Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today
reported unaudited financial results for the second quarter (“Q2
2020”) and six-months ended June 30, 2020.
- Liquidity of $220.7 million as of
end Q2 2020 (including our share of cash amounting to $19.6 million
held in subsidiaries co-owned with York Capital Management Global
Advisors LLC and an affiliated fund (collectively, together with
the funds it manages or advises, “York”)).
- Voyage Revenues of $111.9 million
in Q2 2020.
- Delivery on July 24, 2020 of the
12,690 TEU containership YM Triumph (ex Hull Nr YZJ2015-2057) the
first of a series of five sister vessels ordered in May 2018. On
July 25, 2020, the vessel commenced its ten-year charter with Yang
Ming.
- Adjusted Net Income available to
common stockholders(1) of $31.7 million or $0.26 per share in Q2
2020.
- Net Loss available to common
stockholders of $83.9 million (mainly due to non-cash charges
related to vessels held for sale and vessels’ impairment of $107.5
million) or $0.70 loss per share in Q2 2020.
- Adjusted Net Income available to
common stockholders(1) of $64.3 million or $0.54 per share for the
six-month period ended June 30, 2020.
- Net Loss available to common
stockholders of $58.3 million (mainly due to non-cash charges
related to vessels held for sale and vessels’ impairment of $110.8
million) or $0.49 loss per share for the six-month period ended
June 30, 2020.
- Conclusion of refinancing program
with no meaningful debt maturities until 2024.
- Arranged financing agreements for
an aggregate amount of $140.0 million. More specifically:- Signed a
loan facility agreement with a European financial institution for
an amount of up to $70.0 million, secured by 12 vessels, in order
to partially refinance an existing loan facility originally
maturing in 2021.- Signed a loan facility agreement with a European
financial institution for an amount of up to $70.0 million, secured
by 6 vessels, in order to partially refinance an existing loan
facility originally maturing in 2021.
- Chartered in total 24 vessels over
the quarter.
- Sold the 1997-built, 7,403 TEU
sister container vessels Kawasaki and Kokura.
- Declared dividend of $0.10 per
share on its common stock and dividends on all four classes of its
preferred stock.
(1) Adjusted Net Income available to common
stockholders and respective per share figures are non-GAAP measures
and should not be used in isolation or as substitutes for
Costamare’s financial results presented in accordance with U.S.
generally accepted accounting principles (“GAAP”). For the
definition and reconciliation of these measures to the most
directly comparable financial measure calculated and presented in
accordance with GAAP, please refer to Exhibit I.
New Business Developments
A. New
charter agreements
• The Company
has chartered in total 24 vessels over the quarter. More
specifically, the Company agreed to:
I. Vessels above 5,500 TEU
capacity (Post – Panamax)
- Extend the
charters of the 2013-built, 8,827 TEU sister containerships Valor,
Value, Valiant, Valence and Vantage for 2 years (until Q2-Q3 2025)
with Hapag Lloyd. The daily rate of each charter is $32,400.
- Extend the
charter of the 2006-built, 9,469 TEU containership Cosco Hellas
with COSCO for a period of 2 to 11 months at charterers’ option,
starting from June 18, 2020, at an undisclosed daily rate.
- Extend the
charter of the 2006-built, 9,469 TEU containership Yantian (ex.
Cosco Yantian) with COSCO for a period of 2 to 11 months at
charterers’ option, starting from June 17, 2020, at an undisclosed
daily rate.
- Charter the
2006-built, 9,469 TEU containership Beijing (ex. Cosco Beijing)
with COSCO for a period of approximately 3 to 11.5 months at
charterers’ option, starting from July 5, 2020, at an undisclosed
daily rate.
- Charter the
2000-built, 6,648 TEU containership Maersk Kobe with RCL Feeder for
a period of 11 to 14 months at charterers’ option, starting from
September 6, 2020, at a daily rate of $14,500.
- Charter the
2000-built, 6,648 TEU containership York with Maersk for a period
of 2 to 5 months at charterers’ option, starting from July 3, 2020,
at a daily rate of $11,500.
- Charter the
1996-built, 7,403 TEU containership Kure with COSCO for a period of
approximately 2 to 8 months at charterers’ option, starting from
July 26, 2020, at a daily rate of $9,500.
- Charter the
2001-built, 5,576 TEU containership Ensenada with Evergreen for a
period of 2 to 4 months at charterers’ option, starting from July
13, 2020, at a daily rate of $8,700.
II. Vessels below 5,500 TEU
capacity
- Exercise its
option with ZIM to extend the charters of the 2002-built, 4,992 TEU
sister containerships, ZIM Shanghai and ZIM New York for the period
starting from October 2, 2020 to October 1, 2021, at a market rate
plus $1,100 per day per vessel.
- Extend the
charter of the 2009-built, 4,258 TEU containership JPO Virgo with
CMA CGM for a period of 2 to 10 months at charterers’ option,
starting from May 13, 2020, at a daily rate of $8,950.
Subsequently, agreed to charter the vessel to Evergreen for a
period of 6 to 9 months at charterers’ option, starting from August
8, 2020, at a daily rate of $8,600.
- Charter the
2009-built, 4,258 TEU containership Vela with OOCL for a period of
approximately 3 to 9 months at charterers’ option, starting from
May 19, 2020, at a daily rate of $7,950.
- Charter the
2010-built, 4,258 TEU containership Volans with ZIM for a period of
2 to 12 months at charterers’ option, starting from June 29, 2020,
at a daily rate of $7,000.
- Charter the
2010-built, 4,258 TEU containership Vulpecula with OOCL for a
period of approximately 5 to 9 months at charterers’ option,
starting from July 1, 2020, at a daily rate of $7,000.
- Extend the
charter of the 2005-built, 2,556 TEU containership Etoile for a
period of 5 to 8.5 months at charterers’ option, starting from
August 15, 2020, at an undisclosed daily rate.
- Charter the
2000-built, 2,474 TEU containership Areopolis with COSCO for a
period of 3 to 8.5 months at charterers’ option, starting from June
16, 2020, at a daily rate of $7,500.
- Extend the
charter of the 1997-built, 2,458 TEU containership Messini with
Evergreen for a period of 3 to 5 months at charterers’ option,
starting from May 18, 2020, at a daily rate of $8,500.
- Charter the
2004-built, 2,586 TEU containership Lakonia with COSCO for a period
of 3 to 8.5 months at charterers’ option, starting from June 8,
2020, at a daily rate of $7,500.
- Charter the
1996-built, 1,504 TEU containership Prosper with TS Lines for a
period of approximately 1 to 3 months at charterers’ option,
starting from July 10, 2020, at a daily rate of $5,500.
- Extend the
charter of the 1995-built, 1,162 TEU containership Zagora with MSC
for a period of up to 2 months at charterers’ option, starting from
July 1, 2020, at an undisclosed daily rate.
B. New
Financing Agreements
• In May 2020,
we entered into a loan facility agreement with a European financial
institution for an amount of up to $70.0 million, in order to
partially refinance a facility originally maturing in 2021 (balloon
payment of $48.0 million). The new refinancing facility will be
repayable over five years.
• In June 2020,
we entered into a loan facility agreement with a European financial
institution for an amount of up to $70.0 million, in order to
partially refinance a facility originally maturing in 2021 (balloon
payment of $36.0 million). The new refinancing facility will be
repayable over four years.
C. Newbuild
vessel delivery
• On July 24,
2020, we accepted delivery of the 12,690 TEU containership YM
Triumph, the first of a series of five vessels ordered in May 2018.
On July 25, 2020, the vessel commenced its ten-year charter with
Yang Ming. YM Triumph, as well as the other four sister vessels
currently under construction have secured pre and post delivery
financing.
D. Vessel
Disposals
• In July 2020,
we concluded the sale of the 1997-built, 7,403 TEU sister
containerships Kawasaki and Kokura.
E. Dividend
announcements
• On July 1,
2020, we declared a dividend for the quarter ended June 30, 2020,
of $0.10 per share on our common stock, payable on August 7, 2020,
to stockholders of record of common stock as of July 22, 2020.
• On July 1,
2020, we declared a dividend of $0.476563 per share on our Series B
Preferred Stock, a dividend of $0.531250 per share on our Series C
Preferred Stock, a dividend of $0.546875 per share on our Series D
Preferred Stock and a dividend of $0.554688 per share on our Series
E Preferred Stock, which were all paid on July 15, 2020 to holders
of record as of July 14, 2020.
Mr. Gregory Zikos, Chief Financial
Officer of Costamare Inc., commented:
“During the second quarter the Company delivered
strong results.
Liquidity stood at around $220 million and, as
already announced, during the second quarter of the year we
concluded our refinancing program, resulting in a smooth repayment
profile with no meaningful debt maturities until 2024.
On the market side, laid up capacity has started
decreasing, indicating improving market conditions. Demand
continues to favor the larger and medium sizes, and especially
ships above 8,000 TEUs. Market activity has picked up and we have
chartered in total 24 ships during the quarter.
