upon exercise of the
warrants within the time periods specified in the warrants.
On June 30, 2020, the Company issued 45,850,000
of its common shares in a registered direct offering and 45,850,000
warrants (“PP Warrants”) in a concurrent private placement for a
purchase price of $0.27 per common share and June PP Warrant. The
exercise price of each June PP Warrant is $0.30 per share.
The PP Warrants are exercisable for a period of
five and one-half years commencing on the date of issuance. The
warrants will be exercisable, at the option of each holder, in
whole or in part by delivering to us a duly executed exercise
notice with payment in full in immediately available funds for the
number of common shares purchased upon such exercise. If a
registration statement registering the resale of the common shares
underlying the private placement warrants under the Securities Act
is not effective or available at any time after the six-month
anniversary of the date of issuance of the private placement
warrants, the holder may, in its sole discretion, elect to exercise
the private placement warrant through a cashless exercise, in which
case the holder would receive upon such exercise the net number of
common shares determined according to the formula set forth in the
warrant. If the Company does not issue the shares in a timely
fashion, the warrant contains certain liquidated damages
provisions.
On July 21, 2020, the Company issued 83,333,333
of its common shares in a registered direct offering and 83,333,333
of its July PP Warrants to purchase common shares in a concurrent
private placement for a purchase price of $0.18 per common share
and July PP Warrant. The exercise price of each July PP Warrant is
$0.18 per share. Concurrently with this offering the exercise price
of the June PP Warrants was reduced to $0.18 per share.
The PP Warrants are exercisable for a period of
five and one-half years commencing on the date of issuance. The
warrants will be exercisable, at the option of each holder, in
whole or in part by delivering to us a duly executed exercise
notice with payment in full in immediately available funds for the
number of common shares purchased upon such exercise. If a
registration statement registering the resale of the common shares
underlying the private placement warrants under the Securities Act
is not effective or available at any time after the six-month
anniversary of the date of issuance of the private placement
warrants, the holder may, in its sole discretion, elect to exercise
the private placement warrant through a cashless exercise, in which
case the holder would receive upon such exercise the net number of
common shares determined according to the formula set forth in the
warrant. If the Company does not issue the shares in a timely
fashion, the warrant contains certain liquidated damages
provisions.
From June 22, 2020 till today, the Company
issued 555,000 common shares pursuant to exercises of outstanding
Class A Warrants. As of September 25, 2020, no PP Warrants had been
exercised.
LIBOR will be replaced as the reference
rate under debt obligations
On July 27, 2017, the UK Financial Conduct
Authority announced that it would phase out LIBOR by the end of
2021. As a result, lenders have insisted on provisions that entitle
the lenders, in their discretion, to replace published LIBOR as the
basis for the interest calculation with their cost-of-funds rate.
Certain of the Company’s existing financing arrangements, provide
for the use of replacement rates if LIBOR is discontinued. The
Company is in the process of evaluating the impact of LIBOR
discontinuation. While it cannot predict the effect of the
potential changes to LIBOR or the establishment and use of
alternative rates or benchmarks, the interest payable on debt could
be subject to volatility and the lending costs could increase,
which would have an adverse effect on the Company’s profitability,
earnings and cash flow.
Results of Operations
Second quarter of the year
2020
compared to the
second quarter of
the year
2019
Total comprehensive loss for the second quarter
of the year 2020 amounted to $4.2 million or $0.39 basic and
diluted loss per share based on 10,861,371 weighted average number
of shares, compared to total comprehensive loss of $3 million for
the same period last year or $0.74 basic and diluted loss per share
based on 4,070,153 weighted average number of shares.
