Costamare Inc 6-K, filed Jul 28, 2022
Costamare Inc. (CMRE)
About this 6-K
Costamare Inc filed this 6-K on July 28, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2022
Commission File Number: 001-34934
COSTAMARE INC.
(Translation of registrant’s name into English)
7 rue du Gabian, MC 98000 Monaco
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
INCORPORATION BY REFERENCE
Exhibit 99.2 to this Report on Form 6-K shall be incorporated by reference into our registration statements on Form F-3, as filed with the U.S. Securities and Exchange Commission on July 6, 2016 (File No. 333-212415) and March 15, 2021 (File No. 333-254266), to the extent not superseded by information subsequently filed or furnished (to the extent we expressly state that we incorporate such furnished information by reference) by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 28, 2022
| COSTAMARE INC. | |||
| By: | /s/ Gregory G. Zikos | ||
| Name: | Gregory G. Zikos | ||
| Title: | Chief Financial Officer | ||
Exhibit 99.1
COSTAMARE INC. REPORTS RESULTS FOR THE SECOND QUARTER AND
SIX-MONTH PERIOD ENDED JUNE 30, 2022
Monaco, July 28, 2022 – Costamare Inc. (“Costamare” or the “Company”) (NYSE: CMRE) today reported unaudited financial results for the second quarter (“Q2 2022”) and six-months ended June 30, 2022.
| I. | RECORD PROFITABILITY IN A SECOND QUARTER SINCE NYSE LISTING | |
| · | Q2 2022 Net Income available to common stockholders of $114.1 million ($0.92 per share) vs $82.8 million ($0.67 per share) in Q2 2021. | |
| · | Q2 2022 Adjusted Net Income available to common stockholders1 of $118.6 million ($0.95 per share) vs $58.3 million ($0.47 per share) in Q2 2021. | |
| · | Q2 2022 liquidity of $854.1 million2 vs $564.6 million in Q2 2021. |
| II. | CLOSING OF $500 MILLION SYNDICATED LOAN FACILITY |
| · | Refinancing of existing indebtedness of 17 vessels, secured by long term contracted cash flows, with a tenor of 5 years. | |
| · | Additional liquidity raised of approximately $200 million. | |
| · | Participation of 12 U.S., European and Asian financing institutions, most of which represent new financing relationships. | |
| · | Significant reduction of funding cost, and extension of repayment schedule for 16 out of the 17 refinanced vessels. |
| III. | SHARE REPURCHASE PROGRAM TO DATE |
| · | Repurchase of 4,736,702 common shares (representing 3.8% of total common shares) at an average price of $12.67 per share, for a total consideration of approximately $60 million. | |
| · | Available funds remaining under the share repurchase program of approximately $90 million for common shares and $150 million for preferred shares. |
| IV. | NEW CHARTER ARRANGEMENTS AND FULLY EMPLOYED CONTAINERSHIP FLEET3 FOR THE YEAR AHEAD |
| · | Containership fleet fully employed for the remainder of 2022. | |
| · | More than 95% of the containership fleet4 is fixed for 2023. | |
| · | Forward fixing of two 2004-built, 6,492 TEU containerships, Aries and Argus, for a minimum tenor of 3 years at a daily rate of $58,500. | |
| · | Entered into a total of 27 chartering agreements for the dry bulk fleet since Q1 2022 earnings release. |
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.
2 Including our share of cash amounting to $3.6 million held by vessel owning-companies (the “Framework Deed”) set-up pursuant to the Framework Deed dated May 15, 2013, as amended and restated from time to time, between the Company and York Capital Management Global Advisors LLC and an affiliated fund (collectively, “York”), short term investments in U.S. Treasury Bills amounting to $10.0 million and $152.5 million of available undrawn funds from our two hunting license facilities as of June 30, 2022.
3 Please refer to the Fleet List table in Exhibit 99.2 for additional information on vessel employment details for our containership fleet.
4 Calculated on a TEU basis, including vessels owned by vessel owning-companies set-up pursuant to the Framework Deed, and excluding vessels we have agreed to sell.
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| V. | SALE AND PURCHASE ACTIVITY |
| · | Conclusion of the sale of the 2009-built, 57,334 DWT dry bulk vessel Thunder, resulting in a capital gain of $3.5 million. |
| VI. | DIVIDEND ANNOUNCEMENTS |
| · | On July 1, 2022, the Company declared a dividend of $0.115 per share on the common stock, which will be paid on August 8, 2022, to holders of record of common stock as of July 21, 2022. | |
| · | On July 1, 2022, the Company declared a dividend of $0.476563 per share on the Series B Preferred Stock, $0.531250 per share on the Series C Preferred Stock, $0.546875 per share on the Series D Preferred Stock and $0.554688 per share on the Series E Preferred Stock, which were all paid on July 15, 2022 to holders of record as of July 14, 2022. |
Mr. Gregory Zikos, Chief Financial Officer of Costamare Inc., commented:
“During the second quarter revenues reached approx. $290 million and Adjusted Net Income more than doubled to $119 million, compared to $58 million for the same period last year. As of quarter end, cash balances stood at around $700 million and total liquidity, including undrawn credit lines, was above $850 million.
Over the last months we executed on our previously announced share buy-back program, buying $60 million worth of common shares. At the same time, we concluded a 5-year syndicated loan facility of $500 million, proactively refinancing the indebtedness of 16 vessels and significantly reducing our cost of funding at competitive terms.
Regarding the market, congestion and pressured supply chains remain challenging as we enter the second half of the year. On the container market, asset values and charter rates remain at healthy and historically high levels, as also evidenced by our latest fixtures.
On the dry bulk market, rates have recently been under pressure but still remain at profitable levels, especially for owners who entered the market the year before. We view any potential softening of asset values as a compelling buying opportunity as we feel comfortable with the long-term supply and demand dynamics of the sector.
On the back of our increased liquidity, we are actively evaluating new investment opportunities in the shipping sector that have the potential to provide enhanced returns at acceptable risk levels.”
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Financial Summary
| 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) | 2021 | 2022 | 2021 | 2022 | ||||||||||||
| Voyage revenue | $ | 293,495 | $ | 558,937 | $ | 166,770 | $ | 290,927 | ||||||||
| Accrued charter revenue (1) | $ | 2,146 | $ | 5,069 | $ | 1,114 | $ | 1,712 | ||||||||
| Amortization of time-charter assumed | $ | (345 | ) | $ | 98 | $ | (345 | ) | $ | 49 | ||||||
| Voyage revenue adjusted on a cash basis (2) | $ | 295,296 | $ | 564,104 | $ | 167,539 | $ | 292,688 | ||||||||
| Adjusted Net Income available to common stockholders (3) | $ | 96,262 | $ | 223,058 | $ | 58,275 | $ | 118,563 | ||||||||
| Weighted Average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
| Adjusted Earnings per share (3) | $ | 0.79 | $ | 1.80 | $ | 0.47 | $ | 0.95 | ||||||||
| Net Income | $ | 158,757 | $ | 245,024 | $ | 90,616 | $ | 121,987 | ||||||||
| Net Income available to common stockholders | $ | 143,309 | $ | 229,576 | $ | 82,762 | $ | 114,133 | ||||||||
| Weighted Average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
| Earnings per share | $ | 1.17 | $ | 1.85 | $ | 0.67 | $ | 0.92 | ||||||||
(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. The reverse is true for charters with descending rates.
(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. 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 of our containership fleet are described in the notes to the “Fleet List” table in Exhibit 99.2.
(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-month and the six-month periods ended June 30, 2022 and 2021. 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.
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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) | 2021 | 2022 | 2021 | 2022 | ||||||||||||
| Net Income | $ | 158,757 | $ | 245,024 | $ | 90,616 | $ | 121,987 | ||||||||
| Earnings allocated to Preferred Stock | (15,448 | ) | (15,448 | ) | (7,854 | ) | (7,854 | ) | ||||||||
| Net Income available to common stockholders | 143,309 | 229,576 | 82,762 | 114,133 | ||||||||||||
| Accrued charter revenue | 2,146 | 5,069 | 1,114 | 1,712 | ||||||||||||
| General and administrative expenses - non-cash component | 3,207 | 4,360 | 1,768 | 1,808 | ||||||||||||
| Amortization of Time charter assumed | (345 | ) | 98 | (345 | ) | 49 | ||||||||||
| Realized (gain) / loss on Euro/USD forward contracts (1) | (174 | ) | 950 | (96 | ) | 619 | ||||||||||
| Gain on sale of vessels, net | (1,406 | ) | (21,250 | ) | (1,666 | ) | (3,452 | ) | ||||||||
| Non-recurring, non-cash write-off of loan deferred financing costs | 363 | 2,339 | - | 1,705 | ||||||||||||
| (Gain) / Loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) | 1,012 | 910 | (105 | ) | 983 | |||||||||||
| Non-recurring payments for loan cancellation fees | - | 1,006 | - | 1,006 | ||||||||||||
| Fair value measurement / Change in fair value of equity securities | (51,094 | ) | - | (25,157 | ) | - | ||||||||||
| Other non-recurring, non-cash items | (756 | ) | - | - | - | |||||||||||
| Adjusted Net Income available to common stockholders | $ | 96,262 | $ | 223,058 | $ | 58,275 | $ | 118,563 | ||||||||
| Adjusted Earnings per Share | $ | 0.79 | $ | 1.80 | $ | 0.47 | $ | 0.95 | ||||||||
| Weighted average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
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 or descending charter rates, realized (gain)/loss on Euro/USD forward contracts, gain on sale of vessels, net, fair value measurement of equity securities / change in fair value of equity securities, non-recurring, non-cash write-off of loan deferred financing costs, non-recurring payments for loan cancellation fees, general and administrative expenses - non-cash component, non-cash changes in fair value of derivatives and other non-recurring, non-cash items. “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.