After months of inactivity the demolition market
has re-opened and, as part of our fleet renewal program, we have
sold for demolition two 7,400 TEU ships which we plan to replace
with younger tonnage.”
Financial Summary
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Six-month period ended June 30, |
|
Three-month period ended June 30, |
(Expressed in thousands of
U.S. dollars, except share and per share data): |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
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Voyage revenue |
|
$ 230,010 |
|
|
$ 233,273 |
|
|
$ 117,036 |
|
|
$ 111,869 |
|
Accrued charter revenue
(1) |
|
$ 191 |
|
|
$ 7,721 |
|
|
$ 2,040 |
|
|
$ 7,025 |
|
Amortization of Time-charter
assumed |
|
$ 95 |
|
|
$ 95 |
|
|
$ 48 |
|
|
$ 47 |
|
Voyage revenue adjusted on a
cash basis (2) |
|
$ 230,296 |
|
|
$ 241,089 |
|
|
$ 119,124 |
|
|
118,941 |
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income available
to common stockholders (3) |
|
$ 39,795 |
|
|
$ 64,265 |
|
|
$ 26,215 |
|
|
$ 31,705 |
|
Weighted Average number of
shares |
|
113,540,975 |
|
|
119,927,560 |
|
|
114,040,870 |
|
|
120,319,180 |
|
Adjusted Earnings per share
(3) |
|
$ 0.35 |
|
|
$ 0.54 |
|
|
$ 0.23 |
|
|
$ 0.26 |
|
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|
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|
|
Net Income / (Loss) |
|
$ 27,136 |
|
|
($ 43,447 |
) |
|
$ 28,790 |
|
|
($ 76,223 |
) |
Net Income / (Loss) available
to common stockholders |
|
$ 11,589 |
|
|
($ 58,289 |
) |
|
$ 20,886 |
|
|
($ 83,913 |
) |
Weighted Average number of
shares |
|
113,540,975 |
|
|
119,927,560 |
|
|
114,040,870 |
|
|
120,319,180 |
|
Earnings / (Losses) per
share |
|
$ 0.10 |
|
|
($ 0.49 |
) |
|
$ 0.18 |
|
|
($ 0.70 |
) |
(1) Accrued charter revenue represents the
difference between cash received during the period and revenue
recognized on a straight-line basis. In the early years of a
charter with escalating charter rates, voyage revenue will exceed
cash received during the period and during the last years of such
charter cash received will exceed revenue recognized on a
straight-line basis.(2) Voyage revenue adjusted on a cash basis
represents Voyage revenue after adjusting for non-cash “Accrued
charter revenue” recorded under charters with escalating charter
rates. However, Voyage revenue adjusted on a cash basis is not a
recognized measurement under U.S. generally accepted accounting
principles (“GAAP”). We believe that the presentation of Voyage
revenue adjusted on a cash basis is useful to investors because it
presents the charter revenue for the relevant period based on the
then current daily charter rates. The increases or decreases in
daily charter rates under our charter party agreements are
described in the notes to the “Fleet List” below.(3) Adjusted Net
Income available to common stockholders and Adjusted Earnings per
Share are non-GAAP measures. Refer to the reconciliation of Net
Income to Adjusted Net Income.
Non-GAAP Measures
The Company reports its financial results in
accordance with U.S. GAAP. However, management believes that
certain non-GAAP financial measures used in managing the business
may provide users of these financial measures additional meaningful
comparisons between current results and results in prior operating
periods. Management believes that these non-GAAP financial measures
can provide additional meaningful reflection of underlying trends
of the business because they provide a comparison of historical
information that excludes certain items that impact the overall
comparability. Management also uses these non-GAAP financial
measures in making financial, operating and planning decisions and
in evaluating the Company’s performance. The tables below set out
supplemental financial data and corresponding reconciliations to
GAAP financial measures for the three and the six-month periods
ended June 30, 2020 and 2019. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, voyage
revenue or net income as determined in accordance with GAAP.
Non-GAAP financial measures include (i) Voyage revenue adjusted on
a cash basis (reconciled above), (ii) Adjusted Net Income available
to common stockholders and (iii) Adjusted Earnings per Share.
Exhibit I Reconciliation of Net Income
to Adjusted Net Income available to common stockholders and
Adjusted Earnings per Share
|
|
Six-month period ended June
30, |
|
Three-month period ended June
30, |
(Expressed in thousands of
U.S. dollars, except share and per share data) |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
/ (Loss) |
$ |
27,136 |
|
$ |
(43,447 |
) |
$ |
28,790 |
|
$ |
(76,223 |
) |
Earnings allocated to
Preferred Stock |
|
(15,547 |
) |
|
(15,461 |
) |
|
(7,904 |
) |
|
(7,768 |
) |
Gain on retirement of
Preferred Stock |
|
- |
|
|
619 |
|
|
- |
|
|
78 |
|
Net Income / (Loss)
available to common stockholders |
|
11,589 |
|
|
(58,289 |
) |
|
20,886 |
|
|
(83,913 |
) |
Accrued charter revenue |
|
191 |
|
|
7,721 |
|
|
2,040 |
|
|
7,025 |
|
General and administrative
expenses - non-cash component |
|
1,545 |
|
|
1,508 |
|
|
767 |
|
|
832 |
|
Amortization of prepaid lease
rentals, net |
|
4,042 |
|
|
- |
|
|
2,033 |
|
|
- |
|
Amortization of Time charter
assumed |
|
95 |
|
|
95 |
|
|
48 |
|
|
47 |
|
Realized (Gain) / loss on
Euro/USD forward contracts (1) |
|
208 |
|
|
(78 |
) |
|
112 |
|
|
(54 |
) |
Vessels’ impairment loss |
|
3,042 |
|
|
31,577 |
|
|
- |
|
|
28,506 |
|
(Gain) / Loss on sale /
disposals of vessels |
|
18,420 |
|
|
(10 |
) |
|
- |
|
|
- |
|
Non-recurring, non-cash
write-off of loan deferred financing costs |
|
- |
|
|
478 |
|
|
- |
|
|
478 |
|
Loss on sale / disposal of
vessel by a jointly owned company with York included in equity gain
on investments |
|
38 |
|
|
- |
|
|
38 |
|
|
- |
|
Loss on vessels held for
sale |
|
- |
|
|
79,197 |
|
|
- |
|
|
78,965 |
|
(Gain) / loss on derivative
instruments, excluding interest accrued and realized on non-hedging
derivative instruments (1) |
|
625 |
|
|
2,066 |
|
|
291 |
|
|
(181 |
) |
Adjusted Net Income
available to common stockholders |
$ |
39,795 |
|
$ |
64,265 |
|
$ |
26,215 |
|
$ |
31,705 |
|
Adjusted Earnings per
Share |
$ |
0.35 |
|
$ |
0.54 |
|
$ |
0.23 |
|
$ |
0.26 |
|
Weighted average number of
shares |
|
113,540,975 |
|
|
119,927,560 |
|
|
114,040,870 |
|
|
120,319,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income available to common
stockholders and Adjusted Earnings per Share represent Net Income
after earnings allocated to preferred stock and gain on retirement
of preferred stock, but before non-cash “Accrued charter revenue”
recorded under charters with escalating charter rates, realized
(gain)/loss on Euro/USD forward contracts, vessels’ impairment
loss, (gain)/loss on sale / disposal of vessels, loss on vessels
held for sale, loss on sale / disposal of vessel by a jointly owned
company with York included in equity gain on investments,
non-recurring, non-cash write-off of loan deferred financing costs,
general and administrative expenses - non-cash component,
amortization of prepaid lease rentals, net, amortization of Time
charter assumed and non-cash changes in fair value of derivatives.
“Accrued charter revenue” is attributed to the timing difference
between the revenue recognition and the cash collection. However,
Adjusted Net Income available to common stockholders and Adjusted
Earnings per Share are not recognized measurements under U.S. GAAP.
We believe that the presentation of Adjusted Net Income available
to common stockholders and Adjusted Earnings per Share are useful
to investors because they are frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in our industry. We also believe that Adjusted Net
Income available to common stockholders and Adjusted Earnings per
Share are useful in evaluating our ability to service additional
debt and make capital expenditures. In addition, we believe that
Adjusted Net Income available to common stockholders and Adjusted
Earnings per Share are useful in evaluating our operating
performance and liquidity position compared to that of other
companies in our industry because the calculation of Adjusted Net
Income available to common stockholders and Adjusted Earnings per
Share generally eliminates the effects of the accounting effects of
capital expenditures and acquisitions, certain hedging instruments
and other accounting treatments, items which may vary for different
companies for reasons unrelated to overall operating performance
and liquidity. In evaluating Adjusted Net Income available to
common stockholders and Adjusted Earnings per Share, you should be
aware that in the future we may incur expenses that are the same as
or similar to some of the adjustments in this presentation. Our
presentation of Adjusted Net Income available to common
stockholders and Adjusted Earnings per Share should not be
construed as an inference that our future results will be
unaffected by unusual or non-recurring items.