The following table corresponds to the breakdown
of the factors that led to the decrease in total comprehensive loss
during the second quarter of 2020 compared to the second quarter of
2019 (expressed in $000’s):
2nd
Quarter of 2020
vs 2nd
Quarter of
2019
|
Net loss for the
2nd quarter
of 2019 |
(3,001 |
) |
|
|
Decrease in voyage
revenues |
(1,100 |
) |
|
|
Decrease in Voyage
expenses |
95 |
|
|
|
Decrease in Vessels operating
expenses |
248 |
|
|
|
Decrease in Depreciation |
666 |
|
|
|
Decrease in Depreciation of
dry docking costs |
91 |
|
|
|
Increase in Total
administrative expenses |
(96 |
) |
|
|
Decrease in Other income,
net |
(42 |
) |
|
|
Decrease in Interest
income |
(8 |
) |
|
|
Decrease in Interest expense
and finance costs |
474 |
|
|
|
Decrease in Gain on derivative
financial instruments |
(1,522 |
) |
|
|
Increase in Foreign exchange
losses |
(2 |
) |
|
|
Net loss
for the 2nd
quarter of
2020 |
(4,197 |
) |
|
Voyage
revenuesDuring the
three-month period ended June 30, 2020 and 2019, our Voyage
revenues reached $2.3 million and $3.4 million respectively. The
32% decrease in Voyage revenues was mainly attributed to the
decrease in the average time charter rates achieved by our vessels
during the second quarter of 2020 compared to the same period in
2019. Daily Time Charter Equivalent rate (TCE) for the second
quarter of 2020 was $3,778 per vessel per day against $5,985 per
vessel per day during the same period in 2019 corresponding to a
decrease of 37%.
Voyage expenses Voyage expenses
reached $0.6 million during the second quarter of 2020 compared to
$0.7 during the same period in 2019. Voyage expenses include
commissions on revenues, port and other voyage expenses and bunker
expenses. Bunker expenses mainly refer to the cost of bunkers
consumed during periods that our vessels are travelling seeking
employment. Voyage expenses for the second quarter of 2020 and 2019
are analyzed as follows:
|
In $000’s |
2020 |
2019 |
|
|
Commissions |
29 |
47 |
|
|
Bunkers expenses |
545 |
552 |
|
|
Other voyage expenses |
6 |
76 |
|
|
Total |
580 |
675 |
|
Vessel operating expensesVessel
operating expenses, which include crew costs, provisions, deck and
engine stores, lubricating oils, insurance, maintenance, and
repairs, decreased by $0.2 million or 9% to $2 million during the
three-month period ended June 30, 2020 compared to $2.2 million
during the same period in 2019. The breakdown of our operating
expenses for the quarters ended June 30, 2020 and 2019 was as
follows:
|
|
2020 |
|
2019 |
|
|
|
Crew expenses |
55 |
% |
54 |
% |
|
|
Repairs and spares |
18 |
% |
21 |
% |
|
|
Insurance |
9 |
% |
5 |
% |
|
|
Stores |
9 |
% |
11 |
% |
|
|
Lubricants |
6 |
% |
5 |
% |
|
|
Other |
3 |
% |
4 |
% |
|
Average daily operating expenses during the
three-month periods ended June 30, 2020 and 2019 were $4,353 per
vessel per day and $4,898 per vessel per day respectively,
corresponding to a decrease of 11%. This decrease is mainly
attributed to the decrease of Crew traveling expenses as due to
COVID-19 there are restrictions on travelling on many jurisdictions
and it is increasingly hard, if not restrictive, for our crews to
be relieved by new crew members.
DepreciationDepreciation charge
during the second quarter of 2020 reached $0.5 million compared to
$1.2 million during the same period in 2019. This is mainly
attributed to the impairment loss of $4.6 million and $29.9 million
we recognized in the 1st quarter of 2020 and in December 2019,
respectively, as the recoverable amounts of the vessels were lower
than their respective carrying amounts.
