Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today
reported unaudited financial results for the second quarter and
six-months ended June 30, 2019.
- Adjusted Net Income available to common stockholders(1) of
$26.2 million or $0.23 per share and $39.8 million or $0.35 per
share for the three-months and the six-months ended June 30, 2019,
respectively.
- Arranged financing agreements for an aggregate amount of $460
million with leading European and Asian financial institutions.
More specifically:- Proactively refinanced $227 million of two
syndicated loan facilities maturing in 2020 and extended them to
2025. - Refinanced $120 million of two sale and leaseback
arrangements maturing in 2024 and extended them to 2027.-
Refinanced $58 million of a sale and leaseback arrangement maturing
in 2024 and extended it to 2026.- Arranged 100% financing for the
installation of scrubbers on 5 vessels.
- Chartered in total 18 vessels over the quarter, benefiting from
a rising market in the larger asset classes.
- Declared dividend of $0.10 per share on its common stock and
dividends on all four classes of its preferred stock.
- Elected to pay part of the deferred price (agreed upon in
November 2018) for the acquisition of the 60% equity interest of
York Capital in five 2016 - built 14,000 TEU containerships with
newly-issued shares of the Company’s common stock.
- Sold the 1999-built, 2,526 TEU capacity containership
Elafonisos (co-owned with York Capital).
(1) Adjusted Net Income available to common
stockholders and Adjusted Earnings per Share 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 financing agreements
- In June 2019, we signed a loan facility agreement with a
leading European financial institution for an amount of up to $136
million, in order to refinance the existing indebtedness and
finance the installation of scrubbers on the 2014-built 9,403 TEU
capacity containerships MSC Ajaccio and MSC Amalfi. The
refinancing was completed in July 2019 and the original maturity
was extended by approximately three years to 2027.
- In June 2019, we signed a loan facility agreement with a
leading European financial institution for an amount of up to $68
million, in order to refinance the existing indebtedness and
finance the installation of scrubbers on the 2014-built 9,403 TEU
capacity containership MSC Azov. The refinancing was
completed in July 2019 and the original maturity was extended by
approximately two and a half years to 2026.
- In June 2019, we signed a loan facility agreement with a
leading European financial institution for an amount of up to $150
million, in order to refinance the existing indebtedness (maturing
in 2020 with balloon payments of $117 million) of the 2013-built
8,827 TEU capacity containerships Value, Valence and Vantage. The
refinancing was completed in July 2019 and the new facility will
mature in 2025.
- In July 2019, we signed a loan facility agreement with a
leading European financial institution for an amount of up to $94
million, in order to refinance the existing indebtedness (maturing
in 2020 with balloon payments of $81.5 million) of the 2013-built
8,827 TEU capacity containerships Valor and Valiant. The
refinancing is expected to be completed in July 2019 and the new
facility will mature in 2025.
- In May 2019, we signed a supplemental agreement to an existing
sale and leaseback arrangement with a leading Asian financial
institution for an additional amount of up to $12 million in order
to finance the installation of scrubbers on the 2013-built 8,827
TEU capacity containerships MSC Athens and MSC Athos. The original
maturity date will be extended by approximately three years to
2026, upon scrubbers’ installation.
B.
New charter agreements
- The Company has chartered in total 18 vessels over the quarter.
More specifically, the Company:- Agreed to extend the charter of
the 2006-built, 9,469 TEU containership Cosco Guangzhou with Cosco
for a period starting from July 18, 2019 and expiring at
charterers’ option during the period from April 15, 2020 to June
15, 2020, at a daily rate of $28,900.- Agreed to extend the charter
of the 2006-built, 9,469 TEU containership Cosco Ningbo with Cosco
for a period starting from July 19, 2019 and expiring at
charterers’ option during the period from April 15, 2020 to June
15, 2020, at a daily rate of $28,900.- Agreed to extend the charter
of the 2006-built, 9,469 TEU containership Cosco Beijing with Cosco
for a period starting from August 9, 2019 and expiring at
charterers’ option during the period from May 15, 2020 to July 15,
2020, at a daily rate of $28,900.- Agreed to extend the charter of
the 2006-built, 9,469 TEU containership Cosco Yantian with Cosco
for a period starting from August 27, 2019 and expiring at
charterers’ option during the period from May 15, 2020 to July 15,
2020, at a daily rate of $28,900.- Agreed to extend the charter of
the 2006-built, 9,469 TEU containership Cosco Hellas with Cosco for
a period starting from September 7, 2019 and expiring at
charterers’ option during the period from May 15, 2020 to July 15,
2020, at a daily rate of $28,900.- Agreed to charter the
2013-built, 8,827 TEU containerships, Valor, Value, Valiant,
Valence and Vantage with Hapag Lloyd for 3 years at a daily rate of
$34,500. The charters will commence between April 2020 and January
2021, upon redelivery of the containerships from their current
charterer (Evergreen).- Agreed to extend the charter of the
1997-built, 7,403 TEU containership Maersk Kawasaki with Maersk for
a period starting from June 1, 2019 and expiring at charterers’
option during the period from February 1, 2020 to March 30, 2020,
at a daily rate of $17,050.- Agreed to extend the charter of the
1996-built, 7,403 TEU containership Kure with Cosco for a period of
9 to 11 months at charterers’ option, starting from July 27, 2019,
at a daily rate of $21,500.- Exercised 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, 2019 to October 1, 2020, at a market rate
plus $1,100 per day per vessel.- Agreed to extend the charter of
the 2002-built, 4,132 TEU containership Ulsan with Maersk for a
period starting from June 25, 2019 and expiring at charterers’
option during the period from September 1, 2019 to October 20,
2019, at a daily rate of $11,750.- Agreed to extend the charter of
the 2004-built, 2,586 TEU containership Lakonia with Evergreen for
a period of 3 to 5 months at charterers’ option, starting from June
16, 2019.- Agreed to extend the charter of the 2005-built, 2,556
TEU containership CMA CGM L’Etoile with CMA CGM for a period of 30
to 45 days at charterers’ option, starting from June 13, 2019 at a
daily rate of $10,500. Subsequently, agreed to extend the charter
for a period of 3 to 4 months at charterers’ option, starting from
July 17, 2019 at a daily rate of $9,500.- Agreed to extend the
charter of the 2001-built, 1,550 TEU containership Arkadia with
Evergreen for a period of 7 to 9 months at charterers’ option,
starting from July 28, 2019 at a daily rate of $9,450.
C.
Vessel disposals
- In May 2019, we sold the 1999-built, 2,526 TEU capacity
containership Elafonisos (co-owned with York Capital).
D.
Dividend announcements
- On July 1, 2019, we declared a dividend for the quarter ended
June 30, 2019, of $0.10 per share on our common stock, payable on
August 7, 2019, to stockholders of record of common stock as of
July 22, 2019.
- On July 1, 2019, 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, 2019 to holders of record as of July 12, 2019.
Mr. Gregory Zikos, Chief Financial Officer of Costamare
Inc., commented:
“During the second quarter of the year the
Company delivered profitable results. Net Income and Earnings per
share more than doubled compared to the same period of last
year.