(1) Items to consider for comparability include
gains and charges. Gains positively impacting Net Income available
to common stockholders are reflected as deductions to Adjusted Net
Income available to common stockholders. Charges negatively
impacting Net Income available to common stockholders are reflected
as increases to Adjusted Net Income available to common
stockholders.
Results of Operations
Three-month period ended June 30, 2020
compared to the three-month period ended June 30, 2019
During the three-month periods ended June 30,
2020 and 2019, we had an average of 60.0 and 60.0 vessels,
respectively, in our fleet. In the three-month periods ended June
30, 2020 and 2019, our fleet ownership days totaled 5,460 and 5,460
days, respectively. Ownership days are one of the primary drivers
of voyage revenue and vessels’ operating expenses and represent the
aggregate number of days in a period during which each vessel in
our fleet is owned.
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|
(Expressed in millions of U.S. dollars, except percentages) |
|
Three-month periodended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
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|
|
|
|
|
|
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|
Voyage revenue |
$ |
117.0 |
|
|
$ |
111.9 |
|
|
$ |
(5.1 |
) |
|
(4.4 |
%) |
Voyage expenses |
|
(0.6 |
) |
|
|
(1.6 |
) |
|
|
1.0 |
|
|
166.7 |
% |
Voyage expenses – related
parties |
|
(1.0 |
) |
|
|
(1.5 |
) |
|
|
0.5 |
|
|
50.0 |
% |
Vessels’ operating
expenses |
|
(28.2 |
) |
|
|
(26.9 |
) |
|
|
(1.3 |
) |
|
(4.6 |
%) |
General and administrative
expenses |
|
(1.4 |
) |
|
|
(2.4 |
) |
|
|
1.0 |
|
|
71.4 |
% |
Management fees – related
parties |
|
(5.3 |
) |
|
|
(5.2 |
) |
|
|
(0.1 |
) |
|
(1.9 |
%) |
General and administrative
expenses - non-cash component |
|
(0.8 |
) |
|
|
(0.8 |
) |
|
|
- |
|
|
- |
|
Amortization of dry-docking
and special survey costs |
|
(2.2 |
) |
|
|
(2.3 |
) |
|
|
0.1 |
|
|
4.5 |
% |
Depreciation |
|
(29.9 |
) |
|
|
(27.6 |
) |
|
|
(2.3 |
) |
|
(7.7 |
%) |
Loss on vessels held for
sale |
|
- |
|
|
|
(79.0 |
) |
|
|
79.0 |
|
|
n.m. |
|
Vessel’s impairment loss |
|
- |
|
|
|
(28.5 |
) |
|
|
28.5 |
|
|
n.m. |
|
Foreign exchange gain /
(losses) |
|
0.1 |
|
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
n.m. |
|
Interest income |
|
0.9 |
|
|
|
0.5 |
|
|
|
(0.4 |
) |
|
(44.4 |
%) |
Interest and finance
costs |
|
(22.4 |
) |
|
|
(16.9 |
) |
|
|
(5.5 |
) |
|
(24.6 |
%) |
Income from equity method
investments |
|
2.6 |
|
|
|
4.1 |
|
|
|
1.5 |
|
|
57.7 |
% |
Other |
|
0.3 |
|
|
|
(0.1 |
) |
|
|
(0.4 |
) |
|
n.m. |
|
Gain / (Loss) on derivative
instruments |
|
(0.3 |
) |
|
|
0.2 |
|
|
|
0.5 |
|
|
166.7 |
% |
Net Income /
(Loss) |
$ |
28.8 |
|
|
$ |
(76.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed in millions of U.S. dollars, except percentages) |
|
Three-month periodended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
117.0 |
|
|
$ |
111.9 |
|
|
$ |
(5.1 |
) |
|
(4.4 |
%) |
Accrued charter revenue |
|
2.0 |
|
|
|
7.0 |
|
|
|
5.0 |
|
|
250.0 |
% |
Amortization of time charter
assumed |
|
0.1 |
|
|
|
0.1 |
|
|
|
- |
|
|
- |
|
Voyage revenue adjusted on a
cash basis (1) |
$ |
119.1 |
|
|
$ |
119.0 |
|
|
$ |
(0.1 |
) |
|
(0.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels’
operational data |
|
Three-month period ended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels |
|
60.0 |
|
|
|
60.0 |
|
|
|
- |
|
|
- |
|
Ownership days |
|
5,460 |
|
|
|
5,460 |
|
|
|
- |
|
|
- |
|
Number of vessels under
dry-docking |
|
3 |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
|
(1) Voyage revenue adjusted on a cash basis is
not a recognized measurement under U.S. generally accepted
accounting principles (“GAAP”). Refer to “Financial Summary” above
for the reconciliation of Voyage revenue adjusted on a cash
basis.
Voyage Revenue
Voyage revenue decreased by 4.4%, or $5.1
million, to $111.9 million during the three-month period ended June
30, 2020, from $117.0 million during the three-month period ended
June 30, 2019. The decrease is mainly attributable to revenue not
earned by three vessels sold during the fourth quarter of 2019 and
one vessel sold during the first quarter of 2020 and to the
increased idle days of our fleet during the second quarter of 2020
compared to the second quarter of 2019; partly-offset (i) by
revenue earned by three vessels acquired during the fourth quarter
of 2019 and one vessel acquired during the first quarter of 2020
and (ii) increased charter rates for certain of our vessels during
the second quarter of 2020 compared to the second quarter of
2019.
Voyage revenue adjusted on a cash basis (which
eliminates non-cash “Accrued charter revenue”), decreased by 0.1%,
or $0.1 million, to $119.0 million during the three-month period
ended June 30, 2020, from $119.1 million during the three-month
period ended June 30, 2019. Accrued charter revenue was a positive
amount of $7.0 million and $2.0 million for the three-month periods
ended June 30, 2020 and June 30, 2019, respectively.
Voyage Expenses
Voyage expenses were $1.6 million and $0.6
million for the three-month periods ended June 30, 2020 and 2019,
respectively. Voyage expenses mainly include (i) off-hire expenses
of our vessels, primarily related to fuel consumption and (ii)
third party commissions.
Voyage Expenses – related parties
Voyage expenses – related parties were $1.5
million and $1.0 million for the three-month periods ended June 30,
2020 and 2019, respectively. Voyage expenses – related parties
represent fees of 1.25%1 in the aggregate on voyage revenues
charged by related managers and charter brokerage fees payable to a
related charter brokerage company of amount less than $0.1 million,
in the aggregate.
Vessels’ Operating Expenses
Vessels’ operating expenses, which also include
the realized gain / (loss) under derivative contracts entered into
in relation to foreign currency exposure, were $26.9 million and
$28.2 million during the three-month periods ended June 30, 2020
and 2019, respectively. Daily vessels’ operating expenses were
$4,925 and $5,165 for the three-month periods ended June 30, 2020
and 2019, respectively. Daily operating expenses are calculated as
vessels’ operating expenses for the period over the ownership days
of the period.
General and Administrative Expenses
General and administrative expenses were $2.4
million and $1.4 million during the three-month periods ended June
30, 2020 and 2019, respectively, and both include $0.63 million
paid to a related manager.
Management Fees – related parties
Management fees paid to our related managers
were $5.2 million and $5.3 million during the three-month periods
ended June 30, 2020 and 2019, respectively.
General and administrative expenses - non-cash
component
General and administrative expenses - non-cash
component for the three-month period ended June 30, 2020 amounted
to $0.8 million, representing the value of the shares issued to a
related manager on June 30, 2020. General and administrative
expenses - non-cash component for the three-month period ended June
30, 2019, amounted to $0.8 million, representing the value of the
shares issued to a related manager on June 28, 2019.
Amortization of dry-docking and special
survey
Amortization of deferred dry-docking and special
survey costs was $2.3 million and $2.2 million during the
three-month periods ended June 30, 2020 and 2019, respectively.
During the three-month period ended June 30, 2020, one vessel
underwent and completed its special survey. During the three-month
period ended June 30, 2019, three vessels underwent and completed
their special survey.
Depreciation
Depreciation expense for the three-month period
ended June 30, 2020 and 2019 was $27.6 million and $29.9 million,
respectively.
Loss on vessels held for sale
During the three-month period ended June 30,
2020, we recorded a loss of $78.7 million on three vessels that
were classified as vessels held for sale as at June 30, 2020 and an
additional loss of $0.3 million on one vessel that was
classified as vessel held for sale as at December 31, 2019,
representing the expected loss from their sale during the next
twelve-month period.
Vessel’s impairment loss
During the three-month period ended June 30,
2020, we recorded an impairment loss in relation to two of our
vessels in the amount of $28.5 million. During the three-month
period ended June 30, 2019, no impairment loss was recorded.