Interest expense and finance
costsInterest expense and finance costs reached $1.1
million for the second quarter of 2020 compared to $1.6 million for
the same period of 2019. Interest expense and finance costs for the
second quarter of 2020 and 2019 are analyzed as follows:
|
In $000’s |
2020 |
2019 |
|
|
Interest payable on long-term
borrowings |
1,002 |
722 |
|
|
Bank charges |
7 |
6 |
|
|
Operating lease liability
interest |
11 |
26 |
|
|
Amortization of debt
discount |
71 |
221 |
|
|
Other finance expenses |
2 |
592 |
|
|
Total |
1,093 |
1,567 |
|
Other finance expenses for the second quarter of
2019 include approximately $0.6 million that were the loan
prepayment fee and expenses relating to the prepayment of Macquarie
Loan Agreement.
First half of the year 2020
compared to the first half of the year
2019
Total comprehensive loss for the first half of
the year 2020 amounted to $13.2 million or $1.58 basic and diluted
loss per share based on 8,339,137 weighted average number of
shares, compared to total comprehensive loss of $3.5 million for
the same period last year or $0.95 basic and diluted loss per share
based on 3,642,256 weighted average number of shares.
The following table corresponds to the breakdown
of the factors that led to the increase in total comprehensive loss
during the first half of 2020 compared to the first half of 2019
(expressed in $000’s):
1st
half of 2020 vs
1st half of
2019
|
Net loss for the 1st half
of 2019 |
(3,473 |
) |
|
|
Decrease in voyage
revenues |
(2,353 |
) |
|
|
Increase in Voyage
expenses |
(788 |
) |
|
|
Decrease in Vessels operating
expenses |
276 |
|
|
|
Decrease in Depreciation |
1,172 |
|
|
|
Decrease in Depreciation of
dry docking costs |
54 |
|
|
|
Decrease in Total
administrative expenses |
11 |
|
|
|
Increase in Impairment
loss |
(4,615 |
) |
|
|
Decrease in Other income,
net |
(78 |
) |
|
|
Increase in Interest
income |
3 |
|
|
|
Decrease in Interest expense
and finance costs |
36 |
|
|
|
Decrease in Gain on derivative
financial instruments |
(3,440 |
) |
|
|
Increase in Foreign exchange
losses |
(4 |
) |
|
|
Net loss for the
1st half of 2020 |
(13,199 |
) |
|
Voyage revenuesDuring the
six-month period ended June 30, 2020 and 2019, our Voyage revenues
reached $4.6 million and $6.9 million respectively. The 34%
decrease in Voyage revenues was mainly attributed to the decrease
in the average time charter rates achieved by our vessels during
the first half of 2020 compared to the same period in 2019. Daily
Time Charter Equivalent rate (TCE) for the first half of 2020 was
$3,016 per vessel per day against $6,358 per vessel per day during
the same period in 2019 corresponding to a decrease of 53%, which
is attributed to the outbreak of COVID-19 virus.
Voyage expenses Voyage expenses
reached $2 million during the first half of 2020 compared to $1.2
million during the same period last year. Voyage expenses include
commissions on revenues, port and other voyage expenses and bunker
expenses. Bunker expenses mainly refer to the cost of bunkers
consumed during periods that our vessels are travelling seeking
employment. Voyage expenses for the first half of 2020 and 2019 are
analyzed as follows:
|
In $000’s |
2020 |
2019 |
|
|
Commissions |
61 |
93 |
|
|
Bunkers expenses |
1,825 |
965 |
|
|
Other voyage expenses |
89 |
129 |
|
|
Total |
1,975 |
1,187 |
|
Bunkers expenses for the six-month period ended
June 30, 2020 reached $1.8 million compared to $1 million for the
same period in 2019. This increase is attributed to the more
expensive low sulphur fuel we needed to procure for our vessels in
order to comply with the IMO’s low sulphur fuel oil requirement,
which cuts sulphur levels from 3.5% to 0.5% and became effective as
of January 1, 2020. Another factor that contributed to the increase
was the considerably longer periods that our vessels were
travelling seeking employment due to the decrease of demand, which
is attributed to the outbreak of COVID-19 virus.