Charter rates for the larger container ships
continued to improve, boosted by service upgrades and a reduction
in supply due to scrubber fittings.
We have chartered in total 18 vessels over the
last months benefiting from a rising market in the larger asset
classes.
On the financing side, we arranged financing
agreements for an aggregate amount of $460 million, proactively
extending maturities relating to ten vessels and arranging 100%
financing for the scrubber installation on 5 ships.”
Financial
Summary
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Six-month period endedJune 30, |
|
Three-month period endedJune 30, |
(Expressed in thousands of
U.S. dollars, exceptshare and per share data): |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
Voyage revenue |
|
$ |
183,331 |
|
$ |
230,010 |
|
$ |
90,577 |
|
$ |
117,036 |
Accrued charter revenue
(1) |
|
$ |
(3,567) |
|
$ |
191 |
|
$ |
(1,003) |
|
$ |
2,040 |
Amortization of Time-charter
assumed |
|
|
- |
|
$ |
95 |
|
|
- |
|
$ |
48 |
Voyage revenue adjusted on a
cash basis (2) |
|
$ |
179,764 |
|
$ |
230,296 |
|
$ |
89,574 |
|
$ |
119,124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income available
to common stockholders (3) |
|
$ |
23,835 |
|
$ |
39,795 |
|
$ |
10,469 |
|
$ |
26,215 |
Weighted Average number of
shares |
|
|
109,340,800 |
|
|
113,540,975 |
|
|
109,873,071 |
|
|
114,040,870 |
Adjusted Earnings per share
(3) |
|
$ |
0.22 |
|
$ |
0.35 |
|
$ |
0.10 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
33,467 |
|
$ |
27,136 |
|
$ |
14,300 |
|
$ |
28,790 |
Net Income available to common
stockholders |
|
$ |
18,685 |
|
$ |
11,589 |
|
$ |
6,396 |
|
$ |
20,886 |
Weighted Average number of
shares |
|
|
109,340,800 |
|
|
113,540,975 |
|
|
109,873,071 |
|
|
114,040,870 |
Earnings per share |
|
$ |
0.17 |
|
$ |
0.10 |
|
$ |
0.06 |
|
$ |
0.18 |
|
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|
|
|
|
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|
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|
(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 six-month periods ended
June 30, 2019 and 2018. 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
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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) |
|
2018 |
|
|
2019 |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net Income |
$ |
33,467 |
|
$ |
27,136 |
|
$ |
14,300 |
|
$ |
28,790 |
|
Earnings allocated to
Preferred Stock |
|
(14,782 |
) |
|
(15,547 |
) |
|
(7,904 |
) |
|
(7,904 |
) |
Net Income available
to common stockholders |
|
18,685 |
|
|
11,589 |
|
|
6,396 |
|
|
20,886 |
|
Accrued charter revenue |
|
(3,567 |
) |
|
191 |
|
|
(1,003 |
) |
|
2,040 |
|
General and administrative
expenses – non-cash component |
|
2,127 |
|
|
1,545 |
|
|
1,193 |
|
|
767 |
|
Amortization of prepaid lease
rentals, net |
|
4,041 |
|
|
4,042 |
|
|
2,032 |
|
|
2,033 |
|
Amortization of Time charter
assumed |
|
- |
|
|
95 |
|
|
- |
|
|
48 |
|
Realized (Gain) / loss on
Euro/USD forward contracts (1) |
|
(153 |
) |
|
208 |
|
|
102 |
|
|
112 |
|
Vessels’ impairment loss |
|
- |
|
|
3,042 |
|
|
- |
|
|
- |
|
Loss on sale / disposals of
vessels |
|
861 |
|
|
18,420 |
|
|
861 |
|
|
- |
|
Swaps’ breakage costs |
|
1,234 |
|
|
- |
|
|
- |
|
|
- |
|
Loss on sale / disposal of
vessel by a jointly owned company with York included in equity gain
on investments |
|
- |
|
|
38 |
|
|
- |
|
|
38 |
|
Loss on asset held for sale by
a jointly owned company with York included in equity gain on
investments |
|
668 |
|
|
- |
|
|
668 |
|
|
- |
|
(Gain) / loss on derivative
instruments, excluding interest accrued and realized on non-hedging
derivative instruments (1) |
|
(61 |
) |
|
625 |
|
|
220 |
|
|
291 |
|
Adjusted Net Income
available to common stockholders |
$ |
23,835 |
|
$ |
39,795 |
|
$ |
10,469 |
|
$ |
26,215 |
|
Adjusted Earnings per
Share |
$ |
0.22 |
|
$ |
0.35 |
|
$ |
0.10 |
|
$ |
0.23 |
|
Weighted average number of
shares |
|
109,340,800 |
|
|
113,540,975 |
|
|
109,873,071 |
|
|
114,040,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income available to common
stockholders and Adjusted Earnings per Share represent Net Income
after earnings allocated to 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, loss on sale / disposal of
vessels, swaps’ breakage costs, loss on sale / disposal of vessel
by a jointly owned company with York included in equity gain on
investments, loss on asset held for sale by a jointly owned company
with York included in equity gain on investments, non-cash general
and administrative expenses and non-cash other items, 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, 2019
compared to the three-month period ended June 30, 2018
During the three-month periods ended June 30,
2019 and 2018, we had an average of 60.0 and 54.4 vessels,
respectively, in our fleet. In the three-month period ended June
30, 2018, we accepted delivery of the secondhand containerships
Michigan and Trader with an aggregate capacity of 2,600 TEU and we
sold the container vessel Itea with a capacity of 3,842 TEU. In the
three-month periods ended June 30, 2019 and 2018, our fleet
ownership days totaled 5,460 and 4,948 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, |
|
Change |
|
PercentageChange |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
90.6 |
|
$ |
117.0 |
|
$ |
26.4 |
|
|
29.1% |
Voyage expenses |
|
(1.9 |
) |
|
(0.6 |
) |
|
(1.3 |
) |
|
(68.4%) |
Voyage expenses – related
parties |
|
(0.8 |
) |
|
(1.0 |
) |
|
0.2 |
|
|
25.0% |
Vessels’ operating
expenses |
|
(26.8 |
) |
|
(28.2 |
) |
|
1.4 |
|
|
5.2% |
General and administrative
expenses |
|
(1.2 |
) |
|
(1.4 |
) |
|
0.2 |
|
|
16.7% |
Management fees – related
parties |
|
(4.9 |
) |
|
(5.3 |
) |
|
0.4 |
|
|
8.2% |
General and administrative
expenses - non-cash component |
|
(1.2 |
) |
|
(0.8 |
) |
|
(0.4 |
) |
|
(33.3%) |
Amortization of dry-docking
and special survey costs |
|
(1.8 |
) |
|
(2.2 |
) |
|
0.4 |
|
|
22.2% |
Depreciation |
|
(23.2 |
) |
|
(27.9 |
) |
|
4.7 |
|
|
20.3% |
Amortization of prepaid lease
rentals, net |
|
(2.0 |
) |
|
(2.0 |
) |
|
- |
|
|
n.m. |
Loss on sale / disposal of
vessels |
|
(0.9 |
) |
|
- |
|
|
(0.9 |
) |
|
n.m. |
Foreign exchange gains /
(losses) |
|
(0.1 |
) |
|
0.1 |
|
|
(0.2 |
) |
|
n.m. |
Interest income |
|
0.8 |
|
|
0.9 |
|
|
0.1 |
|
|
12.5% |
Interest and finance
costs |
|
(14.8 |
) |
|
(22.4 |
) |
|
7.6 |
|
|
51.4% |
Equity gain on
investments |
|
2.9 |
|
|
2.6 |
|
|
(0.3 |
) |
|
(10.3%) |
Other |
|
(0.1 |
) |
|
0.3 |
|
|
0.4 |
|
|
n.m. |
Loss on derivative
instruments |
|
(0.3 |
) |
|
(0.3 |
) |
|
- |
|
|
n.m. |
Net
Income |
$ |
14.3 |
|
$ |
28.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed in millions of U.S. dollars, except percentages) |
|
Three-month periodended June 30, |
|
Change |
|
PercentageChange |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
90.6 |
|