4
Exhibit 99.2
Financial Report
Results of Operations
Three-month period ended June 30, 2022 compared to the three-month period ended June 30, 2021
During the three-month periods ended June 30, 2022 and 2021, we had an average of 117.7 and 71.5 vessels, respectively, in our fleet.
In the three-month period ended June 30, 2022, we sold the dry bulk vessel Thunder with DWT of 57,334.
In the three-month period ended June 30, 2021, we accepted delivery of the newbuild container vessel YM Tiptop with a TEU capacity of 12,690 and the secondhand container vessels Androusa, Norfolk, Porto Cheli, Porto Kagio and Porto Germeno with an aggregate TEU capacity of 26,705, and we sold the container vessel Prosper with a TEU capacity of 1,504.
Furthermore, in the three-month period ended June 30, 2021, we acquired all of the equity interest of sixteen companies (which owned or had committed to acquire dry bulk vessels) owned by our Chairman and Chief Executive Officer, Konstantinos Konstantakopoulos. We agreed to acquire these companies from Mr. Konstantakopoulos at cost with no mark-up or premium payable to Mr. Konstantakopoulos or his affiliated entities. Mr. Konstantakopoulos did not receive a profit as a result of the acquisition. Three of the dry bulk vessels that were part of the acquisition, the Builder, Pegasus and Adventure (with an aggregate DWT of 171,997), were delivered to us during the three-month period ended June 30, 2021.
In the three-month periods ended June 30, 2022 and 2021, our fleet ownership days totaled 10,715 and 6,509 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.
Consolidated Financial Results and Vessels’ Operational Data(1)
| Three-month period ended June 30, | Percentage | |||||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | Change | ||||||||||||
| Voyage revenue | $ | 166.8 | $ | 290.9 | $ | 124.1 | 74.4 | % | ||||||||
| Voyage expenses | (2.0 | ) | (11.3 | ) | 9.3 | n.m. | ||||||||||
| Voyage expenses – related parties | (2.4 | ) | (4.0 | ) | 1.6 | 66.7 | % | |||||||||
| Vessels’ operating expenses | (37.8 | ) | (67.6 | ) | 29.8 | 78.8 | % | |||||||||
| General and administrative expenses | (1.7 | ) | (3.5 | ) | 1.8 | 105.9 | % | |||||||||
| Management fees – related parties | (6.3 | ) | (11.0 | ) | 4.7 | 74.6 | % | |||||||||
| General and administrative expenses - non-cash component | (1.8 | ) | (1.8 | ) | - | - | ||||||||||
| Amortization of dry-docking and special survey costs | (2.5 | ) | (2.9 | ) | 0.4 | 16.0 | % | |||||||||
| Depreciation | (31.6 | ) | (41.3 | ) | 9.7 | 30.7 | % | |||||||||
| Gain on sale of vessels | 1.7 | 3.5 | 1.8 | 105.9 | % | |||||||||||
| Foreign exchange gains | - | 0.3 | 0.3 | n.m. | ||||||||||||
| Interest income | 1.1 | 0.1 | (1.0 | ) | (90.9 | %) | ||||||||||
| Interest and finance costs | (20.4 | ) | (30.1 | ) | 9.7 | 47.5 | % | |||||||||
| Change in fair value of equity securities | 25.1 | - | (25.1 | ) | n.m. | |||||||||||
| Income from equity method investments | 1.0 | 0.5 | (0.5 | ) | (50.0 | %) | ||||||||||
| Other | 1.3 | 1.2 | (0.1 | ) | (7.7 | %) | ||||||||||
| Gain / (loss) on derivative instruments | 0.1 | (1.0 | ) | (1.1 | ) | n.m. | ||||||||||
| Net Income | $ | 90.6 | $ | 122.0 | ||||||||||||
| Three-month period ended June 30, | Percentage | |||||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | Change | ||||||||||||
| Voyage revenue | $ | 166.8 | $ | 290.9 | $ | 124.1 | 74.4 | % | ||||||||
| Accrued charter revenue | 1.1 | 1.7 | 0.6 | 54.5 | % | |||||||||||
| Amortization of time charter assumed | (0.3 | ) | - | 0.3 | n.m. | |||||||||||
| Voyage revenue adjusted on a cash basis (1) | $ | 167.6 | $ | 292.6 | $ | 125.0 | 74.6 | % | ||||||||
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| Vessels’ operational data | Three-month period ended June 30, | Percentage | ||||||||||||||
| 2021 | 2022 | Change | Change | |||||||||||||
| Average number of vessels | 71.5 | 117.7 | 46.2 | 64.6 | % | |||||||||||
| Ownership days | 6,509 | 10,715 | 4,206 | 64.6 | % | |||||||||||
| Number of vessels under dry-docking | 6 | 10 | 4 | |||||||||||||
Segmental Financial Summary
| Three-month period ended June 30, 2021 | ||||||||||||||||
| Container vessels | Dry bulk vessels (2) | Other | Total | |||||||||||||
| Voyage revenue | $ | 165.9 | $ | 0.9 | $ | - | $ | 166.8 | ||||||||
| Voyage expenses | (1.9 | ) | (0.1 | ) | - | (2.0 | ) | |||||||||
| Voyage expenses – related parties | (2.4 | ) | - | - | (2.4 | ) | ||||||||||
| Vessels’ operating expenses | (37.6 | ) | (0.2 | ) | - | (37.8 | ) | |||||||||
| General and administrative expenses | (1.7 | ) | - | - | (1.7 | ) | ||||||||||
| Management fees – related parties | (6.3 | ) | - | - | (6.3 | ) | ||||||||||
| General and administrative expenses - non-cash component | (1.8 | ) | - | - | (1.8 | ) | ||||||||||
| Amortization of dry-docking and special survey costs | (2.5 | ) | - | - | (2.5 | ) | ||||||||||
| Depreciation | (31.5 | ) | (0.1 | ) | - | (31.6 | ) | |||||||||
| Gain on sale of vessels | 1.7 | - | - | 1.7 | ||||||||||||
| Interest income | 1.1 | - | - | 1.1 | ||||||||||||
| Interest and finance costs | (20.4 | ) | - | - | (20.4 | ) | ||||||||||
| Change in fair value of equity securities | - | - | 25.1 | 25.1 | ||||||||||||
| Income from equity method investments | - | - | 1.0 | 1.0 | ||||||||||||
| Other | 1.3 | - | - | 1.3 | ||||||||||||
| Gain on derivative instruments | 0.1 | - | - | 0.1 | ||||||||||||
| Net Income | $ | 64.0 | $ | 0.5 | $ | 26.1 | $ | 90.6 | ||||||||
| Three-month period ended June 30, 2022 | ||||||||||||||||
| Container vessels | Dry bulk vessels | Other | Total | |||||||||||||
| Voyage revenue | $ | 190.8 | $ | 100.1 | $ | - | $ | 290.9 | ||||||||
| Voyage expenses | (2.4 | ) | (8.9 | ) | - | (11.3 | ) | |||||||||
| Voyage expenses – related parties | (2.7 | ) | (1.3 | ) | - | (4.0 | ) | |||||||||
| Vessels’ operating expenses | (42.4 | ) | (25.2 | ) | - | (67.6 | ) | |||||||||
| General and administrative expenses | (2.3 | ) | (1.2 | ) | - | (3.5 | ) | |||||||||
| Management fees – related parties | (6.7 | ) | (4.3 | ) | - | (11.0 | ) | |||||||||
| General and administrative expenses - non-cash component | (1.1 | ) | (0.7 | ) | - | (1.8 | ) | |||||||||
| Amortization of dry-docking and special survey costs | (2.7 | ) | (0.2 | ) | - | (2.9 | ) | |||||||||
| Depreciation | (31.4 | ) | (9.9 | ) | - | (41.3 | ) | |||||||||
| Gain on sale of vessels | - | 3.5 | - | 3.5 | ||||||||||||
| Foreign exchange gains | 0.2 | 0.1 | - | 0.3 | ||||||||||||
| Interest income | 0.1 | - | - | 0.1 | ||||||||||||
| Interest and finance costs | (25.6 | ) | (4.5 | ) | - | (30.1 | ) | |||||||||
| Income from equity method investments | - | - | 0.5 | 0.5 | ||||||||||||
| Other | 0.3 | 0.9 | - | 1.2 | ||||||||||||
| Loss on derivative instruments | (0.6 | ) | (0.4 | ) | - | (1.0 | ) | |||||||||
| Net Income | $ | 73.5 | $ | 48.0 | $ | 0.5 | $ | 122.0 | ||||||||
(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Consolidated Financial Results and Vessels’ Operational Data” above for the reconciliation of Voyage revenue adjusted on a cash basis.
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(2) The results of dry bulk vessels are included from June 14, 2021. Prior to that, our results were attributable to container vessels only.