Vessel operating expensesVessel
operating expenses, which include crew costs, provisions, deck and
engine stores, lubricating oils, insurance, maintenance, and
repairs, reached $4 million during the first half of 2020 compared
to $4.3 million during the same period last year. The breakdown of
our operating expenses for the six-month period ended June 30, 2020
and 2019 was as follows:
|
|
2020 |
|
2019 |
|
|
|
Crew expenses |
56 |
% |
55 |
% |
|
|
Repairs and spares |
18 |
% |
19 |
% |
|
|
Insurance |
8 |
% |
7 |
% |
|
|
Stores |
10 |
% |
10 |
% |
|
|
Lubricants |
5 |
% |
5 |
% |
|
|
Other |
3 |
% |
4 |
% |
|
Average daily operating expenses during the
six-month periods ended June 30, 2020 and 2019 were $4,437 per
vessel per day and $4,767 per vessel per day respectively,
corresponding to a decrease of 7%. This is partly attributed to the
decrease of Crew traveling expenses as due to COVID-19 there are
restrictions on travelling on many jurisdictions and it is
increasingly hard, if not restrictive, for our crews to be relieved
by new crew members.
DepreciationDepreciation charge
during the first half of 2020 reached $1.2 million compared to $2.3
million during the same period in 2019. This is mainly attributed
to the impairment loss of $4.6 million and $29.9 million we
recognized in the 1st quarter of 2020 and in December 2019,
respectively, as the recoverable amounts of the vessels were lower
than their respective carrying amounts.
Impairment lossDuring the 1st
quarter of 2020, the Company concluded that the recoverable amounts
of the vessels were lower than their respective carrying amounts
and recognized an impairment loss of $4.6 million.
Interest expense and finance
costsInterest expense and finance costs reached $2.2
million during the first half of 2020 compared to $2.3 million in
2019. Interest expense and finance costs for the first half of 2020
and 2019 are analyzed as follows:
|
In $000’s |
2020 |
2019 |
|
|
Interest payable on long-term
borrowings |
2,061 |
1,343 |
|
|
Bank charges |
12 |
14 |
|
|
Operating lease liability
interest |
23 |
26 |
|
|
Amortization of debt
discount |
141 |
250 |
|
|
Other finance expenses |
5 |
645 |
|
|
Total |
2,242 |
2,278 |
|
As of June 30, 2020, and 2019 we and our
vessel-owning subsidiaries had outstanding borrowings under our
Loan agreements of an aggregate of $37.8 million and of $42.8
million, respectively, gross of unamortized debt discount. The
increase in interest payable is mainly attributed to the increase
of the weighted interest rate from 6.7% during the first half of
2019 to 10.1% for the same period in 2020. Other finance expenses
for the first half 2019 include approximately $600 that were the
loan prepayment fee and expenses relating to the prepayment of
Macquarie Loan Agreement.
Gain/(Loss)
on derivative financial instrumentsThe loss on the
derivative financial instruments is mainly attributed to the
conversions and the repayment of the “Convertible Note”. Further to
the conversion clause included into the Convertible Note during the
1st half of 2020 a total amount of approximately $1,168, principal
and accrued interest, was converted to share capital with the
conversion price of $1 per share and a total number of 1,167,767
new shares issued in name of the holder of the Convertible Note.
These conversions resulted to a loss of approximately $0.3 million
recognized in the consolidated statement of comprehensive loss.
Furthermore, with the repayment of the Convertible Note on June 25,
2020, we recognized a loss of $1.3 million in the consolidated
statement of comprehensive loss.
Liquidity and capital
resourcesAs of June 30, 2020 and 2019, our cash and bank
balances and bank deposits (including restricted cash) were $20.7
and $4.8 million respectively.
Net cash used
in operating activities for
the
three-month period ended
June 30, 2019 was $2 million compared to
$0.7 million during the respective period in 2019. The decrease in
our cash from operations was mainly attributed to the decrease in
our Voyage revenues from $3.4 million during the second quarter of
2019 to $2.3 million during the three-month period under
consideration.