Interest Income
Interest income amounted to $0.5 million and
$0.9 million for the three-month periods ended June 30, 2020 and
2019, respectively.
Interest and Finance Costs
Interest and finance costs were $16.9 million
and $22.4 million during the three-month periods ended June 30,
2020 and 2019, respectively. The decrease is mainly attributable to
the decreased financing cost and the reduced average loan balances
during the three-month period ended June 30, 2020 compared to the
three-month period ended June 30, 2019.
Income from Equity Method Investments
During the three-month period ended June 30,
2020, we recorded an income from the equity method investments of
$4.1 million representing our share of the income in jointly owned
companies pursuant to the Framework Deed dated May 15, 2013, as
amended and restated (the “Framework Deed”), with York. As of June
30, 2020, 13 companies are jointly-owned with York (of which, 10
companies currently own vessels). During the three-month period
ended June 30, 2019, we recorded an income from equity method
investments of $2.6 million also relating to investments under the
Framework Deed.
Gain/(Loss) on Derivative Instruments
The fair value of our nine-interest rate
derivative instruments which were outstanding as of June 30, 2020
equates to the amount that would be paid by us or to us should
those instruments be terminated. As of June 30, 2020, the fair
value of these nine-interest rate derivative instruments in
aggregate amounted to liability of $10.0 million. The change in the
fair value of the interest rate derivative instruments that
qualified for hedge accounting is recorded in “Other Comprehensive
Income” (“OCI”) and reclassified into earnings in the same period
or periods during which the hedged transaction affects earnings and
is presented in the same income statement line item as the earnings
effect of the hedged item while the change in the fair value of the
interest rate derivatives representing hedge components excluded
from the assessment of effectiveness are recognized currently in
earnings and are presented in the same line of the income statement
expected for the hedged item. The change in the fair value of the
interest rate derivative instruments that did not qualify for hedge
accounting is recorded in the consolidated statement of income. For
the three-month period ended June 30, 2020, a loss of $2.1 million
has been included in OCI and a gain of $0.1 million has been
included in Gain/(Loss) on derivative instruments in the
consolidated statement of income, resulting from the fair market
value change of the interest rate derivative instruments during the
three-month period ended June 30, 2020.
________________________1 0.75% until June 30,
2019
Cash Flows
Three-month periods ended June 30, 2020 and
2019
Condensed cash
flows |
|
Three-month period endedJune 30, |
(Expressed in millions of U.S.
dollars) |
|
2019 |
|
2020 |
Net Cash Provided by Operating Activities |
|
$ |
59.4 |
|
|
$ |
71.5 |
|
Net Cash Used in Investing
Activities |
|
$ |
(5.3 |
) |
|
$ |
(3.1 |
) |
Net Cash Provided by / (Used
in) Financing Activities |
|
$ |
74.4 |
|
|
$ |
(104.7 |
) |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities
for the three-month period ended June 30, 2020, increased by $12.1
million to $71.5 million, from $59.4 million for the three-month
period ended June 30, 2019. The increase is mainly attributable to
favorable change in working capital position, excluding the current
portion of long-term debt and the accrued charter revenue
(representing the difference between cash received in that period
and revenue recognized on a straight-line basis) of $2.0 million
and the decreased payments for interest (including swap payments)
of $5.4 million during the three-month period ended June 30, 2020
compared to the three-month period ended June 30, 2019; partly
off-set by the increased special survey costs of $0.3 million
during the three-month period ended June 30, 2020 compared to the
three-month period ended June 30, 2019.
Net Cash Used in Investing Activities
Net cash used in investing activities was $3.1
million in the three-month period ended June 30, 2020, which mainly
consisted by payments for upgrades for certain of our vessels;
partly off-set by return of capital we received from nine entities
jointly -owned with York pursuant to the Framework Deed and advance
payments we received from the sale of two vessels that were
classified as vessels held for sale as at June 30, 2020.
Net cash used in investing activities was $5.3
million in the three-month period ended June 30, 2019, which mainly
consisted of advance payments for upgrades for certain of our
vessels and return of capital we received from an entity jointly
-owned with York pursuant to the Framework Deed.
Net Cash Provided by / (Used in) Financing
Activities
Net cash used in financing activities was $104.7
million in the three-month period ended June 30, 2020, which mainly
consisted of (a) $85.9 million net payments relating to our debt
financing agreements, (b) $9.1 million we paid for dividends to
holders of our common stock for the first quarter of 2020 and (c)
$0.9 million we paid for dividends to holders of our 7.625% Series
B Cumulative Redeemable Perpetual Preferred Stock (“Series B
Preferred Stock”), $2.1 million we paid for dividends to holders of
our 8.500% Series C Cumulative Redeemable Perpetual Preferred Stock
(“Series C Preferred Stock”), $2.2 million we paid for dividends to
holders of our 8.75% Series D Cumulative Redeemable Perpetual
Preferred Stock (“Series D Preferred Stock”) and $2.5 million we
paid for dividends to holders of our 8.875% Series E Cumulative
Redeemable Perpetual Preferred Stock (“Series E Preferred Stock”)
for the period from January 15, 2020 to April 14, 2020.
Net cash provided by financing activities was
$74.4 million in the three-month period ended June 30, 2019, which
mainly consisted of (a) $90.5 million of net proceeds relating to
our debt financing agreements, (b) $6.9 million we paid for
dividends to holders of our common stock for the first quarter of
2019 and (c) $1.0 million we paid for dividends to holders of our
7.625% Series B Preferred Stock, $2.1 million we paid for dividends
to holders of our 8.500% Series C Preferred Stock, $2.2 million we
paid for dividends to holders of our 8.75% Series D Preferred Stock
and $2.5 million we paid for dividends to holders of our 8.875%
Series E Preferred Stock for the period from January 15, 2019 to
April 14, 2019.
Six-month period ended June 30, 2020
compared to the six-month period ended June 30, 2019
During the six-month periods ended June 30, 2020
and 2019, we had an average of 60.1 and 61.0 vessels, respectively,
in our fleet. In the six-month period ended June 30, 2020, we
accepted delivery of the secondhand containership JPO Virgo with a
TEU capacity of 4,258 and we sold the containership vessel Neapolis
with a TEU capacity of 1,645. In the six-month period ended June
30, 2019, we sold the container vessels MSC Pylos and Piraeus with
an aggregate capacity of 7,012 TEU. In the six-month periods ended
June 30, 2020 and 2019, our fleet ownership days totaled 10,935 and
11,035 days, respectively. Ownership days are one of the primary
drivers of voyage revenue and vessels’ operating expenses and
represent the aggregate number of days in a period during which
each vessel in our fleet is owned.
(Expressed in millions of U.S. dollars, except percentages) |
|
Six-month period ended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
230.0 |
|
|
$ |
233.3 |
|
|
$ |
3.3 |
|
|
1.4 |
% |
Voyage expenses |
|
(2.5 |
) |
|
|
(4.1 |
) |
|
|
1.6 |
|
|
64.0 |
% |
Voyage expenses – related
parties |
|
(2.0 |
) |
|
|
(3.1 |
) |
|
|
1.1 |
|
|
55.0 |
% |
Vessels’ operating
expenses |
|
(58.2 |
) |
|
|
(54.8 |
) |
|
|
(3.4 |
) |
|
(5.8 |
%) |
General and administrative
expenses |
|
(2.7 |
) |
|
|
(3.8 |
) |
|
|
1.1 |
|
|
40.7 |
% |
Management fees – related
parties |
|
(10.8 |
) |
|
|
(10.5 |
) |
|
|
(0.3 |
) |
|
(2.8 |
%) |
General and administrative
expenses - non-cash component |
|
(1.5 |
) |
|
|
(1.5 |
) |
|
|
- |
|
|
- |
|
Amortization of dry-docking
and special survey costs |
|
(4.5 |
) |
|
|
(4.5 |
) |
|
|
- |
|
|
- |
|
Depreciation |
|
(59.7 |
) |
|
|
(55.7 |
) |
|
|
(4.0 |
) |
|
(6.7 |
%) |
Gain / (Loss) on sale /
disposal of vessels |
|
(18.4 |
) |
|
|
- |
|
|
|
(18.4 |
) |
|
n.m. |
|
Loss on vessels held for
sale |
|
- |
|
|
|
(79.2 |
) |
|
|
79.2 |
|
|
n.m. |
|
Vessels’ impairment loss |
|
(3.0 |
) |
|
|
(31.6 |
) |
|
|
28.6 |
|
|
n.m. |
|
Foreign exchange losses |
|
- |
|
|
|
(0.2 |
) |
|
|
0.2 |
|
|
n.m. |
|
Interest income |
|
1.7 |
|
|
|
1.2 |
|
|
|
(0.5 |
) |
|
(29.4 |
%) |
Interest and finance
costs |
|
(45.3 |
) |
|
|
(35.4 |
) |
|
|
(9.9 |
) |
|
(21.9 |
%) |
Income from equity method
investments |
|
4.3 |
|
|
|
8.2 |
|
|
|
3.9 |
|
|
90.7 |
% |
Other |
|
0.3 |
|
|
|
0.4 |
|
|
|
0.1 |
|
|
33.3 |
% |
Loss on derivative
instruments |
|
(0.6 |
) |
|
|
(2.1 |
) |
|
|
1.5 |
|
|
250.0 |
% |
Net Income /
(Loss) |
$ |
27.1 |
|
|
$ |
(43.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed in millions of U.S. dollars, except percentages) |
|
Six-month period ended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
230.0 |
|
|
$ |
233.3 |
|
|
$ |
3.3 |
|
|
1.4 |
% |
Accrued charter revenue |
|
0.2 |
|
|
|
7.7 |
|
|
|
7.5 |
|
|
n.m. |
|
Amortization of time charter
assumed |
|
0.1 |
|
|
|
0.1 |
|
|
|
- |
|
|
- |
|
Voyage revenue adjusted on a
cash basis (1) |
$ |
230.3 |
|
|
$ |
241.1 |
|
|
$ |
10.8 |
|
|
4.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels’
operational data |
|
Six-month period ended June 30, |
|
|
|
|
Percentage |
|
|
2019 |
|
|
2020 |
|
|
Change |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels |
|
61.0 |
|
|
|
60.1 |
|
|
|
(0.9 |
) |
|
(1.5 |
%) |
Ownership days |
|
11,035 |
|
|
|
10,935 |
|
|
|
(100 |
) |
|
(0.9 |
%) |
Number of vessels under
dry-docking |
|
6 |
|
|
|
7 |
|
|
|
|
|
|
(1) Voyage revenue adjusted on a cash basis is
not a recognized measurement under U.S. generally accepted
accounting principles (“GAAP”). Refer to “Financial Summary” above
for the reconciliation of Voyage revenue adjusted on a cash
basis.