Voyage Revenue
Voyage revenue increased by 74.4%, or $124.1 million, to $290.9 million during the three-month period ended June 30, 2022, from $166.8 million during the three-month period ended June 30, 2021. The increase is mainly attributable to (i) revenue earned by one container vessel and three dry bulk vessels acquired during the first quarter of 2022, as well as by seven container vessels and 43 dry bulk vessels acquired during the nine-month ended December 31, 2021 and (ii) increased charter rates in certain of our container vessels, partly off-set by revenue not earned by one container vessel and one dry bulk vessel sold during the six-month period ended June 30, 2022 and four container vessels sold during the nine-month period ended December 31, 2021.
Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”) increased by 74.6%, or $125.0 million, to $292.6 million during the three-month period ended June 30, 2022, from $167.6 million during the three-month period ended June 30, 2021. Accrued charter revenue for the three-month periods ended June 30, 2022 and 2021 was a positive amount of $1.7 million and $1.1 million, respectively.
Voyage Expenses
Voyage expenses were $11.3 million and $2.0 million for the three-month periods ended June 30, 2022 and 2021, 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 $4.0 million and $2.4 million for the three-month periods ended June 30, 2022 and 2021, respectively. Voyage expenses – related parties represent (i) fees of 1.25%, in the aggregate, on voyage revenues charged by a related manager and a service provider and (ii) charter brokerage fees (in respect of our container vessels) payable to two related charter brokerage companies for an amount of approximately $0.4 million and $0.3 million, in the aggregate, for the three-month periods ended June 30, 2022 and 2021, respectively.
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 $67.6 million and $37.8 million during the three-month periods ended June 30, 2022 and 2021, respectively. Daily vessels’ operating expenses were $6,309 and $5,811 for the three-month periods ended June 30, 2022 and 2021, respectively. The increase in the daily operating expenses during the quarter ended June 30, 2022 is mainly attributable to increased crew costs related to COVID-19 pandemic measures. 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 $3.5 million and $1.7 million during the three-month periods ended June 30, 2022 and 2021, respectively, and include amounts of $0.67 million and $0.63 million, respectively, that were paid to a related manager.
Management Fees – related parties
Management fees paid to our related party managers were $11.0 million and $6.3 million during the three-month periods ended June 30, 2022 and 2021, respectively.
General and Administrative Expenses - non-cash component
General and administrative expenses - non-cash component for the three-month period ended June 30, 2022 amounted to $1.8 million, representing the value of the shares issued to a related party manager on June 30, 2022. General and administrative expenses - non-cash component for the three-month period ended June 30, 2021 amounted to $1.8 million, representing the value of the shares issued to a related party manager on June 30, 2021.
Amortization of Dry-Docking and Special Survey
Amortization of deferred dry-docking and special survey costs was $2.9 million and $2.5 million during the three-month periods ended June 30, 2022 and 2021, respectively. During the three-month period ended June 30, 2022, seven vessels underwent and completed their dry-docking and special survey and three vessels were in the process of completing their dry-docking and special survey. During the three-month period ended June 30, 2021, five vessels underwent and completed their dry-docking and special survey and one vessel was in the process of completing its dry-docking and special survey.
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Depreciation
Depreciation expense for the three-month periods ended June 30, 2022 and 2021 was $41.3 million and $31.6 million, respectively.
Gain on Sale of Vessels
During the three-month period ended June 30, 2022, we recorded a gain of $3.5 million from the sale of the dry bulk vessel Thunder, which was classified as vessel held for sale during the first quarter of 2022. During the three-month period ended June 30, 2021, we recorded a gain of $1.7 million from the sale of the container vessel Prosper, which was classified as vessel held for sale during the first quarter of 2021.
Vessels Held for Sale
As of June 30, 2022, the container vessels Sealand Illinois, Sealand Michigan, York (initially classified as vessels held for sale during the fourth quarter of 2021), Sealand Washington, and Maersk Kalamata (initially classified as vessels held for sale during the first quarter of 2022) continue to be classified as vessels held for sale. No loss on vessels held for sale was recorded during the second quarter of 2022 since each vessel’s fair value less cost to sell exceeded each vessel’s carrying value.
During the three-month period ended June 30, 2021, the container vessels Zim New York, and Zim Shanghai were classified as vessels held for sale and the container vessel Venetiko continued to be classified as vessel held for sale (initially classified as vessel held for sale during the first quarter of 2021). No loss on vessels held for sale was recorded during the second quarter of 2021, since each vessel’s fair value less cost to sell exceeded each vessel’s carrying value.
Interest Income
Interest income amounted to $0.1 million and $1.1 million for the three-month periods ended June 30, 2022 and 2021, respectively.
Interest and Finance Costs
Interest and finance costs were $30.1 million and $20.4 million during the three-month periods ended June 30, 2022 and 2021, respectively. The increase is mainly attributable to the increased average loan balances and increased financing costs during the three-month period ended June 30, 2022 compared to the three-month period ended June 30, 2021.
Change in Fair Value of Equity Securities
Change in fair value of equity securities of $25.1 million for the three-month period ended June 30, 2021, represents the difference between the aggregate fair value of 1,221,800 ordinary shares of ZIM that we owned as at June 30, 2021 compared to the fair value of such shares as of March 31, 2021. During the fourth quarter of 2021 we sold all the ordinary shares of ZIM we owned.
Income from Equity Method Investments
Income from equity method investments for the three-month period ended June 30, 2022 was $0.5 million ($1.0 million for the three-month period ended June 30, 2021) representing our share of the income in jointly owned companies set up pursuant to the Framework Deed dated May 15, 2013, as amended and restated from time to time (the “Framework Deed”), with York. As of June 30, 2022 and June 30, 2021 six and six companies, respectively, were jointly owned pursuant to the Framework Deed out of which four and five companies, respectively, owned container vessels. The decreased income from equity method investments in the second quarter of 2022 compared to the second quarter of 2021 is mainly attributable to the decreased number of container vessels jointly owned with York during the respective periods.
Gain / (loss) on Derivative Instruments
As of June 30, 2022, we hold 27 interest rate derivatives and two cross currency rate swaps all of which qualify for hedge accounting. As a result, the change in the fair value of each instrument is recorded in “Other Comprehensive Income” (“OCI”). As of June 30, 2022, the fair value of these instruments, in aggregate, amounted to a net asset of $17.4 million. During the three-month period ended June 30, 2022, a gain of $7.6 million has been included in OCI and a loss of $0.1 million has been included in Gain/(loss) on Derivative Instruments.
| 4 |
Cash Flows
Three-month periods ended June 30, 2022 and 2021
| Condensed cash flows | Three-month period ended June 30, | |||||||
| (Expressed in millions of U.S. dollars) | 2021 | 2022 | ||||||
| Net Cash Provided by Operating Activities | $ | 104.0 | $ | 161.1 | ||||
| Net Cash Provided by / (Used in) Investing Activities | $ | (195.1 | ) | $ | 24.9 | |||
| Net Cash Provided by Financing Activities | $ | 204.2 | $ | 14.0 | ||||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the three-month period ended June 30, 2022, increased by $57.1 million to $161.1 million, from $104.0 million for the three-month period ended June 30, 2021. The increase is mainly attributable to increased cash from operations of $125.1 million; partly off-set by the unfavorable 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, by the increased payments for interest (including swap payments) of $6.9 million during the three-month period ended June 30, 2022 compared to the three-month period ended June 30, 2021 and by the increased dry-docking and special survey costs of $8.5 million during the three-month period ended June 30, 2022 compared to the three-month period ended June 30, 2021.
Net Cash Provided by / (Used in) Investing Activities
Net cash provided by investing activities was $24.9 million in the three-month period ended June 30, 2022, which mainly consisted of proceeds we received from (i) the sale of the dry bulk vessel Thunder and (ii) the maturity of short-term investments in US Treasury Bills; partly off-set by payments (i) for upgrades for certain of our container and dry bulk vessels and (ii) for the purchase of short-term investments in US Treasury Bills.
Net cash used in investing activities was $195.1 million in the three-month period ended June 30, 2021, which mainly consisted of (i) net payments for the acquisition of the 51% equity interest in one company, previously jointly owned with York pursuant to the Framework Deed, (ii) payments for the delivery of one newbuild container vessel, four secondhand container vessels and one dry bulk vessel, (iii) advance payments for the acquisition of twelve secondhand dry bulk vessels and (iv) payments for upgrades for certain of our vessels; partly off-set by proceeds we received from the sale of one vessel.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $14.0 million in the three-month period ended June 30, 2022, which mainly consisted of (a) $143.5 million net proceeds relating to our debt financing agreements (including proceeds of $551.3 million we received from our debt financing agreements), (b) $52.4 million we paid for the re-purchase of 4.1 million of our common shares, (c) $57.5 million we paid for dividends to holders of our common stock for the first quarter of 2022 (including a special dividend to holders of our common stock of $46.7 million), (d) $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, 2022 to April 14, 2022.
Net cash provided by financing activities was $204.2 million in the three-month period ended June 30, 2021, which mainly consisted of (a) $227.8 million net proceeds relating to our debt financing agreements (including proceeds we received from the issuance of €100.0 million unsecured bond on the Athens Exchange), (b) $9.4 million we paid for dividends to holders of our common stock for the first quarter of 2021 and (c) $0.9 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 and $2.5 million we paid for dividends to holders of our Series E Preferred Stock for the period from January 15, 2021 to April 14, 2021.
| 5 |
Six-month period ended June 30, 2022 compared to the six-month period ended June 30, 2021
During the six-month periods ended June 30, 2022 and 2021, we had an average of 117.6 and 67.1 vessels, respectively, in our fleet.