Net cash used in operating activities
for the
six-month period ended
June 30, 2020 was $4 million compared to $1.8 million
during the respective period in 2019. The increase in our cash used
in operating activities was mainly attributed to the decrease in
our Voyage revenues from $6.9 million during the first half of 2019
to $4.6 million during the six-month period under
consideration.
Net cash generated
from financing activities during the
three-month and six-month period ended June 30, 2020 and 2019 were
as follows:
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
In $000’s |
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
Proceeds from loans |
- |
|
37,800 |
|
|
- |
|
43,700 |
|
Proceeds from issuance of
share capital |
24,207 |
|
- |
|
|
24,207 |
|
- |
|
Proceeds from issuance of
warrants |
194 |
|
- |
|
|
194 |
|
- |
|
Transaction costs on issue of
new common shares |
(532 |
) |
- |
|
|
(532 |
) |
- |
|
Prepayment of long term
debt |
(2,240 |
) |
(33,833 |
) |
|
(2,240 |
) |
(33,833 |
) |
Repayment of long term
debt |
- |
|
(694 |
) |
|
- |
|
(1,830 |
) |
Restricted cash |
(446 |
) |
(659 |
) |
|
(83 |
) |
(809 |
) |
Payment of financing
costs |
- |
|
(880 |
) |
|
- |
|
(880 |
) |
Repayment of lease
liability |
- |
|
(30 |
) |
|
- |
|
(30 |
) |
Interest paid |
(1,259 |
) |
(1,253 |
) |
|
(1,728 |
) |
(1,833 |
) |
Net cash
generated from financing
activities |
19,924 |
|
451 |
|
|
19,818 |
|
4,485 |
|
As of June 30, 2020 and 2019 we and our
vessel-owning subsidiaries had outstanding borrowings under our
Loan agreements of an aggregate of $37.8 million and of $42.8
million respectively gross of unamortized debt discount.
SELECTED CONSOLIDATED FINANCIAL &
OPERATING DATA
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
(in thousands of U.S. dollars, except per share data) |
(unaudited) |
(unaudited) |
Consolidated statement of
comprehensive loss
data: |
|
|
|
|
Voyage revenues |
2,299 |
|
3,399 |
|
|
4,589 |
|
6,942 |
|
Total Revenues |
2,299 |
|
3,399 |
|
|
4,589 |
|
6,942 |
|
|
|
|
|
|
Voyage expenses |
(580 |
) |
(675 |
) |
|
(1, 975 |
) |
(1,187 |
) |
Vessel operating expenses |
(1,981 |
) |
(2,229 |
) |
|
(4,038 |
) |
(4,314 |
) |
Depreciation |
(543 |
) |
(1,209 |
) |
|
(1,176 |
) |
(2,348 |
) |
Depreciation of dry docking costs |
(365 |
) |
(456 |
) |
|
(856 |
) |
(910 |
) |
Administrative expenses |
(426 |
) |
(364 |
) |
|
(820 |
) |
(827 |
) |
Administrative expenses payable to related parties |
(92 |
) |
(60 |
) |
|
(184 |
) |
(188 |
) |
Share-based payments |
(10 |
) |
(10 |
) |
|
(20 |
) |
(20 |
) |
Impairment loss |
- |
|
- |
|
|
(4,615 |
) |
- |
|
Other income, net |
7 |
|
49 |
|
|
1 |
|
79 |
|
Operating loss |
(1,691 |
) |
(1,555 |
) |
|
(9,094 |
) |
(2,773 |
) |
Interest income |
1 |
|
9 |
|
|
12 |
|
9 |
|
Interest expense and finance costs |
(1,093 |
) |
(1,566 |
) |
|
(2,242 |
) |
(2,278 |
) |
Gain / (Loss) on derivative financial instruments |
(1,374 |
) |
148 |
|
|
(1,868 |
) |
1,572 |
|
Foreign exchange losses, net |
(40 |
) |
(37 |
) |
|
(7 |
) |
(3 |
) |
Total finance costs, net |
(2,506 |
) |
(1,446 |
) |
|
(4,105 |
) |
(700 |
) |
Total comprehensive loss
for the period |
(4,197 |
) |
(3,001 |
) |
|
(13,199 |
) |
(3,473 |
) |
|
|
|
|
|
Basic & diluted loss per
share for the period(1) |
(0.39 |
) |
(0.74 |
) |
|
(1.58 |
) |
(0.95 |
) |
Adjusted EBITDA (2) |
(783 |
) |
110 |
|
|
(2,447 |
) |
485 |
|
(1) |
The weighted
average number of shares for the six-month period ended June 30,
2020 was 8,339,137 compared to 3,642,256 shares for the six-month