Voyage Revenue
Voyage revenue increased by 1.4%, or $3.3
million, to $233.3 million during the six-month period ended June
30, 2020, from $230.0 million during the six-month period ended
June 30, 2019. The increase is mainly attributable to revenue
earned by (i) three vessels acquired during the fourth quarter of
2019 and one vessel acquired during the first quarter of 2020, (ii)
increased charter rates for certain of our vessels during the
six-month period ended June 30, 2020 compared to the six-month
period ended June 30, 2019; partly off-set by revenue not earned by
five vessels sold during the year ended December 31, 2019 and one
vessel sold during the first quarter of 2020 and by increased idle
days of our fleet during the six-month period ended June 30, 2020
compared to the six-month period ended June 30, 2019.
Voyage revenue adjusted on a cash basis (which
eliminates non-cash “Accrued charter revenue”), increased by 4.7%,
or $10.8 million, to $241.1 million during the six-month period
ended June 30, 2020, from $230.3 million during the six-month
period ended June 30, 2019. Accrued charter revenue was a positive
amount of $7.7 million and $0.2 million for the six-month period
ended June 30, 2020 and June 30, 2019, respectively.
Voyage Expenses
Voyage expenses were $4.1 million and $2.5
million for the six-month periods ended June 30, 2020 and 2019,
respectively. Voyage expenses mainly include (i) off-hire expenses
of our vessels, primarily related to fuel consumption and (ii)
third party commissions.
Voyage Expenses – related parties
Voyage expenses – related parties were $3.1
million and $2.0 million for the six-month periods ended June 30,
2020 and 2019, respectively. Voyage expenses – related parties
represent fees of 1.25%2 in the aggregate on voyage revenues
charged by related managers and charter brokerage fees payable to a
related charter brokerage company of amount approximately $0.18
million, in the aggregate.
Vessels’ Operating Expenses
Vessels’ operating expenses, which also include
the realized gain / (loss) under derivative contracts entered into
in relation to foreign currency exposure, were $54.8 million and
$58.2 million during the six-month periods ended June 30, 2020 and
2019, respectively. Daily vessels’ operating expenses were $5,008
and $5,271 for the six-month periods ended June 30, 2020 and 2019,
respectively. Daily operating expenses are calculated as vessels’
operating expenses for the period over the ownership days of the
period.
General and Administrative Expenses
General and administrative expenses were $3.8
million and $2.7 million during the six-month periods ended June
30, 2020 and 2019, respectively, and both include $1.3 million paid
to a related manager.
Management Fees – related parties
Management fees paid to our related managers
were $10.5 million and $10.8 million during the six-month periods
ended June 30, 2020 and 2019, respectively.
General and administrative expenses - non-cash
component
General and administrative expenses - non-cash
component for the six-month period ended June 30, 2020 amounted to
$1.5 million, representing the value of the shares issued to a
related manager on March 30, 2020 and June 30, 2020. General and
administrative expenses - non-cash component for the six-month
period ended June 30, 2019, amounted to $1.5 million, representing
the value of the shares issued to a related manager on March 29,
2019 and June 28, 2019.
Amortization of dry-docking and special
survey
Amortization of deferred dry-docking and special
survey costs was $4.5 million and $4.5 million during the six-month
periods ended June 30, 2020 and 2019, respectively. During the
six-month period ended June 30, 2020, seven vessels underwent and
completed their special survey. During the six-month period ended
June 30, 2019, six vessels underwent and completed their special
survey.
Depreciation
Depreciation expense for the six-month period
ended June 30, 2020 and 2019 was $55.7 million and $59.7 million,
respectively.
Gain / (Loss) on sale / disposal of vessels
During the six-month period ended June 30, 2020,
we recorded a gain of $0.01 million from the sale of the vessel
Neapolis which was classified as asset held for sale as at December
31, 2019. During the six-month period ended June 30, 2019, we
recorded an aggregate loss of $18.4 million from the sale of the
container vessels Piraeus and MSC Pylos. MSC Pylos was classified
as asset held for sale as at December 31, 2018.
Loss on vessels held for sale
During the six-month period ended June 30, 2020,
we recorded a loss of $78.7 million on three vessels that were
classified as vessels held for sale as at June 30, 2020 and an
additional loss of $0.5 million on one vessel that was
classified as vessel held for sale as at December 31, 2019,
representing the expected loss from their sale during the next
twelve-month period.
Vessels’ impairment loss
During the six-month period ended June 30, 2020,
we recorded an impairment loss in relation to five of our vessels
in the amount of $31.6 million, in the aggregate. During the
six-month period ended June 30, 2019, we recorded an impairment
loss in relation to two of our vessels in the amount of $3.0
million, in the aggregate.
Interest Income
Interest income amounted to $1.2 million and
$1.7 million for the six-month periods ended June 30, 2020 and
2019, respectively.
Interest and Finance Costs
Interest and finance costs were $35.4 million
and $45.3 million during the six-month periods ended June 30, 2020
and 2019, respectively. The decrease is mainly attributable to the
decreased financing cost and the reduced loan balances during the
six-month period ended June 30, 2020 compared to the six-month
period ended June 30, 2019.
Income from Equity Method Investments
During the six-month period ended June 30, 2020,
we recorded an income from the equity method investments of $8.2
million representing our share of the income in jointly owned
companies pursuant to the Framework Deed dated May 15, 2013, as
amended and restated (the “Framework Deed”), with York. As of June
30, 2020, 13 companies are jointly-owned with York (of which, 10
companies currently own vessels). During the six-month period ended
June 30, 2019, we recorded an income from equity method investments
of $4.3 million also relating to investments under the Framework
Deed.
Loss on Derivative Instruments
The fair value of our nine-interest rate
derivative instruments which were outstanding as of June 30, 2020
equates to the amount that would be paid by us or to us should
those instruments be terminated. As of June 30, 2020, the fair
value of these nine-interest rate derivative instruments in
aggregate amounted to liability of $10.0 million. The change in the
fair value of the interest rate derivative instruments that
qualified for hedge accounting is recorded in “Other Comprehensive
Income” (“OCI”) and reclassified into earnings in the same
period or periods during which the hedged transaction affects
earnings and is presented in the same income statement line item as
the earnings effect of the hedged item while the change in the fair
value of the interest rate derivatives representing hedge
components excluded from the assessment of effectiveness are
recognized currently in earnings and are presented in the same line
of the income statement expected for the hedged item. The change in
the fair value of the interest rate derivative instruments that did
not qualify for hedge accounting is recorded in the consolidated
statement of income. For the six-month period ended June 30, 2020,
a loss of $8.1 million has been included in OCI and a net loss of
$2.1 million has been included in Loss on derivative instruments in
the consolidated statement of income, resulting from the fair
market value change of the interest rate derivative instruments
during the six-month period ended June 30, 2020.