$ |
117.0 |
$ |
26.4 |
|
29.1% |
Accrued charter revenue |
|
(1.0 |
) |
|
2.0 |
|
3.0 |
|
n.m. |
Amortization of Time-charter
assumed |
|
- |
|
|
0.1 |
|
0.1 |
|
100.0% |
Voyage revenue adjusted on a
cash basis (1) |
$ |
89.6 |
|
$ |
119.1 |
$ |
29.5 |
|
32.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels’ operational data |
|
Three-month periodended June 30, |
|
|
|
PercentageChange |
|
2018 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
Average number of vessels |
|
54.4 |
|
60.0 |
|
5.6 |
|
10.3% |
Ownership days |
|
4,948 |
|
5,460 |
|
512 |
|
10.3% |
Number of vessels under
dry-docking |
|
6 |
|
3 |
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
(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 29.1%, or $26.4
million, to $117.0 million during the three-month period ended June
30, 2019, from $90.6 million during the three-month period ended
June 30, 2018. The increase is mainly attributable to revenue
earned by (i) nine vessels acquired during the six-month period
ended December 31, 2018 and (ii) decreased off-hire days for
certain of our vessels during the three-month period ended June 30,
2019 compared to the three-month period ended June 30, 2018; partly
offset by decreased charter rates for certain of our vessels and
revenue not earned by two vessels sold for demolition in the first
quarter of 2019.
Voyage revenue adjusted on a cash basis (which
eliminates non-cash “Accrued charter revenue”), increased by 32.9%,
or $29.5 million, to $119.1 million during the three-month period
ended June 30, 2019, from $89.6 million during the three-month
period ended June 30, 2019. Accrued charter revenue for the
three-month periods ended June 30, 2019 and 2018, was a positive
amount of $2.0 million and a negative amount of $1.0 million,
respectively.
Voyage Expenses
Voyage expenses were $0.6 million and $1.9
million for the three-month periods ended June 30, 2019 and 2018,
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 $1.0
million and $0.8 million for the three-month periods ended June 30,
2019 and 2018, respectively. Voyage expenses – related parties
represent (i) fees of 0.75% in the aggregate on voyage revenues
charged by Costamare Shipping Company S.A. (“Costamare Shipping”)
and by Costamare Shipping Services Ltd. (“Costamare Services”) and
(ii) charter brokerage fees payable to Blue Net Chartering GmbH
& Co. KG (“Blue Net”). Effective July 1, 2019, the fees paid
under (i) above will increase to 1.25% in the aggregate on voyage
revenues.
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 $28.2 million and
$26.8 million during the three-month periods ended June 30, 2019
and 2018, respectively.
General and Administrative Expenses
General and administrative expenses were $1.4
million and $1.2 million during the three-month periods ended June
30, 2019 and 2018, respectively, and both include $0.63 million
which is part of the annual fee that Costamare Services receives
based on the Services Agreement between Costamare Services and our
vessel-owning subsidiaries dated November 2, 2015 (the “Services
Agreement”).
Management Fees – related parties
Management fees paid to our managers pursuant to
the Framework Agreement between Costamare Shipping and us dated
November 2, 2015 (the “Framework Agreement”) were $5.3 million and
$4.9 million during the three-month periods ended June 30, 2019 and
2018, respectively. We terminated, effective April 1, 2019, our
agreement with Costamare Shipping, dated November 2, 2015, whereby
Costamare Shipping had agreed to pass to us the net profit, if any,
it received pursuant to its co-operation agreement with V.Ships
Greece Ltd.
General and administrative expenses – non-cash
component
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
Costamare Services on June 28, 2019, pursuant to the Services
Agreement. General and administrative expenses – non-cash component
for the three-month period ended June 30, 2018, the respective
amount was $1.2 million, representing the value of the shares
issued to Costamare Services on June 29, 2018, pursuant to the
Services Agreement.
Amortization of Dry-docking and Special Survey Costs
Amortization of deferred dry-docking and special
survey costs was $2.2 million and $1.8 million during the
three-month periods ended June 30, 2019 and 2018, respectively.
During the three-month period ended June 30, 2019, three vessels
underwent and completed their special survey. During the
three-month period ended June 30, 2018, six vessels underwent and
completed their special survey.
Depreciation
Depreciation expense increased by 20.3%, or $4.7
million, to $27.9 million during the three-month period ended June
30, 2019, from $23.2 million during the three-month period ended
June 30, 2018. The increase was partly attributable to the
increased average number of vessels during the three-month period
ended June 30, 2019 compared to the three-month period ended June
30, 2018.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net was
$2.0 million during each of the three-month periods ended June 30,
2019 and 2018.
Loss on sale / disposal of vessels
During the three-month period ended June 30,
2019, no vessel was sold. During the three-month period ended June
30, 2018, we recorded a loss of $0.9 million from the sale of the
vessel Itea, which was classified as Asset held for sale as at
December 31, 2017.
Interest Income
Interest income amounted to $0.9 million and
$0.8 million for the three-month periods ended June 30, 2019 and
2018, respectively.
Interest and Finance Costs
Interest and finance costs were $22.4 million
and $14.8 million during the three-month periods ended June 30,
2019 and 2018, respectively. The increase is mainly attributable to
the increased average loan balance during the three-month period
ended June 30, 2019 compared to the three-month period ended June
30, 2018.
Equity Gain on Investments
During the three-month period ended June 30,
2019, we recorded an equity gain on investments of $2.6 million
representing our share of the net gain in jointly owned companies
pursuant to the Framework Deed dated May 15, 2013, as amended and
restated on May 18, 2015 and as further amended on June 12, 2018
(the “Framework Deed”), between the Company and a wholly-owned
subsidiary on the one hand, and York Capital Management Global
Advisors LLC and an affiliated fund (collectively, together with
the funds it manages or advises, “York”) on the other hand. Since
November 12, 2018, we have held 100% of the equity interest in five
previously jointly owned companies with York, and as of that date
these five companies are consolidated in our consolidated financial
statements. As of June 30, 2019, 13 companies are jointly-owned
with York. During the three-month period ended June 30, 2018, we
recorded an equity gain on investments of $2.9 million also
relating to investments under the Framework Deed.