period ended June 30, 2019. The weighted average number of shares
for the three-month period ended June 30, 2020 was 10,861,371
compared to 4,070,153 shares for the three-month period ended June
30, 2019. |
(2) |
Adjusted EBITDA represents net earnings before interest and
finance costs net, gains or losses from the change in fair value of
derivative financial instruments, foreign exchange gains or losses,
income taxes, depreciation, depreciation of dry-docking costs,
amortization of fair value of time charter acquired, impairment and
gains or losses on sale of vessels. Adjusted EBITDA does not
represent and should not be considered as an alternative to total
comprehensive income/(loss) or cash generated from operations, as
determined by IFRS, and our calculation of Adjusted EBITDA may not
be comparable to that reported by other companies. Adjusted EBITDA
is not a recognized measurement under IFRS. |
Adjusted EBITDA is included herein because it is
a basis upon which we assess our financial performance and because
we believe that it presents useful information to investors
regarding a company’s ability to service and/or incur indebtedness
and it is frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in our
industry.
Adjusted EBITDA has limitations as an analytical
tool, and you should not consider it in isolation, or as a
substitute for analysis of our results as reported under IFRS. Some
of these limitations are:
- Adjusted EBITDA
does not reflect our cash expenditures or future requirements for
capital expenditures or contractual commitments;
- Adjusted EBITDA
does not reflect the interest expense or the cash requirements
necessary to service interest or principal payments on our
debt;
- Adjusted EBITDA
does not reflect changes in or cash requirements for our working
capital needs; and
- Other companies in
our industry may calculate Adjusted EBITDA differently than we do,
limiting its usefulness as a comparative measure.
Because of these limitations, Adjusted EBITDA
should not be considered a measure of discretionary cash available
to us to invest in the growth of our business.
The following table sets forth a
reconciliation of Adjusted EBITDA to total
comprehensive loss and net cash used in operating
activities for the periods presented:
|
Three months ended |
|
|
Six months ended |
|
|
June 30, |
|
|
June 30, |
|
(Expressed in thousands of U.S. dollars) |
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
Total comprehensive loss
for the period |
(4,197 |
) |
(3,001 |
) |
|
(13,199 |
) |
(3,473 |
) |
Interest
and finance costs, net |
1,093 |
|
1,566 |
|
|
2,242 |
|
2,278 |
|
Interest
income |
(1 |
) |
(9 |
) |
|
(12 |
) |
(9 |
) |
Gain /
(Loss) on derivative financial instruments |
1,374 |
|
(148 |
) |
|
1,868 |
|
(1,572 |
) |
Foreign
exchange losses, net |
40 |
|
37 |
|
|
7 |
|
3 |
|
Depreciation |
543 |
|
1,209 |
|
|
1,176 |
|
2,348 |
|
Depreciation of dry docking costs |
365 |
|
456 |
|
|
856 |
|
910 |
|
Impairment loss |
- |
|
- |
|
|
4,615 |
|
- |
|
Adjusted
EBITDA |
(783 |
) |
110 |
|
|
(2,447 |
) |
485 |
|
Share-based payments |
10 |
|
10 |
|
|
20 |
|
20 |
|
Payment
of deferred dry docking costs |
(493 |
) |
(128 |
) |
|
(493 |
) |
(481 |
) |
Net
decrease/(increase) in operating assets |
440 |
|
234 |
|
|
365 |
|
(901 |
) |
Net
decrease in operating liabilities |
(1,159 |
) |
(854 |
) |
|
(1,414 |
) |
(873 |
) |
Provision for staff retirement indemnities |
2 |
|
(64 |
) |
|
3 |
|
(63 |
) |
Foreign
exchange (losses) net, not attributed to cash & cash
equivalents |
(10 |
) |
(3 |
) |
|
(3 |
) |
(5 |
) |