________________________2 0.75% until June 30,
2019
Cash Flows
Six-month periods ended June 30, 2020 and
2019
Condensed cash
flows |
|
Six-month period endedJune 30, |
(Expressed in millions of U.S.
dollars) |
|
2019 |
|
2020 |
Net Cash Provided by Operating Activities |
|
$ |
107.2 |
|
|
$ |
139.2 |
|
Net Cash Provided by Investing
Activities |
|
$ |
9.3 |
|
|
$ |
1.6 |
|
Net Cash Provided by / (Used
in) Financing Activities |
|
$ |
0.9 |
|
|
$ |
(135.5 |
) |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities
for the six-month period ended June 30, 2020, increased by $32.0
million to $139.2 million, from $107.2 million for the six-month
period ended June 30, 2019. The increase is mainly attributable to
the increased cash from operations of $10.8 million, the favorable
change in working capital position, excluding the current portion
of long-term debt and the accrued charter revenue (representing the
difference between cash received in that period and revenue
recognized on a straight-line basis) of $6.0 million and the
decreased payments for interest (including swap payments) of $10.1
million during the six-month period ended June 30, 2020 compared to
the six-month period ended June 30, 2019; partly off-set by the
increased special survey costs of $3.7 million during the six-month
period ended June 30, 2020 compared to the six-month period ended
June 30, 2019.
Net Cash Provided by Investing Activities
Net cash provided by investing activities was
$1.6 million in the six-month period ended June 30, 2020, which
mainly consisted of return of capital we received from nine
entities jointly -owned with York pursuant to the Framework Deed,
the proceeds we received from the sale of one vessel and advance
payments we received from the sale of two vessels that were
classified as vessels held for sale as at June 30, 2020; partly
off-set by payments for upgrades for certain of our vessels and
payment for the acquisition of one secondhand vessel.
Net cash provided by investing activities was
$9.3 million in the six-month period ended June 30, 2019, which
mainly consisted of proceeds we received from the sale of two
vessels, return of capital we received from an entity jointly owned
with York pursuant to the Framework Deed and advance payments for
upgrades for certain of our vessels.
Net Cash Used in Financing Activities
Net cash used in financing activities was $135.5
million in the six-month period ended June 30, 2020, which mainly
consisted of (a) $100.5 million net payments relating to our debt
financing agreements, (b) $15.8 million we paid for dividends to
holders of our common stock for the fourth quarter of 2019 and the
first quarter of 2020 and (c) $1.9 million we paid for dividends to
holders of our 7.625% Series B Preferred Stock, $4.2 million we
paid for dividends to holders of our 8.500% Series C Preferred
Stock, $4.4 million we paid for dividends to holders of our 8.75%
Series D Preferred Stock and $5.1 million we paid for dividends to
holders of our 8.875% Series E Preferred Stock for the period from
October 15, 2019 to January 14, 2020 and January 15, 2020 to April
14, 2020.
Net cash provided by financing activities was
$0.9 million in the six-month period ended June 30, 2019, which
mainly consisted of (a) $31.3 million of net proceeds relating to
our debt financing agreements (including the prepayments following
the sale of two container vessels during the three-month period
ended March 31, 2019), (b) $13.4 million we paid for dividends to
holders of our common stock for the fourth quarter of 2018 and the
first quarter of 2019 and (c) $1.9 million we paid for dividends to
holders of our 7.625% Series B Preferred Stock, $4.2 million we
paid for dividends to holders of our 8.500% Series C Preferred
Stock, $4.4 million we paid for dividends to holders of our 8.75%
Series D Preferred Stock and $5.2 million we paid for dividends to
holders of our 8.875% Series E Preferred Stock for the period from
October 15, 2018 to January 14, 2019 and January 15, 2019 to April
14, 2019.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of June 30, 2020, we had a total cash
liquidity of $201.1 million, consisting of cash, cash equivalents
and restricted cash.
Debt-free vessels
As of July 27, 2020, the following vessels were free of
debt.
|
Unencumbered
Vessels(Refer to fleet list for full details) |
|
|
|
|
|
Vessel
Name |
|
Year Built |
|
TEU Capacity |
ETOILE |
|
2005 |
|
2,556 |
MICHIGAN |
|
2008 |
|
1,300 |
ENSENADA (*) |
|
2001 |
|
5,576 |
MONEMVASIA (*) |
|
1998 |
|
2,472 |
ARKADIA (*) |
|
2001 |
|
1,550 |
(*) Vessels acquired pursuant to the Framework Deed with
York.
Conference Call details:
On Tuesday, July 28, 2020 at 8:30 a.m. EST,
Costamare’s management team will hold a conference call to discuss
the financial results. Participants should dial into the call 10
minutes before the scheduled time using the following numbers:
1-844-887-9405 (from the US), 0808-238-9064 (from the UK) or
+1-412-317-9258 (from outside the US and the UK). Please quote
“Costamare”. A replay of the conference call will be available
until August 4, 2020. The United States replay number is
+1-877-344-7529; the standard international replay number is
+1-412-317-0088; and the access code required for the replay is:
10146002.
Live webcast:
There will also be a simultaneous live webcast
over the Internet, through the Costamare Inc. website
(www.costamare.com). Participants to the live webcast should
register on the website approximately 10 minutes prior to the start
of the webcast.
About Costamare Inc.
Costamare Inc. is one of the world’s leading
owners and providers of containerships for charter. The Company has
46 years of history in the international shipping industry and a
fleet of 73 containerships, with a total capacity of approximately
533,000 TEU, including four newbuild containerships currently under
construction. Ten of our containerships have been acquired pursuant
to the Framework Deed with York by vessel-owning joint venture
entities in which we hold a minority equity interest. The Company’s
common stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock trade on the
New York Stock Exchange under the symbols “CMRE”, “CMRE PR B”,
“CMRE PR C”, “CMRE PR D” and “CMRE PR E”, respectively.
Forward-Looking Statements
This earnings release contains “forward-looking
statements”. In some cases, you can identify these statements by
forward-looking words such as “believe”, “intend”, “anticipate”,
“estimate”, “project”, “forecast”, “plan”, “potential”, “may”,
“should”, “could”, “expect” and similar expressions. These
statements are not historical facts but instead represent only
Costamare’s belief regarding future results, many of which, by
their nature, are inherently uncertain and outside of Costamare’s
control. It is possible that actual results may differ, possibly
materially, from those anticipated in these forward-looking
statements. For a discussion of some of the risks and important
factors that could affect future results, see the discussion in the
Company’s Annual Report on Form 20-F (File No. 001-34934) under the
caption “Risk Factors” and the Company’s Results for the First
Quarter ended March 31, 2020 on Form 6-K (filed on May 11, 2020
with the SEC) under the caption “Risk Factor Update”.
Company Contacts:
Gregory Zikos - Chief Financial Officer Konstantinos Tsakalidis
- Business Development
Costamare Inc., Monaco Tel: (+377) 93 25 09 40Email:
ir@costamare.com
Fleet List
The table below provides additional information,
as of July 27, 2020, about our fleet of containerships, including
our newbuilds on order, the vessels acquired pursuant to the
Framework Deed and those vessels subject to sale and leaseback
agreements. Each vessel is a cellular containership, meaning it is
a dedicated container vessel.