In the six-month period ended June 30, 2022, we accepted delivery of (i) the secondhand container vessel Dyros (ex. Co Kobe) with a TEU capacity of 4,578 and (ii) the secondhand dry bulk vessels Oracle (ex. Belstar), Libra (ex. Universal Bremen) and Norma (ex. Magda) with an aggregate DWT of 172,717. Furthermore, in the six-month period ended June 30, 2022, we sold the container vessel Messini, with a TEU capacity of 2,458, and the dry bulk vessel Thunder, with DWT of 57,334.
In the six-month period ended June 30, 2021, (i) we accepted delivery of the newbuild container vessels YM Target and YM Tiptop with an aggregate TEU capacity of 25,380, the secondhand container vessels Aries, Argus, Glen Canyon, Androusa, Norfolk, Porto Cheli, Porto Kagio and Porto Germeno with an aggregate TEU capacity of 45,331 and we sold the container vessels Halifax Express and Prosper with an aggregate TEU capacity of 6,394 and (ii) we acquired (a) the 75% equity interest of York Capital Management in each of the 11,010 TEU container vessels Cape Kortia and Cape Sounio and (b) the 51% equity interest of York Capital Management in each of the 11,010 TEU container vessels Cape Tainaro, Cape Artemisio and Cape Akritas and as a result we obtained 100% of the equity interest in each of these five vessels.
Furthermore, in the six-month period ended June 30, 2021, we acquired all of the equity interest of sixteen companies (which owned or had committed to acquire dry bulk vessels) owned by our Chairman and Chief Executive Officer, Konstantinos Konstantakopoulos. We agreed to acquire these companies from Mr. Konstantakopoulos at cost with no mark-up or premium payable to Mr. Konstantakopoulos or his affiliated entities. Mr. Konstantakopoulos did not receive a profit as a result of the acquisition. Three of the dry bulk vessels that were part of the acquisition, the Builder, Pegasus and Adventure (with an aggregate DWT of 171,997), were delivered to us during the six-month period ended June 30, 2021.
In the six-month periods ended June 30, 2022 and 2021, our fleet ownership days totaled 21,279 and 12,149 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.
Consolidated Financial Results and Vessels’ Operational Data (1)
Six-month period ended June 30, | Percentage | |||||||||||||||
(Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | Change | ||||||||||||
| Voyage revenue | $ | 293.5 | $ | 558.9 | $ | 265.4 | 90.4 | % | ||||||||
| Voyage expenses | (3.1 | ) | (19.8 | ) | 16.7 | n.m. | ||||||||||
| Voyage expenses – related parties | (4.3 | ) | (7.7 | ) | 3.4 | 79.1 | % | |||||||||
| Vessels’ operating expenses | (69.6 | ) | (133.4 | ) | 63.8 | 91.7 | % | |||||||||
| General and administrative expenses | (3.7 | ) | (6.7 | ) | 3.0 | 81.1 | % | |||||||||
| Management fees – related parties | (11.8 | ) | (21.9 | ) | 10.1 | 85.6 | % | |||||||||
| General and administrative expenses - non-cash component | (3.2 | ) | (4.4 | ) | 1.2 | 37.5 | % | |||||||||
| Amortization of dry-docking and special survey costs | (4.8 | ) | (5.6 | ) | 0.8 | 16.7 | % | |||||||||
| Depreciation | (58.7 | ) | (82.5 | ) | 23.8 | 40.5 | % | |||||||||
| Gain on sale of vessels, net | 1.4 | 21.3 | 19.9 | n.m. | ||||||||||||
| Foreign exchange gains | 0.1 | 0.4 | 0.3 | n.m. | ||||||||||||
| Interest income | 1.5 | 0.1 | (1.4 | ) | (93.3 | %) | ||||||||||
| Interest and finance costs | (36.5 | ) | (55.2 | ) | 18.7 | 51.2 | % | |||||||||
| Fair value measurement of equity securities | 51.1 | - | (51.1 | ) | n.m. | |||||||||||
| Income from equity method investments | 5.0 | 0.8 | (4.2 | ) | (84.0 | %) | ||||||||||
| Other | 2.9 | 1.6 | (1.3 | ) | (44.8 | %) | ||||||||||
| Loss on derivative instruments | (1.0 | ) | (0.9 | ) | (0.1 | ) | (10.0 | %) | ||||||||
| Net Income | $ | 158.8 | $ | 245.0 | ||||||||||||
| 6 |
| Six-month period ended June 30, | Percentage | |||||||||||||||
| (Expressed in millions of U.S. dollars, except percentages) | 2021 | 2022 | Change | Change | ||||||||||||
| Voyage revenue | $ | 293.5 | $ | 558.9 | $ | 265.4 | 90.4 | % | ||||||||
| Accrued charter revenue | 2.1 | 5.1 | 3.0 | n.m. | ||||||||||||
| Amortization of time charter assumed | (0.3 | ) | 0.1 | 0.4 | n.m. | |||||||||||
| Voyage revenue adjusted on a cash basis (1) | $ | 295.3 | $ | 564.1 | $ | 268.8 | 91.0 | % | ||||||||
| Vessels’ operational data | Six-month period ended June 30, | Percentage | ||||||||||||||
| 2021 | 2022 | Change | Change | |||||||||||||
| Average number of vessels | 67.1 | 117.6 | 50.5 | 75.3 | % | |||||||||||
| Ownership days | 12,149 | 21,279 | 9,130 | 75.2 | % | |||||||||||
| Number of vessels under dry-docking | 9 | 12 | 3 | |||||||||||||
Segmental Financial Summary
Six-month period ended June 30, 2021 | ||||||||||||||||
| Container vessels | Dry bulk vessels (2) | Other | Total | |||||||||||||
| Voyage revenue | $ | 292.6 | $ | 0.9 | $ | - | $ | 293.5 | ||||||||
| Voyage expenses | (3.0 | ) | (0.1 | ) | - | (3.1 | ) | |||||||||
| Voyage expenses – related parties | (4.3 | ) | - | - | (4.3 | ) | ||||||||||
| Vessels’ operating expenses | (69.4 | ) | (0.2 | ) | - | (69.6 | ) | |||||||||
| General and administrative expenses | (3.7 | ) | - | - | (3.7 | ) | ||||||||||
| Management fees – related parties | (11.8 | ) | - | - | (11.8 | ) | ||||||||||
| General and administrative expenses - non-cash component | (3.2 | ) | - | - | (3.2 | ) | ||||||||||
| Amortization of dry-docking and special survey costs | (4.8 | ) | - | - | (4.8 | ) | ||||||||||
| Depreciation | (58.6 | ) | (0.1 | ) | - | (58.7 | ) | |||||||||
| Gain on sale of Vessels, net | 1.4 | - | - | 1.4 | ||||||||||||
| Foreign exchange gains | 0.1 | - | - | 0.1 | ||||||||||||
| Interest income | 1.5 | - | - | 1.5 | ||||||||||||
| Interest and finance costs | (36.5 | ) | - | - | (36.5 | ) | ||||||||||
| Fair value measurement of equity securities | - | - | 51.1 | 51.1 | ||||||||||||
| Income from equity method investments | - | - | 5.0 | 5.0 | ||||||||||||
| Other | 2.9 | - | - | 2.9 | ||||||||||||
| Loss on derivative instruments | (1.0 | ) | - | - | (1.0 | ) | ||||||||||
| Net Income | $ | 102.2 | $ | 0.5 | $ | 56.1 | $ | 158.8 | ||||||||
| Six-month period ended June 30, 2022 | ||||||||||||||||
| Container vessels | Dry bulk vessels | Other | Total | |||||||||||||
| Voyage revenue | $ | 380.3 | $ | 178.6 | $ | - | $ | 558.9 | ||||||||
| Voyage expenses | (4.4 | ) | (15.4 | ) | - | (19.8 | ) | |||||||||
| Voyage expenses – related parties | (5.5 | ) | (2.2 | ) | - | (7.7 | ) | |||||||||
| Vessels’ operating expenses | (84.2 | ) | (49.2 | ) | - | (133.4 | ) | |||||||||
| General and administrative expenses | (4.4 | ) | (2.3 | ) | - | (6.7 | ) | |||||||||
| Management fees – related parties | (13.5 | ) | (8.4 | ) | - | (21.9 | ) | |||||||||
| General and administrative expenses – non-cash component | (2.7 | ) | (1.7 | ) | - | (4.4 | ) | |||||||||
| Amortization of dry-docking and special survey costs | (5.3 | ) | (0.3 | ) | - | (5.6 | ) | |||||||||
| Depreciation | (62.9 | ) | (19.6 | ) | - | (82.5 | ) | |||||||||
| Gain on sale of vessels | 17.8 | 3.5 | - | 21.3 | ||||||||||||
| Foreign exchange gains | 0.4 | - | - | 0.4 | ||||||||||||
| Interest income | 0.1 | - | - | 0.1 | ||||||||||||
| Interest and finance costs | (47.2 | ) | (8.0 | ) | - | (55.2 | ) | |||||||||
| Income from equity method investments | - | - | 0.8 | 0.8 | ||||||||||||
| Other | 0.7 | 0.9 | - | 1.6 | ||||||||||||
| Loss on derivative instruments | (0.6 | ) | (0.3 | ) | - | (0.9 | ) | |||||||||
| Net Income | $ | 168.6 | $ | 75.6 | $ | 0.8 | $ | 245.0 | ||||||||
| 7 |
(1) Voyage revenue adjusted on a cash basis is not a recognized measurement under U.S. generally accepted accounting principles (“GAAP”). Refer to “Consolidated Financial Results and Vessels’ Operational Data” above for the reconciliation of Voyage revenue adjusted on a cash basis.