Loss on Derivative Instruments
The fair value of our 15 interest rate
derivative instruments which were outstanding as of June 30, 2019
equates to the amount that would be paid by us or to us should
those instruments be terminated. As of June 30, 2019, the fair
value of these 15 interest rate derivative instruments in aggregate
amounted to a net asset of $0.9 million. The effective portion of
the change in the fair value of the interest rate derivative
instruments that qualified for hedge accounting is recorded in
“Other Comprehensive Income” (“OCI”) while the ineffective portion
is recorded in the consolidated statements of income. 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,
2019, a net loss of $3.4 million has been included in OCI and a net
loss of $0.3 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 three-month period ended June 30, 2019.
Cash Flows
Three-month periods ended June 30, 2019 and
2018
|
|
|
Condensed cash
flows |
|
Three-month period endedJune 30, |
(Expressed in millions of U.S.
dollars) |
|
2018 |
|
2019 |
Net Cash Provided by Operating
Activities |
|
$ |
25.4 |
|
$ |
59.4 |
Net Cash Used in Investing
Activities |
|
$ |
(58.0) |
|
$ |
(5.3) |
Net Cash Provided by / (Used
in) Financing Activities |
|
$ |
(59.7) |
|
$ |
74.4 |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities
for the three-month period ended June 30, 2019, increased by $34.0
million to $59.4 million, from $25.4 million for the three-month
period ended June 30, 2018. The increase is mainly attributable to
the increased cash from operations of $29.6 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 $9.9 million and the
decreased special survey costs of $2.4 million during the
three-month period ended June 30, 2019 compared to the three-month
period ended June 30, 2018; partly off-set by increased payments
for interest (including swap payments) during the period of $6.6
million.
Net Cash Used in Investing Activities
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 dividend distributions we received from an entity
jointly-owned with York pursuant to the Framework Deed.
Net cash used in investing activities was $58.0
million in the three-month period ended June 30, 2018, which mainly
consisted of advance payments for the construction of five newbuild
vessels, payments for the acquisition of two secondhand vessels,
payment for capital injection into one entity pursuant to the
Framework Deed and proceeds we received from the sale for scrap of
one vessel.
Net Cash Provided by / (Used in) Financing
Activities
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 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, 2019 to April 14,
2019.
Net cash used in financing activities was $59.7
million in the three-month period ended June 30, 2018, which mainly
consisted of (a) $47.4 million net payments relating to our debt
financing agreements, (b) $4.8 million we paid for dividends to
holders of our common stock for the first quarter of 2018 and (c)
$1.0 million we paid for dividends to holders of our Series B
Preferred Stock, $2.1 million we paid for dividends to holders of
our Series C Preferred Stock, $2.2 million we paid for dividends to
holders of our Series D Preferred Stock for the period from January
15, 2018 to April 14, 2018 and $2.1 million we paid for dividends
to holders of our Series E Preferred Stock, for the period from
January 30, 2018 to April 14, 2018.
Six-month period ended June 30, 2019
compared to the six-month period ended June 30, 2018
During the six-month periods ended June 30, 2019
and 2018, we had an average of 61.0 and 53.7 vessels, respectively,
in our fleet. 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 period ended June 30, 2018
we accepted delivery of the secondhand containerships Michigan and
Trader with an aggregate capacity of 2,600 TEU and we sold the
container vessel Itea with a capacity of 3,842 TEU. In the
six-month periods ended June 30, 2019 and 2018, our fleet ownership
days totaled 11,035 and 9,718 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 endedJune 30, |
|
Change |
|
PercentageChange |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
183.3 |
$ |
230.0 |
$ |
46.7 |
|
|
25.5% |
Voyage expenses |
|
(3.0) |
|
(2.5) |
|
(0.5 |
) |
|
(16.7%) |
Voyage expenses – related
parties |
|
(1.6) |
|
(2.0) |
|
0.4 |
|
|
25.0% |
Vessels’ operating
expenses |
|
(52.8) |
|
(58.2) |
|
5.4 |
|
|
10.2% |
General and administrative
expenses |
|
(2.8) |
|
(2.7) |
|
(0.1 |
) |
|
(3.6%) |
Management fees – related
parties |
|
(9.6) |
|
(10.8) |
|
1.2 |
|
|
12.5% |
General and administrative
expenses - non-cash component |
|
(2.1) |
|
(1.5) |
|
(0.6 |
) |
|
(28.6%) |
Amortization of dry-docking
and special survey costs |
|
(3.4) |
|
(4.5) |
|
1.1 |
|
|
32.4% |
Depreciation |
|
(46.0) |
|
(55.7) |
|
9.7 |
|
|
21.1% |
Amortization of prepaid lease
rentals, net |
|
(4.0) |
|
(4.0) |
|
- |
|
|
- |
Loss on sale / disposal of
vessels |
|
(0.9) |
|
(18.4) |
|
17.5 |
|
|
n.m. |
Vessels’ impairment loss |
|
- |
|
(3.0) |
|
3.0 |
|
|
n.m. |
Interest income |
|
1.9 |
|
1.7 |
|
(0.2 |
) |
|
(10.5%) |
Interest and finance
costs |
|
(29.4) |
|
(45.3) |
|
15.9 |
|
|
54.1% |
Swaps’ breakage costs |
|
(1.2) |
|
- |
|
- |
|
|
n.m. |
Equity gain on
investments |
|
5.2 |
|
4.3 |
|
(0.9 |
) |
|
(17.3%) |
Other |
|
0.2 |
|
0.3 |
|
0.1 |
|
|
50.0% |
Loss on derivative
instruments |
|
(0.3) |
|
(0.6) |
|
0.3 |
|
|
100.0% |
Net
Income |
$ |
33.5 |
$ |
27.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed in millions of U.S. dollars, except percentages) |
|
Six-month period endedJune 30, |
|
Change |
|
PercentageChange |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
183.3 |
|
$ |
230.0 |
$ |
46.7 |
|
25.5% |
Accrued charter
revenue |
|
(3.6 |
) |
|
0.2 |
|
3.8 |
|
n.m. |
Amortization of
Time-charter assumed |
|
- |
|
|
0.1 |
|
0.1 |
|
n.m. |
Voyage revenue
adjusted on a cash basis (1) |
$ |
179.7 |
|
$ |
230.3 |
$ |
50.6 |
|
28.2% |
|
|
|
|
|
|
|
|
|
Vessels’ operational data |
|
Six-month period endedJune
30, |
|
|
|
|
|
|
2018 |
|
2019 |
|
Change |
|
PercentageChange |
|
|
|
|
|
|
|
|
|
Average number of
vessels |
|
53.7 |
|
61.0 |
|
7.3 |
|
13.6% |
Ownership
days |
|
9,718 |
|
11,035 |
|
1,317 |
|
13.6% |
Number of vessels
under dry-docking |
|
11 |
|
6 |
|
(5) |
|
|
|
|
|
|
|
|
|
|
|
(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 25.5%, or $46.7
million, to $230.0 million during the six-month period ended June
30, 2019, from $183.3 million during the six-month period ended
June 30, 2018. The increase is mainly attributable to revenue
earned by (i) nine vessels acquired during the six-month period
ended December 31, 2018 and (ii) decreased off-hire days for
certain of our vessels during the six-month period ended June 30,
2019 compared to the six-month period ended June 30, 2018; partly
offset by decreased charter rates for certain of our vessels and
revenue not earned by two vessels sold for demolition in June and
October 2018 and two vessels sold for demolition in March 2019.