Net cash used in
operating activities |
(1,993 |
) |
(695 |
) |
|
(3,969 |
) |
(1,818 |
) |
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
|
June 30, |
|
(Expressed in thousands of
U.S. dollars) |
2020 |
2019 |
|
2020 |
|
2019 |
|
|
(Unaudited) |
|
(Unaudited) |
|
Statement of cash flow data: |
|
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
(1,993 |
) |
(695 |
) |
|
(3,969 |
) |
(1,818 |
) |
Net cash generated from/(used
in) investing activities |
1 |
|
(4 |
) |
|
12 |
|
(4 |
) |
Net cash provided by financing
activities |
19,924 |
|
451 |
|
|
19,818 |
|
4,485 |
|
|
As of June
30, |
As of December 31, |
(Expressed in thousands of U.S. Dollars) |
2020 |
2019 |
|
(Unaudited) |
|
Consolidated condensed statement of financial
position: |
|
|
Vessels, net |
43,167 |
48,242 |
Other non-current assets |
1,852 |
1,925 |
Total non-current assets |
45,019 |
50,167 |
Cash and bank balances and bank deposits |
19,495 |
3,551 |
Other current assets |
1,573 |
1,938 |
Total current assets |
21,068 |
5,489 |
Total assets |
66,087 |
55,656 |
Total equity |
21,524 |
9,879 |
Total debt net of unamortized debt discount |
36,706 |
37,746 |
Other liabilities |
7,857 |
8,031 |
Total
liabilities |
44,563 |
45,777 |
Total equity and liabilities |
66,087 |
55,656 |
Consolidated statement of changes in
equity: |
|
|
|
|
|
|
|
(Expressed in thousands of U.S. Dollars) |
Issued share |
Share |
|
(Accumulated |
|
Total |
|
|
Capital |
Premium |
|
Deficit) |
|
Equity |
|
As at December 31, 2019 |
21 |
145,506 |
|
(135,648 |
) |
9,879 |
|
Loss for the period |
- |
- |
|
(13,199 |
) |
(13,199 |
) |
Issuance of common stock due to conversion |
5 |
810 |
|
- |
|
815 |
|
Issuance of new common shares |
341 |
23,866 |
|
- |
|
24,207 |
|
Issuance of new common shares due to exercise of Warrants |
2 |
192 |
|
- |
|
194 |
|
Issuance of Class B preferred shares |
- |
150 |
|
- |
|
150 |
|
Transaction costs on issue of new common shares |
- |
(532 |
) |
- |
|
(532 |
) |
Share-based payments |
- |
10 |
|
- |
|
10 |
|
As at June
30,
2020 |
369 |
170,002 |
|
(148,847 |
) |
21,524 |
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Ownership days (1) |
455 |
|
455 |
|
|
910 |
|
905 |
|
Available days (2) |
455 |
|
455 |
|
|
867 |
|
905 |
|
Operating days (3) |
448 |
|
438 |
|
|
856 |
|
887 |
|
Fleet utilization (4) |
98.5 |
% |
96.4 |
% |
|
98.8 |
% |
98 |
% |
Average number of vessels (5) |
5.0 |
|
5.0 |
|
|
5.0 |
|
5.0 |
|
Daily time charter equivalent (TCE) rate (6) |
3,778 |
|
5,985 |
|
|
3,016 |
|
6,358 |
|
Daily operating expenses (7) |
4,353 |
|
4,898 |
|
|
4,437 |
|
4,767 |
|
Notes: |
(1) |
Ownership days are the aggregate number of days in a period during
which each vessel in our fleet has been owned by us. |
(2) |
Available days are the number
of ownership days less the aggregate number of days that our
vessels are off-hire due to scheduled repairs or repairs under
guarantee, vessel upgrades or special surveys. |
(3) |
Operating days are the number
of available days less the aggregate number of days that the
vessels are off-hire due to any reason, including unforeseen
circumstances but excluding days during which vessels are seeking
employment. |
(4) |
We calculate fleet utilization
by dividing the number of operating days during a period by the
number of available days during the period. |
(5) |
Average number of vessels is
measured by the sum of the number of days each vessel was part of
our fleet during a relevant period divided by the number of
calendar days in such period. |
(6) |
TCE rates are our voyage