(2) The results of dry bulk vessels are included from June 14, 2021. Prior to that, our results were attributable to container vessels only.
Voyage Revenue
Voyage revenue increased by 90.4%, or $265.4 million, to $558.9 million during the six-month period ended June 30, 2022, from $293.5 million during the six-month period June 30, 2021. The increase is mainly attributable to (i) revenue earned by one container vessel and three dry bulk vessels acquired during the first quarter of 2022, as well as by revenue earned by 16 container vessels and 43 dry bulk vessels acquired during the year ended December 31, 2021, and (ii) increased charter rates in certain of our container vessels during the six-month period ended June 30, 2022 compared to the six-month period ended June 30, 2021, partly off-set by revenue not earned by one container vessel and one dry bulk vessel sold during the six-month period ended June 30, 2022 and five container vessels sold during the year ended December 31, 2021.
Voyage revenue adjusted on a cash basis (which eliminates non-cash “Accrued charter revenue”), increased by 91.0%, or $268.8 million, to $564.1 million during the six-month June 30, 2022, from $295.3 million during the six-month June 30, 2021. Accrued charter revenue for the six-month June 30, 2022 and 2021 was a positive amount of $5.1 million and $2.1 million, respectively.
Voyage Expenses
Voyage expenses were $19.8 million and $3.1 million for the six-month periods ended June 30, 2022 and 2021, 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 $7.7 million and $4.3 million for the six-month periods ended June 30, 2022 and 2021, respectively. Voyage expenses – related parties represent (i) fees of 1.25% in the aggregate on voyage revenues charged by a related manager and a service provider and (ii) charter brokerage fees (in respect of our container vessels) payable to two related charter brokerage companies for an amount of approximately $0.8 million and $0.6 million, in the aggregate, for the six-month periods ended June 30, 2022 and 2021, respectively.
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 $133.4 million and $69.6 million during the six-month periods ended June 30, 2022 and 2021, respectively. Daily vessels’ operating expenses were $6,267 and $5,729 for the six-month periods ended June 30, 2022 and 2021, respectively. The increase in the daily operating expenses during the six-month period ended June 30, 2022 is mainly attributable to increased crew costs related to COVID-19 pandemic measures. 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 $6.7 million and $3.7 million during the six-month periods ended June 30, 2022 and 2021, respectively, and both include $1.3 million paid to a related manager.
Management Fees – related parties
Management fees paid to our related party managers were $21.9 million and $11.8 million during the six-month periods ended June 30, 2022 and 2021, respectively.
General and Administrative Expenses – non-cash component
General and administrative expenses – non-cash component for the six-month period ended June 30, 2022 amounted to $4.4 million, representing the value of the shares issued to a related party manager on March 30, 2022 and June 30, 2022. General and administrative expenses - non-cash component for the six-month period ended June 30, 2021 amounted to $3.2 million, representing the value of the shares issued to a related party manager on March 31, 2021 and on June 30, 2021.
| 8 |
Amortization of Dry-Docking and Special Survey
Amortization of deferred dry-docking and special survey costs was $5.6 million and $4.8 million during the six-month periods ended June 30, 2022 and 2021, respectively. During the six-month period ended June 30, 2022, nine vessels underwent and completed their dry-docking and special survey and three vessels were in the process of completing their dry-docking and special survey. During the six-month period ended June 30, 2021, eight vessels underwent and completed their dry-docking and special survey and one vessel was in the process of completing its dry-docking and special survey.
Depreciation
Depreciation expense for the six-month periods ended June 30, 2022 and 2021 was $82.5 million and $58.7 million, respectively.
Gain on Sale of Vessels, net
During the six-month period ended June 30, 2022, we recorded an aggregate gain of $21.3 million from the sale of the container vessel Messini (vessel classified as held for sale during the fourth quarter of 2021) and the dry bulk vessel Thunder (vessel classified as held for sale during the first quarter of 2022). During the six-month period ended June 30, 2021, we recorded a net gain of $1.4 million from the sale of the container vessels Halifax Express (vessel classified as held for sale during the fourth quarter of 2020) and Prosper.
Vessels Held for Sale
During the six-month period ended June 30, 2022, the container vessels Sealand Washington, and Maersk Kalamata were classified as vessels held for sale and the container vessels Sealand Illinois, Sealand Michigan, York (initially classified as vessels held for sale during the fourth quarter of 2021) continued to be classified as vessels held for sale. No loss on vessels held for sale was recorded during the six-month period ended June 30, 2022 since each vessel’s fair value less cost to sell exceeded each vessel’s carrying value.
During the six-month period ended June 30, 2021, the container vessels Venetiko, Zim New York and Zim Shanghai were classified as vessels held for sale. No loss on vessels held for sale was recorded during the six-month period ended June 30, 2021 since each vessel’s fair value less cost to sell exceeded each vessel’s carrying value.
Interest Income
Interest income amounted to $0.1 million and $1.5 million for the six-month periods ended June 30, 2022 and 2021, respectively.
Interest and Finance Costs
Interest and finance costs were $55.2 million and $36.5 million during the six-month periods ended June 30, 2022 and 2021, respectively. The increase is mainly attributable to the increased average loan balances and increased financing costs during the six-month period ended June 30, 2022 compared to the six-month period ended June 30, 2021.
Fair value measurement of equity securities
Fair value measurement of equity securities of $51.1 million for the six-month period ended June 30, 2021, represents the difference between the aggregate fair value of 1,221,800 ordinary shares of ZIM that we owned as at June 30, 2021 of $54.9 million compared to the book value of these shares of $3.8 million as of December 31, 2020. During the fourth quarter of 2021 we sold all the ordinary shares of ZIM we owned. ZIM completed its initial public offering and listing on the New York Stock Exchange of its ordinary shares on January 27, 2021.
| 9 |
Income from Equity Method Investments
Income from equity method investments for the six-month period ended June 30, 2022, was $0.8 million ($5.0 million for the six-month period ended June 30, 2021), representing our share of the income in jointly owned companies set up pursuant to the Framework Deed dated May 15, 2013, as amended and restated from time to time (the “Framework Deed”), with York. As of June 30, 2022 and June 30, 2021 six and six companies, respectively, were jointly owned pursuant to the Framework Deed out of which four and five companies, respectively, owned container vessels. The decreased income from equity method investments in the first half of 2022 compared to the first half of 2021 is mainly attributable to the decreased number of container vessels jointly owned with York during the respective periods.
Loss on Derivative Instruments
As of June 30, 2022, we hold 27 interest rate derivatives and two cross currency rate swaps, all of which qualify for hedge accounting. As a result, the change in the fair value of each instrument is recorded in “Other Comprehensive Income” (“OCI”). As of June 30, 2022, the fair value of these instruments, in aggregate, amounted to a net asset of $17.4 million. During the six-month period ended June 30, 2022, a gain of $28.8 million has been included in OCI and a loss of $0.2 million has been included in Loss on Derivative Instruments.
Cash Flows
Six-month periods ended June 30, 2022 and 2021
| Condensed cash flows | Six-month period ended June 30, | |||||||
| (Expressed in millions of U.S. dollars) | 2021 | 2022 | ||||||
| Net Cash Provided by Operating Activities | $ | 175.2 | $ | 315.4 | ||||
| Net Cash Used in Investing Activities | $ | (281.5 | ) | $ | (21.9 | ) | ||
| Net Cash Provided by Financing Activities | $ | 263.3 | $ | 40.9 | ||||
Net Cash Provided by Operating Activities
Net cash flows provided by operating activities for the six-month period ended June 30, 2022, increased by $140.2 million to $315.4 million, from $175.2 million for the six-month period ended June 30, 2021. The increase is mainly attributable to increased cash from operations of $268.8 million; partly off-set by the unfavorable 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 $7.4 million, by the increased payments for interest (including swap payments) of $11.0 million during the six-month period ended June 30, 2022 compared to the six-month period ended June 30, 2021 and by the increased dry-docking and special survey costs of $8.9 million during the six-month period ended June 30, 2022 compared to the six-month period ended June 30, 2021.
Net Cash Used in Investing Activities
Net cash used in investing activities was $21.9 million in the six-month period ended June 30, 2022, which mainly consisted of (i) payments for the acquisition of two secondhand dry bulk vessels, (ii) settlement payment for the delivery of one secondhand dry bulk vessel, (iii) payment for the purchase of short-term investments in US Treasury Bills and (iv) payments for upgrades for certain of our container and dry bulk vessels; partly off-set by proceeds we received from (i) the sale of the container vessel Messini and the dry bulk vessel Thunder and (ii) the maturity of short-term investments in US Treasury Bills.
Net cash used in investing activities was $281.5 million in the six-month period ended June 30, 2021, which mainly consisted of (i) net payments for the acquisition of the 75% equity interest in two companies and of the 51% equity interest in three companies, previously jointly owned with York pursuant to the Framework Deed, (ii) payments for the delivery of two newbuild container vessels, eight secondhand container vessels and one dry bulk vessel, (iii) advance payments for the acquisition of two secondhand container vessels and twelve secondhand dry bulk vessels and (iv) payments for upgrades for certain of our vessels; partly off-set by proceeds we received from the sale of two container vessels.
| 10 |
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $40.9 million in the six-month period ended June 30, 2022, which mainly consisted of (a) $191.4 million net proceeds relating to our debt financing agreements (including proceeds of $770.4 million we received from our debt financing agreements), (b) $68.2 million we paid for dividends to holders of our common stock for the fourth quarter of 2021 and the first quarter of 2022 (including a special dividend paid to holders of our common stock of $46.7 million for the first quarter of 2022) and (c) $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 and $5.1 million we paid for dividends to holders of our Series E Preferred Stock for the period from October 15, 2021 to January 14, 2022 and January 15, 2022 to April 14, 2022.