Voyage revenue adjusted on a cash basis (which
eliminates non-cash “Accrued charter revenue”), increased by 28.2%,
or $50.6 million, to $230.3 million during the six-month period
ended June 30, 2019, from $179.7 million during the six-month
period ended June 30, 2018. Accrued charter revenue for the
six-month periods ended June 30, 2019 and 2018, was a positive
amount of $0.2 million and a negative amount of $3.6 million,
respectively.
Voyage Expenses
Voyage expenses were $2.5 million and $3.0
million for the six-month periods ended June 30, 2019 and 2018,
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 $2.0
million and $1.6 million for the six-month periods ended June 30,
2019 and 2018, respectively. Voyage expenses – related parties
represent (i) fees of 0.75% in the aggregate on voyage revenues
charged by Costamare Shipping and by Costamare Services and (ii)
charter brokerage fees payable to Blue Net. Effective July 1, 2019,
the fees paid by each vessel-owning subsidiary under (i) above will
increase to 1.25% in the aggregate on voyage revenues.
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 $58.2 million and
$52.8 million during the six-month periods ended June 30, 2019 and
2018, respectively.
General and Administrative Expenses
General and administrative expenses were $2.7
million and $2.8 million for the six-month periods ended June 30,
2019 and 2018, respectively, and both include $1.3 million which is
part of the annual fee that Costamare Services receives based on
the Services Agreement.
Management Fees – related parties
Management fees paid to our managers pursuant to
the Framework Agreement were $10.8 million and $9.6 million during
the six-month periods ended June 30, 2019 and 2018, respectively.
We terminated, effective April 1, 2019, our agreement with
Costamare Shipping, dated November 2, 2015, whereby Costamare
Shipping had agreed to pass to us the net profit, if any, it
received pursuant to its co-operation agreement with V.Ships Greece
Ltd.
General and administrative expenses – non-cash
component
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
Costamare Services on March 29, 2019 and June 28, 2019, pursuant to
the Services Agreement. General and administrative expenses –
non-cash component for the six-month period ended June 30, 2018
amounted to $2.1 million representing the value of the shares
issued to Costamare Services on March 30, 2018 and June 29, 2018,
pursuant to the Services Agreement.
Amortization of Dry-docking and Special Survey
Costs
Amortization of deferred dry-docking and special
survey costs was $4.5 million and $3.4 million during the six-month
periods ended June 30, 2019 and 2018, respectively. During the
six-month period ended June 30, 2019, six vessels underwent and
completed their special survey. During the six-month period ended
June 30, 2018, eleven vessels underwent and completed their special
survey.
Depreciation
Depreciation expense increased by 21.1% or $9.7
million, to $55.7 million during the six-month period ended June
30, 2019, from $46.0 million during the six-month period ended June
30, 2018. The increase was partly attributable to the increased
average number of vessels during the six-month period ended June
30, 2019 compared to the six-month period ended June 30, 2018.
Amortization of Prepaid Lease Rentals, net
Amortization of prepaid lease rentals, net was
$4.0 million during each of the six-month periods ended June 30,
2019 and 2018.
Loss on sale / disposal of vessels
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. During the
six-month period ended June 30, 2018 we recorded a loss of $0.9
million from the sale of the vessel Itea, which was classified as
Asset held for sale as at December 31, 2017.
Vessels’ impairment loss
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. During the six-month
period ended June 30, 2018, no impairment loss was recorded.
Interest Income
Interest income amounted to $1.7 million and $1.9 million for
the six-month periods ended June 30, 2019 and 2018,
respectively.
Interest and Finance Costs
Interest and finance costs were $45.3 million
and $29.4 million during the six-month periods ended June 30, 2019
and 2018, respectively. The increase is mainly attributable to the
increased average loan balance during the six-month period ended
June 30, 2019 compared to the three-month period ended June 30,
2018.
Swaps Breakage Cost
During the six-month period ended June 30, 2018,
we terminated three interest rate derivative instruments that
qualified for hedge accounting and we paid the counterparties
breakage costs of $1.2 million.
Equity Gain on Investments
During the six-month period ended June 30, 2019,
we recorded an equity gain on investments of $4.3 million
representing our share of the net gain in jointly-owned companies
pursuant to the Framework Deed dated May 15, 2013, as amended and
restated on May 18, 2015 and as further amended on June 12, 2018
(the “Framework Deed”), between the Company and a wholly-owned
subsidiary on the one hand, and York Capital Management Global
Advisors LLC and an affiliated fund (collectively, together with
the funds it manages or advises, “York”) on the other hand. Since
November 12, 2018, we have held 100% of the equity interest in five
previously jointly-owned companies with York, and as of that date
these five companies are consolidated in our consolidated financial
statements. As of June 30, 2019, 13 companies are jointly-owned
with York. During the six-month period ended June 30, 2018, we
recorded an equity gain on investments of $5.2 million also
relating to investments under the Framework Deed.
Loss on Derivative Instruments
The fair value of our 15 interest rate
derivative instruments which were outstanding as of June 30, 2019
equates to the amount that would be paid by us or to us should
those instruments be terminated. As of June 30, 2019, the fair
value of these 15 interest rate derivative instruments in aggregate
amounted to a net asset of $0.9 million. The effective portion of
the change in the fair value of the interest rate derivative
instruments that qualified for hedge accounting is recorded in
“Other Comprehensive Income” (“OCI”), while the ineffective portion
is recorded in the consolidated statements of income. 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, 2019,
a net loss of $5.7 million has been included in OCI and a net loss
of $0.6 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, 2019.
Cash FlowsSix-month periods ended June
30, 2019 and 2018
|
|
|
Condensed cash
flows |
|
Six-month period ended June30, |
(Expressed in millions of U.S.
dollars) |
|
2018 |
|
2019 |
Net Cash Provided by Operating Activities |
|
$ |
67.0 |
|
|
$ |
107.2 |
Net Cash Provided by / (Used
in) Investing Activities |
|
$ |
(64.9 |
) |
|
$ |
9.3 |
Net Provided by / (Used in)
Financing Activities |
|
$ |
(61.1 |
) |
|
$ |
0.9 |
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities
for the six-month period ended June 30, 2019 increased by $40.2
million to $107.2 million, compared to $67.0 million for the
six-month period ended June 30, 2018. The increase is mainly
attributable to the increased cash from operations of $50.5
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
$5.0 million and the decreased special survey costs of $4.9 million
during the six-month period ended June 30, 2019 compared to the
six-month period ended June 30, 2018; partly off-set by increased
payments for interest (including swap payments) during the period
of $14.3 million.