|
Vessel Name |
Charterer |
YearBuilt |
Capacity(TEU) |
Current DailyCharter
Rate(1)(U.S. dollars) |
Expiration ofCharter(2) |
1 |
TRITON(ii) |
Evergreen |
2016 |
14,424 |
(*) |
March 2026 |
2 |
TITAN(ii) |
Evergreen |
2016 |
14,424 |
(*) |
April 2026 |
3 |
TALOS(ii) |
Evergreen |
2016 |
14,424 |
(*) |
July 2026 |
4 |
TAURUS(ii) |
Evergreen |
2016 |
14,424 |
(*) |
August 2026 |
5 |
THESEUS(ii) |
Evergreen |
2016 |
14,424 |
(*) |
August 2026 |
6 |
YM TRIUMPH(ii) |
Yang Ming |
2020 |
12,690 |
(*) |
May 2030 |
7 |
CAPE AKRITAS(i) |
ZIM |
2016 |
11,010 |
43,250 |
August 2020 |
8 |
CAPE TAINARO(i) |
ZIM |
2017 |
11,010 |
38,000 |
March 2021 |
9 |
CAPE KORTIA(i) |
ZIM |
2017 |
11,010 |
43,250 |
September 2020 |
10 |
CAPE SOUNIO(i) |
ZIM |
2017 |
11,010 |
38,000 |
March 2021 |
11 |
CAPE ARTEMISIO(i) |
Hapag Lloyd |
2017 |
11,010 |
38,750 |
March 2023 |
12 |
COSCO GUANGZHOU |
COSCO |
2006 |
9,469 |
(*) |
August 2020 |
13 |
COSCO NINGBO |
COSCO |
2006 |
9,469 |
(*) |
August 2020 |
14 |
YANTIAN (ex. COSCO YANTIAN) |
COSCO |
2006 |
9,469 |
(*) |
August 2020 |
15 |
BEIJING (ex. COSCO BEIJING) |
COSCO |
2006 |
9,469 |
(*) |
October 2020 |
16 |
COSCO HELLAS |
COSCO |
2006 |
9,469 |
(*) |
August 2020 |
17 |
MSC AZOV |
MSC |
2014 |
9,403 |
43,000 |
December 2026(3) |
18 |
MSC AMALFI |
MSC |
2014 |
9,403 |
46,300 |
March 2027(4) |
19 |
MSC AJACCIO |
MSC |
2014 |
9,403 |
46,300 |
February 2027(5) |
20 |
MSC ATHENS(ii) |
MSC |
2013 |
8,827 |
42,000 |
January 2026(6) |
21 |
MSC ATHOS(ii) |
MSC |
2013 |
8,827 |
45,300 |
February 2026(7) |
22 |
VALOR |
Hapag Lloyd |
2013 |
8,827 |
32,400 |
April 2025 |
23 |
VALUE |
Hapag Lloyd |
2013 |
8,827 |
32,400 |
April 2025 |
24 |
VALIANT |
Hapag Lloyd |
2013 |
8,827 |
32,400 |
June 2025 |
25 |
VALENCE |
Hapag Lloyd |
2013 |
8,827 |
32,400 |
July 2025 |
26 |
VANTAGE |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/32,400 |
September 2025(8) |
27 |
NAVARINO |
MSC |
2010 |
8,531 |
23,000 |
March 2021 |
28 |
MAERSK KLEVEN |
Maersk |
1996 |
8,044 |
17,500 |
April 2021 |
29 |
MAERSK KOTKA |
Maersk |
1996 |
8,044 |
17,500 |
April 2021 |
30 |
MAERSK KOWLOON |
Maersk |
2005 |
7,471 |
16,000 |
June 2022 |
31 |
KURE |
COSCO |
1996 |
7,403 |
9,500 |
October 2020 |
32 |
MSC METHONI |
MSC |
2003 |
6,724 |
29,000 |
September 2021 |
33 |
YORK |
Maersk |
2000 |
6,648 |
11,500 |
September 2020 |
34 |
KOBE (ex. MAERSK KOBE) |
RCL Feeder |
2000 |
6,648 |
14,500 |
August 2021(9) |
35 |
SEALAND WASHINGTON |
Maersk |
2000 |
6,648 |
13,500 |
March 2022(10) |
36 |
SEALAND MICHIGAN |
Maersk |
2000 |
6,648 |
13,500 |
March 2022(10) |
37 |
SEALAND ILLINOIS |
Maersk |
2000 |
6,648 |
13,500 |
March 2022(10) |
38 |
MAERSK KOLKATA |
Maersk |
2003 |
6,644 |
13,500 |
March 2022(10) |
39 |
MAERSK KINGSTON |
Maersk |
2003 |
6,644 |
13,500 |
March 2022(10) |
40 |
MAERSK KALAMATA |
Maersk |
2003 |
6,644 |
13,500 |
March 2022(10) |
41 |
VENETIKO |
Hapag Lloyd |
2003 |
5,928 |
20,000 |
August 2020 |
42 |
ENSENADA (i) |
Evergreen |
2001 |
5,576 |
8,700 |
September 2020 |
43 |
ZIM NEW YORK |
ZIM |
2002 |
4,992 |
12,430 |
October 2021(11) |
44 |
ZIM SHANGHAI |
ZIM |
2002 |
4,992 |
12,430 |
October 2021(11) |
45 |
LEONIDIO(ii) |
Maersk |
2014 |
4,957 |
14,200 |
December 2024 |
46 |
KYPARISSIA(ii) |
Maersk |
2014 |
4,957 |
14,200 |
November 2024 |
47 |
MEGALOPOLIS |
Maersk |
2013 |
4,957 |
13,500 |
July 2025 |
48 |
MARATHOPOLIS |
Maersk |
2013 |
4.957 |
13,500 |
July 2025 |
49 |
OAKLAND EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
13,750 |
January 2021 |
50 |
HALIFAX EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
10,000 |
October 2020 |
51 |
SINGAPORE EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
10,000 |
July 2020 |
52 |
VULPECULA |
OOCL |
2010 |
4,258 |
7,000 |
December 2020 |
53 |
VOLANS |
ZIM |
2010 |
4,258 |
7,000 |
August 2020 |
54 |
JPO VIRGO |
Evergreen |
2009 |
4,258 |
8,600 |
February 2021(12) |
55 |
VELA |
OOCL |
2009 |
4,258 |
7,950 |
August 2020 |
56 |
ULSAN |
Maersk |
2002 |
4,132 |
12,000 |
June 2021 |
57 |
POLAR ARGENTINA(i)(ii) |
Maersk |
2018 |
3,800 |
19,700 |
October 2024 |
58 |
POLAR BRASIL(i)(ii) |
Maersk |
2018 |
3,800 |
19,700 |
January 2025 |
59 |
LAKONIA |
COSCO |
2004 |
2,586 |
7,500 |
September 2020 |
60 |
ETOILE |
(*) |
2005 |
2,556 |
(*) |
January 2021 |
61 |
AREOPOLIS |
COSCO |
2000 |
2,474 |
7,500 |
September 2020 |
62 |
MONEMVASIA(i) |
Maersk |
1998 |
2,472 |
9,250 |
November 2021 |
63 |
MESSINI |
Evergreen |
1997 |
2,458 |
8,500 |
August 2020 |
64 |
ARKADIA(i) |
Evergreen |
2001 |
1,550 |
8,650 |
September 2020 |
65 |
PROSPER |
TS Lines |
1996 |
1,504 |
5,500 |
October 2020 |
66 |
MICHIGAN |
MSC |
2008 |
1,300 |
6,650 |
September 2020 |
67 |
TRADER |
- |
2008 |
1,300 |
- |
- |
68 |
ZAGORA |
MSC |
1995 |
1,162 |
(*) |
August 2020 |
69 |
LUEBECK |
MSC |
2001 |
1,078 |
6,200 |
January 2021 |
Newbuilds
|
Vessel Name |
Shipyard |
Capacity(TEU) |
Charterer |
Expected Delivery(13) |
1 |
YZJ2015-2058 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q3 2020 |
2 |
YZJ2015-2059 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q3 2020 |
3 |
YZJ2015-2060 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q2 2021 |
4 |
YZJ2015-2061 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q2 2021 |
(1) |
|
Daily charter rates are gross, unless stated otherwise. Amounts set
out for current daily charter rate are the amounts contained in the
charter contracts. |
(2) |
|
Charter terms and expiration dates are based on the earliest date
charters could expire. |
(3) |
|
Following scrubbers’ installation, the daily rate for MSC Azov will
be increased from the current daily rate of $43,000 until December
2, 2023. The charter will also be extended for 3 years. |
(4) |
|
This charter rate will be earned by MSC Amalfi until March 16,
2024. From the aforementioned date until the expiry of the charter,
the daily rate will be $35,300. |
(5) |
|
This charter rate will be earned by MSC Ajaccio until February 1,
2024. From the aforementioned date until the expiry of the charter,
the daily rate will be $35,300. |
(6) |
|
Following scrubbers’ installation, the daily rate for MSC Athens
will be increased from the current daily rate of $42,000 until
January 29, 2023. The charter will also be extended for 3
years. |
(7) |
|
This charter rate will be earned by MSC Athos until February 24,
2023. From the aforementioned date until the expiry of the charter,
the daily rate will be $35,300. |
(8) |
|
Upon redelivery of Vantage from Evergreen in September 2020, the
vessel will commence a 5 year charter with Hapag Lloyd at a daily
rate of $32,400. Until then the daily charter rate will be
$41,700. |
(9) |
|
Kobe (ex Maersk Kobe) is currently in drydock. This charter
rate will be earned from September 6, 2020 until expiry of the
charter. |
(10) |
|
The daily rate for Sealand Washington, Sealand Michigan, Sealand
Illinois, Maersk Kolkata, Maersk Kingston and Maersk Kalamata is a
base rate of $16,000, adjusted pursuant to the terms of a 50:50
profit/loss sharing mechanism based on market conditions with a
minimum charter rate of $12,000 and a maximum charter rate of
$25,000. |
(11) |
|
The amounts in the table reflect the current charter terms, giving
effect to our agreement with ZIM under its 2014 restructuring plan.
Based on this agreement, we have been granted charter extensions
and have been issued equity securities representing 1.2% of ZIM’s
equity and approximately $8.2 million in interest bearing notes
maturing in 2023. In May 2020, the Company exercised its option to
extend the charters of ZIM New York and ZIM Shanghai for a one year
period at market rate plus $1,100 per day per vessel while the
notes remain outstanding. The rate for this sixth optional year
will be determined in September 2020. |
(12) |
|
This charter rate will be earned by JPO Virgo from August 8, 2020.