Net cash provided by financing activities was $263.3 million in the six-month period ended June 30, 2021, which mainly consisted of (a) $309.4 million net proceeds relating to our debt financing agreements (including proceeds we received from the issuance of €100.0 million unsecured bond on the Athens Exchange), (b) $18.6 million we paid for dividends to holders of our common stock for the fourth quarter of 2020 and the first quarter of 2021 and (c) $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 and $5.1 million we paid for dividends to holders of our Series E Preferred Stock for the period from October 15, 2020 to January 14, 2021 and January 15, 2021 to April 14, 2021.
Liquidity and Unencumbered Vessels
Cash and cash equivalents
As of June 30, 2022, we had Cash and cash equivalents of $688.0 million, consisting of cash, cash equivalents and restricted cash and $10.0 million invested in short dated US Treasury Bills (Short-term investments). Furthermore, as of June 30, 2022, our liquidity stood at $854.1 million including (a) our share of cash amounting to $3.6 million held in joint venture companies set up pursuant to the Framework Deed and (b) $152.5 million of available undrawn funds from our two hunting license facilities.
Debt-free vessels
As of July 28, 2022, the following vessels were free of debt.
Unencumbered Vessels
(Refer to Fleet list for full details)
| Vessel Name | Year Built | TEU Capacity | ||
| Containerships | ||||
| MAERSK KOWLOON | 2005 | 7,471 | ||
| ETOILE | 2005 | 2,556 | ||
| MICHIGAN | 2008 | 1,300 | ||
| MONEMVASIA (*) | 1998 | 2,472 | ||
| ARKADIA (*) | 2001 | 1,550 |
(*) Vessels acquired pursuant to the Framework Deed with York.
Conference Call details:
On Thursday, July 28, 2022 at 10:00 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, 2022. 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: 4253103.
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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 and dry bulk vessels for charter. The Company has 48 years of history in the international shipping industry and a fleet of 76 containerships, with a total capacity of approximately 557,000 TEU (including five vessels that we have agreed to sell) and 45 dry bulk vessels with a total capacity of approximately 2,436,000 DWT. Four of our containerships have been acquired pursuant to the Framework Deed with York by vessel-owning joint venture companies 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”.
Company Contacts:
Gregory
Zikos – Chief Financial Officer
Konstantinos Tsakalidis – Business Development
Costamare
Inc., Monaco
Tel: (+377) 93 25 09 40
Email: ir@costamare.com
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Containership Fleet List
The table below provides additional information, as of July 28, 2022, about our fleet of containerships, including the vessels we have agreed to sell, 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 | Year Built | Capacity (TEU) | Current Daily Charter Rate(1) (U.S. dollars) | Expiration of Charter(2) |
| 1 | TRITON | 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 | YM TRUTH(ii) | Yang Ming | 2020 | 12,690 | (*) | May 2030 |
| 8 | YM TOTALITY(ii) | Yang Ming | 2020 | 12,690 | (*) | July 2030 |
| 9 | YM TARGET(ii) | Yang Ming | 2021 | 12,690 | (*) | November 2030 |
| 10 | YM TIPTOP(ii) | Yang Ming | 2021 | 12,690 | (*) | March 2031 |
| 11 | CAPE AKRITAS | MSC | 2016 | 11,010 | 33,000 | August 2031 |
| 12 | CAPE TAINARO | MSC | 2017 | 11,010 | 33,000 | April 2031 |
| 13 | CAPE KORTIA | MSC | 2017 | 11,010 | 33,000 | August 2031 |
| 14 | CAPE SOUNIO | MSC | 2017 | 11,010 | 33,000 | April 2031 |
| 15 | CAPE ARTEMISIO | Hapag Lloyd | 2017 | 11,010 | 36,650 | March 2025 |
| 16 | ZIM SHANGHAI (ex. COSCO GUANGZHOU) | ZIM | 2006 | 9,469 | 72,700 | July 2025 |
| 17 | ZIM YANTIAN (ex. COSCO NINGBO) | ZIM | 2006 | 9,469 | 72,700 | June 2025 |
| 18 | YANTIAN | COSCO | 2006 | 9,469 | 39,600 | February 2024 |
| 19 | COSCO HELLAS | COSCO | 2006 | 9,469 | 39,600 | February 2024 |
| 20 | BEIJING | COSCO | 2006 | 9,469 | 39,600 | March 2024 |
| 21 | MSC AZOV | MSC | 2014 | 9,403 | 46,300 | December 2026(3) |
| 22 | MSC AMALFI | MSC | 2014 | 9,403 | 46,300 | March 2027(4) |
| 23 | MSC AJACCIO | MSC | 2014 | 9,403 | 46,300 | February 2027(5) |
| 24 | MSC ATHENS | MSC | 2013 | 8,827 | 45,300 | January 2026(6) |
| 25 | MSC ATHOS | MSC | 2013 | 8,827 | 45,300 | February 20267) |
| 26 | VALOR | Hapag Lloyd | 2013 | 8,827 | 32,400 | April 2025 |
| 27 | VALUE | Hapag Lloyd | 2013 | 8,827 | 32,400 | April 2025 |
| 28 | VALIANT | Hapag Lloyd | 2013 | 8,827 | 32,400 | June 2025 |
| 29 | VALENCE | Hapag Lloyd | 2013 | 8,827 | 32,400 | July 2025 |
| 30 | VANTAGE | Hapag Lloyd | 2013 | 8,827 | 32,400 | September 2025 |
| 31 | NAVARINO | MSC | 2010 | 8,531 | 31,000 | January 2025 |
| 32 | MAERSK KLEVEN | Maersk/MSC | 1996 | 8,044 | 25,000/41,500 | June 2026(8) |
| 13 |
|
|
Vessel Name | Charterer | Year Built | Capacity (TEU) | Current Daily Charter Rate(1) (U.S. dollars) | Expiration of Charter(2) |
| 33 | MAERSK KOTKA | Maersk/MSC | 1996 | 8,044 | 25,000/41,500 | June 2026(8) |
| 34 | MAERSK KOWLOON | Maersk | 2005 | 7,471 | 18,500 | August 2025 |
| 35 | KURE | COSCO/MSC | 1996 | 7,403 | 31,000/41,500 | March 2026(9) |
| 36 | METHONI | Maersk | 2003 | 6,724 | 46,500 | August 2026 |
| 37 | PORTO CHELI | Maersk | 2001 | 6,712 | 30,075 | June 2026 |
| 38 | YORK(iii) | Maersk | 2000 | 6,648 | 21,250 | November 2022(10) |
| 39 | ZIM TAMPA | ZIM | 2000 | 6,648 | 45,000 | July 2025 |
| 40 | SEALAND WASHINGTON(iii) | Maersk | 2000 | 6,648 | 25,000 | January 2023 (11) |
| 41 | SEALAND MICHIGAN(iii) | Maersk | 2000 | 6,648 | 25,000 | October 2022(11) |
| 42 | SEALAND ILLINOIS(iii) | Maersk | 2000 | 6,648 | 25,000 | October 2022 (11) |
| 43 | MAERSK KALAMATA(iii) | Maersk | 2003 | 6,644 | 25,000 | December 2022(11) |
| 44 | MAERSK KOLKATA | Maersk/ZIM | 2003 | 6,644 | 25,000/53,000 | October 2025 (12) |
| 45 | MAERSK KINGSTON | Maersk/ZIM | 2003 | 6,644 | 25,000/53,000 | October 2025 (12) |
| 46 | ARIES | (*)/(*) | 2004 | 6,492 | (*)/58,500 | March 2026(13) |
| 47 | ARGUS | (*)/(*) | 2004 | 6,492 | (*)/58,500 | April 2026(14) |
| 48 | PORTO KAGIO | Maersk | 2002 | 5,908 | 28,822 | June 2026 |
| 49 | GLEN CANYON | ZIM | 2006 | 5,642 | 62,500 | June 2025 |
| 50 | PORTO GERMENO | Maersk | 2002 | 5,570 | 28,822 | June 2026 |
| 51 | LEONIDIO | Maersk | 2014 | 4,957 | 14,200 | December 2024(15) |
| 52 | KYPARISSIA | Maersk | 2014 | 4,957 | 14,200 | November 2024(15) |
| 53 | MEGALOPOLIS | Maersk | 2013 | 4,957 | 13,500 | July 2025(16) |
| 54 | MARATHOPOLIS | Maersk | 2013 | 4,957 | 13,500 | July 2025(16) |
| 55 | OAKLAND | Maersk | 2000 | 4,890 | 24,500 | March 2023 |
| 56 | GIALOVA | ZIM | 2009 | 4,578 | 25,500 | April 2024 |
| 57 | DYROS | Maersk | 2008 | 4,578 | 22,750 | January 2024 |
| 58 | NORFOLK | Maersk | 2009 | 4,259 | 30,000 | May 2023 |
| 59 | VULPECULA | OOCL/ZIM | 2010 | 4,258 | 22,700/43,250 (on average) | February 2028(17) |
| 60 | VOLANS | ZIM | 2010 | 4,258 | 24,250 | April 2024 |
| 61 | VIRGO | Maersk | 2009 | 4,258 | 30,200 | February 2024 |
| 62 | VELA | OOCL/ZIM | 2009 | 4,258 | 22,700/43,250 (on average) | January 2028(18) |
| 63 | ANDROUSA | Maersk | 2010 | 4,256 | 22,750 | May 2023 |
| 64 | NEOKASTRO | CMA CGM | 2011 | 4,178 | 39,000 | February 2027 |
| 65 | ULSAN | Maersk | 2002 | 4,132 | 34,730 | January 2026 |
| 66 | POLAR ARGENTINA(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | October 2024(19) |
| 67 | POLAR BRASIL(i)(ii) | Maersk | 2018 | 3,800 | 19,700 | January 2025(19) |
| 68 | LAKONIA | COSCO | 2004 | 2,586 | 26,500 | March 2025 |
| 69 | SCORPIUS | Hapag Lloyd | 2007 | 2,572 | 17,750 | January 2023 |
| 70 | ETOILE | (*) | 2005 | 2,556 | (*) | February 2023 |
| 71 | AREOPOLIS | COSCO | 2000 | 2,474 | 26,500 | April 2025 |
| 72 | MONEMVASIA(i) | Maersk | 1998 | 2,472 | 9,250 | January 2023(20) |
| 73 | ARKADIA(i) | Swire Shipping | 2001 | 1,550 | 21,500 | May 2023 |
| 74 | MICHIGAN | MSC | 2008 | 1,300 | 18,700 | September 2023 |
| 75 | TRADER | (*) | 2008 | 1,300 | (*) | October 2024 |
| 76 | LUEBECK | MSC | 2001 | 1,078 | 15,000 | March 2024 |