Net Cash Provided by / (Used in) Investing
Activities
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 for scrap of
two vessels, dividend distribution 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 investing activities was $64.9
million in the six-month period ended June 30, 2018, which mainly
consisted of advance payments for the construction of five newbuild
vessels, payments for the acquisition of two secondhand vessels,
payments for capital injection into certain entities pursuant to
the Framework Deed and proceeds we received from sale for scrap of
one vessel.
Net Cash Provided by / (Used in) Financing
Activities
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 Cumulative Redeemable Perpetual
Preferred Stock, $4.2 million we paid for dividends to holders of
our 8.500% Series C Cumulative Redeemable Perpetual Preferred
Stock, $4.4 million we paid for dividends to holders of our 8.75%
Series D Cumulative Redeemable Perpetual Preferred Stock and $5.2
million we paid for dividends to holders of our 8.875% Series E
Cumulative Redeemable Perpetual Preferred Stock for the period from
October 15, 2018 to January 14, 2019 and January 15, 2019 to April
14, 2019.
Net cash used in financing activities was $61.1
million in the six-month period ended June 30, 2018, which mainly
consisted of (a) $148.2 million net payments relating to our debt
financing agreements, (b) $111.2 million net proceeds we received
from our public offering in January 2018, of 4.6 million shares of
our Series E Preferred Stock, net of underwriting discounts and
expenses incurred in the offering, (c) $9.5 million we paid for
dividends to holders of our common stock for the fourth quarter of
2017 and the first quarter of 2018 and (d) $1.9 million we paid for
dividends to holders of our Series B Preferred Stock, $4.2 million
we paid for dividends to holders of our Series C Preferred Stock,
$4.4 million we paid for dividends to holders of our Series D
Preferred Stock, for the periods from October 15, 2017 to January
14, 2018 and January 15, 2018 to April 14, 2018 and $2.1 million we
paid for dividends to holders of our Series E Preferred Stock, for
the period from January 30, 2018 to April 14, 2018.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of June 30, 2019, we had a total cash
liquidity of $283.9 million, consisting of cash, cash equivalents
and restricted cash.
Debt-free vessels
As of July 24, 2019, the following vessels were free of
debt.
Unencumbered Vessels (Refer
to fleet list for full details)
Vessel Name |
|
Year Built |
|
TEU Capacity |
CMA CGM L’ETOILE |
|
2005 |
|
|
2,556 |
KOKURA |
|
1997 |
|
|
7,403 |
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 Thursday, July 25, 2019 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 1, 2019. 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:
10133847.
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
45 years of history in the international shipping industry and a
fleet of 75 containerships, with a total capacity of approximately
538,000 TEU, including five newbuild containerships currently under
construction. Ten of our containerships have been acquired pursuant
to the Framework Deed with York Capital Management 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
Costamare Inc.’s most recent Annual Report on Form 20-F (File No.
001-34934) under the caption “Risk Factors”.
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 24, 2019, 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 |
CAPE AKRITAS(i) |
Evergreen |
2016 |
11,010 |
28,000 |
August 2019 |
7 |
CAPE TAINARO(i) |
ZIM |
2017 |
11,010 |
39,500 |
March 2020 |
8 |
CAPE KORTIA(i) |
Evergreen |
2017 |
11,010 |
28,000 |
August 2019 |
9 |
CAPE SOUNIO(i) |
ZIM |
2017 |
11,010 |
33,500 |
March 2020 |
10 |
CAPE ARTEMISIO(i) |
Hapag Lloyd |
2017 |
11,010 |
32,500 (net) |
March 2020 |
11 |
COSCO GUANGZHOU |
COSCO |
2006 |
9,469 |
28,900 |
April 2020 |
12 |
COSCO NINGBO |
COSCO |
2006 |
9,469 |
28,900 |
April 2020 |
13 |
COSCO YANTIAN |
COSCO |
2006 |
9,469 |
28,900 |
May 2020 (3) |
14 |
COSCO BEIJING |
COSCO |
2006 |
9,469 |
28,900 |
May 2020 (4) |
15 |
COSCO HELLAS |
COSCO |
2006 |
9,469 |
28,900 |
May 2020 (5) |
16 |
MSC AZOV |
MSC |
2014 |
9,403 |
43,000 |
December 2026(6) |
17 |
MSC AJACCIO |
MSC |
2014 |
9,403 |
43,000 |
February 2027(6) |
18 |
MSC AMALFI |
MSC |
2014 |
9,403 |
43,000 |
March 2027(6) |
19 |
MSC ATHENS(ii) |
MSC |
2013 |
8,827 |
42,000 |
January 2026(7) |
20 |
MSC ATHOS(ii) |
MSC |
2013 |
8,827 |
42,000 |
February 2026(7) |
21 |
VALOR |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/34,500 |
April 2023(8) |
22 |
VALUE |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/34,500 |
April 2023(8) |
23 |
VALIANT |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/34,500 |
June 2023(8) |
24 |
VALENCE |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/34,500 |
July 2023(8) |
25 |
VANTAGE |
Evergreen/Hapag Lloyd |
2013 |
8,827 |
41,700/34,500 |
September 2023(8) |
26 |
NAVARINO |
Evergreen |
2010 |
8,531 |
21,900 |
February 2020 |
27 |
MAERSK KLEVEN |
Maersk |
1996 |
8,044 |
17,500 |
April 2021 |
28 |
MAERSK KOTKA |
Maersk |
1996 |
8,044 |
17,500 |
April 2021 |
29 |
MAERSK KOWLOON |
Maersk |
2005 |
7,471 |
16,000 |
June 2022 |
30 |
MAERSK KAWASAKI |
Maersk |
1997 |
7,403 |
17,050 |
February 2020 |
31 |
KURE |
COSCO |
1996 |
7,403 |