Until July 31, 2020 the vessel is chartered to CMA CGM at a daily
charter rate of $8,950. |
(13) |
|
Based on latest shipyard construction schedule, subject to
change. |
|
|
|
(i) |
|
Denotes vessels acquired pursuant to the Framework Deed. The
Company holds an equity interest ranging between 25% and 49% in
each of the vessel-owning entities. |
(ii) |
|
Denotes vessels subject to a sale and leaseback transaction. |
|
|
|
(*) |
|
Denotes charterer’s identity and/or current daily charter rates
and/or charter expiration dates, which are treated as
confidential. |
|
|
|
|
Consolidated Statements of Income |
|
|
|
|
|
|
|
Six-months ended June 30, |
|
Three-months
ended June
30, |
(Expressed in thousands of
U.S. dollars, except share and per share amounts) |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
230,010 |
|
$ |
233.273 |
|
$ |
117,036 |
|
$ |
111,869 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
(2,479 |
) |
|
(4,071 |
) |
|
(643 |
) |
|
(1,553 |
) |
Voyage expenses – related
parties |
|
(1,952 |
) |
|
(3,062 |
) |
|
(992 |
) |
|
(1,475 |
) |
Vessels' operating
expenses |
|
(58,164 |
) |
|
(54,758 |
) |
|
(28,200 |
) |
|
(26,888 |
) |
General and administrative
expenses |
|
(2,651 |
) |
|
(3,758 |
) |
|
(1,388 |
) |
|
(2,356 |
) |
Management fees - related
parties |
|
(10,827 |
) |
|
(10,521 |
) |
|
(5,279 |
) |
|
(5,199 |
) |
General and administrative
expenses - non-cash component |
|
(1,545 |
) |
|
(1,508 |
) |
|
(767 |
) |
|
(832 |
) |
Amortization of dry-docking
and special survey costs |
|
(4,471 |
) |
|
(4,537 |
) |
|
(2,195 |
) |
|
(2,330 |
) |
Depreciation |
|
(59,761 |
) |
|
(55,737 |
) |
|
(29,906 |
) |
|
(27,601 |
) |
Gain / (Loss) on sale /
disposal of vessels |
|
(18,420 |
) |
|
10 |
|
|
- |
|
|
- |
|
Loss on vessels held for
sale |
|
- |
|
|
(79,197 |
) |
|
- |
|
|
(78,965 |
) |
Vessels’ impairment loss |
|
(3,042 |
) |
|
(31,577 |
) |
|
- |
|
|
(28,506 |
) |
Foreign exchange gains /
(losses) |
|
17 |
|
|
(207 |
) |
|
28 |
|
|
(65 |
) |
Operating
income / (loss) |
$ |
66,715 |
|
$ |
(15,650 |
) |
$ |
47,694 |
|
$ |
(63,901 |
) |
|
|
|
|
|
|
|
|
|
OTHER INCOME
/ (EXPENSES): |
|
|
|
|
|
|
|
|
Interest income |
$ |
1,686 |
|
$ |
1,087 |
|
$ |
851 |
|
$ |
440 |
|
Interest and finance
costs |
|
(45,316 |
) |
|
(35,367 |
) |
|
(22,383 |
) |
|
(16,900 |
) |
Income from equity method
investments |
|
4,299 |
|
|
8,241 |
|
|
2,596 |
|
|
4,077 |
|
Other |
|
327 |
|
|
308 |
|
|
286 |
|
|
(120 |
) |
Gain / (Loss) on derivative
instruments |
|
(575 |
) |
|
(2,066 |
) |
|
(254 |
) |
|
181 |
|
Total other
expenses |
$ |
(39,579 |
) |
$ |
(27,797 |
) |
$ |
(18,904 |
) |
$ |
(12,322 |
) |
Net Income
/ (Loss) |
$ |
27,136 |
|
$ |
(43,447 |
) |
$ |
28,790 |
|
$ |
(76,223 |
) |
Earnings allocated to
Preferred Stock |
|
(15,547 |
) |
|
(15,461 |
) |
|
(7,904 |
) |
|
(7,768 |
) |
Gain on retirement of
Preferred Stock |
|
- |
|
|
619 |
|
|
- |
|
|
78 |
|
Net Income / (Loss)
available to common stockholders |
$ |
11,589 |
|
$ |
(58,289 |
) |
$ |
20,886 |
|
$ |
(83,913 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings / (Losses) per common
share, basic and diluted |
$ |
0.10 |
|
$ |
(0.49 |
) |
$ |
0.18 |
|
$ |
(0.70 |
) |
Weighted average number of
shares, basic |
|
113,540,975 |
|
|
119,927,560 |
|
|
114,040,870 |
|
|
120,319,180 |
|
Weighted average number of
shares, diluted |
|
116,490,307 |
|
|
119,927,560 |
|
|
116,990,202 |
|
|
120,319,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTAMARE INC.Consolidated Balance
Sheets |
|
|
|
|
|
|
|
As of December
31, |
|
As of June
30, |
(Expressed in thousands of U.S. dollars) |
|
2019 |
|
2020 |
ASSETS |
|
|
|
(Unaudited) |
CURRENT
ASSETS: |
|
|
|
|
Cash and cash equivalents |
$ |
148,928 |
|
$ |
155,668 |
|
Restricted cash |
|
6,912 |
|
|
6,592 |
|
Accounts receivable |
|
7,397 |
|
|
10,628 |
|
Inventories |
|
10,546 |
|
|
11,369 |
|
Due from related parties |
|
7,576 |
|
|
2,328 |
|
Fair value of derivatives |
|
748 |
|
|
134 |
|
Insurance claims
receivable |
|
1,607 |
|
|
992 |
|
Asset held for sale |
|
4,908 |
|
|
27,038 |
|
Time charter assumed |
|
192 |
|
|
191 |
|
Prepayments and other |
|
8,430 |
|
|
11,378 |
|
Total current
assets |
$ |
197,244 |
|
$ |
226,318 |
|
FIXED ASSETS,
NET: |
|
|
|
|
Right-of-use assets |
$ |
188,429 |
|
$ |
193,243 |
|
Vessels and advances, net |
|
2,431,830 |
|
|
2,293,249 |
|
Total fixed assets,
net |
$ |
2,620,259 |
|
$ |
2,486,492 |
|
NON-CURRENT
ASSETS: |
|
|
|
|
Equity method investments |
$ |
111,681 |
|
$ |
78,360 |
|
Deferred charges, net |
|
21,983 |
|
|
26,743 |
|
Accounts receivable,
non-current |
|
8,600 |
|
|
5,160 |
|
Restricted cash |
|
40,031 |
|
|
38,837 |
|
Fair value of derivatives,
non-current |
|
605 |
|
|
- |
|
Time charter assumed,
non-current |
|
1,030 |
|
|
936 |
|
Other non-current assets |
|
10,525 |
|
|
10,301 |
|
Total
assets |
$ |
3,011,958 |
|
$ |
2,873,147 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current portion of long-term
debt |
$ |
210,745 |
|
$ |
167,830 |
|
Accounts payable |
|
6,215 |
|
|
5,008 |
|
Due to related parties |
|
473 |
|
|
339 |
|
Finance lease liabilities |
|
16,810 |
|
|
16,910 |
|
Accrued liabilities |
|
19,417 |
|
|
31,395 |
|
Unearned revenue |
|
10,387 |
|
|
9,544 |
|
Fair value of derivatives |
|
397 |
|
|
3,720 |
|
Other current liabilities |
|
2,090 |
|
|
2,543 |
|
Total current
liabilities |
$ |
266,534 |
|
$ |
237,289 |
|
NON-CURRENT
LIABILITIES |
|
|
|
|
Long-term debt, net of current
portion |
$ |
1,206,405 |
|
$ |
1,174,936 |
|
Finance lease liabilities, net
of current portion |
|
119,925 |
|
|
111,446 |
|
Fair value of derivatives, net
of current portion |
|
433 |
|
|
6,297 |
|
Unearned revenue, net of
current portion |
|
7,933 |
|
|
16,113 |
|
Total non-current
liabilities |
$ |
1,334,696 |
|
$ |
1,308,792 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
Preferred stock |
$ |
- |
|
$ |
- |
|
Common stock |
|
12 |
|
|
12 |
|
Additional paid-in
capital |
|
1,351,352 |
|
|
1,358,640 |
|
Retained earnings /
(Accumulated deficit) |
|
60,578 |
|
|
(22,289 |
) |
Accumulated other
comprehensive loss |
|
(1,214 |
) |
|
(9,297 |
) |
Total stockholders’
equity |
$ |
1,410,728 |
|
$ |
1,327,066 |
|
Total liabilities and
stockholders’ equity |
$ |
3,011,958 |
|
$ |
2,873,147 |
|
|
|
|
|
|
|
|
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