revenues less net revenues from our bareboat charters less voyage
expenses during a period divided by the number of our available
days during the period excluding bareboat charter days, which is
consistent with industry standards. TCE is a measure not in
accordance with GAAP. |
(7) |
We calculate daily vessel
operating expenses by dividing vessel operating expenses by
ownership days for the relevant time period excluding bareboat
charter days. |
|
|
Voyage Revenues to Daily Time Charter
Equivalent (“TCE”) Reconciliation
|
Three months ended June 30, |
Six months ended June 30, |
|
2020 |
2019 |
2020 |
2019 |
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
Voyage revenues |
2,299 |
3,399 |
4,589 |
6,942 |
Less: Voyage expenses |
580 |
675 |
1,975 |
1,187 |
Net revenues |
1,719 |
2,724 |
2,614 |
5,755 |
Available days net of bareboat charter days |
455 |
455 |
867 |
905 |
Daily TCE rate (1) |
3,778 |
5,985 |
3,016 |
6,358 |
(1) Subject to rounding.
About Globus Maritime
LimitedGlobus is an integrated dry bulk shipping company
that provides marine transportation services worldwide and
presently owns, operates and manages a fleet of five dry bulk
vessels that transport iron ore, coal, grain, steel products,
cement, alumina and other dry bulk cargoes internationally. Globus’
subsidiaries own and operate five vessels with a total carrying
capacity of 300,571 Dwt and a weighted average age of 12.3 years as
of June 30, 2020.
Safe Harbor StatementThis
communication contains “forward-looking statements” as defined
under U.S. federal securities laws. Forward-looking statements
provide the Company’s current expectations or forecasts of future
events. Forward-looking statements include statements about the
Company’s expectations, beliefs, plans, objectives, intentions,
assumptions and other statements that are not historical facts or
that are not present facts or conditions. Words or phrases such as
“anticipate,” “believe,” “continue,” “estimate,” “expect,”
“intend,” “may,” “ongoing,” “plan,” “potential,” “predict,”
“project,” “will” or similar words or phrases, or the negatives of
those words or phrases, may identify forward-looking statements,
but the absence of these words does not necessarily mean that a
statement is not forward-looking. Forward-looking statements are
subject to known and unknown risks and uncertainties and are based
on potentially inaccurate assumptions that could cause actual
results to differ materially from those expected or implied by the
forward-looking statements. The Company’s actual results could
differ materially from those anticipated in forward-looking
statements for many reasons specifically as described in the
Company’s filings with the Securities and Exchange Commission.
Accordingly, you should not unduly rely on these forward-looking
statements, which speak only as of the date of this communication.
Globus undertakes no obligation to publicly revise any
forward-looking statement to reflect circumstances or events after
the date of this communication or to reflect the occurrence of
unanticipated events. You should, however, review the factors and
risks Globus describes in the reports it will file from time to
time with the Securities and Exchange Commission after the date of
this communication.
For
further information please contact: |
|
|
Globus Maritime Limited |
+30 210 960 8300 |
Athanasios Feidakis, CEO |
a.g.feidakis@globusmaritime.gr |
|
|
Capital Link – New
York |
+1 212 661 7566 |
Nicolas Bornozis |
globus@capitallink.com |
|
|
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