21,500 |
April 2020(9) |
32 |
KOKURA |
Maersk |
1997 |
7,403 |
17,050 |
February 2020 |
33 |
MSC METHONI |
MSC |
2003 |
6,724 |
29,000 |
September 2021 |
34 |
YORK |
MSC |
2000 |
6,648 |
11,450 |
October 2019 |
35 |
MAERSK KOBE |
Maersk |
2000 |
6,648 |
17,000 |
April 2020 |
36 |
SEALAND WASHINGTON |
Maersk |
2000 |
6,648 |
(*) |
March 2022(10) |
37 |
SEALAND MICHIGAN |
Maersk |
2000 |
6,648 |
(*) |
March 2022(10) |
38 |
SEALAND ILLINOIS |
Maersk |
2000 |
6,648 |
(*) |
March 2022(10) |
39 |
MAERSK KOLKATA |
Maersk |
2003 |
6,644 |
26,100 |
March 2022(11) |
40 |
MAERSK KINGSTON |
Maersk |
2003 |
6,644 |
26,100 |
March 2022(11) |
41 |
MAERSK KALAMATA |
Maersk |
2003 |
6,644 |
26,100 |
March 2022(11) |
42 |
VENETIKO |
Hapag Lloyd |
2003 |
5,928 |
9,750 |
August 2019 |
43 |
ENSENADA (i) |
ONE |
2001 |
5,576 |
14,250 |
September 2019 |
44 |
ZIM NEW YORK |
ZIM |
2002 |
4,992 |
12,650 |
October 2020(12) |
45 |
ZIM SHANGHAI |
ZIM |
2002 |
4,992 |
12,650 |
October 2020(12) |
46 |
LEONIDIO(ii) |
Maersk |
2014 |
4,957 |
14,200 |
December 2024 |
47 |
KYPARISSIA(ii) |
Maersk |
2014 |
4,957 |
14,200 |
November 2024 |
48 |
MEGALOPOLIS |
Maersk |
2013 |
4,957 |
(*) |
July 2025 |
49 |
MARATHOPOLIS |
Maersk |
2013 |
4.957 |
(*) |
July 2025 |
50 |
OAKLAND EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
10,000 |
November 2019 |
51 |
HALIFAX EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
10,000 |
October 2020 |
52 |
SINGAPORE EXPRESS |
Hapag Lloyd |
2000 |
4,890 |
10,000 |
July 2020 |
53 |
ULSAN |
Maersk |
2002 |
4,132 |
11,750 |
September 2019 |
54 |
POLAR ARGENTINA(i)(ii) |
Maersk |
2018 |
3,800 |
19,700 |
October 2024 |
55 |
POLAR BRASIL(i)(ii) |
Maersk |
2018 |
3,800 |
19,700 |
January 2025 |
56 |
LAKONIA |
Evergreen |
2004 |
2,586 |
(*) |
September 2019 |
57 |
CMA CGM L’ETOILE |
CMA CGM |
2005 |
2,556 |
9,500 |
October 2019 |
58 |
AREOPOLIS |
Evergreen |
2000 |
2,474 |
8,100 |
August 2019 |
59 |
MONEMVASIA(i) |
Maersk |
1998 |
2,472 |
9,250 |
November 2021 |
60 |
MESSINI |
Evergreen |
1997 |
2,458 |
8,100 |
September 2019 |
61 |
MSC REUNION |
MSC |
1992 |
2,024 |
8,550 |
August 2019 |
62 |
MSC NAMIBIA II |
MSC |
1991 |
2,023 |
9,170 |
September 2019 |
63 |
MSC SIERRA II |
MSC |
1991 |
2,023 |
9,170 |
August 2019 |
64 |
NEAPOLIS |
Evergreen |
2000 |
1,645 |
7,100 |
August 2019 |
65 |
ARKADIA(i) |
Evergreen |
2001 |
1,550 |
9,450 |
February 2020(13) |
66 |
PROSPER |
Evergreen |
1996 |
1,504 |
6,975 |
August 2019 |
67 |
MICHIGAN |
MSC |
2008 |
1,300 |
7,200 |
September 2019 |
68 |
TRADER |
- |
2008 |
1,300 |
- |
- |
69 |
ZAGORA |
MSC |
1995 |
1,162 |
6,500 |
May 2020 |
70 |
LUEBECK |
MSC |
2001 |
1,078 |
6,200 |
January 2020 |
Newbuilds
|
Vessel Name |
Shipyard |
Capacity(TEU) |
Charterer |
Expected Delivery(14) |
1 |
YZJ2015-2057 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q2 2020 |
2 |
YZJ2015-2058 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q3 2020 |
3 |
YZJ2015-2059 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q3 2020 |
4 |
YZJ2015-2060 |
Jiangsu YangzijiangShipbuilding Group |
12,690 |
Yang Ming |
Q2 2021 |
5 |
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) |
This charter rate will be earned by Cosco Yantian from August 27,
2019. Until then the daily charter rate will be $17,900. |
(4) |
This charter rate will be earned by Cosco Beijing from August 9,
2019. Until then the daily charter rate will be $17,900. |
(5) |
This charter rate will be earned by Cosco Hellas from September 7,
2019. Until then the daily charter rate will be $17,900. |
(6) |
Following scrubbers’ installation, the daily rate will be increased
from the current daily rate of $43,000 until the original earliest
redelivery dates of the vessels (December 2, 2023-MSC Azov,
February 1, 2024-MSC Ajaccio and March 16, 2024-MSC Amalfi). The
charters will also be extended for 3 years. |
(7) |
Following scrubbers’ installation, the daily rate will be increased
from the current daily rate of $42,000 until the original earliest
redelivery dates of the vessels (January 29, 2023-MSC Athens and
February 24, 2023-MSC Athos). The charters will also be extended
for 3 years. |
(8) |
Upon redelivery of each vessel from Evergreen between April 2020
and January 2021, each vessel will commence a 3 year charter with
Hapag Lloyd at a daily rate of $34,500. Until then the daily
charter rate of each vessel will be $41,700. |
(9) |
This charter rate will be earned by Kure from July 27, 2019. Until
then the daily charter rate will be $16,350. |
(10) |
The daily rate for Sealand Washington, Sealand Michigan and Sealand
Illinois is a base rate, adjusted pursuant to the terms of a
profit/loss sharing mechanism based on market conditions until
expiry of the charter. |
(11) |
This charter rate will be earned by Maersk Kolkata, Maersk Kingston
and Maersk Kalamata until November 14, 2019, February 28, 2020 and
April 12, 2020, respectively. From the aforementioned dates until
expiry of the charter, the daily rate for each of the three vessels
will be a base rate, adjusted pursuant to the terms of a
profit/loss sharing mechanism based on market conditions. |
(12) |
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 2019, 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 fifth optional year is
expected to be determined in September 2019. |
(13) |
This charter rate will be earned by Arkadia from July 28, 2019.