| (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. |
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| (2) | Charter terms and expiration dates are based on the earliest date charters (unless otherwise noted) could expire. |
| (3) | This charter rate will be earned by MSC Azov until December 2, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300. |
| (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) | This charter rate will be earned by MSC Athens until January 29, 2023. From the aforementioned date until the expiry of the charter, the daily rate will be $35,300. |
| (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) | The current daily rate of each of Maersk Kleven and Maersk Kotka is a base rate of $17,000, 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. Upon redelivery of each vessel from Maersk between June 2023 and October 2023, each vessel will commence a new charter with MSC for a period of 36 to 38 months at a fixed daily rate of $41,500. |
| (9) | Upon redelivery of Kure from COSCO between March 2023 and July 2023, the vessel will commence a new charter with MSC for a period of 36 to 38 months at a daily rate of $41,500. Until then the daily charter rate will be $31,000. |
| (10) | Expiration of charter represents latest redelivery date. |
| (11) | The daily rate for Sealand Washington, Sealand Michigan, Sealand Illinois 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. Expiration dates of the charters of these vessels represent latest redelivery dates. |
| (12) | The current daily rate for Maersk Kolkata and Maersk Kingston 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. Upon expiry of their current employment in October 2022 (estimated on the latest redelivery date) the vessels will enter into a new charter with ZIM for a period of 36 to 40 months at a daily rate of $53,000. |
| (13) | Vessel’s daily charter rate will be $58,500 from March 2023. Until then the vessel is chartered at an undisclosed rate. |
| (14) | Vessel’s daily charter rate will be $58,500 from April 2023. Until then the vessel is chartered at an undisclosed rate. |
| (15) | Charterer has the option to extend the current time charter for an additional period of 12 to 24 months at a daily rate of $17,000. |
| (16) | Charterer has the option to extend the current time charter for an additional period of approximately 24 months at a daily rate of $14,500. |
| (17) | The current daily rate for Vulpecula is $22,700. Upon expiry of its current employment in February 2023 (estimated on the earliest redelivery date) the vessel will enter into a new charter with ZIM for a period of 60 to 64 months at a daily rate of $43,250, on average. For this new charter, the daily rate will be $99,000 for the first 12 month period, $91,250 for the second 12 month period, $10,000 for the third 12 month period and $8,000 for the remaining duration of the charter. |
| (18) | The current daily rate for Vela is $22,700. Upon expiry of its current employment in January 2023 (estimated on the earliest redelivery date) the vessel will enter into a new charter with ZIM for a period of 60 to 64 months at a daily rate of $43,250, on average. For this new charter, the daily rate will be $99,000 for the first 12 month period, $91,250 for the second 12 month period, $10,000 for the third 12 month period and $8,000 for the remaining duration of the charter. |
| (19) | Charterer has the option to extend the current time charter for three additional one-year periods at a daily rate of $21,000. |
| (20) | Expiration of charter represents latest redelivery date. |
| (i) | Denotes vessels acquired pursuant to the Framework Deed. The Company holds an equity interest of 49% in each of the vessel-owning companies. |
| (ii) | Denotes vessels subject to a sale and leaseback transaction. |
| (iii) | Denotes vessels that we have agreed to sell. |
| (*) | Denotes charterer’s identity and/or current daily charter rates and/or charter expiration dates, which are treated as confidential. |
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Dry Bulk Vessel Fleet List
The table below provides information, as of July 28, 2022, about our fleet of dry bulk vessels.
|
|
Vessel Name | Year Built | Capacity (DWT) |
| 1 | AEOLIAN | 2012 | 83,478 |
| 2 | GRENETA | 2010 | 82,166 |
| 3 | HYDRUS | 2011 | 81,601 |
| 4 | PHOENIX | 2012 | 81,569 |
| 5 | BUILDER | 2012 | 81,541 |
| 6 | FARMER | 2012 | 81,541 |
| 7 | SAUVAN | 2010 | 79,700 |
| 8 | ROSE | 2008 | 76,619 |
| 9 | MERCHIA | 2015 | 63,800 |
| 10 | SEABIRD | 2016 | 63,553 |
| 11 | DAWN | 2018 | 63,530 |
| 12 | ORION | 2015 | 63,473 |
| 13 | DAMON | 2012 | 63,227 |
| 14 | TITAN I | 2009 | 58,090 |
| 15 | ERACLE | 2012 | 58,018 |
| 16 | PYTHIAS | 2010 | 58,018 |
| 17 | NORMA | 2010 | 58,018 |
| 18 | ORACLE | 2009 | 57,970 |
| 19 | CURACAO | 2011 | 57,937 |
| 20 | URUGUAY | 2011 | 57,937 |
| 21 | ATHENA | 2012 | 57,809 |
| 22 | SERENA | 2010 | 57,266 |
| 23 | LIBRA | 2010 | 56,729 |
| 24 | PEGASUS | 2011 | 56,726 |
| 25 | MERIDA | 2012 | 56,670 |
| 26 | CLARA | 2008 | 56,557 |
| 27 | PEACE | 2006 | 55,709 |
| 28 | PRIDE | 2006 | 55,705 |
| 29 | BERMONDI | 2009 | 55,469 |
| 30 | COMITY | 2010 | 37,302 |
| 31 | VERITY | 2012 | 37,163 |
| 32 | PARITY | 2012 | 37,152 |
| 33 | ACUITY | 2011 | 37,149 |
| 34 | EQUITY | 2013 | 37,071 |
| 35 | DISCOVERY | 2012 | 37,019 |
| 36 | TAIBO | 2011 | 35,112 |
| 37 | BERNIS | 2011 | 34,627 |
| 16 |
|
|
Vessel Name | Year Built | Capacity (DWT) |
| 38 | MANZANILLO | 2010 | 34,426 |
| 39 | ADVENTURE | 2011 | 33,755 |
| 40 | ALLIANCE | 2012 | 33,751 |
| 41 | CETUS | 2010 | 32,527 |
| 42 | PROGRESS | 2011 | 32,400 |
| 43 | MINER | 2010 | 32,300 |
| 44 | KONSTANTINOS | 2012 | 32,178 |
| 45 | RESOURCE | 2010 | 31,776 |
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) | 2021 | 2022 | 2021 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| REVENUES: | ||||||||||||||||
| Voyage revenue | $ | 293,495 | $ | 558,937 | $ | 166,770 | $ | 290,927 | ||||||||
| EXPENSES: | ||||||||||||||||
| Voyage expenses | (3,071 | ) | (19,833 | ) | (2,030 | ) | (11,262 | ) | ||||||||
| Voyage expenses – related parties | (4,301 | ) | (7,740 | ) | (2,395 | ) | (3,995 | ) | ||||||||
| Vessels’ operating expenses | (69,600 | ) | (133,351 | ) | (37,821 | ) | (67,604 | ) | ||||||||
| General and administrative expenses | (3,709 | ) | (6,725 | ) | (1,741 | ) | (3,463 | ) | ||||||||
| Management fees – related parties | (11,786 | ) | (21,892 | ) | (6,310 | ) | (11,025 | ) | ||||||||
| General and administrative expenses – non-cash component | (3,207 | ) | (4,360 | ) | (1,768 | ) | (1,808 | ) | ||||||||
| Amortization of dry-docking and special survey costs | (4,847 | ) | (5,646 | ) | (2,520 | ) | (2,939 | ) | ||||||||
| Depreciation | (58,726 | ) | (82,476 | ) | (31,630 | ) | (41,326 | ) | ||||||||
| Gain on sale of vessels, net | 1,406 | 21,250 | 1,666 | 3,452 | ||||||||||||
| Foreign exchange gains / (losses) | 146 | 387 | (3 | ) | 277 | |||||||||||
| Operating income | $ | 135,800 | $ | 298,551 | $ | 82,218 | $ | 151,234 | ||||||||
| OTHER INCOME / (EXPENSES): | ||||||||||||||||
| Interest income | $ | 1,489 | $ | 138 | $ | 1,122 | $ | 124 | ||||||||
| Interest and finance costs | (36,548 | ) | (55,211 | ) | (20,441 | ) | (30,081 | ) | ||||||||
| Income from equity method investments | 4,951 | 776 | 960 | 488 | ||||||||||||
| Fair value measurement of equity securities | 51,094 | - | 25,157 | - | ||||||||||||
| Other | 2,983 | 1,680 | 1,495 | 1,205 | ||||||||||||
| Gain / (loss) on derivative instruments | (1,012 | ) | (910 | ) | 105 | (983 | ) | |||||||||
| Total other income / (expenses) | $ | 22,957 | $ | (53,527 | ) | $ | 8,398 | $ | (29,247 | ) | ||||||
| Net Income | $ | 158,757 | $ | 245,024 | $ | 90,616 | $ | 121,987 | ||||||||
| Earnings allocated to Preferred Stock | (15,448 | ) | (15,448 | ) | (7,854 | ) | (7,854 | ) | ||||||||
| Net Income available to common stockholders | $ | 143,309 | $ | 229,576 | $ | 82,762 | $ | 114,133 | ||||||||
| Earnings per common share, basic and diluted | $ | 1.17 | $ | 1.85 | $ | 0.67 | $ | 0.92 | ||||||||
| Weighted average number of shares, basic and diluted | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
| 17 |
COSTAMARE INC.
Consolidated Balance Sheets
| As of December 31, | As of June 30, | |||||||
| (Expressed in thousands of U.S. dollars) | 2021 | 2022 | ||||||
| ASSETS | (Audited) | (Unaudited) | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 276,002 | $ | 601,163 | ||||
| Restricted cash | 8,856 | 11,420 | ||||||
| Short-term investments | - | 9,963 | ||||||
| Accounts receivable | 20,978 | 26,669 | ||||||
| Inventories | 21,365 | 23,669 | ||||||
| Due from related parties | - | 1,341 | ||||||
| Fair value of derivatives | - | 9,207 | ||||||
| Insurance claims receivable | 3,970 | 5,436 | ||||||
| Asset held for sale | 78,799 | 129,301 | ||||||
| Time charter assumed | 198 | 199 | ||||||
| Accrued charter revenue | 7,361 | 7,524 | ||||||
| Prepayments and other | 8,595 | 10,161 | ||||||
| Total current assets | $ | 426,124 | $ | 836,053 | ||||
| FIXED ASSETS, NET: | ||||||||
| Right-of-use assets | $ | 191,303 | $ | - | ||||
| Vessels and advances, net | 3,650,192 | 3,743,956 | ||||||
| Total fixed assets, net | $ | 3,841,495 | $ | 3,743,956 | ||||
| NON-CURRENT ASSETS: | ||||||||
| Equity method investments | $ | 19,872 | $ | 19,520 | ||||
| Deferred charges, net | 31,859 | 45,938 | ||||||
| Accounts receivable, non-current | 5,076 | 5,251 | ||||||
| Restricted cash | 68,670 | 75,386 | ||||||
| Fair value of derivatives, non-current | 3,429 | 25,794 | ||||||
| Accrued charter revenue, non-current | 8,183 | 7,144 | ||||||
| Time charter assumed, non-current | 667 | 568 | ||||||
| Other non-current assets | 1,666 | - | ||||||
| Total assets | $ | 4,407,041 | $ | 4,759,610 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Current portion of long-term debt | $ | 272,365 | $ | 373,750 | ||||
| Accounts payable | 18,865 | 18,795 | ||||||
| Due to related parties | 1,694 | 937 | ||||||
| Finance lease liabilities | 16,676 | - | ||||||
| Accrued liabilities | 27,304 | 49,758 | ||||||
| Unearned revenue | 23,830 | 26,040 | ||||||
| Fair value of derivatives | 6,876 | 3,557 | ||||||
| Other current liabilities | 2,417 | 2,668 | ||||||
| Total current liabilities | $ | 370,027 | $ | 475,505 | ||||
| NON-CURRENT LIABILITIES | ||||||||
| Long-term debt, net of current portion | $ | 2,169,718 | $ | 2,366,391 | ||||
| Finance lease liabilities, net of current portion | 99,689 | - | ||||||
| Fair value of derivatives, net of current portion | 7,841 | 15,153 | ||||||
| Unearned revenue, net of current portion | 33,867 | 34,578 | ||||||
| Total non-current liabilities | $ | 2,311,115 | $ | 2,416,122 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock | $ | - | $ | - | ||||
| Common stock | 12 | 12 | ||||||
| Treasury stock | - | (52,356 | ) | |||||
| Additional paid-in capital | 1,386,636 | 1,413,542 | ||||||
| Retained earnings | 341,482 | 480,202 | ||||||
| Accumulated other comprehensive income / (loss) | (2,231 | ) | 26,583 | |||||
| Total stockholders’ equity | $ | 1,725,899 | $ | 1,867,983 | ||||
| Total liabilities and stockholders’ equity | $ | 4,407,041 | $ | 4,759,610 | ||||
| Total liabilities and stockholders’ equity | $ | 4,407,041 | $ | 4,579,489 | ||||
| 18 |
Financial Summary
| 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) | 2021 | 2022 | 2021 | 2022 | ||||||||||||
| Voyage revenue | $ | 293,495 | $ | 558,937 | $ | 166,770 | $ | 290,927 | ||||||||
| Accrued charter revenue (1) | $ | 2,146 | $ | 5,069 | $ | 1,114 | $ | 1,712 | ||||||||
| Amortization of time-charter assumed | $ | (345 | ) | $ | 98 | $ | (345 | ) | $ | 49 | ||||||
| Voyage revenue adjusted on a cash basis (2) | $ | 295,296 | $ | 564,104 | $ | 167,539 | $ | 292,688 | ||||||||
| Adjusted Net Income available to common stockholders (3) | $ | 96,262 | $ | 223,058 | $ | 58,275 | $ | 118,563 | ||||||||
| Weighted Average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
| Adjusted Earnings per share (3) | $ | 0.79 | $ | 1.80 | $ | 0.47 | $ | 0.95 | ||||||||
| Net Income | $ | 158,757 | $ | 245,024 | $ | 90,616 | $ | 121,987 | ||||||||
| Net Income available to common stockholders | $ | 143,309 | $ | 229,576 | $ | 82,762 | $ | 114,133 | ||||||||
| Weighted Average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
| Earnings per share | $ | 1.17 | $ | 1.85 | $ | 0.67 | $ | 0.92 | ||||||||
(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. The reverse is true for charters with descending rates.
(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. 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 of our containership fleet are described in the notes to the “Fleet List” table above.
(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-month and the six-month periods ended June 30, 2022 and 2021. 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.
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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) | 2021 | 2022 | 2021 | 2022 | ||||||||||||
| Net Income | $ | 158,757 | $ | 245,024 | $ | 90,616 | $ | 121,987 | ||||||||
| Earnings allocated to Preferred Stock | (15,448 | ) | (15,448 | ) | (7,854 | ) | (7,854 | ) | ||||||||
| Net Income available to common stockholders | 143,309 | 229,576 | 82,762 | 114,133 | ||||||||||||
| Accrued charter revenue | 2,146 | 5,069 | 1,114 | 1,712 | ||||||||||||
| General and administrative expenses - non-cash component | 3,207 | 4,360 | 1,768 | 1,808 | ||||||||||||
| Amortization of Time charter assumed | (345 | ) | 98 | (345 | ) | 49 | ||||||||||
| Realized (gain) / loss on Euro/USD forward contracts (1) | (174 | ) | 950 | (96 | ) | 619 | ||||||||||
| Gain on sale of vessels, net | (1,406 | ) | (21,250 | ) | (1,666 | ) | (3,452 | ) | ||||||||
| Non-recurring, non-cash write-off of loan deferred financing costs | 363 | 2,339 | - | 1,705 | ||||||||||||
| (Gain) / Loss on derivative instruments, excluding interest accrued and realized on non-hedging derivative instruments (1) | 1,012 | 910 | (105 | ) | 983 | |||||||||||
| Non-recurring payments for loan cancellation fees | - | 1,006 | - | 1,006 | ||||||||||||
| Fair value measurement / Change in fair value of equity securities | (51,094 | ) | - | (25,157 | ) | - | ||||||||||
| Other non-recurring, non-cash items | (756 | ) | - | - | - | |||||||||||
| Adjusted Net Income available to common stockholders | $ | 96,262 | $ | 223,058 | $ | 58,275 | $ | 118,563 | ||||||||
| Adjusted Earnings per Share | $ | 0.79 | $ | 1.80 | $ | 0.47 | $ | 0.95 | ||||||||
| Weighted average number of shares | 122,615,427 | 124,228,628 | 122,844,260 | 124,306,059 | ||||||||||||
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 or descending charter rates, realized (gain)/loss on Euro/USD forward contracts, gain on sale of vessels, net, fair value measurement of equity securities / change in fair value of equity securities, non-recurring, non-cash write-off of loan deferred financing costs, non-recurring payments for loan cancellation fees, general and administrative expenses - non-cash component, non-cash changes in fair value of derivatives and other non-recurring, non-cash items. “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.
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