Until then the daily charter rate will be $9,800. |
(14) |
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. |
|
|
COSTAMARE
INC.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) |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Voyage revenue |
$ |
183,331 |
|
$ |
230,010 |
|
$ |
90,577 |
|
$ |
117,036 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Voyage expenses |
|
(3,037 |
) |
|
(2,479 |
) |
|
(1,943 |
) |
|
(643 |
) |
Voyage expenses – related
parties |
|
(1,588 |
) |
|
(1,952 |
) |
|
(783 |
) |
|
(992 |
) |
Vessels' operating
expenses |
|
(52,842 |
) |
|
(58,164 |
) |
|
(26,774 |
) |
|
(28,200 |
) |
General and administrative
expenses |
|
(2,785 |
) |
|
(2,651 |
) |
|
(1,241 |
) |
|
(1,388 |
) |
Management fees - related
parties |
|
(9,551 |
) |
|
(10,827 |
) |
|
(4,905 |
) |
|
(5,279 |
) |
General and administrative
expenses – non-cash component |
|
(2,127 |
) |
|
(1,545 |
) |
|
(1,193 |
) |
|
(767 |
) |
Amortization of dry-docking
and special survey costs |
|
(3,358 |
) |
|
(4,471 |
) |
|
(1,824 |
) |
|
(2,195 |
) |
Depreciation |
|
(45,963 |
) |
|
(55,719 |
) |
|
(23,218 |
) |
|
(27,873 |
) |
Amortization of prepaid lease
rentals, net |
|
(4,041 |
) |
|
(4,042 |
) |
|
(2,032 |
) |
|
(2,033 |
) |
Loss on sale / disposal of
vessels |
|
(861 |
) |
|
(18,420 |
) |
|
(861 |
) |
|
- |
|
Vessels’ impairment loss |
|
- |
|
|
(3,042 |
) |
|
- |
|
|
- |
|
Foreign exchange gains /
(losses) |
|
(18 |
) |
|
17 |
|
|
(114 |
) |
|
28 |
|
Operating
income |
$ |
57,160 |
|
$ |
66,715 |
|
$ |
25,689 |
|
$ |
47,694 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
/ (EXPENSES): |
|
|
|
|
|
|
|
|
Interest income |
$ |
1,878 |
|
$ |
1,686 |
|
$ |
878 |
|
$ |
851 |
|
Interest and finance
costs |
|
(29,378 |
) |
|
(45,316 |
) |
|
(14,790 |
) |
|
(22,383 |
) |
Swaps’ breakage cost |
|
(1,234 |
) |
|
- |
|
|
- |
|
|
- |
|
Equity gain on
investments |
|
5,199 |
|
|
4,299 |
|
|
2,889 |
|
|
2,596 |
|
Other |
|
95 |
|
|
327 |
|
|
(40 |
) |
|
286 |
|
Loss on derivative
instruments |
|
(253 |
) |
|
(575 |
) |
|
(326 |
) |
|
(254 |
) |
Total other
expenses |
$ |
(23,693 |
) |
$ |
(39,579 |
) |
$ |
(11,389 |
) |
$ |
(18,904 |
) |
Net
Income |
$ |
33,467 |
|
$ |
27,136 |
|
$ |
14,300 |
|
$ |
28,790 |
|
Earnings allocated to
Preferred Stock |
|
(14,782 |
) |
|
(15,547 |
) |
|
(7,904 |
) |
|
(7,904 |
) |
Net Income available
to common stockholders |
$ |
18,685 |
|
$ |
11,589 |
|
$ |
6,396 |
|
$ |
20,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share,
basic and diluted |
$ |
0.17 |
|
$ |
0.10 |
|
$ |
0.06 |
|
$ |
0.18 |
|
Weighted average number of
shares, basic |
|
109,340,800 |
|
|
113,540,975 |
|
|
109,873,071 |
|
|
114,040,870 |
|
Weighted average number of
shares, diluted |
|
109,340,800 |
|
|
116,490,307 |
|
|
109,873,071 |
|
|
116,990,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTAMARE
INC.Consolidated Balance Sheets
|
|
|
|
|
|
|
As of December
31, |
|
As of June
30, |
(Expressed in thousands of U.S. dollars) |
|
2018 |
|
2019 |
ASSETS |
|
|
|
(Unaudited) |
CURRENT
ASSETS: |
|
|
|
|
Cash and cash equivalents |
$ |
113,714 |
$ |
98,563 |
|
Restricted cash |
|
5,600 |
|
147,292 |
|
Accounts receivable |
|
5,625 |
|
10,073 |
|
Inventories |
|
11,020 |
|
10,610 |
|
Due from related parties |
|
4,681 |
|
875 |
|
Fair value of derivatives |
|
3,514 |
|
1,048 |
|
Insurance claims
receivable |
|
6,476 |
|
2,485 |
|
Prepaid lease rentals |
|
8,752 |
|
27,172 |
|
Asset held for sale |
|
4,838 |
|
- |
|
Time charter assumed |
|
190 |
|
191 |
|
Prepayments and other |
|
6,358 |
|
7,037 |
|
Total current
assets |
$ |
170,768 |
$ |
305,346 |
|
FIXED ASSETS,
NET: |
|
|
|
|
Right-of-use assets |
$ |
401,901 |
$ |
395,076 |
|
Vessels and advances, net |
|
2,206,786 |
|
2,175,523 |
|
Total fixed assets,
net |
$ |
2,608,687 |
$ |
2,570,599 |
|
NON-CURRENT
ASSETS: |
|
|
|
|
Equity method investments |
$ |
131,082 |
$ |
134,076 |
|
Prepaid lease rentals,
non-current |
|
34,167 |
|
11,407 |
|
Deferred charges, net |
|
26,250 |
|
26,460 |
|
Accounts receivable,
non-current |
|
17,789 |
|
11,455 |
|
Restricted cash |
|
47,177 |
|
38,043 |
|
Fair value of derivatives,
non-current |
|
3,727 |
|
129 |
|
Time charter assumed,
non-current |
|
1,222 |
|
1,127 |
|
Other non-current assets |
|
9,942 |
|
10,224 |
|
Total
assets |
$ |
3,050,811 |
$ |
3,108,866 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Current portion of long-term
debt |
$ |
149,162 |
$ |
193,135 |
|
Accounts payable |
|
8,586 |
|
5,705 |
|
Due to related parties |
|
196 |
|
203 |
|
Finance lease liabilities |
|
34,299 |
|
20,963 |
|
Finance lease liabilities to
be settled through term-loan proceeds included in current
Restricted cash |
|
- |
|
119,116 |
|
Accrued liabilities |
|
17,624 |
|
16,589 |
|
Unearned revenue |
|
12,432 |
|
13,851 |
|
Fair value of derivatives |
|
- |
|
262 |
|
Other current liabilities |
|
2,370 |
|
2,307 |
|
Total current
liabilities |
$ |
224,669 |
$ |
372,131 |
|
NON-CURRENT
LIABILITIES |
|
|
|
|
Long-term debt, net of current
portion |
$ |
1,159,244 |
$ |
1,199,107 |
|
Finance lease liabilities, net
of current portion |
|
305,033 |
|
182,326 |
|
Unearned revenue, net of
current portion |
|
4,741 |
|
4,283 |
|
Total non-current
liabilities |
$ |
1,469,018 |
$ |
1,385,716 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
|
Preferred stock |
$ |
- |
$ |
- |
|
Common stock |
|
11 |
|
11 |
|
Additional paid-in
capital |
|
1,313,840 |
|
1,324,542 |
|
Retained earnings |
|
38,734 |
|
27,632 |
|
Accumulated other
comprehensive income / (loss) |
|
4,539 |
|
(1,166 |
) |
Total stockholders’
equity |
$ |
1,357,124 |
$ |
1,351,019 |
|
Total liabilities and
stockholders’ equity |
$ |
3,050,811 |
$ |
3,108,866 |
|
|
|
|
|
|
|
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